JP Morgan Real Estate Income Trust Inc.
03/16/2026 | Press release | Distributed by Public on 03/16/2026 12:18
Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
References herein to "Company," "we," "us," or "our" refer to J.P. Morgan Real Estate Income Trust, Inc. unless the context specifically requires otherwise.
The following discussion should be read in conjunction with the consolidated financial statements and notes thereto appearing elsewhere in this Annual Report. In addition to historical data, this discussion contains forward-looking statements about our business, operations and financial performance based on current expectations that involve risks, uncertainties and assumptions. Our actual results may differ materially from those in this discussion as a result of various factors, including but not limited to those discussed in Part I Item 1A - "Risk Factors" in this Annual Report.
Overview
We are a Maryland corporation formed on November 5, 2021. We were formed to invest primarily in stabilized, income-generating real properties. We are an externally advised, perpetual-life REIT formed to pursue the following investment objectives:
•
provide attractive current income in the form of regular, stable cash distributions;
•
preserve and protect invested capital;
•
realize appreciation in NAV from proactive investment management and asset management; and
•
provide an investment alternative for stockholders seeking to allocate a portion of their long-term investment portfolios to real estate.
We cannot assure you that we will achieve our investment objectives. In particular, we note that our NAV may be subject to volatility related to changes in the values of our assets.
We currently qualify, and intend to continue to qualify, as a REIT for federal income tax purposes. We own all or substantially all of our assets through the Operating Partnership, of which we are the sole general partner.
Our board of directors at all times has ultimate oversight and policymaking authority over us, including responsibility for governance, financial controls, compliance and disclosure. Pursuant to the Advisory Agreement, however, we have delegated to the Adviser the authority to source, evaluate and monitor our investment opportunities and make decisions related to the acquisition, management, financing and disposition of our assets, in accordance with our investment objectives, guidelines, policies and limitations, subject to oversight by our board of directors.
Our initial public offering of our common stock commenced on July 22, 2022. We acquired our first investment on September 2, 2022.
On July 8, 2025, we filed a Registration Statement on Form S-11 (File No. 333-288565) for our second public offering to register up to $4.8 billion of shares of common stock, consisting of up to $3.8 billion in shares in its primary offering and up to $1.0 billion in shares pursuant to our distribution reinvestment plan. On February 4, 2026, we commenced our second public offering and our initial public offering automatically terminated. In addition to our public offerings, we are conducting several private offerings.
We intend to contribute the net proceeds from the Offerings which are not used or retained to pay the fees and expenses attributable to our operations to the Operating Partnership. The Operating Partnership will use the net proceeds received from us to make investments in accordance with our investment strategy and policies.
The number and type of properties or real estate-related and other investments that we acquire will depend upon real estate market conditions, the amount of proceeds we raise in the Offerings and other circumstances existing at the time we are acquiring such assets.
We are not aware of any material trends or uncertainties, favorable or unfavorable, other than national economic conditions affecting real estate generally, that may be reasonably anticipated to have a material impact on either capital resources or the revenue or income to be derived from acquiring properties, real estate debt and real estate-related or other securities.
2025 Highlights
Capital raising and distributions
•
Raised net proceeds of $531.6 million from the sale of shares of our common stock, including shares issued under our distribution reinvestment plan, during the year ended December 31, 2025.
•
Declared distributions totaling $34.4 million for the year ended December 31, 2025, including $3.8 million related to Class E shares and Class E units owned by the Adviser.
The details of the average annualized distribution rates and total returns as of December 31, 2025 are shown in the following table:
|
Class D |
Class I |
Class E |
Class Y |
||||
|
Average annualized distribution rate(1) |
4.72% |
4.70% |
4.37% |
3.58% |
|||
|
Year-to-date total return, without upfront selling commissions(2) |
6.11% |
6.11% |
7.97% |
6.11% |
|||
|
Year-to-date total return, assuming maximum upfront selling commissions(2) |
4.55% |
6.11% |
7.97% |
2.54% |
|||
|
Inception-to-date total return, without upfront selling commissions(2) (3) |
6.12% |
6.17% |
8.09% |
5.95% |
|||
|
Inception-to-date total return, assuming maximum upfront selling commissions(2) (3) |
5.59% |
6.17% |
8.09% |
4.14% |
(1) Average annualized distribution rate is calculated as the current month's distribution annualized and divided by the prior month's NAV, which is inclusive of all fees and expenses.
(2) Total return is calculated as the change in NAV per share during the respective period plus any distributions per share declared in the period and assumes any distributions are reinvested in accordance with our distribution reinvestment plan. Inception-to-date total return is annualized.
(3) The inception date was January 3, 2023 for Class D shares, November 1, 2023 for Class I shares, August 1, 2022 for Class E shares and January 1, 2024 for Class Y shares.
Investing
•
On February 12, 2025, we acquired a 90% interest in the Preserve at Pine Valley, a 219-unit, Class-B housing community in Wilmington, North Carolina for a total purchase price of $32.1 million, excluding closing costs.
•
On March 7, 2025, we entered into a joint venture, of which we own 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 March 25, 2025, we acquired a 133-unit, adaptive reuse, Class-A multifamily property located in the intown neighborhood of Little Five Points in Atlanta, Georgia for a total purchase price of $34.8 million, excluding closing costs.
