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. T

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2025


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______ to ______

Commission File Number: 333-265588

J.P. Morgan Real Estate Income Trust, Inc.

(Exact Name of Registrant as Specified in its Charter)


Maryland	87-3439916
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
277 Park Avenue 9th Floor New York, New York	10172
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (212) 270-6000

Securities registered pursuant to Section 12(b) of the Act:

     Title of each class

     Trading
Symbol(s)

     Name of each exchange on which registered

     None

     N/A

     N/A

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of November 12, 2025, the registrant had outstanding 1,008,673 shares of Class D common stock, 13,787,519 shares of Class I common stock, 55,336,188 shares of Class E common stock and 8,424,361 shares of Class Y common stock. There were no outstanding shares of Class S, Class T or Class X common stock.

Table of Contents


		Page

PART I.	FINANCIAL INFORMATION	2

Item 1.	Financial Statements (Unaudited)
	Condensed Consolidated Balance Sheets as of September 30, 2025 and December 31, 2024	2
	Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2025 and 2024	3
	Condensed Consolidated Statements of Changes in Equity for the three and nine months ended September 30, 2025 and 2024	4
	Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2025 and 2024	6
	Notes to Unaudited Condensed Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	32
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	49
Item 4.	Controls and Procedures	49

PART II.	OTHER INFORMATION	51

Item 1.	Legal Proceedings	51
Item 1A.	Risk Factors	51
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	51
Item 3.	Defaults Upon Senior Securities	52
Item 4.	Mine Safety Disclosures	52
Item 5.	Other Information	52
Item 6.	Exhibits	54
	Signatures	55

Item 1. Financial Statements.

J.P. Morgan Real Estate Income Trust, Inc.

Condensed Consolidated Balance Sheets (Unaudited) (in thousands, except per-share data)


	September 30,			December 31,
	2025			2024
ASSETS
Investments in real estate, net	$	1,042,611		$	365,070
Investments in real estate debt		134,925			79,310
Investments in real estate-related and other securities		15,295			6,417
Intangible assets, net		51,317			20,307
Cash and cash equivalents		18,897			127,692
Restricted cash		3,628			700
Deposits on real estate		—			1,000
Other assets, net		21,386			3,500
Total assets	$	1,288,059		$	603,996
LIABILITIES AND EQUITY
Mortgage notes, net	$	266,586		$	123,091
Repurchase facility, net		88,166			46,383
Unsecured revolving credit facility		45,175			—
Intangible liabilities, net		5,850			2,797
Mandatorily redeemable instruments		83,803			105,325
Due to affiliates		27,017			20,474
Accounts payable, accrued expenses and other liabilities		27,587			5,357
Total liabilities		544,184			303,427

Commitments and contingencies (Note 17)
Redeemable non-controlling interest		841			—

Equity
Common stock – Class D shares, $0.01 par value per share, 600,000 shares authorized, and 1,017 and 993 issued and outstanding as of September 30, 2025 and December 31, 2024, respectively		10			10
Common stock – Class I shares, $0.01 par value per share, 1,500,000 shares authorized, and 13,250 and 10,146 issued and outstanding as of September 30, 2025 and December 31, 2024, respectively		133			101
Common stock – Class S shares, $0.01 par value per share, 1,000,000 shares authorized, and 0 and 56 issued and outstanding as of September 30, 2025 and December 31, 2024, respectively		—			1
Common stock – Class E shares, $0.01 par value per share, 600,000 shares authorized, and 52,734 and 18,566 issued and outstanding as of September 30, 2025 and December 31, 2024, respectively		527			186
Common stock – Class Y shares, $0.01 par value per share, 600,000 shares authorized, and 7,123 and 2,131 issued and outstanding as of September 30, 2025 and December 31, 2024, respectively		71			21
Additional paid-in capital		788,205			329,600
Accumulated deficit		(59,687	)		(33,780	)
Total stockholders' equity		729,259			296,139
Non-controlling interests in consolidated joint ventures		13,775			4,430
Total equity		743,034			300,569
Total liabilities and equity	$	1,288,059		$	603,996

The accompanying notes are an integral part of these condensed consolidated financial statements.

J.P. Morgan Real Estate Income Trust, Inc.

