Quarterly Report for the period ended September 30, 2015




Executive Summary

In the third quarter 2015, JLL Income Property Trust:


Paid net of fees quarterly distributions of $0.11218 on Class M shares, $0.09557 on Class A shares, $0.11883 on Class M-I shares and $0.11221 on Class A-I shares;

Maintained portfolio occupancy at 97%;

Realized 1.13% share appreciation resulting primarily from net increases in underlying property values;

Achieved net Q3 returns of 2.18% on Class M shares, 2.03% on Class A shares, 2.24% on Class M-I shares and 2.18% on Class A-I shares; and

Raised $76 million of new capital during Q3.







Company Update

Distributions
On February 6th, May 1st, and August 7th we paid gross distributions of $0.12 per share related to the fourth quarter of 2014 and first and second quarters of 2015. Our current quarterly distribution provides an annualized distribution to our stockholders of 48 cents per share. For the rolling four quarters ending with this first quarter, our FFO to dividends paid coverage was 120% and our AFFO to dividends paid coverage was 116%.

On August 6, 2015, our board of directors approved a gross distribution for the third quarter of 2015 of $0.12 per share to stockholders of record as of September 29, 2015, payable on or around November 6, 2015. Gross distributions will be reduced by share-class specific fees.

Share Value
The NAV per share of our Class M, Class A, Class M-I and Class A-I shares as of September 30th was between $11.08 and $11.11 per share.

We generally see an upward trend in our NAV throughout the quarter as we accrue our portfolio income, and then we see a comparable reduction in our NAV for the accrual of that dividend payment once we reach our record date.

Our property investment portfolio is externally appraised by our independent valuation advisor, Real Estate Research Corporation. Our daily share values are posted on our website (www.jllipt.com) and are available via our stockholder services customer support line at 855.652.0277.

Investment Returns
The combination of share appreciation and distributions for the quarter ended September 30, 2015, generated a net total return of 2.18% and 2.03% for Class M and A shares, respectively. The total return was comprised of a cash return of 1.03% and 0.88% and an appreciation return of 1.13% and 1.13% for Class M and Class A shares, respectively.












Portfolio Update

In the third quarter we continued to add value to our portfolio through active asset management. Particularly noteworthy accomplishments include closing on three new acquisitions and declaring our fifteenth consecutive quarterly dividend. Shortly after quarter end we successfully acquired a property now owning over 7 million in rentable square feet.

Acquisition Activity
On April 15, 2015, we acquired DFW Distribution Center, a two building, 643,000 square foot, multi-tenant industrial portfolio for approximately $44.3 million. The property is located in Grapevine, Texas just five miles from Dallas/Fort Worth International Airport, the fourth-busiest airport in the world. The two-building portfolio is 100% leased to six tenants with a weighted average lease term of approximately four years; we are comfortable with adding a few shorter duration leases to our portfolio as this is a multi-tenant property with a good mix of lease durations ranging from six years at the long end to two years at the short end.

On May 15, 2015, we acquired Skokie Commons, a newly constructed 93,000 square foot grocery-anchored retail property in an in-fill location in Skokie, Illinois, for approximately $43.8 million. The acquisition was financed at approximately 50% loan-to-value with a fixed interest rate loan at 3.31% for 10 years. The property is 97% leased, with Mariano's supermarket, a leading specialty grocer in the Chicago market, as the anchor tenant, and strong national tenants such as Starbucks and Bank of America, that will further enhance the stability of the property. This investment provides exposure to a major metropolitan city and is anchored by a strong, New Age grocer in a demographic area ranking in the top 5% in population density.

At the end of May, we acquired Townlake of Coppell, a 398 unit garden style apartment property, for approximately $43.2 million. The acquisition was financed with a five-year mortgage loan that bears interest at a fixed-rate of 3.25%. Townlake of Coppell is strategically located in an infill location in northwest suburban Dallas, Texas. The property has historically been well-occupied and should maintain strong occupancy due to the highly desirable school district and community amenities, such as two-resort style pools, as expansive playground, basketball court, and a 24-hour fitness center. This investment expands our apartment portfolio in a mature, bedroom community that has benefitted from its close proximity to DFW airport, local high-end retail shopping and downtown Dallas.

Leasing Activity
Our weighted average lease duration at September 30, 2015 was 6.6 years, down from 7.4 years in the prior quarter. Maintaining an average lease duration between 5.0 and 10.0 ensures portfolio stability as tenant lease terms and related income streams remain consistent over an extended period.

Financing Activity
Disposing of higher loan-to-value investments, extinguishing near term and often times higher rate debt, and acquiring new properties with low leverage has allowed us to achieve a Company loan-to-value ratio of 40%. Our weighted average interest rate on our outstanding loans has decreased from 4.6% at March 31, 2015 to 4.4% as of September 30, 2015 as we retired over $80 million of lower cost floating rate debt that also had risks associated





with increasing interest rates.

