NOTE 6 – DEBT AND DERIVATIVE INSTRUMENTS

The Company’s indebtedness bore interest at a weighted average interest rate of 5.14% per annum as of June 30, 2026, which includes the effects of interest rate swaps. The Company estimates the fair value of its total debt by discounting the future cash flows of each instrument at rates currently offered for similar debt instruments of comparable maturities by the Company’s lenders using Level 3 inputs. The carrying value of the Company’s debt excluding unamortized debt discount was $270,049 and $0 as of June 30, 2026 and December 31, 2025, respectively, and its estimated fair value was $269,970 and $0 as of June 30, 2026 and December 31, 2025, respectively.

Mortgage Loans Payable

CONA Mortgage Loan

On October 30, 2025, the Operating Partnership, through certain subsidiaries as borrowers, entered into an amended and restated loan agreement (the “CONA Loan Agreement”) with Capital One, National Association and Associated Bank, National Association, as lenders (collectively, the “CONA Lender”) and Capital One, National Association as administrative agent, for an aggregate principal amount of $95,000 (the “CONA Mortgage Loan”). The CONA Loan Agreement amended and restated the prior loan agreement by and among the borrower, the CONA Lender and Capital One, National Association as administrative agent dated September 29, 2021, as amended by those certain amendments dated August 1, 2022 and October 31, 2023 (collectively, the “Prior CONA Loan Agreement”).

The CONA Mortgage Loan is collateralized by all the respective real and personal property owned by the Company under the CONA Loan Agreement.

As of June 30, 2026, the Company had $95,000 outstanding under the CONA Mortgage Loan. The CONA Mortgage Loan requires interest only payments. The principal balance of the CONA Mortgage Loan accrues interest at (i) the applicable one-month term secured overnight financing rate (“Term SOFR”) plus (ii) 1.95%. The CONA Mortgage Loan matures on October 29, 2027, and the Company has the option to extend the maturity date for three additional twelve month periods subject to the payment of certain fees and expenses and certain other conditions.

IREIC, the Company’s sponsor, has guaranteed (1) any losses that the administrative agent and lenders may incur as a result of the occurrence of certain bad acts of the Company and (2) the repayment of the CONA Mortgage Loan upon the occurrence of certain other significant events, including bankruptcy. Additionally, the Company, IREIC and Inland Private Capital Corporation (“IPC”), an affiliate of IREIC, have agreed to indemnify the lenders against certain environmental liabilities.

The CONA Mortgage Loan requires compliance with certain covenants, including a minimum project yield requirement and a guarantor's net worth requirement. It also contains customary default provisions including the failure to comply with the Company’s covenants and the failure to pay when amounts outstanding under the CONA Mortgage Loan become due. As of June 30, 2026, the Company was in compliance with all financial covenants related to the CONA Mortgage Loan.

BMO Mortgage Loan

On September 30, 2021, the Operating Partnership, through certain subsidiaries as borrowers, entered into a loan agreement (the “BMO Loan Agreement”) with BMO Harris Bank N.A. (“BMO”), individually and as administrative agent, and other lenders from time to time parties to the BMO Loan Agreement (the “BMO Mortgage Loan”). The BMO Loan Agreement was amended on January 26, 2026 (the “BMO Loan Amendment”). The BMO Loan Amendment extended the maturity date of the BMO Mortgage Loan by 24 months from September 30, 2026 (subject to two one-year extensions) to September 30, 2028 and removed any further extension options.

The BMO Mortgage Loan is collateralized by all the respective properties, rights, interests, and privileges from time to time subject to the liens granted to BMO for the benefit of the lenders, or any security trustee therefor, by the collateral documents.

As of June 30, 2026, the Company had $122,655 outstanding under the BMO Mortgage Loan. The BMO Mortgage Loan requires interest only payments. The principal balance of the BMO Mortgage Loan accrues interest at (i) the applicable Term SOFR plus (ii) 2.10%.

IPC has guaranteed (1) any losses that the administrative agent and lenders may incur as a result of the occurrence of certain bad acts of the Company and (2) the repayment of the BMO Mortgage Loan upon the occurrence of certain other significant events, including bankruptcy. Additionally, the Company and IPC have agreed to indemnify the lenders against certain environmental liabilities.

The BMO Mortgage Loan requires compliance with certain covenants, including a minimum debt yield requirement, a distribution limitation, a limitation on the use of leverage and restrictions on indebtedness. It also contains customary default provisions including the failure to comply with the Company’s covenants and the failure to pay when amounts outstanding under the BMO Mortgage Loan become due. As of June 30, 2026, the Company was in compliance with all financial covenants related to the BMO Mortgage Loan.

Parkway UL Mortgage Loan

On December 1, 2022, the Operating Partnership assumed the Parkway UL Mortgage Loan in the amount of $22,000, which was the original principal amount, from Parkway Bank and Trust Company (“Parkway”) in connection with the acquisition of University Lofts. On March 28, 2024, the Operating Partnership entered into an amendment that increased the principal amount of the Parkway UL Mortgage Loan to $27,759.

As of June 30, 2026, the Company had $27,759 outstanding under the Parkway UL Mortgage Loan. On March 28, 2026, the Operating Partnership entered into a loan modification that extended the maturity date of the Parkway UL Mortgage Loan from March 28, 2026 to March 28, 2029 and modified the interest rate from 5.80% to 5.94% per annum.

The Parkway UL Mortgage Loan contains customary default provisions including the failure to pay when amounts outstanding under the Parkway UL Mortgage Loan become due. The Parkway UL Mortgage Loan is collateralized by the underlying property.

Parkway Storage Mortgage Loan

On April 26, 2024, the Operating Partnership entered into a loan agreement with Parkway for an aggregate principal amount of $28,000 (the “Parkway Storage Mortgage Loan”). On April 25, 2026, the Operating Partnership entered into a loan modification that extended the maturity date of the Parkway Storage Mortgage Loan to April 25, 2029, with the fixed interest rate of 5.80% per annum remaining unchanged. In connection with the modification, the Operating Partnership made a principal repayment of $3,365. As of June 30, 2026, the Company had $24,635 outstanding under the Parkway Storage Mortgage Loan. The Parkway Storage Mortgage Loan requires interest-only payments until the maturity date, at which point the outstanding principal and interest are due.

The Parkway Storage Mortgage Loan contains customary default provisions including the failure to pay when amounts outstanding under the Parkway Storage Mortgage Loan become due. The Parkway Storage Mortgage Loan is collateralized by four self-storage properties (the “Storage Properties”).

Interest Rate Swap Agreements

The Company entered into interest rate swaps to fix a portion of its floating SOFR-based debt under variable rate loans to a fixed rate to manage its risk exposure to interest rate fluctuations. The Company will generally match the maturity of the underlying variable rate debt with the maturity date on the interest rate swaps. See Note 14 – “Fair Value Measurements” for further information.

All of the Company’s interest rate swap contracts are accounted for as cash flow hedges for accounting purposes.

The total amount of interest expense presented on the consolidated statements of operations and comprehensive income (loss) was $2,702 and $2,702 for the three and six months ended June 30, 2026, respectively. The net gain or loss reclassified into income from accumulated other comprehensive loss is reported in interest expense on the consolidated statements of operations and comprehensive income (loss). The amount that is expected to be reclassified from accumulated other comprehensive income into income in the next 12 months is $680.