QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) | |||
(Address of Principal Executive Offices) | (Zip Code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
None | None | None |
Large accelerated filer | ☐ | Accelerated filer | ☐ |
ý | Smaller reporting company | ||
Emerging growth company |
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Item 2. | ||
Item 3. | ||
Item 4. | ||
Item 5. | ||
Item 6. | ||
June 30, | December 31, | ||||||
2020 | 2019 | ||||||
ASSETS | |||||||
Investments in real estate | |||||||
Land | $ | $ | |||||
Building and improvements | |||||||
Tenant improvements | |||||||
Accumulated depreciation | ( | ) | ( | ) | |||
Investments in real estate, net | |||||||
Properties under development and development costs | |||||||
Land | |||||||
Buildings | |||||||
Development costs | |||||||
Properties under development and development costs | |||||||
Cash, cash equivalents and restricted cash | |||||||
Prepaid expenses and other assets, net | |||||||
Tenant receivables, net of $279 and $14 bad debt reserve | |||||||
Lease intangibles, net | |||||||
Assets held for sale | |||||||
Deferred financing costs, net | |||||||
TOTAL ASSETS (1) | $ | $ | |||||
LIABILITIES AND EQUITY | |||||||
LIABILITIES | |||||||
Notes payable, net | $ | $ | |||||
Accounts payable and accrued expenses | |||||||
Amounts due to affiliates | |||||||
Other liabilities | |||||||
Liabilities related to assets held for sale | |||||||
Below-market lease liabilities, net | |||||||
TOTAL LIABILITIES (1) | |||||||
Commitments and contingencies (Note 12) | |||||||
EQUITY | |||||||
Stockholders’ equity | |||||||
Preferred stock, $0.01 par value; 50,000,000 shares authorized, none issued and outstanding | |||||||
Common stock, $0.01 par value; 400,000,000 shares authorized; 10,739,814 and 10,759,721 shares issued and outstanding at June 30, 2020 and December 31, 2019, respectively | |||||||
Additional paid-in capital | |||||||
Accumulated deficit | ( | ) | ( | ) | |||
Total stockholders’ equity | |||||||
Non-controlling interests | |||||||
TOTAL EQUITY | |||||||
TOTAL LIABILITIES AND EQUITY | $ | $ |
(1) | As of June 30, 2020 and December 31, 2019, includes approximately $ |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
Revenue: | |||||||||||||||
Rental and reimbursements | $ | $ | $ | $ | |||||||||||
Expense: | |||||||||||||||
Operating and maintenance | |||||||||||||||
General and administrative | |||||||||||||||
Depreciation and amortization | |||||||||||||||
Interest expense | |||||||||||||||
Operating loss | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Other income (loss): | |||||||||||||||
Equity in loss of unconsolidated joint ventures | ( | ) | ( | ) | |||||||||||
Net gain on disposal of real estate | |||||||||||||||
Loss before income taxes | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Income taxes | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Net loss | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Net loss attributable to non-controlling interests | ( | ) | ( | ) | ( | ) | ( | ||||||||
Net loss attributable to common stockholders | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
Loss per common share - basic and diluted | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
Weighted average shares outstanding used to calculate loss per common share - basic and diluted |
Six Months Ended June 30, 2020 and 2019 | ||||||||||||||||||||||||||
Number of Shares | Par Value | Additional Paid-in Capital | Accumulated Deficit | Total Stockholders’ Equity | Non-controlling Interests | Total Equity | ||||||||||||||||||||
BALANCE — December 31, 2019 | $ | $ | $ | ( | ) | $ | $ | $ | ||||||||||||||||||
Redemption of common shares | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
Net loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
BALANCE — June 30, 2020 | $ | $ | $ | ( | ) | $ | $ | $ | ||||||||||||||||||
BALANCE — December 31, 2018 | $ | $ | $ | ( | ) | $ | $ | $ | ||||||||||||||||||
Redemption of common shares | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
Quarterly distributions | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
Net loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
BALANCE — June 30, 2019 | $ | $ | $ | ( | ) | $ | $ | $ | ||||||||||||||||||
Three Months Ended June 30, 2020 and 2019 | ||||||||||||||||||||||||||
Number of Shares | Par Value | Additional Paid-in Capital | Accumulated Deficit | Total Stockholders’ Equity | Non-controlling Interests | Total Equity | ||||||||||||||||||||
BALANCE — March 31, 2020 | $ | $ | $ | ( | ) | $ | $ | $ | ||||||||||||||||||
Net loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
BALANCE — June 30, 2020 | $ | $ | $ | ( | ) | $ | $ | $ | ||||||||||||||||||
BALANCE — March 31, 2019 | $ | $ | $ | ( | ) | $ | $ | $ | ||||||||||||||||||
Redemption of common shares | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
Quarterly distributions | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
Net loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
BALANCE — June 30, 2019 | $ | $ | $ | ( | ) | $ | $ | $ |
Six Months Ended June 30, | |||||||
2020 | 2019 | ||||||
Cash flows from operating activities: | |||||||
Net loss | $ | ( | ) | $ | ( | ) | |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | |||||||
Net gain on disposal of real estate | ( | ) | ( | ) | |||
Equity in loss of unconsolidated joint ventures | |||||||
Straight-line rent | ( | ) | ( | ) | |||
Amortization of deferred costs | |||||||
Depreciation and amortization | |||||||
Amortization of above and below-market leases | ( | ) | ( | ) | |||
Provision for losses on tenant receivable | |||||||
Changes in operating assets and liabilities: | |||||||
Prepaid expenses and other assets | ( | ) | ( | ) | |||
Tenant receivables | ( | ) | |||||
Accounts payable and accrued expenses | ( | ) | ( | ) | |||
Amounts due to affiliates | ( | ) | ( | ) | |||
Other liabilities | ( | ) | ( | ) | |||
Net cash provided by (used in) operating activities | ( | ) | |||||
Cash flows from investing activities: | |||||||
Proceeds from the sale of real estate | |||||||
Investment in properties under development and development costs | ( | ) | ( | ) | |||
Improvements, capital expenditures, and leasing costs | ( | ) | ( | ) | |||
Investments in unconsolidated joint ventures | ( | ) | |||||
Distributions from unconsolidated joint ventures | |||||||
Net cash provided by (used in) investing activities | ( | ) | |||||
Cash flows from financing activities: | |||||||
Redemption of common shares | ( | ) | ( | ) | |||
Quarterly distributions | ( | ) | ( | ) | |||
Proceeds from notes payable | |||||||
Repayment of notes payable | ( | ) | ( | ) | |||
Payment of loan fees from investments in consolidated variable interest entities | ( | ) | |||||
Payment of loan fees and financing costs | ( | ) | |||||
Net cash provided by (used in) financing activities | ( | ) | |||||
Net increase (decrease) in cash, cash equivalents and restricted cash | ( | ) | |||||
Cash, cash equivalents and restricted cash – beginning of period | |||||||
Cash, cash equivalents and restricted cash – end of period | $ | $ | |||||
Supplemental disclosure of non-cash investing and financing activities and other cash flow information: | |||||||
Distributions declared but not paid | $ | $ | |||||
Change in accrued liabilities capitalized to investment in development | ( | ) | |||||
Change to accrued mortgage note payable interest capitalized to investment in development | ( | ) | |||||
Amortization of deferred loan fees capitalized to investment in development | |||||||
Changes in capital improvements, accrued but not paid | |||||||
Cash paid for interest, net of amounts capitalized |
June 30, 2020 | December 31, 2019 | ||||||
Cash and cash equivalents | $ | $ | |||||
Restricted cash | |||||||
Total cash, cash equivalents, and restricted cash | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
Operating Income | $ | $ | $ | $ |
(Pro Forma) | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
Rental and reimbursement revenues | $ | $ | $ | $ | |||||||||||
Net loss | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Net loss attributable to common stockholders | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Net loss per share, attributable to common shares - basic and diluted | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) |
June 30, | December 31, | ||||||
2020 | 2019 | ||||||
ASSETS | |||||||
Properties under development and development costs: | |||||||
Land | $ | $ | |||||
Buildings | |||||||
Development costs | |||||||
Properties under development and development costs | |||||||
Cash, cash equivalents and restricted cash | |||||||
Prepaid expenses and other assets, net | |||||||
Lease intangibles, net | |||||||
TOTAL ASSETS (1) | $ | $ | |||||
LIABILITIES | |||||||
Notes payable, net (2) | $ | $ | |||||
Accounts payable and accrued expenses | |||||||
Amounts due to affiliates | |||||||
Other liabilities | |||||||
TOTAL LIABILITIES | $ | $ |
(1) | The assets of the Sunset & Gardner Joint Venture and Wilshire Joint Venture can be used only to settle obligations of the respective consolidated joint ventures. |
(2) | As of June 30, 2020 and December 31, 2019, includes reclassification of approximately $ |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
Lease income - operating leases | $ | $ | $ | $ | |||||||||||
Variable lease income (1) | |||||||||||||||
Rental and reimbursements income | $ | $ | $ | $ |
(1) | Primarily includes tenant reimbursements for real estate taxes, insurance and common area maintenance. |
Remainder of 2020 | $ | ||
2021 | |||
2022 | |||
2023 | |||
2024 | |||
Thereafter | |||
Total | $ |
Lease Intangibles | Below-Market Lease Liabilities | ||||||||||||||
June 30, 2020 | December 31, 2019 | June 30, 2020 | December 31, 2019 | ||||||||||||
Cost | $ | $ | $ | ( | ) | $ | ( | ) | |||||||
Accumulated amortization | ( | ) | ( | ) | |||||||||||
Total | $ | $ | $ | ( | ) | $ | ( | ) |
Lease Intangibles | Below-Market Lease Liabilities | ||||||||||||||
Three Months Ended June 30, | Three Months Ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
Amortization | $ | ( | ) | $ | ( | ) | $ | $ | |||||||
Lease Intangibles | Below-Market Lease Liabilities | ||||||||||||||
Six Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
Amortization | $ | ( | ) | $ | ( | ) | $ | $ |
Remainder of 2020 | $ | ||
2021 | |||
2022 | |||
2023 | |||
Total (1) | $ |
(1) | Total future principal payments reflect actual amounts due to creditors, and excludes reclassification of $ |
• | Level 1: unadjusted quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities; |
• | Level 2: quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations in which significant inputs and significant value drivers are observable in active markets; and |
• | Level 3: prices or valuation techniques where little or no market data is available for inputs that are significant to the fair value measurement. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
Shares of common stock redeemed | |||||||||||||||
Purchase price | $ | $ | $ | $ |
Distribution Record Date | Distribution Payable Date | Distribution Per Share of Common Stock / Common Unit | Total Common Stockholders Distribution | Total Common Unit Holders Distribution | Total Distribution | ||||||||||||||
First Quarter 2019 | $ | $ | $ | $ | |||||||||||||||
Second Quarter 2019 | |||||||||||||||||||
Third Quarter 2019 | |||||||||||||||||||
Fourth Quarter 2019 | |||||||||||||||||||
Total | $ | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
Numerator - basic and diluted | |||||||||||||||
Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
