InvenTrust Properties Corp. 10-K

Item 9A. Controls and Procedures As required by Rule 13a-15(b) and Rule 15d-15(b) under the Securities Exchange Act, our management, including our Principal Executive Officer and our Principal Financial Officer evaluated as of December 31, 2021, the effectiveness of our disclosure controls and procedures as defined in Exchange Act Rules 13a-15(e) and Rule 15d-15(e). Based on that evaluation, our Principal Executive Officer and our Principal Financial Officer concluded that our disclosure controls and procedures, as of December 31, 2021, were effective for the purpose of ensuring that information required to be disclosed by us in this report is recorded, processed, summarized and reported within the time periods specified by the rules and forms of the Exchange Act and is accumulated and communicated to management, including the Principal Executive Officer and our Principal Financial Officer as appropriate to allow timely decisions regarding required disclosures. Management’s Annual Report on Internal Control Over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f). Our management, including our Principal Executive Officer and Principal Financial Officer, evaluated as of December 31, 2021, the effectiveness of our internal control over financial reporting based on the framework in "Internal Control-Integrated Framework" issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013). Based on its evaluation, our management has concluded that we maintained effective internal control over financial reporting as of December 31, 2021. The rules of the SEC do not require us to have, and this Annual Report on Form 10-K does not include, an attestation report of an independent registered public accounting firm regarding internal control over financial reporting. 39 Changes in Internal Control over Financial Reporting There has been no change in our internal control over financial reporting during the quarter ended December 31, 2021, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. Item 9B. Other Information None. Part III Item 10. Directors, Executive Officers and Corporate Governance The information called for by this Item is contained in our definitive Proxy Statement for our 2022 Annual Meeting of Stockholders, and is incorporated herein by reference. Item 11. Executive Compensation The information called for by this Item is contained in our definitive Proxy Statement for our 2022 Annual Meeting of Stockholders, and is incorporated herein by reference. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters The information called for by this Item is contained in our definitive Proxy Statement for our 2022 Annual Meeting of Stockholders, and is incorporated herein by reference. Equity Compensation Plan Information The following table provides information regarding our equity compensation plans as of December 31, 2021. I II Equity compensation plans not approved by security holders: Number of Shares Issuable Upon Vesting of Outstanding RSU Awards (a) Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in column I ) (b) InvenTrust Properties Corp. 2015 Incentive Award Plan (c) 609,603 1,498,127 Represents restricted share unit ("RSU") awards outstanding under the Incentive Award Plan as of December 31, 2021. a. Includes shares of common stock available for future grants under the Incentive Award Plan as of December 31, 2021. b. The weighted average grant date price per share of common stock underlying the unvested restricted stock units based on total outstanding restricted stock units as of December 31, 2021 was $30.12 . Item 13. Certain Relationships and Related Transactions, and Director Independence The information called for by this Item is contained in our definitive Proxy Statement for our 2022 Annual Meeting of Stockholders, and is incorporated herein by reference. Item 14. Principal Accounting Fees and Services. The information called for by this Item is contained in our definitive Proxy Statement for our 2022 Annual Meeting of Stockholders, and is incorporated herein by reference. 40 Part IV Item 15. Exhibits and Financial Statement Schedules (a) Documents filed as part of this Annual Report Page Report of Independent Registered Public Accounting Firm (PCAOB ID: 185 ) F- 2 1 Consolidated Financial Statements Consolidated Balance Sheets as of December 31, 2021 and 2020 F- 4 Consolidated Statements of Operations and Comprehensive Income (Loss) for the years ended December 31, 2021, 2020 and 2019 F- 5 Consolidated Statements of Equity for the years ended December 31, 2021, 2020 and 2019 F- 6 Consolidated Statements of Cash Flows for the years ended December 31, 2021, 2020 and 2019 F- 7 Notes to Consolidated Financial Statements F- 9 2 Consolidated Financial Statement Schedules Schedule III - Real Estate and Accumulated Depreciation F- 31 All schedules other than those indicated in the index have been omitted as the required information is inapplicable or the information is presented in the consolidated financial statements or related notes. 3 EXHIBITS The following documents are filed as exhibits to this report: EXHIBIT NO. DESCRIPTION 2.1 Master Modification Agreement, dated as of March 12, 2014, by and among Inland American Real Estate Trust, Inc., Inland American Business Manager & Advisor, Inc., Inland American Lodging Corporation, Inland American Holdco Management LLC, Inland American Retail Management LLC, Inland American Office Management LLC, Inland American Industrial Management LLC and Eagle I Financial Corp. (incorporated by reference to Exhibit 2.1 to the Registrant’s Form 8-K, as filed by the Registrant with the SEC on March 13, 2014) 2.2 Asset Acquisition Agreement, dated as of March 12, 2014, by and among Inland American Real Estate Trust, Inc., Inland American Holdco Management LLC, Inland American Retail Management LLC, Inland American Office Management LLC, Inland American Industrial Management LLC and Eagle I Financial Corp. (incorporated by reference to Exhibit 2.2 to the Registrant’s Form 8-K, as filed by the Registrant with the SEC on March 13, 2014) 2.3 Separation and Distribution Agreement by and between Inland American Real Estate Trust, Inc. and Xenia Hotels & Resorts, Inc., dated as of January 20, 2015 (incorporated by reference to Exhibit 2.1 to the Registrant’s Form 8-K, as filed by the Registrant with the SEC on January 23, 2015) 2.4 Separation and Distribution Agreement by and between InvenTrust Properties Corp. and Highlands REIT, Inc., dated as of April 14, 2016 (incorporated by reference to Exhibit 2.1 to the Registrant’s Form 8-K, as filed by the Registrant with the SEC on April 14, 2016) 2.5 Stock Purchase Agreement by and among InvenTrust Properties Corp., University House Communities Group, Inc. and UHC Acquisition Sub LLC, dated as of January 3, 2016 (incorporated by reference to Exhibit 2.1 to the Registrant's Form 10-Q, as filed by the Registrant on May 10, 2016) 2.6 Amendment No. 1 to Stock Purchase Agreement, dated as of May 30, 2016, by and among InvenTrust Properties Corp., University House Communities Group, Inc. and UHC Acquisition Sub LLC (incorporated by reference to Exhibit 2.2 to the Registrant's Form 8-K, as filed by the Registrant on June 27, 2016) 2.7 Amendment No. 2 to Stock Purchase Agreement, dated as of June 20, 2016, by and among InvenTrust Properties Corp., University House Communities Group, Inc. and UHC Acquisition Sub LLC (incorporated by reference to Exhibit 2.3 to the Registrant's Form 8-K, as filed by the Registrant on June 27, 2016) 3.1 Seventh Articles of Amendment and Restatement of InvenTrust Properties Corp., as amended (incorporated by reference to Exhibit 3.1 to the Registrant’s Form 10-Q, as filed by the Registrant with the SEC on May 14, 2015) 3.2 Articles of Amendment of InvenTrust Properties Corp. (incorporated by reference to Exhibit 3.1 to the Registrant’s Form 8-K, as filed by the Registrant with the SEC on August 5, 2021) 3.3 Articles of Amendment of InvenTrust Properties Corp. (incorporated by reference to Exhibit 3.2 to the Registrant’s Form 8-K, as filed by the Registrant with the SEC on August 5, 2021) 3.4 Articles Supplementary of InvenTrust Properties Corp. (incorporated by reference to Exhibit 3.2 to the Registrant’s Form 8-K, as filed by the Registrant with the SEC on October 12, 2021) 3.5 Third Amended and Restated Bylaws of the Company, dated as of October 12, 2021 (incorporated by reference to Exhibit 3.1 to the Registrant’s Form 8-K, as filed by the Registrant with the SEC on October 12, 2021) 41 EXHIBIT NO. DESCRIPTION 4.1 Statement regarding restrictions on transferability of shares of common stock (to appear on stock certificate or to be sent upon request and without charge to stockholders issued shares without certificates) (incorporated by reference to Exhibit 4.4 to the Registrant’s Amendment No. 1 to Form S-11 Registration Statement, as filed by the Registrant with the SEC on July 31, 2007 (file number 333-139504)) 4.2 Third Amended and Restated Distribution Reinvestment Plan (incorporated by reference to Appendix A to the prospectus dated November 1, 2019 included in Post-Effective Amendment No. 1 to the Registrant’s Registration Statement on Form S-3 (No. 333-172862) filed November 1, 2019) 4.3* Description of Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934 (incorporated by reference to Exhibit 4.3 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2021, as filed by the Registrant with the SEC on February 15, 2022) 10.1 Amended and Restated Master Management Agreement, dated as of March 12, 2014, by and between Inland American Real Estate Trust, Inc. and Inland American Retail Management LLC (incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K, as filed by the Registrant with the Securities and Exchange Commission on March 13, 2014) 10.2 Amended and Restated Master Management Agreement, dated as of March 12, 2014, by and between Inland American Real Estate Trust, Inc. and Inland American Office Management LLC (incorporated by reference to Exhibit 10.2 to the Registrant’s Form 8-K, as filed by the Registrant with the Securities and Exchange Commission on March 13, 2014) 10.3 Amended and Restated Master Management Agreement, dated as of March 12, 2014, by and between Inland American Real Estate Trust, Inc. and Inland American Industrial Management LLC (incorporated by reference to Exhibit 10.3 to the Registrant’s Form 8-K, as filed by the Registrant with the Securities and Exchange Commission on March 13, 2014) 10.4 Articles of Association of Oak Real Estate Association by and among Inland Real Estate Corporation, Inland Real Estate Trust, Inc., Inland Western Retail Real Estate Trust, Inc. and Inland American Real Estate Trust, Inc., dated September 29, 2006 (incorporated by reference to Exhibit 10.139 to the Registrant’s Quarterly Report on Form 10-Q, as filed by the Registrant with the SEC on November 7, 2006) 10.5 Operating Agreement of Oak Property and Casualty L.L.C. by and among Inland Real Estate Corporation, Inland Retail Real Estate Trust, Inc., Inland Western Retail Real Estate Trust, Inc. and Inland American Real Estate Trust, Inc, dated September 29, 2006 (incorporated by reference to Exhibit 10.140 to the Registrant’s Quarterly Report on Form 10-Q, as filed by the Registrant with the SEC on November 7, 2006) 10.6 Oak Property and Casualty L.L.C. Membership Participation Agreement by and among Inland Real Estate Corporation, Inland Retail Real Estate Trust, Inc., Inland Western Retail Real Estate Trust, Inc., Inland American Real Estate Trust, Inc., and Oak Property and Casualty L.L.C. dated September 29, 2006 (incorporated by reference to Exhibit 10.141 to the Registrant’s Quarterly Report on Form 10-Q, as filed by the Registrant with the SEC on November 7, 2006) 10.7 Indemnity Agreement, dated as of August 8, 2014, by and between Inland American Real Estate Trust, Inc., and Xenia Hotels & Resorts, Inc., and Inland American Lodging Group, Inc. (incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q, as filed by the Registrant with the SEC on August 14, 2014) 10.8. 1 ^ Separation and Consulting Agreement, dated as of September 6, 2017, between InvenTrust Properties Corp. and David F. Collins (incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K, as filed by the Registrant with the SEC on September 7, 2017) 10.8. 2 ^ First Amendment to Separation and Consulting Agreement, dated as of December 8, 2017, between InvenTrust Properties Corp. and David F. Collins (incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K, as filed by the Registrant with the SEC on December 11, 2017) 10.8. 3 ^ Second Amendment to Separation and Consulting Agreement, dated as of October 5, 2018, between InvenTrust Properties Corp. and David F. Collins (incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K, as filed by the Registrant with the SEC on October 9, 2018) 10. 9 ^ Employment Offer Letter, dated as of May 10, 2018, by and between InvenTrust Properties Corp. and Ivy Greaner 10. 10 ^ Severance Agreement and General Release, dated as of August 27, 2018, by and between Michael E. Podboy and InvenTrust Properties Corp. (incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K, as filed by the Registrant with the SEC on August 27, 2018) 10. 1 1 ^ Employment Offer Letter, dated as of June 20, 2019, by and between InvenTrust Properties Corp. and Daniel J. Busch (incorporated by reference to Exhibit 10.2 to the Registrant’s Form 10-Q as filed by the Registrant on August 8, 2019) 10 .12 Asset Purchase Agreement, dated as of September 17, 2014, by and among Inland American Real Estate Trust, Inc., IHP I Owner JV, LLC, IHP West Homestead (PA) Owner LLC and Northstar Realty Finance Corp. (incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K, as filed by the Registrant with the SEC on September 22, 2014) 10. 13.1 ^ InvenTrust Properties Corp. 2015 Incentive Award Plan (incorporated by reference to Exhibit 99.1 to the Registrant’s Form S-8 Registration Statement, as filed by the Registrant with the SEC on June 19, 2015) 10. 13.2 ^ First Amendment to InvenTrust Properties Corp. 2015 Incentive Award Plan, dated May 6, 2016 (incorporated by reference to Exhibit 10.3 to the Registrant’s Form 10-Q, as filed by the Registrant with the SEC on August 15, 2016) 10.1 4 ^ Form of Time-Based Restricted Stock Unit Agreement (incorporated by reference to Exhibit 10.2 to the Registrant’s Form 10-Q, as filed by the Registrant with the SEC on August 10, 2017) 10.1 5 ^ Form of Director Restricted Stock Unit Agreement for 2016 Pro Rata Awards (incorporated by reference to Exhibit 10.10.3 to the Registrant's Form 10-K, as filed by the Registrant with the SEC on March 17, 2017) 10.1 6 ^ Form of Director Restricted Stock Unit Agreement for 2017 Annual Pro Rata Awards (incorporated by reference to Exhibit 10.3 to the Registrant’s Form 10-Q, as filed by the Registrant with the SEC on August 10, 2017) 10.1 7 ^ Form of Director Restricted Stock Unit Agreement (incorporated by reference to Exhibit 10.4 to the Registrant’s Form 10-Q, as filed by the Registrant with the SEC on August 10, 2017) 10.1 8 ^ InvenTrust Properties Corp. Director Compensation Program (incorporated by reference to Exhibit 10.1 to the Registrant’s Form 10-Q, as filed by the Registrant with the SEC on August 10, 2017) 10.1 9 ^ InvenTrust Properties Corp. Executive Severance and Change of Control Plan (incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K, as filed by the Registrant on July 13, 2018) 42 EXHIBIT NO. DESCRIPTION 10. 