Press Release

JLL Income Property Trust Announces Tax Treatment of 2019 Distributions

February 6, 2020 — Chicago

JLL Income Property Trust, an institutionally managed, daily valued perpetual life REIT (NASDAQ: ZIPTAX; ZIPTMX; ZIPIAX; ZIPIMX), today announced the income tax treatment of its 2019 dividends.  For the tax year ended December 31, 2019, dividend tax reporting will show 100% long-term capital gain.

As discussed in the company’s August 13, 2019 press release and subsequent 8-K filing, the company’s third quarter 2019 dividend included a $0.04 per share special dividend to reduce certain state income taxes due from the capital gains on the sale of 111 Sutter Street, a San Francisco multi-tenant office property sold in February 2019.  In that communication to stockholders, the company estimated that the $120 million in taxable gain from the 111 Sutter sale would be fully sheltered from federal taxation at the company level but would result in dividends paid throughout 2019 to be characterized as long-term capital gain – a reduced tax rate as compared to ordinary income tax rates for most stockholders.

“Our primary investment objectives remain durability of dividend distributions and preservation of invested capital,” said Allan Swaringen, President and CEO of JLL Income Property Trust.  “However, we also strive to be a source of longer-term tax-advantaged income for stockholders.  The 111 Sutter Street sale last year was strategic in terms of underweighting our portfolio allocation to higher risk markets and property types,” noted Swaringen.  “Additionally, at Sutter’s $227 million sale price, we chose to reinvest the proceeds across multiple new property and market investments, further diversifying our portfolio and establishing a higher depreciable basis in those new investments for the long-term tax benefits of current and future stockholders in lieu of completing a 1031 like-kind exchange as we have done with previous dispositions.”

The table below summarizes the income tax treatment of distributions paid to Class A stockholders during the year ended December 31, 2019:

Record DatePayment DateNet Distribution per share (1)Capital Gain Income (2)Unrecaptured Section 1250 Gain
12/28/20182/1/2019$ 0.10652$ 0.10652       100.0%0.03711
3/28/20195/1/20190.112160.11216          100.0%0.03908
6/27/20198/1/20190.112140.11214          100.0%0.03907
9/27/201911/1/20190.151840.15184          100.0%0.05290
Total$ 0.48266$ 0.48266       100.0%$ 0.16816


(1)
 Distributions per share are net of dealer manager fees of 0.85% of NAV.

(2) Distributions of Capital Gain Income include 34.84% of Unrecaptured Section 1250 Gain.

The table below summarizes the income tax treatment of distributions paid to Class M stockholders during the year ended December 31, 2019:

Record Date Payment Date Net Distribution per share (1) Capital Gain Income (2) Unrecaptured Section 1250 Gain
12/28/2018 2/1/2019 $ 0.12141 $ 0.12141       100.0% 0.04230
3/28/2019 5/1/2019 0.12662 0.12662         100.0% 0.04411
6/27/2019 8/1/2019 0.12643 0.12643         100.0% 0.04405
9/27/2019 11/1/2019 0.16642 0.16642         100.0% 0.05798
Total $ 0.54088 $ 0.54088      100.0% $ 0.18844

(1) Distributions per share are net of dealer manager fees of 0.30% of NAV.

(2) Distributions of Capital Gain Income include 34.84% of Unrecaptured Section 1250 Gain.

The table below summarizes the income tax treatment of distributions paid to Class A-I stockholders during the year ended December 31, 2019:

Record Date Payment Date Net Distribution per share (1) Capital Gain Income (2) Unrecaptured Section 1250 Gain
12/28/2018 2/1/2019 $ 0.12145 $ 0.12145      100.0% 0.04231
3/28/2019 5/1/2019 0.12653 0.12653         100.0% 0.04408
6/27/2019 8/1/2019 0.12653 0.12653         100.0% 0.04408
9/27/2019 11/1/2019 0.16660 0.16660         100.0% 0.05804
Total $ 0.54111 $ 0.54111       100.0% $ 0.18852

(1) Distributions per share are net of dealer manager fees of 0.30% of NAV.

(2) Distributions of Capital Gain Income include 34.84% of Unrecaptured Section 1250 Gain.

