e10vkza
UNITED STATES SECURITIES AND
EXCHANGE COMMISSION
Washington, D.C.
20549
Form 10-K/A
(Amendment
No. 1)
|
|
|
þ
|
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
|
|
|
For the fiscal year ended
December 31,
2009
|
or
|
o
|
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
|
|
|
For the Transition Period
from to .
|
Commission file number
333-154975
TNP STRATEGIC RETAIL TRUST,
INC.
(Exact name of registrant as
specified in its charter)
|
|
|
Maryland
(State or other jurisdiction
of
incorporation or organization)
|
|
90-0413866
(I.R.S. Employer
Identification No.)
|
1900 Maine Street, Suite 700
Irvine, California
(Address of principal
executive offices)
|
|
92614
(Zip
Code)
|
(949) 833-8252
(Registrant’s telephone
number, including area code)
Securities registered pursuant to Section 12(b) of the
Securities Exchange Act of 1934:
None
Securities registered pursuant to Section 12(g) of the
Securities Exchange Act of 1934:
None
Indicate by check mark if the registrant is a well-known
seasoned issuer, as defined in Rule 405 of the Securities
Act. Yes o No þ
Indicate by check mark if the registrant is not required to file
reports pursuant to Section 13 or 15(d) of the
Act. Yes o No þ
Indicate by check mark whether the registrant: (1) has
filed all reports required to be filed by Section 13 or
15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past
90 days. Yes þ No o
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of
Regulation S-K
is not contained herein, and will not be contained, to the best
of the registrant’s knowledge, in definitive proxy or
information statements incorporated by reference in
Part III of this
Form 10-K
or any amendment to this
Form 10-K. o
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer
or a smaller reporting company. See definitions of “large
accelerated filer,” “accelerated filer,” and
“smaller reporting company” in
Rule 12b-2
of the Exchange Act (check one):
|
|
|
|
|
|
|
Large accelerated
filer o
|
|
Accelerated
filer o
|
|
Non-accelerated
filer þ
(Do not check if a smaller
reporting company)
|
|
Smaller reporting
company o
|
Indicate by check mark whether the registrant is a shell company
(as defined in
Rule 12b-2
of the
Act). Yes o No þ
There is no established trading market for the registrant’s
common stock, and therefore the aggregate market value of the
registrant’s common stock held by non-affiliates cannot be
determined.
As of March 26, 2010, there were 908,318 outstanding shares
of common stock of TNP Strategic Retail Trust, Inc.
Explanatory
Note
TNP Strategic Retail Trust, Inc. (the “Company,”
“we,” “us” and “our”) is filing
this Amendment No. 1 to its Annual Report on
Form 10-K
(the “Amended
10-K”)
to amend its Annual Report on
Form 10-K
for the year ended December 31, 2009, filed with the
Securities and Exchange Commission on March 31, 2010 (the
“Original
10-K”).
This Amended 10-K corrects the omission of the conformed
signature of KPMG LLP on the Report of Independent Registered
Public Accounting Firm in Item 8. At the time of filing of
the Original 10-K, we had on-hand a manually signed and dated
Report of Independent Registered Public Accounting Firm from
KPMG LLP. This Amended
10-K also
corrects an immaterial error in our consolidated financial
statements relating to the inclusion in other liabilities and
other expense of the fair value of the derivative related to an
exit fee of $130,000 payable under our convertible note issued
to Moreno Retail Partners, LLC. The executed convertible note
did not include an exit fee. As a result, we have revised our
Consolidated Financial Statements, Selected Financial Data and
Management’s Discussion and Analysis of Financial Condition
to remove references to the derivative and adjust the related
liability and expense. As a result of amending the Original 10-K
for the omission of the signature of KPMG LLP, we have elected
to reflect this immaterial correction in the Amended 10-K. This
Amended 10-K
does not reflect events occurring after the filing of the
Original
10-K and
does not otherwise modify or update the disclosure in the
Original
10-K.
Pursuant to
Rule 12b-15
promulgated under the Securities Exchange Act of 1934, as
amended, this Amended
10-K
consists solely of the preceding cover page, this explanatory
note, Item 6 (Selected Financial Data), Item 7
(Management’s Discussion and Analysis of Financial
Condition and Results of Operations), Item 8 (Financial
Statements and Supplementary Data), Item 9A(T) (Controls
and Procedures), Item 15 (Exhibits and Financial Statement
Schedules), the signature page, and the certifications required
to be filed as exhibits under Item 15 to this Amended
10-K.
TNP
STRATEGIC RETAIL TRUST, INC.
TABLE OF
CONTENTS
i
PART
II
|
|
Item 6.
|
Selected
Financial Data
|
The following selected financial data as of and for the year
ended December 31, 2009 should be read in conjunction with
the accompanying consolidated financial statements and related
notes thereto and “Item 7, Management’s
Discussion and Analysis of Financial Condition and Results of
Operations.” The selected financial data has been derived
from our audited consolidated financial statements.
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
December 31,
|
Selected Financial Data
|
|
2009
|
|
2008
|
|
BALANCE SHEET DATA:
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
15,605,000
|
|
|
$
|
202,000
|
|
Total liabilities
|
|
$
|
12,317,000
|
|
|
$
|
—
|
|
Total equity
|
|
$
|
3,288,000
|
|
|
$
|
202,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Date of Inception)
|
|
|
Year Ended
|
|
through
|
|
|
December 31,
|
|
December 31,
|
|
|
2009
|
|
2008
|
|
STATEMENT OF OPERATIONS DATA:
|
|
|
|
|
|
|
|
|
Total revenues
|
|
$
|
145,000
|
|
|
|
—
|
|
Total expenses
|
|
$
|
(1,228,000
|
)
|
|
|
—
|
|
Other income and expense
|
|
$
|
(117,000
|
)
|
|
|
|
|
Net loss
|
|
$
|
(1,200,000
|
)
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
STATEMENT OF CASH FLOWS DATA:
|
|
|
|
|
|
|
|
|
Net cash used in operating activities
|
|
$
|
(1,047,000
|
)
|
|
$
|
(1,000
|
)
|
Net cash used in investing activities
|
|
$
|
(12,500,000
|
)
|
|
$
|
—
|
|
Net cash provided by financing activities
|
|
$
|
14,452,000
|
|
|
$
|
202,000
|
|
|
|
Item 7.
|
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
|
The following discussion and analysis should be read in
conjunction with the “Selected Financial Data” above
and our accompanying consolidated financial statements and the
notes thereto. Also see “Forward Looking Statements”
preceding Part I.
Overview
We were formed as a Maryland corporation on September 18,
2008 to invest in and manage a portfolio of income-producing
retail properties, located primarily in the Western United
States, and real estate-related assets, including the investment
in or origination of mortgage, mezzanine, bridge and other loans
related to commercial real estate.
On August 7, 2009, our Registration Statement on
Form S-11
(File
No. 333-154975),
registering a public offering of up to $1,100,000,000 in shares
of our common stock, was declared effective under the Securities
Act, and we commenced our initial public offering. We are
offering up to 100,000,000 shares of our common stock to
the public in our primary offering at $10.00 per share and up to
10,526,316 shares of our common stock pursuant to our
distribution reinvestment plan at $9.50 per share.
Pursuant to the terms of our initial public offering, all
subscription proceeds were placed in an account held by our
escrow agent in trust for subscribers’ benefit until we had
achieved gross offering proceeds of $2,000,000 from persons who
are not affiliated with us. On November 12, 2009, we
achieved the minimum offering amount of $2,000,000 and offering
proceeds were released to us from the escrow account. We
acquired our first property on November 19, 2009.
1
We are dependent upon proceeds received from the sale of shares
of our common stock in our initial public offering and any
indebtedness that we may incur in order to conduct our proposed
real estate investment activities. We were capitalized with
$200,000 which was contributed in cash on October 16, 2008,
from the sale of 22,222 shares in the aggregate. Our
sponsor, Thompson National Properties, LLC, or any affiliate of
our sponsor, must maintain this investment while it remains our
sponsor.
As of December 31, 2009, we had accepted investors’
subscriptions for, and issued, 509,752 shares of our common
stock, including shares issued pursuant to our distribution
reinvestment plan, resulting in gross offering proceeds of
$5,009,000. As of March 26, 2010, we had accepted
investors’ subscriptions for, and issued,
893,318 shares of our common stock, including shares issued
pursuant to our distribution reinvestment plan, resulting in
gross offering proceeds of $8,806,000.
We will experience a relative increase in liquidity as
additional subscriptions for shares of our common stock are
received and a relative decrease in liquidity as offering
proceeds are used to acquire and operate our assets.
We are externally managed by our advisor, TNP Strategic Retail
Advisor, LLC. Our advisor may, but is not required to, establish
working capital reserves from offering proceeds out of cash flow
generated by our investments or out of proceeds from the sale of
our investments. We do not anticipate establishing a general
working capital reserve during the initial stages of our initial
public offering; however, we may establish capital reserves with
respect to particular investments. We also may, but are not
required to, establish reserves out of cash flow generated by
investments or out of net sale proceeds in non-liquidating sale
transactions. Working capital reserves are typically utilized to
fund tenant improvements, leasing commissions and major capital
expenditures. Our lenders also may require working capital
reserves.
To the extent that the working capital reserve is insufficient
to satisfy our cash requirements, additional funds may be
provided from cash generated from operations, through short-term
borrowing or borrowings under our revolving credit agreement. In
addition, subject to certain limitations, we may incur
indebtedness in connection with the acquisition of any real
estate asset, refinance the debt thereon, arrange for the
leveraging of any previously unfinanced property or reinvest the
proceeds of financing or refinancing in additional properties.
We intend to qualify as a REIT for federal income tax purposes,
therefore we generally will not be subject to federal income tax
on income that we distribute to our stockholders. If we fail to
qualify as a REIT in any taxable year, including and after the
taxable year in which we initially elect to be taxed as a REIT,
we will be subject to federal income tax on our taxable income
at regular corporate rates and will not be permitted to qualify
for treatment as a REIT for federal income tax purposes for four
years following the year in which qualification is denied.
Failing to qualify as a REIT could materially and adversely
affect our net income.
Review of
our Policies
Our board of directors, including our independent directors, has
reviewed our policies described in this Annual Report and
determined that they are in the best interest of our
stockholders because: (1) they increase the likelihood that
the Company will be able to acquire a diversified portfolio of
income producing properties, thereby reducing risk in its
portfolio; (2) the Company’s executive officers,
directors and affiliates of the advisor have expertise with the
type of real estate investments the Company seeks; and
(3) borrowings should enable the Company to purchase assets
and earn rental income more quickly, thereby increasing the
likelihood of generating income for the Company’s
stockholders and preserving stockholder capital.
Critical
Accounting Policies
General
Our accounting policies have been established to conform to
GAAP. The preparation of financial statements in conformity with
GAAP requires management to use judgment in the application of
accounting policies, including making estimates and assumptions.
These judgments affect the reported amounts of assets
2
and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the
reported amounts of revenue and expenses during the reporting
periods. If management’s judgment or interpretation of the
facts and circumstances relating to various transactions is
different, it is possible that different accounting policies
will be applied or different amounts of assets, liabilities,
revenues and expenses will be recorded, resulting in a different
presentation of the financial statements or different amounts
reported in the financial statements. Additionally, other
companies may utilize different estimates that may impact
comparability of our results of operations to those of companies
in similar businesses. Below is a discussion of the accounting
policies that management considers to be most critical. These
policies require complex judgment in their application or
estimates about matters that are inherently uncertain.
Principles
of Consolidation
Our consolidated financial statements include our accounts and
the accounts of our subsidiaries, TNP Strategic Retail Operating
Partnership, LP, TNP SRT Moreno Marketplace, LLC, and TNP SRT
Waianae Mall, LLC. All intercompany profits, balances and
transactions are eliminated in consolidation.
Our consolidated financial statements will also include the
accounts of our consolidated subsidiaries and joint ventures in
which we are the primary beneficiary or in which we have a
controlling interest. In determining whether we have a
controlling interest in a joint venture and the requirement to
consolidate the accounts of that entity, our management
considers factors such as an entity’s purpose and design
and our ability to direct the activities of the entity that most
significantly impacts the entity’s economic performance,
ownership interest, board representation, management
representation, authority to make decisions, and contractual and
substantive participating rights of the partners/members as well
as whether the entity is a variable interest entity in which we
will absorb the majority of the entity’s expected losses,
if they occur, or receive the majority of the expected residual
returns, if they occur, or both.
Allocation
of Real Property Purchase Price
We account for all acquisitions in accordance with GAAP. We
first determine the value of the land and buildings utilizing an
“as if vacant” methodology. We then assign a fair
value to any debt assumed at acquisition. The balance of the
purchase price is allocated to tenant improvements and
identifiable intangible assets or liabilities. Tenant
improvements represent the tangible assets associated with the
existing leases valued on a fair value basis at the acquisition
date prorated over the remaining lease terms. The tenant
improvements are classified as an asset under investments in
real estate and are depreciated over the remaining lease terms.
Identifiable intangible assets and liabilities relate to the
value of in-place operating leases which come in three forms:
(1) leasing commissions and legal costs, which represent
the value associated with “cost avoidance” of
acquiring in-place leases, such as lease commissions paid under
terms generally experienced in our markets; (2) value of
in-place leases, which represents the estimated loss of revenue
and of costs incurred for the period required to lease the
“assumed vacant” property to the occupancy level when
purchased; and (3) above or below market value of in-place
leases, which represents the difference between the contractual
rents and market rents at the time of the acquisition,
discounted for tenant credit risks. The value of in-place leases
are recorded in acquired lease intangibles, net and amortized
over the remaining lease term. Above or below market leases are
classified in acquired lease intangibles, net or in other
liabilities, depending on whether the contractual terms are
above or below market. Above market leases are amortized as a
decrease to rental revenue over the remaining non-cancelable
terms of the respective leases and below market leases are
amortized as an increase to rental revenue over the remaining
initial lease term and any fixed rate renewal periods, if
applicable.
When we acquire real estate properties, we will allocate the
purchase price to the components of these acquisitions using
relative fair values computed using estimates and assumptions.
These estimates and assumptions impact the amount of costs
allocated between various components as well as the amount of
costs assigned to individual properties in multiple property
acquisitions. These allocations also impact depreciation expense
and gains or losses recorded on future sales of properties.
3
Real
Property
Costs related to the development, redevelopment, construction
and improvement of properties are capitalized. Interest incurred
on development, redevelopment and construction projects is
capitalized until construction is substantially complete.
Maintenance and repair expenses are charged to operations as
incurred. Costs for major replacements and betterments, which
include heating, ventilating, and air conditioning equipment,
roofs and parking lots, are capitalized and depreciated over
their estimated useful lives. Gains and losses are recognized
upon disposal or retirement of the related assets and are
reflected in earnings.