20 ^ Form of Performance-Based Restricted Stock Unit Agreement (incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K, as filed by the Registrant with the SEC on May 14, 2019) 10 .21 First Amendment to Indemnity Agreement by and among Inland American Real Estate Trust, Inc. and Xenia Hotels & Resorts, Inc., dated as of February 3, 2015 (incorporated by reference to Exhibit 10.3 to the Registrant’s Form 8-K, as filed by the Registrant with the SEC on February 9, 2015) 10. 22.1 Amended and Restated Term Loan Credit Agreement dated as of December 21, 2018, among InvenTrust Properties Corp., as Borrower, Wells Fargo Bank, National Association, as Administrative Agent, Bank of America, N.A and U.S. Bank National Association, as tranche A-1 Co-Syndication Agents, PNC Bank, National Association and U.S. Bank National Association, as tranche A-2 Co-Syndication Agents, BMO Harris Bank, N.A. and Fifth Third Bank, as tranche A-1 Co-Documentation Agents, KeyBank National Association, as tranche A-2 Documentation Agent, and the other lenders from time to time party thereto (incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K, as filed by the Registrant with the SEC on December 31, 2018) 10.22.2 First Amendment, dated as of September 22, 2021, to Amended and Restated Term Loan Credit Agreement, among InvenTrust Properties Corp., Wells Fargo Bank, National Association and the other lenders party thereto (incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K, as filed by the Registrant with the SEC on September 22, 2021) 10. 23.1 Second Amended and Restated Credit Agreement dated as of December 21, 2018, among InvenTrust Properties Corp., as borrower, KeyBank National Association, as Administrative Agent, KeyBanc Capital Markets Inc. and Wells Fargo Securities, LLC, as Joint Book Managers, KeyBanc Capital Markets Inc., Wells Fargo Securities, LLC, JPMorgan Chase Bank, N.A., Bank of America, N.A., PNC Bank, National Association, and BMO Harris Bank, N.A., as Joint Lead Arrangers, Wells Fargo Bank, National Association, and JPMorgan Chase Bank, N.A., as Co-Syndication Agents, Bank of America, N.A., PNC Bank, National Association, and BMO Harris Bank, N.A., as Co-Documentation Agents, and the other lenders from time to time party thereto (incorporated by reference to Exhibit 10.3 to the Registrant’s Form 8-K, as filed by the Registrant with the SEC on December 31, 2018) 10.23.2 First Amendment, dated as of September 22, 2021, to Second Amended and Restated Credit Agreement, among InvenTrust Properties Corp., KeyBank, National Association and the other lenders party thereto (incorporated by reference to Exhibit 10.2 to the Registrant's Form 8-K, as filed by the Registrant with the SEC on September 22, 2021) 10. 24^ Form of Director Restricted Stock Unit Agreement for Annual Awards (incorporated by reference to Exhibit 10.1 to the Registrant’s Form 10-Q, as filed by the Registrant with the SEC on August 7, 2020) 10.25^ Separation and Consulting Agreement, by and between InvenTrust Properties Corp. and Thomas McGuinness, dated as of February 18, 2021 (incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K, as filed by the Registrant with the SEC on February 23, 2021) 10.26 Third Amended and Restated Share Repurchase Program (incorporated by reference to Exhibit 99.2 to the Registrant’s Current Report on Form 8-K, as filed by the Registrant with the SEC on April 12, 2021) 10.27^ Form of Indemnification Agreement (incorporated by reference to Exhibit 10.1 to the Registrant’s Form 10-Q, as filed by the Registrant with the SEC on November 9, 2017) 21.1* Subsidiaries of the Registrant 23.1* Consent of KPMG LLP 31.1* Certification by Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 31.2* Certification by Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 32.1** Certification by Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 32.2** Certification by Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 101 The following financial information from our Annual Report for the year ended December 31, 2021, filed with the Securities and Exchange Commission on February 15, 2022, is formatted in Extensible Business Reporting Language ("XBRL"): (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations and Comprehensive Income (Loss), (iii) Consolidated Statements of Equity, (iv) Consolidated Statements of Cash Flows (v) Notes to Consolidated Financial Statements (tagged as blocks of text). 104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) * Filed as part of this Annual Report ** This certification is deemed furnished, and not filed, with the SEC and is not to be incorporated by reference into any filing of the Registrant under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Annual Report on Form 10-K, irrespective of any general incorporation language contained in such filing. ^ Management contract or compensatory plan or arrangement. 43 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. INVENTRUST PROPERTIES CORP. By: /s/ Daniel J. Busch Name: Daniel J. Busch President and Chief Executive Officer Date: February 15, 2022 Pursuant to the requirements of the Securities Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Signature Title Date By: /s/ Daniel J. Busch President, Chief Executive Officer and Director (Principal Executive Officer) February 15, 2022 Name: Daniel J. Busch By: /s/ Michael Phillips Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial Officer and Principal Accounting Officer) February 15, 2022 Name: Michael Phillips By: /s/ Stuart Aitken Director February 15, 2022 Name: Stuart Aitken By: /s/ Amanda Black Director February 15, 2022 Name: Amanda Black By: /s/ Thomas F. Glavin Director February 15, 2022 Name: Thomas F. Glavin By: /s/ Thomas P. McGuinness Director February 15, 2022 Name: Thomas P. McGuinness By: /s/ Scott A. Nelson Director February 15, 2022 Name: Scott A. Nelson By: /s/ Paula J. Saban Director February 15, 2022 Name: Paula J. Saban By: /s/ Michael A. Stein Director February 15, 2022 Name: Michael A. Stein By: /s/ Julian E. Whitehurst Director February 15, 2022 Name: Julian E. Whitehurst 44 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULE Consolidated Financial Statements and Supplementary Data Page Report of Independent Registered Public Accounting Firm F- 2 Financial Statements: Consolidated Balance Sheets as of December 31, 2021 and 2020 F- 4 Consolidated Statements of Operations and Comprehensive Income (Loss) for the years ended December 31, 2021, 2020 and 2019 F- 5 Consolidated Statements of Equity for the years ended December 31, 2021, 2020 and 2019 F- 6 Consolidated Statements of Cash Flows for the years ended December 31, 2021, 2020 and 2019 F- 7 Notes to Consolidated Financial Statements F- 9 Schedule III - Real Estate and Accumulated Depreciation F- 31 All other schedules have been omitted as the information is inapplicable, not required, or the information is included elsewhere in the consolidated financial statements or related notes thereto. F-1 Report of Independent Registered Public Accounting Firm To the Stockholders and Board of Directors InvenTrust Properties Corp.: Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheets of InvenTrust Properties Corp. and subsidiaries (the Company) as of December 31, 2021 and 2020, the related consolidated statements of operations and comprehensive income (loss), equity, and cash flows for each of the years in the three-year period ended December 31, 2021, and the related notes and financial statement schedule III (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the years in the three‑year period ended December 31, 2021, in conformity with U.S. generally accepted accounting principles. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Expected hold period of investment properties As discussed in Note 2 to the consolidated financial statements, the Company assesses the carrying values of its investment properties (including any related intangible assets or liabilities) on an individual basis when events or changes in circumstances, including changes in the expected holding period, indicate their carrying value may not be fully recoverable. If it is determined that the carrying value of the investment property is not recoverable because the expected undiscounted cash flows do not exceed that carrying value of the property, the Company records an impairment loss to the extent that the carrying value exceeds the estimated fair value. Net investment properties as of December 31, 2021 was $1,923 million, or 87% of total assets. F-2 We identified the assessment of the expected hold period for the investment properties evaluated for impairment as a critical audit matter because of the significance of the estimate to the evaluation of the recoverability of the investment properties. Changes in the expected hold period could have a material impact on the projected operating cash flows utilized in the recoverability analysis for the investment property. Subjective and challenging auditor judgment was required to evaluate the reasonableness of management’s assessment of expected hold period. The following are the primary procedures we performed to address this critical audit matter. We evaluated the Company’s consideration of individual real estate properties for potential reductions in expected hold period: • Inquiring of Company officials to evaluate the likelihood that an investment property will be sold before the end of its expected hold period. • Inspecting meeting minutes of the board of directors and the investment committee to evaluate the likelihood that an investment property will be sold before the end of its expected hold period. • Inquiring and obtaining representations from the Company regarding the status and evaluation of any potential disposal of properties. We corroborated that information with others in the organization who are responsible for, and have authority over, disposition activities and compared with the Company’s documented investment plans. • Reading external communications with investors in order to identify information regarding potential sales of the Company’s properties, or other indicators of a reduction in an investment property’s expected hold period. /s/ KPMG LLP We have served as the Company’s auditor since 2005. Chicago, Illinois February 15, 2022 F-3 INVENTRUST PROPERTIES CORP. Consolidated Balance Sheets (in thousands, except share amounts) As of December 31, 2021 2020 Assets Investment properties Land $ 598,936 $ 577,750 Building and other improvements 1,664,525 1,640,693 Construction in progress 9,642 3,246 Total 2,273,103 2,221,689 Less accumulated depreciation ( 350,256 ) ( 292,248 ) Net investment properties 1,922,847 1,929,441 Cash, cash equivalents and restricted cash 44,854 223,770 Investment in unconsolidated entities 107,944 109,051 Intangible assets, net 81,026 95,722 Accounts and rents receivable 30,059 28,983 Deferred costs and other assets, net 25,685 20,372 Total assets $ 2,212,415 $ 2,407,339 Liabilities Debt, net $ 533,082 $ 555,109 Accounts payable and accrued expenses 36,208 28,284 Distributions payable 13,802 13,642 Intangible liabilities, net 28,995 34,872 Other liabilities 28,776 36,569 Total liabilities 640,863 668,476 Commitments and contingencies Stockholders' Equity Preferred stock, $ 0.001 par value, 40,000,000 shares authorized, none outstanding. — — Common stock, $ 0.001 par value, 1,460,000,000 shares authorized, 67,344,374 shares issued and outstanding as of December 31, 2021 and 71,998,654 shares issued and outstanding as of December 31, 2020 67 72 Additional paid-in capital 5,452,550 5,566,902 Distributions in excess of accumulated net income ( 3,876,743 ) ( 3,815,662 ) Accumulated comprehensive loss ( 4,322 ) ( 12,449 ) Total stockholders' equity 1,571,552 1,738,863 Total liabilities and stockholders' equity $ 2,212,415 $ 2,407,339 See accompanying notes to the consolidated financial statements. F-4 INVENTRUST PROPERTIES CORP. Consolidated Statements of Operations and Comprehensive Income (Loss) (in thousands, except share and per share amounts) Year Ended December 31 2021 2020 2019 Income Lease income, net $ 207,350 $ 192,957 $ 220,653 Other property income 1,087 1,229 1,981 Other fee income 3,542 3,647 3,856 Total income 211,979 197,833 226,490 Operating expenses Depreciation and amortization 87,143 87,755 97,429 Property operating 32,788 27,909 31,944 Real estate taxes 31,312 30,845 34,232 General and administrative 38,192 33,141 35,361 Direct listing costs 19,769 — — Total operating expenses 209,204 179,650 198,966 Other (expense) income Interest expense, net ( 16,261 ) ( 18,749 ) ( 22,717 ) Loss on extinguishment of debt ( 400 ) ( 2,543 ) ( 2,901 ) Provision for asset impairment — ( 9,002 ) ( 2,359 ) Gain on sale of investment properties, net 1,522 1,752 62,011 Equity in earnings (losses) of unconsolidated entities 6,398 ( 3,141 ) 957 Other income and expense, net 606 3,326 1,384 Total other (expense) income, net ( 8,135 ) ( 28,357 ) 36,375 Net (loss) income from continuing operations ( 5,360 ) ( 10,174 ) 63,899 Net loss from discontinued operations — — ( 25,500 ) Net (loss) income $ ( 5,360 ) $ ( 10,174 ) $ 38,399 Weighted-average common shares outstanding, basic 71,072,933 72,040,623 72,914,406 Weighted-average common shares outstanding, diluted 71,072,933 72,040,623 72,990,790 Net (loss) income per common share, continuing operations, basic and diluted $ ( 0.08 ) $ ( 0.14 ) $ 0.88 Net loss per common share, discontinued operations, basic and diluted $ — $ — $ ( 0.35 ) Net (loss) income per common share, basic and diluted $ ( 0.08 ) $ ( 0.14 ) $ 0.53 Distributions declared per common share outstanding $ 0.78 $ 0.76 $ 0.73 Distributions paid per common share outstanding $ 0.78 $ 0.75 $ 0.73 Comprehensive income (loss) Net (loss) income $ ( 5,360 ) $ ( 10,174 ) $ 38,399 Unrealized gain (loss) on derivatives 3,795 ( 16,199 ) 816 Reclassification for amounts recognized in net (loss) income 4,332 2,693 ( 1,396 ) Comprehensive income (loss) $ 2,767 $ ( 23,680 ) $ 37,819 See accompanying notes to the consolidated financial statements. F-5 INVENTRUST PROPERTIES CORP. Consolidated Statements of Equity (in thousands, except share amounts) Number of Shares Common Stock Additional Paid-in Capital Distributions in Excess of Accumulated Net Income Accumulated Comprehensive Income (Loss) Total