Inland Real Estate Income Trust, Inc. (INRE) stock intrinsic value fair value estimate & owner earnings analysis

Inland Real Estate Income Trust owns 52 mostly grocery-anchored shopping centers (7.2 million square feet) in 24 states. At December 31, 2025 they were 92.0% occupied with a weighted average remaining lease term of 4.5 years. It has no employees and is managed by an affiliate of its sponsor, Inland; the management agreement runs to March 31, 2027. Its shares are not traded on an exchange. The board's own estimated value was $16.89 per share as of September 30, 2025, down $2.28 from the prior estimate, and the board recently chose not to pursue a sale of the company, so there is no scheduled way to sell shares at that value. What the business earns. We measure owner earnings as operating cash flow, less the swings in receivables, payables and similar items, less stock compensation, less the capital spending needed to keep the centers leased. Interest is already deducted in operating cash flow. On that basis owner earnings were about $1.07 per share in 2021, $0.98 in 2022, $0.94 in 2023, $0.91 in 2024 and $0.66 in 2025. Operating cash flow was steady ($43.3 million in 2024, $42.7 million in 2025) but capital spending on the centers rose from $13.9 million to $22.0 million, and management says it expects about $22 million again in 2026 (the first half of 2026 ran at $9.5 million). Because that higher spending is expected to continue, we anchor on roughly $0.68 per share rather than the higher figures from earlier years. Depreciation and amortization of about $57 million a year is a non-cash charge and is not deducted, which is why the company reports accounting losses while generating cash. Revenue grew about 2% in 2025 (to $153.6 million from $150.2 million), while owner earnings fell about 27% in 2025; the first year of every case therefore assumes no growth. The main risk is debt. The trust owes about $841.7 million, of which $823 million is a credit facility that matures in 2029, at a weighted average rate of 4.65%. Cash interest paid was $38.8 million in 2025, close to the $42.7 million of operating cash flow before the effect of interest is considered as a share of it. Debt is not subtracted from the valuation because interest is already deducted from the cash flows; it is reflected in the bear case. Bear case ($4.30 per share). Owner earnings slip from about $0.60 in 2026 to $0.50 by 2028 as capital spending stays near $22 million and weaker centers stay hard to lease (for example Newington Fair in Connecticut was 72.3% occupied at year end and overall occupancy slipped from 93.1% to 92.0% during 2025). In 2029 the credit facility is refinanced about 1.5 percentage points higher, cutting owner earnings to roughly $0.20 per share, where they stay. Base case ($11.30 per share). Owner earnings stay at about $0.68 per share indefinitely. We credit no growth: the trust made no acquisitions or sales in 2025 and its capital is limited, so there is no proven growth process to rely on. The centers themselves, with reinvestment already deducted, are assumed to keep earning what they earn today. We did not assume any change in refinancing cost in this case because the direction of rates by 2029 cannot be established from the filings. Bull case ($15.00 per share). Capital spending returns toward the roughly $10 million to $14 million a year seen in 2022 through 2024, taking owner earnings to about $0.90 per share, in line with the 2022 to 2024 record, and holding there. We did not credit acquisitions, rent growth or a sale of the company because none is secured. What would make this wrong. If the higher capital spending proves to be temporary catch-up work rather than a new normal, the earnings base is understated. If the 2029 refinancing is done at or below today's rate, the bear case is too harsh. If a sale or exchange listing occurs, holders could realize a price different from these values. The estimated per-share values above rest on filings through the 2025 annual report and the second-quarter 2026 report. Stock compensation was not separately reported for 2021 and 2022 and is treated as zero (it was $0.09 to $0.13 million in later years, immaterial). Some working-capital items were grouped on our own judgement; a check of net loss plus non-cash charges less capital spending against our figure agreed within 1% for 2025.