þ | ANNUAL 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 |
Maryland | 27-0331816 | |
(State or other jurisdiction of | (I.R.S. Employer | |
incorporation or organization) | Identification No.) | |
1845 Walnut Street, 18th Floor, Philadelphia, PA 19103 | ||
(Address of principal executive offices) (Zip code) | ||
(215) 231-7050 | ||
(Registrant's telephone number, including area code) | ||
Securities registered pursuant to Section 12(b) of the Act: | ||
Title of each class | Name of exchange on which registered | |
None | None | |
Securities registered pursuant to Section 12(g) of the Act: | ||
Common Stock, par value $.01 per share |
Large accelerated filer | o | Accelerated filer | o | |
Non-accelerated filer | þ | (Do not check if a smaller reporting company) | Smaller reporting company | o |
Emerging growth company | o |
PAGE | ||
PART 1 | ||
Item 1. | ||
Item 1A. | ||
Item 1B. | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
PART II | ||
Item 5. | ||
Item 6 | ||
Item 7. | ||
Item 7A. | ||
Item 8. | ||
Item 9. | ||
Item 9A. | ||
Item 9B. | ||
PART III | ||
Item 10. | ||
Item 11. | ||
Item 12. | ||
Item 13. | ||
Item 14. | ||
PART IV. | ||
Item 15. | ||
ITEM 1. | BUSINESS |
• | where we may acquire real estate investments; |
• | the amounts that may be invested in properties as compared with the amounts that we may invest in real estate-related debt investments or mortgage loans, each of which may be leveraged and will have differing risks and profit potential; or |
• | the amounts that may be invested in any one real estate investment (the greater the amounts invested in one asset, the greater the potential adverse effect on us if that asset is unprofitable). |
• | the continuation, renewal or enforcement of our agreements with our Advisor and its affiliates, including the advisory agreement and the management agreement; |
• | sales of properties and other investments, which may entitle our Advisor to disposition fees and the possible issuance to our Advisor of shares of our common stock through the conversion of our convertible stock; |
• | acquisitions of properties and investments in loans, which entitle our Advisor to acquisition and asset management fees, and, in the case of acquisitions or investments from other sponsored programs, might entitle affiliates of our Advisor to disposition fees in connection with its services for the seller; |
• | borrowings to acquire properties and other investments, which borrowings will increase the acquisition, debt financing, and asset management fees payable to our Advisor; |
• | whether and when we seek to list our common stock on a national securities exchange, which listing could entitle our Advisor to the issuance of shares of our common stock through the conversion of our convertible stock; |
• | whether we internalize our management, which may entail significant payments to affiliates of our Advisor; and |
• | whether and when we seek to sell the company or its assets, which sale could entitle our Advisor to disposition fees and to the issuance of shares of our common stock through the conversion of our convertible stock. |
• | stagger our board of directors into three classes; |
• | require a two-thirds stockholder vote for removal of directors; |
• | provide that only the board can fix the size of the board; |
• | provide that all vacancies on the board, however created, may be filled only by the affirmative vote of a majority of the remaining directors in office; and |
• | require that special stockholder meetings may only be called by holders of a majority of the voting shares entitled to be cast at the meeting. |
• | downturns in national, regional and local economic conditions; |
• | competition; |
• | adverse local conditions, such as oversupply or reduction in demand and changes in real estate zoning laws that may reduce the desirability of real estate in an area; |
• | vacancies, changes in market rental rates and the need to periodically repair, renovate and re-let space; |
• | changes in the supply of or the demand for similar or competing properties in an area; |
• | changes in interest rates and the availability of permanent mortgage financing, which may render the sale of a property or loan difficult or unattractive; |
• | changes in governmental regulations, including those involving tax, real estate usage, environmental and zoning laws; and |
• | periods of high interest rates and tight money supply. |
• | increased staffing levels; |
• | enhanced technology applications; and |
• | increased marketing efforts. |
• | real estate taxes; |
• | insurance costs; and |
• | maintenance costs. |
• | greater demand for the acquisition of real estate and real estate-related assets, which results in increased prices we must pay for our real estate and real estate-related assets; |
• | delayed investment of our capital; |
• | decreased availability of financing to us; or |
• | reductions in the size or desirability of the potential tenant base for one or more properties that we lease. |
• | make it more difficult for us to find residents to lease units in our apartment communities; |
• | force us to lower our rental prices in order to lease units in our apartment communities; or |
• | substantially reduce our revenues and cash available for distribution. |
• | funds may be expended and management’s time devoted to projects that may not be completed due to a variety of factors, including without limitation, the inability to obtain necessary governmental approvals; |
• | construction costs of a renovation or repositioning project may exceed original estimates, possibly making the project economically unfeasible or the economic return on a repositioned property less than anticipated; |
• | increased material and labor costs, problems with subcontractors, or other costs due to errors and omissions which occur in the renovation process; |
• | projects may be delayed due to required governmental approvals, adverse weather conditions, labor shortages or other unforeseen complications; |
• | occupancy rates and rents at a repositioned property may be less than anticipated; and |
• | the operating expenses at a repositioned property may be higher than anticipated. |
• | In order to continue to qualify as a REIT, we must distribute annually at least 90% of our REIT taxable income (which is determined without regard to the dividends paid deduction or net capital gain for this purpose) to you. |
• | To the extent that we satisfy the distribution requirement but distribute less than 100% of our REIT taxable income, we will be subject to federal corporate income tax on the undistributed income. |
• | We will be subject to a 4% nondeductible excise tax on the amount, if any, by which distributions we pay in any calendar year are less than the sum of 85% of our ordinary income, 95% of our capital gain net income and 100% of our undistributed income from prior years. |
• | If we have net income from the sale of foreclosure property that we hold primarily for sale to customers in the ordinary course of business or other non-qualifying income from foreclosure property, we must pay a tax on that income at the highest corporate income tax rate. |
• | If we sell an asset, other than foreclosure property, that we hold primarily for sale to customers in the ordinary course of business and do not qualify for a safe harbor in the Internal Revenue Code, our gain would be subject to the 100% “prohibited transaction” tax. |
• | Any domestic taxable REIT subsidiary, or TRS, of ours will be subject to federal corporate income tax on its income, and on any non-arm’s-length transactions between us and any TRS, for instance, excessive rents charged to a TRS could be subject to a 100% tax. |
• | We may be subject to tax on income from certain activities conducted as a result of taking title to collateral. |
• | We may be subject to state or local income, property and transfer taxes, such as mortgage recording taxes. |
• | reduces the corporate income tax rate from 35% to 21% (including with respect to our taxable REIT subsidiary); |
• | reduces the rate of U.S. federal withholding tax on distributions made to non-U.S. stockholders by a REIT that are attributable to gains from the sale or exchange of U.S. real property interests from 35% to 21%; |
• | allows an immediate 100% deduction of the cost of certain capital asset investments (generally excluding real estate assets), subject to a phase-down of the deduction percentage over time; |
• | changes the recovery periods for certain real property and building improvements (for example, to 15 years for qualified improvement property under the modified accelerated cost recovery system, and to 30 years (previously 40 years) for residential real property and 20 years (previously 40 years) for qualified improvement property under the alternative depreciation system); |
• | restricts the deductibility of interest expense by businesses (generally, to 30% of the business’ adjusted taxable income) except, among others, real property businesses electing out of such restriction; we have not yet determined whether we and/or our subsidiaries can and/or will make such an election; |
• | requires the use of the less favorable alternative depreciation system to depreciate real property in the event a real property business elects to avoid the interest deduction restriction above; |
• | restricts the benefits of like-kind exchanges that defer capital gains for tax purposes to exchanges of real property; |
• | permanently repeals the “technical termination” rule for partnerships, meaning sales or exchanges of the interests in a partnership will be less likely to, among other things, terminate the taxable year of, and restart the depreciable lives of assets held by, such partnership for tax purposes; |
• | requires accrual method taxpayers to take certain amounts in income no later than the taxable year in which such income is taken into account as revenue in an applicable financial statement prepared under GAAP, which, with respect to certain leases, could accelerate the inclusion of rental income; |
• | eliminates the federal corporate alternative minimum tax; |
• | reduces the highest marginal income tax rate for individuals to 37% from 39.6% (excluding, in each case, the 3.8% Medicare tax on net investment income); |
• | generally allows a deduction for individuals equal to 20% of certain income from pass-through entities, including ordinary dividends distributed by a REIT (excluding capital gain dividends and qualified dividend income), generally resulting in a maximum effective federal income tax rate applicable to such dividends of 29.6% compared to 37% (excluding, in each case, the 3.8% Medicare tax on net investment income); and |
• | limits certain deductions for individuals, including deductions for state and local income taxes, and eliminates deductions for miscellaneous itemized deductions (including certain investment expenses). |
• | the investment is consistent with their fiduciary and other obligations under ERISA and the Internal Revenue Code; |
• | the investment is made in accordance with the documents and instruments governing the plan or IRA, including the plan’s or account’s investment policy; |
• | the investment satisfies the prudence and diversification requirements of Sections 404(a)(1)(B) and 404(a)(1)(C) of ERISA and other applicable provisions of ERISA and the Internal Revenue Code; |
• | the investment in our shares, for which no public market currently exists, is consistent with the liquidity needs of the plan or IRA; |
• | the investment will not produce an unacceptable amount of “unrelated business taxable income” for the plan or IRA; |
• | our stockholders will be able to comply with the requirements under ERISA and the Internal Revenue Code to value the assets of the plan or IRA annually; and |
• | the investment will not constitute a prohibited transaction under Section 406 of ERISA or Section 4975 of the Internal Revenue Code. |
ITEM 1B. | UNRESOLVED STAFF COMMENTS |
Multifamily Community Name | City and State | Number of Units | Date of Acquisition (1) | Purchase Price (2) | Year of Construction | Average Unit Size (Sq. Ft.) | Physical Occupancy Rate (3) | Effective Monthly Revenue per Unit (4) | |||||||||||||
Vista Apartment Homes | (5)(6) | Philadelphia, PA | 133 | 6/17/2011 | $ | 12,000 | 1961 | 876 | 92.5% | $ | 1,598 | ||||||||||
Cannery Lofts | (7) (8) | Dayton, OH | 156 | 5/13/2011 | 7,100 | 1838 | 1,030 | 91.0% | 1,298 | ||||||||||||
Williamsburg | Cincinnati, OH | 976 | 6/20/2012 | 41,250 | 1966 | 1,099 | 86.6% | 1,014 | |||||||||||||
Retreat at Rocky Ridge | Hoover, AL | 206 | 4/18/2013 | 8,500 | 1986 | 869 | 89.9% | 899 | |||||||||||||
Trailpoint at the Woodlands | Houston, TX | 271 | 6/24/2013 | 27,200 | 1981 | 859 | 88.6% | 1,164 | |||||||||||||
The Westside Apartments | Plano, TX | 412 | 7/25/2013 | 32,200 | 1984 | 862 | 93.2% | 1,223 | |||||||||||||
Tech Center Square | Newport News, VA | 208 | 9/9/2013 | 18,250 | 1985 | 803 | 87.0% | 1,129 | |||||||||||||
Verona Apartment Homes | Littleton, CO | 276 | 9/30/2013 | 30,600 | 1985 | 744 | 92.0% | 1,353 | |||||||||||||
Skyview Apartment Homes | Westminster, CO | 224 | 9/30/2013 | 24,250 | 1985 | 748 | 92.0% | 1,250 | |||||||||||||
Maxwell Townhomes | San Antonio, TX | 316 | 12/16/2013 | 22,500 | 1982 | 1,015 | 89.9% | 1,186 | |||||||||||||
Meridian Pointe | Burnsville, MN | 339 | 12/20/2013 | 33,149 | 1988 | 982 | 89.1% | 1,422 | |||||||||||||
Evergreen at Coursey Place | (9) | Baton Rouge, LA | 352 | 1/28/2014 | 15,499 | 2003 | 999 | 86.6% | 1,207 | ||||||||||||
Pinehurst | (10) | Kansas City, MO | 146 | 1/28/2014 | 3,588 | 1983 | 816 | 95.2% | 861 | ||||||||||||
Pheasant Run | (10) | Lee's Summit, MO | 160 | 1/28/2014 | 4,277 | 1985 | 700 | 98.2% | 859 | ||||||||||||
Retreat at Shawnee | (10) | Shawnee, KS | 342 | 1/28/2014 | 5,369 | 1984 | 674 | 94.7% | 794 | ||||||||||||
Pines of York | (11) | Yorktown, VA | 248 | 1/28/2014 | 8,087 | 1974 | 987 | 96.8% | 1,046 | ||||||||||||
The Estates at Johns Creek | Alpharetta, GA | 403 | 3/28/2014 | 70,500 | 1999 | 1457 | 91.6% | 1,805 | |||||||||||||
Perimeter Circle | Atlanta, GA | 194 | 5/19/2014 | 29,500 | 1995 | 961 | 91.2% | 1,564 | |||||||||||||
Perimeter 5550 | Atlanta, GA | 165 | 5/19/2014 | 22,250 | 1995 | 906 | 93.9% | 1,429 | |||||||||||||
Aston at Cinco Ranch | Katy, TX | 228 | 6/26/2014 | 32,300 | 2000 | 1015 | 94.7% | 1,374 | |||||||||||||
Sunset Ridge | San Antonio, TX | 324 | 9/4/2014 | 35,000 | 1949 | 861 | 91.4% | 1,208 | |||||||||||||
Calloway at Las Colinas | Irving, TX | 536 | 9/29/2014 | 48,500 | 1984 | 850 | 93.7% | 1,222 | |||||||||||||
South Lamar Village | Austin, TX | 208 | 2/26/2015 | 24,000 | 1981 | 729 | 88.5% | 1,321 | |||||||||||||
Heritage Pointe | Gilbert, AZ | 458 | 3/19/2015 | 36,000 | 1986 | 697 | 91.9% | 942 | |||||||||||||
The Bryant at Yorba Linda | Yorba Linda, CA | 400 | 6/1/2015 | 118,000 | 1986 | 995 | 90.3% | 1,987 | |||||||||||||
Point Bonita Apartment Homes | Chula Vista, CA | 295 | 6/16/2015 | 49,050 | 1979 | 716 | 92.5% | 1,655 | |||||||||||||
Providence in the Park | Arlington, TX | 524 | 12/22/2016 | 63,200 | 1997 | 893 | 90.1% | 1,243 | |||||||||||||
Green Trails Apartment Homes | Lisle, IL | 440 | 5/31/2017 | 78,000 | 1988 | 828 | 88.4% | 1,474 | |||||||||||||
Terraces at Lake Mary | Lake Mary, FL | 284 | 8/31/2017 | 44,100 | 1998 | 988 | 95.1% | 1,293 | |||||||||||||
Courtney Meadows Apartments | Jacksonville, FL | 276 | 12/20/2017 | 41,400 | 2001 | 1047 | 88.0% | 1,085 | |||||||||||||
9,500 |
(1) | The date of acquisition reflects the date we acquired the property, the note or the initial joint venture interest, where applicable. |
(2) | Purchase price excludes closing costs and acquisition expenses. For properties acquired through foreclosure, the purchase price reflects the contract purchase price of the note. |
(3) | Physical occupancy rate is defined as the units occupied as of December 31, 2017 divided by the total number of residential units. |
(4) | Effective monthly rental revenue per unit has been calculated based on the leases in effect as of December 31, 2017, adjusted for any tenant concessions, such as free rent. Effective monthly rental revenue per unit only includes base rents for occupied units, including affordable housing payments and subsidies. It includes other charges for storage, parking, pets, cleaning, clubhouse or other miscellaneous amounts. |
(5) | In addition to its apartment units, Vista Apartment Homes contains one commercial space which is occupied, and a number of antennae on the roof of the property that generate additional income. |
(6) | Vista Apartment Homes originally served as the collateral for a non-performing promissory note that we purchased on June 17, 2011. The contract purchase price for the note was $12.0 million, excluding closing costs. On August 2, 2011, we were the successful bidder at a sheriff's sale and formally received title to the property. |
(7) | In addition to its apartment units, Cannery Lofts contains 13 commercial spaces, 11 of which are occupied, and one parking garage with parking spaces available to rent. |
(8) | Cannery Lofts originally served as the collateral for a non-performing note that we purchased on May 13, 2011. On December 21, 2011, we entered into a settlement agreement with the borrower whereby the borrower agreed to a consensual foreclosure of the Cannery Note. We formally received title to the property on June 6, 2012. |
(9) | Joint venture interests in this property were originally purchased as a part of the Paladin acquisition in January 2014. The remaining interests in this joint venture were acquired on March 31, 2014. |
(10) | Joint venture interests in this property were originally purchased as a part of the Paladin acquisition in January 2014. The remaining interests in this joint venture were acquired on July 1, 2014. |
(11) | Joint venture interests in this property were originally purchased as a part of the Paladin acquisition in January 2014. The remaining interests in this joint venture were acquired on November 25, 2014. |
ITEM 4. | MINE SAFETY DISCLOSURES |
ITEM 5. | MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES |
December 31, 2017 Net Asset Value | December 31, 2017 Net Asset Value per Share | ||||||
Investments | $ | 1,461,340 | $ | 20.50 | |||
Cash | 117,660 | 1.65 | |||||
Other Assets | 15,459 | 0.22 | |||||
Mortgage Notes Payable and Credit Facility | (802,617 | ) | (11.26 | ) | |||
Other Liabilities | (21,979 | ) | (0.31 | ) | |||
Net asset value | $ | 769,863 | $ | 10.80 |
December 31, 2017 Net Asset Value per Share | December 31, 2016 Net Asset Value per Share (1) | Change in Estimated Value per Share | ||||||||||
Investments | $ | 20.50 | $ | 18.08 | $ | 2.42 | ||||||
Cash | 1.65 | 1.59 | 0.06 | |||||||||
Other Assets | 0.22 | 0.19 | 0.03 | |||||||||
Mortgage Notes Payable and Credit Facility | (11.26 | ) | (8.64 | ) | (2.62 | ) | ||||||
Other Liabilities | (0.31 | ) | (0.28 | ) | (0.03 | ) | ||||||
$ | 10.80 | $ | 10.94 | $ | (0.14 | ) |
Range in Values | Weighted Average Basis | ||
Overall Capitalization Rate | 5.75% to 6.50% | 6.23% |
Range in Values | Weighted Average Basis | ||
Terminal Capitalization Rate | 4.75% to 6.00% | 5.31% | |
Discount Rate | 6.25% to 7.50% | 6.83% |
Change in Estimated Value per Share | ||||||||
Increase of 25 Basis Points | Decrease of 25 Basis Points | Increase of 5% | Decrease of 5% | |||||
Overall Capitalization Rate | $10.62 | $10.99 | $10.58 | $11.04 | ||||
Discount Rate | $10.74 | $10.86 | $10.72 | $10.88 |
• | a stockholder would be able to resell his or her shares at the estimated value per share; |
• | a stockholder would ultimately realize distributions per share equal to our estimated value per share upon liquidation of our assets and settlement of its liabilities or a sale of our company; |
• | our shares of common stock would trade at the estimated value per share on a national securities exchange; |
• | a third party would offer the estimated value per share in an arm’s-length transaction to purchase all or substantially all of our shares of common stock; |
• | another independent third-party appraiser or third-party valuation firm would agree with the our estimated value per share; or |
• | the methodology used to calculate our estimated value per share would be acceptable to FINRA or for compliance with ERISA reporting requirements. |
Period | Total Number of Shares Redeemed (1) | Average Price Paid per Share | Cumulative Number of Shares Purchased as Part of a Publicly Announced Plan or Program (2) | Approximate Dollar Value of Shares Available That May Yet Be Redeemed Under the Program | ||||||
October 2017 | — | $ | — | — | (3) | |||||
November 2017 | — | $ | — | — | (3) | |||||
December 2017 | 856,120 | $ | 10.94 | 3,190,000 | (3) | |||||
856,120 |
Record Date | Per Common Share | Distribution Date | Distributions reinvested in shares of Common Stock | Net Cash Distributions | Total Aggregate Distributions | |||||||||||||
January 30, 2017 | $ | 0.05 | January 31, 2017 | $ | 2,329 | $ | 1,272 | $ | 3,601 | |||||||||
February 27, 2017 | 0.05 | February 28, 2017 | 2,308 | 1,303 | 3,611 | |||||||||||||
March 30, 2017 | 0.05 | March 31, 2017 | 2,274 | 1,314 | 3,588 | |||||||||||||
April 27, 2017 | 0.05 | April 28, 2017 | 2,273 | 1,324 | 3,597 | |||||||||||||
May 30, 2017 | 0.05 | May 31, 2017 | 2,258 | 1,350 | 3,608 | |||||||||||||
June 29, 2017 | 0.05 | June 30, 2017 | 2,249 | 1,322 | 3,571 | |||||||||||||
July 28, 2017 | 0.05 | July 31, 2017 | 2,247 | 1,333 | 3,580 | |||||||||||||
August 30, 2017 | 0.05 | August 31, 2017 | 2,250 | 1,340 | 3,590 | |||||||||||||
September 28, 2017 | 0.05 | September 29, 2017 | 2,233 | 1,335 | 3,568 | |||||||||||||
October 30, 2017 | 0.05 | October 31, 2017 | 2,237 | 1,339 | 3,576 | |||||||||||||
November 29, 2017 | 0.05 | November 30, 2017 | 2,239 | 1,349 | 3,588 | |||||||||||||
December 28, 2017 | 0.05 | December 29, 2017 | 2,217 | 1,338 | 3,555 | |||||||||||||
$ | 0.60 | $ | 27,114 | $ | 15,919 | $ | 43,033 |
Distributions Paid | Distributions Declared | Sources of Distributions Paid | |||||||||||||||||||||||
Amount Paid/Percent of Total | |||||||||||||||||||||||||
2017 | Cash | Distributions Reinvested (DRIP) | Total | Cash Provided By Operating Activities | Total | Per Share | Operating Activities | Debt Financing | Dispositions | ||||||||||||||||
First Quarter | $ | 3,889 | $ | 6,911 | $ | 10,800 | $ | 3,433 | $ | 10,800 | $0.15 | $3,433 / 32% | $7,367 / 68% | — | |||||||||||
Second Quarter | $ | 3,997 | $ | 6,780 | $ | 10,777 | $ | 1,167 | $ | 10,777 | $0.15 | $1,167 / 11% | — | $9,610 / 89% | |||||||||||
Third Quarter | $ | 4,007 | $ | 6,730 | $ | 10,737 | $ | 5,237 | $ | 10,737 | $0.15 | $5,237 / 49% | — | $5,500 / 51% | |||||||||||
Fourth Quarter | $ | 4,026 | $ | 6,693 | $ | 10,719 | $ | 2,151 | $ | 10,719 | $0.15 | $2,151 / 20% | — | $8,868 / 80% | |||||||||||
Total | $ | 15,919 | $ | 27,114 | $ | 43,033 | $ | 11,988 | $ | 43,033 | $0.60 | $11,988/ 28% | $7,367 / 17% | $23,678 / 55% |
As of and for the years ended December 31, | |||||||||||||||||||
Statement of operations data: | 2017 | 2016 | 2015 | 2014 | 2013 | ||||||||||||||
Revenues: | |||||||||||||||||||
Rental income | $ | 125,450 | $ | 117,745 | $ | 117,687 | $ | 99,910 | $ | 40,790 | |||||||||
Gain on foreclosures | — | — | — | — | 3,459 | ||||||||||||||
Interest and dividend income | 239 | 622 | 638 | 359 | 262 | ||||||||||||||
Total revenues | 125,689 | 118,367 | 118,325 | 100,269 | 44,511 | ||||||||||||||
Total expenses | 141,580 | 131,262 | 149,626 | 144,465 | 65,518 | ||||||||||||||
Loss before other income (expense) | (15,891 | ) | (12,895 | ) | (31,301 | ) | (44,196 | ) | (21,007 | ) | |||||||||
Other income (expense): | |||||||||||||||||||
Net gains on dispositions of properties and joint venture interests | 22,735 | 45,057 | 36,041 | 10,484 | — | ||||||||||||||
Interest expense | (28,963 | ) | (22,776 | ) | (22,080 | ) | (14,911 | ) | (951 | ) | |||||||||
Insurance proceeds in excess of cost basis | 150 | 985 | 407 | 425 | — | ||||||||||||||
Total other income (expense) | (6,078 | ) | 23,266 | 14,368 | (4,002 | ) | (951 | ) | |||||||||||
Discontinued operations: | |||||||||||||||||||
Loss from discontinued operations | — | — | — | — | (701 | ) | |||||||||||||
Net gains on dispositions of properties | — | — | — | — | 3,173 | ||||||||||||||
Income from discontinued operations, net | — | — | — | — | 2,472 | ||||||||||||||
Income (loss) from continuing operations | (21,969 | ) | 10,371 | (16,933 | ) | (48,198 | ) | (21,958 | ) | ||||||||||
Income (loss) from discontinued operations | — | — | — | — | 2,472 | ||||||||||||||
Net (loss) income | (21,969 | ) | 10,371 | (16,933 | ) | (48,198 | ) | (19,486 | ) | ||||||||||
Net (income) loss attributable to noncontrolling interests | — | (6,306 | ) | 38 | 2,021 | — | |||||||||||||
Net (loss) income attributable to common stockholders | $ | (21,969 | ) | $ | 4,065 | $ | (16,895 | ) | $ | (46,177 | ) | $ | (19,486 | ) | |||||
Basic and diluted (loss) earnings per share attributable to common stockholders: | |||||||||||||||||||
Continuing operations | $ | (0.31 | ) | $ | 0.06 | $ | (0.24 | ) | $ | (0.68 | ) | $ | (0.56 | ) | |||||
Discontinued operations | — | — | — | — | 0.06 | ||||||||||||||
Net (loss) income | $ | (0.31 | ) | $ | 0.06 | $ | (0.24 | ) | $ | (0.68 | ) | $ | (0.50 | ) | |||||
Dividends declared per common share | $ | 0.60 | $ | 0.60 | $ | 0.60 | $ | 0.45 | $ | 0.37 | |||||||||
Balance sheet data: | |||||||||||||||||||
Total assets | $ | 1,135,792 | $ | 1,034,985 | $ | 1,084,695 | $ | 972,556 | $ | 675,721 | |||||||||
Borrowings | $ | 794,671 | $ | 622,152 | $ | 613,439 | $ | 483,901 | $ | 146,014 | |||||||||