•
On April 10, 2025, we acquired a 95% interest in a joint venture with a private real estate investment and development firm, to recapitalize a portfolio of infill, highly functional industrial service facility sites (the "Norfolk Industrial Portfolio"). The portfolio includes seven assets, with six located in the Norfolk, Virginia Metropolitan Statistical Area and one in Rockledge, Florida. The total size of the portfolio is 581,000 square feet and it is 100% leased to 16 tenants. The total purchase price was $71.2 million, excluding closing costs.
•
On May 5, 2025, we acquired eight Class-B, shallow-bay warehouses strategically located in key infill areas across Dallas, Texas. The total purchase price was $53.0 million, excluding closing costs. On July 1, 2025, as a follow on to the portfolio acquisition on May 5, 2025, we acquired a Class-B, shallow-bay warehouse located in Dallas, Texas. The total purchase price was $12.5 million, excluding closing costs.
•
On May 22, 2025, we acquired a 100-unit multifamily property in South Easton, Massachusetts for $33.0 million, excluding closing costs.
•
On June 10, 2025, we acquired a 300-unit garden style multifamily property in Jacksonville, Florida for $49.0 million, excluding closing costs.
•
On June 17, 2025, we acquired a 16-property industrial outdoor storage portfolio for $95.3 million, excluding closing costs. This strategic transaction was executed as part of a sale-leaseback agreement with a leading North American transportation provider. On September 19, 2025, as a follow on to the portfolio acquisition on June 17, 2025, we 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.
•
On June 18, 2025, we acquired a Class-A, 312-unit garden style multifamily property in the Chicago suburb of Oswego, Illinois for $84.0 million, excluding closing costs.
•
On June 23, 2025, we acquired a stabilized 256-unit workforce housing community in the Mesa submarket of Phoenix, Arizona for $52.0 million, excluding closing costs.
•
On June 24, 2025, we originated a $55.7 million commercial mortgage loan to finance the acquisition of Cortland at Armour Yards (the "Cortland Loan"), a 372-unit mid-rise apartment community located in Atlanta, Georgia. The mortgage loan has an initial term of two years and three, one-year extension options.
•
On July 10, 2025, we 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, we 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, we acquired a 185-unit multifamily property located in suburban New York. The total purchase price was $68.0 million, excluding closing costs.
•
On August 21, 2025, we 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 we own 90%.
•
On October 2, 2025, we entered into a joint venture, of which we own 95%, to acquire a controlling interest in a 133-unit multifamily community in Boston, Massachusetts for $41.0 million, excluding closing costs.
•
On October 9, 2025, we originated a $106.5 million senior mortgage loan to refinance a five-property, 703-unit, multifamily portfolio located in Tennessee and Alabama. The portfolio is 94.3% occupied and consists of three traditional multifamily properties and two student housing properties. The mortgage loan has an initial three-year term and two, one-year extension options.
•
On November 5, 2025, we acquired a 136,340 square foot neighborhood retail center in Coral Springs, Florida for $53.7 million, excluding closing costs.
•
On December 23, 2025, we acquired a 198,531 square foot warehouse and manufacturing building located in the Worcester, Massachusetts Metropolitan Statistical Area for $32.6 million, excluding closing costs.
Financings
•
On March 25, 2025, in connection with the 133-unit, adaptive reuse, Class-A multifamily property acquisition, we assumed a $15.2 million mortgage loan, which bears fixed interest at 3.95% and is amortized on a 30-year schedule with 2.4 years of remaining term.
•
On May 22, 2025, in connection with the Elmstead Acquisition, we assumed $21.2 million of mortgage loans, which bear a weighted average fixed interest of 4.30% and are amortized on a 30-year schedule with a maturity date of April 1, 2031.
•
On June 20, 2025, we entered into a $43.7 million mortgage secured by the Norfolk Industrial Portfolio properties, which bears an interest rate of SOFR plus 1.75% and matures on June 19, 2030. We entered into an interest rate swap that was not designated as a hedge on June 20, 2025, which fixed the rate at 5.41%.
•
On June 24, 2025, we borrowed $41.8 million from the Repurchase Facility to finance the origination of the Cortland Loan.
•
On July 10, 2025, in connection with the Hempstead, New York acquisition, we assumed a $6.6 million mortgage loan, which bears interest at 4.35% and is interest only through its maturity date of July 2028.
•
On August 21, 2025, in connection with the multifamily portfolio acquisition in Charleston, South Carolina, we obtained five, five-year fixed-rate loans totaling $59.7 million at a weighted average interest rate of 5.08% that mature on September 1, 2030.
•
On October 2, 2025, in connection with the acquisition of a 133-unit multifamily community in Dorchester, Boston, we assumed a $23.5 million mortgage loan, which bears a fixed interest rate of 3.91% and is interest only through its maturity date of January 2028.
•
On December 10, 2025, in connection with the Preserve at Pine Valley Acquisition, we entered into a $21.2 million mortgage loan, which bears an interest rate of SOFR plus 1.50% and matures on December 10, 2030. We entered into an interest rate swap that was not designated as a hedge on the same day, which fixed the rate at 4.90%.
•
On December 10, 2025, in connection with the Vineyard Acquisition, we entered into a $45.2 million mortgage loan, which bears an interest rate of SOFR plus 1.40% and matures on January 1, 2030. We entered into an interest rate swap that was not designated as a hedge on the same day, which fixed the rate at 4.88%.