Net loss attributable to non-controlling interests | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Net loss attributable to common shares | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
Denominator - basic and diluted | |||||||||||||||
Basic weighted average common shares | |||||||||||||||
Common Units (1) | |||||||||||||||
Diluted weighted average common shares | |||||||||||||||
Loss per common share - basic and diluted | |||||||||||||||
Net loss attributable to common shares | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) |
(1) | The effect of |
Incurred | Payable as of | |||||||||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | June 30, | December 31, | |||||||||||||||||||||
Expensed | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | ||||||||||||||||||
Asset management fees | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
Reimbursement of operating expenses | ||||||||||||||||||||||||
Property management fees | ||||||||||||||||||||||||
Disposition fees | ||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
Capitalized | ||||||||||||||||||||||||
Acquisition fees | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
Leasing fees | ||||||||||||||||||||||||
Legal leasing fees | ||||||||||||||||||||||||
Construction management fees | ||||||||||||||||||||||||
Financing coordination fees | ||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ |
• | The potential adverse effect of the ongoing public health crisis of the novel coronavirus disease (COVID-19) pandemic, or any future pandemic, epidemic or outbreak of infectious disease, on the financial condition, results of operations, cash flows and performance of the Company and its tenants, the real estate market and the global economy and financial markets. |
• | Our executive officers and certain other key real estate professionals are also officers, directors, managers, key professionals and/or holders of a direct or indirect controlling interest in our advisor. As a result, they face conflicts of interest, including conflicts created by our advisor’s compensation arrangements with us and conflicts in allocating time among us and other programs and business activities. |
• | We are uncertain of our sources for funding our future capital needs. If we cannot obtain debt or equity financing on acceptable terms, our ability to continue to acquire real properties or other real estate-related assets, fund or expand our operations and pay distributions to our stockholders will be adversely affected. |
• | We depend on tenants for our revenue and, accordingly, our revenue is dependent upon the success and economic viability of our tenants. Revenues from our properties could decrease due to a reduction in tenants (caused by factors including, but not limited to, tenant defaults, tenant insolvency, early termination of tenant leases and non-renewal of existing tenant leases) and/or lower rental rates, making it more difficult for us to meet our financial obligations, including debt service and our ability to pay distributions to our stockholders. |
• | A significant portion of our assets are concentrated in one state and in urban retail properties, any adverse economic, real estate or business conditions in this geographic area or in the urban retail market could affect our operating results and our ability to pay distributions to our stockholders. |
• | Our current and future investments in real estate and other real estate-related investments may be affected by unfavorable real estate market and general economic conditions, which could decrease the value of those assets and reduce the investment return to our stockholders. Revenues from our properties could decrease. Such events would |
• | Certain of our debt obligations have variable interest rates with interest and related payments that vary with the movement of LIBOR or other indices. Increases in these indices could increase the amount of our debt payments and limit our ability to pay distributions to our stockholders. |
• | Our Advisor has been able to transition all employees and operations to a remote work environment, beginning on March 16, 2020, and we have been fortunate that our operations have continued successfully during these difficult times. |
• | We are in constant communication with our tenants and are assisting tenants in identifying local, state and federal resources that may be available to support their businesses and employees during the pandemic, including stimulus funds that may be available under the Coronavirus Aid, Relief, and Economic Security Act of 2020. |
• | We believe we have adequate cash and cash equivalents to service our debts and pay for our ongoing general and administrative expenses for the foreseeable future. As of June 30, 2020, we have approximately $4.3 million in cash and cash equivalents. In addition, we have approximately $0.8 million of restricted cash (funds held by the lenders for property taxes, insurance, tenant improvements, leasing commissions, capital expenditures, rollover reserves and other financing needs). Furthermore, the Shops at Turkey Creek remain unencumbered by debt and is available for financing to provide us funds if needed. |
• | We fully paid off the revolving line of credit with the SRT Loan (as defined below) from PFP Holding Company, LLC (the “SRT Lender”). The SRT Loan is secured by six of our core urban properties in Los Angeles and San Francisco. The SRT Loan does not have the sort of restrictive covenants and ongoing debt coverage ratios that could trigger a default caused by tenants not paying rent or seeking rent relief (unlike the former line of credit). |
• | We remain in compliance with all the terms of the Wilshire Construction Loan (as defined below), which matures on May 10, 2022 with the options to extend for two additional twelve-month periods, subject to certain conditions. Similarly, we remain in compliance with the Sunset & Gardner Loan (as defined below), which matures on October 31, 2020. On July 31, 2020, we negotiated an extension to the maturity date of the Sunset & Gardner Loan. Refer to the Subsequent Events section for additional information. |
• | To further preserve cash and liquidity, we suspended our Amended and Restated Share Redemption Program (the “SRP”), such suspension to be effective on May 21, 2020. The SRP will remain suspended and no further redemptions will be made unless and until our board of directors (the “Board”) approves the resumption of the SRP. During the suspension, we will continue to accept death and qualifying disability redemption filings from stockholders, but will not take any action with regard to those requests until the Board has elected to lift the suspension and provided the terms and conditions for any continuation of the program. In addition, on March 27, 2020, the board of directors decided to suspend the payment of any dividend for the quarters ending March 31, 2020, and will reconsider future dividend payments on a quarter by quarter basis as more information becomes available on the impact of COVID-19 and related impact to us. Dividend payments were not reinstated as of June 30, 2020. |
(dollars in thousands) | Rentable Square Feet | Percent Leased (2) | Effective Rent (3) (per Sq. Foot) | Date Acquired | Original Purchase Price (4) | Debt (5) | ||||||||||||||||
Property Name (1) | Location | |||||||||||||||||||||
Shops at Turkey Creek | Knoxville, TN | 16,324 | 61 | % | $ | 30.59 | 3/12/2012 | $ | 4,300 | $ | — | |||||||||||
400 Grove Street | San Francisco, CA | 2,000 | 100 | % | 63.04 | 6/14/2016 | 2,890 | 1,450 | ||||||||||||||
8 Octavia Street | San Francisco, CA | 3,640 | 47 | % | 61.56 | 6/14/2016 | 2,740 | 1,500 | ||||||||||||||
Fulton Shops | San Francisco, CA | 3,758 | 84 | % | 63.63 | 7/27/2016 | 4,595 | 2,200 | ||||||||||||||
450 Hayes | San Francisco, CA | 3,724 | 100 | % | 93.08 | 12/22/2016 | 7,567 | 3,650 | ||||||||||||||
388 Fulton | San Francisco, CA | 3,110 | 100 | % | 68.13 | 1/4/2017 | 4,195 | 2,300 | ||||||||||||||
Silver Lake | Los Angeles, CA | 10,497 | 100 | % | 68.80 | 1/11/2017 | 13,300 | 6,900 | ||||||||||||||
43,053 | $ | 39,587 | $ | 18,000 |
(1) | List of properties does not include a residual parcel at Topaz Marketplace as of June 30, 2020. |
(2) | Percentage is based on leased rentable square feet of each property as of June 30, 2020. |
(3) | Effective rent per square foot is calculated by dividing the annualized June 2020 contractual base rent by the total square feet occupied at the property. The contractual base rent does not include other items such as tenant concessions (e.g., free rent), percentage rent, and expense recoveries. |
(4) | The purchase price for Shops at Turkey Creek includes the issuance of common units in our operating partnership to the sellers. |
(5) | Debt represents the outstanding balance as of June 30, 2020, and excludes reclassification of approximately $0.7 million deferred financing costs, net, as a contra-liability. For more information on our financing, refer to Note 7. “Notes Payable, Net” to our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q. |
Properties Under Development | Location | Estimated Completion Date | Estimated Expected Square Feet | Debt | |||||||
Wilshire Property | Santa Monica, CA | November, 2020 | 12,500 | $ | 11,417 | ||||||
Sunset & Gardner Property | Hollywood, CA | December, 2022 | 100,000 | 8,700 | |||||||
Total | 112,500 | $ | 20,117 |
Three Months Ended June 30, | ||||||||||||||
2020 | 2019 | $ Change | % Change | |||||||||||
Rental revenue and reimbursements | $ | 654 | $ | 939 | $ | (285 | ) | (30.4 | )% | |||||
Operating and maintenance expenses | 359 | 586 | (227 | ) | (38.7 | )% | ||||||||
General and administrative expenses | 443 | 396 | 47 | 11.9 | % | |||||||||
Depreciation and amortization expenses | 301 | 378 | (77 | ) | (20.4 | )% | ||||||||
Interest expense | 66 | 130 | (64 | ) | (49.2 | )% | ||||||||
Operating loss | (515 | ) | (551 | ) | 36 | (6.5 | )% | |||||||
Other loss, net | — | (2 | ) | 2 | (100.0 | )% | ||||||||
Income taxes | (9 | ) | (44 | ) | 35 | (79.5 | )% | |||||||
Net loss | $ | (524 | ) | $ | (597 | ) | $ | 73 | (12.2 | )% | ||||
Six Months Ended June 30, | ||||||||||||||
2020 | 2019 | $ Change | % Change | |||||||||||
Rental revenue and reimbursements | $ | 1,461 | $ | 1,883 | $ | (422 | ) | (22.4 | )% | |||||
Operating and maintenance expenses | 809 | 856 | (47 | ) | (5.5 | )% | ||||||||
General and administrative expenses | 848 | 795 | 53 | 6.7 | % | |||||||||
Depreciation and amortization expenses | 602 | 755 | (153 | ) | (20.3 | )% | ||||||||
Interest expense | 237 | 319 | (82 | ) | (25.7 | )% | ||||||||
Operating loss | (1,035 | ) | (842 | ) | (193 | ) | 22.9 | % | ||||||
Other income (loss), net | 947 | (22 | ) | 969 | (4,404.5 | )% | ||||||||
Income taxes | (11 | ) | (44 | ) | 33 | (75.0 | )% | |||||||
Net loss | $ | (99 | ) | $ | (908 | ) | $ | 809 | (89.1 | )% |
Six Months Ended June 30, | |||||||||||
2020 | 2019 | $ Change | |||||||||
Net cash provided by (used in): | |||||||||||
Operating activities | $ | (540 | ) | $ | 241 | $ | (781 | ) | |||
Investing activities | 4,737 | (1,994 | ) | 6,731 | |||||||
Financing activities | (6,347 | ) | 2,412 | (8,759 | ) | ||||||
Net increase (decrease) in cash, cash equivalents and restricted cash | $ | (2,150 | ) | $ | 659 |
Distribution Record Date | Distribution Payable Date | Distribution Per Share of Common Stock / Common Unit | Total Common Stockholders Distribution | Total Common Unit Holders Distribution | Total Distribution | ||||||||||||||
First Quarter 2019 | 3/31/2019 | 4/30/2019 | $ | 0.06 | $ | 651 | $ | 14 | $ | 665 | |||||||||
Second Quarter 2019 | 6/30/2019 | 7/31/2019 | 0.06 | 648 | 14 | 662 | |||||||||||||
Third Quarter 2019 | 9/30/2019 | 10/31/2019 | 0.06 | 646 | 13 | 659 | |||||||||||||