Total stockholders' equity attributable to common stockholders | $ | 318,592 | $ | 390,593 | $ | 425,246 | $ | 460,133 | $ | 517,047 | |||||||||
Total equity | $ | 318,592 | $ | 392,019 | $ | 433,099 | $ | 468,354 | $ | 517,047 |
ITEM 7. | MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
For the Years Ended | ||||||||||||
December 31, | ||||||||||||
2017 | 2016 | 2015 | ||||||||||
Revenues: | ||||||||||||
Rental income | $ | 125,450 | $ | 117,745 | $ | 117,687 | ||||||
Interest and dividend income | 239 | 622 | 638 | |||||||||
Total revenues | 125,689 | 118,367 | 118,325 | |||||||||
Expenses: | ||||||||||||
Rental operating - expenses | 27,211 | 27,608 | 34,167 | |||||||||
Rental operating - payroll | 13,652 | 14,790 | 16,769 | |||||||||
Rental operating - real estate taxes | 14,454 | 12,668 | 13,154 | |||||||||
Subtotal - Rental operating expenses | 55,317 | 55,066 | 64,090 | |||||||||
Acquisition costs | 4,469 | 1,582 | 5,811 | |||||||||
Management fees | 16,921 | 15,724 | 15,453 | |||||||||
General and administrative | 11,061 | 13,083 | 12,776 | |||||||||
Loss on disposal of assets | 1,468 | 1,576 | 3,093 | |||||||||
Provision for loan loss | — | — | 130 | |||||||||
Depreciation and amortization expense | 52,344 | 44,231 | 48,273 | |||||||||
Total expenses | 141,580 | 131,262 | 149,626 | |||||||||
Loss before other income (expense) | (15,891 | ) | (12,895 | ) | (31,301 | ) | ||||||
Other income (expense): | ||||||||||||
Net gains on dispositions of properties and joint venture interests | 22,735 | 45,057 | 36,041 | |||||||||
Interest expense | (28,963 | ) | (22,776 | ) | (22,080 | ) | ||||||
Insurance proceeds in excess of cost basis | 150 | 985 | 407 | |||||||||
Total other income (expense) | (6,078 | ) | 23,266 | 14,368 | ||||||||
Net (loss) income | $ | (21,969 | ) | $ | 10,371 | $ | (16,933 | ) | ||||
Net (income) loss attributable to noncontrolling interests | — | (6,306 | ) | 38 | ||||||||
Net (loss) income attributable to common stockholders | $ | (21,969 | ) | $ | 4,065 | $ | (16,895 | ) |
For the year ended | For the year ended | ||||||||||||||||||||||||||||||
December 31, 2017 | December 31, 2016 | ||||||||||||||||||||||||||||||
Properties owned both periods | Properties purchased/sold during either period | Company level | Total | Properties owned both periods | Properties purchased/sold during either period | Company level | Total | ||||||||||||||||||||||||
Revenues: | |||||||||||||||||||||||||||||||
Rental income | $ | 108,668 | $ | 16,782 | $ | — | $ | 125,450 | $ | 103,616 | $ | 14,129 | $ | — | $ | 117,745 | |||||||||||||||
Interest and dividend income | 134 | 10 | 95 | 239 | 145 | 451 | 26 | 622 | |||||||||||||||||||||||
Total revenues | 108,802 | 16,792 | 95 | 125,689 | 103,761 | 14,580 | 26 | 118,367 | |||||||||||||||||||||||
Expenses: | |||||||||||||||||||||||||||||||
Rental operating - expenses | 23,448 | 3,756 | 7 | 27,211 | 23,660 | 3,930 | 18 | 27,608 | |||||||||||||||||||||||
Rental operating - payroll | 11,797 | 1,855 | — | 13,652 | 12,825 | 1,965 | — | 14,790 | |||||||||||||||||||||||
Rental operating - real estate taxes | 11,786 | 2,668 | — | 14,454 | 11,460 | 1,208 | — | 12,668 | |||||||||||||||||||||||
Subtotal - Rental operating expenses | 47,031 | 8,279 | 7 | 55,317 | 47,945 | 7,103 | 18 | 55,066 | |||||||||||||||||||||||
Acquisition costs | — | 4,469 | — | 4,469 | 81 | 1,501 | — | 1,582 | |||||||||||||||||||||||
Management fees | 4,816 | 751 | 11,354 | 16,921 | 4,620 | 605 | 10,499 | 15,724 | |||||||||||||||||||||||
General and administrative | 3,621 | 715 | 6,725 | 11,061 | 3,994 | 815 | 8,274 | 13,083 | |||||||||||||||||||||||
Loss on disposal of assets | 431 | 1,037 | — | 1,468 | 736 | 840 | — | 1,576 | |||||||||||||||||||||||
Depreciation and amortization expense | 43,672 | 8,672 | — | 52,344 | 40,626 | 3,605 | — | 44,231 | |||||||||||||||||||||||
Total expenses | 99,571 | 23,923 | 18,086 | 141,580 | 98,002 | 14,469 | 18,791 | 131,262 | |||||||||||||||||||||||
Income (loss) before other income (expense) | 9,231 | (7,131 | ) | (17,991 | ) | (15,891 | ) | 5,759 | 111 | (18,765 | ) | (12,895 | ) | ||||||||||||||||||
Other income (expense): | |||||||||||||||||||||||||||||||
Net gains on dispositions of properties and joint venture interests | — | 22,735 | — | 22,735 | — | 45,057 | — | 45,057 | |||||||||||||||||||||||
Interest expense | (24,086 | ) | (4,558 | ) | (319 | ) | (28,963 | ) | (19,916 | ) | (2,389 | ) | (471 | ) | (22,776 | ) | |||||||||||||||
Insurance proceeds in excess of cost basis | 124 | 26 | — | 150 | 522 | 463 | — | 985 | |||||||||||||||||||||||
Total other income (expense) | (23,962 | ) | 18,203 | (319 | ) | (6,078 | ) | (19,394 | ) | 43,131 | (471 | ) | 23,266 | ||||||||||||||||||
Net (loss) income | (14,731 | ) | 11,072 | (18,310 | ) | (21,969 | ) | (13,635 | ) | 43,242 | (19,236 | ) | 10,371 | ||||||||||||||||||
Net income attributable to noncontrolling interests | — | — | — | — | — | (6,306 | ) | — | (6,306 | ) | |||||||||||||||||||||
Net (loss) income attributable to common stockholders | $ | (14,731 | ) | $ | 11,072 | $ | (18,310 | ) | $ | (21,969 | ) | $ | (13,635 | ) | $ | 36,936 | $ | (19,236 | ) | $ | 4,065 |
Multifamily Community Name | Rental increase (in thousands) | Increase/(decrease) in occupancy | Change in Effective Monthly Revenue per Unit (in dollars) | ||||||
Calloway at Las Colinas | $ | 715 | 0.75 | % | $110 | ||||
Meridian Pointe | 532 | 1.14 | % | 126 | |||||
Heritage Pointe | 525 | 1.68 | % | 90 | |||||
Village of Bonita Glen | 461 | (2.40 | )% | 176 | |||||
Williamsburg | 455 | (2.93 | )% | 74 | |||||
South Lamar Village | 279 | 2.69 | % | 89 | |||||
Perimeter Circle | 268 | 0.31 | % | 119 | |||||
Perimeter 5550 | 256 | (1.20 | )% | 155 | |||||
The Westside Apartments | 225 | (1.89 | )% | 72 | |||||
Estates at Johns Creek | 203 | (1.09 | )% | 67 | |||||
All other, net | 1,133 | ||||||||
$ | 5,052 |
Properties owned both periods | All Other Properties | Total | |||||||||
Depreciation | $ | 3,169 | $ | 1,558 | $ | 4,726 | |||||
Amortization of intangibles | (123 | ) | 3,510 | 3,387 | |||||||
$ | 3,046 | $ | 5,067 | $ | 8,113 |
Multifamily Community | Location | Sale Date | Contract Sales price | Net Gains on Dispositions of Properties and Joint Venture Interests | ||||||||
2017 Dispositions: | ||||||||||||
Chisholm Place | Plano, Texas | May 10, 2017 | $ | 21,250 | $ | 6,922 | ||||||
Mosaic | Oklahoma City, Oklahoma | May 12, 2017 | 6,100 | 1,513 | ||||||||
Deerfield | Hermantown, Minnesota | August 16, 2017 | 23,600 | 11,035 | ||||||||
Stone Ridge | Columbia, South Carolina | September 27, 2017 | 10,534 | 3,265 | ||||||||
$ | 61,484 | $ | 22,735 | |||||||||
2016 Dispositions: | ||||||||||||
Conifer Place (1) | Norcross, Georgia | January 27, 2016 | $ | 42,500 | $ | 9,897 | ||||||
Champion Farms | Louisville, Kentucky | January 29, 2016 | 7,590 | 1,066 | ||||||||
The Ivy at Clear Creek | Houston, Texas | February 17, 2016 | 19,400 | 6,792 | ||||||||
Affinity at Winter Park | Winter Park, Florida | June 9, 2016 | 17,500 | 5,605 | ||||||||
Fieldstone | Woodland, Ohio | June 30, 2016 | 7,514 | 4,096 | ||||||||
The Nesbit Palisades | Alpharetta, Georgia | July 8, 2016 | 45,500 | 17,601 | ||||||||
$ | 140,004 | $ | 45,057 |
For the year ended | For the year ended | ||||||||||||||||||||||||||||||
December 31, 2016 | December 31, 2015 | ||||||||||||||||||||||||||||||
Properties owned both periods | Properties purchased/sold during either period | Company level | Total | Properties owned both periods | Properties purchased/sold during either period | Company level | Total | ||||||||||||||||||||||||
Revenues: | |||||||||||||||||||||||||||||||
Rental income | $ | 91,648 | $ | 26,097 | $ | — | $ | 117,745 | $ | 81,826 | $ | 35,861 | $ | — | $ | 117,687 | |||||||||||||||
Interest and dividend income | 108 | 488 | 26 | 622 | 106 | 502 | 30 | 638 | |||||||||||||||||||||||
Total revenues | 91,756 | 26,585 | 26 | 118,367 | 81,932 | 36,363 | 30 | 118,325 | |||||||||||||||||||||||
Expenses: | |||||||||||||||||||||||||||||||
Rental operating - expenses | 22,150 | 5,440 | 18 | 27,608 | 23,580 | 10,526 | 61 | 34,167 | |||||||||||||||||||||||
Rental operating - payroll | 11,725 | 3,065 | — | 14,790 | 11,873 | 4,896 | — | 16,769 | |||||||||||||||||||||||
Rental operating - real estate taxes | 9,587 | 3,081 | — | 12,668 | 9,645 | 3,509 | — | 13,154 | |||||||||||||||||||||||
Subtotal - rental operating expenses | 43,462 | 11,586 | 18 | 55,066 | 45,098 | 18,931 | 61 | 64,090 | |||||||||||||||||||||||
Acquisition costs | 61 | 1,521 | — | 1,582 | — | 5,811 | — | 5,811 | |||||||||||||||||||||||
Management fees | 4,084 | 1,141 | 10,499 | 15,724 | 3,639 | 1,541 | 10,273 | 15,453 | |||||||||||||||||||||||
General and administrative | 3,724 | 1,085 | 8,274 | 13,083 | 4,062 | 1,952 | 6,762 | 12,776 | |||||||||||||||||||||||
Loss on disposal of assets | 640 | 936 | — | 1,576 | 869 | 2,224 | — | 3,093 | |||||||||||||||||||||||
Provision for loan loss | — | — | — | — | — | 130 | — | 130 | |||||||||||||||||||||||
Depreciation and amortization expense | 35,611 | 8,620 | — | 44,231 | 33,505 | 14,768 | — | 48,273 | |||||||||||||||||||||||
Total expenses | 87,582 | 24,889 | 18,791 | 131,262 | 87,173 | 45,357 | 17,096 | 149,626 | |||||||||||||||||||||||
Loss before other income (expense) | 4,174 | 1,696 | (18,765 | ) | (12,895 | ) | (5,241 | ) | (8,994 | ) | (17,066 | ) | (31,301 | ) | |||||||||||||||||
Other income (expense): | |||||||||||||||||||||||||||||||
Net gains on dispositions of properties and joint venture interests | — | 45,057 | — | 45,057 | — | 36,041 | — | 36,041 | |||||||||||||||||||||||
Interest expense | (16,806 | ) | (5,499 | ) | (471 | ) | (22,776 | ) | (15,834 | ) | (5,723 | ) | (523 | ) | (22,080 | ) | |||||||||||||||
Insurance proceeds in excess of cost basis | 985 | — | — | 985 | 407 | — | — | 407 | |||||||||||||||||||||||
Total other income (expense) | (15,821 | ) | 39,558 | (471 | ) | 23,266 | (15,427 | ) | 30,318 | (523 | ) | 14,368 | |||||||||||||||||||
Net income (loss) | (11,647 | ) | 41,254 | (19,236 | ) | 10,371 | (20,668 | ) | 21,324 | (17,589 | ) | (16,933 | ) | ||||||||||||||||||
Net (income) loss attributable to noncontrolling interests | — | (6,306 | ) | — | (6,306 | ) | — | 38 | — | 38 | |||||||||||||||||||||
Net income (loss) attributable to common stockholders | $ | (11,647 | ) | $ | 34,948 | $ | (19,236 | ) | $ | 4,065 | $ | (20,668 | ) | $ | 21,362 | $ | (17,589 | ) | $ | (16,895 | ) |
Multifamily Community Name | Rental increase (in thousands) | Increase/(decrease) in occupancy | Increase in Effective Monthly Revenue per Unit (in dollars) | ||||||||
Meridian Pointe | $ | 1,005 | 4.15 | % | $ | 237 | |||||
Maxwell Townhomes | 973 | 4.68 | % | $ | 231 | ||||||
Estates at John's Creek | 896 | 3.55 | % | $ | 141 | ||||||
Calloway at Las Colinas | 876 | 6.94 | % | $ | 71 | ||||||
The Westside Apartments | 697 | (0.75 | )% | $ | 159 | ||||||
Verona Apartment Homes | 584 | 11.62 | % | $ | 38 | ||||||
Tech Center Square | 521 | (1.36 | )% | $ | 256 | ||||||
Perimeter Circle | 409 | (0.11 | )% | $ | 193 | ||||||
Skyview Apartment Homes | 402 | 3.49 | % | $ | 119 | ||||||
Perimeter 5550 | 374 | (0.04 | )% | $ | 202 | ||||||
All other, net | 3,085 | ||||||||||
$ | 9,822 |
Properties owned both periods | All Other Properties | Total | |||||||||
Depreciation | $ | 4,008 | $ | (1,918 | ) | $ | 2,090 | ||||
Amortization of intangibles | (1,902 | ) | (4,230 | ) | (6,132 | ) | |||||
$ | 2,106 | $ | (6,148 | ) | $ | (4,042 | ) |
Multifamily Community | Location | Sale Date | Contract Sales price | Net Gains on Dispositions of Properties and Joint Venture Interests | ||||||||
2016 Dispositions: | ||||||||||||
Conifer Place (1) | Norcross, Georgia | January 27, 2016 | $ | 42,500 | $ | 9,897 | ||||||
Champion Farms | Louisville, Kentucky | January 29, 2016 | 7,590 | 1,066 | ||||||||
The Ivy at Clear Creek | Houston, Texas | February 17, 2016 | 19,400 | 6,792 | ||||||||
Affinity at Winter Park | Winter Park, Florida | June 9, 2016 | 17,500 | 5,605 | ||||||||
Fieldstone | Woodland, Ohio | June 30, 2016 | 7,514 | 4,096 | ||||||||
The Nesbit Palisades | Alpharetta, Georgia | July 8, 2016 | 45,500 | 17,601 | ||||||||
$ | 140,004 | $ | 45,057 | |||||||||
2015 Dispositions: | ||||||||||||
The Alcove Apartments | Houston, Texas | January 26, 2015 | $ | 11,050 | $ | 3,784 | ||||||
107th Avenue Apartments | Omaha, Nebraska | January 29, 2015 | 250 | 50 | ||||||||
The Redford Apartments | Houston, Texas | February 27, 2015 | 32,959 | 15,303 | ||||||||
Cityside Apartments | Houston, Texas | March 2, 2015 | 24,500 | 10,028 | ||||||||
One Hundred Chevy Chase | Lexington, Kentucky | June 30, 2015 | 13,500 | 4,386 | ||||||||
The Reserve at Mt. Moriah | Memphis, Tennessee | September 18, 2015 | 5,425 | 2,490 | ||||||||
$ | 87,684 | $ | 36,041 |
Capital deployed during the year ended | Remaining capital budgeted | |||||||
Property | December 31, 2017 | |||||||
The Bryant at Yorba Linda | $ | 4,185 | $ | 8,157 | ||||
Point Bonita Apartment Homes | 2,302 | 2,030 | ||||||
Providence in the Park | 1,896 | 3,882 | ||||||
Heritage Pointe | 1,552 | 2,768 | ||||||
Calloway at Las Colinas | 1,325 | 1,657 | ||||||
Meridian Pointe | 1,263 | 116 | ||||||
The Estates At Johns Creek | 1,168 | 767 | ||||||
Williamsburg | 1,123 | 425 | ||||||
South Lamar Village | 979 | 369 | ||||||
Sunset Ridge | 715 | 538 | ||||||
All other properties | 5,084 | 13,155 | ||||||
$ | 21,592 |
Shares Issued | Gross Proceeds | ||||||
Shares issued through private offering | 1,263,727 | $ | 12,582 | ||||
Shares issued through primary public offering (1) | 62,485,461 | 622,077 | |||||
Shares issued through stock distributions | 2,132,266 | — | |||||
Shares issued through distribution reinvestment plan | 11,560,597 | 118,502 | |||||
Shares issued in conjunction with the Advisor's initial investment, net of 4,500 share conversion | 15,500 | 155 | |||||
Total | 77,457,551 | $ | 753,316 | ||||
Shares redeemed and retired | (6,158,084 | ) | |||||
Total shares outstanding as of December 31, 2017 | 71,299,467 |
December 31, 2017 | December 31, 2016 | |||||||||||||||||||||||||||||||
Outstanding borrowings | Premium (Discount) | Deferred finance costs, net | Carrying Value | Outstanding borrowings | Premium (Discount) | Deferred finance costs, net | Carrying Value | |||||||||||||||||||||||||
Collateral | ||||||||||||||||||||||||||||||||
Vista Apartment Homes | $ | 14,896 | $ | — | $ | (140 | ) | $ | 14,756 | $ | 15,225 | $ | — | $ | (178 | ) | $ | 15,047 | ||||||||||||||
Cannery Lofts | 13,100 | — | (165 | ) | 12,935 | 13,100 | — | (197 | ) | 12,903 | ||||||||||||||||||||||
Deerfield | — | — | — | — | 10,359 | — | (125 | ) | 10,234 | |||||||||||||||||||||||
Trailpoint at the Woodlands | 18,368 | — | (188 | ) | 18,180 | 18,690 | — | (222 | ) | 18,468 | ||||||||||||||||||||||
Verona Apartment Homes | 32,970 | — | (475 | ) | 32,495 | 32,970 | — | (532 | ) | 32,438 | ||||||||||||||||||||||
Skyview Apartment Homes | 28,400 | — | (413 | ) | 27,987 | 28,400 | — | (462 | ) | 27,938 | ||||||||||||||||||||||
Maxwell Townhomes | 13,342 | — | (109 | ) | 13,233 | 13,602 | — | (137 | ) | 13,465 | ||||||||||||||||||||||
Pinehurst | 7,339 | — | (128 | ) | 7,211 | 7,350 | — | (154 | ) | 7,196 | ||||||||||||||||||||||
Pheasant Run | 6,250 | — | — | 6,250 | 6,250 | 43 | (9 | ) | 6,284 | |||||||||||||||||||||||
Retreat of Shawnee | 12,682 | 7 | (2 | ) | 12,687 | 12,893 | 85 | (23 | ) | 12,955 | ||||||||||||||||||||||
Evergreen at Coursey Place | 26,639 | 77 | (75 | ) | 26,641 | 27,107 | 100 | (96 | ) | 27,111 | ||||||||||||||||||||||
Pines of York | 14,717 | (235 | ) | (44 | ) | 14,438 | 14,999 | (299 | ) | (56 | ) | 14,644 | ||||||||||||||||||||
Estates at Johns Creek | 48,603 | — | (286 | ) | 48,317 | 49,596 | — | (405 | ) | 49,191 | ||||||||||||||||||||||
Chisholm Place | — | — | — | — | 11,587 | — | (143 | ) | 11,444 | |||||||||||||||||||||||
Perimeter Circle | 16,923 | — | (84 | ) | 16,839 | 17,298 | — | (143 | ) | 17,155 | ||||||||||||||||||||||
Perimeter 5550 | 13,356 | — | (70 | ) | 13,286 | 13,651 | — | (118 | ) | 13,533 | ||||||||||||||||||||||
Aston at Cinco Ranch | 22,942 | — | (210 | ) | 22,732 | 23,367 | — | (268 | ) | 23,099 | ||||||||||||||||||||||
Sunset Ridge 1 | 19,254 | 189 | (150 | ) | 19,293 | 19,699 | 259 | (205 | ) | 19,753 | ||||||||||||||||||||||
Sunset Ridge 2 | 2,890 | 26 | (19 | ) | 2,897 | 2,948 | 35 | (26 | ) | 2,957 | ||||||||||||||||||||||
Calloway at Las Colinas | 34,396 | — | (241 | ) | 34,155 | 35,083 | — | (306 | ) | 34,777 | ||||||||||||||||||||||
South Lamar Village | 12,177 | — | (80 | ) | 12,097 | 12,435 | — | (131 | ) | 12,304 | ||||||||||||||||||||||
Heritage Pointe | 25,912 | — | (284 | ) | 25,628 | 26,280 | — | (327 | ) | 25,953 | ||||||||||||||||||||||
Yorba Linda | 67,500 | — | (461 | ) | 67,039 | 67,500 | — | (661 | ) | 66,839 | ||||||||||||||||||||||
Point Bonita Apartment Homes | 26,525 | 1,660 | (285 | ) | 27,900 | 26,907 | 1,966 | (338 | ) | 28,535 | ||||||||||||||||||||||
Stone Ridge | — | — | — | — | 5,227 | — | (130 | ) | 5,097 | |||||||||||||||||||||||
The Westside Apartments | 36,820 | — | (390 | ) | 36,430 | 36,820 | — | (448 | ) | 36,372 | ||||||||||||||||||||||
Tech Center Square | 12,141 | — | (164 | ) | 11,977 | 12,375 | — | (196 | ) | 12,179 | ||||||||||||||||||||||
Williamsburg | 53,995 | — | (706 | ) | 53,289 | 53,995 | — | (828 | ) | 53,167 | ||||||||||||||||||||||
Retreat at Rocky Ridge | 11,375 | — | (223 | ) | 11,152 | 11,375 | — | (261 | ) | 11,114 | ||||||||||||||||||||||
Providence in the Park | 47,000 | — | (524 | ) | 46,476 | — | — | — | — | |||||||||||||||||||||||
Green Trails Apartment Homes | 61,500 | — | (667 | ) | 60,833 | — | — | — | — | |||||||||||||||||||||||
Meridian Pointe | 39,500 | — | (588 | ) | 38,912 | — | — | — | — | |||||||||||||||||||||||
Terraces at Lake Mary | 32,250 | — | (377 | ) | 31,873 | — | — | — | — | |||||||||||||||||||||||
Courtney Meadows Apartments | 27,100 | — | (367 | ) | 26,733 | — | — | — | — | |||||||||||||||||||||||
$ | 800,862 | $ | 1,724 | $ | (7,915 | ) | $ | 794,671 | $ | 627,088 | $ | 2,189 | $ | (7,125 | ) | $ | 622,152 | |||||||||||||||
Collateral | Maturity Date | Margin over LIBOR | Annual Interest Rate | Average Monthly Debt Service | Average Monthly Escrow | |||||||||||
Vista Apartment Homes | 1/1/2022 | 2.29 | % | 3.85 | % | (1)(5) | $ | 72 | $ | 16 | ||||||
Cannery Lofts | 11/1/2023 | 2.54 | % | 4.10 | % | (1)(3) | 42 | 26 | ||||||||
Trailpoint at the Woodlands | 11/1/2023 | 2.41 | % | 3.97 | % | (1)(4) | 83 | 47 | ||||||||
Verona Apartment Homes | 10/1/2026 | 2.36 | % | 3.92 | % | (1)(3) | 100 | 40 | ||||||||
Skyview Apartment Homes | 10/1/2026 | 2.36 | % | 3.92 | % | (1)(3) | 86 | 24 | ||||||||
Maxwell Townhomes | 1/1/2022 | — | 4.32 | % | (2)(5) | 71 | 78 | |||||||||
Pinehurst | 11/1/2023 | 2.42 | % | 3.98 | % | (1)(3) | 34 | 15 | ||||||||
Pheasant Run | 10/1/2018 | 2.50 | 4.06 | % | (2)(3)(7) | 18 | 12 | |||||||||
Retreat of Shawnee | 2/1/2019 | — | 5.58 | % | (2)(5)(8) | 78 | 29 | |||||||||
Evergreen at Coursey Place | 8/1/2021 | — | 5.07 | % | (2)(5) | 154 | 37 | |||||||||
Pines of York | 12/1/2021 | — | 4.46 | % | (2)(5) | 80 | 25 | |||||||||
Estates at Johns Creek | 7/1/2020 | — | 3.38 | % | (2)(5) | 221 | 77 | |||||||||
Perimeter Circle | 7/1/2019 | — | 3.42 | % | (2)(5) | 81 | 44 | |||||||||
Perimeter 5550 | 7/1/2019 | — | 3.42 | % | (2)(5) | 64 | 32 | |||||||||
Aston at Cinco Ranch | 10/1/2021 | — | 4.34 | % | (2)(5) | 120 | 70 | |||||||||
Sunset Ridge 1 | 11/1/2020 | — | 4.58 | % | (2)(5) | 113 | 89 | |||||||||
Sunset Ridge 2 | 11/1/2020 | — | 4.54 | % | (2)(5) | 16 | — | |||||||||
Calloway at Las Colinas | 12/1/2021 | — | 3.87 | % | (2)(5) | 171 | 115 | |||||||||
South Lamar Village | 8/1/2019 | — | 3.64 | % | (2)(5) | 59 | 57 | |||||||||
Heritage Pointe | 4/1/2025 | 1.88 | % | 3.44 | % | (1)(4) | 114 | 43 | ||||||||
Yorba Linda | 6/1/2020 | 1.75 | % | 3.31 | % | (1)(3) | 203 | — | ||||||||
Point Bonita Apartment Homes | 10/1/2023 | — | 5.33 | % | (2)(5) | 152 | 61 | |||||||||
The Westside Apartments | 9/1/2026 | 2.12 | % | 3.68 | % | (1)(3) | 121 | 69 | ||||||||
Tech Center Square | 6/1/2023 | 2.58 | % | 4.14 | % | (1)(5) | 58 | 24 | ||||||||
Williamsburg | 1/1/2024 | 2.38 | % | 3.94 | % | (1)(3) | 165 | 167 | ||||||||
Retreat at Rocky Ridge | 1/1/2024 | 2.46 | % | 4.02 | % | (1)(3) | 36 | 23 | ||||||||
Providence in the Park | 2/1/2024 | 2.30 | % | 3.86 | % | (1)(3)(6) | 141 | 138 | ||||||||
Green Trails Apartment Homes | 6/1/2024 | 1.99 | % | 3.55 | % | (1)(3)(6) | 168 | 79 | ||||||||
Meridian Pointe | 8/1/2024 | 1.90 | % | 3.46 | % | (1)(3)(6) | 104 | 56 | ||||||||
Terraces at Lake Mary | 9/1/2024 | 1.91 | % | 3.47 | % | (1)(3)(6) | 86 | 46 | ||||||||
Courtney Meadows Apartments | 1/1/2025 | 1.84 | % | 3.40 | % | (1)(3)(6) | 76 | 51 |
Record Date | Per Common Share | Distribution Date | Distributions reinvested in shares of Common Stock | Net Cash Distributions | Total Aggregate Distributions | |||||||||||||
January 30, 2017 | $ | 0.05 | January 31, 2017 | $ | 2,329 | $ | 1,272 | $ | 3,601 | |||||||||
February 27, 2017 | 0.05 | February 28, 2017 | 2,308 | 1,303 | 3,611 | |||||||||||||
March 30, 2017 | 0.05 | March 31, 2017 | 2,274 | 1,314 | 3,588 | |||||||||||||
April 27, 2017 | 0.05 | April 28, 2017 | 2,273 | 1,324 | 3,597 | |||||||||||||
May 30, 2017 | 0.05 | May 31, 2017 | 2,258 | 1,350 | 3,608 | |||||||||||||
June 29, 2017 | 0.05 | June 30, 2017 | 2,249 | 1,322 | 3,571 | |||||||||||||
July 28, 2017 | 0.05 | July 31, 2017 | 2,247 | 1,333 | 3,580 | |||||||||||||
August 30, 2017 | 0.05 | August 31, 2017 | 2,250 | 1,340 | 3,590 | |||||||||||||
September 28, 2017 | 0.05 | September 29, 2017 | 2,233 | 1,335 | 3,568 | |||||||||||||
October 30, 2017 | 0.05 | October 31, 2017 | 2,237 | 1,339 | 3,576 | |||||||||||||
November 29, 2017 | 0.05 | November 30, 2017 | 2,239 | 1,349 | 3,588 | |||||||||||||
December 28, 2017 | 0.05 | December 29, 2017 | 2,217 | 1,338 | 3,555 | |||||||||||||
$ | 0.60 | $ | 27,114 | $ | 15,919 | $ | 43,033 |
Distributions Paid | Distributions Declared | Sources of Distributions Paid | |||||||||||||||||||||||||
Amount Paid/Percent of Total | |||||||||||||||||||||||||||
2017 | Cash | Distributions Reinvested (DRIP) | Total | Cash Provided by Operating Activities | Total | Per Share | Operating Activities | Debt Financing | Dispositions | ||||||||||||||||||
First Quarter | $ | 3,889 | $ | 6,911 | $ | 10,800 | $ | 3,433 | $ | 10,800 | $0.15 | $3,433 / 32% | $7,367 / 68% | — | |||||||||||||
Second Quarter | $ | 3,997 | $ | 6,780 | $ | 10,777 | $ | 1,167 | $ | 10,777 | $0.15 | $1,167 / 11% | — | $9,610 / 89% | |||||||||||||
Third Quarter | $ | 4,007 | $ | 6,730 | $ | 10,737 | $ | 5,237 | $ | 10,737 | $0.15 | $5,237 / 49% | — | $5,500 / 51% | |||||||||||||
Fourth Quarter | $ | 4,026 | $ | 6,693 | $ | 10,719 | $ | 2,151 | $ | 10,719 | $0.15 | $2,151 / 20% | — | $8,568 / 80% | |||||||||||||
Total | $ | 15,919 | $ | 27,114 | $ | 43,033 | $ | 11,988 | $ | 43,033 | $0.60 | $11,988/ 28% | $7,367 / 17% | $23,678 / 55% |
Fiscal Year Paid | Per Common Share | Distributions reinvested in shares of Common Stock | Net Cash Distributions | Total Aggregate Distributions | ||||||||||||
2012 | $ | 0.15 | $ | 1,052 | $ | 841 | $ | 1,893 | ||||||||
2013 | 0.41 | 9,984 | 4,757 | 14,741 | ||||||||||||
2014 | 0.48 | 22,898 | 9,959 | 32,857 | ||||||||||||
2015 | 0.60 | 28,959 | 13,257 | 42,216 | ||||||||||||
2016 | 0.60 | 28,497 | 14,508 | 43,005 | ||||||||||||
2017 | 0.60 | 27,114 | 15,919 | 43,033 | ||||||||||||
$ | 2.84 | $ | 118,504 | $ | 59,241 | $ | 177,745 |
(1) | acquisition fees and expenses; |
(2) | straight-line rent amounts, both income and expense; |
(3) | amortization of above- or below-market intangible lease assets and liabilities; |
(4) | amortization of discounts and premiums on debt investments; |
(5) | impairment charges; |
(6) | gains or losses from the early extinguishment of debt; |
(7) | gains or losses on the extinguishment or sales of hedges, foreign exchange, securities and other derivatives holdings except where the trading of such instruments is a fundamental attribute of our operations; |
(8) | gains or losses related to fair-value adjustments for derivatives not qualifying for hedge accounting, including interest rate and foreign exchange derivatives; |
(9) | gains or losses related to consolidation from, or deconsolidation to, equity accounting; |
(10) | gains or losses related to contingent purchase price adjustments; and |
(11) | adjustments related to the above items for unconsolidated entities in the application of equity accounting. |
• | Acquisition expenses. In evaluating investments in real estate, including both business combinations and investments accounted for under the equity method of accounting, management’s investment models and analysis differentiate costs to acquire the investment from the operations derived from the investment. Prior to 2009, acquisition costs for both of these types of investments were capitalized under GAAP; however, beginning in 2009, acquisition costs related to business combinations are expensed. Both of these acquisition costs will continue to be funded from the proceeds of debt financing and proceeds from property dispositions and not from operations. We believe by excluding expensed acquisition costs, MFFO provides useful supplemental information that is comparable for each type of real estate investment and is consistent with management’s analysis of the investing and operating performance of our properties. Acquisition expenses include those paid to our Advisor or third parties. |
• | Adjustments for straight-line rents and amortization of discounts and premiums on debt investments. In the proper application of GAAP, rental receipts and discounts and premiums on debt investments are allocated to periods using |
