October 19, 2020 — Chicago
Dear JLL Income Property Trust Stockholders,
October marks the eight-year anniversary of JLL Income Property Trust, making it the longest-tenured daily NAV REIT in the industry. Since our inception in October 2012, we have generated an annualized 6.4% return to our investors while also delivering remarkably low volatility as measured by our standard deviation of 1.8% on Class M-I shares. We are extremely proud to continue to deliver on our founding investment objectives of generating attractive income for distribution to stockholders, preserving and protecting invested capital across market cycles and enabling the use of real estate as a component of long-term portfolio diversification.
JLL Income Property Trust enters the fourth quarter in a strong position; hopeful for strengthening market fundamentals but also bracing for uncertainties that could arise from the upcoming election and a potential COVID-19 resurgence. The quality and attractiveness of our properties and locations could not be demonstrated more clearly than by the over 700,000 square feet of new and renewal leases we have executed throughout 2020. The resiliency of our core investment thesis is also highlighted by our overall 95% leased status. To further strengthen our balance sheet for either a breakout recovery in 2021 or a more muted economic scenario, we reduced our overall leverage ratio from 39% at June 30th to 36% at the end of September. Finally, JLL Income Property Trust has continued to meet its objective of providing reliable cash flow, paying 35 consecutive quarterly dividends since inception, increasing our dividend six times during that period with an average annual dividend increase of 4.2%.
As I review these results, there are three main points to highlight:
Below you will find a more detailed discussion of JLL Income Property Trust’s performance in the quarter.
JLL Income Property Trust ended the third quarter with 78 properties well diversified by property type, geography and tenant base. Our core investment thesis, focused on well-located, well-leased institutional quality properties, combined with the application of conservative leverage, is designed to help preserve and protect investors’ capital during events such as these cycle-ending disruptions. As such, we believe JLL Income Property Trust is well-positioned to deliver on our investment objectives through these challenging times.
During times of greater uncertainty, certainly a fair characterization of 2020 so far, investors tend to seek safety and security. The case for investing in real estate is often made through the sheer weight of its asset class as compared to other investment alternatives – a reasonable premise given commercial real estate’s ranking as the third largest component of the investable universe. Private real estate’s statistical comparisons in terms of non-correlation and lower volatility are also quite compelling. Moreover, long-term patient investors may also want to consider how real estate bridges the past, present and future more so than any other asset class.
The useful economic life of the typical building is two to five times longer than any other “blue chip” investment. Land can represent a significant component of a property’s investment value and retains its economic value over time, while buildings frequently have proven flexible and adaptable over long periods. The income streams generated from well-located, core properties are generally more stable and longer-lived than the financial health of the tenants that are the source of that income. Tenants inevitably come and go as their financial circumstances and location preferences change. Yet, the enduring, adaptable reuse value of the real estate remains intact – especially within the core real estate sectors, which by definition are selected for their longevity of value across multiple cycles. It is this longer-term view that drives our investment strategy.
As the current market environment continues to evolve and post modest improvement, we remain focused on delivering our targeted investment performance, while also keeping our employees and tenants safe and supporting the communities in which we work and invest. I want to reiterate that I am incredibly proud of the way our organization has executed and performed in what has been an incredibly complex and dynamic environment. I want to thank my team for their dedication and efforts, and you for being patient, loyal stockholders.
Sincerely,
C. Allan Swaringen
President & CEO
JLL Income Property Trust
JLL Income Property Trust, Inc. (NASDAQ: ZIPTAX; ZIPTMX; ZIPIAX; ZIPIMX), is a daily NAV REIT that owns and manages a diversified portfolio of high quality, income-producing apartment, industrial, grocery-anchored retail, healthcare and office properties located in the United States. JLL Income Property Trust expects to further diversify its real estate portfolio over time, including on a global basis.
LaSalle Investment Management, Inc. a member of the JLL group and advisor to JLL Income Property Trust, is one of the world’s leading real estate investment managers with approximately $79 billion equity and debt investments under management (as of Q4 2022). LaSalle’s diverse client base includes public and private pension funds, insurance companies, governments, corporations, endowments and private individuals from across the globe. LaSalle sponsors a complete range of investment vehicles including separate accounts, open and closed-end funds, public securities and entity-level investments. LaSalle is a wholly-owned, operationally independent subsidiary of Jones Lang LaSalle Inc. (NYSE: JLL), one of the world’s largest real estate companies. For more information please visit www.lasalle.com.
This press release may contain forward-looking statements with respect to JLL Income Property Trust. Forward-looking statements are statements that are not descriptions of historical facts and include statements regarding management’s intentions, beliefs, expectations, research, market analysis, plans or predictions of the future. Because such statements include risks, uncertainties and contingencies, actual results may differ materially from those expressed or implied by such forward-looking statements. Past performance is not indicative of future results and there can be no assurance that future dividends will be paid.
You should read the prospectus carefully for a description of the risks associated with an investment in JLL Income Property Trust. Some of these risks include but are not limited to the following:
This literature contains forward-looking statements within the meaning of federal securities laws and regulations. These forward-looking statements are identified by their use of terms such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “should,” “will,” and other similar terms, including references to assumptions and forecasts of future results. Forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties, and other factors that may cause the actual results to differ materially from those anticipated at the time the forward-looking statements are made. These risks, uncertainties, and contingencies include, but are not limited to, the following: our ability to effectively raise capital in our offering; uncertainties relating to changes in general economic and real estate conditions; uncertainties relating to the implementation of our investment strategy; and other risk factors as outlined in our prospectus and periodic reports filed with the Securities and Exchange Commission. Although JLLIPT believes the expectations reflected in such forward-looking statements are based upon reasonable assumptions, we can give no assurance that the expectations will be attained or that any deviation will not be material. JLLIPT undertakes no obligation to update any forward-looking statement contained herein to conform the statement to actual results or changes in our expectations.
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