•
On December 16, 2025, in connection with the origination of $106.5 million senior mortgage loan on October 9, 2025, we borrowed $79.9 million from the Repurchase Facility to finance the origination.
Portfolio
The following chart outlines the percentage of our assets across investments in real estate, investments in real estate debt and investments in real estate-related and other securities based on fair value by category as of December 31, 2025:
(1)Real estate includes our direct property investments; real estate debt consists of commercial mortgage loans; and real estate-related and other securities consists of our CMBS investments.
The following charts further describe the composition of our investments in real estate based on estimated fair value as of December 31, 2025:
Investments in real estate
As of December 31, 2025, we owned 60 real estate properties, which are summarized in the following table ($ in thousands):
|
Property type |
Number of Properties |
Sq. Ft. (in thousands)/ |
Occupancy Rate(1)(2) |
Gross Asset |
Revenue(4) |
% of |
||||||||||||
|
Multifamily |
16 |
2,973 units |
89% |
$ |
700,353 |
$ |
39,250 |
55% |
||||||||||
|
Single-family rental(5) |
1 |
126 units |
83% |
46,403 |
3,031 |
4% |
||||||||||||
|
Industrial(6) |
40 |
5,664 sq. ft. |
100% |
461,241 |
22,107 |
31% |
||||||||||||
|
Retail(7) |
3 |
236 sq. ft. |
96% |
120,352 |
6,956 |
10% |
||||||||||||
|
Total |
60 |
$ |
1,328,349 |
$ |
71,344 |
100% |
||||||||||||
(1) Excludes properties under development related to one of our retail investment.
(2) Reflects real estate operating property investments only. Occupancy for our multifamily and single-family rental properties is measured monthly by dividing property market rent for occupied units by the gross market rent potential of all units. Gross market rent potential is the average monthly market rent of all units at the property. For our retail and industrial properties, occupancy represents the percentage of all leased square footage divided by the total available square footage as indicated. An operating property is an existing property that was purchased, regardless of current occupancy. For a newly developed property, operating is defined as reaching 60% occupancy or having been available for occupancy for a year from its certificate of occupancy.
(3)Based on fair value as of December 31, 2025.
(4) Revenue is calculated as annual revenue inclusive of tenant recoveries, straight-line rent, above-market lease amortization and below-market lease amortization.
(5) Represents 126 Fiore townhomes that are included as a single property in the number of properties.
(6) Includes 3.7 million square feet of land related to industrial outdoor storage and 2.0 million square feet of buildings related to other industrial properties.
(7) Includes four retail developments that are represented as a single property in the number of properties.
The following table provides information regarding our real estate properties as of December 31, 2025:
|
Property Type and Investment |
Number of Properties |
Location(1) |
Acquisition Date |
Ownership |
Sq. ft. (in thousands)/Number of Units(3) |
Occupancy(4) |
||||||||||||
|
Multifamily: |
||||||||||||||||||
|
Caroline West Gray |
1 |
Houston, TX |
November 2022 |
95% |
275 units |
92% |
||||||||||||
|
Caroline Post Oak |
1 |
Houston, TX |
November 2022 |
95% |
238 units |
91% |
||||||||||||
|
Coda on Centre |
1 |
Pittsburgh, PA |
December 2022 |
100% |
175 units |
94% |
||||||||||||
|
Preserve at Pine Valley |
1 |
Wilmington, NC |
February 2025 |
90% |
219 units |
88% |
||||||||||||
|
Bass Lofts |
1 |
Atlanta, GA |
March 2025 |
100% |
133 units |
93% |
||||||||||||
|
The Elmstead |
1 |
Providence, RI |
June 2025 |
100% |
100 units |
91% |
||||||||||||
|
The Kensley |
1 |
Jacksonville, FL |
June 2025 |
100% |
300 units |
79% |
||||||||||||
|
Emblem Oswego |
1 |
Chicago, IL |
June 2025 |
100% |
312 units |
82% |
||||||||||||
|
Reflections at Red Mountain |
1 |
Mesa, AZ |
June 2025 |
100% |
256 units |
90% |
||||||||||||
|
Charleston Darby Portfolio |
5 |
Charleston, SC |
August 2025 |
90% |
647 units |
92% |
||||||||||||
|
Vineyard Commons |
1 |
Kingston, NY |
August 2025 |
100% |
185 units |
94% |
||||||||||||
|
Baker Chocolate Factory |
1 |
Boston, MA |
October 2025 |
95% |
133 units |
87% |
||||||||||||
|
Total multifamily |
16 |
2,973 units |
||||||||||||||||
|
Single-family rental: |
||||||||||||||||||
|
Fiore(5) |
1 |
Sarasota, FL |
December 2023 - September 2024 |
100% |
126 units |
83% |
||||||||||||
|
Total single-family rental |
1 |
126 units |
||||||||||||||||
|
Industrial: |
||||||||||||||||||
|
Industrial outdoor storage |
||||||||||||||||||
|
6200 Bristol |
1 |
Philadelphia, PA |