• | Adjustments for amortization of above or below market intangible lease assets. Similar to depreciation and amortization of other real estate related assets that are excluded from FFO, GAAP implicitly assumes that the value of intangibles diminishes predictably over time and that these charges be recognized currently in revenue. Since real estate values and market lease rates in the aggregate have historically risen or fallen with market conditions, management believes that by excluding these charges, MFFO provides useful supplemental information on the performance of the real estate. |
• | Impairment charges, gains or losses related to fair-value adjustments for derivatives not qualifying for hedge accounting and gains or losses related to contingent purchase price adjustments. Each of these items relates to a fair value adjustment, which is based on the impact of current market fluctuations and underlying assessments of general market conditions and specific performance of the holding which may not be directly attributable to current operating performance. As these gains or losses relate to underlying long-term assets and liabilities, management believes MFFO provides useful supplemental information by focusing on the changes in our core operating fundamentals rather than changes that may reflect anticipated gains or losses. In particular, because GAAP impairment charges are not allowed to be reversed if the underlying fair values improve or because the timing of impairment charges may lag the onset of certain operating consequences, we believe MFFO provides useful supplemental information related to current consequences, benefits and sustainability related to rental rate, occupancy and other core operating fundamentals. |
• | Adjustment for gains or losses related to early extinguishment of hedges, debt, consolidation or deconsolidation and contingent purchase price. Similar to extraordinary items excluded from FFO, these adjustments are not related to continuing operations. By excluding these items, management believes that MFFO provides supplemental information related to sustainable operations that will be more comparable between other reporting periods and to other real estate operators. |
Years Ended December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
Net income (loss) attributable to common stockholders – GAAP | $ | (21,969 | ) | $ | 4,065 | $ | (16,895 | ) | |||
Net gains on dispositions of properties and joint venture interests (2) | (22,735 | ) | (38,834 | ) | (36,041 | ) | |||||
Depreciation expense (3) | 48,729 | 43,943 | 40,808 | ||||||||
FFO attributable to common stockholders | 4,025 | 9,174 | (12,128 | ) | |||||||
Adjustments for straight-line rents | (144 | ) | 105 | (176 | ) | ||||||
Amortization of intangible lease assets (4) | 3,615 | 228 | 6,360 | ||||||||
Realized loss on change in fair value of interest rate cap related to extinguishments | 28 | 105 | — | ||||||||
Loss on extinguishment of debt | — | 791 | — | ||||||||
Debt premium amortization (4) | (465 | ) | (485 | ) | (602 | ) | |||||
Acquisition costs | 4,469 | 1,582 | 5,811 | ||||||||
MFFO attributable to common stockholders | 11,528 | 11,500 | (735 | ) | |||||||
Net gains on dispositions of properties and joint venture interests (2) | 22,735 | 38,834 | 36,041 | ||||||||
AFFO attributable to common stockholders | $ | 34,263 | $ | 50,334 | $ | 35,306 | |||||
Basic and diluted net (loss) income per common share - GAAP | $ | (0.31 | ) | $ | 0.06 | $ | (0.24 | ) | |||
FFO per share | $ | 0.06 | $ | 0.13 | $ | (0.17 | ) | ||||
MFFO per share | $ | 0.16 | $ | 0.16 | $ | (0.01 | ) | ||||
AFFO per share | $ | 0.48 | $ | 0.70 | $ | 0.50 | |||||
Weighted average shares outstanding (1) | 71,865 | 71,787 | 70,397 |
(1) | Excludes any dilution from the potential conversion of convertible stock as the actual number of shares that will be issuable upon conversion, if any, is indeterminable at December 31, 2017, 2016, and 2015. |
(2) | Net gains on dispositions of properties and joint venture interests for the year ended December 31, 2016 excludes $6.2 million attributable to noncontrolling interests. |
(3) | Depreciation expense excludes amounts attributable to noncontrolling interests of $60,000 and $1.1 million for the years ended December 31, 2016 and 2015, respectively. |
(4) | Debt premium amortization excludes amounts attributable to noncontrolling interests of $178,000 for the year ended December 31, 2015. There was no noncontrolling interest adjustment for the years ended December 31, 2016 and 2017. |
Buildings | 27.5 years |
Building improvements | 5-27.5 years |
Furniture, fixtures, and equipment | 3-5 years |
Tenant improvements | Shorter of lease term or expected useful life |
Payments due by period | |||||||||||||||||||
Total | Less than 1 Year | 1-3 Years | 3-5 Years | More than 5 Years | |||||||||||||||
Long-Term Debt Obligations | $ | 800,862 | $ | 14,005 | $ | 208,910 | $ | 138,415 | $ | 439,532 | |||||||||
Interest on Long-Term Debt Obligations | 146,588 | 29,162 | 52,340 | 36,726 | 28,360 | ||||||||||||||
Operating Lease Obligations | 226 | 56 | 79 | 73 | 18 | ||||||||||||||
$ | 947,676 | $ | 43,223 | $ | 261,329 | $ | 175,214 | $ | 467,910 |
ITEM 9B. | OTHER INFORMATION |
ITEM 10. | DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE |
ITEM 11. | EXECUTIVE COMPENSATION |
ITEM 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS |
ITEM 13. | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE |
ITEM 14. | PRINCIPAL ACCOUNTING FEES AND SERVICES |
ITEM 15. | EXHIBITS AND FINANCIAL STATEMENT SCHEDULES |
(a) | Financial Statements |
1. | See the Index to Consolidated Financial Statements at page F-1 of this report. |
(b) | Financial Statement Schedules |
i. | Schedule III Real Estate and Accumulated Depreciation |
ii. | Schedule IV - Mortgage Loans on Real Estate |
(c) | Exhibits |
Exhibit No. | Description | |||
3.1 | ||||
3.2 | ||||
4.1 | ||||
4.2 | ||||
4.3 | ||||
4.4 | ||||
10.1 | ||||
10.2 | ||||
10.3 | ||||
10.4 |
21.1 | ||||
23.1 | ||||
31.1 | ||||
31.2 | ||||
32.1 | ||||
32.2 | ||||
99.1 | ||||
99.2 | ||||
99.3 | ||||
101.1 | Interactive Data Files |
RESOURCE REAL ESTATE OPPORTUNITY REIT, INC. | ||
March 29, 2018 | By: | /s/ Alan F. Feldman |
ALAN F. FELDMAN | ||
Chief Executive Officer and Director |
/s/ Robert C. Lieber | Director | March 29, 2018 | |
ROBERT C. LIEBER | |||
/s/ Andrew Ceitlin | Director | March 29, 2018 | |
ANDREW CEITLIN | |||
/s/ Gary Lichtenstein | Director | March 29, 2018 | |
GARY LICHTENSTEIN | |||
/s/ Lee F. Shlifer | Director | March 29, 2018 | |
LEE F. SHLIFER | |||
/s/ Alan F. Feldman | Chief Executive Officer and Director | March 29, 2018 | |
ALAN F. FELDMAN | (Principal Executive Officer) | ||
/s/ Steven R. Saltzman | Chief Financial Officer, Senior Vice President | March 29, 2018 | |
STEVEN R. SALTZMAN | and Treasurer (Principal Financial Officer and Principal Accounting Officer) |
Financial Statements | Page | |
December 31, | |||||||
2017 | 2016 | ||||||
ASSETS | |||||||
Investments: | |||||||
Rental properties, net | $ | 998,889 | $ | 902,454 | |||
Other investments | 782 | 769 | |||||
Identified intangible assets, net | 1,796 | 1,855 | |||||
Total investments | 1,001,467 | 905,078 | |||||
Cash | 117,660 | 114,842 | |||||
Restricted cash | 13,401 | 10,277 | |||||
Due from related parties | 371 | 1,375 | |||||
Tenant receivables, net | 251 | 89 | |||||
Deposits | 227 | 262 | |||||
Prepaid expenses and other assets | 1,745 | 2,351 | |||||
Goodwill | 670 | 711 | |||||
Total assets | $ | 1,135,792 | $ | 1,034,985 | |||
LIABILITIES AND EQUITY | |||||||
Liabilities: | |||||||
Mortgage notes payable, net | $ | 794,671 | $ | 622,152 | |||
Accounts payable | 791 | 1,125 | |||||
Accrued expenses and other liabilities | 8,074 | 6,738 | |||||
Accrued real estate taxes | 9,195 | 7,262 | |||||
Due to related parties | 719 | 2,055 | |||||
Tenant prepayments | 1,178 | 1,069 | |||||
Security deposits | 2,572 | 2,565 | |||||
Total liabilities | $ | 817,200 | $ | 642,966 | |||
Equity: | |||||||
Preferred stock (par value $.01; 10,000,000 shares authorized, none issued) | — | — | |||||
Common stock (par value $.01; 1,000,000,000 shares authorized; 77,457,551 and 74,975,022 shares issued, respectively; and 71,299,467 and 72,006,589 shares outstanding, respectively) | 713 | 720 | |||||
Convertible stock (“promote shares”; par value $.01; 50,000 shares authorized and issued; 49,995 and 50,000 shares outstanding, respectively) | 1 | 1 | |||||
Additional paid-in capital | 635,748 | 642,523 | |||||
Accumulated other comprehensive loss | (562 | ) | (345 | ) | |||
Accumulated deficit | (317,308 | ) | (252,306 | ) | |||
Total stockholders’ equity | 318,592 | 390,593 | |||||
Noncontrolling interests | — | 1,426 | |||||
Total equity | $ | 318,592 | $ | 392,019 | |||
Total liabilities and equity | $ | 1,135,792 | $ | 1,034,985 |
For the Years Ended | |||||||||||
December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
Revenues: | |||||||||||
Rental income | $ | 125,450 | $ | 117,745 | $ | 117,687 | |||||
Interest and dividend income | 239 | 622 | 638 | ||||||||
Total revenues | 125,689 | 118,367 | 118,325 | ||||||||
Expenses: | |||||||||||
Rental operating - expenses | 27,211 | 27,608 | 34,167 | ||||||||
Rental operating - payroll | 13,652 | 14,790 | 16,769 | ||||||||
Rental operating - real estate taxes | 14,454 | 12,668 | 13,154 | ||||||||
Subtotal - Rental operating expenses | 55,317 | 55,066 | 64,090 | ||||||||
Acquisition costs | 4,469 | 1,582 | 5,811 | ||||||||
Management fees | 16,921 | 15,724 | 15,453 | ||||||||
General and administrative | 11,061 | 13,083 | 12,776 | ||||||||
Loss on disposal of assets | 1,468 | 1,576 | 3,093 | ||||||||
Provision for loan loss | — | — | 130 | ||||||||
Depreciation and amortization expense | 52,344 | 44,231 | 48,273 | ||||||||
Total expenses | 141,580 | 131,262 | 149,626 | ||||||||
Loss before other income (expense) | (15,891 | ) | (12,895 | ) | (31,301 | ) | |||||
Other income (expense): | |||||||||||
Net gains on dispositions of properties and joint venture interests | 22,735 | 45,057 | 36,041 | ||||||||
Interest expense | (28,963 | ) | (22,776 | ) | (22,080 | ) | |||||
Insurance proceeds in excess of cost basis | 150 | 985 | 407 | ||||||||
Total other income (expense) | (6,078 | ) | 23,266 | 14,368 | |||||||
Net (loss) income | (21,969 | ) | 10,371 | (16,933 | ) | ||||||
Net (income) loss attributable to noncontrolling interests | — | (6,306 | ) | 38 | |||||||
Net (loss) income attributable to common stockholders | $ | (21,969 | ) | $ | 4,065 | $ | (16,895 | ) | |||
Net (loss) income | $ | (21,969 | ) | $ | 10,371 | $ | (16,933 | ) | |||
Other comprehensive income (loss): | |||||||||||
Reclassification adjustment for realized loss on designated derivatives | 163 | 105 | — | ||||||||
Designated derivatives, fair value adjustments | (380 | ) | (10 | ) | (174 | ) | |||||
Total other comprehensive income (loss) | (217 | ) | 95 | (174 | ) | ||||||
Comprehensive income (loss) | (22,186 | ) | 10,466 | (17,107 | ) | ||||||
Comprehensive (income) loss attributable to noncontrolling interests | — | (6,306 | ) | 38 | |||||||
Total comprehensive income (loss) attributable to stockholders | $ | (22,186 | ) | $ | 4,160 | $ | (17,069 | ) | |||
Weighted average common shares outstanding | 71,865 | 71,787 | 70,397 | ||||||||
Basic and diluted (loss) income per common share: | |||||||||||
Net (loss) income per common share | $ | (0.31 | ) | $ | 0.06 | $ | (0.24 | ) |
Common Stock | Convertible Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit | Total Stockholders’ Equity | Noncontrolling interests | Total Equity | ||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||
Balance at January 1, 2015 | 69,254 | $ | 693 | 50 | $ | 1 | $ | 614,024 | $ | (266 | ) | $ | (154,319 | ) | $ | 460,133 | $ | 8,221 | $ | 468,354 | |||||||||||||||||
Common stock issued through distribution reinvestment plan | 2,865 | 28 | — | — | 28,931 | — | — | 28,959 | — | 28,959 | |||||||||||||||||||||||||||
Distributions on common stock | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
Distributions declared | — | — | — | — | — | — | (42,216 | ) | (42,216 | ) | — | (42,216 | ) | ||||||||||||||||||||||||
Common stock redemptions | (502 | ) | (5 | ) | — | — | (5,101 | ) | — | 64 | (5,042 | ) | — | (5,042 | ) | ||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | — | (174 | ) | — | (174 | ) | — | (174 | ) | ||||||||||||||||||||||||
Contributions from noncontrolling interests | — | — | — | — | — | — | — | — | 151 | 151 | |||||||||||||||||||||||||||
Acquisitions of noncontrolling interests | — | — | — | — | 481 | — | — | 481 | (481 | ) | — | ||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | (16,895 | ) | (16,895 | ) | (38 | ) | (16,933 | ) | |||||||||||||||||||||||
Balance at December 31, 2015 | 71,617 | 716 | 50 | 1 | 638,335 | (440 | ) | (213,366 | ) | 425,246 | 7,853 | 433,099 | |||||||||||||||||||||||||
Common stock issued through distribution reinvestment plan | 2,642 | 26 | — | — | 28,471 | — | — | 28,497 | — | 28,497 | |||||||||||||||||||||||||||
Distributions declared | — | — | — | — | — | — | (43,005 | ) | (43,005 | ) | — | (43,005 | ) | ||||||||||||||||||||||||
Common stock redemptions | (2,252 | ) | (22 | ) | — | — | (24,283 | ) | — | — | (24,305 | ) | — | (24,305 | ) | ||||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | 95 | — | 95 | — | 95 | |||||||||||||||||||||||||||
Distributions to noncontrolling interests | — | — | — | — | — | — | — | — | (9,120 | ) | (9,120 | ) | |||||||||||||||||||||||||
Deconsolidation of subsidiaries | — | — | — | — | — | — | — | — | (3,613 | ) | (3,613 | ) | |||||||||||||||||||||||||
Net income | — | — | — | — | — | — | 4,065 | 4,065 | 6,306 | 10,371 | |||||||||||||||||||||||||||
Balance at December 31, 2016 | 72,007 | 720 | 50 | 1 | 642,523 | $ | (345 | ) | (252,306 | ) | 390,593 | 1,426 | 392,019 | ||||||||||||||||||||||||
Common stock issued through distribution reinvestment plan | 2,482 | 25 | — | — | 27,089 | — | — | 27,114 | — | 27,114 | |||||||||||||||||||||||||||
Distributions declared | — | — | — | — | — | — | (43,033 | ) | (43,033 | ) | — | (43,033 | ) | ||||||||||||||||||||||||
Common stock redemptions | (3,190 | ) | (32 | ) | — | — | (34,786 | ) | — | — | (34,818 | ) | — | (34,818 | ) | ||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | — | (217 | ) | — | (217 | ) | — | (217 | ) | ||||||||||||||||||||||||
Deconsolidation of noncontrolling interests | — | — | — | — | 922 | — | — | 922 | (922 | ) | — | ||||||||||||||||||||||||||
Distribution to noncontrolling interests | — | — | — | — | — | — | — | — | (504 | ) | (504 | ) | |||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | (21,969 | ) | (21,969 | ) | — | (21,969 | ) | ||||||||||||||||||||||||
Balance at December 31, 2017 | 71,299 | $ | 713 | 50 | $ | 1 | $ | 635,748 | $ | (562 | ) | $ | (317,308 | ) | $ | 318,592 | $ | — | $ | 318,592 |
For the Years Ended | |||||||||||
December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
Cash flows from operating activities: | |||||||||||
Net (loss) income | $ | (21,969 | ) | $ | 10,371 | $ | (16,933 | ) | |||
Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities: | |||||||||||
Loss on disposal of assets | 1,468 | 1,576 | 3,093 | ||||||||
Casualty (gains) losses | (103 | ) | (680 | ) | 782 | ||||||
Provision for loan loss | — | — | 130 | ||||||||
Loss on extinguishment of debt | — | 791 | — | ||||||||
Net gains on disposition of properties and joint venture interests | (22,735 | ) | (45,057 | ) | (36,041 | ) | |||||
Depreciation and amortization | 52,344 | 44,231 | 48,273 | ||||||||
Amortization of deferred financing costs | 2,014 | 2,120 | 1,839 | ||||||||
Amortization of debt premium (discount) | (465 | ) | (485 | ) | (779 | ) | |||||
Realized loss on change in fair value of interest rate cap | 163 | 105 | — | ||||||||
Accretion of discount and direct loan fees and costs | (39 | ) | (39 | ) | (39 | ) | |||||
Changes in operating assets and liabilities, net of acquisitions: | |||||||||||
Restricted cash | (1,286 | ) | (1,428 | ) | (1,942 | ) | |||||
Tenant receivables, net | (162 | ) | 55 | 313 | |||||||
Deposits | 35 | (65 | ) | 3 | |||||||
Prepaid expenses and other assets | 1,408 | 489 | 886 | ||||||||
Due to/from related parties, net | (313 | ) | 869 | (722 | ) | ||||||
Accounts payable and accrued expenses | 1,632 | (1,720 | ) | 583 | |||||||
Tenant prepayments | 106 | (102 | ) | (40 | ) | ||||||
Security deposits | (110 | ) | 99 | 91 | |||||||
Net cash provided by (used in) operating activities from continuing operations | 11,988 | 11,130 | (503 | ) | |||||||
Cash flows from investing activities: | |||||||||||
Proceeds from disposal of properties and joint venture interests, net of closing costs | 31,926 | 80,173 | 60,258 | ||||||||
Property acquisitions | (45,302 | ) | (63,126 | ) | (96,953 | ) | |||||
Insurance proceeds received for casualty losses | 248 | 3,171 | 794 | ||||||||
Acquisition of preferred equity interest | — | (408 | ) | (408 | ) | ||||||
Resolution of preferred equity interest | — | 4,300 | — | ||||||||
Capital expenditures | (21,592 | ) | (28,024 | ) | (43,018 | ) | |||||
Restricted cash | (434 | ) | 1,572 | (766 | ) | ||||||
Principal payments received on loans held for investment | 26 | 21 | 601 | ||||||||
Net cash used in investing activities of continuing operations | (35,128 | ) | (2,321 | ) | (79,492 | ) |
For the Years Ended | |||||||||||
December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
Cash flows from financing activities: | |||||||||||
Redemptions of common stock | (34,818 | ) | (24,305 | ) | (5,042 | ) | |||||
Payment of deferred financing costs | (605 | ) | (3,200 | ) | (402 | ) | |||||
Borrowings on mortgages | 84,412 | 194,870 | 31,473 | ||||||||
Principal repayments on mortgages | (6,600 | ) | (93,990 | ) | (6,150 | ) | |||||
Borrowings on credit facility | — | 12,500 | 33,918 | ||||||||
Repayments on credit facility | — | (34,394 | ) | (22,288 | ) | ||||||
Purchase of interest rate caps | (8 | ) | (262 | ) | (95 | ) | |||||
Distributions paid on common stock | (15,919 | ) | (14,508 | ) | (13,257 | ) | |||||
Contributions of noncontrolling interests | — | — | 151 | ||||||||
Distributions to noncontrolling interests | (504 | ) | (9,120 | ) | — | ||||||
Net cash provided by financing activities of continuing operations | 25,958 | 27,591 | 18,308 | ||||||||
Net increase (decrease) in cash | 2,818 | 36,400 | (61,687 | ) | |||||||
Cash at beginning of year | 114,842 | 78,442 | 140,129 | ||||||||
Cash at end of year | $ | 117,660 | $ | 114,842 | $ | 78,442 |
Subsidiary | Apartment Complex | Number of Units | Property Location | |||
RRE Opportunity Holdings, LLC | N/A | N/A | N/A | |||
Resource Real Estate Opportunity OP, LP | N/A | N/A | N/A | |||
RRE Charlemagne Holdings, LLC | N/A | N/A | N/A | |||
RRE Iroquois, LP (“Vista”) | Vista Apartment Homes | 133 | Philadelphia, PA | |||
RRE Iroquois Holdings, LLC | N/A | N/A | N/A | |||
RRE Cannery Holdings, LLC (“Cannery”) | Cannery Lofts | 156 | Dayton, OH | |||
RRE Williamsburg Holdings, LLC (“Williamsburg”) | Williamsburg | 976 | Cincinnati, OH | |||
WPL Holdings, LLC | N/A (a) | N/A | N/A | |||
RRE Autumn Wood Holdings, LLC ("Autumn Wood") | Retreat at Rocky Ridge | 206 | Hoover, AL |
RRE Village Square Holdings, LLC ("Village Square") | Trailpoint at the Woodlands | 271 | Houston, TX | |||
RRE Brentdale Holdings, LLC ("Brentdale") | The Westside Apartments | 412 | Plano, TX | |||
RRE Jefferson Point Holdings, LLC ("Jefferson Point") | Tech Center Square | 208 | Newport News, VA | |||
RRE Centennial Holdings, LLC ("Centennial") | Verona Apartment Homes | 276 | Littleton, CO | |||
RRE Pinnacle Holdings, LLC ("Pinnacle") | Skyview Apartment Homes | 224 | Westminster, CO | |||
RRE River Oaks Holdings, LLC ("River Oaks") | Maxwell Townhomes | 316 | San Antonio, TX | |||
RRE Nicollet Ridge Holdings, LLC ("Nicollet Ridge") | Meridian Pointe | 339 | Burnsville, MN | |||
RRE Addison Place, LLC ("Addison Place") | The Estates at Johns Creek | 403 | Alpharetta, GA | |||
PRIP Coursey, LLC ("Evergreen at Coursey Place") | Evergreen at Coursey Place (b) | 352 | Baton Rouge, LA | |||
PRIP 500, LLC ("Pinehurst") | Pinehurst (b) | 146 | Kansas City, MO | |||
PRIP 1102, LLC ("Pheasant Run") | Pheasant Run (b) | 160 | Lee's Summit, MO | |||
PRIP 11128, LLC ("Retreat at Shawnee") | Retreat at Shawnee (b) | 342 | Shawnee, KS | |||
PRIP Pines, LLC ("Pines of York") | Pines of York (b) | 248 | Yorktown, VA | |||
RRE Berkeley Run Holdings, LLC ("Berkley Run") | Perimeter Circle | 194 | Atlanta, GA | |||
RRE Berkeley Trace Holdings LLC ("Berkley Trace") | Perimeter 5550 | 165 | Atlanta, GA | |||
RRE Merrywood LLC ("Merrywood") | Aston at Cinco Ranch | 228 | Katy, TX | |||
RRE Sunset Ridge Holdings, LLC ("Sunset Ridge") | Sunset Ridge | 324 | San Antonio, TX | |||
RRE Parkridge Place Holdings, LLC ("Parkridge Place") | Calloway at Las Colinas | 536 | Irving, TX | |||
RRE Woodmoor Holdings, LLC ("Woodmoor") | South Lamar Village | 208 | Austin, TX | |||
RRE Gilbert Holdings, LLC ("Springs at Gilbert") | Heritage Pointe | 458 | Gilbert, AZ | |||
RRE Bonita Glen Holdings, LLC ("Bonita") | Point Bonita Apartment Homes | 295 | Chula Vista, CA | |||
RRE Yorba Linda Holdings, LLC ("Yorba Linda") | The Bryant at Yorba Linda | 400 | Yorba Linda, CA | |||
RRE Providence Holdings, LLC ("Providence in the Park") | Providence in the Park | 524 | Arlington, TX | |||
RRE Green Trails Holdings, LLC ("Green Trails") | Green Trails Apartment Homes | 440 | Lisle, IL | |||
RRE Terraces at Lake Mary Holdings, LLC ("Lake Mary") | Terraces at Lake Mary | 284 | Lake Mary, FL | |||
RRE Courtney Meadows Holdings, LLC ("Courtney Meadows") | Courtney Meadows Apartments | 276 | Jacksonville, FL | |||
9,500 | ||||||
Subsidiaries related to disposed investments: | ||||||
RRE Crestwood Holdings, LLC (“Crestwood”) | (c)(f) | N/A | N/A | |||
PRIP 5060/6310, LLC ("Governor Park") | (c)(g) | N/A | N/A | |||
RRE Campus Club Holdings, LLC (“Campus Club”) | (c) | N/A | N/A | |||
PRIP 6700, LLC ("Hilltop Village") | (b)(c)(f) | N/A | N/A | |||
RRE Westhollow Holdings, LLC (“Westhollow”) | (c) | N/A | N/A | |||
RRE Flagstone Holdings, LLC ("Flagstone") | (c)(f) | N/A | N/A | |||
RRE 107th Avenue Holdings, LLC (“107th Avenue”) | (d)(f) | N/A | N/A | |||
RRE Bristol Holdings, LLC (“Bristol”) | (c)(f) | N/A | N/A | |||
RRE Skyview Holdings, LLC ("Skyview") | (c)(f) | N/A | N/A | |||
RRE Kenwick Canterbury Holdings, LLC ("Kenwick & Canterbury") | (c) | N/A | N/A | |||
RRE Foxwood Holdings, LLC ("Foxwood") | (c)(f) | N/A | N/A | |||
PRIP 3383, LLC ("Conifer Place") | (b)(d)(f) | N/A | N/A | |||
PRIP 3700, LLC ("Champion Farms") | (b)(d)(f) | N/A | N/A | |||
RRE Armand Place Holdings, LLC ("Armand") | (d)(f) | N/A | N/A | |||
RRE Spring Hill Holdings, LLC ("Spring Hill") | (e) | N/A | N/A | |||
RRE Nob Hill Holdings, LLC ("Nob Hill") | (d)(f) | N/A | N/A | |||
PRIP 10637, LLC ("Fieldstone") | (b)(d)(f) | N/A | N/A | |||
RRE Jasmine Holdings, LLC ("Jasmine") | (d)(f) | N/A | N/A |
RRE Chisholm Place Holdings LLC ("Chisholm Place") | (g) | N/A | N/A | |||
RRE Park Forest Holdings, LLC ("Park Forest") | (g) | N/A | N/A | |||
RRE Deerfield Holdings, LLC ("Deerfield") | (g) | N/A | N/A | |||
PRIP Stone Ridge, LLC ("Stone Ridge") | (b)(g) | N/A | N/A |
Subsidiary | Ownership % | Apartment Complex | Number of Units | Property Location | ||||
DT Stone Ridge, LLC | 83.4% | Stone Ridge | 188 | Columbia, SC |
Buildings | 27.5 years |
Building improvements | 5.0 to 27.5 years |
Furniture, fixtures, and equipment | 3.0 to 5.0 years |
Tenant improvements | Shorter of lease term or expected useful life |
For the Years Ended | |||||||||||
December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
Non-cash financing and investing activities: | |||||||||||
Stock issued from distribution reinvestment plan | $ | 27,114 | $ | 28,497 | $ | 28,959 | |||||
Deferred financing costs and escrow deposits funded directly by mortgage notes and credit facility | 2,145 | 2,619 | 11,167 | ||||||||
Accrual for construction in progress | 1,346 | 1,343 | 896 | ||||||||
Non-cash activity related to sales: | |||||||||||
Deconsolidation of subsidiary and removal of related mortgage notes payable and noncontrolling interest | — | 35,152 | — | ||||||||
Mortgage notes payable settled directly with proceeds from sale of rental property | 26,976 | 55,720 | — | ||||||||
Non-cash activity related to acquisitions: | |||||||||||
Mortgage notes payable and other liabilities assumed in acquisition of rental property | — | — | 40,284 | ||||||||
Mortgage notes payable used to acquire real property | 118,705 | — | — | ||||||||
Cash paid during the period for: | |||||||||||
Interest | $ | 26,458 | $ | 20,297 | $ | 20,752 |
December 31, | |||||||
2017 | 2016 | ||||||
Real estate taxes | $ | 8,877 | $ | 6,853 | |||
Insurance | 1,995 | 1,854 | |||||
Capital improvements | 2,530 | 1,570 | |||||
Total | $ | 13,401 | $ | 10,277 |
December 31, | |||||||
2017 | 2016 | ||||||
Land | $ | 196,765 | $ | 176,418 | |||
Building and improvements | 905,739 | 795,665 | |||||
Furniture, fixtures and equipment | 37,796 | 32,198 | |||||
Construction in progress | 6,297 | 5,983 | |||||
1,146,597 | 1,010,264 | ||||||
Less: accumulated depreciation | (147,708 | ) | (107,810 | ) | |||
$ | 998,889 | $ | 902,454 |
December 31, | |||||||
2017 | 2016 | ||||||
Unpaid principal balance | $ | 934 | $ | 960 | |||
Unamortized discount and acquisition costs | (152 | ) | (191 | ) | |||
Net book value | $ | 782 | $ | 769 | |||
Maturity date | 10/28/2021 | ||||||
Interest rate | 7.5 | % | |||||
Average monthly payment | $ | 8 |
Fair Value Assigned | ||||||||||||||||||||||||||||||||
Multifamily Community Name | City and State | Date of Acquisition | Contractual Purchase Price (1) | Land | Building and Improvements | Furniture, Fixtures and Equipment | Intangible Assets | Other Assets | Liabilities | |||||||||||||||||||||||
