Some of the risks related to investing in commercial real estate include, but are not limited to: market risks such as local property supply and demand conditions; tenants’ inability to pay rent; tenant turnover; economic matters such as inflation and interest rate fluctuations; increases in operating costs; changes in laws and regulations; relative illiquidity of real estate investments; changing market demographics; acts of nature such as hurricanes, earthquakes, tornadoes or floods; and availability of financing.
An investment in Inland Residential Trust’s shares involves significant risks. If Inland Residential Trust is unable to effectively manage these risks, it may not meet its investment objectives and investors may lose some or all of their investment. Some of the risks specifically related to investing in Inland Residential Trust include, but are not limited to: the board of directors, rather than the trading market, determines the offering price of shares; there is limited liquidity because shares are not bought and sold on an exchange; repurchase programs may be modified or terminated; a typical time horizon for an exit strategy is longer than five years; there is no guarantee that a liquidity event will occur; distributions cannot be guaranteed and have been, and may continue to be, paid from sources other than cash flow from operations, including borrowings and DRP proceeds; and failure to continue to qualify as a real estate investment trust and thus being required to pay federal, state and local taxes. Please consult Inland Residential Trust’s most recent Annual Report on Form 10-K and any subsequent Quarterly Reports on Form 10-Q for more information on the specific risks.