Condensed Consolidated Statements of Operations (Unaudited)

(in thousands, except per-share data)


	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2025			2024			2025			2024
Revenues
Rental revenue	$	22,556		$	6,853		$	44,061		$	17,803
Total revenues		22,556			6,853			44,061			17,803
Expenses
Rental property operating		7,435			3,319			14,904			7,251
General and administrative		2,412			1,344			5,610			3,583
Depreciation and amortization		14,363			2,780			26,053			7,078
Total expenses		24,210			7,443			46,567			17,912
Other income (expense), net
Income from investments in real estate debt		2,412			1,524			5,974			2,415
Income from investments in real estate-related and other securities		306			7			2,440			18
Mandatorily redeemable instruments interest costs		(2,045	)		(2,268	)		(4,783	)		(5,836	)
Interest expense		(5,567	)		(2,123	)		(11,047	)		(5,510	)
Other (expense) income, net		(148	)		768			4,825			1,118
Total other expense, net		(5,042	)		(2,092	)		(2,591	)		(7,795	)
Net loss	$	(6,696	)	$	(2,682	)	$	(5,097	)	$	(7,904	)
Net loss attributable to non-controlling interests in consolidated joint ventures		(277	)		(29	)		(390	)		(46	)
Net loss attributable to JPMREIT stockholders	$	(6,419	)	$	(2,653	)	$	(4,707	)	$	(7,858	)
Net loss per share of common stock – basic and diluted	$	(0.09	)	$	(0.14	)	$	(0.07	)	$	(0.48	)
Weighted-average shares of common stock outstanding – basic and diluted		72,503			18,655			62,968			16,448

The accompanying notes are an integral part of these condensed consolidated financial statements.

J.P. Morgan Real Estate Income Trust, Inc.

Condensed Consolidated Statements of Changes in Equity (Unaudited)

(in thousands, except per-share data)


	Par Value
	Common Stock Class D			Common Stock Class I			Common Stock Class S		Common Stock Class E			Common Stock Class Y		Additional Paid-In Capital			Accumulated Deficit			Total Stockholders' Equity			Non-Controlling Interests			Total Equity
Balance at June 30, 2025	$	11		$	128		$	—	$	498		$	55	$	735,421		$	(45,051	)	$	691,062		$	10,916		$	701,978
Common stock issued, net of offering costs		—			7			—		27			16		53,472			—			53,522			—			53,522
Common stock repurchased		(1	)		(3	)		—		(1	)		—		(4,811	)		—			(4,816	)		—			(4,816	)
Distributions declared on common stock		—			—			—		—			—		—			(8,217	)		(8,217	)		—			(8,217	)
Distribution reinvestments		—			1			—		3			—		4,129			—			4,133			—			4,133
Net loss ($8 loss allocated to redeemable non-controlling interest)		—			—			—		—			—		—			(6,419	)		(6,419	)		(269	)		(6,688	)
Contributions from non-controlling interests		—			—			—		—			—		—			—			—			3,359			3,359
Distributions to non-controlling interests		—			—			—		—			—		—			—			—			(231	)		(231	)
Amortization of restricted stock grants		—			—			—		—			—		20			—			20			—			20
Allocation to redeemable non-controlling interest		—			—			—		—			—		(26	)		—			(26	)		—			(26	)
Balance at September 30, 2025	$	10		$	133		$	—	$	527		$	71	$	788,205		$	(59,687	)	$	729,259		$	13,775		$	743,034


	Par Value
	Common Stock Class D		Common Stock Class I			Common Stock Class S		Common Stock Class E		Common Stock Class Y		Additional Paid-In Capital			Accumulated Deficit			Total Stockholders' Equity			Non-Controlling Interests			Total Equity
Balance at June 30, 2024	$	8	$	77		$	1	$	79	$	9	$	174,027		$	(24,314	)	$	149,887		$	4,513		$	154,400
Common stock issued, net of offering costs		1		13			—		4		4		21,874			—			21,896			—			21,896
Common stock repurchased		—		(1	)		—		—		—		(961	)		—			(962	)		—			(962	)
Distributions declared on common stock		—		—			—		—		—		—			(2,078	)		(2,078	)		—			(2,078	)
Distribution reinvestments		—		—			—		—		—		755			—			755			—			755
Net loss		—		—			—		—		—		—			(2,653	)		(2,653	)		(29	)		(2,682	)
Contributions from non-controlling interests		—		—			—		—		—		—			—			—
Distributions to non-controlling interests		—		—			—		—		—		—			—			—			(27	)		(27	)
Amortization of restricted stock grants		—		—			—		—		—		25			—			25			—			25
Balance at September 30, 2024	$	9	$	89		$	1	$	83	$	13	$	195,720		$	(29,045	)	$	166,870		$	4,457		$	171,327

The accompanying notes are an integral part of these condensed consolidated financial statements.

J.P. Morgan Real Estate Income Trust, Inc.