Courtney Meadows Apartments | Jacksonville, FL | 12/20/2017 | $ | 41,400 | $ | 6,159 | $ | 33,720 | $ | 629 | $ | 892 | $ | 8 | $ | (58 | ) | |||||||||||||||
Terraces at Lake Mary | Lake Mary, GL | 8/31/2017 | $ | 44,100 | $ | 5,402 | $ | 37,297 | $ | 433 | $ | 968 | $ | — | $ | (423 | ) | |||||||||||||||
Green Trails Apartment Homes | Lisle, IL | 5/31/2017 | $ | 78,000 | $ | 14,727 | $ | 61,283 | $ | 1,117 | $ | 1,695 | $ | 14 | $ | (898 | ) |
(1) | Contractual purchase price excludes closing costs, acquisition expenses, and other immaterial settlement date adjustments and pro-rations. |
Multifamily Community | Total Revenues | Net Loss | Acquisition Costs | |||||||||||
2017 Acquisitions: | ||||||||||||||
Green Trails Apartment Homes | $ | 4,128 | $ | (1,920 | ) | $ | (1,774 | ) | ||||||
Terraces at Lake Mary | 1,394 | (1,424 | ) | (1,290 | ) | |||||||||
Courtney Meadows Apartments | 103 | (879 | ) | (1,217 | ) | |||||||||
Various properties | — | — | (188 | ) | (1 | ) | ||||||||
$ | 5,625 | $ | (4,223 | ) | $ | (4,469 | ) |
Multifamily Community | Total Revenues | Net Loss | Acquisition Costs | |||||||||||
2016 Acquisitions: | ||||||||||||||
Providence in the Park | $ | 193 | $ | (781 | ) | $ | (1,509 | ) | ||||||
Various properties | — | — | (73 | ) | (1 | ) | ||||||||
$ | 193 | $ | (781 | ) | $ | (1,582 | ) |
Multifamily Community | Total Revenues | Net Loss | Acquisition Costs | |||||||||
2015 Acquisitions: | ||||||||||||
South Lamar Village | $ | 2,086 | $ | (1,580 | ) | $ | (692 | ) | ||||
Heritage Pointe | 3,019 | (2,173 | ) | (1,005 | ) | |||||||
Yorba Linda | 4,584 | (3,405 | ) | (2,761 | ) | |||||||
Point Bonita Apartment Homes | 2,431 | (2,144 | ) | (1,353 | ) | |||||||
$ | 12,120 | $ | (9,302 | ) | $ | (5,811 | ) |
(1) | Acquisition fees paid related to additional investments in properties to fund additional capital reserves. |
Multifamily Community | Location | Sale Date | Contract Sales price | Net Gains on Dispositions of Properties and Joint Venture Interests | Revenues Attributable to Properties Sold | Net Income Attributable to Properties Sold | ||||||||||||||
2017 Dispositions: | ||||||||||||||||||||
Chisholm Place | Plano, Texas | May 10, 2017 | $ | 21,250 | $ | 6,922 | $ | 823 | $ | 6,657 | ||||||||||
Mosaic | Oklahoma City, Oklahoma | May 12, 2017 | 6,100 | 1,513 | 473 | 1,441 | ||||||||||||||
Deerfield | Hermantown, Minnesota | August 16, 2017 | 23,600 | 11,035 | 1,653 | 11,037 | ||||||||||||||
Stone Ridge | Columbia, South Carolina | September 27, 2017 | 10,534 | 3,265 | 1,291 | 3,060 | ||||||||||||||
$ | 61,484 | $ | 22,735 | $ | 4,240 | $ | 22,195 | |||||||||||||
2016 Dispositions: | ||||||||||||||||||||
Conifer Place (1) | Norcross, Georgia | January 27, 2016 | $ | 42,500 | $ | 9,897 | $ | 365 | $ | 9,942 | ||||||||||
Champion Farms | Louisville, Kentucky | January 29, 2016 | 7,590 | 1,066 | 220 | 1,125 | ||||||||||||||
The Ivy at Clear Creek | Houston, Texas | February 17, 2016 | 19,400 | 6,792 | 386 | 6,629 | ||||||||||||||
Affinity at Winter Park | Winter Park, Florida | June 9, 2016 | 17,500 | 5,605 | 1,010 | 5,757 | ||||||||||||||
Fieldstone | Woodland, Ohio | June 30, 2016 | 7,514 | 4,096 | 1,548 | 4,325 | ||||||||||||||
The Nesbit Palisades | Alpharetta, Georgia | July 8, 2016 | 45,500 | 17,601 | 2,615 | 17,739 | ||||||||||||||
$ | 140,004 | $ | 45,057 | $ | 6,144 | $ | 45,517 | |||||||||||||
2015 Dispositions: | ||||||||||||||||||||
The Alcove Apartments | Houston, Texas | January 26, 2015 | $ | 11,050 | $ | 3,784 | $ | 199 | $ | 3,819 | ||||||||||
107th Avenue Apartments | Omaha, Nebraska | January 29, 2015 | 250 | 50 | 3 | 50 | ||||||||||||||
The Redford Apartments | Houston, Texas | February 27, 2015 | 32,959 | 15,303 | 1,274 | 15,652 | ||||||||||||||
Cityside Apartments | Houston, Texas | March 2, 2015 | 24,500 | 10,028 | 701 | 10,290 | ||||||||||||||
One Hundred Chevy Chase | Lexington, Kentucky | June 30, 2015 | 13,500 | 4,386 | 828 | 4,027 | ||||||||||||||
The Reserve at Mt. Moriah | Memphis, Tennessee | September 18, 2015 | 5,425 | 2,490 | 1,135 | 2,202 | ||||||||||||||
$ | 87,684 | $ | 36,041 | $ | 4,140 | $ | 36,040 |
(1) | On January 27, 2016, the Company and its joint venture partner sold Conifer Place, which resulted in the deconsolidation of the entity as of January 27, 2016. Net income (loss) attributable to properties sold presented includes $6.3 million attributable to noncontrolling interests. |
2018 | $ | 1,770 | |
2019 | 13 | ||
2020 | 9 | ||
2021 | 4 | ||
Thereafter | — | ||
$ | 1,796 |
Balance, January 1, 2016 | $ | 1,231 | |
Activity - 2016: Sale of Conifer Place, Champion Farms, and Fieldstone | (520 | ) | |
Balance, December 31, 2016 | 711 | ||
Activity - 2017: Sale of Stone Ridge | (41 | ) | |
Balance, December 31, 2017 | $ | 670 |
December 31, 2017 | December 31, 2016 | |||||||||||||||||||||||||||||||
Outstanding borrowings | Premium (Discount) | Deferred finance costs, net | Carrying Value | Outstanding borrowings | Premium (Discount) | Deferred finance costs, net | Carrying Value | |||||||||||||||||||||||||
Collateral | ||||||||||||||||||||||||||||||||
Vista Apartment Homes | $ | 14,896 | $ | — | $ | (140 | ) | $ | 14,756 | $ | 15,225 | $ | — | $ | (178 | ) | $ | 15,047 | ||||||||||||||
Cannery Lofts | 13,100 | — | (165 | ) | 12,935 | 13,100 | — | (197 | ) | 12,903 | ||||||||||||||||||||||
Deerfield | — | — | — | — | 10,359 | — | (125 | ) | 10,234 | |||||||||||||||||||||||
Trailpoint at the Woodlands | 18,368 | — | (188 | ) | 18,180 | 18,690 | — | (222 | ) | 18,468 | ||||||||||||||||||||||
Verona Apartment Homes | 32,970 | — | (475 | ) | 32,495 | 32,970 | — | (532 | ) | 32,438 | ||||||||||||||||||||||
Skyview Apartment Homes | 28,400 | — | (413 | ) | 27,987 | 28,400 | — | (462 | ) | 27,938 | ||||||||||||||||||||||
Maxwell Townhomes | 13,342 | — | (109 | ) | 13,233 | 13,602 | — | (137 | ) | 13,465 | ||||||||||||||||||||||
Pinehurst | 7,339 | — | (128 | ) | 7,211 | 7,350 | — | (154 | ) | 7,196 | ||||||||||||||||||||||
Pheasant Run | 6,250 | — | — | 6,250 | 6,250 | 43 | (9 | ) | 6,284 | |||||||||||||||||||||||
Retreat of Shawnee | 12,682 | 7 | (2 | ) | 12,687 | 12,893 | 85 | (23 | ) | 12,955 | ||||||||||||||||||||||
Evergreen at Coursey Place | 26,639 | 77 | (75 | ) | 26,641 | 27,107 | 100 | (96 | ) | 27,111 | ||||||||||||||||||||||
Pines of York | 14,717 | (235 | ) | (44 | ) | 14,438 | 14,999 | (299 | ) | (56 | ) | 14,644 | ||||||||||||||||||||
Estates at Johns Creek | 48,603 | — | (286 | ) | 48,317 | 49,596 | — | (405 | ) | 49,191 | ||||||||||||||||||||||
Chisholm Place | — | — | — | — | 11,587 | — | (143 | ) | 11,444 | |||||||||||||||||||||||
Perimeter Circle | 16,923 | — | (84 | ) | 16,839 | 17,298 | — | (143 | ) | 17,155 | ||||||||||||||||||||||
Perimeter 5550 | 13,356 | — | (70 | ) | 13,286 | 13,651 | — | (118 | ) | 13,533 | ||||||||||||||||||||||
Aston at Cinco Ranch | 22,942 | — | (210 | ) | 22,732 | 23,367 | — | (268 | ) | 23,099 | ||||||||||||||||||||||
Sunset Ridge 1 | 19,254 | 189 | (150 | ) | 19,293 | 19,699 | 259 | (205 | ) | 19,753 | ||||||||||||||||||||||
Sunset Ridge 2 | 2,890 | 26 | (19 | ) | 2,897 | 2,948 | 35 | (26 | ) | 2,957 | ||||||||||||||||||||||
Calloway at Las Colinas | 34,396 | — | (241 | ) | 34,155 | 35,083 | — | (306 | ) | 34,777 | ||||||||||||||||||||||
South Lamar Village | 12,177 | — | (80 | ) | 12,097 | 12,435 | — | (131 | ) | 12,304 | ||||||||||||||||||||||
Heritage Pointe | 25,912 | — | (284 | ) | 25,628 | 26,280 | — | (327 | ) | 25,953 | ||||||||||||||||||||||
Yorba Linda | 67,500 | — | (461 | ) | 67,039 | 67,500 | — | (661 | ) | 66,839 | ||||||||||||||||||||||
Point Bonita Apartment Homes | 26,525 | 1,660 | (285 | ) | 27,900 | 26,907 | 1,966 | (338 | ) | 28,535 | ||||||||||||||||||||||
Stone Ridge | — | — | — | — | 5,227 | — | (130 | ) | 5,097 | |||||||||||||||||||||||
The Westside Apartments | 36,820 | — | (390 | ) | 36,430 | 36,820 | — | (448 | ) | 36,372 | ||||||||||||||||||||||
Tech Center Square | 12,141 | — | (164 | ) | 11,977 | 12,375 | — | (196 | ) | 12,179 | ||||||||||||||||||||||
Williamsburg | 53,995 | — | (706 | ) | 53,289 | 53,995 | — | (828 | ) | 53,167 | ||||||||||||||||||||||
Retreat at Rocky Ridge | 11,375 | — | (223 | ) | 11,152 | 11,375 | — | (261 | ) | 11,114 | ||||||||||||||||||||||
Providence in the Park | 47,000 | — | (524 | ) | 46,476 | — | — | — | — | |||||||||||||||||||||||
Green Trails Apartment Homes | 61,500 | — | (667 | ) | 60,833 | — | — | — | — | |||||||||||||||||||||||
Meridian Pointe | 39,500 | — | (588 | ) | 38,912 | — | — | — | — | |||||||||||||||||||||||
Terraces at Lake Mary | 32,250 | — | (377 | ) | 31,873 | — | — | — | — | |||||||||||||||||||||||
Courtney Meadows Apartments | 27,100 | — | (367 | ) | 26,733 | — | — | — | — | |||||||||||||||||||||||
$ | 800,862 | $ | 1,724 | $ | (7,915 | ) | $ | 794,671 | $ | 627,088 | $ | 2,189 | $ | (7,125 | ) | $ | 622,152 |
Collateral | Maturity Date | Annual Interest Rate | Average Monthly Debt Service | Average Monthly Escrow | ||||||||
Vista Apartment Homes | 1/1/2022 | 3.85% | (1)(5) | $ | 72 | $ | 16 | |||||
Cannery Lofts | 11/1/2023 | 4.10% | (1)(3) | 42 | 26 | |||||||
Trailpoint at the Woodlands | 11/1/2023 | 3.97% | (1)(4) | 83 | 47 | |||||||
Verona Apartment Homes | 10/1/2026 | 3.92% | (1)(3) | 100 | 40 | |||||||
Skyview Apartment Homes | 10/1/2026 | 3.92% | (1)(3) | 86 | 24 | |||||||
Maxwell Townhomes | 1/1/2022 | 4.32% | (2)(5) | 71 | 78 | |||||||
Pinehurst | 11/1/2023 | 3.98% | (1)(3) | 34 | 15 | |||||||
Pheasant Run | 10/1/2018 | 4.06% | (2)(3)(7) | 18 | 12 | |||||||
Retreat of Shawnee | 2/1/2019 | 5.58% | (2)(5)(8) | 78 | 29 | |||||||
Evergreen at Coursey Place | 8/1/2021 | 5.07% | (2)(5) | 154 | 37 | |||||||
Pines of York | 12/1/2021 | 4.46% | (2)(5) | 80 | 25 | |||||||
Estates at Johns Creek | 7/1/2020 | 3.38% | (2)(5) | 221 | 77 | |||||||
Perimeter Circle | 7/1/2019 | 3.42% | (2)(5) | 81 | 44 | |||||||
Perimeter 5550 | 7/1/2019 | 3.42% | (2)(5) | 64 | 32 | |||||||
Aston at Cinco Ranch | 10/1/2021 | 4.34% | (2)(5) | 120 | 70 | |||||||
Sunset Ridge 1 | 11/1/2020 | 4.58% | (2)(5) | 113 | 89 | |||||||
Sunset Ridge 2 | 11/1/2020 | 4.54% | (2)(5) | 16 | — | |||||||
Calloway at Las Colinas | 12/1/2021 | 3.87% | (2)(5) | 171 | 115 | |||||||
South Lamar Village | 8/1/2019 | 3.64% | (2)(5) | 59 | 57 | |||||||
Heritage Pointe | 4/1/2025 | 3.44% | (1)(4) | 114 | 43 | |||||||
Yorba Linda | 6/1/2020 | 3.31% | (1)(3) | 203 | — | |||||||
Point Bonita Apartment Homes | 10/1/2023 | 5.33% | (2)(5) | 152 | 61 | |||||||
The Westside Apartments | 9/1/2026 | 3.68% | (1)(3) | 121 | 69 | |||||||
Tech Center Square | 6/1/2023 | 4.14% | (1)(5) | 58 | 24 | |||||||
Williamsburg | 1/1/2024 | 3.94% | (1)(3) | 165 | 167 | |||||||
Retreat at Rocky Ridge | 1/1/2024 | 4.02% | (1)(3) | 36 | 23 | |||||||
Providence in the Park | 2/1/2024 | 3.86% | (1)(3)(6) | 141 | 138 | |||||||
Green Trails Apartment Homes | 6/1/2024 | 3.55% | (1)(3)(6) | 168 | 79 | |||||||
Meridian Pointe | 8/1/2024 | 3.46% | (1)(3)(6) | 104 | 56 | |||||||
Terraces at Lake Mary | 9/1/2024 | 3.47% | (1)(3)(6) | 86 | 46 | |||||||
Courtney Meadows Apartments | 1/1/2025 | 3.40% | (1)(3)(6) | 76 | 51 |
2018 | $ | 14,005 | ||
2019 | 64,215 | |||
2020 | 144,695 | |||
2021 | 102,886 | |||
2022 | 35,529 | |||
Thereafter | 439,532 | |||
$ | 800,862 |
2018 | $ | 1,683 | |
2019 | 1,580 | ||
2020 | 1,302 | ||
2021 | 1,067 | ||
2022 | 871 | ||
Thereafter | 1,412 | ||
$ | 7,915 |
Balance, January 1, 2015 | $ | (266 | ) |
Unrealized loss on designated derivatives | (174 | ) | |
Balance, December 31, 2015 | (440 | ) | |
Reclassification adjustment for realized loss on designated derivatives | 105 | ||
Unrealized loss on designated derivatives | (10 | ) | |
Balance, December 31, 2016 | (345 | ) | |
Reclassification adjustment for realized loss on designated derivatives | 163 | ||
Unrealized loss on designated derivatives | (380 | ) | |
Balance, December 31, 2017 | $ | (562 | ) |
As of December 31, | |||||||
2017 | 2016 | ||||||
Due from related parties: | |||||||
RAI and affiliates | $ | 371 | $ | 1,375 | |||
Due to related parties: | |||||||
Advisor: | |||||||
Asset management fees | $ | 15 | $ | — | |||
Operating expense reimbursements | 32 | 1,285 | |||||
Subtotal, due to Advisor | 47 | 1,285 | |||||
Manager: | |||||||
Property management fees | 476 | 456 | |||||
Operating expense reimbursements | 196 | 314 | |||||
Subtotal, due to Manager | 672 | 770 | |||||
Total, due to related parties | $ | 719 | $ | 2,055 |
For the Years Ended | |||||||||||
December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
Fees earned / expenses paid to related parties: | |||||||||||
Advisor: | |||||||||||
Acquisition fees (1) | $ | 3,670 | $ | 1,452 | $ | 5,179 | |||||
Asset management fees (2) | 11,352 | 10,484 | 10,240 | ||||||||
Disposition fees (3) | 361 | 686 | 1,140 | ||||||||
Debt financing fees (4) | 1,036 | 532 | 697 | ||||||||
Overhead allocation (5) | 4,442 | 5,621 | 3,733 | ||||||||
Internal audit fees (5) | 69 | 44 | 41 | ||||||||
Manager : | |||||||||||
Property management fees (2) | $ | 5,589 | $ | 5,137 | $ | 4,748 | |||||
Construction management fees (6) | 764 | 926 | 1,895 | ||||||||
Construction payroll reimbursements (6) | 191 | 310 | 483 | ||||||||
Information technology fees (5) | — | 418 | 365 | ||||||||
Operating expense reimbursements (7) | 1,015 | 2,273 | 2,174 | ||||||||
Debt servicing fees (2) | 2 | 15 | 33 | ||||||||
Other: | |||||||||||
Ledgewood (5) | $ | — | $ | 121 | $ | 169 | |||||
The Planning & Zoning Resource Company (1) | 4 | — | — | ||||||||
Graphic Images (5) | 9 | 91 | 59 |
Shares Issued | Gross Proceeds | ||||||
Shares issued through private offering | 1,263,727 | $ | 12,582 | ||||
Shares issued through primary public offering (1) | 62,485,461 | 622,077 | |||||
Shares issued through stock distributions | 2,132,266 | — | |||||
Shares issued through distribution reinvestment plan | 11,560,597 | 118,502 | |||||
Shares issued in conjunction with the Advisor's initial investment, net of 4,500 share conversion | 15,500 | 155 | |||||
Total | 77,457,551 | $ | 753,316 | ||||
Shares redeemed and retired | (6,158,084 | ) | |||||
Total shares outstanding as of December 31, 2017 | 71,299,467 |
(A) | the lesser of |
(1) | the value of the Company as of the date of the event triggering the conversion plus the total distributions paid to its stockholders through such date on the then-outstanding shares of its common stock exceeds |
(2) | the sum of the aggregate issue price of those outstanding shares plus a 10% cumulative, non-compounded, annual return on the issue price of those outstanding shares as of the date of the event triggering the conversion, or |
(1) | the value of the Company as of the date of the event triggering the conversion plus the total distributions paid to its stockholders through such date on the then-outstanding shares of its common stock exceeds |
(2) | the sum of the aggregate issue price of those outstanding shares plus a 6% cumulative, non-compounded, annual return on the issue price of those outstanding shares as of the date of the event triggering the conversion, divided by |
(B) | the value of the Company divided by the number of outstanding shares of common stock, in each case, as of the date of the event triggering the conversion. As of December 31, 2017, no triggering events have occurred. |
Period | Total Number of Shares Redeemed (1) | Average Price Paid per Share | ||
January 2017 | — | — | ||
February 2017 | — | — | ||
March 2017 | 696 | $10.83 | ||
April 2017 | — | — | ||
May 2017 | — | — | ||
June 2017 | 957 | $10.94 | ||
July 2017 | — | — | ||
August 2017 | — | — | ||
September 2017 | 681 | $10.94 | ||
October 2017 | — | — | ||
November 2017 | — | — | ||
December 2017 | 856 | $10.94 | ||
3,190 |
Record Date | Per Common Share | Distribution Date | Distributions Reinvested in Shares of Common Stock | Net Cash Distributions | Total Aggregate Distributions | |||||||||||||
January 30, 2017 | $ | 0.05 | January 31, 2017 | $ | 2,329 | $ | 1,272 | $ | 3,601 | |||||||||
February 27, 2017 | 0.05 | February 28, 2017 | 2,308 | 1,303 | 3,611 | |||||||||||||
March 30, 2017 | 0.05 | March 31, 2017 | 2,274 | 1,314 | 3,588 | |||||||||||||
April 27, 2017 | 0.05 | April 28, 2017 | 2,273 | 1,324 | 3,597 | |||||||||||||
May 30, 2017 | 0.05 | May 31, 2017 | 2,258 | 1,350 | 3,608 | |||||||||||||
June 29, 2017 | 0.05 | June 30, 2017 | 2,249 | 1,322 | 3,571 | |||||||||||||
July 28, 2017 | 0.05 | July 31, 2017 | 2,247 | 1,333 | 3,580 | |||||||||||||
August 30, 2017 | 0.05 | August 31, 2017 | 2,250 | 1,340 | 3,590 | |||||||||||||
September 28, 2017 | 0.05 | September 29, 2017 | 2,233 | 1,335 | 3,568 | |||||||||||||
October 30, 2017 | 0.05 | October 31, 2017 | 2,237 | 1,339 | 3,576 | |||||||||||||
November 29, 2017 | 0.05 | November 30, 2017 | 2,239 | 1,349 | 3,588 | |||||||||||||
December 28, 2017 | 0.05 | December 29, 2017 | 2,217 | 1,338 | 3,555 | |||||||||||||
$ | 0.60 | $ | 27,114 | $ | 15,919 | $ | 43,033 |
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
December 31, 2017 | |||||||||||||||
Assets: | |||||||||||||||
Interest rate caps | $ | — | $ | 49 | $ | — | $ | 49 | |||||||
$ | — | $ | 49 | $ | — | $ | 49 | ||||||||
December 31, 2016 | |||||||||||||||
Assets: | |||||||||||||||
Interest rate caps | $ | — | $ | 242 | $ | — | $ | 242 | |||||||
$ | — | $ | 242 | $ | — | $ | 242 |
December 31, 2017 | December 31, 2016 | ||||||||||||||
Carrying Amount | Fair Value | Carrying Amount | Fair Value | ||||||||||||
Loan held for investment, net | $ | 782 | $ | 1,057 | $ | 769 | $ | 1,104 | |||||||
Mortgage notes payable- outstanding borrowings | (800,862 | ) | (802,523 | ) | (627,088 | ) | (620,578 | ) |
Interest Rate Derivative | Number of Instruments | Notional | Maturity Dates | |||||
Interest Rate Caps | 18 | $ | 477,825 | January 1, 2018 to January 1, 2021 |
Asset Derivatives | Liability Derivatives | |||||||||||||||||||||||
December 31, 2017 | December 31, 2016 | December 31, 2017 | December 31, 2016 | |||||||||||||||||||||
Balance Sheet | Fair Value | Balance Sheet | Fair Value | Balance Sheet | Fair Value | Balance Sheet | Fair Value | |||||||||||||||||
Prepaid expenses and other assets | $ | 49 | Prepaid expenses and other assets | $ | 242 | — | $ | — | — | $ | — |
Quarterly Results for 2017 | March 31 | June 30 | September 30 | December 31 | ||||||||||||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||||||
Revenues | $ | 30,205 | $ | 31,030 | $ | 32,333 | $ | 32,121 | ||||||||
Net income (loss) attributable to common stockholders | (8,866 | ) | (3,162 | ) | 2,191 | (12,132 | ) | |||||||||
Net income (loss) per common share | $ | (0.12 | ) | $ | (0.04 | ) | $ | 0.03 | $ | (0.18 | ) |
Quarterly Results for 2016 | March 31 | June 30 | September 30 | December 31 | ||||||||||||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||||||
Revenues | $ | 30,556 | $ | 30,721 | $ | 28,575 | $ | 28,515 | ||||||||
Net income (loss) | 8,480 | 2,427 | 9,637 | (10,173 | ) | |||||||||||
Less: net (income) loss attributable to noncontrolling interests | (6,281 | ) | (25 | ) | — | — | ||||||||||
Net income (loss) attributable to common stockholders | 2,199 | 2,402 | 9,637 | (10,173 | ) | |||||||||||
Net income (loss) per common share | $ | 0.03 | $ | 0.03 | $ | 0.14 | $ | (0.14 | ) |
RESOURCE REAL ESTATE OPPORTUNITY REIT, INC. SCHEDULE III Real Estate and Accumulated Depreciation December 31, 2017 (in thousands) | ||||||||||||||||||||||||||
Column A | Column B | Column C | Column D | Column E | Column F | Column G | Column H | Column I | ||||||||||||||||||
Description | Encumbrances | Initial cost to Company | Cost capitalized subsequent to acquisition | Gross Amount at which carried at close of period | Accumulated Depreciation | Date of Construction | Date Acquired | Life on which depreciation in latest income is computed | ||||||||||||||||||
Buildings and Land Improvements | Improvements Carrying Costs | Buildings and Land Improvements Total | ||||||||||||||||||||||||
Real estate owned: | ||||||||||||||||||||||||||
Residential | $ | 14,897 | $ | 11,076 | $ | 4,508 | $ | 15,584 | $ | (4,734 | ) | 1961 | 6/17/2011 | 3 - 27.5 years | ||||||||||||
Philadelphia, PA | ||||||||||||||||||||||||||
Residential | 13,100 | 8,273 | 1,759 | 10,032 | (2,640 | ) | 1838 | 5/13/2011 | 3 - 27.5 years | |||||||||||||||||
Dayton, OH | ||||||||||||||||||||||||||
Residential | 53,995 | 39,341 | 13,008 | 52,349 | (16,531 | ) | 1966 | 6/20/2012 | 3 - 27.5 years | |||||||||||||||||
Cincinnati, OH | ||||||||||||||||||||||||||
Residential | 11,375 | 8,064 | 3,672 | 11,736 | (2,796 | ) | 1986 | 4/18/2013 | 3 - 27.5 years | |||||||||||||||||
Hoover, AL | ||||||||||||||||||||||||||
Residential | 18,368 | 26,496 | 4,075 | 30,571 | (6,631 | ) | 1981 | 6/24/2013 | 3 - 27.5 years | |||||||||||||||||
Houston, TX | ||||||||||||||||||||||||||
Residential | 36,820 | 31,001 | 5,438 | 36,439 | (6,876 | ) | 1984 | 7/25/2013 | 3 - 27.5 years | |||||||||||||||||
Plano, TX | ||||||||||||||||||||||||||
Residential | 12,141 | 17,583 | 2,759 | 20,342 | (4,038 | ) | 1985 | 9/9/2013 | 3 - 27.5 years | |||||||||||||||||
Newport News, VA | ||||||||||||||||||||||||||
Residential | 32,970 | 23,321 | 10,091 | 33,412 | (5,565 | ) | 1985 | 9/30/2013 | 3 - 27.5 years | |||||||||||||||||
Littleton, CO | ||||||||||||||||||||||||||
Residential | 28,400 | 29,509 | (1,735 | ) | 27,774 | (4,958 | ) | 1985 | 9/30/2013 | 3 - 27.5 years | ||||||||||||||||
Westminster, CO | ||||||||||||||||||||||||||
Residential | 13,342 | 21,831 | 6,359 | 28,190 | (6,295 | ) | 1982 | 12/16/2013 | 3 - 27.5 years | |||||||||||||||||
San Antonio, TX | ||||||||||||||||||||||||||
Residential (2) | 39,500 | 32,142 | 5,354 | 37,496 | (6,396 | ) | 1988 | 12/20/2013 | 3 - 27.5 years | |||||||||||||||||
Burnsville, MN | ||||||||||||||||||||||||||
Residential | 48,603 | 69,111 | 8,946 | 78,057 | (12,336 | ) | 1999 | 3/28/2014 | 3 - 27.5 years | |||||||||||||||||
Alpharetta, GA | ||||||||||||||||||||||||||
Residential | 26,639 | 42,001 | 1,075 | 43,076 | (7,048 | ) | 2003 | 5/5/2014 | 3 - 27.5 years | |||||||||||||||||
Baton Rouge, LA | ||||||||||||||||||||||||||
Residential | 16,923 | 28,911 | 3,199 | 32,110 | (4,620 | ) | 1995 | 5/19/2014 | 3 - 27.5 years | |||||||||||||||||
Atlanta, GA | ||||||||||||||||||||||||||
Residential | 13,356 | 21,796 | 3,214 | 25,010 | (3,622 | ) | 1995 | 5/19/2014 | 3 - 27.5 years | |||||||||||||||||
Atlanta, GA |
RESOURCE REAL ESTATE OPPORTUNITY REIT, INC. SCHEDULE III Real Estate and Accumulated Depreciation December 31, 2017 (in thousands) (Continued) | ||||||||||||||||||||||||||
Column A | Column B | Column C | Column D | Column E | Column F | Column G | Column H | Column I | ||||||||||||||||||
Description | Encumbrances | Initial cost to Company | Cost capitalized subsequent to acquisition | Gross Amount at which carried at close of period | Accumulated Depreciation | Date of Construction | Date Acquired | Life on which depreciation in latest income is computed | ||||||||||||||||||
Buildings and Land Improvements | Improvements Carrying Costs | Buildings and Land Improvements Total | ||||||||||||||||||||||||
Residential | 22,942 | 31,385 | 3,147 | 34,532 | (4,992 | ) | 2000 | 6/26/2014 | 3 - 27.5 years | |||||||||||||||||
Katy, TX | ||||||||||||||||||||||||||
Residential | 12,682 | 18,250 | 1,222 | 19,472 | (3,645 | ) | 1984 | 7/1/2014 | 3 - 27.5 years | |||||||||||||||||
Shawnee, KS | ||||||||||||||||||||||||||
Residential | 6,250 | 11,898 | 583 | 12,481 | (2,374 | ) | 1985 | 7/1/2014 | 3 - 27.5 years | |||||||||||||||||
Lee's Summit, MO | ||||||||||||||||||||||||||
Residential | 7,338 | 9,691 | 799 | 10,490 | (2,024 | ) | 1983 | 7/1/2014 | 3 - 27.5 years | |||||||||||||||||
Kansas City, MO | ||||||||||||||||||||||||||
Residential | 22,145 | 34,554 | 5,952 | 40,506 | (5,064 | ) | 1949 | 9/4/2014 | 3 - 27.5 years | |||||||||||||||||
San Antonio, TX | ||||||||||||||||||||||||||
Residential | 34,395 | 47,075 | 6,691 | 53,766 | (7,329 | ) | 1984 | 9/29/2014 | 3 - 27.5 years | |||||||||||||||||
Irving, TX | ||||||||||||||||||||||||||
Residential | 14,717 | 21,204 | 580 | 21,784 | (3,153 | ) | 1974 | 11/25/2014 | 3 - 27.5 years | |||||||||||||||||
Yorktown, VA | ||||||||||||||||||||||||||
Residential | 12,177 | 23,370 | 5,192 | 28,562 | (3,307 | ) | 1981 | 2/26/2015 | 3 - 27.5 years | |||||||||||||||||
Austin, TX | ||||||||||||||||||||||||||
Residential | 25,912 | 35,070 | 5,773 | 40,843 | (4,318 | ) | 1986 | 3/19/2015 | 3 - 27.5 years | |||||||||||||||||
Gilbert, AZ | ||||||||||||||||||||||||||
Residential | 67,500 | 116,036 | 8,177 | 124,213 | (8,459 | ) | 1986 | 6/1/2015 | 3 - 27.5 years | |||||||||||||||||
Orange County, CA | ||||||||||||||||||||||||||
Residential | 26,525 | 50,365 | 4,542 | 54,907 | (3,633 | ) | 1988 | 6/16/2015 | 3 - 27.5 years | |||||||||||||||||
Chula Vista, CA | ||||||||||||||||||||||||||
Residential | 47,000 | 61,490 | 1,304 | 62,794 | (2,317 | ) | 1997 | 12/22/2016 | 3 - 27.5 years | |||||||||||||||||
Arlington, TX | ||||||||||||||||||||||||||
Residential | 61,500 | 77,127 | 259 | 77,386 | (1,506 | ) | 1988 | 5/31/2017 | 3 - 27.5 years | |||||||||||||||||
Lisle, IL | ||||||||||||||||||||||||||
Residential | 32,250 | 43,132 | (396 | ) | 42,736 | (501 | ) | 1998 | 8/31/2017 | 3 - 27.5 years | ||||||||||||||||
Lake Mary, FL | ||||||||||||||||||||||||||
RESOURCE REAL ESTATE OPPORTUNITY REIT, INC. SCHEDULE III Real Estate and Accumulated Depreciation December 31, 2017 (in thousands) (Continued) | ||||||||||||||||||||||||||
Column A | Column B | Column C | Column D | Column E | Column F | Column G | Column H | Column I | ||||||||||||||||||
Description | Encumbrances | Initial cost to Company | Cost capitalized subsequent to acquisition | Gross Amount at which carried at close of period | Accumulated Depreciation | Date of Construction | Date Acquired | Life on which depreciation in latest income is computed | ||||||||||||||||||
