UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Fundrise Income Real Estate Fund, LLC
Investment Company Act file number 811-23745
11 Dupont Circle NW, 9th Floor
Washington, D.C. 20036
(Address of Principal Executive Offices)
(202) 584-0550
(Registrant’s Area Code and telephone number)
Michelle A. Mirabal
Rise Companies Corp.
11 Dupont Circle NW, 9th Floor
Washington, D.C. 20036
(Name and Address of Agent for Service)
Copies to:
Paul J. Delligatti, Esq.
Goodwin Procter LLP
1900 N Street, NW
Washington, D.C. 20036
Date of fiscal year end: December 31
Date of reporting period: January 1, 2023 through June 30, 2023
Item 1. Reports to Stockholders
Fundrise
Income
Real
Estate
Fund,
LLC
Semi-Annual
Report
For
the
Six
Months
Ended
June
30,
2023
TABLE
OF
CONTENTS
Schedule
of
Investments
(Unaudited)
3
Statement
of
Assets
and
Liabilities
(Unaudited)
6
Statement
of
Operations
(Unaudited)
7
Statements
of
Changes
in
Net
Assets
8
Statement
of
Cash
Flows
(Unaudited)
9
Financial
Highlights
10
Notes
to
Financial
Statements
(Unaudited)
11
Additional
Information
(Unaudited)
24
Fundrise
Income
Real
Estate
Fund,
LLC
Schedule
of
Investments
(Unaudited)
June
30,
2023
3
See
accompanying
notes
to
the
financial
statements.
(Amounts
in
thousands)
Par/Shares
Description
Acquisition
Date
(1)
Value
as
of
June
30,
2023
Private
Real
Estate
-
72.4%
Equity
-
17.2%
Development
-
9.7%
N/A
(2)
Income
1
TRS,
LLC
|
Various
locations (Cost
$48,961)
(3)(4)(5)(6)
03/31/22
$
55,015
Multifamily
-
7.5%
N/A
(2)
23Hundred
JV
LP
|
Plano,
TX (Cost
$4,232)
(4)(5)
03/31/22
$
7,053
N/A
(2)
FR
MP
Brandon
Glen
JV,
LLC
|
Conyers,
GA (Cost
$6,924)
(4)(5)
03/31/22
10,370
N/A
(2)
Fundrise
Insight
Two
LLC
|
Arlington,
VA (Cost
$1)
(3)(4)(5)
03/31/22
1
N/A
(2)
Liberty
Hills
JV,
LP
|
Houston,
TX (Cost
$7,031)
(4)(5)
03/31/22
6,952
N/A
(2)
Luxe
JV,
LP
|
Tampa,
FL (Cost
$7,670)
(4)(5)
03/31/22
7,462
N/A
(2)
Presley
JV,
LP
|
Charlotte,
NC (Cost
$4,851)
(4)(5)
03/31/22
4,846
N/A
(2)
The
View
JV
LP
|
Lewisville,
TX (Cost
$6,105)
(4)(5)
03/31/22
6,073
Total
Multifamily
(Cost
$36,814
)
$
42,757
Total
Equity
(Cost
$85,775)
$
97,772
Mezzanine
Debt
-
7.3%
Multifamily
-
7.3%
16,423
NexMetro
Grand
Member,
LLC
|
El
Mirage,
AZ,
10.55%,
10.55%
PIK,
01/20/24
(Cost
$19,059)
(4)(5)(7)
03/31/22
$
18,841
12,612
NexMetro
Oakridge
Member,
LLC
|
Forney,
TX,
12.50%,
12.50%
PIK,
10/23/23
(Cost
$16,560)
(4)(5)(7)
03/31/22
16,560
5,915
RSE
Boat
Club
Investor,
LLC
|
Fort
Worth,
TX,
10.25%
+
SOFR,
15.14%
PIK,
09/27/25
(Cost
$6,067)
(4)(5)(7)(8)
09/27/22
6,081
Total
Multifamily
(Cost
$41,686
)
$
41,482
Total
Mezzanine
Debt
(Cost
$41,686)
$
41,482
Preferred
Equity
-
11.1%
Hospitality
-
0.4%
2,229
Y
Hotel
Leveraged
Lender,
LLC
|
Pittsburgh,
PA,
15.50%,
11/13/19
(Cost
$2,229)
(4)(5)(6)(9)
03/31/22
$
2,150
Multifamily
-
10.7%
4,500
Breckenridge
Group
Springfield
Missouri,
LLC
|
Springfield,
MO,
13.50%,
01/01/26
(Cost
$4,500)
(4)(5)
03/31/22
4,514
6,820
C
V
Fort
Meyers
Investor,
LLC
|
Fort
Meyers,
FL,
10.50%,
2.50%
PIK,
07/10/23
(Cost
$8,654)
(4)(5)(7)
03/31/22
8,654
9,681
Encore
Narcoossee,
LLC
|
Orlando,
FL,
9.85%,
9.85%
PIK,
12/29/25
(Cost
$9,836)
(4)(5)(7)
06/29/22
9,480
6,835
Fort
Myers
Reef
Holdings,
LLC
|
Fort
Meyers,
FL,
10.90%,
4.07%
PIK,
09/01/28
(Cost
$8,729)
(3)(4)(5)(7)
03/31/22
8,724
935
RSE
Daytona
Investor,
LLC
|
Daytona
Beach,
FL,
13.50%,
13.50%
PIK,
02/09/26
(Cost
$986)
(3)(4)(5)(7)
02/09/23
989
360
RSE
Thompson
Reserve
Investor,
LLC
|
Scottsdale,
AZ,
13.85%,
10.35%
PIK,
05/09/26
(Cost
$365)
(3)(4)(5)(7)
05/09/23
372
16,700
SFR
Reflections
I,
LLC
|
Sunrise,
FL,
10.10%,
12/01/30
(Cost
$16,700)
(4)(5)
03/31/22
16,767
6,587
WP
Gainesville
MF-FL
Holdings,
LLC
|
Gainesville,
FL,
11.00%,
11.00%
PIK,
09/21/25
(Cost
$7,386)
(4)(5)(7)
03/31/22
7,346
3,750
WP
Walcott
Hackensack
Sub,
LLC
|
Hackensack,
NJ,
11.00%,
6.00%
PIK,
01/29/24
(Cost
$4,546)
(4)(5)(7)
03/31/22
4,546
Total
Multifamily
(Cost
$61,702
)
$
61,392
Total
Preferred
Equity
(Cost
$63,931)
$
63,542
Fundrise
Income
Real
Estate
Fund,
LLC
Schedule
of
Investments
(Unaudited)
June
30,
2023
4
See
accompanying
notes
to
the
financial
statements.
Par/Shares
Description
Acquisition
Date
(1)
Value
as
of
June
30,
2023
Senior
Debt
-
7.4%
Land
-
4.1%
19,255
The
Station
East
Owner
II,
LLC
|
Union
City,
CA,
9.50%,
11/20/23
(Cost
$19,255)
(4)(5)
03/31/22
$
19,255
3,920
The
Station
East
Owner
III,
LLC
|
Union
City,
CA,
15.00%,
09/16/24
(Cost
$3,920)
(4)(5)
05/16/23
3,923
Total
Land
(Cost
$23,175
)
$
23,178
Multifamily
-
3.3%
3,350
1550
South
Fairfax,
LLC
|
Los
Angeles,
CA,
11.00%,
04/15/22
(Cost
$3,350)
(4)(5)(6)(9)
03/31/22
3,350
3,000
4927
Washington,
LLC
|
Los
Angeles,
CA,
12.90%,
04/19/22
(Cost
$3,000)
(4)(5)(6)(9)
03/31/22
3,000
12,463
Vose-Van
Nuys,
LLC
|
Los
Angeles,
CA,
15.00%,
09/01/23
(Cost
$12,463)
(4)(5)
03/31/22
12,465
Total
Multifamily
(Cost
$18,813
)
$
18,815
Total
Senior
Debt
(Cost
$41,988)
$
41,993
Promissory
Notes
-
29.4%
Development
-
29.4%
$
3,587
FR
Arbor
Place,
LLC
|
Douglasville,
GA,
9.50%,
07/21/23
(Cost
$3,587)
(3)(4)(5)
03/31/22
$
3,572
28,160
FR
Beeson,
LLC
|
Katy,
TX,
8.50%,
08/31/23
(Cost
$28,160)
(3)(4)(5)
03/31/22
27,663
7,733
FR
Berry
Creek,
LLC
|
Georgetown,
TX,
9.50%,
03/09/24
(Cost
$7,733)
(3)(4)(5)
03/31/22
7,655
8,135
FR
Berry
Hills,
LLC
|
Georgetown,
TX,
8.50%,
07/29/24
(Cost
$8,135)
(3)(4)(5)
07/29/22
8,070
5,724
FR
Cade's
Bluff,
LLC
|
Mt.
Juliet,
TN,
9.50%,
09/23/24
(Cost
$5,724)
(3)(4)(5)
09/23/22
5,733
1,294
FR
Castlewood,
LLC
|
Taylor,
TX,
9.00%,
05/02/24
(Cost
$1,294)
(3)(4)(5)
05/02/22
1,275
3,995
FR
Clinton
Corner,
LLC
|
Dade
City,
FL,
10.50%,
09/30/23
(Cost
$3,995)
(3)(4)(5)
03/31/22
4,003
4,015
FR
Crescent
Mills,
LLC
|
Smithfield,
NC,
9.00%,
05/02/24
(Cost
$4,015)
(3)(4)(5)
05/03/22
3,966
11,917
FR
Eastwood,
LLC
|
Jarrell,
TX,
9.00%,
11/17/23
(Cost
$11,917)
(3)(4)(5)
03/31/22
11,839
6,054
FR
Holmes,
LLC
|
Myrtle
Beach,
SC,
8.00%,
05/27/24
(Cost
$6,054)
(3)(4)(5)
05/27/22
5,977
3,682
FR
Legacy
Hills,
LLC
|
Celina,
TX,
8.50%,
07/29/24
(Cost
$3,682)
(3)(4)(5)
07/29/22
3,634
11,462
FR
Meadow
Park,
LLC
|
Melissa,
TX,
9.50%,
09/01/23
(Cost
$11,462)
(3)(4)(5)
03/31/22
11,342
8,702
FR
Providence
Gardens,
LLC
|
Davenport,
FL,
8.50%,
02/24/24
(Cost
$8,702)
(3)(4)(5)
03/31/22
8,466
17,162
FR
Swope
LB,
LLC
|
Land
O'
Lakes,
FL,
8.00%,
08/31/24
(Cost
$17,162)
(3)(4)(5)
08/31/22
16,910
12,921
FR
Swope
LH,
LLC
|
Land
O'
Lakes,
FL,
8.50%,
08/31/24
(Cost
$12,921)
(3)(4)(5)
08/31/22
12,895
9,202
FR
Tom
Miller,
LLC
|
Bethlehem,
GA,
9.00%,
06/15/24
(Cost
$9,202)
(3)(4)(5)
06/15/22
9,049
4,268
FR
Trailside,
LLC
|
Mount
Dora,
FL,
8.50%,
08/22/24
(Cost
$4,268)
(3)(4)(5)
08/22/22
4,197
2,124
FR
Vaughn
Farms,
LLC
|
Conyers,
GA,
10.50%,
09/30/23
(Cost
$2,124)
(3)(4)(5)
03/31/22
2,127
4,066
FR
Washington
Street,
LLC
|
Covington,
GA,
9.00%,
11/15/23
(Cost
$4,066)
(3)(4)(5)
03/31/22
4,040
5,626
FR
Willow
Landing,
LLC
|
Nashville,
TN,
9.50%,
09/13/24
(Cost
$5,626)
(3)(4)(5)
09/13/22
5,637
193
FR
Wilsons
Walk,
LLC
|
Clayton,
NC,
9.00%,
10/04/23
(Cost
$193)
(3)(4)(5)
03/31/22
190
9,442
FR
Wong
Tract,
LLC
|
Austin,
TX,
8.50%,
08/31/24
(Cost
$9,442)
(3)(4)(5)
08/31/22
9,430
Total
Promissory
Notes
(Cost
$169,464)
$
167,670
Total
Private
Real
Estate
(Cost
$402,840)
$
412,459
Residential
Mortgage-Backed
Securities
-
9.0%
Non-U.S.