Property is recorded at cost and is depreciated using a
straight-line method over the estimated useful lives of the
assets as follows:
|
|
|
|
|
Years
|
Buildings and improvements
|
|
5-45 years
|
Exterior improvements
|
|
10-20 years
|
Equipment and fixtures
|
|
5-10 years
|
Revenue
Recognition
We recognize rental income on a straight-line basis over the
term of each lease. The difference between rental income earned
on a straight-line basis and the cash rent due under the
provisions of the lease agreements is recorded as deferred rent
receivable and is included as a component of accounts receivable
in the accompanying consolidated balance sheets. We anticipate
collecting these amounts over the terms of the leases as
scheduled rent payments are made. Reimbursements from tenants
for recoverable real estate taxes and operating expenses are
accrued as revenue in the period the applicable expenditures are
incurred. Lease payments that depend on a factor that does not
exist or is not measurable at the inception of the lease, such
as future sales volume, would be contingent rentals in their
entirety and, accordingly, would be excluded from minimum lease
payments and included in the determination of income as they are
earned.
Valuation
of Accounts Receivable
We have taken into consideration certain factors that require
judgments to be made as to the collectability of receivables.
Collectability factors taken into consideration are the amounts
outstanding, payment history and financial strength of the
tenant, which taken as a whole determines the valuation.
Organization
and Offering Costs
Our organization and offering costs (other than selling
commissions and the dealer manager fee) are paid by our advisor
and its affiliates on our behalf. Such costs shall include
legal, accounting, printing and other offering expenses,
including marketing, salaries and direct expenses of our
advisor’s employees and employees of our advisor’s
affiliates and others. Pursuant to our advisory agreement, we
are obligated to reimburse our advisor or its affiliates, as
applicable, for organization and offering costs associated with
our initial public offering, provided that our advisor is
obligated to reimburse us to the extent organization and
offering costs, other than selling commissions and dealer
manager fees, incurred by us exceed 3.0% of our gross offering
proceeds. Any such reimbursement will not exceed actual expenses
incurred by our advisor. Prior to raising the minimum offering
amount of $2,000,000, we had no obligation to reimburse our
advisor or its affiliates for any organization and offering
costs. As of December 31, 2009, organization and offering
costs incurred by our Advisor on our behalf were $1,579,000.
These costs are payable by us to the extent organization and
offering costs, other than selling commissions and dealer
manager fees, do not exceed 3.0% of the gross proceeds of our
initial public offering. As of December 31, 2009,
organization and offering costs did exceed 3.0% of the gross
proceeds of our initial public offering, thus the amount in
excess of 3.0%, or $1,425,000 is deferred.
All offering costs, including sales commissions and dealer
manager fees are recorded as an offset to additional
paid-in-capital,
and all organization costs are recorded as an expense when we
have an obligation to reimburse our advisor.
4
We will reimburse our advisor for all expenses paid or incurred
by our advisor in connection with the services provided to us,
subject to the limitation that we will not reimburse our advisor
for any amount by which our operating expenses (including the
asset management fee) at the end of the four preceding fiscal
quarters exceeds the greater of: (1) 2% of our average
invested assets, or (2) 25% of our net income determined
without reduction for any additions to depreciation, bad debts
or other similar non-cash expenses and excluding any gain from
the sale of our assets for that period. Notwithstanding the
above, we may reimburse our advisor for expenses in excess of
this limitation if a majority of the independent directors
determines that such excess expenses are justified based on
unusual and nonrecurring factors. As of December 31, 2009,
amounts incurred by our advisor in connection with services
provided to us were $1,967,000, of which $1,579,000 were
organization and offering costs and $388,000 were other costs
incurred on our behalf prior to achieving our minimum offering.
Income
Taxes
We intend to elect to be taxed as a REIT under Sections 856
through 860 of the Internal Revenue Code, commencing with the
2009 fiscal year which is the taxable year in which we satisfied
the minimum offering requirements. As we believe we qualify for
taxation as a REIT, we generally will not be subject to federal
corporate income tax to the extent we distributed our REIT
taxable income to our stockholders, so long as we distributed at
least 90% of our REIT taxable income (which is computed without
regard to the dividends paid deduction or net capital gain and
which does not necessarily equal net income as calculated in
accordance with GAAP). REITs are subject to a number of other
organizational and operations requirements. Even though we
believe we qualify for taxation as a REIT, we may be subject to
certain state and local taxes on our income and property, and
federal income and excise taxes on its undistributed income.
Results
of Operations
Our results of operations for the year ended December 31,
2009 are not indicative of those expected in future periods as
we commenced real estate operations on November 19, 2009 in
connection with our first property acquisition. During the
period from our inception (September 18, 2008) to
December 31, 2008, we had been formed but had not yet
commenced our ongoing initial public offering or real estate
operations. As a result, we had no material results of
operations for that period.
As of December 31, 2009, we had acquired one property for
an aggregate purchase price of $12,500,000, plus closing costs.
We funded the acquisition of this property with a combination of
debt and proceeds from our ongoing initial public offering. We
acquired the Moreno property during the fourth quarter of 2009,
and therefore our financial statements do not reflect a full
period of operations for this property. We expect that all
income and expenses related to our portfolio will increase in
future years as a result of owning the property acquired in 2009
for a full year and as a result of anticipated future
acquisitions of real estate and real estate-related assets.
Revenue. Total revenue for the year ended
December 31, 2009, was $145,000, which consisted of rental
revenue from our sole property of $140,000 and $5,000 from other
operating revenue.
General and administrative expenses. General
and administrative expenses were $660,000 for the year ended
December 31, 2009. These general and administrative
expenses consisted primarily of legal and accounting, restricted
stock compensation, directors fees, insurance, and organization
fees. We expect general and administrative costs to increase in
the future based on a full year of real estate operations and as
a result of anticipated future acquisitions, but to decrease as
a percentage of total revenue.
Acquisition expenses. Acquisition expenses for
the year ended December 31, 2009 were $408,000, all of
which were incurred in connection with the acquisition of the
Moreno property.
Operating and maintenance expenses. For the
year ended December 31, 2009, operating and maintenance
expenses were $114,000.
Asset management and property management fees incurred and
payable to our advisor and its affiliates totaled $9,000 and
$5,000, respectively, for the year ended December 31, 2009.
We expect asset management
5
and property management fees to increase in future years as a
result of owning our investments for a full year and as a result
of anticipated future acquisitions.
Depreciation and amortization
expenses. Depreciation and amortization expense
was $46,000 for the year ended December 31, 2009. We expect
these amounts to increase in future years as a result of owning
our property for a full year and as a result of anticipated
future acquisitions.
Interest expense. Interest expense was
$119,000 for the year ended December 31, 2009, which
included the amortization of deferred financing costs of
$39,000. Our real estate property acquisition was financed with
$11,126,000 in debt. We expect that in future periods our
interest expense will vary based on the amount of our
borrowings, which will depend on the cost of borrowings, the
amount of proceeds we raise in our ongoing initial public
offering and our ability to identify and acquire real estate and
real estate-related assets that meet our investment objectives.
Interest income. Interest income for the year
ended December 31, 2009 was $2,000 and related primarily to
cash received from subscription agreements that are held for
future acquisitions.
Net loss. We had a net loss of $1,200,000 for
the year ended December 31, 2009. Our operating loss is due
primarily to the fact that we commenced real estate operations
on November 19, 2009.
Liquidity
and Capital Resources
We commenced real estate operations with the acquisition of our
first property on November 19, 2009.
Our principal demand for funds will be for the acquisition of
real estate assets, the payment of operating expenses and
interest on our outstanding indebtedness and the payment of
distributions to our stockholders. Over time, we intend to
generally fund our cash needs for items other than asset
acquisitions from operations. Our cash needs for acquisitions
and investments will be funded primarily from the sale of shares
of our common stock, including those offered for sale through
our distribution reinvestment plan, and through the assumption
of debt.
Net cash provided by financing activities for the year ended
December 31, 2009 were $14,452,000, consisting primarily of
net offering proceeds of $4,260,000 (after payment of selling
commissions, dealer manager fees and other organization and
offering expenses of $542,000) and $11,126,000 of borrowings.
Between November 19, 2009 (the date we commenced real
estate operations) and December 31, 2009, we incurred
aggregate borrowings related to the purchase of real estate of
$11,126,000. As of December 31, 2009, we had repaid
$636,000 of these borrowings. With capital from our financing
activities, we invested approximately $12,500,000 in property
acquisitions, and paid acquisition fees and closing costs of
$408,000. We paid distributions to stockholders (net of
reinvested distributions) of $6,000 for the year ended
December 31, 2009. Net cash used in operating activities
for the year ended December 31, 2009 was $1,047,000. The
excess cash generated from financing activities (net of cash
used in investing activities and net cash used in operating
activities) of $905,000 is expected to be used to pay
liabilities or to make additional real estate investments.
As of December 31, 2009, our liabilities totaled
$12,317,000. Our financings are described in greater detail
below and summarized in tabular form under
“— Contractual Commitments and
Contingencies.”
KeyBank
Revolving Credit Facility
On November 12, 2009, our operating partnership entered
into a revolving credit agreement, or the credit agreement, with
KeyBank National Association, or KeyBank, as administrative
agent for itself and the other lenders named in the credit
agreement, or the lenders, to establish a revolving credit
facility with a maximum aggregate borrowing capacity of up to
$15,000,000. The proceeds of the revolving credit facility may
be used by the operating partnership for investments in
properties and real estate-related assets, improvement of
properties, costs involved in the ordinary course of the
operating partnership business and for other general working
capital purposes; provided, however, that prior to any funds
being advanced to the operating partnership under the revolving
credit facility, KeyBank shall have the authority to review and
approve, in its
6
sole discretion, the investments which the operating partnership
proposes to make with such funds, and the operating partnership
shall be required to satisfy certain enumerated conditions set
forth in the credit agreement, including, but not limited to,
limitations on outstanding indebtedness with respect to a
proposed property acquisition, a ratio of net operating income
to debt service on the prospective property of at least 1.35 to
1.00 and a requirement that the prospective property be 100%
owned, directly or indirectly, by the operating partnership.
The credit agreement contains customary covenants including,
without limitation, limitations on distributions, the incurrence
of debt and the granting of liens. Additionally, the credit
agreement contains certain covenants relating to the amount of
offering proceeds we receive in our continuous offering of
common stock. We received a waiver from KeyBank relating to the
covenant in our credit agreement requiring us to raise at least
$2,000,000 in shares of our common stock in our public offering
during each of January, February and March 2010. In addition,
our operating partnership received a waiver relating to the
covenant requiring us to maintain a 1.3 to 1 debt service
coverage ratio for the quarter ended March 31, 2010. The
credit agreement is guaranteed by our sponsor and an affiliate
of our sponsor. As part of that guarantee agreement, our sponsor
and its affiliate must maintain minimum net worth and liquidity
requirements on a combined or individual basis.
The operating partnership may, upon prior written notice to
KeyBank, prepay the principal of the borrowings then outstanding
under the revolving credit facility, in whole or in part,
without premium or penalty.
The entire unpaid principal balance of all borrowings under the
revolving credit facility and all accrued and unpaid interest
thereon will be due and payable in full on November 12,
2010. Borrowings under the revolving credit facility will bear
interest at a variable per annum rate equal to the sum of
(a) 425 basis points plus (b) the greater of
(1) 300 basis points or
(2) 30-day
LIBOR as reported by Reuters on the day that is two business
days prior to the date of such determination, and accrued and
unpaid interest on any past due amounts will bear interest at a
variable LIBOR-based rate that in no event shall exceed the
highest interest rate permitted by applicable law. The operating
partnership paid KeyBank a one time $150,000 commitment fee in
connection with entering into the credit agreement and will pay
KeyBank an unused commitment fee of 0.50% per annum.
As of December 31, 2009, $15,000,000 was available under
the KeyBank credit facility, subject to KeyBank’s review
and approval described above, and there were no borrowings
outstanding.
Moreno
Property Loan
In connection with the acquisition of the Moreno property, on
November 19, 2009, which we refer to herein as the
“closing date”, TNP SRT Moreno borrowed $9,250,000
from KeyBank pursuant to a promissory note, or the Moreno
Property Note, secured by the Moreno property. The entire
outstanding principal balance of the Moreno Property Note, plus
any accrued and unpaid interest thereon, is due and payable in
full on November 19, 2011 (as such date may be extended as
described below, the “maturity date”), provided that
TNP SRT Moreno has the option to extend the maturity date for up
to two successive extension periods of twelve months each. Each
exercise by TNP SRT Moreno of its option to extend the maturity
date is subject to (1) TNP SRT Moreno providing KeyBank
with written notice of the requested extension at least sixty
(60) days prior to the then existing maturity date,
(2) the payment by TNP SRT Moreno of an extension fee equal
to 0.25% of the then outstanding principal balance of the
Moreno Property Note and (3) TNP SRT Moreno’s
satisfaction of certain covenants, including, but not limited
to, specific debt service coverage and debt yield ratios, the
absence of any uncured events of default under the Moreno
Property Note and the absence of any material adverse changes in
the financial condition of TNP SRT Moreno or any guarantors of
its obligations under the Moreno Property Note.
A principal payment of $10,000 plus interest, at the applicable
interest rate, on the outstanding principal balance of the
Moreno Property Note will be due and payable monthly until the
maturity date. Interest on the outstanding principal balance of
the Moreno Property Note will accrue at a rate of 5.5% per annum
through the initial maturity date. During the first extension
period, if any, interest on the outstanding principal balance
7
of the Moreno Property Note will accrue at a rate of 7.0% per
annum. During the second extension period, if any, interest on
the outstanding principal balance of the Moreno Property Note
will accrue at a rate equal to the greater of (1) 7.50% per
annum and (2) a variable per annum rate based upon LIBOR as
reported by Reuters. TNP SRT Moreno may prepay the outstanding
principal balance of the Moreno Property Note in full without
premium or penalty if such prepayment occurs on or before the
first anniversary of the closing date. Following the first
anniversary of the closing date, any prepayment in full of the
Moreno Property Note will be subject to an exit fee ranging from
of 0.25% to 0.75% of the then outstanding principal balance of
the Moreno Property Note based upon when such prepayment occurs.
As of December 31, 2009, there was $9,240,000 outstanding
on the Moreno Property Note.