October 2022 |
100% |
424 sq. ft. |
100% |
||||||||||||
|
Industrial outdoor storage portfolio |
17 |
Various(6) |
June and September 2025 |
100% |
3,284 sq. ft. |
100% |
||||||||||||
|
Total industrial outdoor storage |
18 |
3,708 sq. ft. |
||||||||||||||||
|
Other industrial |
||||||||||||||||||
|
Savannah Truck Terminal |
1 |
Savannah, GA |
July 2023 |
100% |
136 sq. ft. |
100% |
||||||||||||
|
PODS |
2 |
Various(7) |
November 2024 |
100% |
154 sq. ft. |
100% |
||||||||||||
|
Norfolk Industrial Portfolio |
7 |
Various(8) |
April 2025 |
88% |
581 sq. ft. |
100% |
||||||||||||
|
Dallas Infill Portfolio |
9 |
Dallas, TX |
May and July 2025 |
100% |
553 sq. ft. |
100% |
||||||||||||
|
One Brooklyn |
1 |
New York, NY |
July 2025 |
100% |
76 sq. ft. |
100% |
||||||||||||
|
11801 Industry |
1 |
Jacksonville, FL |
July 2025 |
100% |
257 sq. ft. |
100% |
||||||||||||
|
125 Fisher Street |
1 |
Worcester, MA |
December 2025 |
100% |
199 sq. ft. |
90% |
||||||||||||
|
Total other industrial |
22 |
1,956 sq. ft. |
||||||||||||||||
|
Total industrial |
40 |
|||||||||||||||||
|
Retail: |
||||||||||||||||||
|
Shops at Grand Avenue |
1 |
New York, NY |
May 2024 |
95% |
100 sq. ft. |
90% |
||||||||||||
|
Stablewood |
1 |
Various(9) |
Various |
98% |
- |
- |
||||||||||||
|
Shoppes at Heron Lakes |
1 |
Miami, FL |
November 2025 |
100% |
136 sq. ft. |
100% |
||||||||||||
|
Total retail |
3 |
236 sq. ft. |
||||||||||||||||
(1)Refers to the metropolitan statistical area.
(2)Certain of the joint venture agreements entered into by us provide the other partner a profits interest based on certain internal rate of return hurdles being achieved.
(3)Excludes properties under development related to one of our retail investments.
(4) Reflects real estate operating property investments only. Occupancy for our multifamily properties is measured monthly by dividing property market rent for occupied units by the gross market rent potential of all units. Gross market rent potential is the average monthly market rent of all units at the property. For our retail and industrial investments, occupancy represents the percentage of all leased square footage divided by the total available square footage as indicated. An operating property is an existing property that was purchased, regardless of current occupancy. For a newly developed property, operating is defined as reaching 60% occupancy or having been available for occupancy for a year from its certificate of occupancy.
(5) Represents 126 Fiore townhomes that are included as a single property in the number of properties.
(6) Includes five properties located in Illinois, three properties located in New Jersey, two properties in each of Pennsylvania, New York and Wisconsin and one property in each of California, Connecticut and Washington.
(7) Represents one property located in Tampa, Florida and one located in Pinellas Park, Florida.
(8) Represents six properties located in Norfolk, Virginia and one located in Rockledge, Florida.
(9) Represents four retail developments including one in Greenville, South Carolina, one in Denver, Colorado, one in Pensacola, Florida and one in Holland, Michigan.
Lease expirations
The following table details the expiring leases at our industrial and retail properties by annualized base rent as of December 31, 2025 ($ in thousands). The table below excludes our multifamily and single-family rental properties as substantially all leases at such properties expire within 12 months:
|
Industrial |
Retail |
|||||||||||||||||||||||
|
Year |
Number of Expiring Leases |
Annualized Rent(1) |
% of Total Annualized Rent Expiring |
Number of Expiring Leases |
Annualized Rent(1) |
% of Total Annualized Rent Expiring |
||||||||||||||||||
|
2026 |
10 |
$ |
2,136 |
8 |
% |
- |
$ |
- |
- |
|||||||||||||||
|
2027 |
4 |
1,038 |
4 |
% |
5 |
837 |
12 |
% |
||||||||||||||||
|
2028 |
6 |
1,416 |
6 |
% |
9 |
1,132 |
17 |
% |
||||||||||||||||
|
2029 |
4 |
2,204 |
9 |
% |
5 |
314 |
5 |
% |
||||||||||||||||
|
2030 |
5 |
5,914 |
23 |
% |
11 |
1,065 |
15 |
% |
||||||||||||||||
|
2031 |
2 |
631 |
3 |
% |
- |
- |
- |
|||||||||||||||||
|
2032 |
2 |
1,616 |
6 |
% |
1 |
98 |
1 |
% |
||||||||||||||||
|
2033 |
- |
- |
0 |
% |
1 |
1,784 |
26 |
% |
||||||||||||||||
|
2034 |
1 |
136 |
1 |
% |
3 |
433 |
6 |
% |
||||||||||||||||
|
2035 |
1 |
1,101 |
4 |
% |
2 |
214 |
3 |
% |
||||||||||||||||
|
Thereafter |
19 |
9,060 |
36 |
% |
2 |
1,035 |
15 |
% |
||||||||||||||||
|
Total |
54 |
$ |
25,252 |
100 |
% |
39 |
$ |
6,912 |
100 |
% |
||||||||||||||
(1)Annualized rent is determined from the annualized straight-line rent due to expire in the year of lease expiration and excludes tenant recoveries, above-market lease amortization and below-market lease amortization.