Condensed Consolidated Statements of Changes in Equity (Unaudited)

(in thousands, except per-share data)


	Par Value
	Common Stock Class D			Common Stock Class I			Common Stock Class S			Common Stock Class E			Common Stock Class Y		Additional Paid-In Capital			Accumulated Deficit			Total Stockholders' Equity			Non-Controlling Interests			Total Equity
Balance at December 31, 2024	$	10		$	101		$	1		$	186		$	21	$	329,600		$	(33,780	)	$	296,139		$	4,430		$	300,569
Common stock issued, net of offering costs		1			34			—			336			50		456,903			—			457,324			—			457,324
Common stock repurchased		(1	)		(5	)		(1	)		(1	)		—		(7,807	)		—			(7,815	)		—			(7,815	)
Distributions declared on common stock		—			—			—			—			—		—			(21,200	)		(21,200	)		—			(21,200	)
Distribution reinvestments		—			3			—			6			—		9,477			—			9,486			—			9,486
Net loss ($6 loss allocated to redeemable non-controlling interest)		—			—			—			—			—		—			(4,707	)		(4,707	)		(384	)		(5,091	)
Contributions from non-controlling interests		—			—			—			—			—		—			—			—			12,241			12,241
Distributions to non-controlling interests		—			—			—			—			—		—			—			—			(2,512	)		(2,512	)
Amortization of restricted stock grants		—			—			—			—			—		70			—			70			—			70
Allocation to redeemable non-controlling interest		—			—			—			—			—		(38	)		—			(38	)		—			(38	)
Balance at September 30, 2025	$	10		$	133		$	—		$	527		$	71	$	788,205		$	(59,687	)	$	729,259		$	13,775		$	743,034


	Par Value
	Common Stock Class D		Common Stock Class I			Common Stock Class S		Common Stock Class E		Common Stock Class Y		Additional Paid-In Capital			Accumulated Deficit			Total Stockholders' Equity			Non-Controlling Interests			Total Equity
Balance at December 31, 2023	$	5	$	54		$	1	$	64	$	—	$	122,915		$	(15,679	)	$	107,360		$	2,107		$	109,467
Common stock issued, net of offering costs		4		35			—		19		13		72,172			—			72,243			—			72,243
Common stock repurchased		—		(1	)		—		—		—		(1,191	)		—			(1,192	)					(1,192	)
Distributions declared on common stock		—		—			—		—		—		—			(5,508	)		(5,508	)		—			(5,508	)
Distribution reinvestments		—		1			—		—		—		1,749			—			1,750			—			1,750
Net loss		—		—			—		—		—		—			(7,858	)		(7,858	)		(46	)		(7,904	)
Contributions from non-controlling interests		—		—			—		—		—		—			—			—			2,432			2,432
Distributions to non-controlling interests		—		—			—		—		—		—			—			—			(36	)		(36	)
Amortization of restricted stock grants		—		—			—		—		—		75			—			75			—			75
Balance at September 30, 2024	$	9	$	89		$	1	$	83	$	13	$	195,720		$	(29,045	)	$	166,870		$	4,457		$	171,327

The accompanying notes are an integral part of these condensed consolidated financial statements.

J.P. Morgan Real Estate Income Trust, Inc.

Condensed Consolidated Statements of Cash Flows (Unaudited) (in thousands)


	For the Nine Months Ended September 30,
	2025			2024
Cash flows from operating activities:
Net loss	$	(5,097	)	$	(7,904	)

Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		26,051			7,078
Amortization of above- and below-market lease intangibles, net		(1,345	)		91
Amortization of deferred financing costs		911			274
Amortization of discount on real estate-related and other securities		(193	)		—
Amortization of restricted stock grants		70			75
Realized gain on financial instruments		(559	)		(391	)
Unrealized loss on financial instruments		547			909
Redemption value adjustment on mandatorily redeemable instruments		1,689			2,613
Change in assets and liabilities:
(Increase) decrease in other assets		(3,333	)		(1,511	)
Increase in due to affiliates		4,673			2,669
Increase in accounts payable, accrued expenses and other liabilities		4,626			446
Net cash provided by operating activities		28,040			4,349

Cash flows from investing activities:
Acquisitions of real estate		(674,371	)		(69,652	)
Capital improvements on real estate		(8,814	)		(1,021	)
Origination of investments in real estate debt		(55,700	)		(62,400	)
Deposits on real estate acquisitions		(4,691	)		—
Variation margin proceeds		188			23
Proceeds from real estate-related and other securities		55,041			840
Purchases of real-estate related and other securities		(63,064	)		(885	)
Net cash used in investing activities		(751,411	)		(133,095	)

Cash flows from financing activities:
Proceeds from issuance of common stock		459,854			73,952
Repurchase of common stock		(7,316	)		(503	)
Repurchase of mandatorily redeemable instruments		(16,386	)		—
Borrowings under unsecured revolving credit facility		45,175			—
Contributions from non-controlling interests		6,643			10
Distributions paid on common stock		(10,002	)		(3,504	)
Distributions to non-controlling interests		(429	)		(36	)
Proceeds from mortgage notes		104,210			10,000
Proceeds from repurchase facility		41,775			46,800
Principal repayments of mortgage notes		(585	)		(379	)
Payment of deferred financing costs		(5,435	)		(185	)
Net cash provided by financing activities		617,504			126,155

Net change in cash, cash equivalents and restricted cash:		(105,867	)		(2,591	)
Cash, cash equivalents and restricted cash, at the beginning of the period		128,392			32,683
Cash, cash equivalents and restricted cash, at the end of the period	$	22,525		$	30,092

J.P. Morgan Real Estate Income Trust, Inc.