Convertible
Note
In connection with the acquisition of the Moreno property, on
November 19, 2009, TNP SRT Moreno borrowed $1,250,000 from
Moreno Retail Partners, LLC, or MRP, pursuant to a subordinated
convertible promissory note, or the convertible note. The entire
outstanding principal balance of the convertible note, plus any
accrued and unpaid interest, is due and payable in full on
November 18, 2015. Interest on the outstanding principal
balance of the convertible note will accrue at a rate of 8% per
annum, payable quarterly in arrears. After April 2, 2010,
TNP SRT Moreno may, at any time and from time to time, prepay
all or any portion of the then outstanding principal balance of
the convertible note without premium or penalty. The convertible
note provides for customary events of default, including,
without limitation, payment defaults and insolvency and
bankruptcy related defaults. Upon an uncured event of default,
MRP may declare all amounts due under the convertible note
immediately due and payable in full.
At any time after January 2, 2010 but before April 2,
2010, MRP may elect to convert the unpaid principal balance due
on the convertible note (which we refer to herein as the
“conversion amount”) into a capital contribution by
MRP to TNP SRT Moreno to be credited to a capital account with
TNP SRT Moreno. At any time after February 2, 2010 but
before April 2, 2010, TNP SRT Moreno may elect to convert
the conversion amount into a capital contribution by MRP to TNP
SRT Moreno to be credited to a capital account with TNP SRT
Moreno. Any accrued but unpaid interest on the convertible note
shall be payable to MRP in cash upon the conversion of the
conversion amount. As of this filing, neither party had
converted this note. If the note is not converted, TNP SRT
Moreno will pay our Advisor an additional acquisition fee of
$110,000.
Contractual
Commitments and Contingencies
The following is a summary of our contractual obligations as of
December 31, 2009:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payments Due by Period
|
Contractual Obligations
|
|
Total
|
|
2010
|
|
2011-2012
|
|
2013-2014
|
|
Thereafter
|
|
Long-term debt obligations(1)
|
|
$
|
10,490,000
|
|
|
|
120,000
|
|
|
|
9,120,000
|
|
|
|
—
|
|
|
|
1,250,000
|
|
Interest payments on outstanding debt obligations(2)
|
|
|
1,508,000
|
|
|
|
605,000
|
|
|
|
616,000
|
|
|
|
200,000
|
|
|
|
87,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
11,998,000
|
|
|
|
725,000
|
|
|
|
9,376,000
|
|
|
|
200,000
|
|
|
|
1,337,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Amounts include principal payments only. |
|
(2) |
|
Projected interest payments are based on the outstanding
principal amounts and weighted-average interest rates at
December 31, 2009. |
Potential
Property Acquisition
On December 14, 2009, we assumed the rights to a purchase
and sale agreement for the acquisition of Waianae Mall, an
approximately 170,275 square foot multi-tenant retail
center consisting of 11 buildings located in Honolulu, Hawaii or
the Waianae property. An affiliate of our sponsor previously
entered into a purchase agreement to purchase the Waianae
property for an aggregate purchase price of $25,688,000,
including the assumption of debt on the property. In connection
with this potential acquisition, we formed TNP SRT Waianae Mall,
LLC, a wholly owned subsidiary of our operating partnership, to
complete the
8
acquisition and have paid a $250,000 refundable deposit as of
December 31, 2009. We intend to purchase the Waianae
property using debt financing and funds raised through our
public offering of common stock. We anticipate paying an
acquisition fee of 2.5%, or $642,000, of the purchase price to
our advisor. We expect to close the acquisition in the second
quarter of 2010, however, there is no assurance that the closing
will occur within this timeframe, or at all. This potential
acquisition is subject to substantial conditions to closing
including: (1) the sale of a sufficient number of shares of
common stock in our public offering to fund a portion of the
purchase price for the Waianae property; (2) the approval
of the loan servicer for the existing indebtedness on the
Waianae property to be assumed by us and the receipt of other
applicable third-party consents; and (3) the absence of a
material adverse change to the Waianae property prior to the
date of the acquisition.
Inflation
The majority of our leases at the Moreno property contain
inflation protection provisions applicable to reimbursement
billings for common area maintenance charges, real estate tax
and insurance reimbursements on a per square foot basis, or in
some cases, annual reimbursement of operating expenses above a
certain per square foot allowance. We expect to include similar
provisions in our future tenant leases designed to protect us
from the impact of inflation. Due to the generally long-term
nature of these leases, annual rent increases, as well as rents
received from acquired leases, may not be sufficient to cover
inflation and rent may be below market.
REIT
Compliance
To qualify as a REIT for tax purposes, we are required to
distribute at least 90% of our REIT taxable income to our
stockholders. We must also meet certain asset and income tests,
as well as other requirements. We will monitor the business and
transactions that may potentially impact our REIT status. If we
fail to qualify as a REIT in any taxable year, we will be
subject to federal income tax (including any applicable
alternative minimum tax) on our taxable income at regular
corporate rates and generally will not be permitted to qualify
for treatment as a REIT for federal income tax purposes for the
four taxable years following the year during which our REIT
qualification is lost unless the Internal Revenue Service grants
us relief under certain statutory provisions. Such an event
could materially adversely affect our net income and net cash
available for distribution to our stockholders.
Distributions
We intend to make regular cash distributions to our
stockholders, typically on a monthly basis. The actual amount
and timing of distributions will be determined by our board of
directors in its discretion and typically will depend on the
amount of funds available for distribution, which is impacted by
current and projected cash requirements, tax considerations and
other factors. As a result, our distribution rate and payment
frequency may vary from time to time. However, to qualify as a
REIT for tax purposes, we must make distributions equal to at
least 90% of our “REIT taxable income” each year.
On August 13, 2009, our board of directors approved a
monthly cash distribution of $0.05625 per common share, which
represents an annualized distribution of $0.675 per share. The
commencement of the distribution, which was expected to take
place in the calendar month following the closing of our first
asset acquisition, was subject to our having achieved minimum
offering proceeds of $2,000,000, the sale of a sufficient number
of shares in our public offering to finance an asset acquisition
and our identification and completion of an asset acquisition.
On November 12, 2009, we achieved the minimum offering
amount $2,000,000, and on November 19, 2009 we completed
our first asset acquisition. On November 30, 2009, we
declared a monthly distribution in the aggregate amount of
$7,000, of which $6,000 was paid in cash on December 15,
2009 and $1,000 was paid through our distribution reinvestment
plan in the form of additional shares issued on
November 30, 2009. On December 31, 2009, we declared a
monthly distribution on the aggregate of $24,000, of which
$18,000 was paid in cash on January 15, 2010 and $6,000 was
paid through our distribution reinvestment plan in the form of
additional shares issued on December 31, 2009. We did not
have any funds from operation, or FFO, for the year ended
December 31, 2009, and the cash amounts
9
distributed to stockholders in December 2009 were funded from
proceeds from our offering. FFO is a non-GAAP financial measure
that is widely recognized as a measure of REIT operating
performance. See the “Funds from Operations and Adjusted
Funds from Operations” section below for a reconciliation
of FFO and adjusted FFO to our net income.
On January 31, 2010, we declared a monthly distribution in
the aggregate of $32,000, of which $25,000 was paid in cash on
February 12, 2010 and $7,000 was paid through our
distribution reinvestment plan in the form of additional shares
issued on January 31, 2010. On February 28, 2010, we
declared a monthly distribution in the aggregate of $40,000, of
which $29,000 was paid in cash on March 15, 2010 and
$11,000 was paid through our distribution reinvestment plan in
the form of additional shares issued on February 28, 2010.
Funds
from Operations and Adjusted Funds from Operations
One of our objectives is to provide cash distributions to our
stockholders from cash generated by our operations. Cash
generated from operations is not equivalent to net operating
income as determined under GAAP. Due to certain unique operating
characteristics of real estate companies, the National
Association of Real Estate Investment Trusts, an industry trade
group, or NAREIT, has promulgated a standard known as Funds from
Operations, or FFO for short, which it believes more accurately
reflects the operating performance of a REIT. As defined by
NAREIT, FFO means net income computed in accordance with GAAP,
excluding gains (or losses) from sales of property, plus
depreciation and amortization, and after adjustments for
unconsolidated partnerships and joint ventures in which the REIT
holds an interest. We believe that FFO is helpful to investors
and our management as a measure of operating performance because
it excludes depreciation and amortization, gains and losses from
property dispositions, and extraordinary items, and as a result
when compared year over year, reflects the impact on operations
from trends in occupancy rates, rental rates, operating costs,
general and administrative expenses and interests costs, which
is not immediately apparent from net income.
Changes in the accounting and reporting rules under GAAP have
prompted a significant increase in the amount of non-operating
items included in FFO, as defined. As a result, in addition to
FFO, we also calculate Adjusted Funds from Operations, or
adjusted FFO, which excludes from FFO (1) any acquisition
expenses and acquisition fees expensed by us and that are
related to any property, loan or other investment acquired or
expected to be acquired by us and (2) any non-operating
non-cash charges incurred by us, such as impairments of property
or loans, any
other-than-temporary
impairments of marketable securities, or other similar charges.
We believe that adjusted FFO is helpful to our investors and
management as a measure of operating performance because it
excludes costs that management considers more reflective of
investing activities and other non-operating items included in
FFO.
As explained below, management’s evaluation of our
operating performance excludes the items considered in the
calculation of adjusted FFO based on the following economic
considerations:
Acquisition costs: In evaluating investments
in real estate, including both business combinations and
investments accounted for under the equity method of accounting,
management’s investment models and analysis differentiates
costs to acquire the investment from the operations derived from
the investment. Prior to 2009, acquisition costs for these types
of investments were capitalized; however, beginning in 2009
acquisition costs related to business combinations are expensed.
We believe by excluding expensed acquisition costs, adjusted FFO
provides useful supplemental information that is comparable for
each type of our real estate investments and is consistent with
management’s analysis of the investing and operating
performance of our properties.
Impairment charge: An impairment charge
represents a downward adjustment to the carrying amount of a
long-lived asset to reflect the current valuation of the asset
even when the asset is intended to be held long-term. Such
adjustment, when properly recognized under GAAP, may lag the
underlying consequences related to rental rates, occupancy and
other operating performance trends. The valuation is also based,
in part, on the impact of current market fluctuations and
estimates of future capital requirements and long-term operating
performance that may not be directly attributable to current
operating performance. Because adjusted FFO
10
excludes impairment charges, management believes adjusted FFO
provides useful supplemental information by focusing on the
changes in our operating fundamentals rather than changes that
may reflect only anticipated losses.
Subject to the following limitations, FFO and adjusted FFO
provides a better basis for measuring our operating performance.
The calculation of FFO and adjusted FFO may, however, vary from
entity to entity because capitalization and expense policies
tend to vary from entity to entity. Consequently, the
presentation of FFO and adjusted FFO by us may not be comparable
to other similarly titled measures presented by other REITs. FFO
and adjusted FFO are not intended to be alternatives to net
income as an indicator of our performance, liquidity or to
“Cash Flows from Operating Activities” as determined
by GAAP as a measure of our capacity to pay distributions.
Our calculation of FFO, and adjusted FFO, is presented in the
following table for the year ended December 31, 2009:
|
|
|
|
|
Net Loss
|
|
$
|
(1,200,000
|
)
|
Add:
|
|
|
|
|
Depreciation and amortization of real estate assets
|
|
|
46,000
|
|
|
|
|
|
|
FFO
|
|
|
(1,154,000
|
)
|
Add:
|
|
|
|
|
Acquisition expenses
|
|
|
408,000
|
|
|
|
|
|
|
Adjusted FFO
|
|
$
|
(746,000
|
)
|
|
|
|
|
|
Off-Balance
Sheet Arrangements
As of December 31, 2009, we had no off-balance sheet
arrangements that have or are reasonably likely to have a
current or future effect on our financial conditions, changes in
financial conditions, revenues or expenses, results of
operations, liquidity, capital expenditures or capital resources.
New
Accounting Pronouncements
In June 2009, the Financial Accounting Standards Board, or FASB,
issued ASC
810-10,
Consolidation, which will become effective for us on
January 1, 2010. This Statement requires an enterprise to
perform an analysis to determine whether the enterprise’s
variable interest or interests give it a controlling financial
interest in a variable interest entity. We do not expect such
standard will have a significant impact on our financial
statements as it relates to existing entities we have an
ownership interest in.
In August 2009, the FASB issued Accounting Standards Update
(ASU)
No. 2009-05,
Fair Value Measurements and Disclosures. ASU
No. 2009-05,
which became effective for us in 2009, provides clarification to
measuring the fair value of a liability. In circumstances in
which a quoted market price in an active market for the
identical liability is not available, a reporting entity is
required to measure fair value by using either (1) a
valuation technique that uses quoted prices for identical or
similar liabilities or (2) another valuation technique,
such as a present value technique or a technique that is based
on the amount paid or received by the reporting entity to
transfer an identical liability. ASU
No. 2009-05
only applies to our disclosures in note 5 related to the
estimated fair value of our notes payable and did not have a
significant impact on our footnote disclosures.
In January 2010, the FASB issued ASU
No. 2010-06,
Fair Value Measurements and Disclosures (Topic 820): Improving
Disclosures about Fair Value Measurements. Effective for interim
and annual reporting periods beginning after December 15,
2009, this ASU requires new disclosures and clarifies existing
disclosure requirements about fair value measurement. ASU
No. 2010-06
only applies to our disclosures in Note 5 of our
consolidated financial statements included in this Annual Report
related to the estimated fair values of our notes payable and is
not expected to have a significant impact on our footnote
disclosures.
11
Subsequent
Events
Status
of Offering
We commenced our initial public offering of up to $1,100,000,000
in shares of our common stock on August 7, 2009. As of
March 26, 2010, we had accepted investors’
subscriptions for, and issued, 893,318 shares of our common
stock, including shares issued pursuant to our distribution
reinvestment plan, resulting in gross offering proceeds of
$8,806,000.
|
|
Item 8.
|
Financial
Statements and Supplementary Data
|
The Company’s consolidated financial statements and
supplementary data and the report of KPMG LLP, Independent
Registered Public Accounting Firm, are included elsewhere
herein. Reference is made to the Index to Consolidated Financial
Statements and Schedules in Item 15.
|
|
Item 9A(T).
|
Controls
and Procedures
|
Evaluation
of Disclosure Controls and Procedures
As of the end of the period covered by this report, management,
including the Chief Executive Officer and Chief Financial
Officer, evaluated the effectiveness of the design and operation
of the Company’s disclosure controls and procedures. Based
upon, and as of the date of, the evaluation, the Chief Executive
Officer and Chief Financial Officer concluded that the
disclosure controls and procedures were effective (as defined in
Rules 13a-15(e)
and
13d-15(e)
under the Exchange Act).
