Commercial Real Estate

Some of the risks related to investing in commercial real estate include, but are not limited to: market risks such as local property supply and demand conditions; tenants’ inability to pay rent; tenant turnover; economic matters such as inflation and interest rate fluctuations; increases in operating costs; changes in laws and regulations; relative illiquidity of real estate investments; changing market demographics; acts of God such as earthquakes, tornadoes or floods; and availability of financing.

REIT

Some of the risks specifically related to investing in a nonlisted real estate investment trust (REIT) include, but are not limited to:

• The board of directors, rather than the trading market, determines the offering price of shares; there is limited liquidity because shares are not bought and sold on an exchange; repurchase programs may be modified or terminated; a typical time horizon for an exit strategy may be longer than five years; and there is no guarantee that a liquidity event will occur.
• Distributions cannot be guaranteed and may be paid from sources other than cash flow from operations, including borrowings and net offering proceeds. Payments of distributions from sources other than cash flow from operations may reduce the amount of capital a REIT ultimately invests in real estate assets and a stockholder’s overall return may be reduced.
• Failure to qualify as a REIT and thus being required to pay federal, state and local taxes, which may reduce the amount of cash available for distributions.
• Principal and interest payments on borrowings will reduce the funds available for other purposes, such as distributions to stockholders. In addition, rates on floating rate loans can adjust to higher levels, and there is a potential for default on loans.
• Conflicts of interest with, and payments of significant fees to, a business manager, real estate manager or other affiliates.
• Tax implications are different for each stockholder. Stockholders should consult a tax advisor.

Private Placement

Investments in offerings sponsored by Inland Private Capital Corporation (IPCC) involve certain risks including but not limited to: tax risks; general real estate risks; risks relating to the financing on the applicable property (if any); risks relating to the ownership and management of the property; risks relating to private offerings and the lack of liquidity; and risks relating to the Delaware statutory trust structure. In addition, IPCC can give no assurance that IPCC-sponsored programs will be able to pay or maintain distributions, or that distributions will increase over time.