Condensed Consolidated Statements of Cash Flows (Unaudited) (in thousands)


	For the Nine Months Ended September 30,
	2025		2024
Reconciliation of cash, cash equivalents and restricted cash to the Condensed Consolidated Balance Sheets:
Cash and cash equivalents	$	18,897	$	29,425
Restricted cash		3,628		667
Total cash, cash equivalents and restricted cash	$	22,525	$	30,092

Supplemental disclosure of cash flow information:
Cash paid for interest	$	9,290	$	4,854

Supplemental disclosure of non-cash investing and financing activities:
Assumption of mortgage note, net, in conjunction with acquisition of real estate	$	41,787	$	—
Assumption of working capital in conjunction with acquisition of real estate	$	4,837	$	108
Accrued loan and offering costs due to affiliate	$	—	$	1,391
Accrued distributions	$	1,713	$	253
Distribution re-investments	$	9,486	$	1,751
Reclassification of deposits to investments in real estate, net	$	5,729	$	9,072
Accrued stockholder servicing fee due to affiliate	$	3,692	$	933
Non-controlling interest contributions to investment in real estate, net	$	3,514	$	2,422
Accrued redemptions	$	7,324	$	689
Redeemable non-controlling interest issued as settlement for performance participation allocation	$	810	$	—
Sale of equity interest to non-controlling interest	$	2,083	$	—
Accrued deferred financing costs	$	603	$	—

The accompanying notes are an integral part of these condensed consolidated financial statements.

J.P. Morgan Real Estate Income Trust, Inc.

Condensed Notes to Consolidated Financial Statements (Unaudited)

September 30, 2025

1. Organization and Business Purpose

J.P. Morgan Real Estate Income Trust, Inc. (the “Company” or “JPMREIT”) was formed on November 5, 2021 as a Maryland corporation and qualifies as a real estate investment trust (“REIT”) for U.S. federal income tax purposes. The Company invests primarily in stabilized, income-generating real estate properties, and to a lesser extent, real estate debt, real estate-related securities and other securities. The Company is the sole general partner of J.P. Morgan REIT Operating Partnership, L.P., a Delaware limited partnership (“Operating Partnership”). J.P. Morgan REIT OP Special Limited Partner, L.P. (the “Special Limited Partner”), an affiliate of J.P. Morgan Investment Management Inc. (the “Adviser” or “JPMIM” and together with its affiliates “J.P. Morgan”), owns a special limited partner interest in the Operating Partnership. Substantially all of the Company’s business is conducted through the Operating Partnership. The Company and the Operating Partnership are externally managed by JPMIM.

As of September 30, 2025, the Company owned 57 real estate properties consisting of 39 industrial properties, 15 multifamily properties, two retail properties and 126 single-family townhomes that are included as a single property. The Company also has three commercial mortgage-backed securities (“CMBS”) investments and three real estate debt investments. The Company currently operates in five reportable segments: multifamily, industrial, single-family rental, retail, and investments in real estate debt, real estate-related and other securities. See Note 15 for a description of the Company's segment reporting.

The Company depends on the Adviser and its affiliates for certain services that are essential to it, including acquisition and disposition decisions, and certain other responsibilities. If the Adviser and its affiliates were unable or unwilling to provide such services, the Company would be required to find alternative service providers.

2. Capitalization

On November 15, 2021, the Company was capitalized with a $0.2 million investment by the Adviser in exchange for 20,000 shares of the Company’s Class E common stock. The Adviser has agreed to not sell, transfer or dispose of the shares to any party other than an affiliate of the Adviser for so long as the Adviser or its affiliate performs an advisory function for the Company.

On July 22, 2022, the Company commenced its initial public offering of up to $5.0 billion in shares of common stock pursuant to a Registration Statement on Form S-11 filed with the Securities and Exchange Commission (the “SEC”), consisting of up to $4.0 billion in shares in its primary offering and up to $1.0 billion in shares pursuant to its distribution reinvestment plan, pursuant to which the Company is selling any combination of four classes of shares of its common stock, Class D shares, Class I shares, Class S shares and Class T shares, with a dollar value up to the maximum offering amount (the “Offering”, and together with the Company’s private offerings described below, the “Offerings”). The share classes have different upfront selling commissions and ongoing stockholder servicing fees. The purchase price per share for each class of the Company’s common stock will vary and will generally equal the prior month’s net asset value (“NAV”) per share for such class, as determined monthly, plus any applicable upfront selling commissions and dealer manager fees, provided that until the Company has any Class S or Class T shares outstanding, the per-share purchase price for the Company’s Class S and Class T shares will equal the most recently determined NAV per share for the Class E shares, plus, applicable upfront selling commissions and dealer manager fees.