Management’s
Annual Report on Internal Control over Financial
Reporting
This Annual Report on
Form 10-K/A
does not include a report of management’s assessment
regarding internal control over financial reporting or an
attestation report of the Company’s registered public
accounting firm, and the Company has not evaluated any change in
its internal control over financial reporting that occurred
during our last fiscal quarter due to a transition period
established by the rules of the Securities and Exchange
Commission for newly public companies.
12
PART IV
|
|
Item 15.
|
Exhibits
and Financial Statement Schedules
|
(a) The following documents are filed as part of this
Annual Report:
|
|
1.
|
Consolidated
Financial Statements
|
Index to Consolidated Financial Statements
Report of Independent Registered Public Accounting Firm
Consolidated Balance Sheets as of December 31, 2009 and 2008
Consolidated Statements of Operations for the year ended
December 31, 2009 and for the Period from
September 18, 2008 (date of inception) through
December 31, 2008
Consolidated Statements of Equity for the year ended
December 31, 2009 and for the Period from
September 18, 2008 (date of inception) through
December 31, 2008
Consolidated Statements of Cash Flows for the year ended
December 31, 2009 and for the Period from
September 18, 2008 (date of inception) through
December 31, 2008
Notes to Consolidated Financial Statements
|
|
2.
|
Financial
Statement Schedules
|
Schedule III — Real Estate Assets and Accumulated
Depreciation and Amortization
All other schedules have been omitted as the required
information is either not material, inapplicable or the
information is presented in the financial statements or related
notes.
|
|
|
|
|
|
3
|
.1
|
|
Articles of Amendment and Restatement of TNP Strategic Retail
Trust, Inc. (filed as Exhibit 3.1 to Pre-Effective
Amendment No. 5 to the Company’s Registration
Statement on
Form S-11
(No. 333-154975)
and incorporated herein by reference).
|
|
3
|
.2
|
|
Bylaws of TNP Strategic Retail Trust, Inc. (filed as
Exhibit 3.2 to the Company’s Registration Statement on
Form S-11
(No. 333-154975)
and incorporated herein by reference).
|
|
4
|
.1
|
|
Form of Subscription Agreement (included as Appendix C to
prospectus, incorporated by reference to Exhibit 4.1 to
Pre-Effective Amendment No. 6 to the Company’s
Registration Statement on
Form S-11
(No. 333-154975)).
|
|
4
|
.2
|
|
TNP Strategic Retail Trust, Inc. Distribution Reinvestment Plan
(included as Appendix D to prospectus, incorporated by
reference to Exhibit 4.2 to Pre-Effective Amendment
No. 6 to the Company’s Registration Statement on
Form S-11
(No. 333-154975)).
|
|
10
|
.1
|
|
Escrow Agreement among TNP Strategic Retail Trust, Inc., TNP
Securities, LLC and CommerceWest Bank, N.A. (filed as
Exhibit 10.1 to Pre-Effective Amendment No. 5 to the
Company’s Registration Statement on
Form S-11
(No. 333-154975)
and incorporated herein by reference).
|
|
10
|
.2
|
|
Advisory Agreement among TNP Strategic Retail Trust, Inc., TNP
Strategic Retail Operating Partnership, LP and TNP Strategic
Retail Advisor, LLC (filed as Exhibit 10.2 to Pre-Effective
Amendment No. 5 to the Company’s Registration
Statement on
Form S-11
(No. 333-154975)
and incorporated herein by reference).
|
|
10
|
.3
|
|
Limited Partnership Agreement of TNP Strategic Retail Operating
Partnership, LP (filed as Exhibit 10.3 to Pre-Effective
Amendment No. 3 to the Company’s Registration
Statement on
Form S-11
(No. 333-154975)
and incorporated herein by reference).
|
|
10
|
.4
|
|
TNP Strategic Retail Trust, Inc. 2009 Long-Term Incentive Plan
(filed as Exhibit 10.4 to Pre-Effective Amendment
No. 5 to the Company’s Registration Statement on
Form S-11
(No. 333-154975)
and incorporated herein by reference).
|
13
|
|
|
|
|
|
10
|
.5
|
|
TNP Strategic Retail Trust, Inc. Amended and Restated
Independent Directors Compensation Plan (filed as
Exhibit 10.5 to Pre-Effective Amendment No. 5 to the
Company’s Registration Statement on
Form S-11
(No. 333-154975)
and incorporated herein by reference).
|
|
10
|
.6
|
|
Dealer Manager Agreement (filed as Exhibit 1.1 to
Pre-Effective Amendment No. 5 to the Company’s
Registration Statement on
Form S-11
(No. 333-154975)
and incorporated herein by reference).
|
|
10
|
.7
|
|
Purchase and Sale Agreement (relating to the acquisition of the
Moreno Marketplace), dated September 22, 2009, by and
between Moreno Marketplace, LLC and Bill and John Skeffington
(filed as Exhibit 10.1 to the Current Report on
Form 8-K
filed with the SEC on November 24, 2009).
|
|
10
|
.8
|
|
Assignment of Purchase and Sale Agreement (relating to the
acquisition of the Moreno Marketplace), dated October 21,
2009 (filed as Exhibit 10.2 to the Current Report on
Form 8-K
filed with the SEC on November 24, 2009).
|
|
10
|
.9
|
|
Assignment of Purchase and Sale Agreement (relating to the
acquisition of the Moreno Marketplace), dated November 9,
2009 (filed as Exhibit 10.3 to the Current Report on
Form 8-K
filed with the SEC on November 24, 2009).
|
|
10
|
.10
|
|
Promissory Note between TNP SRT Moreno Marketplace, LLC and
KeyBank National Association, dated November 12, 2009
(filed as Exhibit 10.9 to Pre-Effective Amendment
No. 1 to Post-Effective Amendment No. 1 to the
Company’s Registration Statement on
Form S-11
(No. 333-154975)
and incorporated herein by reference).
|
|
10
|
.11
|
|
Subordinated Convertible Promissory Note between TNP SRT Moreno
Marketplace, LLC and Moreno Retail Partners, LLC, dated
November 18, 2009 (filed as Exhibit 10.10 to
Pre-Effective Amendment No. 1 to Post-Effective Amendment
No. 1 to the Company’s Registration Statement on
Form S-11
(No. 333-154975)
and incorporated herein by reference).
|
|
10
|
.12
|
|
Guaranty, dated November 12, 2009, by and between TNP
Strategic Retail Trust, Inc. and Anthony W. Thompson, for the
benefit of KeyBank National Association (filed as
Exhibit 10.11 to Pre-Effective Amendment No. 1 to
Post-Effective Amendment No. 1 to the Company’s
Registration Statement on
Form S-11
(No. 333-154975)
and incorporated herein by reference).
|
|
10
|
.13
|
|
Environmental Indemnity Agreement, dated November 12, 2009,
by and among TNP SRT Moreno Marketplace, LLC, TNP Strategic
Retail Trust, Inc., Moreno Retail Partners, LLC, John
Skeffington, William Skeffington and KeyBank National
Association (filed as Exhibit 10.12 to Pre-Effective
Amendment No. 1 to Post-Effective Amendment No. 1 to
the Company’s Registration Statement on
Form S-11
(No. 333-154975)
and incorporated herein by reference).
|
|
10
|
.14
|
|
Reimbursement and Fee Agreement, dated November 20, 2009,
by and among TNP SRT Moreno Marketplace, LLC, TNP Strategic
Retail Trust, Inc. and Anthony W. Thompson (filed as
Exhibit 10.13 to Pre-Effective Amendment No. 1 to
Post-Effective Amendment No. 1 to the Company’s
Registration Statement on
Form S-11
(No. 333-154975)
and incorporated herein by reference).
|
|
10
|
.15
|
|
Revolving Credit Agreement, dated November 12, 2009, by and
among TNP Strategic Retail Operating Partnership, LP, TNP
Strategic Retail Trust, Inc. and KeyBank National Association
(filed as Exhibit 10.14 to Pre-Effective Amendment
No. 1 to Post-Effective Amendment No. 1 to the
Company’s Registration Statement on
Form S-11
(No. 333-154975)
and incorporated herein by reference).
|
|
10
|
.16
|
|
Revolving Credit Note of TNP Strategic Retail Operating
Partnership, LP, dated November 12, 2009, in favor of
KeyBank National Association (filed as Exhibit 10.15 to
Pre-Effective Amendment No. 1 to Post-Effective Amendment
No. 1 to the Company’s Registration Statement on
Form S-11
(No. 333-154975)
and incorporated herein by reference).
|
|
10
|
.17
|
|
Guaranty Agreement, dated November 12, 2009, by and among
TNP Strategic Retail Trust, Inc., Thompson National Properties,
LLC and Anthony W. Thompson, for the benefit of KeyBank National
Association (filed as Exhibit 10.16 to Pre-Effective
Amendment No. 1 to Post-Effective Amendment No. 1 to
the Company’s Registration Statement on
Form S-11
(No. 333-154975)
and incorporated herein by reference).
|
14
|
|
|
|
|
|
10
|
.18
|
|
Pledge and Security Agreement, dated November 12, 2009, by
and between TNP Strategic Retail Trust, Inc. and KeyBank
National Association (filed as Exhibit 10.17 to
Pre-Effective Amendment No. 1 to Post-Effective Amendment
No. 1 to the Company’s Registration Statement on
Form S-11
(No. 333-154975)
and incorporated herein by reference).
|
|
10
|
.19
|
|
Pledge and Security Agreement, dated November 12, 2009, by
and between TNP Strategic Retail Operating Partnership, LP and
KeyBank National Association (filed as Exhibit 10.18 to
Pre-Effective Amendment No. 1 to Post-Effective Amendment
No. 1 to the Company’s Registration Statement on
Form S-11
(No. 333-154975)
and incorporated herein by reference).
|
|
10
|
.20
|
|
Reimbursement Agreement, dated November 12, 2009, by and
between TNP Strategic Retail Operating Partnership, LP and
Anthony W. Thompson (filed as Exhibit 10.19 to
Pre-Effective Amendment No. 1 to Post-Effective Amendment
No. 1 to the Company’s Registration Statement on
Form S-11
(No. 333-154975)
and incorporated herein by reference).
|
|
10
|
.21
|
|
Reimbursement and Fee Agreement, dated November 12, 2009,
by and between TNP Strategic Retail Operating Partnership, LP
and Thompson National Properties, LLC (filed as
Exhibit 10.20 to Pre-Effective Amendment No. 1 to
Post-Effective Amendment No. 1 to the Company’s
Registration Statement on
Form S-11
(No. 333-154975)
and incorporated herein by reference).
|
|
10
|
.22*
|
|
Agreement for Purchase and Sale and Joint Escrow Instructions,
dated July 13, 2009, by and between West Oahu Mall Associates,
LLC and TNP Acquisitions, LLC.
|
|
10
|
.23*
|
|
Assignment and Assumption Agreement, dated December 14, 2009, by
and between TNP Acquisitions, LLC and TNP SRT Waianae Mall, LLC.
|
|
10
|
.24*
|
|
First Amendment of Agreement of Purchase and Sale and Joint
Escrow Instructions, dated July 22, 2009, by and among West Oahu
Mall Associates, LLC, TNP Acquisitions, LLC and Title Guaranty
Escrow Services, Inc.
|
|
10
|
.25*
|
|
Second Amendment of Agreement of Purchase and Sale and Joint
Escrow Instructions, dated August 13, 2009, by and among West
Oahu Mall Associates, LLC, TNP Acquisitions, LLC and Title
Guaranty Escrow Services, Inc.
|
|
10
|
.26*
|
|
Third Amendment of Agreement of Purchase and Sale and Joint
Escrow Instructions, dated August 31, 2009, by and among West
Oahu Mall Associates, LLC, TNP Acquisitions, LLC and Title
Guaranty Escrow Services, Inc.
|
|
10
|
.27*
|
|
Tenth Amendment of Agreement of Purchase and Sale and Joint
Escrow Instructions, dated March 10, 2010, by and among West
Oahu Mall Associates, LLC, TNP SRT Waianae Mall, LLC and Title
Guaranty Escrow Services, Inc.
|
|
21
|
*
|
|
Subsidiaries of the Company
|
|
31
|
.1
|
|
Certification of Chief Executive Officer pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
|
|
31
|
.2
|
|
Certification of Chief Financial Officer pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
|
|
32
|
.1
|
|
Certification of Chief Executive Officer pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
|
|
32
|
.2
|
|
Certification of Chief Financial Officer pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
|
* |
|
Previously filed with the Annual Report on
Form 10-K,
filed on March 31, 2010 |
15
Report of
Independent Registered Public Accounting Firm
The Board of Directors and Stockholders
TNP Strategic Retail Trust, Inc.:
We have audited the accompanying consolidated balance sheets of
TNP Strategic Retail Trust, Inc. and subsidiaries (the Company)
as of December 31, 2009 and 2008, and the related
consolidated statements of operations, equity, and cash flows
for the year ended December 31, 2009 and for the period
from September 18, 2008 (date of inception) through
December 31, 2008. In connection with our audits of the
consolidated financial statements, we have also audited the
financial statement schedule III. 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 conducted our audits in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred
to above present fairly, in all material respects, the financial
position of TNP Strategic Retail Trust, Inc. and subsidiaries as
of December 31, 2009 and 2008, and the results of their
operations and their cash flows for the year ended
December 31, 2009 and for the period from
September 18, 2008 (date of inception) through
December 31, 2008, in conformity with U.S. generally
accepted accounting principles. Additionally, in our opinion,
the related financial statement schedule III, when considered in
relation to the basic consolidated financial statements taken as
a whole, presents fairly, in all material respects, the
information set forth therein.