Government
Agency
Issues
-
9.0%
14,067
Bridge
2022-SFR1
Trust (E1
Class),
6.30%,
11/17/25
(10)
$
13,364
3,254
New
Residential
Mortgage
Loan
Trust
2022-SFR2
(E2
Class),
4.00%,
09/17/27
(10)
2,663
22,000
New
Residential
Mortgage
Loan
Trust
2022-SFR2
(F
Class),
4.00%,
09/17/27
(10)
17,875
2,500
Progress
Residential
2021-SFR4
Trust,
3.41%,
05/17/26
(10)
2,179
14,745
Progress
Residential
2022-SFR7
Trust (E1
Class),
6.75%,
10/17/27
(10)
14,019
1,000
Tricon
Residential
Trust
2023-SFR
1
E,
7.98%,
07/17/28
(10)
1,000
Total
Residential
Mortgage-Backed
Securities
(Cost
$51,167)
$
51,100
Fundrise
Income
Real
Estate
Fund,
LLC
Schedule
of
Investments
(Unaudited)
June
30,
2023
5
See
accompanying
notes
to
the
financial
statements.
Par/Shares
(000s)
Description
Acquisition
Date
(1)
Value
(000s)
as
of
June
30,
2023
Short-Term
Investments
-
20.4%
116,091
Allspring
Government
Money
Market
Fund,
Select
Class
Shares,
5.14%
(11)
$
116,091
428
Northern
Institutional
U.S.
Government
Select
Portfolio,
4.99%
(11)
428
Total
Short-Term
Investments
(Cost
$116,519)
$
116,519
Total
investments,
at
value
-
101.8%
(Cost
$570,530)
$
580,078
Other
assets
in
excess
of
liabilities
-
(1.8)%
(10,314)
Total
Net
Assets
-
100.0%
$
569,764
LLC
Limited
Liability
Company
LP
Limited
Partnership
(1)
Initial
acquisition
or
investment
date.
Assets
with
an
acquisition
date
of
March
31,
2022
were
acquired
by
the
Fund
in
connection
with
the
Merger.
See
Note
6,
Investment
Manager
Fees
and
Other
Related
Party
Transactions
,
for
more
information
on
the
assets
acquired
from
the
Merger.
(2)
The
Fund
owns
LLC
or
LP
membership
interests
in
restricted
security
not
traded
in
public
markets.
(3)
Investment
in
an
affiliate.
See
Note
2,
Summary
of
Significant
Accounting
Policies
-
Fair
Value
Measurement
for
additional
information.
(4)
Investments
classified
as
Level
3
within
the
three-tier
fair
value
hierarchy.
See
the
accompanying
notes
to
the
financial
statements
for
an
explanation
of
this
hierarchy,
as
well
as
a
list
of
significant
unobservable
inputs
used
in
the
valuation
of
these
instruments
(5)
Restricted
security.
The
aggregate
value
of
restricted
securities
at
June
30,
2023
is
approximately
$412,459
and
represents
72.4%
of
net
assets.
See
Note
2,
Summary
of
Significant
Accounting
Policies
-
Fair
Value
Measurement
for
additional
information.
(6)
Non-income
producing
investment.
(7)
Rate
disclosed
for
investments
with
payment
in
kind
(PIK)
interest.
See
Note
2,
Summary
of
Significant
Accounting
Policies
for
more
information
on
recognition
policy.
(8)
This
investment
has
a
floating
interest
rate.
Investments
are
shown
at
their
current
rate
as
of
June
30,
2023.
(9)
As
of
June
30,
2023,
this
investment
had
incurred
an
event
of
default
due
to
non-payment
of
outstanding
principal
and
contractual
interest,
and
is
non-
accrual.
The
real
estate
investment
is
secured
by
the
underlying
property.
(10)
Security
is
exempt
from
registration
under
Rule
144A
of
the
Securities
Act
of
1933.
These
securities
may
be
resold
to
qualified
institutional
buyers
in
transactions
exempt
from
registration.
At
the
period
end,
the
value
of
these
securities
amounted
to
$51,100
or
9.0%
of
net
assets.
(11)
Rate
disclosed
is
representative
of
the
Fund's
seven-day
effective
yield
as
of
June
30,
2023.
Geographic
Composition
as
of
6/30/2023
Percent
of
Total
Investments
Texas
21.3%
Florida
18.3%
California
7.2%
Georgia
5.1%
Arizona
3.2%
Tennessee
2.0%
North
Carolina
1.5%
South
Carolina
1.0%
Missouri
0.8%
New
Jersey
0.8%
Pennsylvania
0.4%
Virginia
0.0%
(1)
Other
38.4%
Total
Investments
100.0%
(1)
Value
is
less
than
0.05%
of
Total
Investments.
Fundrise
Income
Real
Estate
Fund,
LLC
STATEMENT
OF
ASSETS
AND
LIABILITIES
(Unaudited)
June
30,
2023
6
See
accompanying
notes
to
financial
statements.
(Amounts
in
thousands,
except
share
and
per
share
data)
Assets
Investments
in
unaffiliated
entities,
at
value
(Cost
$342,024)
$
347,308
Investments
in
non-controlled
affiliated
entities,
at
value
(Cost
$179,545)
177,755
Investments
in
controlled
affiliated
entities,
at
value
(Cost
$48,961)
55,015
Interest
receivable
from
unaffiliated
investments
1,484
Interest
receivable
from
non-controlled
affiliated
investments
1,352
Cash
and
cash
equivalents
920
Other
assets
107
Total
Assets
$
583,941
Liabilities
Distributions
payable
$
10,741
Payable
for
investments
purchased
1,000
Settling
subscriptions
816
Interest
received
in
advanced
608
Accounts
payable
and
accrued
expenses
435
Accrued
management
fees
395
Redemptions
payable
126
Other
liabilities
40
Payable
to
related
party
16
Total
Liabilities
$
14,177
Total
Net
Assets
$
569,764
Components
of
Net
Assets
Paid-in
capital
$
563,605
Distributable
earnings
6,159
Total
Net
Assets
$
569,764
Net
Asset
Value
Net
assets
$
569,764
Common
shares
outstanding
as
of
June
30,
2023;
unlimited
shares
authorized
57,249,810
Net
Asset
Value
Per
Share
$
9.95
Fundrise
Income
Real
Estate
Fund,
LLC
STATEMENT
OF
OPERATIONS
(Unaudited)
FOR
THE
SIX
MONTHS
ENDED
JUNE
30,
2023
7
See
accompanying
notes
to
the
financial
statements.
(Amounts
in
thousands)
Investment
Income
Interest
income
from
unaffiliated
investments
$
7,888
Interest
income
from
non-controlled
affiliated
investments
7,538
Interest
income
–
PIK
from
unaffiliated
investments
3,734
Dividend
income
from
unaffiliated
investments
2,366
Interest
income
–
PIK
from
non-controlled
affiliated
investments
292
Total
Investment
Income
$
21,818
Expenses
Management
fees
$
2,330
Miscellaneous
expenses
265
Bank
and
custody
fees
213
Legal
fees
198
Audit
and
tax
fees
153
Insurance
fees
79
Directors’
fees
74
Transfer
agent
fees
64
Offering
costs
49
Real
estate
fees
–
related
party
32
Financial
printing
fees
10
Total
Expenses
$
3,467
Net
Investment
Income
(Loss)
$
18,351
Net
Realized
and
Unrealized
Gain
(Loss)
on
Investments
Net
realized
gain
(loss)
from
unaffiliated
investments
$
(662)
Net
change
in
unrealized
appreciation/depreciation
from
controlled
affiliated
investments
1,354
Net
change
in
unrealized
appreciation/depreciation
from
unaffiliated
investments
653
Net
change
in
unrealized
appreciation/depreciation
from
non-controlled
affiliated
investments
(414)
Total
Net
Realized
and
Unrealized
Gain
(Loss)
on
Investments
$
931
Net
Increase
in
Net
Assets
Resulting
from
Operations
$
19,282
Fundrise
Income
Real
Estate
Fund,
LLC
STATEMENTS
OF
CHANGES
IN
NET
ASSETS
8
See
accompanying
notes
to
financial
statements.
(Amounts
in
thousands)
For
the
Six
Months
Ended
June
30,
2023
(Unaudited)
For
the
Period
February
3,
2022
(1)
through
December
31,
2022
Operations:
Net
investment
income
(loss)
$
18,351
$
20,485
Net
realized
gain
(loss)
on
investments
(662)
8,399
Net
change
in
unrealized
appreciation/depreciation
on
investments
1,593
(6,271)
Net
Increase
(Decrease)
in
Net
Assets
Resulting
from
Operations
$
19,282
$
22,613
Distributions
to
Common
Shareholders
from:
From
distributable
earnings
$
(22,216)
$
(22,638)
Net
Decrease
in
Net
Assets
from
Distributions
to
Common
Shareholders
$
(22,216)
$
(22,638)
Capital
Share
Transactions:
Proceeds
from
merger
transaction
(Note
6)
$
–
$
452,385
Proceeds
from
sale
of
shares
77,055
114,006
Distributions
reinvested
4,309
2,305
Repurchase
of
shares
(43,951)
(33,486)
Net
Increase
(Decrease)
in
Net
Assets
from
Capital
Share
Transactions
$
37,413
$
535,210
Net
Increase
(Decrease)
in
Net
Assets
$
34,479
$
535,185
Net
Assets:
Beginning
of
Period
$
535,285
$
100
End
of
Period
$
569,764
$
535,285
(1)
Effective
date
of
the
Fund’s
Registration
Statement
.
Fundrise
Income
Real
Estate
Fund,
LLC
STATEMENT
OF
CASH
FLOWS
(Unaudited)
FOR
THE
SIX
MONTHS
ENDED
JUNE
30,
2023
9
See
accompanying
notes
to
financial
statements.
Operating
Activities:
Net
increase
in
net
assets
resulting
from
operations
$
19,282
Adjustments
to
reconcile
net
increase
in
net
assets
resulting
from
operations
to
net
cash
provided
by
(used
in)
operating
activities:
Investments
in
unaffiliated
entities
(83,492)
Investments
in
non-controlled
affiliated
entities
(17,595)
Investments
in
controlled
affiliated
entities
(7,000)
Accretion
of
discounts
(930)
Amortization
of
deferred
offering
costs
49
Net
change
in
interest
income
–
PIK
from
unaffiliated
investments
(3,734)
Net
change
in
interest
income
–
PIK
from
non-controlled
affiliated
investments
(292)
Net
realized
gain
(loss)
from
unaffiliated
investments
662
Net
change
in
unrealized
appreciation/depreciation
from
unaffiliated
investments
(653)
Net
change
in
unrealized
appreciation/depreciation
from
non-controlled
affiliated
investments
414
Net
change
in
unrealized
appreciation/depreciation
from
controlled
affiliated
investments
(1,354)
Proceeds
from
sale
of
unaffiliated
investments
72,900
Proceeds
from
sale
of
non-controlled
affiliated
investments
6,438
Changes
in
assets
and
liabilities:
Net
(increase)
decrease
in
interest
receivable
from
non-controlled
affiliated
investments
(152)
Net
(increase)
decrease
in
interest
receivable
from
unaffiliated
investments
(214)
Net
(increase)
decrease
in
other
assets
(75)
Net
increase
(decrease)
in
accrued
management
fees
12
Net
increase
(decrease)
in
settling
subscriptions
(1,157)
Net
increase
(decrease)
in
interest
received
in
advance
(1,473)
Net
increase
(decrease)
in
accounts
payable
and
accrued
expenses
(208)
Net
increase
(decrease)
in
other
liabilities
(1)
Net
increase
(decrease)
in
payable
to
related
party
1
Net
(increase)
decrease
payable
for
investments
purchased
1,000
Net
cash
provided
by
(used
in)
operating
activities
$
(17,5
72
)
Financing
Activities:
Proceeds
from
issuance
of
common
shares
77,055
Cash
paid
for
shares
repurchased
(43,883)
Distributions
paid
(17,021)
Net
cash
provided
by
(used
in)
financing
activities
$
16,
151
Net
increase
(decrease)
in
cash
and
cash
equivalents
$
(1,421)
Cash
and
cash
equivalents,
beginning
of
period
2,341
Cash
and
cash
equivalents,
end
of
period
$
920
Supplemental
Disclosure
of
Non-Cash
Activity:
Distributions
reinvested
$
4,309
Fundrise
Income
Real
Estate
Fund,
LLC
FINANCIAL
HIGHLIGHTS
10
See
accompanying
notes
to
financial
statements.