On July 8, 2025, the Company filed a Registration Statement on Form S-11 for its second public offering of up to $4.8 billion in shares of common stock, consisting of up to $3.8 billion in shares of common stock in the primary offering and up to $1.0 billion in shares of common stock pursuant to the distribution reinvestment plan, which has not yet been declared effective.

Pursuant to a separate private offering whose commitments have been fully called, as of September 30, 2025, the Company had sold $67.9 million in Class E shares and $94.2 million in Class E units of the Operating Partnership (“Class E units”), including $5.8 million in Class E shares and $94.2 million in Class E units purchased by JPMIM (the “JPM Initial Capitalization” and together with other Class E shares sold pursuant to such private offering, the “Initial Capitalization”). See Note 13 for further details.

3. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements include the accounts of the Company, and in the opinion of management, include all necessary adjustments, consisting of only normal and recurring items, necessary for a fair statement of the Company’s financial position and results of operations for the interim period. These financial statements have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and the applicable rules and regulations of the SEC. The accompanying unaudited condensed consolidated interim financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC on March 18, 2025.

Certain amounts on the Company’s Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2024 have been reclassified to conform to the current period presentation. Such reclassification has no effect on previously reported totals or subtotals on the Condensed Consolidated Statements of Cash Flows.

All intercompany balances and transactions have been eliminated in consolidation. The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the balance sheet. Actual results could differ from those estimates.

There is no other comprehensive income (loss) for the three and nine months ended September 30, 2025 and 2024, resulting in comprehensive income (loss) equaling net income (loss). Accordingly, the statement of other comprehensive income (loss) is not presented.

Principles of Consolidation

The accompanying condensed consolidated financial statements include the accounts of the Company and the Company’s subsidiaries in which the Company has a controlling interest. For consolidated joint ventures, the non-controlling partner’s share of the assets, liabilities and operations of the joint ventures is included in non-controlling interests on the Company's Condensed Consolidated Balance Sheets and Condensed Consolidated Statements of Operations. The non-controlling partner’s interest is generally computed as the joint venture partner’s ownership percentage.

In determining whether the Company has a controlling financial interest in a partially owned entity and the requirement to consolidate the accounts of that entity, the Company considers whether the entity is a variable interest entity (“VIE”) and whether it is the primary beneficiary. The Company is the primary beneficiary of a VIE when it has (i) the power to direct the most significant activities impacting the economic performance of the VIE and (ii) the obligation to absorb losses or receive benefits significant to the VIE. Entities that do not qualify as VIEs are generally considered voting interest entities (“VOEs”) and are evaluated for consolidation under the voting interest model. VOEs are consolidated when the Company controls the entity through a majority voting interest or other means. When the requirements for consolidation are not met and the Company has significant influence over the operations of the entity, the investment is accounted for under the equity method of accounting. Equity method investments for which the Company has not elected a fair value option (“FVO”) are initially recorded at cost and subsequently adjusted for the Company’s pro rata share of net income, contributions and distributions. When the Company elects the FVO, the Company records its share of net asset value of the entity and any related unrealized gains and losses.

The Operating Partnership is considered to be a VIE. The Company consolidates the Operating Partnership because it has the ability to direct the most significant activities of the entities such as purchases, dispositions, financings, budgets, and overall operating plans.

Each of the Company’s joint ventures is considered to be a VIE. The Company consolidated these entities because it has the ability to direct the most significant activities of the joint venture. The total assets and liabilities of the Company’s consolidated VIEs were $368.6 million and $194.5 million and $178.2 million and $89.1 million as of September 30, 2025 and December 31, 2024, respectively. Such amounts are included on the Company’s Condensed Consolidated Balance Sheets.

Investments in Real Estate

The Company determines whether the acquisition of a property qualifies as a business combination, which requires that the assets acquired and liabilities assumed constitute a business. If the property acquired is not a business, the Company accounts for the transaction as an asset acquisition. All property acquisitions have been accounted for as asset acquisitions.

Whether the acquisition of a property is considered a business combination or asset acquisition, the Company recognizes the identifiable tangible and intangible assets acquired, the liabilities assumed, and any non-controlling interest in the acquired entity. In addition, for transactions that are business combinations, the Company evaluates the existence of goodwill or a gain from a bargain purchase. The Company expenses acquisition-related costs associated with business combinations as they are incurred and capitalizes acquisition-related costs associated with asset acquisitions.

Upon the acquisition of a property deemed to be an asset acquisition, the Company assesses the fair value of acquired tangible and intangible assets (including land, buildings, tenant improvements, above-market and below-market leases, acquired in-place leases, other identified intangible assets and assumed liabilities) and allocates the purchase price to the acquired assets and assumed liabilities. The Company assesses and considers fair value based on estimated cash flow projections that utilize discount and/or capitalization rates that it deems appropriate, as well as other available market information. Estimates of future cash flows are based on a number of factors including the historical operating results, known and anticipated trends and market and economic conditions.