The table below summarizes the income tax treatment of distributions paid to Class M-I stockholders during the year ended December 31, 2019:

Record Date Payment Date Net Distribution per share (1) Capital Gain Income (2) Unrecaptured Section 1250 Gain
12/28/2018 2/1/2019 $ 0.13000 $ 0.13000      100.0% 0.04529
3/28/2019 5/1/2019 0.13500 0.13500        100.0% 0.04703
6/27/2019 8/1/2019 0.13500 0.13500        100.0% 0.04703
9/27/2019 11/1/2019 0.17500 0.17500        100.0% 0.06097
Total $ 0.57500 $ 0.57500      100.0% $ 0.20033

(1) Distributions of Capital Gain Income include 34.84% of Unrecaptured Section 1250 Gain.

The table below summarizes the income tax treatment of distributions paid to Class D stockholders during the year ended December 31, 2019:

Record Date Payment Date Net Distribution per share (1) Capital Gain Income (2) Unrecaptured Section 1250 Gain
12/28/2018 2/1/2019 $ 0.13000 $ 0.13000      100.0% 0.04529
3/28/2019 5/1/2019 0.13500 0.13500        100.0% 0.04703
6/27/2019 8/1/2019 0.13500 0.13500        100.0% 0.04703
9/27/2019 11/1/2019 0.17500 0.17500        100.0% 0.06097
Total $ 0.57500 $ 0.57500      100.0% $ 0.20033

(1) Distributions of Capital Gain Income include 34.84% of Unrecaptured Section 1250 Gain.

The dollar amount reported on each investor's respective 1099-DIV will depend on the total amount of distributions received throughout the year which can be affected by the share class held and the length of time the shares were owned. The distribution declared on November 1, 2019, paid on February 3, 2020, will be a 2020 tax event and is not reflected in the 2019 tax allocation.

This release is based on the preliminary results of work on the company's tax filings and may be subject to adjustment. The income tax allocation for the distributions discussed above has been calculated using the best available information as of the date of the release. The company is releasing information at this time to aid those required to distribute Forms 1099 on the company's distributions. Tax treatment of distributions is dependent on a number of factors and there is no guarantee that future distributions will qualify as a non-dividend distribution, return of capital or long-term capital gain.

JLL Income Property Trust is an institutionally managed, daily NAV REIT that gives investors access to a growing portfolio of commercial real estate investments selected by an institutional investment management team and sponsored by one of the world’s leading real estate services firms.


About JLL Income Property Trust

Jones Lang LaSalle Income Property Trust, Inc. (NASDAQ: ZIPTAX; ZIPTMX; ZIPIAX; ZIPIMX), is a daily NAV REIT that owns and manages a diversified portfolio of high quality, income-producing apartment, industrial, office and retail properties located in the United States. JLL Income Property Trust expects to further diversify its real estate portfolio over time, including on a global basis.

About LaSalle Investment Management

LaSalle Investment Management, Inc., a member of the JLL group and advisor to JLL Income Property Trust, is one of the world’s leading real estate investment managers with approximately $65.0 billion equity and debt investments under management (as of Q1 2020). LaSalle’s diverse client base includes public and private pension funds, insurance companies, governments, corporations, endowments and private individuals from across the globe. LaSalle sponsors a complete range of investment vehicles including separate accounts, open and closed-end funds, public securities and entity-level investments. LaSalle is a wholly-owned, operationally independent subsidiary of Jones Lang LaSalle Inc. (NYSE: JLL), one of the world’s largest real estate companies. For more information please visit www.lasalle.com.

Forward Looking Statements

This press release may contain forward-looking statements with respect to JLL Income Property Trust. Forward-looking statements are statements that are not descriptions of historical facts and include statements regarding management’s intentions, beliefs, expectations, research, market analysis, plans or predictions of the future. Because such statements include risks, uncertainties and contingencies, actual results may differ materially from those expressed or implied by such forward-looking statements. Past performance is not indicative of future results and there can be no assurance that future dividends will be paid.