Beginning balance, January 1, 2019 72,908,273 $ 73 $ 5,586,407 $ ( 3,735,810 ) $ 1,637 $ 1,852,307 Net income — — — 38,399 — 38,399 Unrealized gain on derivatives — — — — 816 816 Reclassification to interest expense, net — — — — ( 1,396 ) ( 1,396 ) Distributions declared — — — ( 53,473 ) — ( 53,473 ) Stock-based compensation, net 76,650 — 3,324 — — 3,324 Repurchase of common stock under share repurchase plan ( 851,760 ) ( 1 ) ( 20,375 ) — — ( 20,376 ) Ending balance, December 31, 2019 72,133,163 72 5,569,356 ( 3,750,884 ) 1,057 1,819,601 Net loss — — — ( 10,174 ) — ( 10,174 ) Unrealized loss on derivatives — — — — ( 16,199 ) ( 16,199 ) Reclassification to interest expense, net — — — — 2,634 2,634 Reclassification to equity in losses of unconsolidated entities — — — — 59 59 Distributions declared — — — ( 54,604 ) — ( 54,604 ) Stock-based compensation, net 71,199 — 2,840 — — 2,840 Repurchase of common stock under share repurchase plan ( 213,612 ) — ( 5,201 ) — — ( 5,201 ) Common stock issuance costs in excess of proceeds from distribution reinvestment plan 7,904 — ( 93 ) — — ( 93 ) Ending balance, December 31, 2020 71,998,654 72 5,566,902 ( 3,815,662 ) ( 12,449 ) 1,738,863 Net loss — — — ( 5,360 ) — ( 5,360 ) Unrealized gain on derivatives — — — — 3,795 3,795 Reclassification to interest expense, net — — — — 4,198 4,198 Reclassification to equity in earnings of unconsolidated entities — — — — 134 134 Distributions declared — — — ( 55,721 ) — ( 55,721 ) Stock-based compensation, net 101,363 6 5,653 — — 5,659 Repurchase of common stock under share repurchase plan ( 755,643 ) ( 7 ) ( 16,678 ) — — ( 16,685 ) Repurchase of common stock through tender offer ( 4,000,000 ) ( 4 ) ( 103,327 ) — — ( 103,331 ) Ending balance, December 31, 2021 67,344,374 $ 67 $ 5,452,550 $ ( 3,876,743 ) $ ( 4,322 ) $ 1,571,552 See accompanying notes to the consolidated financial statements. F-6 INVENTRUST PROPERTIES CORP. Consolidated Statements of Cash Flows (in thousands) Year Ended December 31, 2021 2020 2019 Cash flows from operating activities: Net (loss) income $ ( 5,360 ) $ ( 10,174 ) $ 38,399 Adjustments to reconcile net (loss) income to net cash provided by operating activities: Depreciation and amortization 87,143 87,755 97,429 Amortization of above and below-market leases and lease inducements, net ( 4,318 ) ( 7,060 ) ( 6,148 ) Amortization of debt premiums, discounts, and financing costs, net 1,816 1,826 1,706 Straight-line rent adjustment, net ( 3,272 ) ( 2,590 ) ( 3,609 ) Provision for asset impairment — 9,002 2,359 Provision for estimated credit losses 2,271 11,119 1,557 Gain on sale of investment properties, net ( 1,522 ) ( 1,752 ) ( 62,011 ) Loss on extinguishment of debt 400 2,543 2,901 Equity in (earnings) losses of unconsolidated entities ( 6,398 ) 3,141 ( 957 ) Distributions from unconsolidated entities 8,085 6,380 8,228 Stock-based compensation, net 9,116 4,449 5,541 Provision for indemnification claims — — 25,500 Changes in operating assets and liabilities: Accounts and rents receivable 257 ( 7,451 ) ( 4,922 ) Deferred costs and other assets, net ( 1,834 ) 192 ( 1,624 ) Accounts payable and accrued expenses 1,875 ( 1,888 ) ( 66 ) Other liabilities 1,697 ( 1,337 ) 1,725 Net cash provided by operating activities 89,956 94,155 106,008 Cash flows from investing activities: Purchase of investment properties ( 53,078 ) ( 41,446 ) ( 359,095 ) Capital expenditures and tenant improvements ( 15,361 ) ( 12,918 ) ( 17,754 ) Investment in development and re-development projects ( 5,466 ) ( 2,189 ) ( 7,103 ) Proceeds from the sale of investment properties, net 14,807 8,027 346,707 Proceeds from the sale of unconsolidated entity — — 30,000 Indemnification payment related to the sale of investment properties — — ( 30,000 ) Lease commissions and other leasing costs ( 4,055 ) ( 1,391 ) ( 5,621 ) Other assets ( 179 ) 3,096 333 Other liabilities ( 1,369 ) ( 2,239 ) 736 Net cash used in investing activities ( 64,701 ) ( 49,060 ) ( 41,797 ) Cash flows from financing activities: Payment of tax withholdings for share-based compensation $ ( 1,833 ) $ ( 1,072 ) $ ( 1,397 ) Repurchase of common stock under share repurchase plan ( 16,685 ) ( 5,201 ) ( 20,384 ) Repurchase of common stock through tender offer ( 103,331 ) — — Proceeds from distribution reinvestment plan — 185 — Distributions to stockholders ( 55,561 ) ( 54,214 ) ( 53,250 ) Proceeds from debt 431,000 150,000 118,000 Payoffs of debt ( 450,000 ) ( 167,349 ) ( 106,041 ) Debt prepayment penalties — ( 2,504 ) ( 1,834 ) Principal payments on mortgage debt ( 1,306 ) ( 1,441 ) ( 2,692 ) F-7 INVENTRUST PROPERTIES CORP. Consolidated Statements of Cash Flows (in thousands) Year Ended December 31, 2021 2020 2019 Payment of loan fees and deposits ( 6,065 ) ( 100 ) ( 446 ) Payment of finance lease liabilities ( 390 ) ( 377 ) ( 272 ) Net cash used in financing activities ( 204,171 ) ( 82,073 ) ( 68,316 ) Net decrease in cash, cash equivalents and restricted cash ( 178,916 ) ( 36,978 ) ( 4,105 ) Cash, cash equivalents and restricted cash at beginning of year 223,770 260,748 264,853 Cash, cash equivalents and restricted cash at end of year $ 44,854 $ 223,770 $ 260,748 Supplemental disclosure of cash flow information: Cash flow disclosure, including non-cash investing and financing activities: Cash paid for interest, net of capitalized interest $ 14,570 $ 17,256 $ 21,259 Cash paid for income taxes, net of refunds $ 276 $ 833 $ 446 Distributions payable to stockholders $ 13,802 $ 13,642 $ 13,252 Accrued capital expenditures and tenant improvements $ 3,552 $ 1,404 $ 1,180 Capitalized costs placed in service $ 7,453 $ 8,213 $ 29,027 Gross issuance of shares for share-based compensation $ 5,040 $ 3,593 $ 4,051 Reclassification of registration statement costs incurred to equity issuance costs $ — $ 278 $ — Purchase of investment properties: Net investment properties $ 45,791 $ 37,329 $ 332,148 Accounts and rents receivable, lease intangibles, and deferred costs and other assets 8,734 6,066 37,103 Accounts payable and accrued expenses, lease intangibles, and other liabilities ( 1,447 ) ( 1,949 ) ( 10,156 ) Cash outflow for purchase of investment properties, net 53,078 41,446 359,095 Capitalized acquisition costs ( 59 ) ( 121 ) ( 2,334 ) Credits and other changes in cash outflow, net 1,691 922 9,003 Gross acquisition price of investment properties $ 54,710 $ 42,247 $ 365,764 Sale of investment properties: Net investment properties $ 10,953 $ 6,400 $ 286,682 Accounts and rents receivable, lease intangibles, and deferred costs and other assets 2,332 249 9,295 Accounts payable and accrued expenses, lease intangibles, and other liabilities — ( 374 ) ( 9,189 ) Gain on sale of investment properties, net 1,522 1,752 62,011 Loss on extinguishment of debt — — ( 2,092 ) Proceeds from sale of investment properties, net 14,807 8,027 346,707 Credits and other changes in cash inflow, net 174 11,093 11,093 Gross disposition price of investment properties $ 14,981 $ 19,120 $ 357,800 See accompanying notes to the consolidated financial statements. F-8 INVENTRUST PROPERTIES CORP. Notes to Consolidated Financial Statements December 31, 2021, 2020 and 2019 1. Organization On October 4, 2004, InvenTrust Properties Corp. (the "Company" or "InvenTrust") was incorporated as Inland American Real Estate Trust, Inc., a Maryland corporation, and has elected and operates in a manner to be taxed as a real estate investment trust ("REIT") for federal tax purposes. The Company changed its name to InvenTrust Properties Corp. in April of 2015 and is focused on owning, leasing, redeveloping, acquiring and managing a multi-tenant retail platform. The accompanying consolidated financial statements include the accounts of the Company, as well as all wholly-owned subsidiaries. Subsidiaries generally consist of limited liability companies ("LLCs") and limited partnerships ("LPs"). All significant intercompany balances and transactions have been eliminated. Each retail property is owned by a separate legal entity that maintains its own books and financial records. Each separate legal entity's assets are not available to satisfy the liabilities of other affiliated entities, except as otherwise disclosed in " Note 6. Investment in Unconsolidated Entities ". As of December 31, 2021 and 2020, the Company had an investment in one unconsolidated real estate joint venture, as disclosed in " Note 6. Investment in Unconsolidated Entities ". The Company determined it has a single reportable segment, multi-tenant retail, for disclosure purposes in accordance with United States ("U.S.") generally accepted accounting principles ("GAAP"). Unless otherwise noted, all square feet and dollar amounts are stated in thousands, except share, per share and per square foot data. Number of properties and square feet are unaudited. The following table summarizes the Company's retail portfolio as of December 31, 2021 and 2020: Wholly-Owned Retail Properties Unconsolidated Retail Properties at 100% 2021 2020 2021 2020 No. of properties 55 55 7 10 Gross Leasable Area (square feet) 8,560 8,392 1,768 2,470 New York Sock Exchange Listing and Reverse Stock Split On October 12, 2021, the Company’s shares of common stock were listed and began trading on the New York Stock Exchange ("NYSE") under the ticker symbol "IVT" (the "NYSE Listing"). On August 5, 2021, the Company effected a 1-for-10 reverse stock split of its common stock. As a result of the reverse stock split, every ten shares of issued and outstanding common stock were changed into one share of common stock, with any fractional shares being rounded up to the next higher whole share. Immediately after effecting the reverse stock split, the Company decreased the par value of each issued and outstanding share of common stock from $ 0.01 par value per share to $ 0.001 par value per share. In addition, equitable adjustments were made to the maximum number of shares of common stock that may be issued pursuant to the "Incentive Award Plan" and the maximum number of shares of common stock that may be issued upon exercise of incentive stock options under the Incentive Award Plan, in each case, to reflect the 1-for-10 reverse stock split. The number of shares of common stock subject to outstanding awards under the Incentive Award Plan, and certain performance goals applicable to such awards, have also been equitably adjusted to reflect the 1-for-10 reverse stock split. Unless otherwise noted, the share and per share information of the Company's common stock in these consolidated financial statements have been retroactively adjusted to give effect to the 1-for-10 reverse stock split for all periods presented. "Dutch Auction" Tender Offer On October 12, 2021, in conjunction with the NYSE Listing, the Company commenced a modified "Dutch Auction" tender offer (the "Tender Offer") to purchase for cash up to $ 100.0 million of its shares of common stock at a price not greater than $ 28.00 nor less than $ 25.00 per share, net to the seller in cash, less any applicable withholding of taxes and without interest. The Tender Offer expired on November 8, 2021. As a result of the Tender Offer, the Company accepted for purchase 4,000,000 shares of its common stock (which represented approximately 5.6 % of the total number of shares of common stock outstanding as of November 8, 2021) at a purchase price of $ 25.00 per share, for a cost of approximately $ 100.0 million, excluding related fees and expenses. Aggregate fees and expenses of $ 3.3 million were recognized as reductions to common stock and additional paid-in capital. F-9 2. Basis of Presentation and Summary of Significant Accounting Policies Estimates, Risks, and Uncertainties The accompanying consolidated financial statements have been prepared in accordance with GAAP, which requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Significant estimates, judgments and assumptions are required in a number of areas, including, but not limited to, evaluating the impairment of long-lived assets, allocating the purchase price of acquired retail properties, determining the fair value of debt and evaluating the collectability of accounts receivable. The Company bases these estimates, judgments and assumptions on historical experience and various other factors that the Company believes to be reasonable under the circumstances. Actual results may differ from these estimates. Reclassifications The Company has made certain reclassifications to the consolidated balance sheet as of December 31, 2020 to conform to the 2021 presentation, including $ 1,160 reported as restricted cash, now reported as cash, cash equivalents and restricted cash. Variable Interest Entities The Company evaluates its investments in LLCs and LPs to determine whether each such entity may be a variable interest entity ("VIE"). The accounting standards related to the consolidation of VIEs require qualitative assessments to determine whether the Company is the primary beneficiary. Determination of the primary beneficiary is based on whether the Company has (i) power to direct significant activities of the VIE and (ii) an obligation to absorb losses or the right to receive benefits that could be potentially significant to the VIE. The Company consolidates a VIE if it is deemed to be the primary beneficiary. The equity method of accounting is applied to entities in which the Company is not the primary beneficiary, or if the entity is not a VIE and the Company does not have control, but can exercise significant influence over the entity with respect to its operations and major decisions. As of December 31, 2021 and 2020, the Company had no VIEs. Revenue Recognition Adoption of Topic 842 In conjunction with the adoption of Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 842, Leases , ("Topic 842") on January 1, 2019, the Company elected the package of practical expedients which permitted the Company to not reassess: (1) whether any expired or existing contracts are, or contain leases; (2) the lease classification for any expired or existing leases; and (3) any initial direct costs for existing leases as of the effective date. In addition, the Company has elected to not separate lease and non-lease components for all qualifying leases. In effect, this generally relieves the Company from accounting for certain consideration under ASC 606, Revenue from Contracts with Customers ("Topic 606"). As a result of the election, all income arising from leases is presented on a combined basis as lease income, net. Lease Income The majority of revenue recognized from the Company's retail properties is comprised of fixed and variable consideration received from tenants under long-term operating leases with varying terms. Fixed consideration generally consists of minimum lease payments for the rental of retail space while the variable consideration generally consists of reimbursements of the tenant's pro-rata share of certain operating expenses incurred by the Company, including