Filed Pursuant to Rule 424(b)(3)
Registration No. 333-265588
J.P. MORGAN REAL ESTATE INCOME TRUST, INC.
SUPPLEMENT NO. 8 DATED OCTOBER 16, 2023
TO THE PROSPECTUS DATED APRIL 13, 2023
This prospectus supplement (the “Supplement”) is part of and should be read in conjunction with the prospectus of J.P. Morgan Real Estate Income Trust, Inc., dated April 13, 2023 (the “Prospectus”). Unless otherwise defined herein, capitalized terms used in this Supplement shall have the same meanings as in the Prospectus.
The purposes of this Supplement are as follows:
• | to disclose the transaction price for each class of our common stock as of November 1, 2023; |
• | to disclose the calculation of our September 30, 2023 net asset value (“NAV”) per share for each class of our common stock; |
• | to provide an update on the status of our offering; |
• | to update the “Experts” section of the Prospectus; and |
• | to update certain disclosures in the Prospectus. |
November 1, 2023 Transaction Price
The transaction price for each share class of our common stock sold in this offering for subscriptions accepted as of November 1, 2023 (and repurchases as of October 31, 2023) is as follows:
|
| Transaction Price |
| |
Class D | $ | 10.48 |
| |
Class I | $ | 10.53 |
| |
Class S | $ | 10.90 |
| |
Class T | $ | 10.93 |
| |
As of September 30, 2023, we had not sold any Class T shares. As a result, the transaction price for our Class T shares is equal to the NAV per share for our Class E shares as of September 30, 2023. Class E shares are not sold as a part of this offering. The purchase price of our common stock for each share class equals the transaction price of such class, plus applicable upfront selling commissions and dealer manager fees. The repurchase price for each share class equals the transaction price of such class.
September 30, 2023 NAV Per Share
We calculate NAV per share in accordance with the valuation guidelines that have been approved by our board of directors. Our NAV per share, which is updated as of the last calendar day of each month, is posted on our website at www.jpmreit.com. Please refer to “Net Asset Value Calculation and Valuation Guidelines” in the Prospectus for how our NAV is determined. The Adviser is ultimately responsible for determining our NAV.
The following table provides a breakdown of the major components of our NAV as of September 30, 2023 ($ and shares in thousands):
Components of NAV |
| September 30, 2023 |
| |
Investments in real estate |
| $ | 290,185 |
|
Investment in real estate debt |
|
| 16,825 |
|
Investments in real estate-related and other securities |
|
| 2,163 |
|
Cash and cash equivalents |
|
| 23,601 |
|
Restricted cash |
|
| 197 |
|
Other assets |
|
| 457 |
|
Debt obligations |
|
| (112,995 | ) |
Other liabilities |
|
| (4,014 | ) |
Accrued performance participation allocation |
|
| (212 | ) |
Stockholder servicing fees payable the following month(1) |
|
| — |
|
Non-controlling interests in joint ventures |
|
| (7,898 | ) |
Mandatorily redeemable instruments(2) |
|
| (97,079 | ) |
Net Asset Value |
| $ | 111,230 |
|
Number of outstanding shares of common stock |
|
| 10,351 |
|
(1) | Stockholder servicing fees only apply to Class T, Class S and Class D shares. For purposes of NAV, we recognize the stockholder servicing fee as a reduction of NAV on a monthly basis as such fee is paid. Under accounting principles generally accepted in the United States of America (“GAAP”), we accrue the full cost of the stockholder servicing fee as an offering cost at the time we sell Class T, Class S and Class D shares. As of September 30, 2023, we had accrued under GAAP stockholder servicing fees of $0.04 million. |
(2) | Represents Class E units in the Operating Partnership and Class E shares (collectively the “Mandatorily Redeemable Instruments”) held by J.P. Morgan Investment Management Inc. (the “Adviser” or “JPMIM”) that are mandatorily redeemable and only subject to delays to the continuous obligation to ultimately redeem such shares once sufficient availability exists under the share repurchase agreements. Therefore, the Mandatorily Redeemable Instruments held by JPMIM are classified as a liability pursuant to ASC 480 Distinguishing Liabilities From Equity and is initially presented at the initial funding amount received, which is equivalent to fair value at the issuance dates. Subsequently, the Mandatorily Redeemable Instruments are carried at their cash redemption value as if the units and shares were repurchased or redeemable at the reporting date, which equals NAV per unit of $10.93. As of September 30, 2023 there were approximately 8.5 million Class E units and approximately 0.4 million Class E shares included in Mandatorily Redeemable Instruments. |