The fair value of the tangible assets of an acquired property considers the value of the property as if it were vacant. The Company also considers an allocation of purchase price of other acquired intangibles, including acquired in-place leases that may have a customer relationship intangible value, including, but not limited to, the nature and extent of the existing relationship with the tenants, the tenants’ credit quality and expectations of lease renewals.

The cost of buildings and improvements includes the purchase price of the Company’s properties and any acquisition-related costs, along with any subsequent capitalized improvements to such properties.

The Company’s investments in real estate are stated at cost and are generally depreciated on a straight-line basis over the estimated useful lives of the assets as follows:


Description		Depreciable Life
Buildings		15-40 years
Site improvements - buildings and land		2-20 years
Furniture, fixtures and equipment		5-15 years
Lease intangibles		Over lease term

Repairs and maintenance are expensed to operations as incurred and are included in property operating expenses on the Company’s Condensed Consolidated Statements of Operations. Significant improvements to properties are capitalized. When assets are sold or retired, their costs and related accumulated depreciation are removed from the accounts with the resulting gains or losses reflected in net income or loss for the period.

The Company records acquired above-market and below-market leases at their fair values (using a discount rate which reflects the risks associated with the leases acquired). In the case of an above-market lease, the excess payment (the difference between (1) the contractual amounts to be received pursuant to the lease and (2) management’s estimate of fair-market lease rates for the lease, measured over a period equal to the remaining term of the lease) is recorded as an asset on the Company’s Condensed Consolidated Balance Sheets. In the case of a below-market lease, the difference between (1) the contractual amounts to be received pursuant to the lease and (2) management’s estimate of fair-market lease rates for the lease, measured over a period equal to the initial term plus the term of any below-market fixed-rate renewal options is recorded as a liability on the Company’s Condensed Consolidated Balance Sheets. Other intangible assets acquired include amounts for in-place lease values that are based on the Company’s evaluation of the specific characteristics of each tenant’s lease. Factors to be considered include estimates of carrying costs during hypothetical expected lease-up periods considering current market conditions, and costs to execute similar leases. In estimating carrying costs, the Company includes real estate taxes, insurance and other operating expenses and estimates of lost rentals at market rates during the expected lease-up periods, depending on local market conditions.

In estimating costs to execute similar leases, the Company considers leasing commissions, legal and other related expenses. The amortization of acquired above-market and below-market leases is recorded as an adjustment to rental revenue on the Company’s Condensed Consolidated Statements of Operations. The amortization of in-place leases is recorded as an adjustment to depreciation and amortization expense on the Company’s Condensed Consolidated Statements of Operations.

The Company’s management reviews the Company’s real estate properties for impairment each quarter or when there is an event or change in circumstances that indicates an impaired value. Since cash flows on real estate properties considered to be "long-lived assets to be held and used" are considered on an undiscounted basis to determine whether an asset has been impaired, the Company’s strategy of holding properties over the long term decreases the likelihood of recording an impairment loss. If the Company’s strategy changes or market conditions otherwise dictate an earlier sale date, an impairment loss may be recognized and such loss could be material to the Company’s results. If the Company determines that an impairment has occurred, the affected assets must be reduced to their estimated fair value. During the three and nine months ended September 30, 2025 and 2024, no such impairments occurred.

Fair Value Measurements

Under normal market conditions, the fair value of an investment is the amount that would be received to sell an asset or transfer a liability in an orderly transaction between market participants at the measurement date (i.e., the exit price). Additionally, there is a hierarchical framework that prioritizes and ranks the level of market price observability used in measuring investments at fair value. Market price observability is impacted by a number of factors, including the type of investment and the characteristics specific to the investment and the state of the marketplace, including the existence and transparency of transactions between market participants. Investments with readily available active quoted prices or for which fair value can be measured from actively quoted prices generally will have a higher degree of market price observability and a lesser degree of judgment used in measuring fair value. Investments measured and reported at fair value are classified and disclosed in one of the following levels within the fair value hierarchy:

•

Level 1 — quoted prices are available in active markets for identical investments as of the measurement date. The Company does not adjust the quoted price for these investments.

•

Level 2 — quoted prices are available in markets that are not active, or model inputs are based on inputs that are either directly or indirectly observable as of the measurement date.

•

Level 3 — pricing inputs are unobservable and include instances where there is minimal, if any, market activity for the investment.

These inputs require significant judgment or estimation by management or third parties when determining fair value and generally represent anything that does not meet the criteria of Levels 1 and 2. Due to the inherent uncertainty of these estimates, these values may differ materially from the values that would have been used had a ready market for these investments existed.