real estate taxes, special assessments, insurance, utilities, common area maintenance, management fees and certain capital repairs. Certain other tenants are subject to net leases whereby the tenant is responsible for fixed minimum lease payments to the Company, as well as directly paying all costs and expenses associated with occupancy to third party service providers. Such direct payments to third parties are not recorded as revenue and expense by the Company. Minimum lease payments are recognized on a straight-line basis over the term of each lease. The cumulative difference between fixed consideration recognized on a straight-line basis and the cash payments due under the provisions of the lease agreements is recorded as deferred rent receivable and is included as a component of accounts and rents receivable. The Company records lease termination income when all conditions of a signed termination agreement have been met, the tenant is no longer occupying the property, and termination income amounts due are considered collectible. The Company defers recognition of contingent lease income until the specified target that triggers the contingent lease income is achieved. F-10 The Company commences revenue recognition on its leases when the lessee takes possession of, or controls the physical use of, the leased asset, unless the lessee is constructing improvements for which the Company is deemed to be the owner for accounting purposes. If the Company is deemed the owner for accounting purposes, the leased asset is the finished space and revenue recognition commences when the lessee takes possession of it, typically when the improvements are substantially complete. Alternatively, if the lessee is deemed to be the owner of the improvements for accounting purposes, then the leased asset is the unimproved space, and any tenant improvement allowances funded under the lease are treated as lease incentives, which reduce lease income recognized over the lease term, and the Company commences revenue recognition when the lessee takes possession of the unimproved space. The determination of who owns the tenant improvements, for accounting purposes, is based on contractual rights and subject to judgment. In making that judgment, no one factor is determinative. The Company routinely considers: • whether the lease stipulates how and on what a tenant improvement allowance may be spent; • whether the tenant is required to provide evidence supporting the cost of improvements prior to reimbursement; • whether the tenant or landlord retains legal title to the improvements; • the uniqueness of the improvements; • the expected economic life of the tenant improvements relative to the length of the lease; and • who constructs or directs the construction of the improvements. Staff Q&A, Topic 842 and Topic 840: Accounting for Lease Concessions Related to the Effects of the COVID-19 Pandemic In April 2020, the FASB issued a document titled Staff Q&A, Topic 842 and Topic 840: Accounting for Lease Concessions Related to the Effects of the COVID-19 Pandemic ("FASB Q&A document"). The FASB Q&A document permits an election whereby an entity is not required to evaluate whether certain relief provided by a lessor in response to the COVID-19 pandemic is a lease modification (the "COVID-19 election"). An entity that makes this election can then either apply the modification guidance to that relief or account for the concession as if it were contemplated as part of the existing contract. This election is available for concessions related to the effects of the COVID-19 pandemic that do not result in a substantial increase in the rights of the lessor or the obligations of the lessee. The Company has adopted the COVID-19 election, under which lease amendments providing tenants with COVID-19 related rent relief are not treated as lease modifications unless: • the total payments required by the amended lease are not substantially equal to or less than the total payments required by the original lease; or • the amended lease results in an increase to the lease term. A deferral affects the timing of cash receipts, but the amount of consideration is substantially the same as that required by the original lease. Under the Company's COVID-19 election, deferrals are accounted for as if no changes to the lease contract were made. The Company continues to recognize rental income and increase lease receivables during the deferral period. Rent abatements or other reductions in total payments are treated as negative variable rent in the period to which the rent relates. Credit Losses The Company reviews the collectability of amounts due from its tenants on a regular basis. Such reviews consider the tenant's financial condition and payment history and other economic conditions impacting the tenant. Changes in collectability occur when the Company no longer believes it is probable that substantially all the lease payments will be collected over the term of the lease. If collection is not probable, regardless of whether the Company has entered into an amendment to provide the tenant with COVID-19 related rent relief, the lease payments will be accounted for on a cash basis, and revenue will be recorded as cash is received. If reassessed, and the collection of substantially all of the lease payments from the tenant becomes probable, the accrual basis of revenue recognition is reestablished. The provision for estimated credit losses resulting from changes in the expected collectability of lease payments, including variable payments, is recognized as a direct adjustment to lease income, and a direct write-off of the operating lease receivables, including straight-line rent receivable. F-11 Other Fee Income The Company recognizes other fee income when it satisfies a performance obligation relating to services provided to its joint venture partnership. The resulting receivables are settled through recurring monthly payments for the services provided over the term of the contract. The Company generally does not receive prepayments for services or recognize revenue prior to being legally entitled to payment. As a result, the Company does not generally record contract assets or contract liabilities. Property management and asset management fees are recognized over time as services are rendered to the joint venture partnership. The bundled services of the property management performance obligation and asset management performance obligation each qualify as a series of distinct services satisfied over time. The variable consideration related to each of the performance obligations is recognized in each of the periods that directly relate to the Company's efforts to provide those services. Accordingly, the Company elected the optional exemption provided by Topic 606 to not disclose information about remaining wholly unsatisfied performance obligations. The variability in timing of the property management and asset management fees, which generally relate to the fluctuation in cash receipts from tenants and potential changes in equity capitalization, are resolved on a monthly basis. For certain services, the Company acts as an agent on behalf of the customer to arrange for performance by a third party. Based on the Company's judgment, both the underlying asset management service activities and the underlying property management service activities are not distinct but are inputs (or fulfillment activities) to provide the combined output (either the overall asset management service or the overall property management service). Leasing commissions and other fees are recognized at a point in time consistent with the underlying service rendered to the joint venture partnership. The leasing performance obligation and other performance obligations are satisfied at the point in which the customer is transferred control over and consumes the benefit of the service. The uncertainty of the leasing commissions and other fees are resolved upon delivery of the underlying service. Generally, the first and second installments of leasing commissions are paid upon lease execution and rent commencement, respectively. Sale of Real Estate The Company derecognizes real estate and recognizes a gain or loss when a contract exists and control of the property has transferred to the buyer. Control of the property, including controlling financial interest, is generally considered to transfer upon closing through transfer of the legal title and possession of the property, at which point the Company recognizes a gain or loss equal to the difference between the transaction price and the carrying amount of the property. Acquisition of Real Estate The Company evaluates the inputs, processes and outputs of each asset acquired to determine if the transaction is a business combination or asset acquisition. If an acquisition qualifies as a business combination, the related transaction costs are expensed. If an acquisition qualifies as an asset acquisition, the related transaction costs are generally capitalized and amortized over the useful life of the acquired assets. Generally, our acquisitions of real estate qualify as asset acquisitions. The Company allocates the purchase price of real estate to land, building, other building improvements, tenant improvements, intangible assets and liabilities (such as the value of above- and below-market leases, in-place leases and origination costs associated with in-place leases). The values of above- and below-market leases are recorded as intangible assets and intangible liabilities, respectively, and are amortized as either a decrease (in the case of above-market leases) or an increase (in the case of below-market leases) to lease income, net over the remaining term of the associated tenant lease. The values, if any, associated with in-place leases are recorded as intangible assets and amortized to depreciation and amortization expense over the remaining lease term. The difference between the contractual rental rates and the Company's estimate of market rental rates is measured over a period equal to the remaining non-cancelable term of the leases plus the term of any below-market renewal options. For the amortization period, the remaining term of leases with renewal options at terms below market reflect the assumed exercise of such below-market renewal options, if reasonably assured. If a tenant vacates its space prior to the contractual expiration of the lease and no rental payments are being made on the lease, any unamortized balance of the related intangible asset or liability is written off. Tenant improvements are depreciated and origination costs are amortized over the remaining term of the lease or charged against earnings if the lease is terminated prior to its contractual expiration date. F-12 With the assistance of a third-party valuation specialist, the Company performs the following procedures for assets acquired: • Estimate the value of the property "as if vacant" as of the acquisition date; • Allocate the value of the property among land, building, and other building improvements and determine the associated useful life for each; • Calculate the value and associated life of above- and below-market leases on a tenant-by-tenant basis. The difference between the contractual rental rates and the Company’s estimate of market rental rates is measured over a period equal to the remaining term of the leases (using a discount rate which reflects the risks associated with the leases acquired, including geographical location, size of leased area, tenant profile and credit risk); • Estimate the fair value of the tenant improvements, legal costs and leasing commissions incurred to obtain the leases and calculate the associated useful life for each; • Estimate the fair value of assumed debt, if any; and • Estimate the intangible value of the in-place leases based on lease execution costs of similar leases as well as lost rent payments during an assumed lease-up period and their associated useful lives on a tenant-by-tenant basis. Properties Held for Sale In determining whether to classify a property as held for sale, the Company considers whether: (i) management has committed to a plan to sell the property; (ii) the property is available for immediate sale, in its present condition; (iii) the Company has initiated a program to locate a buyer; (iv) the Company believes that the sale of the property is probable; (v) the Company has received a significant non-refundable deposit for the purchase of the property; (vi) the Company is actively marketing the property for sale at a price that is reasonable in relation to its estimated fair value; and (vii) actions required for the Company to complete the plan indicate that it is unlikely that any significant changes will be made to the plan. When all criteria are met, the property is classified as held for sale and carried at the lower of cost or estimated fair value less costs to sell. Additionally, if the sale represents a strategic shift that has (or will have) a major effect on the Company's results and operations, the income and expenses for the period are classified as discontinued operations on the consolidated statements of operations and comprehensive income (loss) for all periods presented. Impairment of Long Lived Assets The Company assesses the carrying values of long-lived tangible and intangible assets whenever events or changes in circumstances indicate that they may not be fully recoverable. An example of an event or changed circumstance is a reduction in the expected hold period of a property. When such event or circumstances occur, if it is expected that the carrying value is not recoverable, because the expected undiscounted cash flows do not exceed that carrying value, the Company recognize an impairment loss to the extent that the carrying value exceeds the estimated fair value. The valuation and possible subsequent impairment of investment properties is a significant estimate that can and does change based on the Company's continuous process of analyzing each property's economic condition over time and reviewing and updating assumptions about uncertain inherent factors, including observable inputs such as contractual revenues and unobservable inputs such as forecasted revenues and expenses, estimated net disposition proceeds, and discount rate. These unobservable inputs are based on a property's market conditions and expected growth rates. Assumptions and estimates about future cash flows and capitalization rates are complex and subjective. Changes in economic and operating conditions and the Company's ultimate investment intent that occur subsequent to the impairment analyses could impact these assumptions and result in additional impairment. The Company's assessment of expected hold period for investment properties evaluated for impairment is of particular significance because of the material impact it has on the evaluation of the property's