Summary of Risk Factors

You should read the prospectus carefully for a description of the risks associated with an investment in JLL Income Property Trust. Some of these risks include but are not limited to the following:

  • Since there is no public trading market for shares of our common  stock, repurchases of shares by us after a one-year minimum  holding period will likely be the only way to dispose of your  shares. After a required one-year holding period, JLLIPT limits the amount of shares that may be repurchased under our repurchase plan to approximately 5% of our net asset value (NAV) per quarter and 20% of our NAV per annum. Because our assets will consist primarily of properties that generally cannot be readily liquidated, JLLIPT may not have sufficient liquid resources to satisfy repurchase requests. Further, our board of directors may modify or suspend our repurchase plan if it deems such action to be in the best interest of our stockholders. As a result, our shares have limited liquidity and at times may be illiquid.
  • The purchase and redemption price for shares of our common stock will be based on the NAV of each class of common stock and will not be based on any public trading market. Because valuation of properties is inherently subjective, our NAV may not accurately reflect the actual price at which our assets could be liquidated on any given day.
    JLLIPT is dependent on our advisor to conduct our operations. JLLIPT will pay substantial fees to our advisor, which increases your risk of loss. JLLIPT has a history of operating losses and cannot assure you that JLLIPT will achieve profitability. Our advisor will face conflicts of interest as a result of, among other things, time constraints, allocation of investment opportunities, and the fact that the fees it will receive for services rendered to us will be based on our NAV, which it is responsible for   calculating.
  • The amount of distributions JLLIPT makes is uncertain and there is no assurance that future distributions will be made. JLLIPT may pay distributions from sources other than cash f low from operations, including, without limitation, the sale of assets, borrowings, or offering proceeds. Our use of leverage increases the risk of your investment. If JLLIPT fails to maintain our status as a REIT, and no relief provisions apply, JLLIPT would be subject to serious adverse tax consequences that would cause a significant reduction in our cash available for distribution to our stockholders and potentially have a negative impact on our NAV.
  • While JLLIPT’s investment strategy is to invest in stabilized commercial real estate properties diversified by sector with a focus on providing current income to investors, an investment in JLLIPT is not an investment in fixed income. Fixed income has material differences from an investment in a non-traded REIT, including those related to vehicle structure, investment objectives and restrictions, risks, fluctuation of principal, safety, guarantees or insurance, fees and expenses, liquidity and tax treatment.
  • Investing in commercial real estate assets involves certain risks, including but not limited to: tenants’ inability to pay rent; increases in interest rates and lack of availability of financing; tenant turnover and vacancies; and changes in supply of or demand for similar properties in a given market.
  • You should carefully review the “Risk Factors” section of our prospectus for a discussion of the risks and uncertainties that we believe are material to our business, operating results, prospects and financial condition. Except as otherwise required by federal securities laws, we do not undertake to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
  • This sales material must be read in conjunction with the prospectus in order to fully understand all the implications and risks of the offering of securities to which it relates. This sales material is neither an offer to sell nor a solicitation of an offer to buy securities. An offering is made only by the prospectus.
  • Investors could lose all or a substantial amount of their investment. Alternative investments are suitable only for eligible, long-term investors who are willing to forgo liquidity and put capital at risk for an indefinite period of time.
  • This material is not to be reproduced or distributed to any other persons (other than professional advisors of the investors or prospective investors, as applicable, receiving this material) and is intended solely for the use of the persons to whom it has been delivered. 

Forward-Looking Statement Disclosure

This literature contains forward-looking statements within the meaning of federal securities laws and regulations. These forward-looking statements are identified by their use of terms such as  “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,”  “intend,” “may,” “plan,” “predict,” “project,” “should,” “will,”  and other similar terms, including references to assumptions  and forecasts of future results. Forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties, and other factors that may cause the actual results to differ materially from those anticipated at the time the forward-looking statements are made. These risks, uncertainties, and contingencies include, but are not limited to, the following: our ability to effectively raise capital in our offering; uncertainties relating to changes in general economic and real estate conditions; uncertainties relating to the implementation of our investment strategy; and other risk factors as outlined in our prospectus and periodic reports filed with the Securities and Exchange Commission. Although JLLIPT believes the expectations reflected in such forward-looking statements are based upon reasonable assumptions, we can give no assurance that the expectations will be attained or that any deviation will not be material. JLLIPT undertakes no obligation to update any forward-looking statement contained herein to conform the statement to actual results or changes in our expectations.