Valuation of assets and liabilities measured at fair value

The Company’s investments in real estate debt, real estate-related and other securities and derivatives are recorded at fair value. The Company generally determines the fair value of its investments by utilizing third-party pricing service providers. In determining the value of a particular real estate-related security, the pricing service providers may use broker-dealer quotations, reported trades or valuation estimates from their internal pricing models to determine the reported price. The pricing service providers’ internal models for real estate-related securities usually consider the attributes applicable to a particular class of security (e.g., credit rating, seniority), current market data, and estimated cash flows for each class and incorporate deal collateral performance such as prepayment speeds and default rates, as available.

Certain of the Company’s investments in real estate debt that consist of loans secured by real estate, such as commercial mortgage loans and the mezzanine loan, are unlikely to have readily available market quotations. In such cases, the Company will generally determine the initial value based on the origination amount or acquisition price of the investment if acquired by the Company or the par value of the investment if originated by the Company. Following the initial measurement, the Company will determine fair value by utilizing or reviewing certain of the following inputs: (i) market yield data, (ii) discounted cash flow modeling, (iii) collateral asset performance, (iv) local or macro real estate performance, (v) capital market conditions, (vi) debt yield or loan-to-value ratios and (vii) borrower financial condition and performance.

The Company's derivative financial instruments consist of treasury note futures contracts and interest rate swaps. The fair value of the Company's treasury note futures contracts is based on quoted market prices for identical instruments. The fair value of the Company’s interest rate swaps are estimated using information provided by a third-party valuation service provider based on contractual cash flows and interest calculations using the appropriate discount rate.

Class E units held by the Adviser that are mandatorily redeemable and only subject to delays to the continuous obligation to ultimately redeem such units once sufficient availability exists under the share repurchase agreements (the “Mandatorily Redeemable Instruments”) are carried at their cash redemption value as if the units were repurchased or redeemable at the reporting date, which equals NAV per unit at the reporting date.

The carrying amounts of financial instruments such as other assets, accounts payable, accrued expenses and other liabilities approximate their fair values due to the short-term maturities and market rates of interest of these instruments.

The following table details the Company’s assets and liabilities measured at fair value on a recurring basis ($ in thousands):


	September 30, 2025								December 31, 2024
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets:
Investments in real estate debt	$	—	$	—	$	134,925	$	134,925	$	—	$	—	$	79,310	$	79,310
Investments in real estate-related and other securities		—		15,295		—		15,295		588		5,829		—		6,417
Total	$	—	$	15,295	$	134,925	$	150,220	$	588	$	5,829	$	79,310	$	85,727

Liabilities:
Mandatorily Redeemable Instruments	$	—	$	—	$	83,803	$	83,803	$	—	$	—	$	105,325	$	105,325
Interest rate swaps(1)		—		888		—		888		—		118		—		118
Treasury note futures contracts(1)		—		—		—		—		17		—		—		17
Total	$	—	$	888	$	83,803	$	84,691	$	17	$	118	$	105,325	$	105,460

(1) Included in accounts payable, accrued expenses and other liabilities on the Company’s Condensed Consolidated Balance Sheets.

The following table details the Company’s assets and liabilities measured at fair value on a recurring basis using Level 3 inputs ($ in thousands):


	Investments in Real Estate Debt (asset)			Mandatorily Redeemable Instruments (liability)
Balance at December 31, 2024	$	79,310		$	105,325
Additions		55,700			—
Repurchases		—			(23,211	)
Distributions declared		—			3,094
Reclassify to distributions payable/paid		—			(3,094	)
Redemption value adjustment		—			1,689
Fair value adjustment		(85	)		—
Balance at September 30, 2025	$	134,925		$	83,803

The following table contains the quantitative inputs and assumptions used for items categorized in Level 3 of the fair value hierarchy ($ in thousands):

            
           September 30, 2025

            
           Fair Value

           Valuation Technique

           Unobservable Inputs

           Weighted - Average Rate

           Impact to Valuation from an Increase in Input

           Assets:

Investments in real estate debt

134,925

Discounted cash flow

Market credit spread

SOFR(1) + 2.99%

Decrease

           Liabilities:

Mandatorily Redeemable Instruments(2)

83,803

Discounted cash flow

Discount rate/
Exit capitalization rate/
Market yield

53%/  
01%/  
04%

Decrease

(1) "SOFR" refers to the Secured Overnight Financing Rate, which was 4.13% at September 30, 2025.

(2) Mandatorily Redeemable Instruments are carried at the NAV of the Class E units and Class E shares, which is determined monthly in accordance with the Company's valuation guidelines.

Valuation of assets and liabilities not measured at fair value

The fair value of the Company’s financial instruments (other than mortgage notes, repurchase facility and the unsecured revolving credit facility), including cash and cash equivalents and other financial instruments, approximate their carrying or contract value. The fair value of the Company’s indebtedness is estimated by modeling the cash flows required by the Company’s debt agreements and discounting them back to the present value using an appropriate discount rate. Additionally, the Company considers current market rates and conditions by evaluating similar borrowing agreements with comparable loan-to-value ratios and credit profiles. The inputs used in determining the fair value of the Company’s indebtedness are considered Level 3.