recoverability. Changes in the Company's disposition strategy or changes in the marketplace may alter the hold period of an asset or asset group which may result in an impairment loss and such loss could be material to the Company's financial condition or operating performance. Periodically, management assesses whether there are any indicators that the carrying value of the Company's investments in unconsolidated entities may be other-than-temporarily impaired. To the extent other-than-temporary impairment has occurred, the loss is measured as the excess of the carrying value of the investment over the estimated fair value of the investment. The estimated fair value of the investment is generally derived from the cash flows generated from the underlying real property investments of the investee. F-13 Real Estate Capitalization and Depreciation Real estate is reflected at cost less accumulated depreciation within investment properties on the consolidated balance sheets. Ordinary repairs and maintenance are expensed as incurred. Depreciation expense is computed using the straight-line method. A range of estimated useful lives of 15 - 30 years is used for buildings and other improvements, and a range of 5 - 20 years is used for furniture, fixtures and equipment. Finance lease right-of-use ("ROU") asset amortization is computed using the straight-line method over the lease term and included in depreciation and amortization expense. Tenant improvements are amortized on a straight-line basis over the lesser of the life of the tenant improvement or the lease term. Amortization is included in depreciation and amortization expense. Deferred leasing costs are recognized as a part of deferred costs and other assets, net and are amortized to depreciation and amortization expense over the remaining term of the associated tenant lease. Direct and indirect costs that are clearly related to the construction and improvements of investment properties are capitalized. Costs incurred for interest, property taxes and insurance are capitalized during periods in which activities necessary to prepare the property for its intended use are in progress. Cash, Cash Equivalents and Restricted Cash The Company considers all demand deposits, money market accounts and investments in certificates of deposit and repurchase agreements with a maturity of three months or less, at the date of purchase, to be cash equivalents. The Company maintains its cash and cash equivalents at financial institutions. The combined account balances at one or more institutions generally exceed the Federal Deposit Insurance Corporation ("FDIC") insurance coverage. The Company periodically assesses the credit risk associated with these financial institutions. The Company believes insignificant credit risk exists related to amounts on deposit in excess of FDIC insurance coverage. The Company had restricted cash of $ 7,865 and $ 1,160 as of December 31, 2021 and 2020, respectively. Restricted cash often consists of lenders’ escrows, operating real estate escrows for taxes, insurance, capital expenditures and payments required under certain lease agreements, and funds restricted through lender or other agreements, including funds held in escrow for future acquisitions. Fair Value Measurements In accordance with FASB ASC 820, Fair Value Measurement and Disclosures ("Topic 820"), the Company defines fair value based on the price that would be received upon sale of an asset or the exit price that would be paid to transfer or settle a liability in an orderly transaction between market participants at the measurement date. The Company uses a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value. The fair value hierarchy consists of the three broad levels described below: • Level 1 - Quoted prices in active markets for identical assets or liabilities that the entity has the ability to access. • Level 2 - Observable inputs, other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. • Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets and liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs. The Company has estimated the fair value of its financial instruments and non-financial assets using available market information and valuation methodologies the Company believes to be appropriate for these purposes. Considerable judgment and a high degree of subjectivity are involved in developing these estimates and, accordingly, they are not necessarily indicative of amounts that would be realized upon disposition. The carrying amounts of cash, cash equivalents and restricted cash, accounts and rents receivables, other assets, accounts payable, accrued expenses and other liabilities reasonably approximate fair value, in management’s judgment, because of their short-term nature. Fair value information pertaining to derivative financial instruments, investment properties, investments in unconsolidated entities and debt is provided in "Note 9. Fair Value Measurements" . F-14 Derivative Instruments In the normal course of business, the Company is exposed to the effect of interest rate changes. The Company's objective in using interest rate derivatives is to manage its exposure to interest rate movements and add stability to interest expense. To accomplish this objective, the Company uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable rate amounts from a counterparty in exchange for the Company making fixed rate payments over the life of the agreement without exchange of the underlying notional amount. The Company has a policy of only entering into contracts with established financial institutions based upon their credit ratings and other factors. When viewed in conjunction with the underlying and offsetting exposure that the derivatives are designed to hedge, the Company has not sustained a material loss from those instruments, nor does it anticipate any material adverse effect on its net income or financial position in the future from the use of derivatives. The Company recognizes all derivatives on the consolidated balance sheets at fair value. Additionally, changes in fair value will affect either equity or earnings depending on whether the derivative instruments qualify as a hedge for accounting purposes and, if so, the nature of the hedging activity. When the underlying transaction is terminated or completed, all changes in the fair value of the instrument are marked-to-market with changes in value included in earnings each period until the instrument matures. Any derivative instrument used for risk management that does not meet the criteria for hedge accounting is marked-to-market each period in earnings. The Company does not use derivatives for trading or speculative purposes. Income Taxes The Company has elected and operates in a manner to be taxed as a REIT under the Internal Revenue Code of 1986, as amended (the "Code") for federal income tax purposes commencing with the tax year ended December 31, 2005. To qualify as a REIT, the Company is generally required to distribute at least 90% of its REIT taxable income (subject to certain adjustments) to its stockholders each year (the "90% Distribution Requirement"). As a REIT, the Company is entitled to a tax deduction for some or all of the dividends paid to stockholders. Accordingly, the Company generally will not be subject to federal income taxes as long as it currently distributes to stockholders an amount equal to or in excess of the Company's taxable income. If the Company fails to qualify as a REIT in any taxable year, without the benefit of certain relief provisions, the Company will be subject to federal and state income tax on its taxable income at regular corporate tax rates. Even if the Company qualifies for taxation as a REIT, the Company may be subject to certain state and local taxes on its income, property or net worth and federal income and excise taxes on its undistributed income. From time to time, the Company may elect to treat certain of its consolidated subsidiaries as taxable REIT subsidiaries ("TRSs") pursuant to the Code. Among other activities, TRSs may participate in non-real estate related activities and/or perform non-customary services for tenants and are subject to federal and state income tax at regular corporate tax rates. Income tax expense or benefit is recognized as a part of other income and expense, net. During the year ended December 31, 2021, the Company did not have any operations within TRSs. During the year ended December 31, 2020, the Company either revoked the TRS elections or dissolved the legal entities for any of its consolidated subsidiaries that were TRSs. Income tax expense for the year ended December 31, 2021 generally pertains to Texas margin tax. Income tax expense for the years ended December 31, 2020 and 2019 is generally comprised of federal and state taxes paid by consolidated TRSs and certain state taxes paid by the Company. Under the federal legislation enacted on March 27, 2020, known as the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act"), certain limitations on the deductibility of net operating losses ("NOLs") enacted under prior federal tax legislation have been temporarily rolled back. As a result of the anticipated NOL carryback claims for the Company's TRSs, total additional tax benefits of $ 1,172 were recognized as a part of other income and expense, net during the year ended December 31, 2020. The Company has accrued no material interest or penalties relating to income taxes. As of December 31, 2021, the Company's 2020, 2019, and 2018 tax years remain subject to examination by U.S. and various state tax jurisdictions. F-15 Share-Based Compensation As of December 31, 2021, the Company has one share-based compensation plan under which time-based restricted stock units ("RSUs") and performance-based RSUs have been issued with tandem dividend equivalents. Compensation expense related to these awards, which are generally equity classified, and the tandem dividend equivalent cash payments are recognized as a part of general and administrative expense. Time-based awards are generally measured at grant date fair value and not subsequently re-measured. Compensation expense related to these awards is recognized on a straight-line basis over the vesting period. Performance-based awards are measured at grant date fair value and each grantee is eligible to vest in a number of RSUs ranging from 0 % to 100 % of the total number granted based on specified performance levels. For awards with a performance condition, compensation cost is recognized when the performance condition is considered probable of achievement. If a performance award has more than one potential outcome, recognition of compensation cost is based on the most likely outcome. During the service period, a cumulative catch-up approach is used to account for changes in the assessment of which outcome is most likely to occur. Absent a change in the determination of the most likely outcome, compensation expense related to these awards would be recognized on a straight-line basis from the grant date through the vesting date. Forfeitures of awards are recognized as they occur. Recently Issued Accounting Pronouncements Adopted Standard Description Date of adoption Effect on the financial statements or other significant matters ASU No. 2021-01, Reference Rate Reform (Topic 848): Scope ASU 2021-01 is intended to clarify that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition. Topic 848 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. Application of these expedients, which may be elected over time as reference rate reform activities occur, preserves the presentation of derivatives consistent with past presentation. January 2021 The Company's adoption of ASU No. 2021-01 did not result in any incremental elections under Topic 848 regarding cash flow hedges. The Company continues to evaluate the guidance of Topic 848 and expects that its application will not change its presentation of derivatives as cash flow hedges. Other recently issued accounting standards or pronouncements not disclosed in the foregoing tables have been excluded because they are either not relevant to the Company, or are not expected to have, or did not have, a material effect on the consolidated financial statements of the Company. F-16 3. Revenue Recognition Operating Leases Minimum lease payments to be received under long-term operating leases and short-term specialty leases, excluding additional percentage rent based on tenants' sales volume and tenant reimbursements of certain operating expenses, and assuming no exercise of renewal options or early termination rights, are as follows: For the year ending December 31, As of December 31, 2021 2022 $ 151,695 2023 139,212 2024 123,513 2025 106,443 2026 91,175 Thereafter 257,841 Total $ 869,879 The table above includes payments from tenants who have taken possession of their space and tenants who have been moved to the cash basis of accounting for revenue recognition purposes. The remaining lease terms range from less than one year to seventy-seven years . The following table reflects the disaggregation of lease income, net: Year Ended December 31, 2021 2020 2019 Minimum base rent $ 128,716 $ 127,630 $ 139,827 Real estate tax recoveries 27,874 27,898 31,484 Common area maintenance, insurance, and other recoveries 23,948 21,842 24,187 Ground rent income 13,167 12,976 13,789 Above and below-market rent and lease inducement amortization, net 4,318 7,060 6,148 Short-term and other lease income 3,378 2,825 2,094 Termination fee income 406 1,255 1,217 Straight-line rent adjustment, net 3,272 2,590 3,464 Provision for uncollectible straight-line rent ( 468 ) ( 3,214 ) ( 145 ) Provision for uncollectible billed rent and recoveries ( 2,264 ) ( 9,212 ) ( 1,722 ) Reversal of uncollectible billed rent and recoveries 5,003 1,307 310 Lease income, net $ 207,350 $ 192,957 $ 220,653 As of December 31, 2021, the Company had granted approximately $ 5,339 on a cumulative basis of rental payment deferrals, with contractual payment terms through the year ending December 31, 2023. During the year ended December 31, 2021, deferred rental payments of $ 4,973 became due of which the Company has collected $ 4,858 as of December 31, 2021. Other Fee Income Other fee income is derived from services provided to the Company's unconsolidated real estate joint venture and therefore deemed to be related party transactions. The property management, asset management, leasing and other services are provided over the term of the contract which has a remaining original duration through 2023. The Company had receivables of $ 215 and $ 327 as of December 31, 2021 and 2020, respectively, which are included in deferred costs and other assets, net. The following table reflects the disaggregation of other fee income: Timing of Satisfaction of Performance Obligations Year Ended December 31, 2021 2020 2019 Property management fee Over time $ 1,952 $ 2,093 $ 2,421 Asset management fee Over time 1,128 1,098 1,074 Leasing commissions and other fees Point in time 462 456 361 Other fee income $ 3,542 $ 3,647 $ 3,856 F-17 4. Acquired Properties The following table reflects the retail properties acquired, accounted for as asset acquisitions, during the year ended December 31, 2021: Acquisition Date Property Metropolitan Area Gross Acquisition Price Square Feet July 12, 2021 Prestonwood Town Center (a) Dallas, TX $ 52,800 233 September 2, 2021 Rio Pinar Plaza - Outparcel (b) Orlando, FL 1,910 7 $ 54,710 240 (a) This retail property was acquired from the Company's unconsolidated joint venture. See "Note 6. Investment in Unconsolidated Entities". (b) The assets, liabilities and operations of the outparcel acquired were combined for presentation purposes with a retail property already owned by the Company. The following table reflects the retail properties acquired, accounted for as asset acquisitions, during the year ended December 31, 2020: Acquisition Date Property Metropolitan Area Gross Acquisition Price Square Feet February 25, 2020 Trowbridge Crossing Atlanta, GA $ 10,950 63 March 10, 2020 Antoine Town Center (a) Houston, TX 22,254 110 November 6, 2020 Eldridge Town Center Kroger (b) Houston, TX 9,043 65 $ 42,247 238 (a) This retail property was acquired from the Company's unconsolidated joint venture. See "Note 6. Investment in Unconsolidated Entities". (b) The assets, liabilities and operations of the grocer acquired are combined for presentation purposes with the retail property already owned by the Company. Transaction costs of $ 59 and $ 121 were capitalized during the years ended December 31, 2021 and 2020, respectively. 