These
financial
highlights
reflect
selected
data
for
a
share
outstanding
throughout
each
period.
(1)
For
the
Six
Months
Ended
June
30,
2023
(Unaudited)
For
the
Period
February
3,
2022
(2)
to
December
31,
2022
Net
Asset
Value,
Beginning
of
Period
$
1
0
.
00
$
10.00
Income
from
Investment
Operations
Net
investment
income
(loss)
$
0.33
$
0.42
Net
realized
and
unrealized
gain
(loss)
on
investments
0.
03
0.04
Total
Income
from
Investment
Operations
$
0.
36
$
0.46
Distributions
to
Common
Shareholders
From:
Net
investment
income
$
(0.41)
$
(0.40)
Net
realized
gain
–
(0.06)
Total
Distributions
to
Common
Shareholders
$
(0.41)
$
(0.46)
Net
Asset
Value,
End
of
Period
$
9.95
$
10.00
Total
Investment
Return
Based
on
Net
Asset
Value
(3)
1.45%
(4)
4.60%
(5)
Ratios
and
Supplemental
Data
Net
assets
at
end
of
period
(thousands)
$
569,764
$
535,285
Ratio
of
gross
expenses
to
average
net
assets
(6)(7)
1.27%
(8)
1.42%
(
5
)
Ratio
of
net
expenses
to
average
net
assets
(6)(7)
1.27%
(8)
1.49%
(
5
)(9
)
Ratio
of
net
investment
income
(loss)
to
average
net
assets
(7)
6.70%
(8)
5.61
%
(5)(9)
Portfolio
turnover
rate
14%
(4)
13%
(
10
)
(1)
Based
on
average
shares
outstanding
during
each
period.
(2)
Effective
date
of
the
Fund's
Registration
Statement.
(3)
Total
investment
return
based
on
net
asset
value
is
based
upon
the
change
in
net
asset
value
per
share
between
the
opening
and
ending
net
asset
values
per
share
in
the
period
indicated
and
assumes
that
dividends
are
reinvested
in
accordance
with
the
Fund’s
dividend
reinvestment
policy.
Returns
shown
do
not
reflect
the
deduction
of
taxes
that
a
Shareholder
would
pay
on
Fund
distributions
or
the
repurchase
of
Fund
shares.
(4)
Not
annualized.
(5)
Ratios
were
calculated
from
the
date
the
Fund
commenced
investment
operations,
April
1,
2022,
and
are
annualized.
(6)
Reflects
the
expense
ratio
excluding
any
waivers
and/or
reimbursements.
(7)
Expenses
do
not
include
operating
expenses
of
the
underlying
investments.
(8)
Annualized.
(9)
The
ratio
is
net
of
a
waiver
of
0.02%
and
is
inclusive
of
fee
recoupment
of
0.07%.
(10)
Portfolio
turnover
rate
was
calculated
from
the
date
the
Fund
commenced
investment
operations,
April
1,
2022,
and
is
not
annualized.
This
alternative
presents,
in
all
material
aspects,
the
most
accurate
portrayal
of
portfolio
turnover.
Fundrise
Income
Real
Estate
Fund,
LLC
Notes
to
Financial
Statements
(Unaudited)
June
30,
2023
11
1.
Formation
and
Organization
Fundrise
Income
Real
Estate
Fund,
LLC
(the
“Fund”
or
the
“Registrant”)
is
a
Delaware
limited
liability
company
and
has
elected
to
be
taxed
as
a
real
estate
investment
trust
(a
“REIT”)
for
U.S.
federal
income
tax
purposes
under
Part
II
of
Subchapter
M
of
Chapter
1
of
the
Internal
Revenue
Code
of
1986,
as
amended
(the
“Code”),
commencing
with
its
taxable
year
ending
December
31,
2022,
and
intends
to
continue
to
operate
as
such.
The
Fund
is
organized
as
a
continuously
offered,
non-diversified,
closed-end
management
investment
company
registered
under
the
Investment
Company
Act
of
1940,
as
amended
(the
“1940
Act”),
that
operates
as
an
interval
fund.
The
Fund’s
registration
statement
was
declared
effective
on
February
3,
2022.
The
Fund
commenced
investment
operations
on
April
1,
2022,
following
the
tax-free
reorganization
on
March
31,
2022.
See
Note
6,
Investment
Manager
Fees
and
Other
Related
Party
Transactions
for
more
information.
The
Fund’s
investment
objective
is
to
seek
current
income
from
which
to
pay
attractive,
consistent
cash
distributions
while
preserving
capital.
Generally,
the
Fund’s
investment
strategy
is
to
invest
at
least
80%
of
its
net
assets
(plus
the
amount
of
any
borrowings
for
investment
purposes)
in
residential
and
commercial
real
estate,
the
securities
of
real
estate
and
real
estate-related
issuers,
and
real
estate-related
loans
or
other
real
estate-related
debt
securities.
The
investment
adviser
to
the
Fund
is
Fundrise
Advisors,
LLC
(the
“Adviser”),
an
investment
adviser
registered
with
the
U.S.
Securities
and
Exchange
Commission
(“SEC”)
under
the
Investment
Advisers
Act
of
1940,
as
amended.
The
Adviser
is
a
wholly-
owned
subsidiary
of
Rise
Companies
Corp.
(“Rise
Companies”
or
the
“Sponsor”),
the
Fund’s
sponsor.
Subject
to
the
supervision
of
the
Board
of
Directors
of
the
Fund
(the
“Board”),
the
Adviser
is
responsible
for
directing
the
management
of
the
Fund’s
business
and
affairs,
managing
the
Fund’s
day-to-day
affairs,
and
implementing
the
Fund’s
investment
strategy.
2.
Summary
of
Significant
Accounting
Policies
Basis
of
Presentation
The
accompanying
financial
statements
of
the
Fund
are
prepared
in
accordance
with
accounting
principles
generally
accepted
in
the
United
States
(“U.S.
GAAP”).
The
Fund
is
an
investment
company
and
follows
the
accounting
and
reporting
guidance
in
the
Financial
Accounting
Standards
Board
(“FASB”)
Accounting
Standards
Codification
(“ASC”)
Topic
946,
Financial
Services
-
Investment
Companies
(“ASC
946”).
The
Fund
maintains
its
financial
records
in
U.S.
dollars
and
follows
the
accrual
basis
of
accounting.
The
estimates
and
assumptions
underlying
these
financial
statements
are
based
on
information
available
as
of
June
30,
2023,
including
judgments
about
the
financial
market
and
economic
conditions
which
may
change
over
time.
Estimates
The
preparation
of
financial
statements
in
conformity
with
U.S.
GAAP
requires
management
to
make
estimates
and
assumptions
that
affect
the
reported
amounts
of
assets
and
liabilities
at
the
date
of
the
financial
statements
and
the
reported
amounts
of
revenues
and
expenses
during
the
reporting
period.
Actual
results
could
differ
from
those
estimates.
Cash
and
cash
equivalents
Cash
and
cash
equivalents
may
consist
of
demand
deposits
and
highly
liquid
investments
with
original
maturities
of
three
months
or
less.
The
Fund
may
invest
its
cash
in
an
institutional
money
market
fund,
valued
at
the
net
asset
value
(“NAV”)
as
of
the
close
of
each
business
day.
The
Fund’s
uninvested
cash
is
maintained
with
a
high
credit
quality
financial
institution.
To
date,
the
Fund
has
not
experienced
any
losses
with
respect
to
cash
and
cash
equivalents.
Interest
Received
in
Advance
When
a
real
estate
debt
investment,
including
mezzanine
debt,
senior
debt,
and
promissory
notes,
is
funded
net
of
an
interest
reserve
holdback,
and
is
held
by
the
Fund,
the
Fund
accounts
for
the
holdback
funds
by
classifying
them
as
interest
received
in
advance.
As
interest
is
incurred
by
the
borrower,
the
Fund
recognizes
interest
income
and
reduces
the
interest
received
in
advance
until
such
time
that
the
reserve
is
exhausted
or
the
real
estate
debt
investment
redeems.
Any
remaining
interest
received
in
advance
will
be
applied
to
the
real
estate
debt
investment
balance
upon
redemption.
Fundrise
Income
Real
Estate
Fund,
LLC
Notes
to
Financial
Statements
(Unaudited)
June
30,
2023
12
Valuation
Oversight
In
connection
with
SEC
Rule
2a-5,
effective
September
2022,
the
Board
has
approved
the
Adviser
as
the
Fund’s
Valuation
Designee
(“Valuation
Designee”),
to
provide
administration
and
oversight
of
the
Fund’s
valuation
policies
and
procedures.
The
Fund
values
its
investments
in
accordance
with
such
procedures.
Generally,
portfolio
securities
and
other
assets
for
which
market
quotations
are
readily
available
are
valued
at
market
value,
which
is
ordinarily
determined
on
the
basis
of
official
closing
prices
or
the
last
reported
sales
prices.
If
market
quotations
are
not
readily
available
or
are
deemed
unreliable,
the
Fund
will
use
the
fair
value
of
the
securities
or
other
assets
as
determined
by
the
Adviser
in
good
faith,
taking
into
consideration
all
available
information
and
other
factors
that
the
Adviser
deems
pertinent,
in
each
case
subject
to
the
overall
supervision
and
responsibility
of
the
Board.
In
calculating
the
Fund’s
net
asset
value,
the
Adviser,
subject
to
the
oversight
of
the
Board,
uses
various
valuation
methodologies.
To
the
extent
practicable,
the
Adviser
generally
endeavors
to
maximize
the
use
of
observable
inputs
and
minimize
the
use
of
unobservable
inputs
by
requiring
that
the
most
observable
inputs
are
to
be
used
when
available.
The
availability
of
valuation
techniques
and
observable
inputs
can
vary
from
investment
to
investment
and
are
affected
by
a
wide
variety
of
factors.
When
valuation
is
based
on
models
or
inputs
that
are
less
observable
or
unobservable
in
the
market,
the
determination
of
fair
value
requires
more
judgment,
and
may
involve
alternative
methods
to
obtain
fair
values
where
market
prices
or
market-based
valuations
are
not
readily
available.
As
a
result,
the
Adviser
may
exercise
a
higher
degree
of
judgment
in
determining
fair
value
for
certain
securities
or
other
assets.
Fair
Value
Measurement
The
following
is
a
summary
of
certain
methods
generally
used
currently
to
value
investments
of
the
Fund
under
the
Fund’s
valuation
procedures:
The
Fund
applies
FASB
ASC
Topic
820,
Fair
Value
Measurement,
as
amended,
which
establishes
a
framework
for
measuring
fair
value
in
accordance
with
U.S.
GAAP
and
required
disclosures
of
fair
value
measurement.
U.S.
GAAP
defines
the
fair
value
as
the
price
that
the
Fund
would
receive
to
sell
an
asset
or
pay
to
transfer
a
liability
in
an
orderly
transaction
between
market
participants
at
the
measurement
date.
The
Fund
determines
the
fair
value
of
certain
investments
in
accordance
with
the
fair
value
hierarchy
that
requires
an
entity
to
maximize
the
use
of
observable
inputs.
The
fair
value
hierarchy
includes
the
following
three
levels
based
on
the
objectivity
of
the
inputs,
which
were
used
for
categorizing
the
assets
or
liabilities
for
which
fair
value
is
being
measured
and
reported:
Level
1
–
Quoted
market
prices
in
active
markets
for
identical
assets
or
liabilities.