Investments in real estate debt
The following table summarizes our investments in real estate debt as of December 31, 2025 and December 31, 2024 ($ in thousands):
|
December 31, 2025 |
December 31, 2024 |
|||||||||||||||||||||||||||||||||||||||
|
Real Estate Debt |
Number of Positions |
Credit Rating |
Weighted-Average |
Weighted-Average Maturity Date |
Face Value |
Cost Basis |
Fair Value |
Face Value |
Cost Basis |
Fair Value |
||||||||||||||||||||||||||||||
|
Mezzanine Loan(1) |
- |
- |
- |
- |
$ |
- |
$ |
- |
$ |
- |
$ |
16,825 |
$ |
16,825 |
$ |
16,825 |
||||||||||||||||||||||||
|
Commercial Mortgage Loan |
3 |
Not Rated |
SOFR(2)+ 2.69% |
November 28, 2027 |
224,600 |
224,600 |
224,600 |
62,400 |
62,400 |
62,485 |
||||||||||||||||||||||||||||||
|
Total investments in |
3 |
$ |
224,600 |
$ |
224,600 |
$ |
224,600 |
$ |
79,225 |
$ |
79,225 |
$ |
79,310 |
|||||||||||||||||||||||||||
(1) Mezzanine loan outstanding as of December 31, 2024 was paid off during the year at maturity.
(2) "SOFR" refers to the Secured Overnight Financing Rate.
Investments in real estate-related and other securities
The following table summarizes our investment in real estate-related and other securities as of December 31, 2025 and December 31, 2024 ($ in thousands):
|
December 31, 2025 |
December 31, 2024 |
|||||||||||||||||||||||||||||||
|
Real Estate-Related and Other Securities |
Weighted-Average |
Weighted-Average Maturity Date |
Face Amount |
Cost |
Fair |
Face Amount |
Cost |
Fair |
||||||||||||||||||||||||
|
CMBS |
6.7% |
September 6, 2039 |
$ |
15,000 |
$ |
15,107 |
$ |
15,323 |
$ |
5,800 |
$ |
5,797 |
$ |
5,829 |
||||||||||||||||||
|
U.S. Treasury(1) |
- |
- |
- |
- |
- |
595 |
582 |
588 |
||||||||||||||||||||||||
|
Total real estate-related |
$ |
15,000 |
$ |
15,107 |
$ |
15,323 |
$ |
6,395 |
$ |
6,379 |
$ |
6,417 |
||||||||||||||||||||
(1) Includes $0.5 million of securities pledged as collateral related to the treasury note futures contracts as of December 31, 2024.
Results of Operations
The following table sets forth information regarding our consolidated results of operations (in thousands, except per share data):
|
For the Years Ended December 31, |
||||||||||||
|
2025 |
2024 |
Change |
||||||||||
|
Revenues |
||||||||||||
|
Rental revenue |
$ |
71,344 |
$ |
25,253 |
$ |
46,091 |
||||||
|
Total revenues |
71,344 |
25,253 |
46,091 |
|||||||||
|
Expenses |
||||||||||||
|
Rental property operating |
24,334 |
9,947 |
14,387 |
|||||||||
|
General and administrative expenses |
7,091 |
4,641 |
2,450 |
|||||||||
|
Depreciation and amortization |
43,385 |
10,057 |
33,328 |
|||||||||
|
Total expenses |
74,810 |
24,645 |
50,165 |
|||||||||
|
Other income (expense), net |
||||||||||||
|
Income from investments in real estate debt |
10,989 |
4,125 |
6,864 |
|||||||||
|
Income from investments in real estate-related and other securities |
2,721 |
109 |
2,612 |
|||||||||
|
Mandatorily redeemable instruments interest costs |
(6,562 |
) |
(7,870 |
) |
1,308 |
|||||||
|
Interest expense |
(19,375 |
) |
(8,116 |
) |
(11,259 |
) |
||||||
|
Other income, net |
5,310 |
1,349 |
3,961 |
|||||||||
|
Total other expense, net |
(6,917 |
) |
(10,403 |
) |
3,486 |
|||||||
|
Net loss |
$ |
(10,383 |
) |
$ |
(9,795 |
) |
$ |
(588 |
) |
|||
|
Net loss attributable to non-controlling interests in consolidated joint ventures |
(603 |
) |
(52 |
) |
(551 |
) |
||||||
|
Net loss attributable to JPMREIT stockholders |
$ |
(9,780 |
) |
$ |
(9,743 |
) |
$ |
(37 |
) |
|||
|
Net loss per share of common stock - basic and diluted |
$ |
(0.15 |
) |
$ |
(0.52 |
) |
$ |
0.37 |
||||
|
Weighted-average shares of common stock outstanding - basic and diluted |
66,691 |
18,731 |
47,960 |
|||||||||
Rental revenue
Due to our acquisitions of real estate since December 31, 2024, our rental revenue for the years ended December 31, 2025 and 2024 are not comparable. Rental revenue primarily consists of base rent arising from tenant leases at our multifamily, single-family rental, industrial and retail properties. Rental revenue, aside from short-term leases generally less than one year in term, is recognized on a straight-line basis over the life of the lease, including any fixed and measurable rent escalations and abatements.