5. Disposed Properties The following table reflects the real property disposed of during the year ended December 31, 2021: Date Property Metropolitan Area Square Feet Gross Disposition Price Gain (Loss) on Sale, net February 28, 2021 Sonterra Village (a) San Antonio, TX N/A $ 616 $ 436 March 14, 2021 Eldridge Town Center (a) Houston, TX N/A 133 104 March 31, 2021 Windward Commons (a) Alpharetta, GA N/A 150 ( 21 ) June 30, 2021 Eldridge Town Center (a) Houston, TX N/A 418 361 July 20, 2021 Kroger Tomball Houston, TX 74 13,655 636 October 31, 2021 Westpark Shopping Center (a) Washington D.C/Richmond Metro Area N/A 9 6 74 $ 14,981 $ 1,522 (a) These dispositions were related to completions of partial condemnations at four retail properties. The following table reflects the real property disposed of during the year ended December 31, 2020: Date Property Metropolitan Area Square Feet Gross Disposition Price Gain (Loss) on Sale, net February 10, 2020 University Oaks Shopping Center (a) Round Rock, TX N/A $ 527 $ 357 February 12, 2020 Centerplace of Greeley (a) Greeley, CO N/A 123 100 May 1, 2020 Woodlake Crossing San Antonio, TX 160 5,500 ( 213 ) September 30, 2020 Eldridge Town Center (a) Houston, TX N/A 451 424 November 25, 2020 Antoine Town Center (b) Houston, TX 2 800 66 December 31, 2020 Eldridge Town Center (a) Houston, TX N/A 1,055 1,018 162 $ 8,456 $ 1,752 (a) These dispositions were related to completions of partial condemnations at three retail properties. (b) Disposition was related to an outparcel at this retail property. F-18 6. Investment in Unconsolidated Entities Joint Venture Interest in IAGM As of December 31, 2021 and 2020, the Company owned a 55 % interest in one unconsolidated entity, IAGM Retail Fund I, LLC ("IAGM"), a joint venture partnership between the Company and PGGM Private Real Estate Fund ("PGGM"). IAGM was formed on April 17, 2013 for the purpose of acquiring, owning, managing, and disposing of retail properties and sharing in the profits and losses from those retail properties and their activities. The Company analyzed the joint venture agreement and determined that IAGM was not a VIE. The Company also considered the joint venture partners' participating rights under the joint venture agreement and determined that the joint venture partners have the ability to participate in major decisions, which equates to shared decision making. Accordingly, the Company has significant influence but does not control IAGM. Therefore, IAGM was not consolidated by the Company, and the equity method of accounting was applied. Under the equity method of accounting, the net equity investment of the Company and the Company's share of net income or loss from the unconsolidated entity are reflected in the consolidated balance sheets and the consolidated statements of operations and comprehensive income (loss). The following table reflects the retail properties disposed by IAGM of during the years ended December 31, 2021 and 2020: Date Property Metropolitan Area Square Feet Gross Disposition Price Gain on Sale March 10, 2020 Antoine Town Center (a) Houston, TX 110 $ 22,254 $ 1,741 July 12, 2021 Prestonwood Town Center (b) Dallas, TX 233 $ 52,800 $ 12,428 September 3, 2021 Westover Marketplace San Antonio, TX 243 $ 28,775 $ 399 December 1, 2021 South Frisco Village Frisco, TX 227 $ 32,600 $ 5,467 (a) The Company purchased Antoine Town Center from IAGM at a purchase price determined by a third party real estate valuation specialist. The Company deferred its share of IAGM's gain on sale of $ 958 and began amortizing it over 30 years as an increase to equity in earnings of unconsolidated entities. The Company completed a subsequent sale of an outparcel at this retail property to an unrelated third party which resulted in recognizing $ 54 of previously deferred gain. (b) The Company purchased Prestonwood Town Center from IAGM at a purchase price determined by a third party real estate valuation specialist. The Company deferred its share of IAGM's gain on sale of $ 6,835 and began amortizing it over 30 years as an increase to equity in earnings of unconsolidated entities. The following table reflects the mortgage paydowns by IAGM of during the years ended December 31, 2021 and 2020: Date Mortgaged Property Contractual Interest Rate Mortgage Paydown (a) Loss on Debt Extinguishment January 22, 2020 South Frisco Village 1.70 % + 1M LIBOR $ 14,872 $ 8 March 26, 2021 Westover Marketplace 4.08 % $ 23,150 $ 14 July 12, 2021 Senior secured pooled loan 1.55 % + 1M LIBOR $ 54,103 $ 215 (a) Mortgage paydowns were funded by cash on hand and proceeds from the sale of properties. During the year ended December 31, 2020, IAGM entered into two interest rate swap agreements to achieve fixed interest rates on its senior secured term loan facility previously subject to variability in the London Inter-bank Offered Rate ("LIBOR"). Each of the interest rate swaps have an effective date of April 1, 2020 and a termination date of November 2, 2023. One interest rate swap has a notional amount of $ 45,000 and achieves a fixed interest rate of 1.979 %. The other interest rate swap has a notional amount of $ 30,000 and achieves a fixed interest rate of 1.956 %. The Company recognizes its share of gains or losses resulting from IAGM's interest rate swaps as an adjustment to the Company's investment in IAGM and an increase or decrease in comprehensive income. As of December 31, 2021, the interest rate swaps were recorded as a asset with a fair value of $ 530 on IAGM's consolidated balance sheet, of which the Company's share was $ 291 . During the year ended December 31, 2020, IAGM recognized a provision for asset impairment of $ 11,016 on one retail property, of which the Company's share of this provision for asset impairment was $ 6,059 , as disclosed in "Note 9. Fair Value Measurements" . F-19 Condensed Financial Information The following table presents condensed balance sheet information for IAGM. As of December 31, 2021 December 31, 2020 Assets: Net investment properties $ 288,014 $ 387,394 Other assets 98,696 72,453 Total assets 386,710 459,847 Liabilities and equity: Mortgage debt, net 165,831 242,388 Other liabilities 12,409 19,144 Equity 208,470 198,315 Total liabilities and equity 386,710 459,847 Company's share of equity 115,513 109,928 Outside basis difference, net (a) ( 7,569 ) ( 877 ) Carrying value of investments in unconsolidated entities $ 107,944 $ 109,051 (a) The outside basis difference relates to the unamortized deferred gain on sale of Antoine Town Center and Prestonwood Town Center. The following table presents condensed income statement information of IAGM and disposed joint ventures. Year ended December 31, IAGM 2021 2020 2019 Total income $ 42,145 $ 46,259 $ 53,396 Depreciation and amortization ( 14,437 ) ( 16,303 ) ( 20,135 ) Property operating ( 7,265 ) ( 7,143 ) ( 8,372 ) Real estate taxes ( 7,507 ) ( 8,687 ) ( 9,426 ) Asset management fees ( 1,128 ) ( 1,098 ) ( 1,073 ) Interest expense, net ( 5,637 ) ( 7,455 ) ( 10,882 ) Other (expense) and income, net ( 422 ) ( 307 ) 157 Loss on debt extinguishment ( 229 ) ( 8 ) — Provision for asset impairment — ( 11,016 ) ( 1,443 ) Gain (loss) on sale of real estate, net 18,294 1,741 ( 559 ) Net income (loss) 23,814 ( 4,017 ) 1,663 Disposed joint venture Net loss — — ( 4,869 ) Total net income (loss) of unconsolidated entities $ 23,814 $ ( 4,017 ) $ ( 3,206 ) Company's share of net income (loss) $ 13,089 $ ( 2,264 ) $ ( 3,446 ) Outside basis adjustment for investee's sale of real estate, net ( 6,691 ) ( 877 ) 4,403 Equity in earnings (losses) of unconsolidated entities $ 6,398 $ ( 3,141 ) $ 957 The following table summarizes the scheduled maturities of IAGM's mortgages payable as of December 31, 2021: Scheduled maturities by year: As of December 31, 2021 2022 $ — 2023 126,022 2024 — 2025 22,880 2026 17,800 Thereafter — Total $ 166,702 As of December 31, 2021, none of IAGM's mortgages payable are recourse to the Company. It is anticipated that the joint venture will be able to repay, refinance or extend all of its debt on a timely basis. F-20 7. Intangible Assets, Liabilities, and Deferred Leasing Costs The following table summarizes the Company’s intangible assets, liabilities, and deferred leasing costs as of December 31, 2021 and 2020: As of December 31, 2021 2020 Intangible assets: In-place leases $ 137,579 $ 146,484 Above-market leases 15,082 15,124 Intangible assets 152,661 161,608 Accumulated amortization: In-place leases ( 63,741 ) ( 58,571 ) Above-market leases ( 7,894 ) ( 7,315 ) Accumulated amortization ( 71,635 ) ( 65,886 ) Intangible assets, net $ 81,026 $ 95,722 Intangible liabilities: Below-market leases $ 58,256 $ 64,963 Accumulated amortization ( 29,261 ) ( 30,091 ) Intangible liabilities, net $ 28,995 $ 34,872 Deferred leasing costs: Leasing costs $ 18,482 $ 15,029 Accumulated amortization ( 6,055 ) ( 4,298 ) Deferred leasing costs, net $ 12,427 $ 10,731 The following table provides a summary of the amortization related to intangible assets, liabilities, and deferred leasing costs for the years ended December 31, 2021, 2020 and 2019: Year ended December 31, 2021 2020 2019 Intangible assets: In-place leases $ 18,730 $ 22,994 $ 24,601 Above-market leases 2,036 2,446 2,613 Amortization of intangible assets $ 20,766 $ 25,440 $ 27,214 Intangible liabilities: Amortization of below-market leases $ 6,317 $ 9,468 $ 8,736 Deferred leasing costs: Amortization of deferred leasing costs $ 2,138 $ 1,913 $ 2,311 The following table provides a summary of the amortization during the next five years and thereafter related to intangible assets, liabilities, and deferred leasing costs as of December 31, 2021: Year ending December 31, In-place leases Above market leases Deferred leasing costs Below market leases 2022 $ 14,998 $ 1,684 $ 2,846 $ 4,850 2023 12,097 1,311 1,891 3,753 2024 9,879 989 1,605 3,014 2025 8,584 777 1,460 2,579 2026 7,638 640 1,300 2,356 Thereafter 20,642 1,787 3,325 12,443 Total $ 73,838 $ 7,188 $ 12,427 $ 28,995 F-21 8. Debt As of December 31, 2021, the Company's total debt, net, was $ 533,082 , which consists of mortgages payable, net, of $ 105,574 , unsecured term loans, net, of $ 396,508 , and a line of credit balance of $ 31,000 . The Company believes it has the ability to repay, refinance or extend any of its debt, and that it has adequate sources of funds to meet short-term cash needs. It is anticipated that the Company will use proceeds from property sales, cash on hand, and available capacity on credit agreements, if any, to repay, refinance or extend the mortgages payable maturing in the near term. The Company's credit agreements and mortgage loans require compliance with certain covenants, such as debt service coverage ratios, investment restrictions and distribution limitations. As of December 31, 2021 and 2020, the Company was in compliance with all loan covenants. Mortgages payable As of December 31, 2021 and 2020, the Company's mortgages payable, net were as follows: December 31, 2021 December 31, 2020 Mortgages payable (a) $ 105,955 $ 107,261 Discount, net of accumulated amortization ( 46 ) ( 84 ) Debt issuance costs, net of accumulated amortization ( 335 ) ( 449 ) Total mortgages payable, net $ 105,574 $ 106,728 (a) Fixed interest rates ranged from 3.49 % to 4.58 %, with a weighted average interest rate of 4.07 % as of December 31, 2021 and 2020. The following table summarizes the scheduled maturities of the Company's mortgages payable as of December 31, 2021: Scheduled maturities by year: As of December 31, 2021 2022 $ 22,399 2023 39,226 2024 15,700 2025 28,630 2026 — Thereafter — Total $ 105,955 Credit Agreements Revolving line of credit On December 21, 2018, the Company entered into an unsecured revolving credit agreement, which amended and restated its prior unsecured revolving credit agreement in its entirety, and provided for a $ 350,000 unsecured revolving line of credit (the "Revolving Credit Agreement"). On September 22, 2021, the Company entered into an amendment to the Revolving Credit Agreement (the "Amended Revolving Credit Agreement"), which provides for, among other things, an extension of the maturity of the Company's $ 350,000 Revolving Credit Agreement to September 22, 2025, with two six-month extension options. The following table summarizes the Company's activity under the revolving line of credit during the years ended December 31, 2021, and 2020: Revolving Line of Credit Interest Rate Outstanding borrowings as of January 1, 2020 $ — Draw on March 27, 2020 $ 150,000 Repayment on October 28, 2020 $ ( 100,000 ) Outstanding borrowings as of December 31, 2020 (a) $ 50,000 1.1980 % (b) Repayment on March 11, 2021 $ ( 50,000 ) Draw on November 9, 2021 $ 31,000 Outstanding borrowings as of December 31, 2021 (a) $ 31,000 1.1520 % (c) (a) As of December 31, 2021 and 2020, $ 319,000 and $ 300,000 remained undrawn, respectively, and the credit facility fee was 0.15 %. (b) Interest rate reflects 1-Month LIBOR plus 1.05 % effective December 29, 2020. (c) Interest rate reflects 1-Month LIBOR plus 1.05 % effective December 9, 2021. F-22 Unsecured term loans On December 21, 2018, the Company entered into an unsecured term loan credit agreement, which amended and restated its prior unsecured term loan