Level
2
–
Significant
other
observable
inputs
(e.g.,
quoted
prices
for
similar
items
in
active
markets,
quoted
prices
for
identical
or
similar
items
in
markets
that
are
not
active,
inputs
other
than
quoted
prices
that
are
observable
such
as
interest
rate
and
yield
curves,
and
market-corroborated
inputs).
Level
3
–
Valuation
generated
from
model-based
techniques
that
use
inputs
that
are
significant
and
unobservable
in
the
market.
These
unobservable
assumptions
reflect
estimates
of
inputs
that
market
participants
would
use
in
pricing
the
asset
or
liability.
Valuation
techniques
may
include
use
of
discounted
cash
flow
methodologies
or
similar
techniques,
which
incorporate
management’s
own
estimates
of
assumptions
that
market
participants
would
use
in
pricing
the
instrument
or
other
valuation
assumptions
that
require
significant
management
judgment
or
estimation.
The
Fund’s
real
estate
equity
investments
are
typically
fair
valued
based
on
a
discounted
cash
flow
or
other
income
approach,
or
by
market
approaches
like
sales
comparisons
and
cost
approaches.
The
Fund
accounts
for
properties
at
the
individual
property
level
and
such
assets
are
fair
valued
using
inputs
that
consider
property-level
data
that
is
gathered
and
evaluated
periodically
to
reflect
new
information
(e.g.,
rental
payment
history)
regarding
the
property.
The
Fund’s
real
estate
debt
investments
in
loans,
including
senior
loans,
mezzanine
loans,
and
promissory
notes,
fair
value
is
generally
determined
by
the
yield
method
using
a
discounted
cash
flow
model
using
current
market
rates
derived
from
observable
market
data.
Fundrise
Income
Real
Estate
Fund,
LLC
Notes
to
Financial
Statements
(Unaudited)
June
30,
2023
13
Properties
held
through
joint
ventures
generally
will
be
valued
in
a
manner
that
is
consistent
with
the
methods
described
above.
Once
the
value
of
a
property
held
by
the
joint
venture
is
determined
and
the
Fund
determines
the
fair
value
of
any
other
assets
and
liabilities
of
the
joint
venture,
the
value
of
the
Fund’s
interest
in
the
joint
venture
is
then
determined.
Investments
in
registered
investment
companies,
including
money
market
funds,
are
valued
at
the
NAV
as
of
the
close
of
each
business
day.
To
the
extent
these
securities
are
actively
traded,
they
are
categorized
in
Level
1
of
the
fair
value
hierarchy.
Fixed
income
securities
may
be
valued
by
an
outside
pricing
service
overseen
by
the
Valuation
Designee.
The
pricing
service
may
employ
a
pricing
model
that
takes
into
account,
among
other
things,
bids,
yield
spreads
and/or
other
market
data
and
specific
security
characteristics.
In
the
event
prices
or
quotations
are
not
readily
available
or
that
the
application
of
these
valuation
methods
results
in
a
price
for
an
investment
that
is
deemed
to
be
not
representative
of
the
fair
value
of
such
investment,
fair
value
will
be
determined
in
good
faith
by
the
Valuation
Designee,
in
accordance
with
the
valuation
policy
and
procedures
approved
by
the
Board.
To
the
extent
these
securities
are
actively
traded,
they
are
categorized
in
Level
2
of
the
fair
value
hierarchy.
Due
to
the
inherent
uncertainty
of
determining
the
fair
value
of
investments
that
do
not
have
a
readily
available
market
value,
the
fair
value
of
the
Fund’s
investments
may
differ
significantly
from
the
values
that
would
have
been
used
had
a
readily
available
market
value
existed
for
such
investments,
and
the
differences
could
be
material.
The
following
is
a
summary
of
the
inputs
used
as
of
June
30,
2023
,
in
valuing
the
Fund’s
investments
carried
at
fair
value
(amounts
in
thousands)
:
The
following
is
a
summary
of
quantitative
information
about
the
significant
unobservable
inputs
of
the
Fund’s
Level
3
investments
as
of
June
30,
2023
(amounts
in
thousands)
.
The
weighted
average
range
of
unobservable
inputs
is
based
on
the
fair
value
of
investments.
Various
valuation
techniques
were
used
in
the
valuation
of
certain
investments
and
weighted
based
on
the
level
of
significance.
The
tables
are
not
intended
to
be
all-inclusive
but
instead
capture
the
significant
unobservable
inputs
relevant
to
the
Fund’s
determination
of
fair
value.
Level
1
Level
2
Level
3
Total
Private
Real
Estate
Equity
$
–
$
–
$
97,772
$
97,772
Private
Real
Estate
Preferred
Equity
–
–
63,542
63,542
Private
Real
Estate
Mezzanine
Debt
–
–
41,482
41,482
Private
Real
Estate
Senior
Debt
–
–
41,993
41,993
Private
Real
Estate
Promissory
Notes
–
–
167,670
167,670
Residential
Mortgage-Backed
Securities
���
51,100
–
51,100
Short-Term
Investments
116,519
–
–
116,519
Total
Investments
$
116,519
$
51,100
$
412,459
$
580,078
Investment
Fair
Value
Valuation
Technique
Unobservable
Input
(1)
Range
(Weighted
Average)
Impact
to
Valuation
from
an
Increase
in
Input
(2)
Private
Real
Estate
Equity
$
87,400
Yield
Method
Discount
Rate
9.0%
-
9.3%
(9.1%)
Decrease
10,372
Income
Approach,
Direct
Capitalization
Method
Capitalization
Rate
5.0%
-
5.3%
(5.3%)
Decrease
Private
Real
Estate
Preferred
Equity
61,392
Yield
Method
Discount
Rate
9.3%
-
12.5%
(10.0%)
Decrease
2,150
Liquidation
Approach
Liquidation
Value
$9,350
-
$9,350
($9,350)
Increase
Private
Real
Estate
Mezzanine
Debt
41,482
Yield
Method
Discount
Rate
12.5%
-
13.5%
(13.2%)
Decrease
Private
Real
Estate
Senior
Debt
41,993
Yield
Method
Discount
Rate
10.0%
-
11.0%
(10.2%)
Decrease
Private
Real
Estate
Promissory
Notes
167,670
Yield
Method
Discount
Rate
8.8%
-
10.5%
(9.4%)
Decrease
Total
Investments
$
412,459
(1)
Represents
the
significant
unobservable
inputs
used
to
fair
value
the
financial
instruments
of
the
joint
ventures.
The
fair
value
of
such
financial
instruments
is
the
largest
component
of
the
valuation
of
such
entity
as
a
whole.
(2)
Represents
the
expected
directional
change
in
the
fair
value
of
the
Level
3
investments
that
would
result
from
an
increase
in
the
corresponding
input.
A
decrease
to
the
unobservable
input
would
have
the
opposite
effect.
Significant
changes
in
these
inputs
could
result
in
significantly
higher
or
lower
fair
value
measurements
Fundrise
Income
Real
Estate
Fund,
LLC
Notes
to
Financial
Statements
(Unaudited)
June
30,
2023
14
The
following
is
a
reconciliation
of
investments
in
which
significant
unobservable
inputs
(Level
3)
were
used
in
determining
fair
value
(amounts
in
thousands)
:
The
Fund
invests
in
one
or
more
affiliated
entities.
As
of
June
30,
2023
,
the
investments
in
affiliates
consist
of
investments
in
real
estate
investment
vehicles
used
to
acquire,
hold,
and
finance
multifamily
properties
and
land
for
future
development.
The
affiliated
investment
vehicles
have
not
been
registered
under
the
Securities
Act
of
1933,
as
amended,
and
thus
are
subject
to
restrictions
on
resale.
As
defined
in
the
1940
Act,
an
investment
is
deemed
to
be
a
“Controlled
Affiliate”
of
a
fund
when
a
fund
owns,
either
directly
or
indirectly,
25%
or
more
of
the
affiliated
fund’s
outstanding
shares
or
has
the
power
to
exercise
control
over
management
or
policies
of
such
fund.
During
the
six
months
ended
June
30,
2023,
investments
in
affiliates
were
as
follows
(amounts
in
thousands)
:
Private
Real
Estate
Equity
Private
Real
Estate
Preferred
Equity
Private
Real
Estate
Mezzanine
Debt
Private
Real
Estate
Senior
Debt
Private
Real
Estate
Promissory
Notes
Total
Balance
as
of
December
31,
2022
$
88,591
$
51,920
$
46,035
$
82,068
$
158,207
$
426,821
Purchases
7,000
10,974
5,915
4,120
16,300
44,109
Accrued
discounts
(premiums)
–
–
–
–
–
–
PIK
interest
and
dividends
–
1,173
2,853
–
–
4,026
Realized
gain
(loss)
–
–
–
–
–
–
Net
change
in
unrealized
appreciation/
depreciation
2,181
(525)
174
5
(399)
1,436
Return
of
capital
distributions
–
–
–
–
–
–
Sales
–
–
(13,495)
(44,200)
(6,438)
(63,933)
Transfers
into
Level
3
–
–
–
–
–
–
Transfers
out
of
Level
3
–
–
–
–
–
–
Balance
as
of
June
30,
2023
$
97,772
$
63,542
$
41,482
$
41,993
$
167,670
$
412,459
Net
change
in
unrealized
appreciation/
depreciation
for
the
six
months
ended
June
30,
2023
related
to
Level
3
investments
held
at
June
30,
2023
$
2,181
$
(525)
$
174
$
5
$
(399)
$
1,436
Affiliate
Acquisition
Date
(1)
Balance
as
of
December
31,
2022
Purchases
at
Cost
Proceeds
from
Sales
Net
Realized
Gain
(Loss)
and
Capital
Gain
Distributions
PIK
Interest
and
Dividend
Income
Return
of
Capital
Distribution
Change
in
Unrealized
Appreciation/
Depreciation
Balance
as
of
June
30,
2023
Fort
Meyers
Reef
Holdings,
LLC
(1)
03/31/22
$
8,513
$
–
$
–
$
–
$
236
$
–
$
(25)
$
8,724
RSE
Daytona
Investor,
LLC
(1)
02/09/23
–
935
–
–
51
–
3
989
RSE
Thompson
Reserve
Investor,
LLC
(1)
05/09/23
–
360
–
–
5
–
7
372
FR
Arbor
Place,
LLC
–
Promissory
Note
03/31/22
3,570
–
–
–
–
–
2
3,572
FR
Beeson,
LLC
–
Promissory
Note
03/31/22
28,216
–
–
–
–
–
(553)
27,663
FR
Berry
Creek,
LLC
–
Promissory
Note
03/31/22
7,640
–
–
–
–
–
15
7,655
FR
Berry
Hills,
LLC
–
Promissory
Note
03/31/22
8,056
–
–
–
–
–
14
8,070
FR
Cade’s
Bluff,
LLC
–
Promissory
Note
03/31/22
5,734
–
–
–
–
–
(1)
5,733
FR
Castlewood,
LLC
–
Promissory
Note
03/31/22
1,274
–
–
–
–
–
1
1,275
FR
Clinton
Corner,
LLC
–
Promissory
Note
03/31/22
4,300
–
(300)
–
–
–
3
4,003
Fundrise
Income
Real
Estate
Fund,
LLC
Notes
to
Financial
Statements
(Unaudited)
June
30,
2023
15
Restricted
Securities
The
Fund
may
purchase
securities
for
which
there
is
a
limited
trading
market
or
which
are
subject
to
restrictions
on
resale
to
the
public.
Restricted
securities
and
securities
for
which
there
is
a
limited
trading
market
may
be
significantly
more
difficult
to
value
due
to
the
unavailability
of
reliable
market
quotations
for
such
securities,
and
investment
in
such
securities
may
have
an
adverse
impact
on
NAV.