/s/ KPMG LLP
Irvine, California
March 31, 2010, except
as to Note 1 and Note 7,
which are as of May 17, 2010
F-2
TNP
STRATEGIC RETAIL TRUST, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
2009
|
|
|
2008
|
|
|
ASSETS
|
Cash and cash equivalents
|
|
$
|
1,106,000
|
|
|
$
|
201,000
|
|
Prepaid expenses and other assets
|
|
|
360,000
|
|
|
|
—
|
|
Accounts receivable
|
|
|
11,000
|
|
|
|
1,000
|
|
Investments in real estate
|
|
|
|
|
|
|
|
|
Land
|
|
|
3,080,000
|
|
|
|
—
|
|
Building and improvements
|
|
|
6,124,000
|
|
|
|
—
|
|
Tenant improvements
|
|
|
656,000
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,860,000
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
Accumulated depreciation
|
|
|
(28,000
|
)
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
Total investments in real estate, net
|
|
|
9,832,000
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
Acquired lease intangibles, net
|
|
|
2,617,000
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
Deferred costs
|
|
|
|
|
|
|
|
|
Organization and offering
|
|
|
1,425,000
|
|
|
|
—
|
|
Financing fees, net
|
|
|
254,000
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
Total deferred costs, net
|
|
|
1,679,000
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
15,605,000
|
|
|
$
|
202,000
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
|
|
|
Accounts payable and accrued expenses
|
|
$
|
326,000
|
|
|
$
|
—
|
|
Amounts due to affiliates
|
|
|
1,489,000
|
|
|
|
—
|
|
Other liabilities
|
|
|
12,000
|
|
|
|
—
|
|
Notes payable
|
|
|
10,490,000
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
12,317,000
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
COMMITMENTS AND CONTINGENCIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EQUITY
|
|
|
|
|
|
|
|
|
Stockholders’ equity
|
|
|
|
|
|
|
|
|
Preferred stock, $0.01 par value per share;
50,000,000 shares authorized; none issued and outstanding
|
|
|
—
|
|
|
|
—
|
|
Common stock, $0.01 par value per share;
400,000,000 shares authorized; 524,752 issued and
outstanding at December 31, 2009, 22,222 issued and
outstanding at December 31, 2008
|
|
|
5,000
|
|
|
|
—
|
|
Additional paid-in capital
|
|
|
4,512,000
|
|
|
|
200,000
|
|
Accumulated deficit
|
|
|
(1,231,000
|
)
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
Total stockholders’ equity
|
|
|
3,286,000
|
|
|
|
200,000
|
|
|
|
|
|
|
|
|
|
|
Noncontrolling interest
|
|
|
2,000
|
|
|
|
2,000
|
|
|
|
|
|
|
|
|
|
|
Total equity
|
|
|
3,288,000
|
|
|
|
202,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
|
|
$
|
15,605,000
|
|
|
$
|
202,000
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes to consolidated financial statements
F-3
TNP
STRATEGIC RETAIL TRUST, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period from
|
|
|
|
|
|
|
September 18,
|
|
|
|
|
|
|
2008
|
|
|
|
|
|
|
(date of inception)
|
|
|
|
Year Ended
|
|
|
through
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
2009
|
|
|
2008
|
|
|
Revenue:
|
|
|
|
|
|
|
|
|
Rental
|
|
$
|
140,000
|
|
|
$
|
—
|
|
Other
|
|
|
5,000
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
145,000
|
|
|
|
—
|
|
Expense:
|
|
|
|
|
|
|
|
|
General and administrative
|
|
|
660,000
|
|
|
|
—
|
|
Acquisition expenses
|
|
|
408,000
|
|
|
|
—
|
|
Operating and maintenance
|
|
|
114,000
|
|
|
|
—
|
|
Depreciation and amortization
|
|
|
46,000
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,228,000
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
Loss before other income (expenses)
|
|
|
(1,083,000
|
)
|
|
|
—
|
|
Other income and expense:
|
|
|
|
|
|
|
|
|
Interest income
|
|
|
2,000
|
|
|
|
—
|
|
Interest expense
|
|
|
(119,000
|
)
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(1,200,000
|
)
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
Net loss per share — basic and diluted
|
|
$
|
(17.14
|
)
|
|
$
|
—
|
|
Weighted average number of common shares
outstanding — basic and diluted
|
|
|
71,478
|
|
|
|
22,222
|
|
Distributions declared ($0.11 per share)
|
|
$
|
31,000
|
|
|
$
|
—
|
|
See accompanying notes to consolidated financial statements
F-4
TNP
STRATEGIC RETAIL TRUST, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number
|
|
|
Par
|
|
|
Additional Paid-In
|
|
|
Accumulated
|
|
|
Stockholders’
|
|
|
Non-controlling
|
|
|
|
|
|
|
of Shares
|
|
|
Value
|
|
|
Capital
|
|
|
Deficit
|
|
|
Equity
|
|
|
Interest
|
|
|
Total Equity
|
|
|
BALANCE — September 18, 2008 (date of
inception)
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Issuance of common stock
|
|
|
22,222
|
|
|
|
—
|
|
|
|
200,000
|
|
|
|
—
|
|
|
|
200,000
|
|
|
|
—
|
|
|
|
200,000
|
|
Contributions from non-controlling interest
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2,000
|
|
|
|
2,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BALANCE — December 31, 2008
|
|
|
22,222
|
|
|
|
—
|
|
|
|
200,000
|
|
|
|
—
|
|
|
|
200,000
|
|
|
|
2,000
|
|
|
|
202,000
|
|
Issuance of common stock
|
|
|
486,815
|
|
|
|
5,000
|
|
|
|
4,797,000
|
|
|
|
—
|
|
|
|
4,802,000
|
|
|
|
—
|
|
|
|
4,802,000
|
|
Offering costs
|
|
|
—
|
|
|
|
—
|
|
|
|
(542,000
|
)
|
|
|
—
|
|
|
|
(542,000
|
)
|
|
|
—
|
|
|
|
(542,000
|
)
|
Issuance of vested and non-vested restricted common stock
|
|
|
15,000
|
|
|
|
—
|
|
|
|
135,000
|
|
|
|
—
|
|
|
|
135,000
|
|
|
|
—
|
|
|
|
135,000
|
|
Deferred stock compensation
|
|
|
—
|
|
|
|
—
|
|
|
|
(85,000
|
)
|
|
|
—
|
|
|
|
(85,000
|
)
|
|
|
—
|
|
|
|
(85,000
|
)
|
Issuance of common stock under DRIP
|
|
|
715
|
|
|
|
—
|
|
|
|
7,000
|
|
|
|
—
|
|
|
|
7,000
|
|
|
|
—
|
|
|
|
7,000
|
|
Distributions
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(31,000
|
)
|
|
|
(31,000
|
)
|
|
|
—
|
|
|
|
(31,000
|
)
|
Net loss
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(1,200,000
|
)
|
|
|
(1,200,000
|
)
|
|
|
—
|
|
|
|
(1,200,000
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BALANCE — December 31, 2009
|
|
|
524,752
|
|
|
$
|
5,000
|
|
|
$
|
4,512,000
|
|
|
$
|
(1,231,000
|
)
|
|
$
|
3,286,000
|
|
|
$
|
2,000
|
|
|
$
|
3,288,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes to consolidated financial statements
F-5
TNP
STRATEGIC RETAIL TRUST, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period from
|
|
|
|
|
|
|
September 18,
|
|
|
|
|
|
|
2008
|
|
|
|
|
|
|
(date of inception)
|
|
|
|
Year Ended
|
|
|
through
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
2009
|
|
|
2008
|
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(1,200,000
|
)
|
|
$
|
—
|
|
Adjustment to reconcile net loss to net cash used in operating
activities:
|
|
|
|
|
|
|
|
|
Amortization of deferred financing costs
|
|
|
39,000
|
|
|
|
—
|
|
Depreciation and amortization
|
|
|
46,000
|
|
|
|
—
|
|
Stock based compensation,
|
|
|
50,000
|
|
|
|
—
|
|
Amortization of above market leases
|
|
|
4,000
|
|
|
|
—
|
|
Changes in assets and liabilities:
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
(10,000
|
)
|
|
|
(1,000
|
)
|
Amounts due to affiliates
|
|
|
64,000
|
|
|
|
—
|
|
Prepaid expenses and other assets
|
|
|
(360,000
|
)
|
|
|
—
|
|
Accounts payable and accrued expenses
|
|
|
308,000
|
|
|
|
—
|
|
Other liabilities
|
|
|
12,000
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
Net cash used in operating activities
|
|
|
(1,047,000
|
)
|
|
|
(1,000
|
)
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
Investments in real estate
|
|
|
(9,861,000
|
)
|
|
|
—
|
|
Acquired lease intangibles
|
|
|
(2,639,000
|
)
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
Net cash used in investing activities
|
|
|
(12,500,000
|
)
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
Proceeds from issuance of common stock
|
|
|
4,802,000
|
|
|
|
200,000
|
|
Distributions
|
|
|
(6,000
|
)
|
|
|
—
|
|
Contributions from noncontrolling interests
|
|
|
—
|
|
|
|
2,000
|
|
Payment of offering costs
|
|
|
(542,000
|
)
|
|
|
—
|
|
Proceeds from notes and loan payables
|
|
|
11,126,000
|
|
|
|
—
|
|
Repayment of notes and loan payable
|
|
|
(636,000
|
)
|
|
|
—
|
|
Payment of deferred financing costs
|
|
|
(292,000
|
)
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by financing activities
|
|
|
14,452,000
|
|
|
|
202,000
|
|
|
|
|
|
|
|
|
|
|
Net increase in cash
|
|
|
905,000
|
|
|
|
201,000
|
|
Cash and cash equivalents — Beginning of the period
|
|
|
201,000
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents — End of the period
|
|
$
|
1,106,000
|
|
|
$
|
201,000
|
|
|
|
|
|
|
|
|
|
|
Supplemental disclosure of non-cash financing activities:
|
|
|
|
|
|
|
|
|
Deferred organization and offering costs due to affiliates
|
|
$
|
1,425,000
|
|
|
$
|
—
|
|
Issuance of common stock under the DRIP
|
|
$
|
7,000
|
|
|
$
|
—
|
|
Distributions declared but not paid
|
|
$
|
18,000
|
|
|
$
|
—
|
|
Cash paid for interest
|
|
$
|
22,000
|
|
|
$
|
—
|
|
See accompanying notes to consolidated financial statements
F-6
TNP
Strategic Retail Trust, Inc. and Subsidiaries
Notes to
Consolidated Financial Statements
December 31,
2009 and 2008
TNP Strategic Retail Trust, Inc. (the “Company”) was
formed on September 18, 2008, as a Maryland corporation and
believes it qualifies as a real estate investment trust
(“REIT”) under the Internal Revenue Code of 1986, as
amended (the “Internal Revenue Code”). The Company was
organized primarily to acquire income-producing retail
properties located in the Western United States, real
estate-related assets and other real estate assets. As discussed
in Note 4, the Company sold stock to Thompson National
Properties, LLC (“Sponsor”) on October 16, 2008.
The Company’s fiscal year end is December 31.
On November 4, 2008, the Company filed a registration
statement on
Form S-11
with the Securities and Exchange Commission (the
“SEC”) to offer a maximum of 100,000,000 shares
of its common stock to the public in its primary offering and
10,526,316 shares of its common stock pursuant to its
distribution reinvestment plan. On August 7, 2009, the SEC
declared the offering effective and the Company commenced its
initial public offering. The Company is offering shares to the
public in its primary offering at a price of $10.00 per share,
with discounts available for certain purchasers, and to its
stockholders pursuant to its distribution reinvestment plan at a
price of $9.50 per share. Pursuant to the terms of the
Company’s initial public offering, the Company was required
to deposit all subscription proceeds in escrow pursuant to the
terms of an escrow agreement with CommerceWest Bank, N.A. until
the Company received subscriptions aggregating at least
$2,000,000. On November 12, 2009, the Company achieved the
minimum offering amount of $2,000,000 and offering proceeds were
released to the Company from the escrow account. As of
December 31, 2009, the Company had accepted investors’
subscriptions for, and issued, including shares through the
distribution reinvestment plan, 509,752 shares of the
Company’s common stock, resulting in gross offering
proceeds of $5,009,000.
The Company intends to use the net proceeds from its public
offering primarily to acquire retail properties. The Company may
also make or acquire first mortgages or second mortgages,
mezzanine loans, preferred equity investments and investments in
common stock of private real estate companies and publicly
traded real estate investment trusts, in each case provided that
the underlying real estate meets the Company’s criteria for
direct investment. The Company may also invest in any real
properties or other real estate-related assets that, in the
opinion of the Company’s board of directors, meets the
Company’s investment objectives. As of December 31,
2009, the Company, through wholly owned subsidiaries, had
acquired one multi-tenant retail property encompassing
approximately 78,743 rentable square feet (see Note 3,
Real Estate).
On August 13, 2009, the Company’s board of directors
approved a monthly cash distribution of $0.05625 per common
share, which represents an annualized distribution of $0.675 per
share. The commencement of the distribution was subject to the
Company having achieved minimum offering proceeds of $2,000,000,
the sale of a sufficient number of shares in the Company’s
public offering to finance an asset acquisition and the
Company’s identification and completion of an asset
acquisition. On November 12, 2009, the Company achieved the
minimum offering amount $2,000,000, and on November 19,
2009 the Company completed its first asset acquisition. As of
December 31, 2009, the Company had paid an aggregate of
$7,000 in distributions to the Company’s stockholders.
The Company’s advisor is TNP Strategic Retail Advisor, LLC
(“Advisor”), a Delaware limited liability company.
Subject to certain restrictions and limitations, Advisor is
responsible for managing the Company’s affairs on a
day-to-day
basis and for identifying and making acquisitions and
investments on behalf of the Company.
The Company is the sole general partner of its operating
partnership, TNP Strategic Retail Operating Partnership, LP, a
Delaware limited partnership (the “OP”), and as of
December 31, 2009 and 2008, the Company owned 99.8% and
95.7%, respectively, of the limited partnership interest in the
OP. As of December 31, 2009 and 2008, Advisor owned a 0.2%
and 4.3%, respectively, limited partnership interest in
F-7
TNP
Strategic Retail Trust, Inc. and Subsidiaries
Notes to
Consolidated Financial
Statements — (Continued)
the OP and TNP Strategic Retail OP Holdings, LLC, a Delaware
limited liability company (“TNP OP”), is a
special limited partner in the OP.
Substantially all of the Company’s business will be
conducted through the OP. The initial limited partners of the OP
are Advisor and TNP OP. Advisor has invested $1,000 in the
OP in exchange for common units and TNP OP has invested $1,000
in the OP and has been issued a separate class of limited
partnership units (the “Special Units”). As the
Company accepts subscriptions for shares, it will transfer
substantially all of the net proceeds of the offering to the OP
as a capital contribution. The partnership agreement provides
that the OP will be operated in a manner that will enable the
Company to (1) satisfy the requirements for being
classified as a REIT for tax purposes, (2) avoid any
federal income or excise tax liability, and (3) ensure that
the OP will not be classified as a “publicly traded
partnership” for purposes of Section 7704 of the
Internal Revenue Code, which classification could result in the
OP being taxed as a corporation, rather than as a partnership.
In addition to the administrative and operating costs and
expenses incurred by the OP in acquiring and operating real
properties, the OP will pay all of the Company’s
administrative costs and expenses, and such expenses will be
treated as expenses of the OP.
Correction
of an Immaterial Error
For the year ended December 31, 2009, the Company included
in other liabilities and other expense the fair value of a
derivative related to an exit fee of $130,000 payable under the
Convertible Note (as defined in Note 7) issued to MRP (as
defined in Note 7). However, the executed Convertible Note
did not include an exit fee. The error resulted in the
overstatement of other liabilities by $130,000 and overstatement
of other expense by $130,000 as of and for the year ended
December 31, 2009, respectively. The Company assessed the
materiality of the error in accordance with Staff Accounting
Bulletin No. 99, Materiality, and determined that the
error was immaterial to previously reported amounts.