Generally, using moderate leverage is a strategic way to extend our investment capacity and further diversify our portfolio. We plan on maintaining the 30-50% Company leverage ratio range during 2015, which will ensure our balance sheet is healthy while allowing us to take advantage of the current low interest rate environment.

During the quarter we extended and expanded our revolving line of credit with Bank of America. The new facility has a two year term with a one-year extension at our option, includes an accordion feature which allows us to expand the available balance from $40 million to $75 million. This expanded credit facility provides us with greater flexibility and agility to pursue our strategic objectives in this very competitive capital markets environment. The new facility will be used to accelerate acquisitions, provide working capital and for other general corporate purposes.

Occupancy
Enhancing the operational performance of our properties continues to be one of the key priorities of our asset management team. At quarter end, our total portfolio occupancy was stable at 97% and increased 1% from the prior year.

Looking at each operating segment, which we define as our primary property types, our apartment occupancy remained stable at 95% this quarter, an increase of 3% from the prior year. Our industrial occupancy remained unchanged at 99% this quarter, the thirteenth consecutive quarter having our industrial segment fully occupied. Our overall office occupancy decreased by 3% the quarter to 93% due to tenant vacancy at 111 Sutter Street dropping its occupancy to 85%, however we have three LOIs executed and leases are currently being negotiated, which would bring the occupancy at 111 Sutter Street up to 93% by the end of Q3. Our retail occupancy was stable at 97% this quarter and increased 4% compared to last year primarily due to the sale of a non-grocery anchored property in 2014. In all cases, our segment occupancies compare well with national averages of 96% for apartments, 90% for industrial, 87% for office and 94% for retail.

Disposition Strategy
We had no dispositions in the second quarter and we anticipate holding most of our properties for an extended period, we may determine to sell a property before the end of its anticipated hold period due to changes in its value to the portfolio. We continually monitor each investment within the portfolio, and the overall portfolio composition, for appropriateness in meeting our investment objectives.

2015 Activities to Date

On August 6, 2015, our board of directors approved a gross distribution for the third quarter of 2015 of $0.12 per share to stockholders of record as of September 29, 2015, payable on or around November 6, 2015.

On July 30, 2015, after quarter-end, we acquired AQ Rittenhouse, a newly constructed, 110 unit, 12-story conventional apartment building located in Philadelphia, Pennsylvania for approximately $ million using cash on hand. We intend to obtain a mortgage loan at an approximate 50% loan to value on this investment. The property i





s located in the trendy Rittenhouse Square neighborhood that has become a Millennial magnet in recent years. The brand new property features studio, one and two bedroom units with condo-quality finishes and has a very unique amenity; a rooftop tenant lounge and outdoor patio with unobstructed views of the city skyline.  The property is in its lease-up phase and has seen good tenant demand. This investment continues to rebuild our allocation to Apartments and increases our exposure to the East region of the United States.

Outlook
Overall, we are extremely pleased with our second quarter accomplishments. We now own 29 different properties in our portfolio, comprised of 11 industrial warehouses, 5 grocery anchored retail centers, 6 office buildings, 5 apartment complexes and 2 parking garages. It is worth noting that over the last two years we have sold 21 different properties, all at arms-length market determined pricing all of which closed within 1% of our most recent independent appraised value. We believe those sales speak volumes to the credibility of our valuation methodologies and ultimately should translate to confidence in our daily NAV.

Since 2012, we have raised over $500 million of new capital. We have also disposed of 21 non-strategic properties generating approximately $310 million in sale proceeds. With this capital we have acquired 17 new properties (all of consistent with our go-forward strategy) investing approximately $470million. We also repaid or refinanced over $280 million in higher interest rate and higher loan-to-value loans and repurchased more than $130 million of our shares, returning capital to stockholders that desired liquidity or chose to reduce their allocations to core real estate.

We declared our fifteenth consecutive quarterly dividend to our stockholders beginning with the first quarter 2012. We continue to offer to our investors stable dividend payments fully covered by cash flow from operations and at one of the highest dividend coverage ratios in the non-listed REIT industry. Offering an attractive level of current income for distribution to our stockholders is one of our primary investment objectives.

Lastly, we remain the preferred daily NAV core real estate offering in the marketplace attracting nearly as much capital as all of our competitors combined. We have also significantly expanded our distribution partnerships, which now span ten different wealth management platforms representing wirehouses, private trust banks, RIA's and major national independent broker dealers.

Positive forecasts for the U.S. economy and U.S. real estate, including continued job growth, low interest rates, active capital markets, lowering vacancy rates and minimal new construction, give us much to look forward to for the remainder of 2015 as we continue to actively manage our portfolio of diversified core properties to provide attractive income returns to our stockholders.