credit agreement in its entirety (the “Term Loan Credit Agreement”). On September 22, 2021, the Company entered into an amendment to its $ 400,000 Term Loan Credit Agreement (the "Amended Term Loan Agreement"), which provides for, among other things, an extension of the maturity and a reallocation of indebtedness under the two outstanding tranches of term loans thereunder . The Amended Term Loan Agreement consists of a $ 200,000 5 -year tranche maturing on September 22, 2026, and a $ 200,000 5.5 -year tranche maturing on March 22, 2027. As of December 31, 2021, the Company had the following unsecured term loan tranches outstanding under the Amended Term Loan Agreement: Principal Balance Interest Rate Maturity Date $ 200.0 million 5 year - swapped to fixed rate $ 100,000 2.6795 % (a) September 22, 2026 $ 200.0 million 5 year - swapped to fixed rate 100,000 2.6795 % (a) September 22, 2026 $ 200.0 million 5.5 year - swapped to fixed rate 50,000 2.6915 % (a) March 22, 2027 $ 200.0 million 5.5 year - swapped to fixed rate 50,000 2.6990 % (a) March 22, 2027 $ 200.0 million 5.5 year - variable rate 100,000 1.2993 % (b) March 22, 2027 Total unsecured term loans 400,000 Issuance costs, net of accumulated amortization ( 3,492 ) Total unsecured term loans, net $ 396,508 (a) Interest rates reflect the fixed rates achieved through the Company's interest rate swaps. (b) Interest rate reflects 1-Month LIBOR plus 1.20 % effective December 1, 2021. As of December 31, 2020, the Company had the following borrowings outstanding under the Term Loan Credit Agreement: Principal Balance Interest Rate Maturity Date $ 250.0 million 5 year - swapped to fixed rate $ 100,000 2.6795 % (a) December 21, 2023 $ 250.0 million 5 year - swapped to fixed rate 100,000 2.6795 % (a) December 21, 2023 $ 250.0 million 5 year - variable rate 50,000 1.3548 % (b) December 21, 2023 $ 150.0 million 5.5 year - swapped to fixed rate 50,000 2.6915 % (a) June 21, 2024 $ 150.0 million 5.5 year - swapped to fixed rate 50,000 2.6990 % (a) June 21, 2024 $ 150.0 million 5.5 year - variable rate 50,000 1.3548 % (b) June 21, 2024 Total unsecured term loans 400,000 Issuance costs, net of accumulated amortization ( 1,619 ) Total outstanding credit agreements, net $ 398,381 (a) Interest rates reflect the fixed rates achieved through the Company's interest rate swaps. (b) Interest rate reflects 1-Month LIBOR plus 1.20 % effective December 1, 2020. F-23 Interest Rate Swaps During the year ended December 31, 2021, the Company entered into four interest rate forward swap agreements to address the periods between the maturity dates of the effective swaps and the maturity dates of the Amended Term Loan Agreement. In tandem, the interest rate swaps achieve fixed interest rates for a constant notional amount through the maturity dates of the Amended Term Loan Agreement. The following table summarizes the Company's four effective interest rate swaps as of December 31, 2021 and 2020: Effective Interest Rate Swaps Notional Amount Company Receives Variable Rate of Company Pays Fixed Rate of Fixed Rate Achieved Effective Date Maturity Date 5 Year Term Loan $ 100,000 1-Month LIBOR 1.47950 % 2.67950 % Dec 2, 2019 Dec 21, 2023 5 Year Term Loan 100,000 1-Month LIBOR 1.47950 % 2.67950 % Dec 2, 2019 Dec 21, 2023 5.5 Year Term Loan 50,000 1-Month LIBOR 1.49150 % 2.69150 % Dec 2, 2019 Jun 21, 2024 5.5 Year Term Loan 50,000 1-Month LIBOR 1.49900 % 2.69900 % Dec 2, 2019 Jun 21, 2024 $ 300,000 The following table summarizes the Company's four forward interest rate swaps as of December 31, 2021: Forward Interest Rate Swaps Notional Amount Company Receives Variable Rate of Company Pays Fixed Rate of Fixed Rate Achieved Effective Date Maturity Date 5 Year Term Loan $ 100,000 1-Month LIBOR 1.57625 % 2.77625 % Dec 21, 2023 Sep 22, 2026 5 Year Term Loan 100,000 1-Month LIBOR 1.57300 % 2.77300 % Dec 21, 2023 Sep 22, 2026 5.5 Year Term Loan 50,000 1-Month LIBOR 1.57700 % 2.77700 % Jun 21, 2024 Mar 22, 2027 5.5 Year Term Loan 50,000 1-Month LIBOR 1.59600 % 2.79600 % Jun 21, 2024 Mar 22, 2027 $ 300,000 The following table summarizes the effects of derivative financial instruments on the consolidated financial statements: Location and amount of gain (loss) recognized in accumulated comprehensive income Location and amount of (loss) gain reclassified from accumulated comprehensive income into net (loss) income Total interest expense presented in the consolidated statements of operations in which the effects of cash flow hedges are recorded 2021 2020 2019 2021 2020 2019 2021 2020 2019 Unrealized gain (loss) on derivatives $ 3,795 $ ( 16,199 ) $ 816 Interest expense, net $ ( 4,332 ) $ ( 2,693 ) $ 1,396 Interest expense, net $ 16,261 $ 18,749 $ 22,717 As of December 31, 2021 and 2020, each of the Company's interest rate swaps are in a liability position and included within other liabilities on the consolidated balance sheets. The Company has designated these interest rate swaps as cash flow hedges. F-24 9. Fair Value Measurements Recurring Measurements The following financial instruments are remeasured at fair value on a recurring basis: Fair Value Measurements as of Cash Flow Hedges: (a) December 31, 2021 December 31, 2020 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Derivative interest rate liabilities (b)(c) — $ ( 4,322 ) — — ( 12,449 ) — (a) During the twelve months subsequent to December 31, 2021, an estimated $ 3,068 of derivative interest rate liabilities recognized in accumulated comprehensive loss will be reclassified into earnings. (b) The Company's and IAGM's derivative liabilities are recognized as a part of other liabilities and investment in unconsolidated entities, respectively, on the Company's consolidated balance sheets. (c) As of December 31, 2021 and 2020, the Company determined that the credit valuation adjustments associated with nonperformance risk are not significant to the overall valuation of its derivatives. As a result, the Company's derivative valuations in their entirety are classified as Level 2 of the fair value hierarchy. Level 1 At December 31, 2021 and 2020, the Company had no Level 1 recurring fair value measurements. Level 2 To calculate the fair value of the derivative interest rate instruments, the Company primarily uses quoted prices for similar contracts and inputs based on data that are observed in the forward yield curve that is widely observable in the marketplace. The Company also incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements that utilize Level 3 inputs, such as estimates of current credit spreads. Level 3 At December 31, 2021 and 2020, the Company had no Level 3 recurring fair value measurements. Non-Recurring Measurements Investment Properties During the year ended December 31, 2021, the Company had no Level 3 nonrecurring fair value measurements. During the year ended December 31, 2020, the Company identified one retail property that had a reduction in its expected holding period and recorded a provision for asset impairment of $ 9,002 as a result of the fair value being lower than the property's carrying value. The Company's fair value was based on an executed sales contract. This property was disposed of on May 1, 2020. During the year ended December 31, 2019, the Company identified one retail property that had a reduction in its expected holding period and recorded a provision for asset impairment of $ 2,359 as a result of the fair value being lower than the property's carrying value. The Company's fair value was based on an executed sales contract. This property was disposed of on September 25, 2019. F-25 Assets Held by Unconsolidated Entities During the year ended December 31, 2020, the Company identified one retail property within the IAGM joint venture that had a reduction in its expected holding period by the joint venture and recorded a provision for asset impairment of $ 11,016 . A discounted cash flow model was utilized to estimate the fair value of this retail property. This cash flow model consisted of unobservable inputs such as forecasted revenues and expenses and estimated net disposition proceeds at the end of the hold period, based on market conditions and expected growth rates. A 8.50 % terminal capitalization rate and a discount rate of 9.50 % was utilized in the model based upon observable rates that the Company believed to be within a reasonable range of then current market rates, based on the nature of the underlying investment and associated risks. The Company recognized its' share of this provision for asset impairment of $ 6,059 as part of equity in earnings (losses). The following table summarizes activity for the Company’s assets measured at fair value on a non-recurring basis and the related impairment charges for the years ended December 31, 2021, 2020, and 2019: December 31, 2021 December 31, 2020 December 31, 2019 Level 3 Impairment Loss Level 3 Impairment Loss Level 3 Impairment Loss Investment properties $ — $ — $ 5,500 $ 9,002 $ 42,250 $ 2,359 Financial Instruments Not Measured at Fair Value The table below represents the estimated fair value of financial instruments presented at carrying values in the Company's consolidated financial statements as of December 31, 2021 and 2020: December 31, 2021 December 31, 2020 Carrying Value Estimated Fair Value Carrying Value Estimated Fair Value Mortgages payable $ 105,955 $ 104,938 $ 107,261 $ 106,494 Term loans $ 400,000 $ 400,470 $ 400,000 $ 400,055 Revolving line of credit $ 31,000 $ 31,062 $ 50,000 $ 50,032 The Company estimated the fair value of its mortgages payable using a weighted-average effective market interest rate of 4.44 % and 4.25 % as of December 31, 2021 and 2020, respectively. The fair value estimate of the term loans approximate the carrying value due to limited market volatility in pricing. The assumptions reflect the terms currently available on similar borrowing terms to borrowers with credit profiles similar to that of the Company's. As a result, the Company used a weighted-average interest rate of 2.39 % and 1.36 % as of December 31, 2021 and 2020, respectively, to estimate the fair value of its term loans. The Company has determined that its debt instrument valuations are classified in Level 2 of the fair value hierarchy. F-26 10. Earnings Per Share and Equity Transactions Basic earnings per share ("EPS") is computed using the two-class method by dividing net income or loss by the weighted average number of common shares outstanding for the period (the "common shares") and participating securities. The time-based restricted share awards issued pursuant to the Incentive Award Plan are deemed to be participating securities. Diluted EPS is generally computed using the treasury-stock method by dividing net income or loss by the common shares plus potential common shares resulting from time-based restricted share awards. The following table reconciles the amounts used in calculating basic and diluted earnings per share: Year ended December 31, 2021 2020 2019 Numerator: Net (loss) income from continuing operations $ ( 5,360 ) $ ( 10,174 ) $ 63,899 Earnings allocated to unvested restricted shares — — ( 29 ) Net (loss) income from continuing operations attributable to common shareholders $ ( 5,360 ) $ ( 10,174 ) $ 63,870 Net loss from discontinued operations attributable to common shareholders $ — $ — $ ( 25,500 ) Denominator: Weighted average common shares outstanding - basic 71,072,933 72,040,623 72,914,406 Effect of unvested restricted shares (a) — — 76,384 Weighted average common shares outstanding - diluted 71,072,933 72,040,623 72,990,790 Basic and diluted earnings per common share: Net (loss) income per common share, continuing operations, basic and diluted $ ( 0.08 ) $ ( 0.14 ) $ 0.88 Net loss per common share, discontinued operations, basic and diluted — — ( 0.35 ) Net (loss) income per common share, basic and diluted $ ( 0.08 ) $ ( 0.14 ) $ 0.53 (a) For the years ended December 31, 2021 and 2020, the Company has excluded the anti-dilutive effect of unvested restricted shares. On August 5, 2021, the Company effected a 1-for-10 reverse stock split of its common stock, reducing the number of shares of common stock outstanding from 712,090,283 to 71,261,403 shares on that date. Fractional shares resulted in the issuance of an additional 52,375 shares, which have been included in the total issued and outstanding shares for all periods presented. See "Note 1. Organization" for more information concerning the reverse stock split. On April 6, 2021, the Company adopted the Third Amended and Restated Share Repurchase Program, (as amended, the "SRP"). On April 12, 2021, the Company announced the reinstatement of the SRP, effective May 14, 2021, for qualifying stockholders. The repurchase price per share of $ 21.70 for eligible stockholders is equal to a 25 % discount to the most recent estimated Net Asset Value ("NAV") per share of the Company's common stock established by the Company's board of directors (the "Board"), which was $ 28.90 per share as of December 1, 2020. During the year ended December 31, 2021 , 755,643 shares were repurchased in connection with the SRP. On August 5, 2021, the Board suspended the SRP effective September 5, 2021. On November 1, 2019, the Company adopted a Second Amended and Restated Share Repurchase Program (the "Original SRP"). During the year ended December 31, 2020 , 213,612 shares were repurchased in connection with the Original SRP. Effective July 11, 2020, the Company suspended the Original SRP. During the year ended December 31, 2019, 851,760 shares were repurchased in connection with the Original SRP at a price per share of $ 2.355 . On November 1, 2019, the Company began offering shares of its common stock to existing stockholders pursuant to its Amended and Restated Distribution Reinvestment Plan ("DRP"). During the year ended December 31, 2020 , 7,904 shares, respectively, were issued pursuant to the DRP. During the year ended December 31, 2019, the Company did not issue shares pursuant to the DRP. Effective July 11, 2020, the Company suspended the DRP. F-27 11. Stock-Based Compensation Incentive Award Plan Effective as of June 19, 2015, the Company's Board adopted the Incentive Award Plan, under which the Company may grant cash and equity incentive awards to eligible employees, directors, and consultants. Time-based RSU awards granted to employees vest equally on each of the first three anniversaries of the applicable vesting commencement date, subject to the employees' continued service to the Company. The time-based RSU awards granted to directors vest on the earlier of the one -year anniversary of the applicable grant date or the date of the Company's next annual meeting of its stockholders following the grant date, subject to the directors' continued service to the Company. Performance-based RSU awards granted to employees vest at the conclusion of the performance period, subject to the recipients' continued service to the Company and