The following is a summary of the effects of the correction on
the Company’s consolidated balance sheet as of
December 31, 2009 and the statements of operations, equity
and cash flows for the previously reported year ended
December 31, 2009:
|
|
|
|
|
|
|
|
|
|
|
As
|
|
|
|
|
|
|
previously
|
|
|
As
|
|
Consolidated Balance Sheet
|
|
reported
|
|
|
corrected
|
|
|
Total liabilities
|
|
$
|
12,447,000
|
|
|
$
|
12,317,000
|
|
|
|
|
|
|
|
|
|
|
Total equity
|
|
$
|
3,158,000
|
|
|
$
|
3,288,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Statement of
Operations
|
|
|
|
|
|
|
|
|
Other expense
|
|
$
|
(130,000
|
)
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(1,330,000
|
)
|
|
$
|
(1,200,000
|
)
|
|
|
|
|
|
|
|
|
|
Loss per share — basic and diluted
|
|
$
|
(19.17
|
)
|
|
$
|
(17.14
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Statement of
Equity
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(1,330,000
|
)
|
|
$
|
(1,200,000
|
)
|
|
|
|
|
|
|
|
|
|
Accumulated Deficit
|
|
$
|
(1,361,000
|
)
|
|
$
|
(1,231,000
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Statement of Cash
Flows
|
|
|
|
|
|
|
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(1,330,000
|
)
|
|
$
|
(1,200,000
|
)
|
Change in other liabilities
|
|
$
|
142,000
|
|
|
$
|
12,000
|
|
F-8
TNP
Strategic Retail Trust, Inc. and Subsidiaries
Notes to
Consolidated Financial
Statements — (Continued)
|
|
2.
|
Summary
of Significant Accounting Policies
|
Consolidation
The Company’s consolidated financial statements include its
accounts and the accounts of its subsidiaries, the OP, TNP
Moreno Marketplace, LLC, and TNP Waianae Mall, LLC. All
intercompany profits, balances and transactions are eliminated
in consolidation.
Under accounting principles generally accepted in the United
States of America (“GAAP”), the Company’s
consolidated financial statements will also include the accounts
of its consolidated subsidiaries and joint ventures in which the
Company is the primary beneficiary, or in which the Company has
a controlling interest. In determining whether the Company has a
controlling interest in a joint venture and the requirement to
consolidate the accounts of that entity, the Company’s
management considers factors such as an entity’s purpose
and design and the Company’s ability to direct the
activities of the entity that most significantly impacts the
entity’s economic performance, ownership interest, board
representation, management representation, authority to make
decisions, and contractual and substantive participating rights
of the partners/members as well as whether the entity is a
variable interest entity in which it will absorb the majority of
the entity’s expected losses, if they occur, or receive the
majority of the expected residual returns, if they occur, or
both.
Allocation
of Real Property Purchase Price
The Company accounts for all acquisitions in accordance with
GAAP. The Company first determines the value of the land and
buildings utilizing an “as if vacant” methodology. The
Company then assigns a fair value to any debt assumed at
acquisition. The balance of the purchase price is allocated to
tenant improvements and identifiable intangible assets or
liabilities. Tenant improvements represent the tangible assets
associated with the existing leases valued on a fair value basis
at the acquisition date prorated over the remaining lease terms.
The tenant improvements are classified as an asset under real
estate investments and are depreciated over the remaining lease
terms. Identifiable intangible assets and liabilities relate to
the value of in-place operating leases which come in three
forms: (1) leasing commissions and legal costs, which
represent the value associated with “cost avoidance”
of acquiring in-place leases, such as lease commissions paid
under terms generally experienced in the Company’s markets;
(2) value of in-place leases, which represents the
estimated loss of revenue and of costs incurred for the period
required to lease the “assumed vacant” property to the
occupancy level when purchased; and (3) above or below
market value of in-place leases, which represents the difference
between the contractual rents and market rents at the time of
the acquisition, discounted for tenant credit risks. The value
of in-place leases are recorded in acquired lease intangibles
and amortized over the remaining lease term. Above or below
market leases are classified in acquired lease intangibles, net
or in other liabilities, depending on whether the contractual
terms are above or below market. Above market leases are
amortized as a decrease to rental revenue over the remaining
non-cancelable terms of the respective leases and below market
leases are amortized as an increase to rental revenue over the
remaining initial lease term and any fixed rate renewal periods,
if applicable.
When the Company acquires real estate properties, the Company
will allocate the purchase price to the components of these
acquisitions using relative fair values computed using its
estimates and assumptions. Acquisition costs will be expensed as
incurred. These estimates and assumptions impact the amount of
costs allocated between various components as well as the amount
of costs assigned to individual properties in multiple property
acquisitions. These allocations also impact depreciation expense
and gains or losses recorded on future sales of properties.
Noncontrolling
Interest
In December 2007, the Financial Accounting Standards Board (the
“FASB”) issued a standard that establishes accounting
and reporting standards for ownership interests in subsidiaries
held by parties other than the parent, the amount of
consolidated net income attributable to the parent and to the
noncontrolling interest,
F-9
TNP
Strategic Retail Trust, Inc. and Subsidiaries
Notes to
Consolidated Financial
Statements — (Continued)
changes in a parent’s ownership interest, and the valuation
of retained noncontrolling equity investments when a subsidiary
is deconsolidated. The standard, which is effective for fiscal
years beginning after December 15, 2008, also establishes
disclosure requirements that clearly identify and distinguish
between the interests of the parent and the interests of the
noncontrolling owners. In accordance with the guidance, the
presentation provisions were presented retrospectively on the
Company’s consolidated balance sheets, which resulted in a
reclassification of $2,000 in noncontrolling interests to
permanent equity as of December 31, 2008. The adoption of
this standard had no impact on the Company’s consolidated
statements of operations or cash flows.
Real
Property
Costs related to the development, redevelopment, construction
and improvement of properties are capitalized. Interest incurred
on development, redevelopment and construction projects is
capitalized until construction is substantially complete.
Maintenance and repair expenses are charged to operations as
incurred. Costs for major replacements and betterments, which
include heating, ventilating, and air conditioning equipment,
roofs, and parking lots, are capitalized and depreciated over
their estimated useful lives. Gains and losses are recognized
upon disposal or retirement of the related assets and are
reflected in earnings.
Property is recorded at cost and is depreciated using a
straight-line method over the estimated useful lives of the
assets as follows:
|
|
|
|
|
|
|
Years
|
|
Buildings and improvements
|
|
|
5-45 years
|
|
Exterior improvements
|
|
|
10-20 years
|
|
Equipment and fixtures
|
|
|
5-10 years
|
|
Revenue
Recognition
The Company recognizes rental income on a straight-line basis
over the term of each lease. Rental income recognition commences
when the tenant takes possession or controls the physical use of
the leased space. The difference between rental income earned on
a straight-line basis and the cash rent due under the provisions
of the lease agreements will be recorded as deferred rent
receivable and will be included as a component of accounts
receivable in the accompanying consolidated balance sheets. The
Company anticipates collecting these amounts over the terms of
the leases as scheduled rent payments are made. Reimbursements
from tenants for recoverable real estate taxes and operating
expenses are accrued as revenue in the period the applicable
expenditures are incurred. Lease payments that depend on a
factor that does not exist or is not measurable at the inception
of the lease, such as future sales volume, would be contingent
rentals in their entirety and, accordingly, would be excluded
from minimum lease payments and included in the determination of
income as they are earned.
Valuation
of Accounts Receivable
The Company has taken into consideration certain factors that
require judgments to be made as to the collectability of
receivables. Collectability factors taken into consideration are
the amounts outstanding, payment history and financial strength
of the tenant, which taken as a whole determines the valuation.
Use of
Estimates
The preparation of consolidated financial statements in
conformity with GAAP requires the Company’s management to
make estimates and assumptions that affect the reported amounts
of assets and liabilities and the disclosure of contingent
assets and liabilities at the date of the consolidated financial
statements and the
F-10
TNP
Strategic Retail Trust, Inc. and Subsidiaries
Notes to
Consolidated Financial
Statements — (Continued)
reported amount of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
Organization
and Offering Costs
Organization and offering costs of the Company (other than
selling commissions and the dealer manager fee) are initially
being paid by the Advisor and its affiliates on the
Company’s behalf. Such costs shall include legal,
accounting, printing and other offering expenses, including
marketing, salaries and direct expenses of Advisor’s
employees and employees of Advisor’s affiliates and others.
Pursuant to the advisory agreement, the Company is obligated to
reimburse Advisor or its affiliates, as applicable, for
organization and offering costs associated with the
Company’s initial public offering, provided that Advisor is
obligated to reimburse the Company to the extent organization
and offering costs, other than selling commissions and dealer
manager fees, incurred by the Company exceed 3.0% of the gross
offering proceeds from the Company’s initial public
offering. Any such reimbursement will not exceed actual expenses
incurred by Advisor. Prior to raising the minimum offering
amount of $2,000,000 on November 12, 2009, the Company had
no obligation to reimburse Advisor or its affiliates for any
organization and offering costs.
All offering costs, including sales commissions and dealer
manager fees are recorded as an offset to additional
paid-in-capital,
and all organization costs are recorded as an expense when the
Company has an obligation to reimburse the Advisor.
As of December 31, 2009, organization and offering costs
incurred by the Advisor on the Company’s behalf were
$1,579,000. Such costs are payable by the Company to the extent
that organization and offering costs, other than selling
commissions and dealer manager fees, do not exceed 3% of the
gross proceeds of the Company’s initial public offering. As
of December 31, 2009, the Company’s organization and
other offering costs did exceed 3% of the gross proceeds of our
initial public offering, thus the amount in excess of 3% is
deferred.
Income
Taxes
The Company intends to elect to be taxed as a REIT under
Sections 856 through 860 of the Internal Revenue Code,
commencing in the taxable year ended December 31, 2009. The
Company believes that it qualifies for taxation as a REIT, thus
the Company generally will not be subject to federal corporate
income tax to the extent it distributes its REIT taxable income
to its stockholders, so long as it distributes at least 90% of
its REIT taxable income (which is computed without regard to the
dividends paid deduction or net capital gain and which does not
necessarily equal net income as calculated in accordance with
accounting principles generally accepted in the United States of
America). REITs are subject to a number of other organizational
and operations requirements. Even if the Company qualifies for
taxation as a REIT, it may be subject to certain state and local
taxes on its income and property, and federal income and excise
taxes on its undistributed income.
Cash
and Cash Equivalents
Cash and cash equivalents represents current bank accounts and
other bank deposits free of encumbrances and having maturity
dates of three months or less from the respective dates of
deposit. As of December 31, 2009, the Company had $513,000
in excess of federally insured limits in a money market account.
The Company limits cash investments to financial institutions
with high credit standing; therefore, the Company believes it is
not exposed to any significant credit risk in cash.
Provisions
for Impairment
We review long-lived assets for impairment whenever events or
changes in circumstances indicate that the carrying amount of an
asset may not be recoverable. Generally, a provision for
impairment is recorded if
F-11
TNP
Strategic Retail Trust, Inc. and Subsidiaries
Notes to
Consolidated Financial
Statements — (Continued)
estimated future operating cash flows (undiscounted and without
interest charges) plus estimated disposition proceeds
(undiscounted) are less than the current book value of the
property. Key inputs that we estimate in this analysis include
projected rental rates, capital expenditures and property sales
capitalization rates. Additionally, a property classified as
held for sale is carried at the lower of carrying cost or
estimated fair value, less estimated cost to sell.
No provisions for impairment were recorded by the Company in
2009 or 2008.
Recent
Accounting Pronouncements
In June 2009, the Financial Accounting Standards Board, or FASB,
issued ASC
810-10,
Consolidation, which will become effective for us on
January 1, 2010. This Statement requires an enterprise to
perform an analysis to determine whether the enterprise’s
variable interest or interests give it a controlling financial
interest in a variable interest entity. We do not expect such
standard will have a significant impact on our financial
statements as it relates to existing entities we have an
ownership interest in.
In August 2009, the FASB issued Accounting Standards Update
(“ASU”)
No. 2009-05,
Fair Value Measurements and Disclosures. ASU
No. 2009-05,
which became effective for us in 2009, provides clarification to
measuring the fair value of a liability. In circumstances in
which a quoted market price in an active market for the
identical liability is not available, a reporting entity is
required to measure fair value by using either (1) a
valuation technique that uses quoted prices for identical or
similar liabilities or (2) another valuation technique,
such as a present value technique or a technique that is based
on the amount paid or received by the reporting entity to
transfer an identical liability. ASU
No. 2009-05
only applies to our disclosures in note 5 related to the
estimated fair value of our notes payable and did not have a
significant impact on our footnote disclosures.
In January 2010, the FASB issued ASU
No. 2010-06,
Fair Value Measurements and Disclosures (Topic 820): Improving
Disclosures about Fair Value Measurements. Effective for interim
and annual reporting periods beginning after December 15,
2009, this ASU requires new disclosures and clarifies existing
disclosure requirements about fair value measurement. ASU
No. 2010-06
only applies to our disclosures in note 5 related to the
estimated fair values of our notes payable and is not expected
to have a significant impact on our footnote disclosures.
|
|
3.
|
Investments
in Real Estate
|
2009
Property Acquisition
As of December 31, 2009, the Company had acquired, through
a wholly-owned subsidiary, one property, which was acquired in
the fourth quarter of 2009.
Moreno
Property
On November 19, 2009, the Company acquired a fee simple
interest in the Moreno Marketplace, a multi-tenant retail center
located in Moreno Valley, California (the “Moreno
Property”), through TNP SRT Moreno Marketplace, LLC
(“TNP SRT Moreno”), a wholly owned subsidiary of the
OP. TNP SRT Moreno acquired the Moreno Property from an
unaffiliated third party for an aggregate purchase price of
$12,500,000, exclusive of closing costs.
The Moreno Property is an approximately 94,574 square foot
multi-tenant retail center located in Moreno Valley, California
that was constructed in 2008 and is comprised of six buildings
and two vacant pad sites. The Moreno Property is comprised of
approximately 78,743 square feet of building improvements
and approximately 15,831 square feet of finished but
unimproved pad sites. As of December 31, 2009, the Moreno
Property is approximately 70.1% leased excluding the
15,831 square feet of unimproved pad sites. The Moreno
Property is anchored by Stater Bros. Stater Bros. occupies 55.9%
of the rentable square footage of the Moreno Property and
F-12
TNP
Strategic Retail Trust, Inc. and Subsidiaries
Notes to
Consolidated Financial
Statements — (Continued)
pays an annual rent of $730,000 pursuant to a lease that expires
in November 2028. Stater Bros. has the option to renew the term
of its lease for up to six successive five-year renewal terms
after the expiration of the initial term. No other tenants
occupy 10% or more of the rentable square feet at the Moreno
Property.