The following table presents the carrying value and fair value of financial instruments that are not carried at fair value on the Condensed Consolidated Balance Sheets ($ in thousands):


	September 30, 2025				December 31, 2024
	Carrying Value(1)		Fair Value		Carrying Value(1)		Fair Value
Mortgage notes	$	271,524	$	270,311	$	124,836	$	123,252
Repurchase facility		88,575		88,575		46,800		46,832
Unsecured revolving credit facility		45,175		45,175		—		—
Total	$	405,274	$	404,061	$	171,636	$	170,084

(1) Carrying value excludes deferred financing costs and discounts.

Recent Accounting Pronouncements

In November 2024, the Financial Accounting Standards Board issued accounting standard update 2024-03, “Income Statement— Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses.” The amendments in this update require public entities to disclose, on an annual and interim basis, disaggregated information about certain income statement expenses, including purchases of inventory, employee compensation, depreciation, intangible asset amortization and depletion, that are included in each relevant income statement expense line item. The amendments also require qualitative descriptions of the amounts remaining in relevant expense line items not separately disaggregated quantitatively. Certain amounts already disclosed under existing GAAP are required to be included in the same disclosure as the other disaggregated income statement expense line items. In addition, the amendments require disclosure of the total amount of selling expenses and, in annual reporting periods, an entity’s definition of those expenses. The new guidance will be applied prospectively and is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The Company is currently assessing the impacts of this standard.

On July 4, 2025, President Trump signed into law the One Big Beautiful Bill Act (the “OBBBA”). The OBBBA permanently extended certain provisions that were enacted in the Tax Cuts and Jobs Act of 2017. Such extensions included the permanent extension of the 20% deduction for “qualified REIT dividends” for individuals and other non-corporate taxpayers. The OBBBA also increased the percentage limit under the REIT asset test applicable to taxable REIT subsidiaries (“TRSs”) (the permissible value of TRS securities that a REIT may hold) from 20% to 25% of the value of the REIT’s total assets for taxable years beginning after December 31, 2025. The Company is currently evaluating this legislation to determine its potential impact on the Company’s condensed consolidated financial statements and related disclosures.

4. Investments in Real Estate

Investments in real estate, net consisted of the following ($ in thousands):


	September 30, 2025			December 31, 2024
Building and building improvements	$	748,110		$	268,327
Land and land improvements		315,340			106,654
Furniture, fixtures and equipment		8,144			3,881
Total		1,071,594			378,862
Accumulated depreciation		(28,983	)		(13,792	)
Investments in real estate, net	$	1,042,611		$	365,070

Acquisitions

On March 7, 2025, the Company entered into a joint venture, of which the Company owns 98%, to originate a geographically diversified portfolio of construction loans that will be used to develop single-tenant net leased retail properties. The joint venture committed $50 million and secured a line of credit for $50 million to finance the loan originations. The joint venture held its first closing in July 2025.

On July 1, 2025, as a follow on to the portfolio acquisition on May 5, 2025, the Company acquired a Class-B, shallow-bay warehouse located in Dallas, Texas. The total purchase price was $12.5 million, excluding closing costs.

On July 10, 2025, the Company acquired a 76,028 square foot warehouse located in Hempstead, New York. The total purchase price was $18.6 million, excluding closing costs.

On July 21, 2025, the Company acquired a 257,200 square foot industrial asset located in Jacksonville, Florida. The total purchase price was $20.8 million, excluding closing costs.

On August 12, 2025, the Company acquired a 185-unit multifamily property located in Highland, New York. The total purchase price was $68.0 million, excluding closing costs.

On August 21, 2025, the Company acquired a multifamily portfolio of 647 workforce housing units across five properties in Charleston, South Carolina. The total purchase price was $86.3 million, excluding closing costs. The portfolio was acquired through a joint venture, of which the Company owns 90%.

On September 19, 2025, as a follow on to the portfolio acquisition on June 17, 2025, the Company acquired an industrial outdoor storage asset for $12.7 million, excluding closing costs. This transaction was executed as part of a sale-leaseback agreement with a leading North American transportation provider.

The following table provides details of the properties acquired during the nine months ended September 30, 2025 ($ and square feet in thousands):


Property Type	Purchase Price(1)		Number of Transactions		Number of Properties		Sq. Ft./Units
Industrial properties	$	287,364		7		35	4,751 sq. ft.
Multifamily		442,851		8		12	2,152 units
Total	$	730,215		15		47

(1) Purchase price is inclusive of acquisition-related costs.

The following table details the purchase price allocation for the properties acquired during the nine months ended September 30, 2025 ($ in thousands):


	For the Nine Months Ended September 30,
	2025
Building and building improvements	$	471,135
Land and land improvements

J.P. Morgan Real Estate Income Trust, Inc. 10-Q