The following table provides a breakdown of our total NAV and NAV per share of common stock by share class as of September 30, 2023 ($ and shares in thousands, except per share data):
NAV Per Share |
| Class D |
|
| Class I |
|
| Class S |
|
| Class T |
|
| Class E |
|
| Total |
| ||||||
Net asset value attributable to common stockholders |
| $ | 3,392 |
|
| $ | 45,634 |
|
| $ | 587 |
|
| $ | - |
|
| $ | 61,617 |
|
| $ | 111,230 |
|
Number of outstanding shares |
|
| 324 |
|
|
| 4,334 |
|
|
| 54 |
|
|
| - |
|
|
| 5,640 |
|
|
| 10,351 |
|
NAV per share |
| $ | 10.48 |
|
| $ | 10.53 |
|
| $ | 10.90 |
|
| $ | - |
|
| $ | 10.93 |
|
|
|
| |
Set forth below are the weighted averages of the key assumptions in the discounted cash flow methodology used in the September 30, 2023 valuations, based on property types.
Property Type |
| Discount Rate |
|
| Exit Capitalization Rate |
| ||
Multifamily |
|
| 6.56 | % |
|
| 5.13 | % |
Industrial |
|
| 7.25 | % |
|
| 5.55 | % |
2
These assumptions are determined by our independent valuation advisor and reviewed by the Adviser. A change in these assumptions would impact the calculation of the value of our property investments. For example, assuming all other factors remain unchanged, the changes listed below would result in the following effects on our investment values:
Input |
| Hypothetical Change |
| Industrial Investment Values |
|
| Multifamily Investment Values |
| ||
Discount Rate |
| 0.25% decrease |
|
| 1.90 | % |
|
| 2.05 | % |
(weighted average) |
| 0.25% increase |
|
| (2.01 | )% |
|
| (1.89 | )% |
Exit Capitalization Rate |
| 0.25% decrease |
|
| 3.07 | % |
|
| 3.22 | % |
(weighted average) |
| 0.25% increase |
|
| (2.75 | )% |
|
| (2.97 | )% |
Status of our Current Public Offering
Our public offering was declared effective by the SEC on July 22, 2022, and we are currently offering on a continuous basis up to $5.0 billion in shares of our common stock, consisting of up to $4.0 billion in shares in our primary offering and up to $1.0 billion in shares pursuant to our distribution reinvestment plan. As of the date hereof, we have issued and sold 375,772 Class D, 4,021,430 Class I and 53,776 Class S shares in the primary offering for total proceeds of approximately $46.1 million. We have issued 3,318 Class D, 23,829 Class I and 287 Class S shares for a total value of approximately $287,000 pursuant to our distribution reinvestment plan. As of the date hereof, we have not sold any Class T shares in this offering. We intend to continue selling shares in the public offering on a monthly basis.
Experts
The following disclosure is added to the “Experts” section of the Prospectus.
The amounts of the estimated market values of our investments in real estate as of September 30, 2023 presented on page 2 of this Supplement under the section “September 30, 2023 NAV Per Share” have been prepared by SitusAMC Real Estate Valuation Services, LLC, an independent valuation firm, and are included in this Supplement given the authority of such firm as experts in property valuations and appraisals. SitusAMC Real Estate Valuation Services, LLC will not calculate or be responsible for our NAV per share for any class of our shares.
Prospectus Updates
All disclosures in the Prospectus related to the source of distributions, including on pages 12, 17 and 19, are revised with the following disclosure.
Distributions are not guaranteed and may be funded from sources other than cash flow from operations, including, without limitation, the sale of or repayments under our assets, borrowings, return of capital, offering proceeds and advances or the deferral of fees and expense reimbursements, and we have no limits on the amounts we may pay from such sources.
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