Fourth Quarter 2019 | 12/31/2019 | 1/31/2020 | 0.02 | 215 | 5 | 220 | |||||||||||||
Total | $ | 2,160 | $ | 46 | $ | 2,206 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
FFO | 2020 | 2019 | 2020 | 2019 | ||||||||||||
Net loss | $ | (524 | ) | $ | (597 | ) | $ | (99 | ) | $ | (908 | ) | ||||
Adjustments: | ||||||||||||||||
Gain on disposal of assets | — | (13 | ) | (947 | ) | (13 | ) | |||||||||
Adjustment to reflect FFO of unconsolidated joint ventures | — | 100 | — | 178 | ||||||||||||
Depreciation of real estate | 241 | 299 | 481 | 598 | ||||||||||||
Amortization of in-place leases and leasing costs | 60 | 79 | 121 | 157 | ||||||||||||
FFO attributable to common shares and Common Units (1) | $ | (223 | ) | $ | (132 | ) | $ | (444 | ) | $ | 12 | |||||
FFO per share and Common Unit (1) | $ | (0.02 | ) | $ | (0.01 | ) | $ | (0.04 | ) | $ | — | |||||
Weighted average common shares and units outstanding (1) | 10,957,204 | 11,074,259 | 10,966,939 | 11,086,036 |
(1) | Our common units have the right to convert a unit into common stock for a one-to-one conversion. Therefore, we are including the related non-controlling interest income/loss attributable to common units in the computation of FFO and including the common units together with weighted average shares outstanding for the computation of FFO per share and common unit. |
Strategic Realty Trust, Inc. | ||
By: | /s/ Andrew Batinovich | |
Andrew Batinovich | ||
Chief Executive Officer, Corporate Secretary and Director (Principal Executive Officer) | ||
By: | /s/ M. Bradley Kettmann | |
M. Bradley Kettmann | ||
Chief Financial Officer (Principal Financial Officer) |
Incorporated by Reference | ||||||||
Exhibit No. | Description | Filed Herewith | Form/File No. | Filing Date | ||||
Articles of Amendment and Restatement of TNP Strategic Retail Trust, Inc. | S-11/ No. 333-154975 | 7/10/2009 | ||||||
Articles of Amendment, dated August 22, 2013 | 8-K | 8/26/2013 | ||||||
Articles Supplementary, dated November 1, 2013 | 8-K | 11/4/2013 | ||||||
Articles Supplementary, dated January 22, 2014 | 8-K | 1/28/2014 | ||||||
Description of Registrant’s Securities | 10-K | 3/18/2020 | ||||||
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | X | |||||||
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | X | |||||||
Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | X | |||||||
Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | X | |||||||
Strategic Realty Trust, Inc. Amended and Restated Share Redemption Program Adopted August 26, 2016 | 8-K | 8/30/2016 | ||||||
101.INS | Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | X | ||||||
101.SCH | Inline XBRL Taxonomy Extension Schema Document | X | ||||||
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | X | ||||||
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | X | ||||||
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | X | ||||||
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | X | ||||||
104.1 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
1. | I have reviewed this Quarterly Report on Form 10-Q of Strategic Realty Trust, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ Andrew Batinovich | |
Andrew Batinovich | |
Chief Executive Officer, Corporate Secretary and Director | |
(Principal Executive Officer) |
1. | I have reviewed this Quarterly Report on Form 10-Q of Strategic Realty Trust, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ M. Bradley Kettmann | |
M. Bradley Kettmann | |
Chief Financial Officer | |
(Principal Financial Officer) |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Andrew Batinovich | |
Andrew Batinovich | |
Chief Executive Officer, Corporate Secretary and Director | |
(Principal Executive Officer) |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ M. Bradley Kettmann | |
M. Bradley Kettmann | |
Chief Financial Officer | |
(Principal Financial Officer) |
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
|||||||
---|---|---|---|---|---|---|---|---|---|
Investments in real estate | |||||||||
Land | $ 13,791 | $ 13,536 | |||||||
Building and improvements | 23,765 | 23,732 | |||||||
Tenant improvements | 1,615 | 1,264 | |||||||
Investments in real estate, gross | 39,171 | 38,532 | |||||||
Accumulated depreciation | (3,787) | (3,308) | |||||||
Investments in real estate, net | 35,384 | 35,224 | |||||||
Properties under development and development costs | |||||||||
Land | 25,851 | 25,851 | |||||||
Buildings | 546 | 554 | |||||||
Development costs | 25,277 | 20,813 | |||||||
Properties under development and development costs | 51,674 | 47,218 | |||||||
Cash, cash equivalents and restricted cash | 5,091 | 7,241 | |||||||
Prepaid expenses and other assets, net | 125 | 114 | |||||||
Tenant receivables, net of $279 and $14 bad debt reserve | 825 | 727 | |||||||
Lease intangibles, net | 1,363 | 1,321 | |||||||
Assets held for sale | 0 | 9,216 | |||||||
Deferred financing costs, net | 0 | 105 | |||||||
TOTAL ASSETS (1) | 94,462 | [1] | 101,166 | ||||||
LIABILITIES | |||||||||
Notes payable, net | 37,129 | 33,927 | |||||||
Accounts payable and accrued expenses | 1,770 | 2,404 | |||||||
Amounts due to affiliates | 68 | 140 | |||||||
Other liabilities | 165 | 180 | |||||||
Liabilities related to assets held for sale | 0 | 8,939 | |||||||
Below-market lease liabilities, net | 266 | 296 | |||||||
TOTAL LIABILITIES (1) | 39,398 | 45,886 | |||||||
Commitments and contingencies (Note 12) | |||||||||
EQUITY | |||||||||
Preferred stock, $0.01 par value; 50,000,000 shares authorized, none issued and outstanding | 0 | 0 | |||||||
Common stock, $0.01 par value; 400,000,000 shares authorized; 10,739,814 and 10,759,721 shares issued and outstanding at June 30, 2020 and December 31, 2019, respectively | 110 | 110 | |||||||
Additional paid-in capital | 94,602 | 94,719 | |||||||
Accumulated deficit | (40,668) | (40,571) | |||||||
Total stockholders’ equity | 54,044 | 54,258 | |||||||
Non-controlling interests | 1,020 | 1,022 | |||||||
TOTAL EQUITY | 55,064 | 55,280 | |||||||
TOTAL LIABILITIES AND EQUITY | 94,462 | 101,166 | |||||||
Variable Interest Entity, Primary Beneficiary [Member] | |||||||||
Properties under development and development costs | |||||||||
Land | 25,851 | 25,851 | |||||||
Buildings | 546 | 554 | |||||||
Development costs | 25,277 | 20,813 | |||||||
Properties under development and development costs | 51,674 | 47,218 | |||||||
Cash, cash equivalents and restricted cash | 330 | 2,154 | |||||||
Prepaid expenses and other assets, net | 45 | 7 | |||||||
Lease intangibles, net | 73 | 4 | |||||||
TOTAL ASSETS (1) | [2] | 52,122 | 49,383 | ||||||
LIABILITIES | |||||||||
Notes payable, net | [3] | 19,788 | 16,713 | ||||||
Accounts payable and accrued expenses | 1,276 | 1,702 | |||||||
Amounts due to affiliates | 61 | 111 | |||||||
Other liabilities | 25 | 5 | |||||||
TOTAL LIABILITIES (1) | $ 21,150 | $ 18,531 | |||||||
|
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Preferred stock par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 50,000,000 | 50,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | |
Common stock par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 400,000,000 | 400,000,000 |
Common stock, shares issued | 10,739,814 | 10,759,721 |
Common stock, shares outstanding | 10,739,814 | 10,759,721 |
Bad debt reserve | $ 279 | $ 40 |
CONDENSED CONSOLIDATED STATEMENT OF EQUITY - USD ($) |
Total |
Common Stock |
Additional Paid-in Capital |
Accumulated Deficit |
Total Stockholders' Equity |
Non-controlling Interests |
---|---|---|---|---|---|---|
BALANCE at Dec. 31, 2018 | $ 58,070,000 | $ 110,000 | $ 95,336,000 | $ (38,546,000) | $ 56,900,000 | $ 1,170,000 |
BALANCE (in shares) at Dec. 31, 2018 | 10,863,299 | |||||
Redemption of common shares (in shares) | (62,158) | |||||
Redemption of common shares, value | (375,000) | $ 0 | (375,000) | 0 | (375,000) | 0 |
Stock Dividends, Shares | 0 | |||||
Quarterly distributions | (1,327,000) | $ 0 | 0 | (1,299,000) | (1,299,000) | (28,000) |
Net loss | (908,000) | 0 | 0 | (889,000) | (889,000) | (19,000) |
BALANCE at Jun. 30, 2019 | 55,460,000 | $ 110,000 | 94,961,000 | (40,734,000) | 54,337,000 | 1,123,000 |
BALANCE (in shares) at Jun. 30, 2019 | 10,801,141 | |||||
BALANCE at Mar. 31, 2019 | 56,968,000 | $ 110,000 | 95,210,000 | (39,501,000) | 55,819,000 | 1,149,000 |
BALANCE (in shares) at Mar. 31, 2019 | 10,842,444 | |||||
Redemption of common shares (in shares) | (41,303) | |||||
Redemption of common shares, value | (249,000) | $ 0 | (249,000) | 0 | (249,000) | 0 |
Stock Dividends, Shares | 0 | |||||
Quarterly distributions | (662,000) | $ 0 | 0 | (648,000) | (648,000) | (14,000) |
Net loss | (597,000) | 0 | 0 | (585,000) | (585,000) | (12,000) |
BALANCE at Jun. 30, 2019 | 55,460,000 | $ 110,000 | 94,961,000 | (40,734,000) | 54,337,000 | 1,123,000 |
BALANCE (in shares) at Jun. 30, 2019 | 10,801,141 | |||||
BALANCE at Dec. 31, 2019 | 55,280,000 | $ 110,000 | 94,719,000 | (40,571,000) | 54,258,000 | 1,022,000 |
BALANCE (in shares) at Dec. 31, 2019 | 10,759,721 | |||||
Redemption of common shares (in shares) | (19,907) | |||||
Redemption of common shares, value | (117,000) | $ 0 | (117,000) | 0 | (117,000) | 0 |
Net loss | (99,000) | 0 | 0 | (97,000) | (97,000) | (2,000) |
BALANCE at Jun. 30, 2020 | 55,064,000 | $ 110,000 | 94,602,000 | (40,668,000) | 54,044,000 | 1,020,000 |
BALANCE (in shares) at Jun. 30, 2020 | 10,739,814 | |||||
BALANCE at Mar. 31, 2020 | 55,588,000 | $ 110,000 | 94,602,000 | (40,154,000) | 54,558,000 | 1,030,000 |
BALANCE (in shares) at Mar. 31, 2020 | 10,739,814 | |||||
Net loss | (524,000) | $ 0 | 0 | (514,000) | (514,000) | (10,000) |
BALANCE at Jun. 30, 2020 | $ 55,064,000 | $ 110,000 | $ 94,602,000 | $ (40,668,000) | $ 54,044,000 | $ 1,020,000 |
BALANCE (in shares) at Jun. 30, 2020 | 10,739,814 |
ORGANIZATION AND BUSINESS |
6 Months Ended |
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Jun. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND BUSINESS | ORGANIZATION AND BUSINESS Strategic Realty Trust, Inc. (the “Company”) was formed on September 18, 2008, as a Maryland corporation. Effective August 22, 2013, the Company changed its name from TNP Strategic Retail Trust, Inc. to Strategic Realty Trust, Inc. The Company believes it qualifies as a real estate investment trust (“REIT”) under the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), and has elected REIT status beginning with the taxable year ended December 31, 2009, the year in which the Company began material operations. Since the Company’s inception, its business has been managed by an external advisor. The Company has no direct employees and all management and administrative personnel responsible for conducting the Company’s business are employed by its advisor. Currently, the Company is externally managed and advised by SRT Advisor, LLC, a Delaware limited liability company (the “Advisor”) pursuant to an advisory agreement with the Advisor (the “Advisory Agreement”) initially executed on August 10, 2013, and subsequently renewed every year through 2020. The current term of the Advisory Agreement terminates on August 9, 2021. The Advisor is an affiliate of Glenborough, LLC (together with its affiliates, “Glenborough”), a privately held full-service real estate investment and management company focused on the acquisition, management and leasing of commercial properties. Substantially all of the Company’s business is conducted through Strategic Realty Operating Partnership, L.P. (the “OP”). During the Company’s initial public offering (“Offering”), as the Company accepted subscriptions for shares of its common stock, it transferred substantially all of the net proceeds of the Offering to the OP as a capital contribution. The Company is the sole general partner of the OP. As of June 30, 2020 and December 31, 