Rental property operating expenses
Rental property operating expenses consist of the costs of ownership and operation of our real estate investments. Examples of rental property operating expenses include insurance, utilities, real estate taxes and repair and maintenance expenses. Due to our acquisitions of real estate since December 31, 2024, our rental property operating expenses for the years ended December 31, 2025 and 2024 are not comparable.
General and administrative expenses
During the year ended December 31, 2025, general and administrative expenses increased by $2.5 million in comparison to the corresponding period in 2024. The increase in general and administrative expenses was driven by an increase in accrued asset management fees of $0.9 million, an increase in accrued performance participation fees of $0.6 million, and an increase of $0.8 million in professional fees.
Depreciation and amortization expenses
Depreciation and amortization expenses are impacted by the fair values assigned to buildings, personal property and in-place lease assets as part of the initial purchase price allocation. During the year ended December 31, 2025, depreciation and amortization expenses increased by $33.3 million in comparison to the corresponding period in 2024 due to our acquisitions of real estate since December 31, 2024.
Income from investments in real estate debt
During the year ended December 31, 2025, income from our investments in real estate debt increased by $6.9 million in comparison to the corresponding period in 2024 primarily due to an increase in interest income of $6.1 million due to our acquisitions of new investments in real estate debt during 2025 and an increase in origination fees of $1.0 million.
Income from investments in real estate-related and other securities
During the year ended December 31, 2025, income from our investments in real estate-related and other securities increased by $2.6 million in comparison to the corresponding period in 2024 primarily due to an increase of $2.0 million in interest income and $0.5 million increase in realized gains on securities.
Mandatorily redeemable instruments interest costs
During the year ended December 31, 2025, mandatorily redeemable instruments interest costs decreased by $1.3 million in comparison to the corresponding period in 2024 due to a decrease in the allocation of appreciation of $0.8 million relating to the change in the redemption value adjustment of Mandatorily Redeemable Instruments and a decrease in distribution expense of $0.5 million due to repurchases during the year.
Interest expense
During the year ended December 31, 2025, interest expense increased by $11.3 million in comparison to the corresponding period in 2024. Interest expense primarily consists of interest expense incurred on our mortgage notes, Credit Facility and Repurchase Facility. The change in interest expense was primarily attributable to an increase in interest expense relating to new mortgage notes and new borrowings under the Credit Facility and Repurchase Facility.
Other income, net
During the year ended December 31, 2025, other income, net increased by $4.0 million in comparison to the corresponding period in 2024 primarily due to an increase of $3.9 million in interest income from our investment in a money market fund.
Net loss attributable to non-controlling interests in consolidated joint ventures
During the year ended December 31, 2025, net loss attributable to non-controlling interests in consolidated joint ventures increased by $0.6 million in comparison to the corresponding period in 2024 primarily due to the non-controlling interest held by our joint venture partners in properties acquired during the year.
Liquidity and Capital Resources
Liquidity
Our primary needs for liquidity and capital resources are to fund our investments, to make distributions to our stockholders, to repurchase shares of our common stock pursuant to our share repurchase plan, to pay our offering and operating fees and expenses and to pay interest on any outstanding indebtedness we may incur. Our offering and operating fees and expenses include the management fee we pay to the Adviser, the performance participation allocation that the Operating Partnership pays to the Special Limited Partner, stockholder servicing fees we pay to the Dealer Manager, legal, audit, tax and valuation expenses, federal and state filing fees, printing expenses, administrative fees, transfer agent fees, marketing and distribution expenses and fees related to acquiring, financing, appraising and managing our properties. We do not have any office or personnel expenses as we do not have any employees.
Over time, we generally intend to fund our cash needs for items other than asset acquisitions from operations. Our cash needs for acquisitions will be funded primarily from the sale of shares of our common stock, through the assumption or incurrence of secured or unsecured financings from banks or other lenders and from proceeds from the sales of assets. If necessary, we may use financings or other sources of capital in the event of unforeseen significant capital expenditures.
If we are unable to raise substantial funds, we will make fewer investments, resulting in less diversification in terms of the type, number and size of investments we make and the value of an investment in us will fluctuate with the performance of the specific assets we acquire. Further, we have certain fixed operating expenses, including certain expenses as a publicly offered REIT, regardless of whether we are able to raise substantial funds. Our inability to raise substantial funds would increase our fixed operating expenses as a percentage of gross income, reducing our net income and limiting our ability to make distributions.