The
Fund
may
purchase
Rule
144A
securities
for
which
there
may
be
a
secondary
market
of
qualified
institutional
buyers
Affiliate
Acquisition
Date
(1)
Balance
as
of
December
31,
2022
Purchases
at
Cost
Proceeds
from
Sales
Net
Realized
Gain
(Loss)
and
Capital
Gain
Distributions
PIK
Interest
and
Dividend
Income
Return
of
Capital
Distribution
Change
in
Unrealized
Appreciation/
Depreciation
Balance
as
of
June
30,
2023
FR
Crescent
Mills,
LLC
–
Promissory
Note
03/31/22
3,960
–
–
–
–
–
6
3,966
FR
Eastwood,
LLC
–
Promissory
Note
03/31/22
15,943
–
(4,138)
–
–
–
34
11,839
FR
Holmes,
LLC
–
Promissory
Note
03/31/22
4,000
2,000
–
–
–
–
(23)
5,977
FR
Legacy
Hills,
LLC
–
Promissory
Note
03/31/22
3,628
–
–
–
–
–
6
3,634
FR
Meadow
Park,
LLC
–
Promissory
Note
03/31/22
8,457
3,000
–
–
–
–
(115)
11,342
FR
Providence
Gardens,
LLC
–
Promissory
Note
03/31/22
7,480
3,000
(2,000)
–
–
–
(14)
8,466
FR
Swope
LB,
LLC
–
Promissory
Note
03/31/22
16,751
–
–
–
–
–
159
16,910
FR
Swope
LH,
LLC
–
Promissory
Note
03/31/22
12,820
–
–
–
–
–
75
12,895
FR
Tom
Miller,
LLC
–
Promissory
Note
03/31/22
886
8,300
–
–
–
–
(137)
9,049
FR
Trailside,
LLC
–
Promissory
Note
03/31/22
4,128
–
–
–
–
–
69
4,197
FR
Vaughn
Farms,
LLC
–
Promissory
Note
03/31/22
2,127
–
–
–
–
–
–
2,127
FR
Wilsons
Walk,
LLC
–
Promissory
Note
03/31/22
193
–
–
–
–
–
(3)
190
FR
Washington
Street,
LLC
–
Promissory
Note
03/31/22
4,038
–
–
–
–
–
2
4,040
FR
Willow
Landing,
LLC
–
Promissory
Note
03/31/22
5,633
–
–
–
–
–
4
5,637
FR
Wong
Tract,
LLC
–
Promissory
Note
03/31/22
9,373
–
–
–
–
–
57
9,430
Fundrise
Insight
Two,
LLC
(1)
03/31/22
1
–
–
–
–
–
–
1
Income
1
TRS,
LLC
(2)
03/31/22
46,661
7,000
–
–
–
–
1,354
55,015
Total
$
213,382
$
24,595
$
(6,438)
$
–
$
292
$
–
$
940
$
232,771
(1)
Investment
represents
a
co-investment
arrangement,
in
which
the
Fund
co-invested
alongside
an
affiliate
of
the
Fund,
including
those
of
the
Adviser
(“Real
Estate
Co-Investment
Joint
Ventures”).
This
arrangement
is
pursuant
to
the
terms
and
conditions
of
the
exemptive
order
issued
by
the
SEC
to
the
Fund,
allowing
the
Fund
to
co-invest
alongside
certain
entities
affiliated
with
or
managed
by
the
Adviser.
The
Fund’s
investments
in
real
estate
through
the
securities
of
a
Real
Estate
Co-Investment
Joint
Ventures
with
its
affiliates
is
subject
to
the
requirements
of
the
1940
Act
and
terms
and
conditions
of
an
exemptive
order
the
Fund
received
from
the
SEC
allowing
the
Fund
and/or
the
Real
Estate
Co-Investment
Joint
Ventures
to
co-invest
alongside
certain
entities
affiliated
with
or
managed
by
the
Adviser
(REITs
(each,
an
“
eREIT
®”)
or
other
non-REIT
compliant
real
estate-related
funds).
The
exemptive
order
from
the
SEC
imposes
extensive
conditions
on
the
terms
of
any
co-investment
made
by
an
affiliate
of
the
Fund.
The
Fund
has
adopted
procedures
reasonably
designed
to
ensure
compliance
with
the
exemptive
order
and
the
Board
also
oversees
risk
relative
to
such
compliance.
(2)
Controlled
affiliate.
Fundrise
Income
Real
Estate
Fund,
LLC
Notes
to
Financial
Statements
(Unaudited)
June
30,
2023
16
as
contemplated
by
Rule
144A
under
the
Securities
Act.
Rule
144A
provides
an
exemption
from
the
registration
requirements
of
the
Securities
Act
for
the
resale
of
certain
restricted
securities
to
qualified
institutional
buyers.
Restricted
securities
held
at
June
30,
2023
are
identified
within
the
Schedule
of
Investments.
Organizational
and
Offering
Costs
Organizational
costs
may
include,
among
other
things,
the
cost
of
organizing
as
a
Delaware
limited
liability
company,
the
cost
of
certain
legal
services
and
other
fees
pertaining
to
the
Fund’s
organization.
These
costs
are
expensed
as
incurred
by
the
Fund.
Offering
costs
may
include,
among
other
things,
legal,
printing
and
other
expenses
pertaining
to
offering
the
Fund’s
Shares.
Ongoing
offering
costs
will
be
expensed
as
incurred.
Any
offering
costs
paid
by
the
Adviser
prior
to
commencement
of
investment
operations
will
be
recorded
as
a
Payable
to
Adviser.
Thereafter,
these
offering
costs
will
be
amortized
over
12
months
on
a
straight-line
basis.
Ongoing
offering
costs
will
be
expensed
as
incurred.
All
organizational
and
offering
costs
of
the
Fund
paid
by
the
Adviser
are
subject
to
reimbursement
pursuant
to
the
Expense
Limitation
Agreement
as
described
in
Note
6,
Investment
Manager
Fees
and
Other
Related
Party
Transactions
.
Income
Taxes
The
Fund
has
elected
to
be
taxed
as
a
REIT
under
the
Code,
and
intends
to
qualify
as
a
REIT,
commencing
with
the
taxable
year
ending
December
31,
2022.
To
qualify
as
a
REIT,
the
Fund
must
meet
certain
organizational
and
operational
requirements,
including
a
requirement
to
distribute
at
least
90%
of
the
Fund’s
annual
REIT
taxable
income
to
the
shareholders
of
the
Fund
(“Shareholders”)
(which
is
computed
without
regard
to
the
dividends
paid
deduction
and
generally
equals
the
Fund’s
ordinary
income
plus
the
excess
of
its
net
short-term
capital
gains
over
its
net
long-term
capital
losses,
minus
deductible
expenses).
As
a
REIT,
the
Fund
generally
will
not
be
subject
to
U.S.
federal
income
tax
to
the
extent
it
distributes
qualifying
dividends
to
its
Shareholders.
Even
if
the
Fund
qualifies
for
taxation
as
a
REIT,
it
may
be
subject
to
certain
state
and
local
taxes
on
its
income
and
property,
and
federal
income
and
excise
taxes
on
its
undistributed
income.
The
tax
period
for
the
taxable
year
ending
December
31,
2022
and
all
tax
periods
following
remain
open
to
examination
by
the
major
taxing
authorities
in
all
jurisdictions
where
we
are
subject
to
taxation.
For
the
open
tax
periods,
the
Fund
has
no
uncertain
tax
positions
that
would
require
recognition
in
the
financial
statements.
Income
tax
and
related
interest
and
penalties
would
be
recognized
by
the
Fund
as
tax
expense
in
the
Statement
of
Operations
if
the
tax
positions
were
deemed
to
not
meet
the
more-likely-than-not
threshold.
For
the
six
months
ended
June
30,
2023,
the
Fund
did
not
incur
any
income
tax,
interest,
or
penalties.
Issuance
of
Shares
The
Fund
offers
its
Shares
on
a
continuous
basis
through
the
Fundrise
Platform,
an
investment
platform
available
both
online
at
www.fundrise.com
and
through
various
mobile
applications
owned
and
operated
by
the
Sponsor.
The
price
a
Shareholder
pays
for
Shares
is
based
on
the
Fund’s
NAV.
The
NAV
of
the
Fund’s
Shares
is
calculated
daily
on
each
day
that
the
New
York
Stock
Exchange
is
open
for
business
as
of
the
close
of
the
regular
trading
session
on
the
NYSE,
usually
4:00
p.m.,
Eastern
Standard
Time.
Cash
received
for
investor
subscriptions
is
recorded
as
Settling
Subscriptions
in
the
Statement
of
Assets
and
Liabilities
until
settlement
occurs
and
Shares
are
issued.
Distributions
To
Shareholders
The
Fund
has
made,
and
intends
to
continue
to
make,
distributions
necessary
to
qualify
for
taxation
as
a
REIT.
The
Fund
expects
that
it
will
declare
daily
distributions
to
Shareholders
of
record
as
of
close
of
business
on
each
day,
paid
on
a
quarterly
basis,
or
more
or
less
frequently
as
determined
by
the
Board,
in
arrears.
The
Board
may
authorize
distributions
in
Shares
or
in
excess
of
those
required
for
the
Fund
to
maintain
REIT
tax
status
depending
on
the
Fund’s
financial
condition
and
such
other
factors
as
the
Board
may
deem
relevant.
The
distribution
rate
may
be
modified
by
the
Board
from
time
to
time.
The
Board
reserves
the
right
to
change
or
suspend
the
distribution
policy
from
time
to
time.
Distributions
to
shareholders
of
the
Fund
are
recorded
on
the
ex-dividend
date.
Dividend
Reinvestment
The
Fund
operates
under
a
dividend
reinvestment
policy
administered
by
the
Adviser.
Pursuant
to
the
policy,
a
Shareholder��s
income
dividends,
capital
gains
or
other
distributions,
net
of
any
applicable
U.S.
withholding
tax,
can
be
reinvested
in
the
Shares
of
the
Fund,
provided
that,
if
a
Shareholder
participates
in
an
investment
plan
offered
by
the
Adviser,
such
distributions
will
be
reinvested
in
accordance
with
such
investment
plan.
Unless
a
Shareholder
elects
to
“opt
in”
to
the
Fund’s
dividend
reinvestment
policy,
any
Fundrise
Income
Real
Estate
Fund,
LLC
Notes
to
Financial
Statements
(Unaudited)
June
30,
2023
17
dividends
and
other
distributions
paid
to
the
Shareholder
by
the
Fund
will
not
be
reinvested
in
additional
Shares
of
the
Fund
under
the
policy.
When
the
Fund
declares
a
distribution
payable
in
cash,
the
Shareholders
enrolled
in
the
dividend
reinvestment
plan
will
receive
an
equivalent
amount
in
Shares
from
the
Fund
either
newly
issued
or
repurchased
from
Shareholders
by
the
Fund
or
according
to
their
investment
plan,
if
applicable.
The
number
of
Shares
to
be
received
when
distributions
are
reinvested
will
be
determined
by
dividing
the
amount
of
the
distribution
(or
the
percentage
of
the
distribution
allocable
to
the
Fund
under
the
terms
of
the
investment
plan,
if
applicable)
by
the
Fund’s
NAV
per
Share
next
computed
after
the
distribution
is
paid.
Shareholders
who
do
not
participate
in
the
Fund’s
dividend
reinvestment
policy
will
receive
all
dividends
in
cash.
Investment
Income
and
Securities
Transactions
Securities
transactions
are
accounted
for
on
the
date
the
securities
are
purchased
or
sold
(trade
date).
Realized
gains
and
losses
on
sales
of
investments
are
determined
on
a
specific
identification
basis.
Dividend
income
and
distributions
are
reported
on
the
ex-
dividend
date,
and
interest
income
is
recorded
on
an
accrual
basis.
Amortization
of
premiums
and
accretion
of
discounts
on
fixed
income
securities
is
calculated
using
the
effective
interest
method,
or
straight-line
method
when
appropriate,
over
the
holding
period
of
the
investment
and
are
included
in
interest
income.
Distributions
received
from
investments
generally
are
comprised
of
ordinary
income
and
return
of
capital.
The
Fund
estimates
the
allocation
of
distributions
between
investment
income
and
return
of
capital
based
on
historical
information
or
regulatory
filings.
These
estimates
may
subsequently
be
revised
based
on
actual
allocations
received
from
investments
after
their
tax
reporting
periods
are
concluded,
as
the
actual
character
of
these
distributions
is
not
known
until
after
the
reporting
period
of
the
Fund.