The purchase price of the Moreno Property was allocated as
follows:
|
|
|
|
|
Land
|
|
$
|
3,080,000
|
|
Building & improvements
|
|
|
6,124,000
|
|
Tenant improvements
|
|
|
656,000
|
|
|
|
|
|
|
|
|
$
|
9,860,000
|
|
|
|
|
|
|
Acquired lease intangibles
|
|
$
|
2,640,000
|
|
|
|
|
|
|
|
|
$
|
12,500,000
|
|
|
|
|
|
|
Minimum
Future Rents
Minimum future rents to be received on noncancelable operating
leases as of December 31, 2009 for each of the next five
years ending December 31 and thereafter is as follows:
|
|
|
|
|
2010
|
|
$
|
1,062,000
|
|
2011
|
|
|
1,064,000
|
|
2012
|
|
|
1,067,000
|
|
2013
|
|
|
1,073,000
|
|
2014
|
|
|
1,055,000
|
|
Thereafter
|
|
|
14,077,000
|
|
|
|
|
|
|
|
|
$
|
19,398,000
|
|
|
|
|
|
|
Potential
Property Acquisition
On December 14, 2009, the Company assumed the rights to a
purchase and sale agreement for the acquisition of Waianae Mall,
an approximately 170,275 square foot multi-tenant retail
center consisting of 11 buildings located in Honolulu, Hawaii
(the “Waianae property”). An affiliate of the Sponsor
entered into a purchase agreement to purchase the Waianae
property for an aggregate purchase price of $25,688,000,
including the assumption of debt on the property. In connection
with this potential acquisition, the Company formed TNP SRT
Waianae Mall, LLC, a wholly owned subsidiary of the OP, to
complete the acquisition and has paid a $250,000 refundable
deposit which is included in prepaid expenses and other assets.
The $250,000 deposit along with $72,000 in acquisition related
expenses were paid to the affiliate of the Sponsor upon
assumption of the rights to the purchase and sale agreement. The
Company intends to purchase the Waianae property using debt
financing and funds raised through its public offering of common
stock. The Company anticipates paying an acquisition fee of
2.5%, or $642,000, of the purchase price to its Advisor. The
Company expects to close the acquisition in the second quarter
of 2010, however, there is no assurance that the closing will
occur within this timeframe, or at all. This potential
acquisition is subject to substantial conditions to closing
including: (1) the sale of a sufficient number of shares of
the Company’s common stock in its public offering to fund a
portion of the purchase price for the Waianae property;
(2) the approval of the loan servicer for the existing
indebtedness on the Waianae property to be assumed by the
Company and the receipt of other applicable third-party
consents; and (3) the absence of a material adverse change
to the Waianae property prior to the date of the acquisition.
F-13
TNP
Strategic Retail Trust, Inc. and Subsidiaries
Notes to
Consolidated Financial
Statements — (Continued)
|
|
4.
|
Acquired
Lease Intangibles, Net
|
Acquired lease intangibles, net consisted of the following at
December 31, 2009:
|
|
|
|
|
Lease commissions
|
|
$
|
1,169,000
|
|
Above market leases
|
|
|
247,000
|
|
Leases in place
|
|
|
1,167,000
|
|
Marketing costs
|
|
|
57,000
|
|
|
|
|
|
|
|
|
$
|
2,640,000
|
|
Accumulated amortization
|
|
|
(23,000
|
)
|
|
|
|
|
|
Acquired lease intangibles, net
|
|
$
|
2,617,000
|
|
|
|
|
|
|
The acquired lease intangibles have a weighted average remaining
life of 214 months as of December 31, 2009.
Estimated amortization expense on acquired lease intangibles as
of December 31, 2009 for each of the next five years ending
December 31 and thereafter is as follows:
|
|
|
|
|
2010
|
|
$
|
181,000
|
|
2011
|
|
|
181,000
|
|
2012
|
|
|
181,000
|
|
2013
|
|
|
181,000
|
|
2014
|
|
|
164,000
|
|
Thereafter
|
|
|
1,729,000
|
|
|
|
|
|
|
|
|
$
|
2,617,000
|
|
|
|
|
|
|
Deferred costs, net consisted of the following at
December 31, 2009:
|
|
|
|
|
Financing fees
|
|
$
|
293,000
|
|
Accumulated amortization
|
|
|
(39,000
|
)
|
|
|
|
|
|
|
|
|
254,000
|
|
|
|
|
|
|
Organization and offering
|
|
|
1,425,000
|
|
|
|
|
|
|
Deferred costs, net
|
|
$
|
1,679,000
|
|
|
|
|
|
|
Deferred financing fees have a weighted average remaining life
of 14 months as of December 31, 2009.
Estimated amortization to interest expense of the deferred
financing fees as of December 31, 2009 for each of the next
five years ending December 31 and thereafter is as follows:
|
|
|
|
|
2010
|
|
$
|
214,000
|
|
2011
|
|
|
40,000
|
|
2012
|
|
|
—
|
|
2013
|
|
|
—
|
|
2014
|
|
|
—
|
|
Thereafter
|
|
|
—
|
|
|
|
|
|
|
|
|
$
|
254,000
|
|
|
|
|
|
|
F-14
TNP
Strategic Retail Trust, Inc. and Subsidiaries
Notes to
Consolidated Financial
Statements — (Continued)
Common
Stock
Under the Company’s charter, the Company has the authority
to issue 400,000,000 shares of common stock. All shares of
such stock have a par value of $0.01 per share. On
October 16, 2008, the Company sold 22,222 shares of
common stock to the Sponsor for an aggregate purchase price of
$200,000. As of December 31, 2009, the Company had accepted
investors’ subscriptions for, and issued, including shares
through the distribution reinvestment plan (DRIP),
509,752 shares of the Company’s common stock in the
Company’s ongoing public offering.
The Company’s board of directors is authorized to amend its
charter, without the approval of the stockholders, to increase
the aggregate number of authorized shares of capital stock or
the number of shares of any class or series that the Company has
authority to issue.
Preferred
Stock
The Company’s charter authorizes it to issue
50,000,000 shares of $0.01 par value preferred stock.
As of December 31, 2009 and 2008, no shares of preferred
stock were issued and outstanding.
Share
Redemption Plan
The share redemption plan allows for share repurchases by the
Company when certain criteria are met by requesting
stockholders. Share repurchases will be made at the sole
discretion of the Company’s board of directors. The Company
presently intends to limit the number of shares to be redeemed
during any calendar year to no more than (1) 5.0% of the
weighted average of the number of shares of its common stock
outstanding during the prior calendar year and (2) those
that could be funded from the net proceeds from the sale of
shares under the distribution reinvestment plan in the prior
calendar year plus such additional funds as may be borrowed or
reserved for that purpose by the Company’s board of
directors. In addition, the Company’s board of directors
reserves the right to reject any redemption request for any
reason or no reason or to amend or terminate the share
redemption program at any time.
For the year ended December 31, 2009 and for the period
from September 18, 2008 (date of inception) to
December 31, 2008, the Company’s did not repurchase
any shares of its common stock pursuant to the share redemption
program.
Distribution
Reinvestment Plan
The Company adopted a distribution reinvestment plan (the
“DRIP”), which that allows stockholders to purchase
additional shares of common stock through the reinvestment of
distributions, subject to certain conditions. The Company
registered and reserved 10,526,316 shares of its common
stock for sale pursuant to the DRIP in its public offering. As
of December 31, 2009 $7,000 in distributions were
reinvested and 715 shares of common stock were issued under
the DRIP.
Distributions
On August 13, 2009, our board of directors approved a
monthly cash distribution of $0.05625 per common share, which
represents an annualized distribution of $0.675 per share. The
commencement of the distribution was subject to our having
achieved minimum offering proceeds of $2,000,000, the sale of a
sufficient number of shares in our public offering to finance an
asset acquisition and our identification and completion of an
asset acquisition. On November 12, 2009, we achieved the
minimum offering amount $2,000,000, and on November 19,
2009 we completed our first asset acquisition, thus satisfying
all of the conditions for the commencement of the monthly
distribution. On November 30, 2009, we declared a monthly
distribution in the aggregate amount of $7,000 of which $6,000
was paid in cash on December 15, 2009 and $1,000 was paid
through our distribution reinvestment plan in the form of
additional shares issued on November 30, 2009.
F-15
TNP
Strategic Retail Trust, Inc. and Subsidiaries
Notes to
Consolidated Financial
Statements — (Continued)
On December 31, 2009, we declared a monthly distribution in
the aggregate of $24,000, of which $18,000 was paid in cash on
January 15, 2010 and $6,000 was paid through our
distribution reinvestment plan in the form of additional shares
issued on December 31, 2009. On January 31, 2010, we
declared a monthly distribution in the aggregate of $32,000, of
which $25,000 was paid in cash on February 12, 2010 and
$7,000 was paid through our distribution reinvestment plan in
the form of additional shares issued on January 31, 2010.
On February 28, 2010, we declared a monthly distribution in
the aggregate of $40,000, of which $29,000 was paid in cash on
March 15, 2010 and $11,000 was paid through our
distribution reinvestment plan in the form of additional shares
issued on February 28, 2010.
During the year ended December 31, 2009, the Company
incurred $119,000 of interest expense, of which $57,000 was
payable at December 31, 2009.
The following is a schedule of maturities for all notes payable
as of December 31, 2009 for each of the next five years
ending December 31 and thereafter:
|
|
|
|
|
2010
|
|
$
|
120,000
|
|
2011
|
|
|
9,120,000
|
|
2012
|
|
|
—
|
|
2013
|
|
|
—
|
|
2014
|
|
|
—
|
|
Thereafter
|
|
|
1,250,000
|
|
|
|
|
|
|
|
|
$
|
10,490,000
|
|
|
|
|
|
|
During the year ended December 31, 2009, the Company
entered into the following financings:
KeyBank
Revolving Credit Facility
On November 12, 2009, the OP entered into a revolving
credit agreement, or the credit agreement, with KeyBank National
Association, or KeyBank, as administrative agent for itself and
the other lenders named in the credit agreement, or the lenders,
to establish a revolving credit facility with a maximum
aggregate borrowing capacity of up to $15,000,000. The proceeds
of the revolving credit facility may be used by the OP for
investments in properties and real estate-related assets,
improvement of properties, costs involved in the ordinary course
of the OP business and for other general working capital
purposes; provided, however, that prior to any funds being
advanced to the OP under the revolving credit facility, KeyBank
shall have the authority to review and approve, in its sole
discretion, the investments which the OP proposes to make with
such funds, and the OP shall be required to satisfy certain
enumerated conditions set forth in the credit agreement,
including, but not limited to, limitations on outstanding
indebtedness with respect to a proposed property acquisition, a
ratio of net operating income to debt service on the prospective
property of at least 1.35 to 1.00 and a requirement that the
prospective property be 100% owned, directly or indirectly, by
the OP.
The credit agreement contains customary covenants including,
without limitation, limitations on distributions, the incurrence
of debt and the granting of liens. Additionally, the credit
agreement contains certain covenants relating to the amount of
offering proceeds the Company receives in its continuous
offering of common stock. The OP received a waiver from KeyBank
relating to the covenant in the credit agreement requiring the
Company to raise at least $2,000,000 in shares of common stock
in its public offering during each of January, February and
March 2010. In addition, the OP received a waiver relating to
the covenant requiring the Company to maintain a 1.3 to 1 debt
service coverage ratio for the quarter ended March 31,
2010. The credit agreement is guaranteed by the Sponsor and an
affiliate of the Sponsor. As part of the
F-16
TNP
Strategic Retail Trust, Inc. and Subsidiaries
Notes to
Consolidated Financial
Statements — (Continued)
guarantee agreement, the Sponsor and its affiliate must maintain
minimum net worth and liquidity requirements on a combined or
individual basis.
The OP may, upon prior written notice to KeyBank, prepay the
principal of the borrowings then outstanding under the revolving
credit facility, in whole or in part, without premium or penalty.
The entire unpaid principal balance of all borrowings under the
revolving credit facility and all accrued and unpaid interest
thereon will be due and payable in full on November 12,
2010. Borrowings under the revolving credit facility will bear
interest at a variable per annum rate equal to the sum of
(a) 425 basis points plus (b) the greater of
(1) 300 basis points or
(2) 30-day
LIBOR as reported by Reuters on the day that is two business
days prior to the date of such determination, and accrued and
unpaid interest on any past due amounts will bear interest at a
variable LIBOR-based rate that in no event shall exceed the
highest interest rate permitted by applicable law. The OP paid
KeyBank a one time $150,000 commitment fee in connection with
entering into the credit agreement and will pay KeyBank an
unused commitment fee of 0.50% per annum.
As of December 31, 2009, $15,000,000 was available under
the KeyBank credit facility subject to KeyBank’s review and
approval described above. The OP borrowed $626,000 under the
revolving credit facility on November 12, 2009 in
connection with the acquisition of the Moreno property. As of
December 31, 2009, the OP had repaid such borrowings.
Moreno
Property Loan
In connection with the acquisition of the Moreno Property, on
November 19, 2009, TNP SRT Moreno borrowed $9,250,000
from KeyBank pursuant to a promissory note (the “Moreno
Property Note”), secured by the Moreno property. The entire
outstanding principal balance of the Moreno Property Note, plus
any accrued and unpaid interest thereon, is due and payable in
full on November 19, 2011, provided that TNP SRT Moreno has
the option, subject to the satisfaction of certain conditions,
to extend the maturity date for up to two successive periods of
twelve months each (each an “Extension Period”). A
principal payment of $10,000 plus interest, at the applicable
interest rate, on the outstanding principal balance of the
Moreno Property Note will be due and payable monthly. Interest
on the outstanding principal balance of the Moreno Property Note
will accrue at a rate of 5.5% per annum through the initial
maturity date. During the first Extension Period, if any,
interest on the outstanding principal balance will accrue at a
rate of 7.0% per annum. During the second Extension Period, if
any, interest on the outstanding principal balance will accrue
at a rate equal to the greater of (i) 7.50% per annum and
(ii) a variable per annum rate based upon LIBOR as reported
by Reuters. The Moreno Property Note is secured by a first deed
of trust on the Moreno Property and an assignment of all leases
and rents of and from the Moreno Property in favor of KeyBank.