Capital resources
The following table is a summary of our total indebtedness as of December 31, 2025 and December 31, 2024 ($ in thousands):
|
Principal Balance Outstanding |
||||||||||||||||
|
Indebtedness |
Interest Rate |
Maturity Date |
Maximum |
December 31, 2025 |
December 31, 2024 |
|||||||||||
|
Fixed rate debt secured by our properties |
||||||||||||||||
|
Caroline West Gray |
5.44% |
December 1, 2029 |
N/A |
$ |
45,911 |
$ |
45,911 |
|||||||||
|
Caroline Post Oak |
5.44% |
December 1, 2029 |
N/A |
40,528 |
40,528 |
|||||||||||
|
Coda on Centre |
4.28% |
May 1, 2029 |
N/A |
27,860 |
28,397 |
|||||||||||
|
The Elmstead(1) |
4.30% |
April 1, 2031 |
N/A |
21,245 |
- |
|||||||||||
|
Bass Lofts |
3.95% |
September 5, 2027 |
N/A |
14,902 |
- |
|||||||||||
|
One Brooklyn |
4.35% |
July 1, 2028 |
N/A |
6,600 |
- |
|||||||||||
|
Charleston |
5.08% |
September 1, 2030 |
N/A |
59,728 |
- |
|||||||||||
|
Baker Chocolate |
3.91% |
January 1, 2028 |
N/A |
23,500 |
- |
|||||||||||
|
Total fixed rate |
240,274 |
114,836 |
||||||||||||||
|
Variable rate debt secured by our properties |
||||||||||||||||
|
6200 Bristol(2) |
SOFR + 2.05% |
April 1, 2029 |
N/A |
10,000 |
10,000 |
|||||||||||
|
Norfolk Industrial Portfolio(3) |
SOFR + 1.75% |
June 19, 2030 |
N/A |
43,700 |
- |
|||||||||||
|
Preserve at Pine Valley(4) |
SOFR + 1.50% |
December 10, 2030 |
N/A |
21,200 |
- |
|||||||||||
|
Vineyard Commons(5) |
SOFR + 1.40% |
January 1, 2030 |
N/A |
45,175 |
- |
|||||||||||
|
Stablewood |
SOFR + 3.75% |
August 8, 2028 |
$ |
50,000 |
5,292 |
- |
||||||||||
|
Total variable rate |
125,367 |
10,000 |
||||||||||||||
|
Total loans secured by real estate |
365,641 |
124,836 |
||||||||||||||
|
Deferred financing costs, net |
(4,327 |
) |
(1,142 |
) |
||||||||||||
|
Mortgage discount, net |
(1,869 |
) |
(603 |
) |
||||||||||||
|
Total debt secured by our properties |
$ |
359,445 |
$ |
123,091 |
||||||||||||
|
Repurchase Facility |
SOFR + 1.58% |
August 22, 2027 |
$ |
250,000 |
168,450 |
46,800 |
||||||||||
|
Unsecured revolving credit facility |
SOFR + 1.30% |
July 15, 2028 |
$ |
325,000 |
73,000 |
- |
||||||||||
|
Total indebtedness |
$ |
600,895 |
$ |
169,891 |
||||||||||||
(1) This loan is comprised of a senior and mezzanine loan. The interest rate and maturity date presented are the weighted average.
(2) The Company entered into an interest rate swap that was not designated as a hedge on April 2, 2024, which fixed the rate at 6.26%.
(3) The Company entered into an interest rate swap that was not designated as a hedge on June 20, 2025, which fixed the rate at 5.41%.
(4) The Company entered into an interest rate swap that was not designated as a hedge on December 10, 2025, which fixed the rate at 4.90%.
(5) The Company entered into an interest rate swap that was not designated as a hedge on December 10, 2025, which fixed the rate at 4.88%.
Cash Flows
The following table provides a breakdown of the net change in our cash and cash equivalents and restricted cash ($ in thousands):
|
For the Years Ended December 31, |
|||||||
|
2025 |
2024 |
||||||
|
Net cash provided by operating activities |
$ |
39,033 |
$ |
5,974 |
|||
|
Net cash used in investing activities |
(953,219 |
) |
(167,459 |
) |
|||
|
Net cash provided by financing activities |
808,899 |
257,194 |
|||||
|
Net change in cash and cash equivalents |
$ |
(105,287 |
) |
$ |
95,709 |
||
Cash flows provided by operating activities increased by $33.1 million for the year ended December 31, 2025 compared to the corresponding period in 2024 primarily due to an increase in interest income from real-estate related and other securities and money market investments and an increase in cash flows from operations from our investments in real estate as a result of growth in the size of our portfolio.
Cash flows used in investing activities increased by $785.8 million for the year ended December 31, 2025 compared to the corresponding period in 2024 primarily due to an increase of $682.3 million in real estate acquisitions, an increase of $155.6 million of originations of real estate debt and purchases of real-estate related and other securities and an increase of $15.8 million in capital improvements on real estate, partially offset by an increase of $53.7 million in proceeds from real estate-related and other securities.
Cash flows provided by financing activities increased by $551.7 million for the year ended December 31, 2025 compared to the corresponding period in 2024 primarily due to an increase of net proceeds from the issuance of common stock of $306.1 million, an increase in proceeds from mortgage notes of $165.1 million, an increase of $74.9 million in proceeds from the Repurchase Facility and an increase in net proceeds from the Credit Facility of $73.0 million, partially offset by an increase of $47.2 million of repurchases of Mandatorily Redeemable Instruments, an increase of $9.2 million of total distributions paid and an increase of $7.4 million of repurchases of common stock.
Critical Accounting Policies
The preparation of the financial statements in accordance with GAAP involves significant judgments and assumptions and requires estimates about matters that are inherently uncertain. These judgments will affect our reported amounts of assets and liabilities and our disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. With different estimates or assumptions, materially different amounts could be reported in our financial statements.
Purchase price allocation of acquired investments in real estate
Upon the acquisition of a property, we assess the fair value of acquired tangible and intangible assets and liabilities (including land, buildings, tenant improvements, above-market and below-market leases, acquired in-place leases, other identified intangible assets and assumed liabilities) and allocate the purchase price to the acquired assets and assumed liabilities on a relative fair value basis in accordance with Accounting Standard Codification 805, Business Combinations. All expenses related to asset acquisitions are capitalized and allocated among the identified assets. Generally, the most significant portion of the allocation is to the building and land and requires the use of market-based estimates and assumptions.