The
Fund
currently
holds,
and
expects
to
hold
in
the
future,
some
investments
in
its
portfolio
that
contain
Payment-in-Kind
(“PIK”)
interest
provisions.
The
PIK
interest,
computed
at
the
contractual
rate
specified
in
each
loan
agreement,
is
added
to
the
principal
balance
of
the
investment,
rather
than
being
paid
in
cash,
and
is
recorded
as
interest
income.
Thus,
the
actual
collection
of
PIK
interest
may
be
deferred
until
the
time
of
debt
principal
repayment.
PIK
interest,
which
is
a
non-cash
source
of
income
at
the
time
of
recognition,
is
included
in
the
Fund’s
taxable
income
and
therefore
affects
the
amount
the
Fund
is
required
to
distribute
to
its
stockholders
to
maintain
its
qualification
as
a
“REIT”
for
federal
income
tax
purposes,
even
though
the
Fund
has
not
yet
collected
the
cash.
Generally,
when
current
cash
interest
and/or
principal
payments
on
an
investment
become
past
due,
or
if
the
Fund
otherwise
does
not
expect
the
borrower
to
be
able
to
service
its
debt
and
other
obligations,
the
Fund
will
place
the
investment
on
PIK
non-accrual
status
and
will
cease
recognizing
PIK
interest
income
on
that
investment
for
financial
reporting
purposes
until
all
principal
and
interest
have
been
brought
current
through
payment
or
due
to
a
restructuring
such
that
the
interest
income
is
deemed
to
be
collectible.
The
Fund
writes
off
any
accrued
and
uncollected
PIK
interest
when
it
is
determined
that
the
PIK
interest
is
no
longer
collectible.
As
of
June
30,
2023,
the
Fund
held
three
current
non-accrual
assets.
The
investments
are
past
maturity
and
have
failed
to
repay
outstanding
principal
and
contractual
current
interest.
Interest
earned
prior
to
the
investment
default
that
remains
outstanding
as
of
June
30,
2023
has
not
been
written
off
as
the
investments
are
secured
by
the
underlying
properties
and
the
Fund
expects
to
collect
outstanding
principal
and
contractual
interest
by
remedies
outlined
in
the
loan
agreement.
The
Fund
has
determined
contractual
interest
after
default
to
be
uncollectible
and
has
classified
the
investments
as
non-accrual.
3.
Concentration
of
Risk
Investing
in
the
Fund
involves
risks,
including,
but
not
limited
to,
those
set
forth
below.
The
risks
described
below
are
not,
and
are
not
intended
to
be,
a
complete
enumeration
or
explanation
of
the
risks
involved
in
an
investment
in
the
Fund.
For
a
more
complete
discussion
of
the
risks
of
investing
in
the
Fund,
see
the
section
entitled
“Principal
Risks”
in
the
Fund’s
Prospectus
and
Statement
of
Additional
Information
filed
on
April
28,
2023,
and
the
Fund’s
other
filings
with
the
SEC.
Non-Listed
Closed-End
Interval
Fund;
Liquidity
Risk.
The
Fund
is
a
non-diversified,
closed-end
management
investment
company
operating
as
an
“interval
fund”
and
is
designed
primarily
for
long-term
investors.
Closed-end
funds
differ
from
open-end
management
investment
companies
(commonly
known
as
mutual
funds)
because
investors
in
a
closed-end
fund
do
not
have
the
right
to
redeem
their
shares
on
a
daily
basis.
Unlike
many
closed-end
funds,
which
typically
list
their
shares
on
a
securities
exchange,
the
Fund
does
not
currently
intend
to
list
the
Shares
for
trading
on
any
securities
exchange,
and
the
Fund
does
not
expect
any
secondary
market
to
develop
for
the
Shares
in
the
foreseeable
future.
Therefore,
an
investment
in
the
Fund,
unlike
an
investment
in
a
typical
closed-end
fund,
is
not
a
liquid
investment.
The
Fund
is
not
intended
to
be
a
typical
traded
investment.
Shareholders
are
also
subject
to
transfer
restrictions
and
there
is
no
guarantee
that
they
will
be
able
to
sell
their
Shares.
If
a
secondary
market
were
to
develop
for
the
Shares
in
the
future,
and
a
Shareholder
is
able
to
sell
his
or
her
Shares,
the
Shareholder
will
likely
receive
less
than
the
purchase
price
and
Fundrise
Income
Real
Estate
Fund,
LLC
Notes
to
Financial
Statements
(Unaudited)
June
30,
2023
18
the
then-current
NAV
per
Share.
Although
the
Fund,
as
a
fundamental
policy,
will
make
quarterly
offers
to
repurchase
at
least
5%
and
up
to
25%
of
its
outstanding
Shares
at
NAV,
the
number
of
Shares
tendered
in
connection
with
a
repurchase
offer
may
exceed
the
number
of
Shares
the
Fund
has
offered
to
repurchase,
in
which
case
not
all
of
a
Shareholder’s
Shares
tendered
in
that
offer
will
be
repurchased.
In
connection
with
any
given
repurchase
offer,
it
is
likely
that
the
Fund
may
offer
to
repurchase
only
the
minimum
amount
of
5%
of
its
outstanding
Shares.
Hence,
a
Shareholder
may
not
be
able
to
sell
their
Shares
when
or
in
the
amount
that
they
desire.
Non-Diversification
Risk.
As
a
“non-diversified”
fund,
the
Fund
may
invest
more
than
5%
of
its
total
assets
in
the
securities
of
one
or
more
issuers
.
Therefore,
the
Fund
may
be
more
susceptible
than
a
diversified
fund
to
being
adversely
affected
by
events
impacting
a
single
borrower,
geographic
location,
security
or
investment
type.
Further,
a
non-diversified
fund
is
more
vulnerable
than
a
more
broadly
diversified
fund
to
fluctuations
in
the
values
of
the
securities
it
holds.
For
these
reasons,
an
investment
in
the
Fund
may
fluctuate
in
value
and
have
a
greater
degree
of
risk.
Investment
and
Market
Risk.
An
investment
in
the
Fund
is
subject
to
investment
risk,
including
the
possible
loss
of
the
entire
amount
that
a
Shareholder
invests.
The
value
of
the
Fund’s
investments
may
move
up
or
down,
sometimes
rapidly
and
unpredictably.
At
any
point
in
time,
Shares
may
be
worth
less
than
the
original
investment,
even
after
taking
into
account
the
reinvestment
of
Fund
dividends
and
distributions.
Global
economic,
political
and
market
conditions
and
economic
uncertainty,
including
those
caused
by
the
ongoing
COVID-19
pandemic,
may
adversely
affect
the
Fund’s
business,
results
of
operations
and
financial
condition.
Risks
Related
to
Specific
Private
Commercial
Real
Estate
(“CRE”)
Property
Types.
The
Fund
intends
to
invest
in
a
variety
of
Private
CRE
property
types,
which
will
expose
the
Fund
to
risks
associated
with
Private
CRE,
including
general
risks
affecting
all
types
of
Private
CRE
property
and
certain
specific
risks
associated
with
specific
types
of
Private
CRE
property.
New
Construction
and
Real
Estate
Development
Risk
.
The
Fund
expects
to
engage
in
the
strategy
of
acquiring,
holding
and
financing
land
for
future
development.
The
risks
inherent
in
financing,
purchasing,
owning,
selling,
and
developing
land
increase
as
the
demand
for
new
homes
and
rentals
decreases.
Real
estate
markets
are
highly
uncertain,
and
the
value
of
undeveloped
land
has
fluctuated
significantly
and
may
continue
to
fluctuate.
The
Fund’s
investments
are
subject
to
risks
inherent
in
residential
and
commercial
real
estate
generally
as
well
as
risks
inherent
to
new
construction
and
development,
such
as
the
risk
that
there
will
be
insufficient
tenant
demand
to
occupy
newly
developed
properties,
the
risk
that
costs
of
construction
materials
or
construction
labor
may
rise
materially
during
the
development,
overbuilding
and
price
competition,
decreased
availability
of
suitable
land,
and
changing
government
regulations
(including
zoning,
usage
and
tax
laws).
In
addition,
land
carrying
costs
can
be
significant
and
can
result
in
losses
or
reduced
profitability.
As
a
result,
the
Fund
may
hold
certain
land,
and
may
acquire
or
finance
additional
land,
in
its
development
pipeline
at
a
cost
that
the
Fund
may
not
be
able
to
fully
recover
or
at
a
cost
which
precludes
profitable
development.
Valuation
Risk.
The
Fund
is
subject
to
valuation
risk,
which
is
the
risk
that
one
or
more
of
the
assets
in
which
the
Fund
invests
are
priced
incorrectly,
due
to
factors
such
as
incomplete
data,
market
instability
or
human
error.
If
the
Fund
ascribes
a
higher
value
to
assets
and
their
value
subsequently
drops
or
fails
to
rise
because
of
market
factors,
returns
on
the
Fund’s
investment
may
be
lower
than
expected
and
could
experience
losses.
Interest
Rate
Risk.
Changes
in
interest
rates,
including
changes
in
expected
interest
rates
or
“yield
curves,”
may
affect
the
Fund’s
business
in
a
number
of
ways.
Changes
in
the
general
level
of
interest
rates
can
affect
the
Fund’s
net
interest
income,
which
is
the
difference
between
the
interest
income
earned
on
the
Fund’s
interest-earning
assets
and
the
interest
expense
incurred
in
connection
with
its
interest-bearing
borrowings
and
hedges.
Risks
Related
to
the
Fund’s
Tax
Status
as
a
REIT.
The
Fund
has
elected
to
be
taxed
as
and
has
qualified
for
treatment
each
year
as
a
REIT
under
the
Internal
Revenue
Code
of
1986,
as
amended
(defined
above
as
the
"Code")
beginning
with
its
taxable
period
ended
December
31,
2022
and
intends
to
continue
to
qualify
as
a
REIT.
However,
qualification
as
a
REIT
for
tax
purposes
involves
the
application
of
highly
technical
and
complex
Code
provisions
for
which
only
a
limited
number
of
judicial
or
administrative
interpretations
exist.
Notwithstanding
the
availability
of
cure
provisions
in
the
Code,
various
compliance
requirements
could
be
failed
and
could
jeopardize
the
Fund’s
REIT
tax
status.
Failure
to
qualify
for
taxation
as
a
REIT
would
cause
the
Fund
to
be
taxed
as
a
regular
corporation,
which
would
substantially
reduce
funds
available
for
distributions
to
Shareholders.
In
addition,
complying
with
the
requirements
to
maintain
its
REIT
tax
status
may
cause
the
Fund
to
forego
otherwise
attractive
opportunities
or
to
liquidate
Fundrise
Income
Real
Estate
Fund,
LLC
Notes
to
Financial
Statements
(Unaudited)
June
30,
2023
19
otherwise
attractive
investments,
adversely
affect
the
Fund’s
liquidity
and
force
the
Fund
to
borrow
funds
during
unfavorable
market
conditions,
and/or
limit
the
Fund’s
ability
to
hedge
effectively
and
cause
the
Fund
to
incur
tax
liabilities.
4.
Share
Transactions
Below
is
a
summary
of
transactions
with
respect
to
the
Fund’s
common
shares
for
the
six
months
ended
June
30,
2023
and
for
the
period
February
3,
2022
(effective
date
of
the
Fund’s
Registration
Statement)
to
December
31,
2022
(all
tabular
amounts
are
in
thousands
except
share
data)
:
As
of
June
30,
2023,
the
Fund
has
issued
13,100
common
shares
to
the
Sponsor
and
150,400
common
shares
to
Fundrise,
L.P.,
an
affiliate
of
the
Sponsor.
For
the
six
months
ended
June
30,
2023,
total
distributions
declared
to
these
related
parties
were
approximately
$65,900.
5.
Repurchase
Offers
The
Fund
operates
as
an
interval
fund
under
Rule
23c-3
of
the
1940
Act
and,
as
such,
provides
a
limited
degree
of
liquidity
to
Shareholders.