achievement of the specified performance levels. The Company is authorized to grant up to 3,000,000 shares of the Company's common stock pursuant to awards under the Incentive Award Plan. As of December 31, 2021, 1,498,127 shares were available for future issuance under the Incentive Award Plan. On February 18, 2021, the Board approved grants of time-based and performance-based RSUs under the Company's Incentive Award Plan at the most recent estimated NAV per share of $ 28.90 as of December 1, 2020. On February 23, 2021, the Company announced the expected retirement of its President and Chief Executive Officer in August 2021, which resulted in accelerated recognition of certain stock-based compensation expenses. The Company also announced the appointment of certain executives in establishing a plan of succession. In connection with the appointments, the Board approved one-time grants of time-based RSUs under the Company's Incentive Award Plan at the most recent estimated NAV per share of $ 28.90 as of December 1, 2020. The following table summarizes the Company's RSU activity under the Incentive Award Plan during the years ended December 31, 2021, 2020, and 2019: Unvested Time-Based RSUs Unvested Performance-Based RSUs Weighted Average Grant Date Price Per Share Outstanding as of January 1, 2019 154,816 $ 31.80 Shares granted 122,517 145,081 $ 31.40 Shares vested ( 127,519 ) — $ 31.80 Shares forfeited ( 20,244 ) ( 6,117 ) $ 31.70 Outstanding as of December 31, 2019 129,570 138,964 $ 31.40 Shares granted 125,579 248,434 $ 31.40 Shares vested ( 114,434 ) — $ 31.40 Shares forfeited ( 30,333 ) ( 55,303 ) $ 31.40 Outstanding as of December 31, 2020 110,382 332,095 $ 31.40 Shares granted 209,539 218,835 $ 28.90 Shares vested ( 167,806 ) — $ 30.04 Shares forfeited ( 13,880 ) ( 79,562 ) $ 30.73 Outstanding as of December 31, 2021 138,235 471,368 $ 30.12 As of December 31, 2021, there was $ 4,756 of total unrecognized compensation expense related to unvested stock-based compensation arrangements that will vest through December 2023. The Company recognized stock-based compensation expense of $ 9,116 , $ 4,449 and $ 5,541 for the years ended December 31, 2021, 2020 and 2019, respectively, as a part of general and administrative expenses . F-28 12. Commitments and Contingencies The Company is subject, from time to time, to various types of third-party legal claims or litigation that arise in the ordinary course of business, including, but not limited to, property loss claims, personal injury or other damages resulting from contact with the Company's properties. These claims and lawsuits and any resulting damages are generally covered by the Company's insurance policies. The Company accrues for legal costs associated with loss contingencies when these costs are probable and reasonably estimable. While the resolution of these matters cannot be predicted with certainty, based on currently available information, management does not expect that the final outcome of any pending claims or legal proceedings will have a material adverse effect on the financial condition, results of operations or cash flows of the Company. University House Communities Group, Inc., Indemnity Claims The Company received an indemnity notice from UHC Acquisition Sub LLC ("UHC") regarding certain matters under the Stock Purchase Agreement, dated January 3, 2016, for University House Communities Group, Inc., which was sold in June 2016. The notice set forth various items for which UHC believed they were entitled to indemnification from the Company. On June 14, 2019, UHC and the Company, through various negotiations, reached a final settlement for the claims in the amount of $ 30,000 , which was paid by the Company on June 24, 2019. The Company recognized losses from discontinued operations related to these claims of $ 25,500 during the year ended December 31, 2019. Operating and Finance Lease Commitments The Company has non-cancelable contracts of property improvements that have been deemed to contain finance leases that, prior to the adoption of Topic 842, were previously classified as capital leases. In addition, the Company has non-cancelable operating leases for office space used in its business and, upon the adoption of Topic 842, the Company recognized operating lease ROU assets of $ 2,890 and lease liabilities of $ 3,114 . The following table reflects the Company's operating and finance lease arrangements as of December 31, 2021 and 2020: As of Balance Sheet Caption December 31, 2021 December 31, 2020 Operating lease ROU assets Deferred costs and other assets, net $ 2,961 $ 2,696 Operating lease ROU accumulated amortization Deferred costs and other assets, net $ ( 215 ) $ ( 896 ) Operating lease liabilities Other liabilities $ 3,189 $ 1,976 Finance lease ROU assets Building and other improvements $ 1,641 $ 1,641 Finance lease ROU accumulated amortization Accumulated depreciation $ ( 406 ) $ ( 297 ) Finance lease liabilities Other liabilities $ 283 $ 673 The following table reflects the Company's total lease cost, weighted-average lease terms and weighted-average discount rates for the years ended December 31, 2021 and 2020: Statement of Operations and Comprehensive Income (Loss) Caption Year ended December 31, 2021 2020 Minimum operating lease payments General and administrative $ 515 $ 663 Variable operating lease payments General and administrative 163 276 Short-term operating lease payments General and administrative 174 124 ROU amortization of finance leases Depreciation and amortization 109 109 Interest expense of finance leases Interest expense, net 24 37 Total lease cost $ 985 $ 1,209 Weighted-average remaining lease term of operating leases 7.9 years 4.0 years Weighted-average remaining lease term of finance leases 1.0 year 1.8 years Weighted-average discount rate of operating leases 4.36 % 4.44 % Weighted-average discount rate of finance leases 3.50 % 3.50 % F-29 The following table reflects the Company's future minimum lease obligations as of December 31, 2021: Future Minimum Lease Payments Scheduled minimum payments by year: Operating Leases Finance Leases 2022 $ 152 $ 279 2023 513 21 2024 575 — 2025 456 — 2026 460 — Thereafter 1,740 — Total expected minimum lease obligation 3,896 300 Less: Amount representing interest (a) ( 707 ) ( 17 ) Present value of net minimum lease payments $ 3,189 $ 283 (a) Interest includes the amount necessary to reduce the total expected minimum lease obligations to present value calculated at the Company's incremental borrowing rate. 13. Subsequent Events In preparing its consolidated financial statements, the Company evaluated events and transactions occurring after December 31, 2021 through the date the financial statements were issued for recognition and disclosure purposes. On February 2, 2022, the Company acquired two properties in Austin, Texas for $ 189.3 million, Escarpment Village, approximately 168,000 square feet and anchored by H.E.B., and The Shops at Arbor Trails, approximately 357,000 square feet and anchored by Costco and Whole Foods. The Company assumed $ 57.5 million of existing mortgage debt and drew down approximately $ 105.0 million on its line of credit to fund the acquisition. F-30 INVENTRUST PROPERTIES CORP. Schedule III - Real Estate and Accumulated Depreciation (amounts stated in thousands) Initial Cost (A) Gross amount at which carried at end of period PROPERTY NAME Location Encumbrance Land Buildings and Improvements Adjustments to Land Basis (B) Adjustments to Basis (B) Land Buildings and Improvements Total (C) Accumulated Depreciation (D,E) Date Acquired Antoine Town Center Houston, TX $ — $ 5,327 $ 14,333 $ — $ 37 $ 5,327 $ 14,370 $ 19,697 $ 1,210 2020 Bear Creek Village Center Wildomar, CA — 3,523 12,384 — 427 3,523 12,811 16,334 5,904 2009 Bent Tree Plaza Raleigh, NC — 1,983 7,093 — 1,880 1,983 8,973 10,956 3,874 2009 Buckhead Crossing Atlanta, GA — 7,565 27,104 — 1,275 7,565 28,379 35,944 13,218 2009 Campus Marketplace San Marcos, CA — 26,928 43,445 55 467 26,983 43,912 70,895 7,828 2017 Cary Park Town Center Cary, NC — 5,555 17,280 — 22 5,555 17,302 22,857 2,805 2017 Centerplace of Greeley Greeley, CO — 3,904 14,715 ( 23 ) 662 3,881 15,377 19,258 6,944 2009 Cheyenne Meadows Colorado Springs, CO — 2,023 6,991 — 303 2,023 7,294 9,317 3,380 2009 Commons at University Place Durham, NC — 3,198 17,909 — — 3,198 17,909 21,107 1,817 2019 Coweta Crossing Newnan, GA — 1,143 4,590 — 8 1,143 4,598 5,741 2,284 2009 Custer Creek Village Richardson, TX — 4,750 12,245 — 1,760 4,750 14,005 18,755 6,449 2007 Eldorado Marketplace Frisco, TX — 15,732 49,311 — 127 15,732 49,438 65,170 4,091 2019 Eldridge Town Center & Windermere Village Houston, TX — 5,380 22,994 1,977 5,770 7,357 28,764 36,121 12,134 2005 Garden Village San Pedro, CA — 3,188 16,522 3,268 1,470 6,456 17,992 24,448 7,675 2009 Gateway Market Center St. Petersburg, FL — 13,600 4,992 — 4,421 13,600 9,413 23,013 2,884 2010 Kennesaw Marketplace Kennesaw, GA — 12,587 51,860 — 420 12,587 52,280 64,867 6,541 2018 Kyle Marketplace Kyle, TX — 6,076 48,220 — 468 6,076 48,688 54,764 7,412 2017 Lakeside & Lakeside Crossing Winter Park, FL — 16,594 41,085 — ( 237 ) 16,594 40,848 57,442 4,031 2019 Market at Westlake Westlake Hills, TX — 1,200 6,274 ( 64 ) 210 1,136 6,484 7,620 3,257 2007 Northcross Commons Charlotte, NC — 7,591 21,303 — 637 7,591 21,940 29,531 4,067 2016 F-31 Initial Cost (A) Gross amount at which carried at end of period PROPERTY NAME Location Encumbrance Land Buildings and Improvements Adjustments to Land Basis (B) Adjustments to Basis (B) Land Buildings and Improvements Total (C) Accumulated Depreciation (D,E) Date Acquired Old Grove Marketplace Oceanside, CA $ — $ 12,545 $ 8,902 $ — $ 232 $ 12,545 $ 9,134 $ 21,679 $ 1,885 2016 Pavilion at La Quinta LaQuinta, CA 22,399 15,200 20,947 — 1,571 15,200 22,518 37,718 10,122 2009 Peachland Promenade Port Charlotte, FL — 1,742 6,502 4,158 9,450 5,900 15,952 21,852 2,291 2009 PGA Plaza Palm Beach Gardens, FL — 10,414 75,730 — 698 10,414 76,428 86,842 9,237 2018 Plantation Grove Ocoee, FL 7,300 3,705 6,300 — 719 3,705 7,019 10,724 1,927 2014 Plaza Midtown Atlanta, GA — 5,295 23,946 — 381 5,295 24,327 29,622 3,509 2017 Prestonwood Town Center Dallas, TX — 22,055 22,140 — — 22,055 22,140 44,195 547 2021 Renaissance Center Durham, NC 14,107 26,713 96,141 — 4,763 26,713 100,904 127,617 21,283 2016 Rio Pinar Plaza Orlando, FL — 5,171 26,903 676 1,758 5,847 28,661 34,508 6,076 2015 River Oaks Santa Clarita, CA — 24,598 88,418 — 1,081 24,598 89,499 114,097 13,340 2017 Riverview Village Arlington, TX — 6,000 9,649 — 908 6,000 10,557 16,557 5,526 2007 Riverview Market Flower Mound, TX — 5,931 23,922 — 548 5,931 24,470 30,401 4,557 2016 Rose Creek Woodstock, GA — 1,443 5,630 — 500 1,443 6,130 7,573 2,767 2009 Sandy Plains Centre Marietta, GA — 12,364 27,270 652 2,182 13,016 29,452 42,468 3,024 2018 Sarasota Pavilion Sarasota, FL — 12,000 25,823 — 4,796 12,000 30,619 42,619 11,730 2010 Scofield Crossing Austin, TX — 8,100 4,992 ( 576 ) 3,454 7,524 8,446 15,970 3,122 2007 Shops at Fairview Town Center Fairview, TX — 7,299 25,233 — 208 7,299 25,441 32,740 2,230 2019 Shops at The Galleria Bee Cave, TX — 52,104 75,651 — 2,006 52,104 77,657 129,761 16,117 2016 Sonterra Village San Antonio, TX — 5,150 15,095 ( 181 ) 689 4,969 15,784 20,753 3,350 2015 Southern Palm Crossing Royal Palm Beach, FL — 37,735 49,843 ( 745 ) 260 36,990 50,103 87,093 4,698 2019 Stevenson Ranch Stevenson Ranch, CA — 29,519 39,190 — 139 29,519 39,329 68,848 8,035 2016 F-32 Initial Cost (A) Gross amount at which carried at end of period PROPERTY NAME Location Encumbrance Land Buildings and Improvements Adjustments to Land Basis (B) Adjustments to Basis (B) Land Buildings and Improvements Total (C) Accumulated Depreciation (D,E) Date Acquired Suncrest Village Orlando, FL $ 8,400 $ 6,742 $ 6,403 $ — $ ( 1,374 ) $ 6,742 $ 5,029 $ 11,771 $ 1,427 2014 Sycamore Commons Matthews, NC — 12,500 31,265 — 2,015 12,500 33,280 45,780 14,245 2010 The Centre on Hugh Howell Tucker, GA — 2,250 11,091 — 1,007 2,250 12,098 14,348 6,599 2007 The Parke Cedar Park, TX — 9,271 83,078 — 1,162 9,271 84,240 93,511 13,131 2017 The Pointe at Creedmoor Raleigh, NC — 7,507 5,454 — 55 7,507 5,509 13,016 1,222 2016 The Shops at Town Center & Century Station Germantown, MD — 19,998 29,776 — 849 19,998 30,625 50,623 5,228 2017 The Shops at Walnut Creek Westminster, CO 28,630 10,132 44,089 — 6,530 10,132 50,619 60,751 11,222 2015 Thomas Crossroadas Newnan, GA — 1,622 8,322 — 1,552 1,622 9,874 11,496 4,129 2009 Travilah Square Rockville, MD — 8,964 39,836 — 298 8,964 40,134 49,098 3,163 2019 Trowbridge Crossing Sandy Springs, GA — 2,366 7,808 — 311 2,366 8,119 10,485 503 2020 University Oaks Shopping Center Round Rock, TX 25,119 7,250 25,326 ( 170 ) 8,504 7,080 33,830 40,910 14,405 2010 Westfork Plaza & Paraiso Parc Pembroke Pines, FL — 28,267 124,019 — 5,414 28,267 129,433 157,700 21,891 2017 Westpark Shopping Center Glen Allen, VA — 7,462 24,164 ( 4 ) 4,732 7,458 28,896 36,354 5,458 2013 Windward Commons Alpharetta, GA — 12,823 13,779 ( 171 ) 870 12,652 14,649 27,301 2,914 2016 Total corporate assets — — — — 2,843 — 2,843 2,843 1,541 - Total $ 105,955 $ 590,084 $ 1,573,287 $ 8,852 $ 91,238 $ 598,936 $ 1,664,525 $ 2,263,461 $ 350,256 Construction in progress — — — 9,642 — 9,642 9,642 — Total investment properties $ 590,084 $ 1,573,287 $ 8,852 $ 100,880 $ 598,936 $ 1,674,167 $ 2,273,103 $ 350,256 F-33 INVENTRUST PROPERTIES CORP. Schedule III - Real Estate and Accumulated Depreciation (amounts stated in thousands) Notes to Schedule III The aggregate cost of real estate owned at December 31, 2021 for federal income tax purposes was approximately $ 2,503,849 (unaudited). (A) The initial cost to the Company represents the original purchase price of the asset, including amounts incurred subsequent to acquisition which were contemplated at the time the property was acquired. (B) Cost capitalized subsequent to acquisition includes additional tangible costs associated with investment properties. Amount also includes impairment charges recorded subsequent to acquisition to reduce basis. (C) Reconciliation of total investment properties: 2021 2020 2019 Balance at January 1, $ 2,221,689 $ 2,204,891 $ 2,242,283 Acquisitions and capital improvements 71,324 52,222 359,753 Disposals and write-offs of assets no longer in service ( 19,910 ) ( 35,424 ) ( 397,145 ) Balance at December 31, $ 2,273,103 $ 2,221,689 $ 2,204,891 (D) Reconciliation of accumulated depreciation: 2021 2020 2019 Balance at January 1, $ 292,248 $ 246,702 $ 286,330 Depreciation expense 66,275 61,897 66,808 Disposal and write-offs of assets no longer in service ( 8,267 ) ( 16,351 ) ( 106,436 ) Balance at December 31, $ 350,256 $ 292,248 $ 246,702 (E) Depreciation is computed based upon the following estimated lives: Buildings and other improvements 15 - 30 years Tenant improvements Life of the lease Furniture, fixtures and equipment 5 - 20 years F-34