2019, the Company owned 98.0% and 98.0%, respectively, of the limited partnership interests in the OP. The Company’s principal demand for funds has been for the acquisition of real estate assets, the payment of operating expenses, interest on outstanding indebtedness, the payment of distributions to stockholders, and investments in development of properties. Substantially all of the proceeds of the completed Offering have been used to fund investments in real properties and other real estate-related assets, for payment of operating expenses, for payment of interest, for payment of various fees and expenses, such as acquisition fees and management fees, and for payment of distributions to stockholders. The Company’s available capital resources, cash and cash equivalents on hand and sources of liquidity are currently limited. The Company expects its future cash needs will be funded using cash from operations, future asset sales, debt financing and the proceeds to the Company from any sale of equity that it may conduct in the future. The Company invests in and manages a portfolio of income-producing retail properties, located in the United States, real estate-owning entities and real estate-related assets. The Company has invested directly, and indirectly through joint ventures, in a portfolio of income-producing retail properties located throughout the United States, with a focus on grocery anchored multi-tenant retail centers, including neighborhood, community and lifestyle shopping centers, multi-tenant shopping centers and free standing single-tenant retail properties. During the first quarter of 2016, the Company invested, through joint ventures, in two significant retail projects under development. As of June 30, 2020, in addition to the development projects, the Company’s portfolio of properties was comprised of 7 properties with approximately 43,000 rentable square feet of retail space located in two states, as well as an improved land parcel. As of June 30, 2020, the rentable space at the Company’s retail properties was 79% leased. COVID-19 Pandemic Currently, one of the most significant risks and uncertainties facing the Company, the retail industry, the real estate industry and the economy generally is the potential adverse effect of the ongoing public health crisis of the novel coronavirus disease (COVID-19) pandemic. The Company continues to monitor the impact of the COVID-19 pandemic on all aspects of its business, including how the pandemic is impacting its tenants and business partners. Many of the Company’s tenants have requested rent deferral or rent abatement as a result of the pandemic. During the three months ended June 30, 2020, some of the tenants, that had requested rent relief, resumed paying full or partial rent. As such, the Company is unable to predict the full impact that the pandemic will have on its financial condition, results of operations and cash flows. The full extent to which the COVID-19 pandemic impacts the Company’s operations and those of its tenants will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the scope, severity and duration of the pandemic, the actions taken to contain the pandemic or mitigate its impact, and the direct and indirect economic effects of the pandemic and containment measures, among others. Refer to Note 5, “Leases” for additional information.
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation and Basis of Presentation The accompanying interim unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) as contained within the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) and the rules and regulations of the Securities and Exchange Commission (the “SEC”), including the instructions to Form 10-K and Regulation S-X. The interim unaudited condensed consolidated financial statements include the accounts of the Company, the OP, their direct and indirect owned subsidiaries, and the accounts of joint ventures that are determined to be variable interest entities for which the Company is the primary beneficiary. All significant intercompany balances and transactions are eliminated in consolidation. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) necessary to present fairly the Company’s condensed consolidated financial position, results of operations and cash flows have been included. The Company evaluates the need to consolidate joint ventures and variable interest entities based on standards set forth in ASC Topic 810, Consolidation (“ASC 810”). In determining whether the Company has a controlling interest in a joint venture or a variable interest entity and the requirement to consolidate the accounts of that entity, management considers factors such as ownership interest, 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 for which the Company is the primary beneficiary. As of June 30, 2020 and December 31, 2019, the Company held variable interests in two variable interest entities and consolidated those entities. Refer to Note 4. “Variable Interest Entities” for additional information. Cash, Cash Equivalents and Restricted Cash Cash and cash equivalents represent 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. 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. Restricted cash includes escrow accounts for real property taxes, insurance, capital expenditures and tenant improvements, debt service and leasing costs held by lenders. The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported on the condensed consolidated balance sheets that sum to the total of the same such amounts shown on the condensed consolidated statement of cash flows (amounts in thousands):
Recent Accounting Pronouncements The FASB issued the following ASUs, which could have potential impact to the Company’s condensed consolidated financial statements: In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820) Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”). ASU 2018-13 modifies the disclosure requirements on fair value measurements in Topic 820. ASU 2018-13 is effective for fiscal years beginning after December 15, 2019. The Company adopted ASU 2018-13 effective January 1, 2020. The adoption of ASU 2018-13 did not have an impact on the Company’s condensed consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (“ASU 2016-13”). ASU 2016-13 requires a financial asset, measured at amortized cost basis to be presented at the net amount expected to be collected. ASU 2016-13 was effective for fiscal years beginning after December 15, 2019, with adoption permitted for fiscal years beginning after December 15, 2018. Adjustments resulting from adopting ASU 2016-13 shall be applied through a cumulative-effect adjustment to retained earnings. In November 2019, the FASB issued ASU No. 2019-10, Financial Instruments—Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842) Effective Dates (“ASU 2019-10”). ASU 2019-10 extended the mandatory effective date for smaller reporting companies to beginning after December 15, 2022. The adoption of Financial Instruments - Credit Losses is not expected to have an impact on the Company’s condensed consolidated financial statements.
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REAL ESTATE INVESTMENTS REAL ESTATE INVESTMENTS |
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Real Estate [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
REAL ESTATE INVESTMENTS | REAL ESTATE INVESTMENTS Sale of Properties On February 10, 2020, the Company consummated the disposition of Topaz Marketplace, located in Hesperia, California, for approximately $10.5 million in cash. The Company used the net proceeds from the sale to repay the line of credit in its entirety. The disposition of Topaz Marketplace resulted in a gain of approximately $0.9 million, which was included in the Company’s condensed consolidated statement of operations. The Company retained a residual land parcel, that is an improved drive-thru pad. Since the sale of this property does not represent a strategic shift that will have a major effect on the Company’s operations and financial results, the results of operations of this property were not reported as discontinued operations in the Company’s condensed consolidated financial statements. The Company used the net proceeds from the sale of this property to repay the outstanding balance on its line of credit. The Company’s condensed consolidated statements of operations include net operating income for the three and six months ended June 30, 2020 and 2019, related to Topaz Marketplace as follows (amounts in thousands):
Pro Forma Financial Information The pro forma financial information below is based upon the Company’s historical condensed consolidated statements of operations for the three and six months ended June 30, 2020 and 2019, adjusted to give effect to the above sale transaction as if it had been completed at the beginning of 2020 and 2019, respectively. The pro forma financial information is presented for information purposes only, and may not be indicative of what actual results of operations would have been had the transaction occurred at the beginning of 2020 and 2019, respectively, nor does it purport to represent results of operations for future periods (amounts in thousands, except per share amounts):
Assets Held for Sale and Liabilities Related to Assets Held for Sale Assets and liabilities related to Shops at Turkey Creek, located in Knoxville, Tennessee, were previously classified as held for sale, as the Company was in contract to sell the property. The buyer canceled the contract due to the uncertainty related to COVID-19. As a result, as of March 31, 2020, Shops at Turkey Creek no longer met certain criteria to be classified as held for sale. As such, all related assets, net of depreciation and liabilities were recorded within the relevant categories in the condensed consolidated balance sheet. Additionally, as of March 31, 2020, the residual land parcel at Topaz Marketplace, located in Hesperia, California, no longer met certain criteria to be classified as held for sale. As such, the value related to the parcel was recorded within the relevant line item in the condensed consolidated balance sheet. There were no assets classified as held for sale at June 30, 2020.
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VARIABLE INTEREST ENTITIES |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
VARIABLE INTEREST ENTITIES | VARIABLE INTEREST ENTITIES The Company has variable interests in, and is the primary beneficiary of, variable interest entities (“VIEs”) through its investments in (i) the Sunset & Gardner Joint Venture (formerly known as Gelson’s Joint Venture) and (ii) the 3032 Wilshire Joint Venture. The Company has consolidated the accounts of these variable interest entities. Through June 30, 2020, post the initial capital contributions, the Company made additional capital contributions totaling approximately $6.8 million and $7.0 million to the Sunset & Gardner Joint Venture and Wilshire Joint Venture, respectively. The following reflects the aggregate assets and liabilities of the Sunset & Gardner Joint Venture and the Wilshire Joint Venture, which were consolidated by the Company, as of June 30, 2020 and December 31, 2019 (amounts in thousands):
(2) As of June 30, 2020 and December 31, 2019, includes reclassification of approximately $0.3 million and $0.5 million, respectively, of deferred financing costs, net, as a contra-liability. The creditors of the consolidated joint ventures do not have recourse to the general credit of the Company. The notes payable of the Wilshire Joint Venture is partially guaranteed by the Company, refer to Note 7, “Notes Payable, Net”. The notes payable of the Sunset & Gardner Joint Venture is not guaranteed by the Company.