As
an
interval
fund,
the
Fund
has
adopted
a
fundamental
policy
to
offer
to
repurchase
at
quarterly
intervals
a
specified
percentage
of
its
outstanding
Shares
at
NAV
(the
“Repurchase
Offer
Policy”).
The
Repurchase
Offer
Policy
provides
that,
once
each
quarter,
the
Fund
will
offer
to
repurchase
at
NAV
no
less
than
5%
and
no
more
than
25%
of
the
outstanding
Shares
of
the
Fund,
unless
suspended
or
postponed
in
accordance
with
regulatory
requirements.
The
Repurchase
Offer
Policy
is
a
fundamental
policy
that
may
not
be
changed
without
the
vote
of
the
holders
of
a
majority
of
the
Fund’s
outstanding
voting
securities
(as
defined
in
the
1940
Act).
To
conduct
a
repurchase
offer,
the
Fund
will
send
a
repurchase
offer
notice
to
Shareholders
no
less
than
21
days
and
no
more
than
42
days
before
the
date
(the
“Repurchase
Request
Deadline”)
by
which
the
Fund
announces
that
Shareholders
must
tender
their
Shares
in
response
to
such
repurchase
offer
notice.
The
Fund
must
receive
repurchase
requests
submitted
by
Shareholders
in
response
to
the
Fund’s
repurchase
offer
on
or
before
the
Repurchase
Request
Deadline.
The
Repurchase
Offer
Policy
provides
that
the
repurchase
pricing
occurs
no
later
than
the
14th
day
after
the
Repurchase
Request
Deadline
or
the
next
business
day
if
the
14th
day
is
not
a
business
day
(the
“Repurchase
Pricing
Date”).
The
repurchase
price
of
the
Shares
will
be
the
Fund’s
NAV
as
of
the
close
of
the
Repurchase
Pricing
Date.
The
Board,
in
its
sole
discretion,
will
determine
the
number
of
Shares
that
the
Fund
will
offer
to
repurchase
(“Repurchase
Offer
Amount”)
for
a
given
Repurchase
Request
Deadline.
If
Shareholders
tender
for
repurchase
more
than
the
Repurchase
Offer
Amount
for
a
given
repurchase
offer,
the
Fund
may,
but
is
not
required
to,
repurchase
an
additional
number
of
Shares
not
to
exceed
2%
of
the
outstanding
Shares
of
the
Fund
on
the
Repurchase
Request
Deadline.
If
the
Fund
determines
not
to
repurchase
more
than
the
Repurchase
Offer
Amount,
or
if
Shareholders
tender
Shares
in
an
amount
exceeding
the
Repurchase
Offer
Amount
plus
2%
of
the
outstanding
Shares
on
the
Repurchase
Request
Deadline,
the
Fund
will
repurchase
the
Shares
on
a
pro
rata
basis.
However,
the
Fund
may
accept
all
Shares
tendered
for
repurchase
by
Shareholders
who
own
less
than
one
hundred
Shares
and
who
tender
all
of
their
Shares,
before
prorating
other
amounts
tendered.
For
the
Six
Months
Ended
June
30,
2023
For
the
Period
February
3,
2022
(1)
to
December
31,
2022
Common
Shares
Shares
Amount
Shares
Amount
Proceeds
from
merger
transaction
(Note
6)
–
$
–
45,238,475
$
452,385
Proceeds
from
sale
of
shares
7,701,999
77,055
11,368,436
114,006
Reinvestment
of
distributions
430,530
4,309
229,478
2,305
Total
gross
proceeds
8,132,529
81
,
3
6
4
56,836,389
568,696
Less:
shares
repurchased
(
4,388,311
)
(
43,951
)
(3,340,797)
(33,486)
Net
Proceeds
from
Common
Shares
3,744,218
$
37,413
53,495,592
$
535,210
(1)
Effective
date
of
the
Fund’s
Registration
Statement.
Fundrise
Income
Real
Estate
Fund,
LLC
Notes
to
Financial
Statements
(Unaudited)
June
30,
2023
20
The
Fund
may
not
condition
a
repurchase
offer
upon
the
tender
of
any
minimum
number
of
Shares.
The
Fund
does
not
currently
charge
a
repurchase
fee,
and
it
does
not
currently
expect
to
impose
a
repurchase
fee.
However,
the
Fund
may
in
the
future
charge
a
repurchase
fee
of
up
to
2.00%,
subject
to
approval
of
the
Board.
The
following
table
presents
the
repurchase
offers
that
were
completed
during
the
six
months
ended
June
30,
2023
(all
tabular
amounts
are
in
thousands
except
share
data)
:
6.
Investment
Manager
Fees
and
Other
Related
Party
Transactions
The
Fund
entered
into
an
Investment
Management
Agreement
with
the
Adviser.
Pursuant
to
the
Investment
Management
Agreement,
and
in
consideration
of
the
services
provided
by
the
Adviser
to
the
Fund,
the
Adviser
is
entitled
to
a
management
fee
(the
“Management
Fee”)
of
0.85%
of
the
Fund’s
average
daily
net
assets.
The
Management
Fee
will
be
calculated
and
accrued
daily
and
payable
monthly
in
arrears.
The
Fund
will
reimburse
the
Adviser
for
actual
expenses
incurred
on
behalf
of
the
Fund
in
connection
with
the
selection,
acquisition
or
origination
of
an
investment,
to
the
extent
not
reimbursed
by
a
third-party
borrower,
whether
or
not
the
Fund
ultimately
acquires
or
originates
the
investment.
During
the
six
months
ended
June
30,
2023
,
there
were
no
expenses
incurred
on
behalf
of
the
fund
or
reimbursed
to
the
Adviser
related
to
the
selection,
acquisition
or
origination
of
an
investment.
The
Fund
will
reimburse
the
Adviser
for
out-of-pocket
expenses
paid
to
third
parties
in
connection
with
providing
services
to
the
Fund.
This
does
not
include
the
Adviser’s
overhead,
employee
costs
borne
by
the
Adviser,
or
utilities
costs.
Expense
reimbursements
payable
to
the
Adviser
also
may
include
expenses
incurred
by
the
Sponsor
in
the
performance
of
services
pursuant
to
a
shared
services
agreement
between
the
Adviser
and
the
Sponsor,
including
any
increases
in
insurance
attributable
to
the
management
or
operation
of
the
Fund.
During
the
six
months
ended
June
30,
2023
,
there
were
approximately
$166,000
of
expenses
reimbursed
to
the
Adviser
pursuant
to
the
shared
services
agreement.
The
Adviser
or
its
affiliates
may
be
entitled
to
certain
fees
as
permitted
by
the
1940
Act
or
as
otherwise
permitted
by
applicable
law
and
regulation
fees
and
expenses
associated
with
the
selection,
acquisition,
or
origination
of
real
estate
properties,
construction,
real
estate
development,
special
servicing
of
non-performing
assets
(including,
but
not
limited
to,
reimbursement
of
non-ordinary
expenses
and
employee
time
required
to
special
service
a
non-performing
asset)
whether
or
not
the
Fund
ultimately
acquires
or
originates
the
investment,
and
the
sale
of
equity
investments
in
real
estate.
No
such
fees
were
incurred
or
paid
by
the
Fund
to
the
Adviser
or
its
affiliates
for
the
six
months
ended
June
30,
2023.
The
Adviser
and
Rise
Companies
entered
into
a
Shared
Services
Agreement
where
Rise
Companies
will
provide
the
Adviser
with
the
personnel,
services
and
resources
necessary
for
the
Adviser
to
comply
with
its
obligations
and
responsibilities
under
the
Second
Amended
and
Restated
Operating
Agreement
(“Operating
Agreement”)
and
Investment
Management
Agreement,
which
includes
responsibility
for
operations
of
the
Fund
and
performance
of
such
services
and
activities
relating
to
the
investments
and
operations
of
the
Fund
as
may
be
appropriate,
including
without
limitation
those
services
and
activities
listed
in
the
Operating
Agreement
and
Investment
Management
Agreement.
Repurchase
Offers
Fourth
Quarter
Repurchase
Commencement
Date
December
1,
2022
Repurchase
Request
Deadline
December
31,
2022
Repurchase
Pricing
Date
January
3,
2023
Amount
Repurchased
$
19,969
Shares
Repurchased
1,994,922
Repurchase
Offers
First
Quarter
Repurchase
Commencement
Date
February
28,
2023
Repurchase
Request
Deadline
March
31,
2023
Repurchase
Pricing
Date
April
3,
2023
Amount
Repurchased
$
23,982
Shares
Repurchased
2,393,389
Fundrise
Income
Real
Estate
Fund,
LLC
Notes
to
Financial
Statements
(Unaudited)
June
30,
2023
21
Fundrise
Real
Estate,
LLC
The
Fund
entered
into
a
Real
Estate
Services
Agreement
(the
“Agreement”)
with
Fundrise
Real
Estate,
LLC
(“the
Vendor”),
a
wholly-
owned
subsidiary
of
our
Sponsor.
Pursuant
to
the
Agreement,
the
Vendor
is
entitled
to
Real
Estate
Operating
Fees
for
performing
certain
real
estate
operating
services
for
the
Fund.
Pursuant
to
the
agreement,
the
Vendor
is
also
entitled
to
reimbursement
of
third-
party
costs
and
overhead
associated
with
the
performance
of
certain
services
outlined
in
the
Agreement,
paid
no
less
frequently
than
quarterly.
As
of
June
30,
2023,
the
Fund
had
approximately
$16,000
in
Real
Estate
Operating
Fees
payable
to
the
Vendor.
Tax-free
Reorganization
Fundrise
Advisors,
LLC,
in
its
capacity
as
Manager
of
Fundrise
Income
eREIT
II,
LLC
(“Income
eREIT
II”);
Fundrise
Income
eREIT
III,
LLC
(“Income
eREIT
III”);
Fundrise
Income
eREIT
2019,
LLC
(“Income
eREIT
2019”);
Fundrise
Income
eREIT
V,
LLC
(“Income
eREIT
V”);
Fundrise
eREIT
XIV,
LLC
(“eREIT
XIV”);
and
Fundrise
Real
Estate
Investment
Trust,
LLC
(“Income
eREIT”)
(individually
a
“Target
Company”
and
collectively
the
“Target
Companies”),
approved
the
Agreement
of
Merger
and
Plan
of
Reorganization
(the
“Merger
Agreement”),
providing
for
the
transfer
of
all
assets
and
liabilities
of
each
Target
Company
to
the
Fund.
In
accordance
with
the
terms
of
the
Merger
Agreement,
the
Target
Companies
were
merged
with
and
into
the
Fund,
with
the
Fund
being
the
surviving
entity
of
the
Merger.
The
primary
purpose
for
the
reorganization
was
to
streamline
operations,
cut
administrative
costs,
provide
additional
liquidity
to
shareholders,
and
maximize
returns
to
the
benefit
of
shareholders.
The
tax-free
reorganization
took
place
on
March
31,
2022,
prior
to
commencement
of
investment
operations
of
the
Fund.
The
following
is
a
summary
of
shares
outstanding,
net
assets,
net
asset
value
per
share
and
unrealized
appreciation/depreciation
immediately
fore
and
after
the
tax-free
reorganization
(all
tabular
amounts
are
in
thousands
except
share
data)
:
Assuming
the
reorganization
had
been
completed
on
January
1,
2022,
the
Fund’s
results
of
operations
for
the
period
ended
December
31,
2022,
would
have
been
as
follows
(unaudited)
:
The
Fund
has
elected
to
carry
forward
the
historical
cost
basis
of
each
investment
within
the
acquired
investment
portfolio
for
purposes
of
measuring
unrealized
appreciation/depreciation
and
realized
gain
(loss)
for
statement
of
operations
presentation.
This
policy
will
align
any
subsequent
reporting
of
realized
gains
with
the
tax-basis
gains
distributable
to
shareholders.
7.
Investments
The
Fund
gains
exposure
to
commercial
and
residential
real
estate
through
a
diversified
portfolio
of
investments
in
real
property;
a
variety
of
real
estate
loans;
real
estate-related
debt
and
equity
securities,
and
other
real
estate-related
assets.