We assess and consider fair value based on estimated cash flow projections that utilize appropriate discount and/or capitalization rates, 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.
Acquired above-market and below-market leases are recorded at their fair values (using a discount rate which reflects the risks associated with the leases acquired) equal to the difference between (1) the contractual amounts to be paid pursuant to each in-place lease and (2) management's estimate of fair market lease rates for each corresponding in-place lease, measured over a period equal to the remaining term of the lease for above-market leases and the initial term plus the term of any below-market fixed rate renewal options for below-market leases. Other intangible assets acquired include amounts for in-place lease values that are based on our 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, we include 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, we consider leasing commissions, legal and other related expenses. A change in any of the assumptions above, which are subjective, could have a material impact on our results of operations.
The allocation of the purchase price directly affects the following in our consolidated financial statements:
•
the amount of purchase price allocated to the various tangible and intangible assets and liabilities on our Consolidated Balance Sheets;
•
the amounts allocated to the value of above-market and below-market lease values are amortized to rental income over the remaining non-cancelable terms of the respective leases. The amounts allocated to all other tangible and intangible assets are recognized in depreciation or amortization expense. Thus, depending on the amounts allocated between land and other depreciable assets, changes in the purchase price allocation among our assets could have a material impact on our net income; and
•
the period of time over which tangible and intangible assets are depreciated varies greatly, and thus, changes in the amounts allocated to these assets will have a direct impact on our results of operations. Intangible assets are generally amortized over the respective life of the leases. We depreciate our buildings over a maximum of 40 years, but do not depreciate our land. These differences in timing could have a material impact on our results of operations.
Impairment of long-lived assets
We review real estate properties (including any related amortizable intangible assets or liabilities) for impairment each quarter or when there is an indicator, including property operating performance, changes in anticipated holding period and general market conditions, that the value of the real estate properties may be impaired. Our estimate of the expected future cash flows in testing for impairment is subjective and based on, among other things, our estimates regarding future market conditions, rental rates, occupancy levels, costs of tenant improvements, assumptions regarding the residual value of our properties at the end of our anticipated holding period, discount rates, exit capitalization rates and the length of our anticipated holding period. In preparing the projection of undiscounted future cash flows, we estimate exit capitalization rates and market rental rates using information that we obtain from market comparability studies and other comparable sources and apply the undiscounted cash flows against our expected holding period. These assumptions could differ materially from actual results. If changes in our strategy or the market conditions result in a reduction in the holding period and an earlier sale date, an impairment loss could be recognized and such loss could be material. If impairment was indicated, the carrying value of the property would be written down to its estimated fair value based on our best estimate of the property's discounted future cash flows using market derived capitalization rates, discount rates and market rental rates applied against our expected hold period.
Using the methodology discussed above, we evaluated our portfolio, as of December 31, 2025 and 2024, for impairment indicators. We did not record any impairment losses for the years ended December 31, 2025 or 2024.
Mandatorily Redeemable Instruments
We report our Mandatorily Redeemable Instruments as a liability on our Consolidated Balance Sheets at JPMIM's cash redemption value. JPMIM's cash redemption value is determined based on our NAV per Class E share or Class E unit as of our balance sheet date. For purposes of determining our NAV, our investments in real estate are recorded at fair value based on independent third-party valuations prepared by licensed appraisers in accordance with standard industry practice or in the case of real estate-related and other securities using readily available actively quoted prices.
These fair value estimates of our investments in real estate are particularly important as they are used for the calculation of NAV, which determines the adjustment to the carrying value of our Mandatorily Redeemable Instruments. Significant differences in the fair value of our Mandatorily Redeemable Instruments may result from changes in market conditions that cause our NAV, and thus JPMIM's redemption value, to increase or decrease during the period which is recorded as a component of mandatorily redeemable instruments interest costs on our Consolidated Statements of Operations.
Investments in real estate debt
Our investments in real estate debt consist of commercial mortgage loans. Our investments in real estate debt are carried at fair value as we elected the fair value option. Investments with readily available, actively 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.
Our real estate debt investments are unlikely to have readily available market quotations. As such, we determine fair value by utilizing or reviewing certain of the following (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. We classify these investments as Level 3 within the valuation hierarchy. Judgments used to determine the fair values of Level 3 instruments are more significant than those required when determining the fair value of instruments classified as Level 1 or 2 due to the inherent uncertainty of the estimates and judgments used. These values may differ materially from the values that would have been used had a ready market for these investments existed. External factors may cause those values and the values of those investments for which readily observable inputs exist, to increase or decrease over time, impacting the value of our investment which is recorded in income from investments in real estate debt on the Consolidated Statements of Operations.
Recent Accounting Pronouncements
See Note 3 - "Summary of Significant Accounting Policies" to our consolidated financial statements in this Annual Report for a discussion concerning recent accounting pronouncements.
Off-Balance Sheet Arrangements
We currently have no off-balance sheet arrangements that are reasonably likely to have a material current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
JP Morgan Real Estate Income Trust Inc. published this content on March 16, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on March 16, 2026 at 18:18 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]