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LEASES |
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Operating Leases, Future Minimum Payments Receivable [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FUTURE MINIMUM RENTAL INCOME | LEASES Operating Leases The Company’s real estate properties are leased to tenants under operating leases for which the terms and expirations vary. As of June 30, 2020, the leases at the Company’s properties, excluding properties classified as held for sale, have remaining terms (excluding options to extend) of up to 14.3 years with a weighted-average remaining term (excluding options to extend) of approximately 7.7 years. The leases may have provisions to extend the lease agreements, options for early termination after paying a specified penalty, rights of first refusal to purchase the property at competitive market rates, and other terms and conditions as negotiated. The Company retains substantially all of the risks and benefits of ownership of the real estate assets leased to tenants. Generally, upon the execution of a lease, the Company requires security deposits from tenants in the form of a cash deposit and/or a letter of credit. Amounts required as security deposits vary depending upon the terms of the respective leases and the creditworthiness of the tenant, but generally are not significant amounts. Therefore, exposure to credit risk exists to the extent that a receivable from a tenant exceeds the amount of its security deposit. Security deposits received in cash related to tenant leases are included in other liabilities in the accompanying condensed consolidated balance sheets and totaled approximately $0.1 million and $0.2 million as of June 30, 2020 and December 31, 2019, respectively. The following table presents the components of income from real estate operations for the three and six months ended June 30, 2020 and 2019 (amounts in thousands):
During the three and six months ended June 30, 2020, certain of the Company’s tenants requested rent relief as a result of the COVID-19 pandemic. These tenants account for approximately 95% of the Company’s annualized rents. Not all tenant requests resulted in modified agreements nor did the Company forgo its contractual rights under its lease agreements. To date only a small percent of the requests for rent relief resulted in modified agreements, however the Company is reviewing requests on a case by case basis and continues to monitor and communicate with its commercial tenants to assess their needs and ability to make either full or partial rent payments. As of June 30, 2020, approximately $0.4 million of rental income due and payable was outstanding. The Company collected approximately $45 thousand, or 12%, of the outstanding balance in July 2020. Additionally, approximately $50 thousand of rental income earned and recognized during the three months ended June 30, 2020, was deferred and is expected to be collected in future periods. As of June 30, 2020, the future minimum rental income from the Company’s properties under non-cancelable operating leases, was as follows (amounts in thousands):
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LEASE INTANGIBLES AND BELOW-MARKET LEASE LIABILITIES |
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Finite-Lived Intangible Assets, Net [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ACQUIRED LEASE INTANGIBLES AND BELOW-MARKET LEASE LIABILITIES | LEASE INTANGIBLES AND BELOW-MARKET LEASE LIABILITIES, NET As of June 30, 2020 and December 31, 2019, the Company’s acquired lease intangibles and below-market lease liabilities, were as follows (amounts in thousands):
The Company’s amortization of lease intangibles and below-market lease liabilities for the three and six months ended June 30, 2020 and 2019, were as follows (amounts in thousands):
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NOTES PAYABLE, NET |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||
NOTES PAYABLE | NOTES PAYABLE, NET Multi-Property Secured Financing On December 24, 2019, the Company entered into a Loan Agreement (the “SRT Loan Agreement”) with PFP Holding Company, LLC (the “SRT Lender”) for a non-recourse secured loan (the “SRT Loan”). The SRT Loan is secured by first deeds of trust on the Company’s five San Francisco assets (Fulton Shops, 8 Octavia, 400 Grove, 450 Hayes and 388 Fulton Street) as well as the Company’s Silverlake Collection located in Los Angeles. Proceeds from the SRT Loan were used by the Company to pay down the Company’s credit facility and in connection with such payment, the properties referenced above were released from liens related to that credit facility. The SRT Loan matures on January 9, 2023. The Company has an option to extend the term of the loan for two additional twelve-month periods, subject to the satisfaction of certain covenants and conditions contained in the SRT Loan Agreement. The Company has the right to prepay the SRT Loan in whole at any time or in part from time to time, subject to the payment of yield maintenance payments if such prepayment occurs in the first 18 months of the loan term, calculated through the 18th monthly payment date, as well as certain expenses, costs or liabilities potentially incurred by the SRT Lender as a result of the prepayment and subject to certain other conditions contained in the loan documents. Individual properties may be released from the SRT Loan collateral in connection with bona fide third-party sales, subject to compliance with certain covenants and conditions contained in the SRT Loan Agreement. Any prepayment or repayment on or before the first 12 months of the loan term in connection with a bona fide third-party sale of a property securing the SRT Loan shall only require the payment of yield maintenance payments calculated through the 12th monthly payment date. As of June 30, 2020, the SRT Loan had a principal balance of approximately $18.0 million. The SRT Loan is a floating LIBOR rate loan which bears interest at 30-day LIBOR (with a floor of 1.50%) plus 2.80%. The default rate is equal to 5% above the rate that otherwise would be in effect. Monthly payments are interest-only with the entire principal balance and all outstanding interest due at maturity. Pursuant to the SRT Loan, the Company must comply with certain matters contained in the loan documents including but not limited to, (i) requirements to deliver audited and unaudited financial statements, SEC filings, tax returns, pro forma budgets, and quarterly compliance certificates, and (ii) minimum limits on the Company’s liquidity and tangible net worth. The SRT Loan contains customary covenants, including, without limitation, covenants with respect to maintenance of properties and insurance, compliance with laws and environmental matters, covenants limiting or prohibiting the creation of liens, and transactions with affiliates. At June 30, 2020, the Company was in compliance with the covenants in effect as of that date. In connection with the SRT Loan, the Company executed customary non-recourse carveout and environmental guaranties, together with limited additional assurances with regard to the condominium structures of the San Francisco assets. Line of Credit On February 10, 2020, the Company used proceeds from the sale of Topaz Marketplace to repay the line of credit in its entirety. The line of credit expired of its own accord on February 15, 2020, with no balance outstanding. As part of the payoff, Shops at Turkey Creek was released from the line of credit. The Company’s line of credit was a revolving credit facility with an initial maximum aggregate commitment of $30.0 million. Effective February 15, 2017, the Company’s line of credit was refinanced to increase the maximum aggregate commitment under the credit facility from $30.0 million to $60.0 million. Effective November 7, 2019, the Company elected to permanently reduce the maximum aggregate commitment under its line of credit from $60.0 million to $30.0 million. All other terms of the credit facility remained the same. Effective January 8, 2020, the Company elected to permanently reduce the maximum aggregate commitment under its line of credit from $30.0 million to $10.5 million. Other than changes to the line of credit’s maximum aggregate commitment, all other terms of the credit facility remained the same throughout the life of the credit facility. The credit facility matured on February 15, 2020. Each loan made pursuant to the credit facility was either a LIBOR loan or a base rate loan, at the election of the Company, plus an applicable margin, as defined. Monthly payments were interest only with the entire principal balance and all outstanding interest due at maturity. The Company paid the lender an unused commitment fee, quarterly in arrears, which was accrued at 0.30% per annum, if the usage under the Company’s line of credit was less than or equal to 50% of the line of credit amount, and 0.20% per annum if the usage under the Company’s line of credit was greater than 50% of the line of credit amount. The Company was providing a guaranty of all of its obligations under the Company’s line of credit. Loans Secured by Properties Under Development On May 7, 2019, the Company refinanced and repaid its financing from Loan Oak Fund, LLC with a new construction loan from ReadyCap Commercial, LLC (the “Lender”) (the “Wilshire Construction Loan”). As of June 30, 2020, the Wilshire Construction Loan had a principal balance of approximately $11.4 million, with future funding availability up to a total of approximately $13.9 million, and bears an interest rate of 1-month LIBOR plus an interest margin of 4.25% per annum, payable monthly. The Wilshire Loan is scheduled to mature on May 10, 2022, with options to extend for two additional twelve-month periods, subject to certain conditions as stated in the loan agreement. The Wilshire Construction Loan is secured by a first Deed of Trust on the Wilshire Property. The Company executed a guaranty that guaranties that the loan interest reserve amounts are kept in compliance with the terms of the loan agreement. The Lender also required that a principal in the upstream owner of the Company’s joint venture partner in the Wilshire Joint Venture (the “Guarantor”), guarantees performance of borrower’s obligations under the loan agreement with respect to the completion of capital improvements to the property. The Company executed an Indemnity Agreement in favor of the Guarantor against liability under that completion guaranty except to the extent caused by gross negligence or willful misconduct, as well as for liabilities incurred under the Environmental Indemnity Agreement executed by the Guarantor in favor of the Lender. The Company used working capital funds of approximately $3.1 million to repay the difference between the Wilshire Construction Loan initial advance and the prior loan, to pay transaction costs, as well as to fund certain required interest and construction reserves. On October 29, 2018, the Company entered into a loan agreement with Lone Oak Fund, LLC (the “Sunset & Gardner Loan”). The Sunset & Gardner Loan has a principal balance of approximately $8.7 million, and bears an interest rate of 6.9% per annum. The Sunset & Gardner Loan was scheduled to mature on October 31, 2019. The Company extended the Sunset & Gardner Loan for an additional twelve-month period under the same terms, with an interest rate of 6.5% per annum. The new maturity date is October 31, 2020. The Company negotiated an additional one year extension with the lender. Refer to footnote 13, “Subsequent Events” for additional information. The Sunset & Gardner Loan is secured by a first Deed of Trust on the Sunset & Gardner Property. The following is a schedule of future principal payments for all of the Company’s notes payable outstanding as of June 30, 2020 (amounts in thousands):
During the three months ended June 30, 2020, the Company incurred and expensed approximately $66 thousand of interest costs, which consisted of amortization of deferred financing costs. During the three months ended June 30, 2019, the Company incurred and expensed approximately $0.1 million of interest costs, which primarily consisted of amortization of deferred financing costs. Also during the three months ended June 30, 2020 and 2019, the Company incurred and capitalized approximately $0.6 million and $0.8 million, respectively, of interest expense related to the variable interest entities, which included amortization of deferred financing costs of approximately $80 thousand and $0.2 million, respectively, for each period. During the six months ended June 30, 2020, the Company incurred and expensed approximately $0.2 million of interest costs, which consisted of amortization of deferred financing costs. During the six months ended June 30, 2019, the Company incurred and expensed approximately $0.3 million of interest costs, which primarily consisted of amortization of deferred financing costs. Also during the six months ended June 30, 2020 and 2019, the Company incurred and capitalized approximately $1.2 million and $1.4 million, respectively, of interest expense related to the variable interest entities which included amortization of deferred financing costs of approximately $0.2 million and $0.2 million, respectively, for each period. As of both June 30, 2020 and December 31, 2019, interest expense payable was approximately $0.2 million, including an amount related to the variable interest entities of approximately $0.1 million, for each period.
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FAIR VALUE DISCLOSURES |
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Fair Value Disclosures [Abstract] | |||||||||||||
FAIR VALUE DISCLOSURES | FAIR VALUE DISCLOSURES Certain financial assets and liabilities are measured at fair value on a recurring basis. The Company determines fair value using the following hierarchy:
The Company believes the total carrying values reflected on its consolidated balance sheets for cash, cash equivalents and restricted cash, accounts receivable, accounts payable and accrued expenses, amounts due to affiliates, mortgage loan and construction loan secured by properties under development, and the Company’s multi-property secured financing, reasonably approximated their fair values based on their nature, terms, and interest rates that approximate current market rates at June 30, 2020. As part of the Company’s ongoing evaluation of the Company’s real estate portfolio, the Company estimates the fair value of its investments in real estate by obtaining outside independent appraisals on all of the operating properties. The appraised values are compared with the carrying values of its real estate portfolio to determine if there are indications of impairment. For both the three and six months ended June 30, 2020 and 2019, the Company did not record any impairment losses.