Buildings and Land Improvements | Improvements Carrying Costs | Buildings and Land Improvements Total | ||||||||||||||||||||||||
Residential | 27,100 | 40,508 | (561 | ) | 39,947 | — | 2001 | 12/20/2017 | 3 - 27.5 years | |||||||||||||||||
Jacksonville, FL | ||||||||||||||||||||||||||
$ | 800,862 | $ | 1,031,611 | $ | 114,986 | $ | 1,146,597 | $ | (147,708 | ) |
For the Years Ended | |||||||||||
December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
Investments in Rental Properties: | |||||||||||
Balance, beginning of the period | $ | 1,010,264 | $ | 1,063,211 | $ | 857,151 | |||||
Acquisitions | 160,767 | 61,490 | 224,841 | ||||||||
Improvements, etc. | 21,592 | 28,024 | 43,018 | ||||||||
Dispositions during the period | (46,026 | ) | (142,461 | ) | (61,799 | ) | |||||
Balance, close of the period (1) | $ | 1,146,597 | $ | 1,010,264 | $ | 1,063,211 | |||||
Accumulated depreciation: | |||||||||||
Balance, beginning of the period | $ | (107,810 | ) | $ | (77,363 | ) | $ | (45,133 | ) | ||
Sales | 8,146 | 12,737 | 9,031 | ||||||||
Disposals | 685 | 819 | 652 | ||||||||
Depreciation | (48,729 | ) | (44,003 | ) | (41,913 | ) | |||||
Balance, close of the period (1) | $ | (147,708 | ) | $ | (107,810 | ) | $ | (77,363 | ) |
Column A | Column B | Column C | Column D | Column E | Column F | Column G | Column H | |||||||||||||
Description | Interest rate | Final maturity date | Periodic payment term | Prior liens | Face amount of mortgages | Carrying amount of mortgages | Principal amount of loans subject to delinquent principal or interest | |||||||||||||
Residential Columbia City, IN | Fixed interest rate of 7.5% | 10/28/2021 | N/A | N/A | $ | 1,058 | $ | 782 | $ | — | ||||||||||
$ | 1,058 | $ | 782 | $ | — |
Year Ended | |||
December 31, 2017 | |||
Balance, beginning of the period | $ | 769 | |
Interest accretion | 39 | ||
Principal reductions | (26 | ) | |
Balance, end of the period | $ | 782 |
Subsidiaries |
RRE Opportunity Holdings, LLC |
Resource Real Estate Opportunity OP, LP |
RRE Westhollow Holdings, LLC |
RRE Iroquois, LP |
RRE Iroquois Holdings, LLC |
RRE Campus Club Holdings, LLC |
RRE Cannery Holdings, LLC |
RRE Williamsburg Holdings, LLC |
WPL Holdings, LLC |
RRE Park Forest Holdings, LLC |
RRE Deerfield Holdings, LLC |
RRE Kenwick & Canterbury Holdings, LLC |
RRE Autumn Wood Holdings, LLC |
RRE Village Square Holdings, LLC |
RRE Brentdale Holdings, LLC |
RRE Jefferson Point Holdings, LLC |
RRE Centennial Holdings, LLC |
RRE Pinnacle Holdings, LLC |
RRE River Oaks Holdings, LLC |
RRE Nicollet Ridge Holdings, LLC |
RRE Charlemagne Holdings, LLC |
RRE Addison Place, LLC |
PRIP Coursey, LLC |
PRIP 500, LLC |
PRIP 1102, LLC |
PRIP 11128, LLC |
PRIP Stone Ridge, LLC |
PRIP Pines, LLC |
RRE Chisholm Place Holdings LLC |
RRE Berkeley Run Holdings, LLC |
RRE Berkeley Trace Holdings LLC |
RRE Merrywood LLC |
RRE Sunset Ridge Holdings, LLC |
RRE Parkridge Place Holdings, LLC |
RRE Spring Hill Holdings, LLC |
RRE Woodmoor Holdings, LLC |
RRE Gilbert Holdings, LLC |
RRE Bonita Glen Holdings, LLC |
RRE Yorba Linda Holdings, LLC |
RRE Providence Holdings, LLC |
RRE Green Trails Holdings, LLC |
RRE Terraces at Lake Mary Holdings, LLC |
RRE Courtney Meadows Holdings, LLC |
/s/ GRANT THORNTON LLP |
Philadelphia, Pennsylvania |
March 29, 2018 |
1) | I have reviewed this annual report on Form 10-K for the year ended December 31, 2017 of Resource Real Estate Opportunity REIT, 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(s) 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(s) 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. |
RESOURCE REAL ESTATE OPPORTUNITY REIT, INC. | ||
March 29, 2018 | By: | /s/ Alan F. Feldman |
Alan F. Feldman | ||
Chief Executive Officer | ||
(Principal Executive Officer) |
1) | I have reviewed this annual report on Form 10-K for the year ended December 31, 2017 of Resource Real Estate Opportunity REIT, 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(s) 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(s) 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. |
RESOURCE REAL ESTATE OPPORTUNITY REIT, INC. | ||
March 29, 2018 | By: | /s/ Steven R. Saltzman |
Steven R. Saltzman | ||
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, and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
RESOURCE REAL ESTATE OPPORTUNITY REIT, INC. | ||
March 29, 2018 | By: | /s/ Alan F. Feldman |
Alan F. Feldman | ||
Chief Executive Officer | ||
(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, and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
RESOURCE REAL ESTATE OPPORTUNITY REIT, INC. | ||
March 29, 2018 | By: | /s/ Steven R. Saltzman |
Steven R. Saltzman | ||
Chief Financial Officer | ||
(Principal Financial Officer) |
/s/ Duff & Phelps, LLC |
Duff & Phelps, LLC |
March 29, 2018 |
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Document and Entity Information - USD ($) |
12 Months Ended | ||
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Dec. 31, 2017 |
Mar. 21, 2018 |
Jun. 30, 2017 |
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Document and Entity Information [Abstract] | |||
Entity Registrant Name | Resource Real Estate Opportunity REIT, Inc. | ||
Entity Central Index Key | 0001466225 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2017 | ||
Document Fiscal Year Focus | 2017 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 71,704,077 | ||
Public Float | $ 0 |
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares |
Dec. 31, 2017 |
Dec. 31, 2016 |
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Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, issued (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized (in shares) | 1,000,000,000 | 1,000,000,000 |
Common stock, issued (in shares) | 77,457,551 | 74,975,022 |
Common stock, outstanding (in shares) | 71,299,467 | 72,006,589 |
Convertible stock ('promote shares'), par value (in dollars per share) | $ 0.01 | $ 0.01 |
Convertible stock ('promote shares'), authorized (in shares) | 50,000 | 50,000 |
Convertible stock ('promote shares'), issued (in shares) | 50,000 | 50,000 |
Convertible stock ('promote shares'), outstanding (in shares) | 49,995 | 50,000 |
NATURE OF BUSINESS AND OPERATIONS |
12 Months Ended |
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Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
NATURE OF BUSINESS AND OPERATIONS | NATURE OF BUSINESS AND OPERATIONS Resource Real Estate Opportunity REIT, Inc. (the “Company”) was organized in Maryland on June 3, 2009 to purchase a diversified portfolio of discounted U.S. commercial real estate and real estate-related assets in order to generate gains to stockholders from the potential appreciation in the value of the assets and to generate current income for stockholders by distributing cash flow from the Company’s investments. Resource Real Estate Opportunity Advisor, LLC (the “Advisor”), an indirect wholly owned subsidiary of Resource America, Inc. (“RAI”) has been engaged to manage the day-to-day operations of the Company. RAI is a wholly-owned subsidiary of C-III Capital Partners LLC, ("C-III"), a leading commercial real estate investment management and services company engaged in a broad range of activities. C-III controls both our Advisor and Resource Real Estate Opportunity Manager, LLC (the "Manager"), the Company's property manager; C-III also controls all of the shares of common stock held by the Advisor. Through its private offering and primary public offering, which concluded on December 13, 2013, the Company raised aggregate gross offering proceeds of $645.8 million, which resulted in the issuance of 64.9 million shares of common stock, including 276,056 shares purchased by the Advisor and 1.2 million shares sold in the Company's distribution reinvestment plan. During the years ended December 31, 2017, 2016 and 2015, the Company issued a total of 8.0 million, in aggregate, additional shares for $84.6 million pursuant to its distribution reinvestment plan. The Company's distribution reinvestment plan offering is ongoing. The Company has acquired, and may continue to acquire, real estate and real estate-related debt. The Company has a particular focus on owning and operating multifamily assets, and has targeted, and intends to continue to target, this asset class while also possibly acquiring interests in other types of commercial property assets consistent with its investment objectives. The Company’s portfolio predominantly consists of multifamily rental properties to which the Company has added or will add value with a capital infusion (referred to as “value add properties”). However, the Company is not limited in the types of real estate assets in which it may invest and, accordingly, it may invest in other real estate-related assets either directly or together with a co-investor or joint venture partner. The Company is organized and conducts its operations in a manner intended to allow it to qualify as a real estate investment trust (“REIT”) for U.S. federal income tax purposes under Subchapter M of the Internal Revenue Code of 1986, as amended. The Company also operates its business in a manner intended to maintain its exemption from registration under the Investment Company Act of 1940, as amended. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A summary of the significant accounting policies consistently applied in the preparation of the accompanying consolidated financial statements follows: Basis of Presentation The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP"). Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries as follows:
N/A - Not Applicable (a) Subsidiary transferred its interest in a portion of the Williamsburg parking lot to RRE Williamsburg Holdings, LLC in 2016. (b) Wholly-owned subsidiary of RRE Charlemagne Holdings, LLC. (c) Underlying investment sold prior to 2016. (d) Underlying investment sold in 2016. (e) Underlying investment resolved in 2016. (f) Subsidiary was dissolved prior to December 31, 2017. (g) Underlying investment sold in 2017. All intercompany accounts and transactions have been eliminated in consolidation. The consolidated financial statements reflect the Company's accounts and the accounts of the Company's majority-owned and/or controlled subsidiaries. The Company follows the provisions of Accounting Standards Codification (“ASC”) Topic 810, “Consolidation,” and accordingly consolidates entities that are variable interest entities (“VIEs”) where it has determined that it is the primary beneficiary of such entities. Once it has been determined that the Company holds a variable interest in a VIE, management performs a qualitative analysis to determine (i) if the Company has the power to direct the matters that most significantly impact the VIE's financial performance; and (ii) if the Company has the obligation to absorb the losses of the VIE that could potentially be significant to the VIE or the right to receive the benefits of the VIE that could potentially be significant to the VIE. If the Company's interest possesses both of these characteristics, the Company is deemed to be the primary beneficiary and would be required to consolidate the VIE. The Company will continually assess its involvement with VIEs and re-evaluate the requirement to consolidate them. For consolidated entities (including VIEs of which the Company is the primary beneficiary), noncontrolling interests are presented and disclosed as a separate component of stockholders' equity (not as a liability or other item outside of stockholders' equity). Consolidated net income (loss) includes the noncontrolling interests’ share of income (loss). All changes in the Company’s ownership interest in a subsidiary are accounted for as stockholders' equity transactions if the Company retains its controlling financial interest in the subsidiary. The portions of these entities that the Company does not own are presented as noncontrolling interests as of the dates and for the periods presented in the consolidated financial statements. The consolidated financial statements include the accounts of the Company's majority-owned and/or controlled subsidiaries, which are VIEs, as follows:
The property held by DT Stone Ridge, LLC was sold on September 27, 2017 and a distribution to the joint venture partner was completed in October 2017. As a result, all of the Company's subsidiaries are wholly-owned. Until June 16, 2016, the Company had a preferred equity investment that was repaid in full on that date. The Company's preferred equity investment was a VIE for which the Company had determined it was not the primary beneficiary; therefore, the Company did not consolidate the entity. The Company was not considered the primary beneficiary of the preferred equity investee because it did not possess the unilateral power to direct the key activities of the investee that were considered most significant. The Company has no further continuing involvement with the investee. Additional information with respect to the preferred equity investment is disclosed in Note 6. Segment Reporting The Company does not evaluate performance on a relationship specific or transactional basis and does not distinguish its principal business or group its operations on a geographical basis for purposes of measuring performance. Accordingly, the Company believes it has a single operating segment for reporting purposes in accordance with GAAP. Use of Estimates The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Assets Held for Sale The Company presents the assets and liabilities of any rental properties which qualify as held for sale, separately in the consolidated balance sheets. Real estate assets held for sale are measured at the lower of carrying amount or fair value less cost to sell. Both the real estate and the corresponding liabilities are presented separately in the consolidated balance sheets. Subsequent to classification of an asset as held for sale, no further depreciation is recorded. The Company had no rental properties included in assets held for sale as of December 31, 2017 and 2016. Rental Properties The Company records acquired rental properties at fair value on their respective acquisition date. The Company considers the period of future benefit of an asset to determine its appropriate useful life and depreciates the rental properties using the straight line method. The Company anticipates the estimated useful lives of its assets by class as follows:
Improvements and replacements in excess of $1,000 are capitalized when they have a useful life greater than or equal to one year. The Manager earns a construction management fee of 5.0% of actual aggregate costs to construct improvements, or to repair, rehab or reconstruct a property. These costs are capitalized along with the related asset. Costs of repairs and maintenance are expensed as incurred. As of December 31, 2017, the Company's real estate investments in Texas, Georgia, and California represented approximately 27%, 11%, and 17% of the net book value of its rental property assets, respectively. As a result, the geographic concentration of the Company's portfolio makes it particularly susceptible to adverse economic developments in the Texas, Georgia, and California real estate markets. Any adverse economic or real estate developments in these markets, such as business layoffs or downsizing, industry slowdowns, relocations of businesses, changing demographics and other factors, or any decrease in demand for multifamily rentals resulting from the local business climate, could adversely affect the Company's operating results and its ability to make distributions to stockholders. Concentration of Credit Risk Financial instruments, which potentially subject the Company to concentration of credit risk, consist of periodic temporary deposits of cash. At December 31, 2017, the Company had $133.0 million of deposits at various banks, $119.2 million of which were over the insurance limit of the Federal Deposit Insurance Corporation. No losses have been experienced on such deposits. Contractual Obligations The Company leases parking space and equipment under leases with varying expiration dates through 2023. As of December 31, 2017, the total payments due under these obligations were $226,000. Impairment of Long Lived Assets When circumstances indicate the carrying value of a property may not be recoverable, the Company reviews the asset for permanent impairment. This review is based on an estimate of the future undiscounted cash flows, excluding interest charges, expected to result from the property’s use and eventual disposition. The review also considers factors such as expected future operating income, market and other applicable trends and residual value, as well as the effects of leasing demand, competition and other factors. An impairment loss will be recorded to the extent that the carrying value exceeds the estimated fair value of the property for properties to be held and used. For properties held for sale, the impairment loss would be the adjustment to fair value less the estimated cost to dispose of the asset. There were no impairment losses recorded on long lived assets during the years ended December 31, 2017, 2016 and 2015. Loans Held for Investment, Net The Company records acquired performing loans held for investment at cost and reviews them for potential impairment at each balance sheet date. The Company considers a loan to be impaired if one of two conditions exists. The first condition is if, based on current information and events, management believes it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement. The second condition is if the loan is deemed to be a troubled-debt restructuring (“TDR”) where a concession has been given to a borrower in financial difficulty. A TDR may not have an associated specific loan loss allowance if the principal and interest amount is considered recoverable based on current market conditions, expected collateral performance and/or guarantees made by the borrowers. The amount of impairment, if any, is measured by comparing the recorded amount of the loan to the present value of the expected cash flows or, as a practical expedient, the fair value of the collateral. If a loan is deemed to be impaired, the Company records a reserve for loan losses through a charge to income for any shortfall. Interest income from performing loans held for investment is recognized based on the contractual terms of the loan agreement. Fees related to any buy down of the interest rate are deferred as prepaid interest income and amortized over the term of the loan as an adjustment to interest income. The initial investment made in a purchased performing loan includes the amount paid to the seller plus fees. The initial investment frequently differs from the related loan’s principal amount at the date of the purchase. The difference is recognized as an adjustment of the yield over the life of the loan. Closing costs related to the purchase of a performing loan held for investment are amortized over the term of the loan and accreted as an adjustment to interest income. The Company may acquire real estate loans at a discount due to the credit quality of such loans and the respective borrowers under such loans. Revenues from these loans are recorded under the effective interest method. Under this method, an effective interest rate (“EIR”) is applied to the cost basis of the real estate loan held for investment. The EIR that is calculated when the loan held for investment is acquired remains constant and is the basis for subsequent impairment testing and income recognition. However, if the amount and timing of future cash collections are not reasonably estimable, the Company accounts for the real estate receivable on the cost recovery method. Under the cost recovery method of accounting, no income is recognized until the basis of the loan held for investment has been fully recovered. Preferred Equity Investment The Company recorded its preferred equity investment, included in other investments on the consolidated balance sheets, at amortized cost. Investments carried at amortized cost were evaluated for impairment at each reporting date. When an investment was impaired and that impairment was considered other than temporary, the amount of the loss accrual was calculated by comparing the carrying amount of the investment to its estimated fair value. This investment was repaid in full on June 6, 2016 (See Note 6). Dividend income was recognized when earned based on the contractual terms of the preferred equity agreement. Allocation of the Purchase Price of Acquired and Foreclosed Assets The company records the acquisition of real properties as business combinations. The cost of rental properties acquired directly as fee interests and through foreclosing on a loan are allocated to net tangible and intangible assets based on their relative fair values. The Company allocates the purchase price of properties to acquired tangible assets, consisting of land, buildings, fixtures and improvements, and to identified intangible lease assets and liabilities, consisting of the value of above-market and below-market leases, as applicable, the value of in-place leases and the value of tenant relationships. Fair value estimates are based on information obtained from a number of sources, including information obtained about each property as a result of pre-acquisition due diligence, marketing and leasing activities. In addition, the Company may obtain independent appraisal reports. The information in the appraisal reports along with the aforementioned information available to the Company's management is used in allocating the purchase price. The independent appraisers have no involvement in management's allocation decisions other than providing market information. In allocating the purchase price, management also includes real estate taxes, insurance and other operating expenses and estimates of lost rentals at market rates during the expected lease-up period. Management also estimates costs to execute similar leases, including leasing commissions and legal and other related expenses, to the extent that such costs have not already been incurred in connection with a new lease origination as part of the transaction. The Company records above-market and below-market in-place lease values for acquired properties based on the present value (using an interest rate that reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to the in-place leases and (ii) management’s estimate of fair market lease rates for the corresponding in-place leases, measured over a period equal to the remaining non-cancelable term of the lease. The Company amortizes any capitalized above-market or below-market lease values as an increase or reduction to rental income over the remaining non-cancelable terms of the respective leases. The Company measures the aggregate value of other intangible assets acquired based on the difference between (i) the property valued with existing in-place leases adjusted to market rental rates and (ii) the property valued as if it were vacant. Management’s estimates of value are made using methods similar to those used by independent appraisers (e.g., discounted cash flow analysis). Factors to be considered by management in its analysis include an estimate of carrying costs during hypothetical expected lease-up periods considering current market conditions and costs to execute similar leases. The total amount of other intangible assets acquired is further allocated to customer relationship intangible values based on management’s evaluation of the specific characteristics of each tenant’s lease and the Company’s overall relationship with that respective tenant. Characteristics to be considered by management in allocating these values include the nature and extent of the Company’s existing relationships with the tenant, the tenant’s credit quality and expectations of lease renewals (including those existing under the terms of the lease agreement), among other factors. The Company amortizes the value of in-place leases to expense over the average remaining term of the respective leases. The value of customer relationship intangibles are amortized to expense over the initial term and any renewal periods in the respective leases, but in no event will the amortization periods for the intangible assets exceed the remaining depreciable life of the building. Should a tenant terminate its lease, the unamortized portion of the in-place lease value and customer relationship intangibles associated with that tenant would be charged to expense in that period. The determination of the fair value of assets and liabilities acquired requires the use of significant assumptions with regard to current market rental rates, discount rates and other variables. The use of inappropriate estimates would result in an incorrect assessment of the purchase price allocations, which could impact the amount of the Company’s reported net income. Initial purchase price allocations are subject to change until all information is finalized, which is generally within one year of the acquisition date. Goodwill The Company records the excess of the cost of an acquired entity over the difference between the amounts assigned to assets acquired (including identified intangible assets) and liabilities assumed as goodwill. Goodwill is not amortized but is tested for impairment at a level of reporting referred to as a reporting unit during the fourth quarter of each calendar year, or more frequently if events or changes in circumstances indicate that the asset might be impaired. The Company tested goodwill as of December 31, 2017 and found no indications of