Convertible
Note
In connection with the acquisition of the Moreno Property, on
November 19, 2009, TNP SRT Moreno borrowed $1,250,000 from
Moreno Retail Partners, LLC (“MRP”) pursuant to a
subordinated convertible promissory note (the “Convertible
Note”). The entire outstanding principal balance of the
Convertible Note, plus any accrued and unpaid interest, is due
and payable in full on November 18, 2015. Interest on the
outstanding principal balance of the Convertible Note will
accrue at a rate of 8% per annum, payable monthly in arrears. At
any time after January 2, 2010 but before April 2,
2010, MRP may elect to convert the unpaid principal balance due
on the Convertible Note (the “Conversion Amount”) into
a capital contribution by MRP to TNP SRT Moreno to be credited
to a capital account with TNP SRT Moreno. At any time after
February 2, 2010 but before April 2, 2010, TNP SRT
Moreno may elect to convert the Conversion Amount into a capital
contribution by MRP to TNP SRT Moreno to be credited to a
capital account with TNP SRT Moreno. If the note is not
converted, TNP SRT Moreno will pay our Advisor an additional
acquisition fee of $110,000.
F-17
TNP
Strategic Retail Trust, Inc. and Subsidiaries
Notes to
Consolidated Financial
Statements — (Continued)
As of December 31, 2009, all of our outstanding
indebtedness accrued interest at a fixed rate and therefore an
increase or decrease in interest rates would have no effect on
our interest expense. The carrying value of our debt
approximates fair value as of December 31, 2009, as all of
our debt has a fixed interest rate and the rate approximates
market interest rates.
|
|
8.
|
Related
Party Arrangements
|
Advisor and certain affiliates of Advisor receive fees and
compensation in connection with the Company’s public
offering, and the acquisition, management and sale of the
Company’s real estate investments.
TNP Securities, LLC (“Dealer Manager”), the dealer
manager of the offering and a related party, will receive a
commission of up to 7.0% of gross offering proceeds. Dealer
Manager may reallow all or a portion of such sales commissions
earned to participating broker-dealers. In addition, the Company
will pay Dealer Manager a dealer manager fee of up to 3.0% of
gross offering proceeds, a portion of which may be reallowed to
participating broker-dealers. No selling commissions or dealer
manager fee will be paid for sales under the Company’s
distribution reinvestment plan. As of December 31, 2009,
the Company had paid the Dealer Manager $262,000 in sales
commissions and $114,000 in dealer manager fees. The company has
$31,000 and $13,000 recorded in amounts due to affiliates for
sales commissions and dealer manager fees, respectively, as of
December 31, 2009.
Advisor will receive up to 3.0% of the gross offering proceeds
for reimbursement of organization and offering expenses. Advisor
will be responsible for the payment of organization and offering
expenses, other than selling commissions and dealer manager fees
and to the extent they exceed 3.0% of gross offering proceeds,
without recourse against or reimbursement by the Company. As of
December 31, 2009, the Advisor and its affiliates had
incurred organizational and offering expenses of $1,579,000 (of
which $122,000 are offering expenses that are recorded as a
reduction to equity, $32,000 are organizational expenses that
are recorded in general and administrative expense, and
$1,425,000 recorded as deferred organization and offering costs
and in amounts due to affiliates as the amount of organization
and offering costs has exceeded 3% of gross offering proceeds).
Advisor, or its affiliates, will also receive an acquisition fee
equal to 2.5% of (1) the cost of investments the Company
acquires or (2) the Company’s allocable cost of
investments acquired in a joint venture. As of December 31,
2009, the Company had paid the Advisor $202,000 in acquisition
fees.
The Company expects to pay TNP Property Manager, LLC (“TNP
Manager”), its property manager and a related party, a
market-based property management fee of up to 5.0% of the gross
revenues generated by the properties in connection with the
operation and management of properties. TNP Manager may
subcontract with third party property managers and will be
responsible for supervising and compensating those property
managers. For the year ended December 31, 2009, we incurred
a property management fee payable to TNP Manager of $5,000 which
is included in amounts due to affiliates.
The Company will pay Advisor a monthly asset management fee of
one-twelfth of 0.6% on all real estate investments the Company
acquires; provided, however, that Advisor will not be paid the
asset management fee until the Company’s funds from
operations exceed the lesser of (1) the cumulative amount
of any distributions declared and payable to the Company’s
stockholders or (2) an amount that is equal to a 10.0%
cumulative, non-compounded, annual return on invested capital
for the Company’s stockholders. If Advisor or its
affiliates provides a substantial amount of services, as
determined by the Company’s independent directors, in
connection with the sale of a real property, Advisor or its
affiliates also will be paid disposition fees up to 50.0% of a
customary and competitive real estate commission, but not to
exceed 3.0% of the contract sales price of each property sold.
For the year ended December 31, 2009, we incurred an asset
management fee payable to our advisor of $9,000 which is
included in amounts due to affiliates.
F-18
TNP
Strategic Retail Trust, Inc. and Subsidiaries
Notes to
Consolidated Financial
Statements — (Continued)
The Company reimburses Advisor for the cost of administrative
services, including personnel costs and our allocable share of
other overhead of the advisor such as rent and utilities;
provided, however, that no reimbursement shall be made for costs
of such personnel to the extent that personnel are used in
transactions for which our advisor receives a separate fee or an
officer of Advisor. As of December 31, 2009, the Company
had paid Advisor $17,500 for administrative services.
During the year ended December 31, 2009, the Advisor
incurred $388,000 in costs on behalf of the Company prior to
achieving the minimum offering amount. Of such costs, $348,000
were reimbursed to the Advisor during the year ended
December 31, 2009 and $40,000 is included in amounts due to
affiliates.
The Company will reimburse Advisor for all expenses paid or
incurred by Advisor in connection with the services provided to
the Company, subject to the limitation that the Company will not
reimburse Advisor for any amount by which its operating expenses
(including the asset management fee) at the end of the four
preceding fiscal quarters exceeds the greater of: (1) 2% of
its average invested assets, or (2) 25% of its net income
determined without reduction for any additions to depreciation,
bad debts or other similar non-cash expenses and excluding any
gain from the sale of the Company’s assets for that period
(the “2%/25% guidelines”). Notwithstanding the above,
the Company may reimburse Advisor for expenses in excess of this
limitation if a majority of the independent directors determines
that such excess expenses are justified based on unusual and
nonrecurring factors. In accordance with the advisory agreement,
the Company will recognize on a quarterly basis amounts not
exceeding the 2%/25% guidelines; however, we cannot yet evaluate
whether our operating expenses have exceeded the 2%/25%
guidelines because we have only been conducting our operations
since November 2009.
The Company adopted an incentive plan (the “Incentive Award
Plan”) that provides for the grant of equity awards to its
employees, directors and consultants and those of the
Company’s affiliates on July 7, 2009. The Incentive
Award Plan authorized the grant of non-qualified and incentive
stock options, restricted stock awards, restricted stock units,
stock appreciation rights, dividend equivalents and other
stock-based awards or cash-based awards. The Company has
reserved 2,000,000 shares of common stock for stock grants
pursuant to the Incentive Award Plan. The Company granted each
of its current independent directors an initial grant of
5,000 shares of restricted stock (the “initial
restricted stock grant”) following the Company’s
raising of the $2,000,000 minimum offering amount on
November 12, 2009. Each new independent director that
subsequently joins the board of directors will receive the
initial restricted stock grant on the date he or she joins the
board of directors. In addition, on the date of each of the
Company’s annual stockholders meetings at which an
independent director is re-elected to the board of directors, he
or she will receive 2,500 shares of restricted stock. The
restricted stock will vest as to one-third of the shares on the
grant date and as to one-third of the shares on each of the
first two anniversaries of the grant date. The restricted stock
will become fully vested in the event of an independent
directors’ termination of service due to his or her death
or disability, or upon the occurrence of a change in control of
the Company.
For the year ended December 31, 2009 and for the period
from September 18, 2008 (date of inception) through
December 31, 2008, we recognized compensation expense of
$50,000 and $0, respectively, related to the restricted common
stock grants, which is included in general and administrative in
our accompanying consolidated statements of operations. Shares
of restricted common stock have full voting rights and rights to
dividends.
As of December 31, 2009 and 2008, there was $85,000 and $0,
respectively, of total unrecognized compensation expense,
related to nonvested shares of restricted common stock. As of
December 31, 2009, this expense is expected to be realized
over a remaining period of 2.87 years.
F-19
TNP
Strategic Retail Trust, Inc. and Subsidiaries
Notes to
Consolidated Financial
Statements — (Continued)
As of December 31, 2009 and 2008, the fair value of the
nonvested shares of restricted common stock was $90,000 and $0,
respectively. A summary of the status of the nonvested shares of
restricted common stock as of December 31, 2009 and 2008,
and the changes for the year ended December 31, 2009 and
for the period from September 18, 2008 (date of inception)
through December 31, 2008, is presented below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
|
|
|
|
Restricted
|
|
|
Average
|
|
|
|
Common
|
|
|
Grant Date
|
|
|
|
Stock
|
|
|
Fair Value
|
|
|
Balance — September 18, 2008 (date of inception)
|
|
|
—
|
|
|
$
|
—
|
|
Granted
|
|
|
—
|
|
|
|
—
|
|
Vested
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
Balance — December 31, 2008
|
|
|
—
|
|
|
|
—
|
|
Granted
|
|
|
15,000
|
|
|
|
9.00
|
|
Vested
|
|
|
(5,000
|
)
|
|
|
9.00
|
|
|
|
|
|
|
|
|
|
|
Balance — December 31, 2009
|
|
|
10,000
|
|
|
$
|
9.00
|
|
|
|
|
|
|
|
|
|
|
|
|
10.
|
Subordinated
Participation Interest
|
Pursuant to the Limited Partnership Agreement for the OP, the
holders of the Special Units will be entitled to distributions
from the OP in an amount equal to 15.0% of net sales proceeds
received by the OP on dispositions of its assets and
dispositions of real properties by joint ventures or
partnerships in which the OP owns a partnership interest, after
the other holders of common units, including the Company, have
received, in the aggregate, cumulative distributions from
operating income, sales proceeds or other sources, equal to
their capital contributions plus a 10.0% cumulative
non-compounded annual pre-tax return thereon. The Special Units
will be redeemed for the above amount upon the earliest of:
(1) the occurrence of certain events that result in the
termination or non-renewal of the advisory agreement or
(2) a listing liquidity event.
|
|
11.
|
Tax
Treatment of Distributions
|
Our distributions in excess of our taxable income, including
distributions reinvested, have resulted in a return of capital
to our stockholders for federal income tax purposes. The tax
treatment for distributions reportable for the year ended
December 31, 2009 was 100% return of capital.
|
|
12.
|
Selected
Quarterly Financial Data (Unaudited)
|
Set forth below is the unaudited selected quarterly financial
data. We believe that all necessary adjustments, consisting only
of normal recurring adjustments, have been included in the
amounts stated below to present fairly, and in accordance with
GAAP, the unaudited selected quarterly financial data when read
in conjunction with our consolidated financial statements.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarters Ended:
|
|
|
December 31,
|
|
September 30,
|
|
June 30,
|
|
March 31,
|
|
|
2009
|
|
2009
|
|
2009
|
|
2009
|
|
Revenues
|
|
$
|
145,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Expenses
|
|
|
1,139,000
|
|
|
|
89,000
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before other expense
|
|
|
994,000
|
|
|
|
89,000
|
|
|
|
—
|
|
|
|
—
|
|
Other expense, net
|
|
|
117,000
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
1,111,000
|
|
|
$
|
89,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Loss per share
|
|
$
|
5.24
|
|
|
$
|
4.01
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Weighted average number of shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
outstanding
|
|
|
217,640
|
|
|
|
22,222
|
|
|
|
22,222
|
|
|
|
22,222
|
|
F-20
TNP
Strategic Retail Trust, Inc. and Subsidiaries
Notes to
Consolidated Financial
Statements — (Continued)
Status
of Offering
The Company commenced its initial public offering of up to
$1,100,000,000 in shares of its common stock on August 7,
2009. As of March 26, 2010, the Company had accepted
investors’ subscriptions for, and issued,
893,318 shares of the Company’s common stock,
including shares issued pursuant to our distribution
reinvestment plan, resulting in gross offering proceeds of
$8,806,000.
Distributions
Declared
On December 31, 2009, we declared a monthly distribution in
the aggregate of $24,000, of which $18,000 was paid in cash on
January 15, 2010 and $6,000 was paid through our
distribution reinvestment plan in the form of additional shares
issued on December 31, 2009. On January 31, 2010, we
declared a monthly distribution in the aggregate of $32,000, of
which $25,000 was paid in cash on February 12, 2010 and
$7,000 was paid through our distribution reinvestment plan in
the form of additional shares issued on January 31, 2010.
On February 28, 2010, we declared a monthly distribution in
the aggregate of $40,000, of which $29,000 was paid in cash on
March 15, 2010 and $11,000 was paid through our
distribution reinvestment plan in the form of additional shares
issued on February 28, 2010.
F-21
SCHEDULE III —
REAL ESTATE OPERATING PROPERTIES
AND ACCUMULATED DEPRECIATION
December 31, 2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Initial Cost to Company
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Building,
|
|
Cost
|
|
Gross Amount at Which Carried at Close of Period
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Improvements
|
|
Capitalized
|
|
|
|
Building,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and
|
|
Subsequent to
|
|
|
|
Improvements
|
|
|
|
Accumulated
|
|
Date of
|
|
Date
|
|
|
|
|
Encumbrances
|
|
Land
|
|
Fixtures
|
|
Acquisition
|
|
Land
|
|
and Fixtures
|
|
Total
|
|
Depreciation
|
|
Construction
|
|
Acquired
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Moreno Marketplace
|
|
|
Moreno Valley, CA
|
|
|
$
|
10,490,000
|
|
|
$
|
3,080,000
|
|
|
$
|
6,780,000
|
|
|
$
|
—
|
|
|
$
|
3,080,000
|
|
|
$
|
6,780,000
|
|
|
$
|
9,860,000
|
|
|
$
|
28,000
|
|
|
|
2008
|
|
|
|
11/19/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
$
|
10,490,000
|
|
|
$
|
3,080,000
|
|
|
$
|
6,780,000
|
|
|
$
|
—
|
|
|
$
|
3,080,000
|
|
|
$
|
6,780,000
|
|
|
$
|
9,860,000
|
|
|
$
|
28,000
|
|
|
|
|
|
|
|
|
|
The aggregate cost of our real estate for federal income tax
purposes is $12,936,000.
F-22
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.
TNP STRATEGIC RETAIL TRUST, INC.
|
|
|
|
By:
|
/s/ Wendy
J. Worcester
|
Wendy J. Worcester
Chief Financial Officer, Treasurer and Secretary
Date: May 17, 2010