The
cost
of
purchases
and
proceeds
from
the
sale
of
investments,
other
than
short-term
securities,
for
the
six
months
ended
June
30,
2023
amounted
to
$66,098
and
$79,338,
respectively
(amounts
in
thousands)
.
8.
Tax
Basis
Information
The
timing
and
characterization
of
certain
income,
capital
gains,
and
return
of
capital
distributions
are
determined
annually
in
accordance
with
federal
tax
regulations,
which
may
differ
from
GAAP.
As
a
result,
the
net
investment
income
(loss)
and
net
realized
gain
(loss)
on
investment
transactions
for
a
reporting
period
may
differ
significantly
from
distributions
during
such
period.
These
book/tax
differences
may
be
temporary
or
permanent
in
nature.
To
the
extent
these
differences
are
permanent,
they
are
charged
or
Income
eREIT
II
Income
eREIT
III
Income
eREIT
2019
Income
eREIT
V
eREIT
XIV
Income
eREIT
Income
Real
Estate
Fund
Income
Real
Estate
Fund
Shares
8,151,870
3,721,677
4,292,269
6,914,643
4,825,859
17,332,156
10,000
45,248,475
Net
Assets
$
81,519
$
37,217
$
42,923
$
69,146
$
48,258
$
173,322
$
100
$
452,485
Net
Asset
Value
$
10.15
$
8.86
$
9.97
$
10.04
$
10.44
$
10.09
$
10.00
$
10.00
Unrealized
appreciation/
depreciation
(1)
$
2,796
$
–
$
–
$
–
$
–
$
–
$
–
$
14,225
(1)
Prior
to
the
Merger,
investments
were
not
historically
recorded
at
Fair
Value.
Net
investment
income
$
26,673
Net
realized
gain
(loss)
on
investments
and
net
unrealized
appreciation/depreciation
on
investments
2,128
Net
increase
in
net
assets
resulting
from
operations
$
28,801
Fundrise
Income
Real
Estate
Fund,
LLC
Notes
to
Financial
Statements
(Unaudited)
June
30,
2023
22
credited
to
paid-in
capital,
accumulated
net
investment
income/loss
or
accumulated
net
realized
gain/loss,
as
appropriate,
in
the
period
in
which
the
differences
arise.
As
of
December
31,
2022,
the
tax
basis
of
distributable
earnings
(accumulated
deficit)
was
as
follows
(amounts
in
thousands)
:
During
the
tax
years
presented
below,
the
tax
character
of
distributions
paid
by
the
Fund
was
as
follows
(amounts
in
thousands)
:
As
of
June
30,
2023
,
the
unrealized
appreciation
and
depreciation
of
investments,
based
on
cost
for
federal
income
tax
purposes,
were
as
follows
(amounts
in
thousands)
:
The
difference
between
book-basis
and
tax-basis
unrealized
appreciation
is
attributable
to
the
book/tax
differences
in
the
treatment
of
depreciation
and
other
flow
through
income
on
certain
investments.
9.
New
Accounting
Pronouncements
In
June
2022,
FASB
issued
Accounting
Standards
Update
No.
2022-03
(“ASU
2022-03”),
“Fair
Value
Measurement
of
Equity
Securities
Subject
to
Contractual
Sale
Restrictions”
(“Topic
820”).
ASU
2022-03
clarifies
the
guidance
in
Topic
820,
related
to
the
measurement
of
the
fair
value
of
an
equity
security
subject
to
contractual
sale
restrictions,
where
it
eliminates
the
need
to
apply
a
discount
to
fair
value
of
these
securities,
and
introduces
disclosure
requirements
related
to
such
equity
securities.
The
guidance
is
effective
for
fiscal
years,
and
interim
periods
within
those
fiscal
years,
beginning
after
December
15,
2023,
and
allows
for
early
adoption.
The
Fund
is
currently
evaluating
the
implications,
if
any,
of
the
additional
requirements
and
its
impact
on
the
financial
statements.
10.
Subsequent
Events
In
connection
with
the
preparation
of
the
accompanying
financial
statements,
the
Fund
has
evaluated
events
and
transactions
occurring
after
the
date
of
this
report
and
through
the
date
at
which
these
financial
statements
were
available
to
be
issued.
Undistributed
ordinary
income
(loss)
$
1,339
Undistributed
long-term
capital
gain
(loss)
(2)
–
Tax
accumulated
earnings
(loss)
$
1,339
Accumulated
capital
and
other
losses
–
Other
book/tax
temporary
differences
(2)
(333)
Net
unrealized
gain
(loss)
on
investments
(3)
8,088
Total
Distributable
Earnings
$
9,094
(1)
The
difference
between
book-basis
and
tax-basis
capital
gains
is
attributable
to
differing
treatments
of
guaranteed
payments
from
certain
investments.
(2)
Other
book/tax
differences
are
attributable
to
deductibility
of
various
expenses.
(3)
The
difference
between
book-basis
and
tax-basis
unrealized
appreciation
(depreciation)
is
attributable
to
the
book/tax
differences
in
the
treatment
of
depreciation
and
other
flow
through
income
on
certain
investments.
For
the
Tax
Year
Ended
December
31,
2022
Ordinary
Income
$
19,545
Long-term
capital
gain
3,093
Return
of
capital
–
Total
Distributions
Paid
$
22,638
Cost
of
investments
for
tax
purposes
$
5
70
,
396
Gross
tax
unrealized
appreciation
$
13,211
Gross
tax
unrealized
depreciation
(3,529)
Net
Tax
Unrealized
Appreciation
$
9,
682
Fundrise
Income
Real
Estate
Fund,
LLC
Notes
to
Financial
Statements
(Unaudited)
June
30,
2023
23
Share
Transactions
Following
the
date
of
this
report,
the
following
repurchase
offers
have
occurred
(all
tabular
amounts
are
in
thousands
except
share
data)
:
Repurchase
Offers
Second
Quarter
Repurchase
Commencement
Date
May
26,
2023
Repurchase
Request
Deadline
June
30,
2023
Repurchase
Pricing
Date
July
3,
2023
Amount
Repurchased
$
23,017
Shares
Repurchased
2,313,301
Fundrise
Income
Real
Estate
Fund,
LLC
Additional
Information
(Unaudited)
June
30,
2023
24
1.
Disclosure
of
Portfolio
Holdings
The
Fund
files
its
complete
schedule
of
portfolio
holdings
with
the
SEC
for
the
first
and
third
quarters
of
each
fiscal
year
as
an
exhibit
to
its
reports
on
Form
N-PORT.
The
Fund’s
Form
N-PORT
reports
will
be
available
without
charge,
upon
request,
by
calling
(202)
584-0550
or
on
the
SEC’s
website
at
http://www.sec.gov.
2.
Proxy
Voting
Policies
and
Procedures
A
description
of
the
policies
and
procedures
that
the
Fund
uses
to
determine
how
to
vote
proxies
relating
to
portfolio
securities
and,
once
available,
information
regarding
how
the
Fund
voted
those
proxies
(if
any)
during
the
year
ended
June
30,
2023,
is
available
(1)
without
charge,
upon
request,
by
calling
(202)
584-0550,
(2)
on
the
Fund’s
website
at
www.fundriseintervalfund.com
and
(3)
on
the
SEC’s
website
at
http://www.sec.gov.
During
the
year
ended
June
30,
2023,
the
Fund
did
not
have
any
investments
that
required
the
Fund
to
vote
proxies,
and
therefore
did
not
vote
any
proxies
during
such
period.
3.
Compensation
of
Directors
The
Fund’s
Statement
of
Additional
Information
includes
additional
information
about
the
Directors
and
is
available
(1)
without
charge,
upon
request,
by
calling
(202)
584-0550,
(2)
on
the
Fund’s
website
at
www.fundriseintervalfund.com
and
(3)
on
the
SEC’s
website
at
http://www.sec.gov.
The
following
table
sets
forth
information
regarding
the
total
compensation
to
be
paid
to
the
Independent
Directors
for
their
services
as
Independent
Directors
for
the
Fund’s
fiscal
year
ended
December
31,
2023.
As
an
Interested
Director,
Mr.
Miller
receives
no
compensation
from
the
Fund
for
his
service
as
a
Director.
No
other
compensation
or
retirement
benefits
are
received
by
any
Director
or
officer
from
the
Fund.
Name
Aggregate
Compensation
from
the
Fund
Aggregate
Compensation
from
the
Fund
and
Fund
Complex
(1)
Paid
to
Directors
Jeffrey
R.
Deitrich
$
37,500
$
120,000
Glenn
R.
Osaka
37,500
120,000
Gayle
P.
Starr
37,500
75,000
Mark
D.
Monte
37,500
75,000
(1)
The
“Fund
Complex”
consists
of
the
Fund,
Fundrise
Growth
Tech
Fund,
LLC,
and
Fundrise
Real
Estate
Interval
Fund,
LLC.
FOR
MORE
INFORMATION
Investment
Adviser
Fundrise
Advisors,
LLC
11
Dupont
Circle
NW,
9th
Floor
Washington,
DC
20036
Fundrise
Income
Real
Estate
Fund,
LLC
11
Dupont
Circle
NW,
9th
Floor
Washington,
DC
20036
(202)
584-0550
This
report
is
submitted
for
the
general
information
of
the
shareholders
of
the
Fund.
It
is
not
authorized
for
distribution
to
prospective
investors
unless
preceded
or
accompanied
by
an
effective
prospectus,
which
includes
information
regarding
the
Fund’s
risks,
objectives,
fees
and
expenses,
experience
of
its
management,
and
other
information.
Item 2. Code of Ethics
Not applicable for semi-annual reporting period.
Item 3. Audit Committee Financial Expert
Not applicable for semi-annual reporting period.
Item 4. Principal Accountant Fees and Services
Not applicable for semi-annual reporting period.
Item 5. Audit Committee of Listed Registrants
Not applicable for semi-annual reporting period.
Item 6. Investments
(a) The schedule of investments is included as part of the report to Shareholders filed under Item 1 of this form.
(b) There were no divestment of securities (as defined by Section 13(c) of the 1940 Act) for this semi-annual reporting period.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies
Not applicable for semi-annual reporting period.
Item 8. Portfolio Managers of Closed-End Management Investment Companies
(a) Not applicable for semi-annual reporting period.
(b) As of August 25, 2023, there have been no changes in portfolio managers since the most recent annual report.
Item 9. Purchase of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers
There were no repurchases of equity securities by the Sponsor or other affiliated purchasers for this semi-annual reporting period.
Item 10. Submission of Matters to a Vote of Security Holders
As of August 25, 2023, there have been no material changes in the procedures by which Shareholders may recommend nominees to the Board of Directors.
Item 11. Controls and Procedures
(a) The Registrant’s principal executive officer and principal financial officer have concluded that the Registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the 1940 Act) are effective as of a date within 90 days of the filing date of this Report, based on the evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as amended.
(b) There were no changes in the Registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, the Registrant’s internal control over financial reporting.
During the period covered by this report, a third-party service provider commenced performing certain accounting and administrative services for the Registrant that are subject to Rise Companies’ oversight.
Item 12. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies
Not applicable.
Item 13. Exhibits
(a)(1) Not applicable.
(a)(2)
A separate certification for each of the Registrant’s Principal Executive Officer and Principal Financial Officer as required by Rule 30a-2(a) under the 1940 Act (17 CFR 270.30a-2(a)) and Section 302 of the Sarbanes-Oxley Act of 2002 is filed herewith.
(b)
Certifications pursuant to Rule 30a-2(b) under the 1940 Act and Section 906 of the Sarbanes-Oxley Act of 2002 are filed herewith.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.
Fundrise Income Real Estate Fund, LLC
By: | /s/ Benjamin S. Miller | |
Name: Benjamin S. Miller | ||
Title: President | ||
Date: | August 25, 2023 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
By: | /s/ Benjamin S. Miller | |
Name: Benjamin S. Miller | ||
Title: President | ||
Date: | August 25, 2023 |
By: | /s/ Alison A. Staloch | |
Name: Alison A. Staloch | ||
Title: Treasurer and Principal Financial/Accounting Officer | ||
Date: | August 25, 2023 |