impairment. Revenue Recognition The Company recognizes minimum rent, including rental abatements and contractual fixed increases attributable to operating leases, on a straight-line basis over the term of the related lease and includes amounts expected to be received in later years. The future minimum rental payments to be received from noncancelable operating leases for residential rental properties are $58.2 million and $95,000 for the years ending December 31, 2018 and 2019, respectively, and none thereafter. The future minimum rental payments to be received from noncancelable operating leases for commercial rental properties and antenna rentals are $440,000, $389,000, $318,000, $241,000, and $114,000 for the years ending December 31, 2018, 2019, 2020, 2021, and 2022, respectively, and none thereafter. Revenue is primarily derived from the rental of residential housing units, however, included within rental income is other income such as pet fees, parking fees, and late fees, as well as property operating expense reimbursements due from tenants for common area maintenance, real estate taxes and other recoverable costs. The Company records the ancillary charges in the period they are earned or received and records the reimbursements in the period in which the related expenses are incurred. Total other income included within rental income was $12.6 million, $10.8 million and $11.7 million for the years ended December 31, 2017, 2016 and 2015, respectively. Tenant Receivables Tenant receivables are stated in the financial statements at amounts due from tenants net of an allowance for uncollectible receivables. Payment terms vary and receivables outstanding longer than the payment terms are considered past due. The Company determines its allowance by considering a number of factors, including the length of time receivables are past due, security deposits held, the Company’s previous loss history, the tenants’ current ability to pay their obligations to the Company, the condition of the general economy and the industry as a whole. The Company writes off receivables when they become uncollectible. At December 31, 2017 and 2016, there were allowances for uncollectible receivables of $149,300 and $5,200, respectively. Income Taxes The Company elected to be taxed as a REIT commencing with its taxable year ended December 31, 2010. To maintain its REIT qualification for U.S. federal income tax purposes, the Company is generally required to distribute at least 90% of its taxable net income (excluding net capital gains) to its stockholders as well as comply with other requirements, including certain asset, income and stock ownership tests. As a REIT, the Company is not subject to federal corporate income tax to the extent that it distributes 100% of its REIT taxable income each year. If the Company fails to qualify as a REIT, and does not qualify for certain statutory relief provisions, it is subject to U.S. federal, state and local income taxes and may be precluded from qualifying as a REIT for the subsequent four taxable years following the year in which it fails its REIT qualification. Accordingly, the Company’s failure to qualify as a REIT could have a material adverse impact on its results of operations and amounts available for distribution to its stockholders. The dividends-paid deduction of a REIT for qualifying dividends to its stockholders is computed using the Company’s taxable income as opposed to net income reported on the financial statements. Generally, taxable income differs from net income reported on the financial statements because the determination of taxable income is based on tax provisions and not financial accounting principles. The Company may elect to treat any of its subsidiaries as taxable REIT subsidiaries (“TRSs”). In general, the Company’s TRSs may hold assets and engage in activities that the Company cannot hold or engage in directly and generally may engage in any real estate or non-real estate-related business. A TRS is subject to U.S. federal, state and local corporate income taxes. While a TRS may generate net income, a TRS can declare dividends to the Company which will be included in the Company's taxable income and necessitate a distribution to its stockholders. Conversely, if the Company retains earnings at a TRS level, no distribution is required and the Company can increase book equity of the consolidated entity. As of December 31, 2017 and 2016, the Company had no TRSs. The Company evaluates the benefits from tax positions taken or expected to be taken in its tax return. Only the largest amount of benefits from tax positions that will more likely than not be sustainable upon examination are recognized by the Company. The Company does not have any unrecognized tax benefits, nor interest and penalties, recorded in its consolidated financial statements and does not anticipate significant adjustments to the total amount of unrecognized tax benefits within the next 12 months. The Company is subject to examination by the U.S. Internal Revenue Service and by the taxing authorities in other states in which the Company has significant business operations. The Company is not currently undergoing any examinations by taxing authorities. The Company is not subject to IRS examination for tax return years 2013 and prior. The Tax Cuts and Jobs Act ("TCJA") was signed into law on December 22, 2017. The TCJA makes significant changes to the U.S. federal income tax rules for taxation of individuals and corporations (including REITs), generally effective for taxable years beginning after December 31, 2017. The Company is continuing to evaluate this legislation but does not expect it to have a significant impact. Earnings Per Share Basic earnings per share are calculated on the basis of the weighted-average number of common shares outstanding during the year. Basic earnings per share are computed by dividing income available to common stockholders by the weighted-average common shares outstanding during the period. Diluted earnings per share take into account the potential dilution that could occur if securities or other contracts to issue common stock were exercised and converted to common stock. None of the 49,995 shares of convertible stock (discussed in Note 15) are included in the diluted earnings per share calculations because the necessary conditions for conversion have not been satisfied as of December 31, 2017 (were such date to represent the end of the contingency period). For the purposes of calculating earnings per share, all common shares and per common share information in the financial statements have been adjusted retroactively for the effect of seven 1.5% stock distributions, two 0.75% stock distributions, one 0.585% stock distribution and two 0.5% stock distributions issued to stockholders. Common stock shares issued on the consolidated balance sheets have also been adjusted retroactively for the effect of these 12 distributions. Reclassifications Certain amounts in the prior year financial statements have been reclassified to conform to the current-year presentation. The impact of the reclassifications made to prior year amounts are not material and did not affect net income (loss). Adoption of New Accounting Standards Accounting Standards Issued But Not Yet Effective In May 2014, FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers” ("ASU No. 2014-09"), which will replace most existing revenue recognition guidance in GAAP. Under the new standard, revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred, the fee is fixed or determinable, and collectability is probable. ASU No. 2014-09 requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments. The Company will adopt ASU 2014-09 as of January 1, 2018 using the modified retrospective approach. The majority of the Company’s revenue is derived from residential rental income and other lease income, which are scoped out from this standard and included in the current lease accounting framework, and will be accounted for under ASU No. 2016-02, Leases, as discussed below. Revenue streams that are in the scope of the new standards include (but are not limited to) administrative and late fees and revenue sharing arrangements of cable income from contracts with cable providers at the Company's properties. Due to the nature and timing of the Company’s identified revenue streams as of December 31, 2017, the Company does not anticipate the adoption of the new standards will have a material impact on its financial position or results of operations. In February 2016, FASB issued ASU No. 2016-02, "Leases" ("ASU No. 2016-02"), which is intended to improve financial reporting about leasing transactions and requires organizations that lease assets to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases. In September 2017, the FASB issued ASU 2017-13, "Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842)", which provides additional implementation guidance on the previously issued ASU No. 2016-02 Leases (Topic 842). ASU No. 2016-02 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company is continuing to evaluate this guidance, however, the Company expects that its operating leases where it is the lessor will be accounted for on its balance sheet similar to its current accounting with the underlying leased asset recognized as real estate. The Company expects that executory costs and certain other non-lease components will need to be accounted for separately from the lease component of the lease with the lease component continuing to be recognized on a straight-line basis over the lease term and the executory costs and certain other non-lease components being accounted for under the new revenue recognition guidance in ASU 2014-09. For leases in which the Company is the lessee, primarily consisting of office equipment leases, the Company expects to recognize a right-of-use asset and a lease liability equal to the present value of the minimum lease payments with rental payments being applied to the lease liability and to interest expense and the right-of-use asset being amortized to expense on a straight-line basis over the term of the lease. In June 2016, FASB issued ASU No. 2016-13, “Financial Instruments - Credit Losses”, which requires measurement and recognition of expected credit losses for financial assets held. ASU No. 2016-13 will be effective for the Company beginning January 1, 2019. The Company is evaluating this guidance; however, it does not expect the adoption of ASU No. 2016-13 to have a significant impact on its consolidated financial statements. In August 2016, FASB issued ASU No. 2016-15, "Classification of Certain Cash Receipts and Cash Payments", which addresses eight specific cash flow issues with the objective of reducing existing diversity in practice. The guidance is effective for the Company beginning January 1, 2018. Early application is permitted. The adoption of the new requirements is not expected to have a material impact on the reporting of the Company's consolidated cash flows. In November 2016, the FASB issued ASU No. 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash” (“ASU No. 2016-18”), which provides guidance on the classification of restricted cash in the statement of cash flows. ASU No. 2016-18 is effective for the Company's fiscal year beginning January 1, 2018, and the Company does not expect the adoption of ASU No. 2016-18 to have a material effect on the Company's consolidated financial statements and disclosures. In January 2017, FASB issued ASU No. 2017-01, "Business Combinations (Topic 850): Clarifying the Definition of Business", which clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of businesses. ASU No. 2017-01 is effective for the Company beginning January 1, 2018 but early adoption is allowed. The Company believes all future acquisitions will be accounted for as asset acquisitions, not business acquisitions. In January 2017, FASB issued ASU No. 2017-04, "Intangibles - Goodwill and Other (Topic 350): Simplifying the Accounting for Goodwill Impairment", which alters the current goodwill impairment testing procedures to eliminate Step 2. Step 2 required that, if the carrying amount of a reporting unit exceeded its fair value, the implied fair value of the goodwill must be compared to the carrying amount in order to determine impairment. ASU No. 2017-04 will be effective for the Company beginning December 15, 2019. Early application is permitted. The Company is evaluating this guidance and assessing the impact of this guidance on its consolidated financial statements. In August 2017, FASB issued ASU No. 2017-12, "Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities", which expands and refines hedge accounting for both financial and non-financial risk components, aligns the recognition and presentation of the effects of hedging instruments and hedge items in the financial statements, and includes certain targeted improvements to ease the application of current guidance related to the assessment of hedge effectiveness. The update to the standard is effective for the Company on January 1, 2019, with early adoption permitted in any interim period. The Company is continuing to evaluate this guidance and assessing the impact of this guidance on its consolidated financial statements. |
SUPPLEMENTAL CASH FLOW INFORMATION |
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Supplemental Cash Flow Elements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SUPPLEMENTAL CASH FLOW INFORMATION | SUPPLEMENTAL CASH FLOW INFORMATION The following table presents the Company's supplemental cash flow information (in thousands):
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RESTRICTED CASH |
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Restricted Cash | RESTRICTED CASH Restricted cash represents escrow deposits with lenders to be used to pay real estate taxes, insurance, and capital improvements. The following table presents a summary of the components of the Company's restricted cash (in thousands):
In addition, the Company had unrestricted cash designated for capital expenditures of approximately $86.9 million and $101.6 million as of December 31, 2017 and 2016, respectively. |
RENTAL PROPERTIES, NET |
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RENTAL PROPERTIES, NET | RENTAL PROPERTIES, NET The following table presents the Company’s investments in rental properties (in thousands):
Depreciation expense for the years ended December 31, 2017, 2016, and 2015 was $48.7 million, $44.0 million, and $41.9 million, respectively. |
OTHER INVESTMENTS |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
OTHER INVESTMENTS | OTHER INVESTMENTS Preferred equity investment: On November 12, 2014, the Company, through its wholly owned subsidiary, RRE Spring Hill Holdings, LLC, made a $3.5 million preferred equity investment in Spring Hill Investors Limited Partner, LLC (the “Investment Vehicle”) and became the Preferred Member. An unaffiliated limited liability company, Presidium AMC Spring Hill Venture, LLC, owned the common equity and acted as the managing member of the Investment Vehicle. In October 2015 and March 2016, the Company increased its investment by $800,000. The Company was paid a dividend equal to 12% of the total amount invested, of which 7% was paid monthly and the remaining amount was accrued. This preferred equity investment, including accrued interest, was repaid in full on June 6, 2016. In conjunction with the payoff, the Company received an exit fee of $230,000, which is included in interest and dividend income in the Company's consolidated statement of operations. Loan held for investment, net: In 2011, the Company purchased, at a discount, one performing promissory note (the "Trail Ridge Note”), which is secured by a first priority mortgage on a multifamily rental apartment community. The contract purchase price for the Trail Ridge Note was $700,000, excluding closing costs. As of both December 31, 2017 and December 31, 2016, the Trail Ridge Note was both current and performing. In 2011, the Company also purchased, at a discount, a non-performing promissory note (the "Heatherwood Note”), which was secured by a first priority mortgage on multifamily rental apartment communities. The contract purchase price for the Heatherwood Note was $800,000, excluding closing costs. On August 18, 2011, the Company was the successful bidder at a foreclosure sale of the property collateralizing the Heatherwood Note. Possession of the Heatherwood Apartments was obtained in February 2012 and the property was subsequently sold in April 2013. On April 18, 2013, in connection with the sale of the Heatherwood Apartments, the Company originated an $800,000 mortgage loan (the "Heatherwood Sale Note") to the purchaser of the Heatherwood Apartments on the same date. In May 2015, the Company agreed to accept $583,000 from the borrower and apply $58,000 of escrow balances in full satisfaction of the loan. As such, the Company recorded a provision for loan loss of $130,000 during the year ended December 31, 2015 related to this payoff. The following table presents details of the balance and terms of the Trail Ridge Note, the Company's remaining loan held for investment at December 31, 2017 and 2016 (in thousands):
The Company has evaluated the loan for impairment and determined that, as of December 31, 2017, it was not impaired. There were no allowances for credit losses as of both December 31, 2017 and 2016. There were no charge-offs for the years ended December 31, 2017 and 2016. |
ACQUISITIONS |
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ACQUISITIONS | ACQUISITIONS Real Estate Investments As of December 31, 2017, the Company owned 30 properties, including five of the 11 properties purchased on January 28, 2014 as part of the Paladin Realty Income Properties, Inc. (“Paladin”) portfolio acquisition. The Company estimated the fair values of certain of the acquired assets and liabilities based on preliminary valuations at the date of purchase. In order to finalize the fair values of the acquired assets and liabilities, a third-party appraisal was obtained for each property acquired. The Company has up to 12 months from the date of acquisition to finalize the valuation for each property. All valuations have been finalized as of December 31, 2017. The table below summarizes the Company's wholly-owned acquisitions during the year ended December 31, 2017 and the respective fair values assigned (dollars in thousands):
Acquisitions The Company acquired three properties during the year ended December 31, 2017. The tables below present the total revenues, net loss, and acquisition costs of the Company's acquisitions during the years ended December 31, 2017, 2016, and 2015 (dollars in thousands):
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DISPOSITION OF PROPERTIES AND DECONSOLIDATION OF INTERESTS |
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Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DISPOSITION OF PROPERTIES AND DECONSOLIDATION OF INTERESTS | DISPOSITION OF PROPERTIES AND DECONSOLIDATION OF INTERESTS The following table presents details of our disposition and deconsolidation activity during the years ended December 31, 2017, 2016, and 2015 (in thousands):
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IDENTIFIED INTANGIBLE ASSETS, NET |
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||
IDENTIFIED INTANGIBLE ASSETS, NET | IDENTIFIED INTANGIBLE ASSETS, NET Identified intangible assets, net, relate to in-place apartment unit rental and antennae leases. The value of the acquired in-place leases totaled $1.8 million and $1.9 million as of December 31, 2017 and 2016, respectively, net of accumulated amortization of $26.6 million and $24.3 million, respectively. The weighted-average remaining life of the acquired apartment unit rental leases is five months and seven months as of December 31, 2017 and 2016, respectively. Expected amortization for the antennae leases at the Vista Apartment Homes for the years ended December 31, 2018, 2019, 2020, and 2021 are $14,000, $13,000, $9,000, and $5,000, respectively, and none thereafter. Amortization of the rental and antennae leases for the years ended December 31, 2017, 2016, and 2015 was $3.6 million, $228,000, and $6.4 million, respectively. The following table presents the Company's expected amortization for the rental and antennae leases for the next five years ending December 31, and thereafter (in thousands):
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GOODWILL |
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Dec. 31, 2017 | |||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||
Goodwill | GOODWILL The following table presents a rollforward of the Company's activity in goodwill for the years ended December 31, 2017 and 2016 (in thousands):
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MORTGAGE NOTES PAYABLE, NET |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
MORTGAGE NOTES PAYABLE, NET | MORTGAGE NOTES PAYABLE, NET The following table presents a summary of the Company's mortgage notes payable, net (in thousands):
The following table presents additional information about the Company's mortgage notes payable, net, at December 31, 2017 (in thousands, except percentages):
(1) Variable rate based on one-month LIBOR of 1.56425% (as of December 31, 2017) plus applicable margin. (2) Fixed rate. (3) Monthly interest-only payment currently required. (4) Monthly fixed principal plus interest payment required. (5) Fixed monthly principal and interest payment required. (6) New debt placed during the year ended December 31, 2017. (7) Automatic extension to October 1, 2018 occurred on October 1, 2017 at which time the fixed interest rate converted to a variable rate. (8) Automatic extension to February 1, 2019 occurred on February 1, 2018 at which time the fixed interest rate converted to a variable rate. Loans assumed as part of the Point Bonita Apartment Homes, South Lamar Village, Paladin (Pinehurst, Pheasant Run, Retreat of Shawnee, Evergreen at Coursey Place, Pines of York), Sunset Ridge and Maxwell Townhomes acquisitions were recorded at fair value. The premium or discount is amortized over the remaining term of the loans and included in interest expense. For the years ended December 31, 2017, 2016, and 2015, interest expense was reduced by $465,000, $485,000, and $779,000, respectively, for the amortization of the premium or discount. All mortgage notes are collateralized by a first mortgage lien on the assets of the respective property as named in the table above. The amount outstanding on the mortgages may be prepaid in full during the entire term with a prepayment penalty on the majority of mortgages held. The following table presents the Company's annual principal payments on outstanding borrowings for each of the next five years ending December 31, and thereafter (in thousands):
The mortgage notes payable are recourse only with respect to the properties that secure the notes, subject to certain limited standard exceptions, as defined in each mortgage note. The Company has guaranteed the mortgage notes by executing a guarantee with respect to the properties. These exceptions are referred to as “carveouts.” In general, carveouts relate to damages suffered by the lender for a borrower’s failure to pay rents, insurance or condemnation proceeds to lender, failure to pay water, sewer and other public assessments or charges, failure to pay environmental compliance costs or to deliver books and records, in each case as required in the loan documents. The exceptions also require the Company to guarantee payment of audit costs, lender’s enforcement of its rights under the loan documents and payment of the loan if the borrower voluntarily files for bankruptcy or seeks reorganization, or if a related party of the borrower does so with respect to the subsidiary. The Company has also guaranteed the completion and payment of costs of completion of no less than $7.0 million of renovations to The Estates at Johns Creek by July 1, 2018. These renovations were completed as of December 31, 2017, and the guaranty was released. The Company may borrow an additional $7.5 million on the mortgage secured by The Bryant at Yorba Linda when certain debt service coverage and loan to value criteria are met. The Bryant at Yorba Linda mortgage loan includes a net worth and liquidity covenant. The Company was in compliance with all covenants related to this loan as of December 31, 2017. On December 20, 2013, the Company, through a wholly-owned subsidiary, entered into a loan, ("Tech Center Loan") with PNC Bank, National Association. Draws under the Tech Center Loan were secured by the assets of Tech Center Square (formerly known as the Jefferson Point Apartments). The Company provided a repayment guarantee of all interest and scheduled monthly principal payments (excluding the final payment at maturity for the outstanding balance.) The Company paid certain closing costs in connection with the Tech Center Loan including loan fees totaling $75,000. In March 2016, the Company amended the loan, removing any additional borrowing capacity and requiring monthly principal repayments beginning April 1, 2016. The interest rate on the loan was also increased from one-month LIBOR plus 2% to one-month LIBOR plus 2.25%. On May 3, 2016, the existing loan was repaid in full and was refinanced with a different lender. On December 27, 2013, the Company, through a wholly-owned subsidiary, entered into a loan ("Westside Loan") with U.S. Bank National Association for $29.7 million. Draws under the Westside Loan were secured by the assets of The Westside Apartments. The Company could draw the remaining $6.7 million when certain debt service coverage and loan to value criteria were met. Amounts repaid on the loan could not be reborrowed. The Company had provided a $6.5 million repayment guarantee. The Company paid certain closing costs in connection with the Westside Loan, including loan fees totaling $222,000. On September 1, 2016, the existing loan was repaid in full and was refinanced with a different lender. In addition to Tech Center Square Apartments and The Westside Apartments, the Company refinanced the loans on Verona Apartment Homes, Skyview Apartment Homes, Pinehurst, and Cannery Lofts during the year ended December 31, 2016. As a result, $791,000 of loss on extinguishment of debt was included in interest expense on the consolidated statement of operations for the year ended December 31, 2016. Deferred financing costs incurred to obtain financing are amortized over the term of the related debt. During the years ended December 31, 2017, 2016, and 2015, $1.9 million, $1.8 million, and $1.5 million, respectively, of amortization of deferred financing costs were included in interest expense. Accumulated amortization as of December 31, 2017 and 2016 was $4.0 million and $2.6 million, respectively. The following table presents the Company's estimated amortization of the existing deferred financing costs for the next five years ending December 31, and thereafter (in thousands):