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EQUITY |
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Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EQUITY | EQUITY Share Redemption Program On April 1, 2015, the Company’s board of directors approved the reinstatement of the share redemption program (which had been suspended since January 15, 2013) and adopted the Amended and Restated Share Redemption Program (the “SRP”). Under the SRP, only shares submitted for repurchase in connection with the death or “qualifying disability” (as defined in the SRP) of a stockholder are eligible for repurchase by the Company. Under the current SRP, as amended to date, the number of shares to be redeemed is limited to the lesser of (i) a total of $3.8 million for redemptions sought upon a stockholder’s death and a total of $1.2 million for redemptions sought upon a stockholder’s qualifying disability, and (ii) 5% of the weighted-average number of shares of the Company’s common stock outstanding during the prior calendar year. Share repurchases pursuant to the SRP are made at the sole discretion of the Company. The Company 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 subject to the notice requirements in the SRP. The redemption price for shares that are redeemed is 100% of the Company’s most recent estimated net asset value per share as of the applicable redemption date. A redemption request must be made within one year after the stockholder’s death or qualifying disability. The SRP provides that any request to redeem less than $5,000 worth of shares will be treated as a request to redeem all of the stockholder’s shares. If the Company cannot honor all redemption requests received in a given quarter, all requests, including death and qualifying disability redemptions, will be honored on a pro rata basis. If the Company does not completely satisfy a redemption request in one quarter, it will treat the unsatisfied portion as a request for redemption in the next quarter when funds are available for redemption, unless the request is withdrawn. The Company may increase or decrease the amount of funding available for redemptions under the SRP on ten business days’ notice to stockholders. Shares submitted for redemption during any quarter will be redeemed on the penultimate business day of such quarter. The record date for quarterly distributions has historically been and is expected to continue to be the last business day of each quarter; therefore, shares that are redeemed during any quarter are expected to be redeemed prior to the record date and thus would not be eligible to receive the distribution declared for such quarter. In order to preserve cash in light of the uncertainty relating to the duration of shelter-in-place orders and the economic impact of COVID-19 on the Company, by unanimous written consent executed on April 21, 2020, the board of directors approved the suspension of the SRP, which offered redemption opportunities only in connection with a stockholder’s death or qualifying disability. Under the SRP, the board of directors may amend, suspend, or terminate the SRP with 30 days’ notice to the Company’s stockholders. The Current Report on Form 8-K, filed on April 21, 2020 with the SEC, served as such required notice and therefore the suspension of the SRP became effective on May 21, 2020. The SRP will remain suspended and no further redemptions will be made until the board of directors approves the resumption of the SRP. During the suspension, the Company will continue to accept death and qualifying disability redemption filings from stockholders, but will not take any action with regard to those requests until the board of directors has elected to lift the suspension and provided the terms and conditions for any continuation of the SRP. The following table summarizes share redemption activity during the three and six months ended June 30, 2020 and 2019 (amounts in thousands, except shares):
As stated above, cumulatively, through June 30, 2020, pursuant to the Original Share Redemption Program and the Amended and Restated SRP, the Company has redeemed 878,458 shares sold in the Offering and/or its dividend reinvestment plan for $6.2 million. Quarterly Distributions In order to qualify as a REIT, the Company is required to distribute at least 90% of its annual REIT taxable income, subject to certain adjustments, to its stockholders. Some or all of the Company’s distributions have been paid, and in the future may continue to be paid from sources other than cash flows from operations. The Company’s board of directors evaluates the Company’s ability to make quarterly distributions based on the Company’s operational cash needs. In light of the COVID-19 pandemic, its impact on the economy and the related future uncertainty, on March 27, 2020, the board of directors of the Company voted to suspend the payment of any dividend for the quarter ending March 31, 2020, and to reconsider future dividend payments on a quarter by quarter basis as more information becomes available on the impact of COVID-19 and related impact to the Company. Dividend payments were not reinstated as of June 30, 2020. The following table set forth the quarterly distributions declared to the Company’s common stockholders and Common Unit holders for the year ended 2019 (amounts in thousands, except per share amounts):
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EARNINGS PER SHARE |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EARNINGS PER SHARE | EARNINGS PER SHARE EPS is computed by dividing net income (loss) attributable to common stockholders by the weighted average number of common shares outstanding during each period. Diluted EPS is computed after adjusting the basic EPS computation for the effect of potentially dilutive securities outstanding during the period. The effect of non-vested shares, if dilutive, is computed using the treasury stock method. The Company applies the two-class method for determining EPS as its outstanding shares of non-vested restricted stock are considered participating securities as dividend payments are not forfeited even if the underlying award does not vest. There was no unvested stock as of June 30, 2020. The Company’s excess of distributions over earnings related to participating securities are shown as a reduction in income (loss) attributable to common stockholders in the Company’s computation of EPS. The following table sets forth the computation of the Company’s basic and diluted earnings per share for the three and six months ended June 30, 2020 and 2019 (amounts in thousands, except shares and per share amounts):
(1) The effect of 217,475 convertible Common Units pursuant to the redemption rights outlined in the Company’s registration statement on Form S-11 have not been included as they would not be dilutive.
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RELATED PARTY TRANSACTIONS |
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Related Party Transaction, Due from (to) Related Party [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS On August 7, 2013, the Company entered into the Advisory Agreement with the Advisor, which has been renewed for successive terms with a current expiration date of August 9, 2021. The Advisor manages the Company’s business as the Company’s external advisor pursuant to the Advisory Agreement. Pursuant to the Advisory Agreement, the Company will pay the Advisor specified fees for services related to the investment of funds in real estate and real estate-related investments, management of the Company’s investments and for other services. Summary of Related Party Fees The following table sets forth the Advisor related party costs incurred and payable by the Company for the periods presented (amounts in thousands):
Acquisition Fees Under the Advisory Agreement, the Advisor is entitled to receive an acquisition fee equal to 1% of (1) the cost of each investment acquired directly by the Company or (2) the Company’s allocable cost of an investment acquired pursuant to a joint venture, in each case including purchase price, acquisition expenses and any debt attributable to such investments. An acquisition fee is capitalized by the Company when the related transaction does not qualify as a business combination; otherwise an acquisition fee is expensed. Financing Coordination Fees Under the Advisory Agreement, the Advisor is entitled to receive a financing coordination fee equal to 1% of the amount made available and/or outstanding under any (1) financing obtained or assumed, directly or indirectly, by the Company or the OP and used to acquire or originate investments, or (2) the refinancing of any financing obtained or assumed, directly or indirectly, by the Company or the OP. Asset Management Fees Under the Advisory Agreement, the Advisor is entitled to receive an asset management fee equal to a monthly fee of one-twelfth (1/12th) of 0.6% of the higher of (1) aggregate cost on a GAAP basis (before non-cash reserves and depreciation) of all investments the Company owns, including any debt attributable to such investments, or (2) the fair market value of the Company’s investments (before non-cash reserves and depreciation) if the board of directors has authorized the estimate of a fair market value of the Company’s investments; provided, however, that the asset management fee will not be less than $250,000 in the aggregate during any one calendar year. Reimbursement of Operating Expenses The Company reimburses the Advisor for all expenses paid or incurred by the Advisor in connection with the services provided to the Company, subject to the limitation that the Company will not reimburse the Advisor for any amount by which the Company’s total operating expenses (including the asset management fee described above) at the end of the four preceding fiscal quarters exceeded the greater of (1) 2% of its average invested assets (as defined in the Company’s Articles of Amendment and Restatement (the “Charter”)); or (2) 25% of its net income (as defined in the Charter) 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% Guideline”). The Advisor is required to reimburse the Company quarterly for any amounts by which total operating expenses exceed the 2%/25% Guideline in the previous expense year that the independent directors do not approve. The Company will not reimburse the Advisor for any of its personnel costs or other overhead costs except for customary reimbursements for personnel costs under property management agreements entered into between the OP and the Advisor or its affiliates. Notwithstanding the above, the Company may reimburse the Advisor for expenses in excess of the 2%/25% Guideline if a majority of the independent directors determine that such excess expenses are justified based on unusual and non-recurring factors. Pursuant to an amendment to the Advisory Agreement entered on August 2, 2018, the board of directors, including a majority of the independent directors identified certain unusual and non-recurring factors that would justify reimbursement to the Advisor of amounts in excess of the 2%/25% Guidelines and confirmed that the Advisor would not be obligated to reimburse the Company for these excess amounts to the extent the excess was caused by such factors. For the three months ended June 30, 2020 and 2019, the Company’s total operating expenses (as defined in the Charter) did not exceed the 2%/25% Guideline. Property Management Fees Under the property management agreements between the Company and Glenborough, Glenborough is entitled to receive property management fees calculated at a maximum of up to 4% of the properties’ gross revenue. The property management agreements with Glenborough have been renewed for an additional 12 months, beginning on August 10, 2019. Property management agreements with Glenborough automatically renew every year, unless expressly terminated. Disposition Fees Under the Advisory Agreement, if the Advisor or its affiliates provide a substantial amount of services, as determined by the Company’s independent directors, in connection with the sale of a real property, the Advisor or its affiliates may be paid disposition fees up to 50% of a customary and competitive real estate commission, but not to exceed 3% of the contract sales price of each property sold. Leasing Fees Under the property management agreements, Glenborough is entitled to receive a separate fee for the leases of new tenants, and for expansions, extensions and renewals of existing tenants in an amount not to exceed the fee customarily charged by similarly situated parties rendering similar services in the same geographic area for similar properties. Legal Leasing Fees Under the property management agreements, Glenborough is entitled to receive a market-based legal leasing fee for the negotiation and production of new leases, renewals, and amendments. Construction Management Fees In connection with the construction or repair in or about a property, the property manager is responsible for coordinating and facilitating the planning and the performance of all construction and is entitled to receive a fee equal to 5% of the hard costs for the project in question.
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COMMITMENTS AND CONTINGENCIES |
6 Months Ended |
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Jun. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Economic Dependency The Company is dependent on the Advisor and its affiliates for certain services that are essential to the Company, including the identification, evaluation, negotiation, purchase, and disposition of real estate and real estate-related investments, management of the daily operations of the Company’s real estate and real estate-related investment portfolio, and other general and administrative responsibilities. In the event that the Advisor is unable to provide such services to the Company, the Company will be required to obtain such services from other sources. Environmental As an owner of real estate, the Company is subject to various environmental laws of federal, state and local governments. The Company is not aware of any environmental liability that could have a material adverse effect on its condensed consolidated financial condition or results of operations. However, changes in applicable environmental laws and regulations, the uses and conditions of properties in the vicinity of the Company’s properties, the activities of its tenants and other environmental conditions of which the Company is unaware with respect to the properties could result in future environmental liabilities.