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CREDIT FACILITY |
12 Months Ended |
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Dec. 31, 2017 | |
Line of Credit Facility [Abstract] | |
CREDIT FACILITY | CREDIT FACILITY The secured revolving credit facility with Bank of America, N.A. (“Bank of America”), as amended, matured on May 23, 2017 and was closed; all collateral subject to the revolving credit line was released. For the year ended December 31, 2017, the Company paid an unused line of credit fee to Bank of America of $250,000, which is included in interest expense in the consolidated statements of operations and comprehensive income (loss). For the years ended December 31, 2017 and 2016, the Company had weighted average borrowings of $0 and $6.8 million, respectively, under the Bank of America Credit Facility. The interest rate of the line was LIBOR plus 3.0%, and the weighted average interest rate for the borrowings in 2016 was 3.44% Deferred financing costs incurred to obtain financing are amortized over the term of the related debt. During the years ended December 31, 2017, 2016, and 2015, $0, $321,000, and $327,000, respectively, of amortization of deferred financing costs were included in interest expense. Deferred financing costs were fully amortized on the date of maturity. Accumulated amortization as of December 31, 2017 and 2016 was $0 and $857,000, respectively. |
ACCUMULATED OTHER COMPREHENSIVE LOSS |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||
ACCUMULATED OTHER COMPREHENSIVE LOSS | ACCUMULATED OTHER COMPREHENSIVE LOSS The following table presents the changes in each component of the Company's accumulated other comprehensive loss for the years ended December 31, 2017, 2016, and 2015 (dollars in thousands):
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CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS |
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Related Party Transactions [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS | CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS In the ordinary course of its business operations, the Company has ongoing relationships with several related parties. Relationship with RAI and C-III Property loss pool. The Company's properties participate in a property loss self-insurance pool with other properties directly and indirectly managed by RAI and C-III, which is backed by a catastrophic insurance policy. Substantially all of the receivables from related parties represent insurance deposits held in escrow by RAI and C-III to the self-insurance pool which, if unused, will be returned to the Company. The pool covers losses up to $2.5 million, after a $25,000 deductible per incident. Claims beyond the insurance pool limits will be covered by the catastrophic insurance policy, which covers claims up to $250.0 million, after a $25,000 deductible per incident. Therefore, unforeseen or catastrophic losses in excess of the Company's insured limits could have a material adverse effect on the Company's financial condition and operating results. During the years ended December 31, 2017 and 2016, the Company paid $1.0 million and $1.8 million into the insurance pools. General liability loss pool. The Company's properties participated in a general liability pool with other properties directly or indirectly managed by RAI and C-III until April 22, 2017. The pool covers claims up to $50,000 per incident through April 22, 2017. Effective April 23, 2017, the loss pool was eliminated, and the Company now participates (with other properties directly or indirectly managed by RAI and C-III) in a general liability policy. The insured limit for the general liability policy is $76 million in total claims, after a $25,000 deductible per incident. Internal audit fees. RAI performs internal audit services for the Company. Directors and officers liability insurance. The Company participates in a liability insurance program for directors and officers coverage with other C-III managed entities and subsidiaries for coverage up to $100.0 million. The Company paid premiums of $304,047 in connection with this insurance program during the year ended December 31, 2017. Other expenses. The Company utilizes the services of The Planning and Zoning Resource Company, an affiliate of C-III, for zoning reports for acquisitions. Relationship with the Advisor In September 2009, the Company entered into an advisory agreement (the “Advisory Agreement”) pursuant to which the Advisor provides the Company with investment management, administrative and related services. The Advisory Agreement was amended in January 2010 and further amended in January 2011 and March 2015. The Advisory Agreement has a one-year term and renews for an unlimited number of successive one-year terms upon the approval of the conflicts committee of the Company's board of directors. The Company renewed the advisory agreement for another year on September 15, 2017. Under the Advisory Agreement, the Advisor receives fees and is reimbursed for its expenses as set forth below: Acquisition fees. The Company pays the Advisor an acquisition fee of 2.0% of the cost of investments acquired on behalf of the Company, plus any capital expenditure reserves allocated, or the amount funded by the Company to acquire loans, including acquisition expenses and any debt attributable to such investments. Asset management fees. The Company pays the Advisor a monthly asset management fee equal to one-twelfth of 1.0% of the higher of the cost or the independently appraised value of each asset, without deduction for depreciation, bad debts or other non-cash reserves. The asset management fee is based only on the portion of the costs or value attributable to the Company’s investment in an asset if the Company does not own all or a majority of an asset and does not manage or control the asset. Disposition fees. The Advisor earns a disposition fee in connection with of the sale of a property equal to the lesser of one-half of the aggregate brokerage commission paid, or if none is paid, 2.75% of the contract sales price. Debt financing fees. The Advisor earns a debt financing fee equal to 0.5% of the amount available under any debt financing obtained for which it provided substantial services. Expense reimbursements. The Company also pays directly or reimburses the Advisor for all of the expenses paid or incurred by the Advisor or its affiliates on behalf of the Company or in connection with the services provided to the Company in relation to its public offering, including its ongoing distribution reinvestment plan offering. Reimbursements also include expenses the Advisor incurs in connection with providing services to the Company, including the Company’s allocable share of costs for Advisor personnel and overhead, out of pocket expenses incurred in connection with the selection and acquisition of properties or other real estate related debt investments, whether or not the Company ultimately acquires the investment. However, the Company will not reimburse the Advisor or its affiliates for employee costs in connection with services for which the Advisor earns acquisition or disposition fees. Relationship with the Manager The Manager manages the Company's real estate properties and real estate-related debt investments and coordinates the leasing of, and manages construction activities related to, some of the Company’s real estate properties pursuant to the terms of the management agreement with the Manager. Property management fees. The Manager earns 4.5% of the gross receipts from the Company's properties, provided that for properties that are less than 75% occupied, the Manager receives a minimum fee for the first 12 months of ownership, for performing certain property management and leasing activities. Construction management fees. The Manager earns a construction management fee of 5.0% of actual aggregate costs to construct improvements, or to repair, rehab or reconstruct a property. Debt servicing fees. The Manager earns a debt servicing fee of 2.75% on payments received from loans held by the Company for investment. Information technology fees and Operating Expense reimbursement. During the ordinary course of business, the Manager or other affiliates of RAI may pay certain shared information technology fees and operating expenses on behalf of the Company. Relationship with Other Related Parties The Company has also made payments for legal services to the law firm of Ledgewood P.C. (“Ledgewood”). Until 1996, the Chairman of RAI was of counsel to Ledgewood. In connection with the termination of his affiliation with Ledgewood and its redemption of his interest, the Chairman continues to receive certain payments from Ledgewood, but as of September 8, 2016 is no longer the Chairman of RAI. Until March 2006, an executive of RAI was the managing member of Ledgewood. This executive remained of counsel to Ledgewood through June 2007, at which time he became an Executive Vice President of RAI, but as of September 8, 2016 is no longer an executive of RAI. The Company utilizes the services of a printing company, Graphic Images, LLC (“Graphic Images”), whose principal owner is the father of RAI’s Chief Financial Officer. The following table presents the Company's amounts payable to and amounts receivable from such related parties (in thousands):
The following table presents the Company's fees earned by and expenses paid to such related parties (in thousands):
(1) Included in Acquisition costs on the consolidated statements of operations and comprehensive income (loss). (2) Included in Management fees on the consolidated statements of operations and comprehensive income (loss). (3) Included in Net gains on dispositions of properties and joint venture interests on the consolidated statements of operations and comprehensive income (loss). (4) Included in Mortgage notes payable, net on the consolidated balance sheets. (5) Included in General and administrative costs on the consolidated statements of operations and comprehensive income (loss). (6) Included in Rental Properties, net on the consolidated balance sheets. (7) Included in Rental operating expenses on the consolidated statements of operations and comprehensive income (loss). |
EQUITY |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EQUITY | EQUITY Preferred Stock The Company’s charter authorizes the Company to issue 10.0 million shares of its $0.01 par value preferred stock. As of December 31, 2017 and 2016, no shares of preferred stock were issued and outstanding. Common Stock As of December 31, 2017, the Company had issued an aggregate of 77,457,551 shares of its $0.01 par value common stock as follows (dollars in thousands):
(1) Includes 276,056 shares held by the Advisor. Convertible Stock As of December 31, 2017 and 2016, the Company had 49,995 and 50,000 shares, respectively, of $0.01 par value convertible stock outstanding of which the Advisor and affiliated persons own 49,063 shares and outside investors own 932 shares at December 31, 2017. In 2017, the Company repurchased and retired five shares. The convertible stock will convert into shares of the Company’s common stock upon the occurrence of (a) the Company having paid distributions to common stockholders that in the aggregate equal 100% of the price at which the Company originally sold the shares plus an amount sufficient to produce a 10% cumulative, non-compounded annual return on the shares at that price; or (b) if the Company lists its common stock on a national securities exchange and, on the 31st trading day after listing, the Company’s value based on the average trading price of its common stock since the listing, plus prior distributions, combine to meet the same 10% return threshold. Each of these two events is a “Triggering Event.” Upon a Triggering Event, the Company's convertible stock will, unless its advisory agreement has been terminated or not renewed on account of a material breach by its Advisor, generally be converted into a number of shares of common stock equal to 1/50,000 of the quotient of:
(i) 25% of the amount, if any, by which
(ii) 15% of the amount, if any, by which
Redemption of Securities During the year ended December 31, 2017, the Company redeemed shares of its outstanding common stock as follows (in thousands, except per share data):
(1) All redemptions of equity securities by the Company during the year ended December 31, 2017 were made pursuant to the Company's share redemption program. All redemption requests tendered were honored during the year ended December 31, 2017. The Company will not redeem in excess of 5% of the weighted-average number of shares outstanding during the 12-month period immediately prior to the effective date of redemption. The Company's board of directors will determine at least quarterly whether it has sufficient excess cash to repurchase shares. Generally, the cash available for redemptions will be limited to proceeds from the Company's distribution reinvestment plan plus, if the Company has positive operating cash flow from the previous fiscal year, 1% of all operating cash flow from the previous year. The Company's board of directors, in its sole discretion, may suspend, terminate or amend the Company's share redemption program without stockholder approval upon 30 days' notice if it determines that such suspension, termination or amendment is in the Company's best interest. The Company's board may also reduce the number of shares purchased under the share redemption program if it determines the funds otherwise available to fund the Company's share redemption program are needed for other purposes. These limitations apply to all redemptions, including redemptions sought upon a stockholder's death, qualifying disability or confinement to a long-term care facility. Distributions For the year ended December 31, 2017, the Company paid aggregate distributions of $43.0 million, including $15.9 million of distributions paid in cash and $27.1 million of distributions reinvested in shares of common stock through the Company's distribution reinvestment plan, as follows (in thousands, except per share data):
Since its formation, the Company has declared a total of seven quarterly stock distributions of 0.015 shares each, two quarterly stock distributions of 0.0075 shares each, one quarterly stock distribution of 0.00585 shares each, and two quarterly stock distributions of 0.005 shares each of its common stock outstanding. |
FAIR VALUE MEASURES AND DISCLOSURES |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE MEASURES AND DISCLOSURES | FAIR VALUE MEASURES AND DISCLOSURES In analyzing the fair value of its investments accounted for on a fair value basis, the Company follows the fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The Company determines fair value based on quoted prices when available or, if quoted prices are not available, through the use of alternative approaches, such as discounting the expected cash flows using market interest rates commensurate with the credit quality and duration of the investment. The fair value of cash, tenant receivables and accounts payable, approximate their carrying value due to their short nature. The hierarchy followed defines three levels of inputs that may be used to measure fair value: Level 1 - Quoted prices in active markets for identical assets and liabilities that the reporting entity has the ability to access at the measurement date. Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset and liability or can be corroborated with observable market data for substantially the entire contractual term of the asset or liability. Level 3 - Unobservable inputs that reflect the entity’s own assumptions about the assumptions that market participants would use in the pricing of the asset or liability and are consequently not based on market activity, but rather through particular valuation techniques. The determination of where an asset or liability falls in the hierarchy requires significant judgment. The Company evaluates its hierarchy disclosures each quarter; depending on various factors, it is possible that an asset or liability may be classified differently from quarter to quarter. However, the Company expects that changes in classifications between levels will be rare. Derivatives (interest rate caps), which are reported at fair value in the consolidated balance sheets, are valued by a third-party pricing agent using an income approach with models that use, as their primary inputs, readily observable market parameters. This valuation process considers factors including interest rate yield curves, time value, credit and volatility factors (Level 2). The following table presents information about the Company's assets measured at fair value on a recurring basis and indicates the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair value as follows (in thousands):
The following table presents the carrying and fair values of the Company’s loan held for investment, net, and mortgage notes payable-outstanding borrowings (in thousands):
The fair value of the loan held for investment, net was estimated using rates available to the Company for debt with similar terms and remaining maturities (Level 3). The carrying amount of the mortgage notes payable presented is the outstanding borrowings excluding premium or discount and deferred finance costs, net. The fair value of the mortgage notes payable was estimated using rates available to the Company for debt with similar terms and remaining maturities (Level 3). |
DERIVATIVES AND HEDGING ACTIVITIES |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DERIVATIVES AND HEDGING ACTIVITIES | DERIVATIVES AND HEDGING ACTIVITIES Risk Management Objective of Using Derivatives The Company is exposed to certain risk arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity, and credit risk primarily by managing the amount, sources, and duration of its debt funding and the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. The Company’s derivative financial instruments are used to manage differences in the amount, timing, and duration of the Company’s known or expected cash receipts and its known or expected cash payments principally related to the Company’s investments and borrowings. As a condition to certain of the Company’s financing facilities, from time to time the Company may be required to enter into certain derivative transactions as may be required by the lender. These transactions would generally be in line with the Company’s own risk management objectives and also service to protect the lender. Cash Flow Hedges of Interest Rate Risk The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company entered into a total of 18 interest rate caps that were designated as cash flow hedges. Interest rate caps designated as cash flow hedges involve the receipt of variable amounts from a counterparty if interest rates rise above the strike rate on the contract in exchange for an up-front premium. The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in accumulated other comprehensive income and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. During the years ended December 31, 2017 and 2016, such derivatives were used to hedge the variable cash flows, indexed to USD-LIBOR, associated with existing variable-rate loan agreements. The ineffective portion of the change in fair value of the derivatives is recognized directly in earnings. During the year ended December 31, 2017, the Company had a loss of $162,636 due to hedge ineffectiveness. During the year ended December 31, 2016, the Company had a loss of $104,941 due to hedge ineffectiveness related to the sales of Nesbit Palisades and Ivy at Clear Creek. Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable-rate debt. At December 31, 2017, the Company estimates that an additional $203,188 will be reclassified as an increase to interest expense over the next 12 months. As of December 31, 2017, the Company had the following outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk (dollars in thousands):
Tabular Disclosure of Fair Values of Derivative Instruments on the Balance Sheet The table below presents the fair value of the Company’s derivative financial instruments on the consolidated balance sheets as of December 31, 2017 and 2016 (in thousands):
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OPERATING EXPENSES |
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Dec. 31, 2017 | |
Operating Expenses [Abstract] | |
OPERATING EXPENSES | OPERATING EXPENSES Under its charter, the Company must limit its total operating expenses to the greater of 2% of its average invested assets or 25% of its net income for the four most recently completed fiscal quarters, unless the conflicts committee of the Company’s board of directors has determined that such excess expenses were justified based on unusual and non-recurring factors. Operating expenses for the four quarters ended December 31, 2017 were in compliance with the charter imposed limitation. Allocated payroll expense associated with a portion of the compensation paid by the Advisor or its affiliates to the Company's executive officers was included in general and administrative in the consolidated statements of operations and comprehensive (loss) income and was reimbursed to the Advisor during the years ended December 31, 2017 and 2016. This expense is included in "overhead allocation" in Note 14. |
INSURANCE PROCEEDS IN EXCESS OF COST BASIS |
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Dec. 31, 2017 | |
INSURANCE PROCEEDS IN EXCESS OF COST BASIS [Abstract] | |
INSURANCE PROCEEDS IN EXCESS OF COST BENEFIT | INSURANCE PROCEEDS IN EXCESS OF COST BASIS For the year ended December 31, 2017, there were $150,000 of insurance proceeds in excess of cost basis included on the consolidated statements of operations and comprehensive income (loss) received in 2017 from casualties that occurred in prior years at Evergreen at Coursey, Verona Apartment Homes, Skyview Apartment Homes, Meridian Pointe, Chisholm Place and Perimeter Circle. For the year ended December 31, 2016, there were $985,000 of insurance proceeds in excess of cost basis included on the consolidated statements of operations and comprehensive income (loss). The Company received $735,000 of proceeds from insurers, net of expenses, due to incidents at Deerfield, The Westside Apartments, and Chisholm Place in 2016 and $250,000 of proceeds from insurers, net of expenses, due to incidents at Verona Apartment Homes, Skyview Apartment Homes, Meridian Pointe, and Stone Ridge in 2015. For the year ended December 31, 2015, there were $407,000 of insurance proceeds in excess of cost basis included on the consolidated statements of operations and comprehensive income (loss). The Company received $247,000 of proceeds due to prior owners from insurers, net of expenses, due to an incident at Stone Ridge in 2013 and $160,000 of proceeds from insurers, net of expenses, due to an incident at Chisholm Place in 2014. |
QUARTERLY FINANCIAL DATA (UNAUDITED) |
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Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarterly Financial Data (Unaudited) | QUARTERLY FINANCIAL DATA (UNAUDITED) The following tables present the Company's operating results by quarter (in thousands, except share data):
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SUBSEQUENT EVENTS |