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SUBSEQUENT EVENTS SUBSEQUENT EVENTS |
6 Months Ended |
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Jun. 30, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | SUBSEQUENT EVENTS On July 31, 2020, the Company extended the Sunset & Gardner Loan for an additional twelve-month period under the same terms, with an interest rate of 7.3% per annum. The new maturity date is October 31, 2021. The Company evaluates subsequent events up until the date the condensed consolidated financial statements are issued.
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) |
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
Principles of Consolidation and Basis of Presentation | Principles of Consolidation and Basis of Presentation The accompanying interim unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) as contained within the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) and the rules and regulations of the Securities and Exchange Commission (the “SEC”), including the instructions to Form 10-K and Regulation S-X. The interim unaudited condensed consolidated financial statements include the accounts of the Company, the OP, their direct and indirect owned subsidiaries, and the accounts of joint ventures that are determined to be variable interest entities for which the Company is the primary beneficiary. All significant intercompany balances and transactions are eliminated in consolidation. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) necessary to present fairly the Company’s condensed consolidated financial position, results of operations and cash flows have been included. The Company evaluates the need to consolidate joint ventures and variable interest entities based on standards set forth in ASC Topic 810, Consolidation (“ASC 810”). In determining whether the Company has a controlling interest in a joint venture or a variable interest entity and the requirement to consolidate the accounts of that entity, management considers factors such as ownership interest, 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 for which the Company is the primary beneficiary. As of June 30, 2020 and December 31, 2019, the Company held variable interests in two variable interest entities and consolidated those entities. Refer to Note 4. “Variable Interest Entities” for additional information.
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Cash, Cash Equivalents and Restricted Cash | Cash, Cash Equivalents and Restricted Cash Cash and cash equivalents represent 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. 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. Restricted cash includes escrow accounts for real property taxes, insurance, capital expenditures and tenant improvements, debt service and leasing costs held by lenders. The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported on the condensed consolidated balance sheets that sum to the total of the same such amounts shown on the condensed consolidated statement of cash flows (amounts in thousands):
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Recent Accounting Pronouncements | Recent Accounting Pronouncements The FASB issued the following ASUs, which could have potential impact to the Company’s condensed consolidated financial statements: In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820) Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”). ASU 2018-13 modifies the disclosure requirements on fair value measurements in Topic 820. ASU 2018-13 is effective for fiscal years beginning after December 15, 2019. The Company adopted ASU 2018-13 effective January 1, 2020. The adoption of ASU 2018-13 did not have an impact on the Company’s condensed consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (“ASU 2016-13”). ASU 2016-13 requires a financial asset, measured at amortized cost basis to be presented at the net amount expected to be collected. ASU 2016-13 was effective for fiscal years beginning after December 15, 2019, with adoption permitted for fiscal years beginning after December 15, 2018. Adjustments resulting from adopting ASU 2016-13 shall be applied through a cumulative-effect adjustment to retained earnings. In November 2019, the FASB issued ASU No. 2019-10, Financial Instruments—Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842) Effective Dates (“ASU 2019-10”). ASU 2019-10 extended the mandatory effective date for smaller reporting companies to beginning after December 15, 2022. The adoption of Financial Instruments - Credit Losses is not expected to have an impact on the Company’s condensed consolidated financial statements.
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) |
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
Cash, Cash Equivalents and Restricted Cash [Table Text Block] | The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported on the condensed consolidated balance sheets that sum to the total of the same such amounts shown on the condensed consolidated statement of cash flows (amounts in thousands):
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REAL ESTATE INVESTMENTS REAL ESTATE INVESTMENTS (Tables) |
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Real Estate [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disposal Groups, Including Discontinued Operations [Table Text Block] | The Company’s condensed consolidated statements of operations include net operating income for the three and six months ended June 30, 2020 and 2019, related to Topaz Marketplace as follows (amounts in thousands):
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Business Acquisition, Pro Forma Information [Table Text Block] | The pro forma financial information is presented for information purposes only, and may not be indicative of what actual results of operations would have been had the transaction occurred at the beginning of 2020 and 2019, respectively, nor does it purport to represent results of operations for future periods (amounts in thousands, except per share amounts):
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VARIABLE INTEREST ENTITIES (Tables) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Variable Interest Entities | The following reflects the aggregate assets and liabilities of the Sunset & Gardner Joint Venture and the Wilshire Joint Venture, which were consolidated by the Company, as of June 30, 2020 and December 31, 2019 (amounts in thousands):
(2) As of June 30, 2020 and December 31, 2019, includes reclassification of approximately $0.3 million and $0.5 million, respectively, of deferred financing costs, net, as a contra-liability. The creditors of the consolidated joint ventures do not have recourse to the general credit of the Company. The notes payable of the Wilshire Joint Venture is partially guaranteed by the Company, refer to Note 7, “Notes Payable, Net”. The notes payable of the Sunset & Gardner Joint Venture is not guaranteed by the Company.
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LEASES (Tables) |
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Operating Leased Assets [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Operating Lease, Lease Income [Table Text Block] | The following table presents the components of income from real estate operations for the three and six months ended June 30, 2020 and 2019 (amounts in thousands):
(1) Primarily includes tenant reimbursements for real estate taxes, insurance and common area maintenance.
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Schedule of Future Minimum Rental Receivable For Operating Leases | As of June 30, 2020, the future minimum rental income from the Company’s properties under non-cancelable operating leases, was as follows (amounts in thousands):
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LEASE INTANGIBLES AND BELOW-MARKET LEASE LIABILITIES (Tables) |
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Finite-Lived Intangible Assets, Net [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquired Lease Intangibles and Below Market Lease Liabilities | As of June 30, 2020 and December 31, 2019, the Company’s acquired lease intangibles and below-market lease liabilities, were as follows (amounts in thousands):
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Amortization Of Finite Lease Intangibles and Below-Market Lease Liabilities | The Company’s amortization of lease intangibles and below-market lease liabilities for the three and six months ended June 30, 2020 and 2019, were as follows (amounts in thousands):
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NOTES PAYABLE, NET (Tables) |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||
Schedule of maturities for notes payable outstanding | The following is a schedule of future principal payments for all of the Company’s notes payable outstanding as of June 30, 2020 (amounts in thousands):
(1) Total future principal payments reflect actual amounts due to creditors, and excludes reclassification of $1.0 million deferred financing costs, net.
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EQUITY (Tables) |
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Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share Redemption Program | The following table summarizes share redemption activity during the three and six months ended June 30, 2020 and 2019 (amounts in thousands, except shares):
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Distributions declared and paid | The following table set forth the quarterly distributions declared to the Company’s common stockholders and Common Unit holders for the year ended 2019 (amounts in thousands, except per share amounts):
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EARNINGS PER SHARE (Tables) |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Company's basic and diluted (loss)earnings per share | The following table sets forth the computation of the Company’s basic and diluted earnings per share for the three and six months ended June 30, 2020 and 2019 (amounts in thousands, except shares and per share amounts):
(1) The effect of 217,475 convertible Common Units pursuant to the redemption rights outlined in the Company’s registration statement on Form S-11 have not been included as they would not be dilutive.
|
RELATED PARTY TRANSACTIONS (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transaction, Due from (to) Related Party [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions | The following table sets forth the Advisor related party costs incurred and payable by the Company for the periods presented (amounts in thousands):
|
ORGANIZATION AND BUSINESS (Details Textual) ft² in Thousands |
6 Months Ended | 12 Months Ended |
---|---|---|
Jun. 30, 2020
ft²
|
Dec. 31, 2019 |
|
Real Estate Properties [Line Items] | ||
Number of Real Estate Properties | 7 | |
Net Rentable Area | 43 | |
Number of States in which Entity Operates | 2 | |
Percent of Real Estate Properties Leased | 79.00% | |
Strategic Realty Trust [Member] | ||
Real Estate Properties [Line Items] | ||
Partnership Interest Ownership Percentage | 98.00% | 98.00% |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|---|---|
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents [Abstract] | ||||
Cash and Cash Equivalents | $ 4,295 | $ 6,119 | ||
Restricted Cash | 796 | 1,122 | ||
Total cash, cash equivalents and restricted cash | $ 5,091 | $ 7,241 | $ 4,006 | $ 3,347 |
REAL ESTATE INVESTMENTS SALE OF PROPERTIES (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
Feb. 10, 2020 |
|
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Net gain on disposal of real estate | $ 0 | $ 13 | $ 947 | $ 13 | |
Operating Income | (515) | (551) | (1,035) | (842) | |
Topaz Marketplace [Member] | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Sales Price | $ 10,500 | ||||
Net gain on disposal of real estate | 900 | ||||
Operating Income | $ 0 | $ 99 | $ 52 | $ 181 |
REAL ESTATE INVESTMENTS PRO FORMA (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Rental and reimbursement revenues | $ 654 | $ 939 | $ 1,461 | $ 1,883 |
Net loss attributable to common shares | $ (514) | $ (585) | $ (97) | $ (889) |
Loss per common share - basic and diluted | $ (0.05) | $ (0.05) | $ (0.01) | $ (0.08) |
Pro Forma [Member] | ||||
Rental and reimbursement revenues | $ 654 | $ 700 | $ 1,343 | $ 1,426 |
Net loss | (522) | (697) | (149) | (142) |
Net loss attributable to common shares | $ (513) | $ (664) | $ (147) | $ (120) |
Loss per common share - basic and diluted | $ (0.05) | $ (0.06) | $ (0.01) | $ (0.01) |
VARIABLE INTEREST ENTITIES (Details) - USD ($) $ in Thousands |
6 Months Ended | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
May 07, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
Dec. 31, 2019 |
Dec. 31, 2018 |
||||||||
Payments to Acquire Interest in Joint Venture | $ 0 | $ 38 | ||||||||||
Properties under development and development costs: | ||||||||||||
Land | 25,851 | $ 25,851 | ||||||||||
Buildings | 546 | 554 | ||||||||||
Development costs | 25,277 | 20,813 | ||||||||||
Properties under development and development costs | 51,674 | 47,218 | ||||||||||
Cash, cash equivalents and restricted cash | 5,091 | $ 4,006 | 7,241 | $ 3,347 | ||||||||
Prepaid expenses and other assets, net | 125 | 114 | ||||||||||
Lease intangibles, net | 1,363 | 1,321 | ||||||||||
Total assets | 94,462 | [1] | 101,166 | |||||||||
LIABILITIES | ||||||||||||
Notes payable | 37,129 | 33,927 | ||||||||||
Accounts payable and accrued expenses | 1,770 | 2,404 | ||||||||||
Amounts due to affiliates | 68 | 140 | ||||||||||
Other liabilities | 165 | 180 | ||||||||||
TOTAL LIABILITIES (1) | 39,398 | 45,886 | ||||||||||
Deferred Costs | 1,000 | |||||||||||
Sunset and Gardner Joint Venture [Member] | Subsequent Contribution [Member] | ||||||||||||
Payments to Acquire Interest in Joint Venture | 6,800 | |||||||||||
Wilshire Joint Venture [Member] | Subsequent Contribution [Member] | ||||||||||||
Payments to Acquire Interest in Joint Venture | $ 3,100 | 7,000 | ||||||||||
Variable Interest Entity, Primary Beneficiary [Member] | ||||||||||||
Properties under development and development costs: | ||||||||||||
Land | 25,851 | 25,851 | ||||||||||
Buildings | 546 | 554 | ||||||||||
Development costs | 25,277 | 20,813 | ||||||||||
Properties under development and development costs | 51,674 | 47,218 | ||||||||||
Cash, cash equivalents and restricted cash | 330 | 2,154 | ||||||||||
Prepaid expenses and other assets, net | 45 | 7 | ||||||||||
Lease intangibles, net | 73 | 4 | ||||||||||
Total assets | [2] | 52,122 | 49,383 | |||||||||
LIABILITIES | ||||||||||||
Notes payable | [3] | 19,788 | 16,713 | |||||||||
Accounts payable and accrued expenses | 1,276 | 1,702 | ||||||||||
Amounts due to affiliates | 61 | 111 | ||||||||||
Other liabilities | 25 | 5 | ||||||||||
TOTAL LIABILITIES (1) | 21,150 | 18,531 | ||||||||||
Deferred Costs | $ 300 | $ 500 | ||||||||||
|
LEASES (Details Textual) - USD ($) $ in Millions |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Leases [Abstract] | ||
Lessee, Operating Lease, Term of Contract | 14 years 3 months 18 days | |
Operating Leases Weighted Average Remaining Term | 7 years 8 months 12 days | |
Security Deposit | $ 0.1 | $ 0.2 |
LEASES LEASES (Income from Real Estate Operations) (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|||||
Leases [Abstract] | ||||||||
Lease income - operating leases | $ 553 | $ 719 | $ 1,189 | $ 1,421 | ||||
Variable lease income (1) | 101 | 220 | [1] | 272 | 462 | [1] | ||
Rental and reimbursements income | $ 654 | $ 939 | $ 1,461 | $ 1,883 | ||||
|
LEASES LEASES (Rental Income Outstanding and Deferred) (Details) - USD ($) $ in Thousands |
Jul. 31, 2020 |
Jun. 30, 2020 |
---|---|---|
Subsequent Event [Line Items] | ||
Accounts Receivable, before Allowance for Credit Loss | $ 400 | |
Deferred Accounts Receivable | $ 50 | |
Subsequent Event [Member] | ||
Subsequent Event [Line Items] | ||
Subsequent collection of outstanding accounts receivable | $ 45 | |
Subsequent collection of outstanding accounts receivable, percent | 12.00% |
LEASES (Future Minimum Lease Payments) (Details) $ in Thousands |
Jun. 30, 2020
USD ($)
|
---|---|
Operating Leases, Future Minimum Payments Receivable [Abstract] | |
Remainder of 2020 | $ 1,002 |
2021 | 2,036 |
2022 | 2,053 |
2023 | 2,078 |
2024 | 2,031 |
Thereafter | 7,062 |
Total | $ 16,262 |
LEASE INTANGIBLES AND BELOW-MARKET LEASE LIABILITIES (Details) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Finite-Lived Intangible Assets, Net [Abstract] | ||
Lease Intangibles, Cost | $ 2,119 | $ 2,084 |
Lease Intangibles, Accumulated amortization | (756) | (763) |
Lease intangibles, net | 1,363 | 1,321 |
Below - Market Lease Liabilities, Cost | (449) | (492) |
Below - Market Lease Liabilities, Accumulated amortization | 183 | 196 |
Below Market Lease, Net | $ (266) | $ (296) |
LEASE INTANGIBLES AND BELOW-MARKET LEASE LIABILITIES LEASE INTANGIBLE AND BELOW-MARKET LEASE AMORTIZATION (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Amortization [Abstract] | ||||
Amortization of Intangible Assets | $ (62) | $ (90) | $ (126) | $ (178) |
Amortization of Below-Market Lease Liabilities | $ 15 | $ 16 | $ 30 | $ 32 |
NOTES PAYABLE, NET NOTES PAYABLE, NET (Multi-Property Secured Financing) (Details) $ in Millions |
6 Months Ended |
---|---|
Jun. 30, 2020
USD ($)
| |
Debt Instrument [Line Items] | |
Secured Debt | $ 18.0 |
Secured Debt [Member] | |
Debt Instrument [Line Items] | |
Debt Instrument, Maturity Date | Jan. 09, 2023 |
Debt Instrument, Description of Variable Rate Basis | 30-day LIBOR |
Debt Instrument, Basis Spread on Variable Rate | 2.80% |
Secured Debt [Member] | Minimum [Member] | |
Debt Instrument [Line Items] | |
Debt Instrument, Basis Spread on Variable Rate | 1.50% |
Measurement Input, Default Rate [Member] | Secured Debt [Member] | |
Debt Instrument [Line Items] | |
Debt Instrument, Basis Spread on Variable Rate | 5.00% |
NOTES PAYABLE, NET (Line Of Credit) (Details) - Secured Line Of Credit [Member] - USD ($) $ in Millions |
6 Months Ended | |||
---|---|---|---|---|
Feb. 15, 2017 |
Jun. 30, 2020 |
Jan. 08, 2020 |
Nov. 07, 2019 |
|
Debt Instrument [Line Items] | ||||
Line of Credit Facility, Current Borrowing Capacity | $ 60.0 | $ 10.5 | $ 30.0 | |
Line of Credit Facility, Maximum Borrowing Capacity | $ 30.0 | $ 30.0 | $ 60.0 | |
Line of Credit Facility, Expiration Date | Feb. 15, 2020 | |||
Usage Under Credit Facility | 50.00% | |||
Minimum [Member] | ||||
Debt Instrument [Line Items] | ||||
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage | 0.20% | |||
Maximum [Member] | ||||
Debt Instrument [Line Items] | ||||
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage | 0.30% |
NOTES PAYABLE, NET (Future Principal Payments) (Details) $ in Thousands |
Jun. 30, 2020
USD ($)
|
---|---|
Debt Disclosure [Abstract] | |
Deferred Costs | $ 1,000 |
Schedule of maturities for notes payable outstanding | |
Remainder of 2020 | 8,700 |
2021 | 0 |
2022 | 11,417 |
2022 | 18,000 |
Total (1) | $ 38,117 |
NOTES PAYABLE, NET NOTES PAYABLE, NET (Interest Expense) (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
Dec. 31, 2019 |
|
Short-term Debt [Line Items] | |||||
Interest expense | $ 66 | $ 130 | $ 237 | $ 319 | |
Interest Payable | 200 | 200 | $ 200 | ||
Variable Interest Entity, Primary Beneficiary [Member] | |||||
Short-term Debt [Line Items] | |||||
Amortization of Debt Issuance Costs | 80 | 200 | 200 | 200 | |
Interest Costs Capitalized | 600 | $ 800 | 1,200 | $ 1,400 | |
Interest Payable | $ 100 | $ 100 | $ 100 |
EQUITY (Share Redemption) (Details) - USD ($) |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
Apr. 01, 2015 |
|
Class of Stock [Line Items] | |||||
Stock Redeemed or Called During Period, Value | $ 249,000 | $ 117,000 | $ 375,000 | ||
Common Stock Outstanding Percentage | 5.00% | 5.00% | |||
Redemption Price for Shares Percentage | 100.00% | 100.00% | |||
Share Redemption Amount Minimum Limit | $ 5,000 | $ 5,000 | |||
Common Stock | |||||
Class of Stock [Line Items] | |||||
Stock Redeemed or Called During Period, Shares | 0 | 41,303 | 19,907 | 62,158 | |
Stock Redeemed or Called During Period, Value | $ 0 | $ 249,000 | $ 117,000 | $ 375,000 | |
Cumulative stock redeemed to date, shares | 878,458 | 878,458 | |||
Cumulative stock redeemed to date, value | $ 6,200,000 | $ 6,200,000 | |||
Death of a shareholder [Member] | |||||
Class of Stock [Line Items] | |||||
Stock Repurchase Program, Authorized Amount | $ 3,800,000 | ||||
Disability of a Shareholder [Member] | |||||
Class of Stock [Line Items] | |||||
Stock Repurchase Program, Authorized Amount | $ 1,200,000 |
EQUITY EQUITY (Quarterly Distribution (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 6 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|---|
Dec. 31, 2019 |
Sep. 30, 2019 |
Jun. 30, 2019 |
Mar. 31, 2019 |
Jun. 30, 2020 |
Dec. 31, 2019 |
|
Dividends Payable [Line Items] | ||||||
Minimum Percentage of Taxable Income Distributed to Shareholders | 90.00% | |||||
Dividends Payable, Date Declared | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | ||
Dividends Payable, Date to be Paid | Jan. 31, 2020 | Oct. 31, 2019 | Jul. 31, 2019 | Apr. 30, 2019 | ||
Common Stock, Dividends, Per Share, Declared | $ 0.02 | $ 0.06 | $ 0.06 | $ 0.06 | ||
Total Common Unit Holders Distribution | $ 5 | $ 13 | $ 14 | $ 14 | $ 46 | |
Stock Dividends | 215 | 646 | 648 | 651 | 2,160 | |
Total Distribution | $ 220 | $ 659 | $ 662 | $ 665 | $ 2,206 |
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|||
Numerator - basic and diluted | ||||||
Net loss | $ (524) | $ (597) | $ (99) | $ (908) | ||
Net loss attributable to non-controlling interests | (10) | (12) | (2) | (19) | ||
Net loss attributable to common shares | $ (514) | $ (585) | $ (97) | $ (889) | ||
Denominator - basic and diluted | ||||||
Basic weighted average common shares | 10,739,729 | 10,839,065 | 10,749,464 | 10,850,842 | ||
Common Units (1) | [1] | 0 | 0 | 0 | 0 | |
Diluted weighted average common shares | 10,739,729 | 10,839,065 | 10,749,464 | 10,850,842 | ||
Loss per common share - basic and diluted | ||||||
Net loss attributable to common shares | $ (0.05) | $ (0.05) | $ (0.01) | $ (0.08) | ||
|
EARNINGS PER SHARE (Details Textual) |
6 Months Ended |
---|---|
Jun. 30, 2020
shares
| |
Earnings Per Share [Abstract] | |
Antidiluted Convertible Common Units of Redemption | 217,475 |
SUBSEQUENT EVENTS Loans Secured by Properties Under Development (Details) - Sunset and Gardner Joint Venture [Member] |
6 Months Ended | |
---|---|---|
Jul. 31, 2020 |
Jun. 30, 2020 |
|
Short-term Debt [Line Items] | ||
Debt Instrument, Interest Rate, Stated Percentage | 6.90% | |
Debt Instrument, Maturity Date | Oct. 31, 2020 | |
Subsequent Event [Member] | ||
Short-term Debt [Line Items] | ||
Debt Instrument, Interest Rate, Stated Percentage | 7.30% | |
Debt Instrument, Maturity Date | Oct. 31, 2021 |
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