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Dec. 31, 2017 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS On January 29, 2018, the Company's Board of Directors declared a $0.05 per share cash distribution to its common stockholders of record at the close of business on January 30, 2018. On February 1, 2018, the Company's Board of Directors declared a $0.05 per share cash distribution to its common stockholders of record at the close of business on February 27, 2018 and March 29, 2018. Such distributions were or are to be paid on January 31, February 28, and April 2, 2018. On February 12, 2018, the Company entered into an agreement to purchase Addison at Sandy Spring Apartments, a 236 unit multifamily apartment complex in Sandy Springs, Georgia for $34.0 million with an expected closing date in the second quarter of 2018. On March 12, 2018, the Company entered into an agreement to purchase Bristol at Grapevine Apartments, a 376 unit multifamily apartment complex in Grapevine, Texas for $44.7 million with an expected closing date in the second quarter of 2018. On March 26, 2018, the Company's Board of Directors approved $11.0 million of redemption requests from investors. On March 28, 2018, the Company's Board of Directors approved and adopted a Second Amended and Restated Share Redemption Program (the “Amended SRP”). Pursuant to the Amended SRP, the Company will redeem shares at a purchase price equal to 95% of the current net asset value per share redeemed. The Amended SRP will be effective for all redemptions occurring after April 29, 2018. In addition, the Board approved and adopted a Third Amended and Restated Distribution Reinvestment Plan (the “Amended DRP”). Pursuant to the Amended DRP, shares will be sold at a price equal to 95% of the current per share net asset value. The Amended DRP will be effective for all DRP issuances after April 8, 2018. The Company has evaluated subsequent events and determined that no events have occurred, other than those disclosed above, which would require an adjustment to or additional disclosure in the consolidated financial statements. |
SCHEDULE III Real Estate and Accumulated Depreciation |
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SEC Schedule III, Real Estate and Accumulated Depreciation Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SCHEDULE III Real Estate and Accumulated Depreciation |
(1) Includes properties held for sale at 12/31/2015. |
SCHEDULE IV Mortgage Loans on Real Estate |
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Mortgage Loans on Real Estate [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SCHEDULE IV Mortgage Loans on Real Estate | SCHEDULE IV Mortgage Loans on Real Estate December 31, 2017 (dollars in thousands)
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP"). Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries as follows:
N/A - Not Applicable (a) Subsidiary transferred its interest in a portion of the Williamsburg parking lot to RRE Williamsburg Holdings, LLC in 2016. (b) Wholly-owned subsidiary of RRE Charlemagne Holdings, LLC. (c) Underlying investment sold prior to 2016. (d) Underlying investment sold in 2016. (e) Underlying investment resolved in 2016. (f) Subsidiary was dissolved prior to December 31, 2017. (g) Underlying investment sold in 2017. All intercompany accounts and transactions have been eliminated in consolidation. The consolidated financial statements reflect the Company's accounts and the accounts of the Company's majority-owned and/or controlled subsidiaries. The Company follows the provisions of Accounting Standards Codification (“ASC”) Topic 810, “Consolidation,” and accordingly consolidates entities that are variable interest entities (“VIEs”) where it has determined that it is the primary beneficiary of such entities. Once it has been determined that the Company holds a variable interest in a VIE, management performs a qualitative analysis to determine (i) if the Company has the power to direct the matters that most significantly impact the VIE's financial performance; and (ii) if the Company has the obligation to absorb the losses of the VIE that could potentially be significant to the VIE or the right to receive the benefits of the VIE that could potentially be significant to the VIE. If the Company's interest possesses both of these characteristics, the Company is deemed to be the primary beneficiary and would be required to consolidate the VIE. The Company will continually assess its involvement with VIEs and re-evaluate the requirement to consolidate them. For consolidated entities (including VIEs of which the Company is the primary beneficiary), noncontrolling interests are presented and disclosed as a separate component of stockholders' equity (not as a liability or other item outside of stockholders' equity). Consolidated net income (loss) includes the noncontrolling interests’ share of income (loss). All changes in the Company’s ownership interest in a subsidiary are accounted for as stockholders' equity transactions if the Company retains its controlling financial interest in the subsidiary. The portions of these entities that the Company does not own are presented as noncontrolling interests as of the dates and for the periods presented in the consolidated financial statements. The consolidated financial statements include the accounts of the Company's majority-owned and/or controlled subsidiaries, which are VIEs, as follows:
The property held by DT Stone Ridge, LLC was sold on September 27, 2017 and a distribution to the joint venture partner was completed in October 2017. As a result, all of the Company's subsidiaries are wholly-owned. Until June 16, 2016, the Company had a preferred equity investment that was repaid in full on that date. The Company's preferred equity investment was a VIE for which the Company had determined it was not the primary beneficiary; therefore, the Company did not consolidate the entity. The Company was not considered the primary beneficiary of the preferred equity investee because it did not possess the unilateral power to direct the key activities of the investee that were considered most significant. The Company has no further continuing involvement with the investee. Additional information with respect to the preferred equity investment is disclosed in Note 6. |
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Segment Reporting | Segment Reporting The Company does not evaluate performance on a relationship specific or transactional basis and does not distinguish its principal business or group its operations on a geographical basis for purposes of measuring performance. Accordingly, the Company believes it has a single operating segment for reporting purposes in accordance with GAAP. |
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Use of Estimates | Use of Estimates The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
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Assets Held for Sale | Assets Held for Sale The Company presents the assets and liabilities of any rental properties which qualify as held for sale, separately in the consolidated balance sheets. Real estate assets held for sale are measured at the lower of carrying amount or fair value less cost to sell. Both the real estate and the corresponding liabilities are presented separately in the consolidated balance sheets. Subsequent to classification of an asset as held for sale, no further depreciation is recorded. The Company had no rental properties included in assets held for sale as of December 31, 2017 and 2016. |
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Rental Properties | Rental Properties The Company records acquired rental properties at fair value on their respective acquisition date. The Company considers the period of future benefit of an asset to determine its appropriate useful life and depreciates the rental properties using the straight line method. The Company anticipates the estimated useful lives of its assets by class as follows:
Improvements and replacements in excess of $1,000 are capitalized when they have a useful life greater than or equal to one year. The Manager earns a construction management fee of 5.0% of actual aggregate costs to construct improvements, or to repair, rehab or reconstruct a property. These costs are capitalized along with the related asset. Costs of repairs and maintenance are expensed as incurred. As of December 31, 2017, the Company's real estate investments in Texas, Georgia, and California represented approximately 27%, 11%, and 17% of the net book value of its rental property assets, respectively. As a result, the geographic concentration of the Company's portfolio makes it particularly susceptible to adverse economic developments in the Texas, Georgia, and California real estate markets. Any adverse economic or real estate developments in these markets, such as business layoffs or downsizing, industry slowdowns, relocations of businesses, changing demographics and other factors, or any decrease in demand for multifamily rentals resulting from the local business climate, could adversely affect the Company's operating results and its ability to make distributions to stockholders. |
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Concentration of Credit Risk | Concentration of Credit Risk Financial instruments, which potentially subject the Company to concentration of credit risk, consist of periodic temporary deposits of cash. At December 31, 2017, the Company had $133.0 million of deposits at various banks, $119.2 million of which were over the insurance limit of the Federal Deposit Insurance Corporation. No losses have been experienced on such deposits. |
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Contractual Obligations | Contractual Obligations The Company leases parking space and equipment under leases with varying expiration dates through 2023. As of December 31, 2017, the total payments due under these obligations were $226,000. |
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Impairment of Long-Lived Assets | Impairment of Long Lived Assets When circumstances indicate the carrying value of a property may not be recoverable, the Company reviews the asset for permanent impairment. This review is based on an estimate of the future undiscounted cash flows, excluding interest charges, expected to result from the property’s use and eventual disposition. The review also considers factors such as expected future operating income, market and other applicable trends and residual value, as well as the effects of leasing demand, competition and other factors. An impairment loss will be recorded to the extent that the carrying value exceeds the estimated fair value of the property for properties to be held and used. For properties held for sale, the impairment loss would be the adjustment to fair value less the estimated cost to dispose of the asset. There were no impairment losses recorded on long lived assets during the years ended December 31, 2017, 2016 and 2015. |
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Loans Held for Investment, Net | Loans Held for Investment, Net The Company records acquired performing loans held for investment at cost and reviews them for potential impairment at each balance sheet date. The Company considers a loan to be impaired if one of two conditions exists. The first condition is if, based on current information and events, management believes it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement. The second condition is if the loan is deemed to be a troubled-debt restructuring (“TDR”) where a concession has been given to a borrower in financial difficulty. A TDR may not have an associated specific loan loss allowance if the principal and interest amount is considered recoverable based on current market conditions, expected collateral performance and/or guarantees made by the borrowers. The amount of impairment, if any, is measured by comparing the recorded amount of the loan to the present value of the expected cash flows or, as a practical expedient, the fair value of the collateral. If a loan is deemed to be impaired, the Company records a reserve for loan losses through a charge to income for any shortfall. Interest income from performing loans held for investment is recognized based on the contractual terms of the loan agreement. Fees related to any buy down of the interest rate are deferred as prepaid interest income and amortized over the term of the loan as an adjustment to interest income. The initial investment made in a purchased performing loan includes the amount paid to the seller plus fees. The initial investment frequently differs from the related loan’s principal amount at the date of the purchase. The difference is recognized as an adjustment of the yield over the life of the loan. Closing costs related to the purchase of a performing loan held for investment are amortized over the term of the loan and accreted as an adjustment to interest income. The Company may acquire real estate loans at a discount due to the credit quality of such loans and the respective borrowers under such loans. Revenues from these loans are recorded under the effective interest method. Under this method, an effective interest rate (“EIR”) is applied to the cost basis of the real estate loan held for investment. The EIR that is calculated when the loan held for investment is acquired remains constant and is the basis for subsequent impairment testing and income recognition. However, if the amount and timing of future cash collections are not reasonably estimable, the Company accounts for the real estate receivable on the cost recovery method. Under the cost recovery method of accounting, no income is recognized until the basis of the loan held for investment has been fully recovered. |
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Preferred Equity Investment | Preferred Equity Investment The Company recorded its preferred equity investment, included in other investments on the consolidated balance sheets, at amortized cost. Investments carried at amortized cost were evaluated for impairment at each reporting date. When an investment was impaired and that impairment was considered other than temporary, the amount of the loss accrual was calculated by comparing the carrying amount of the investment to its estimated fair value. This investment was repaid in full on June 6, 2016 (See Note 6). Dividend income was recognized when earned based on the contractual terms of the preferred equity agreement. |
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Allocation of the Purchase Price of Acquired and Foreclosed Assets | Allocation of the Purchase Price of Acquired and Foreclosed Assets The company records the acquisition of real properties as business combinations. The cost of rental properties acquired directly as fee interests and through foreclosing on a loan are allocated to net tangible and intangible assets based on their relative fair values. The Company allocates the purchase price of properties to acquired tangible assets, consisting of land, buildings, fixtures and improvements, and to identified intangible lease assets and liabilities, consisting of the value of above-market and below-market leases, as applicable, the value of in-place leases and the value of tenant relationships. Fair value estimates are based on information obtained from a number of sources, including information obtained about each property as a result of pre-acquisition due diligence, marketing and leasing activities. In addition, the Company may obtain independent appraisal reports. The information in the appraisal reports along with the aforementioned information available to the Company's management is used in allocating the purchase price. The independent appraisers have no involvement in management's allocation decisions other than providing market information. In allocating the purchase price, management also includes real estate taxes, insurance and other operating expenses and estimates of lost rentals at market rates during the expected lease-up period. Management also estimates costs to execute similar leases, including leasing commissions and legal and other related expenses, to the extent that such costs have not already been incurred in connection with a new lease origination as part of the transaction. The Company records above-market and below-market in-place lease values for acquired properties based on the present value (using an interest rate that reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to the in-place leases and (ii) management’s estimate of fair market lease rates for the corresponding in-place leases, measured over a period equal to the remaining non-cancelable term of the lease. The Company amortizes any capitalized above-market or below-market lease values as an increase or reduction to rental income over the remaining non-cancelable terms of the respective leases. The Company measures the aggregate value of other intangible assets acquired based on the difference between (i) the property valued with existing in-place leases adjusted to market rental rates and (ii) the property valued as if it were vacant. Management’s estimates of value are made using methods similar to those used by independent appraisers (e.g., discounted cash flow analysis). Factors to be considered by management in its analysis include an estimate of carrying costs during hypothetical expected lease-up periods considering current market conditions and costs to execute similar leases. The total amount of other intangible assets acquired is further allocated to customer relationship intangible values based on management’s evaluation of the specific characteristics of each tenant’s lease and the Company’s overall relationship with that respective tenant. Characteristics to be considered by management in allocating these values include the nature and extent of the Company’s existing relationships with the tenant, the tenant’s credit quality and expectations of lease renewals (including those existing under the terms of the lease agreement), among other factors. The Company amortizes the value of in-place leases to expense over the average remaining term of the respective leases. The value of customer relationship intangibles are amortized to expense over the initial term and any renewal periods in the respective leases, but in no event will the amortization periods for the intangible assets exceed the remaining depreciable life of the building. Should a tenant terminate its lease, the unamortized portion of the in-place lease value and customer relationship intangibles associated with that tenant would be charged to expense in that period. The determination of the fair value of assets and liabilities acquired requires the use of significant assumptions with regard to current market rental rates, discount rates and other variables. The use of inappropriate estimates would result in an incorrect assessment of the purchase price allocations, which could impact the amount of the Company’s reported net income. Initial purchase price allocations are subject to change until all information is finalized, which is generally within one year of the acquisition date. |
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Goodwill | Goodwill The Company records the excess of the cost of an acquired entity over the difference between the amounts assigned to assets acquired (including identified intangible assets) and liabilities assumed as goodwill. Goodwill is not amortized but is tested for impairment at a level of reporting referred to as a reporting unit during the fourth quarter of each calendar year, or more frequently if events or changes in circumstances indicate that the asset might be impaired. The Company tested goodwill as of December 31, 2017 and found no indications of impairment. |
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Revenue Recognition | Revenue Recognition The Company recognizes minimum rent, including rental abatements and contractual fixed increases attributable to operating leases, on a straight-line basis over the term of the related lease and includes amounts expected to be received in later years. The future minimum rental payments to be received from noncancelable operating leases for residential rental properties are $58.2 million and $95,000 for the years ending December 31, 2018 and 2019, respectively, and none thereafter. The future minimum rental payments to be received from noncancelable operating leases for commercial rental properties and antenna rentals are $440,000, $389,000, $318,000, $241,000, and $114,000 for the years ending December 31, 2018, 2019, 2020, 2021, and 2022, respectively, and none thereafter. Revenue is primarily derived from the rental of residential housing units, however, included within rental income is other income such as pet fees, parking fees, and late fees, as well as property operating expense reimbursements due from tenants for common area maintenance, real estate taxes and other recoverable costs. The Company records the ancillary charges in the period they are earned or received and records the reimbursements in the period in which the related expenses are incurred. Total other income included within rental income was $12.6 million, $10.8 million and $11.7 million for the years ended December 31, 2017, 2016 and 2015, respectively. |
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Tenant Receivables | Tenant Receivables Tenant receivables are stated in the financial statements at amounts due from tenants net of an allowance for uncollectible receivables. Payment terms vary and receivables outstanding longer than the payment terms are considered past due. The Company determines its allowance by considering a number of factors, including the length of time receivables are past due, security deposits held, the Company’s previous loss history, the tenants’ current ability to pay their obligations to the Company, the condition of the general economy and the industry as a whole. The Company writes off receivables when they become uncollectible. At December 31, 2017 and 2016, there were allowances for uncollectible receivables of $149,300 and $5,200, respectively. |
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Income Taxes | Income Taxes The Company elected to be taxed as a REIT commencing with its taxable year ended December 31, 2010. To maintain its REIT qualification for U.S. federal income tax purposes, the Company is generally required to distribute at least 90% of its taxable net income (excluding net capital gains) to its stockholders as well as comply with other requirements, including certain asset, income and stock ownership tests. As a REIT, the Company is not subject to federal corporate income tax to the extent that it distributes 100% of its REIT taxable income each year. If the Company fails to qualify as a REIT, and does not qualify for certain statutory relief provisions, it is subject to U.S. federal, state and local income taxes and may be precluded from qualifying as a REIT for the subsequent four taxable years following the year in which it fails its REIT qualification. Accordingly, the Company’s failure to qualify as a REIT could have a material adverse impact on its results of operations and amounts available for distribution to its stockholders. The dividends-paid deduction of a REIT for qualifying dividends to its stockholders is computed using the Company’s taxable income as opposed to net income reported on the financial statements. Generally, taxable income differs from net income reported on the financial statements because the determination of taxable income is based on tax provisions and not financial accounting principles. The Company may elect to treat any of its subsidiaries as taxable REIT subsidiaries (“TRSs”). In general, the Company’s TRSs may hold assets and engage in activities that the Company cannot hold or engage in directly and generally may engage in any real estate or non-real estate-related business. A TRS is subject to U.S. federal, state and local corporate income taxes. While a TRS may generate net income, a TRS can declare dividends to the Company which will be included in the Company's taxable income and necessitate a distribution to its stockholders. Conversely, if the Company retains earnings at a TRS level, no distribution is required and the Company can increase book equity of the consolidated entity. As of December 31, 2017 and 2016, the Company had no TRSs. The Company evaluates the benefits from tax positions taken or expected to be taken in its tax return. Only the largest amount of benefits from tax positions that will more likely than not be sustainable upon examination are recognized by the Company. The Company does not have any unrecognized tax benefits, nor interest and penalties, recorded in its consolidated financial statements and does not anticipate significant adjustments to the total amount of unrecognized tax benefits within the next 12 months. The Company is subject to examination by the U.S. Internal Revenue Service and by the taxing authorities in other states in which the Company has significant business operations. The Company is not currently undergoing any examinations by taxing authorities. The Company is not subject to IRS examination for tax return years 2013 and prior. The Tax Cuts and Jobs Act ("TCJA") was signed into law on December 22, 2017. The TCJA makes significant changes to the U.S. federal income tax rules for taxation of individuals and corporations (including REITs), generally effective for taxable years beginning after December 31, 2017. |
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Earnings Per Share | Earnings Per Share Basic earnings per share are calculated on the basis of the weighted-average number of common shares outstanding during the year. Basic earnings per share are computed by dividing income available to common stockholders by the weighted-average common shares outstanding during the period. Diluted earnings per share take into account the potential dilution that could occur if securities or other contracts to issue common stock were exercised and converted to common stock. None of the 49,995 shares of convertible stock (discussed in Note 15) are included in the diluted earnings per share calculations because the necessary conditions for conversion have not been satisfied as of December 31, 2017 (were such date to represent the end of the contingency period). For the purposes of calculating earnings per share, all common shares and per common share information in the financial statements have been adjusted retroactively for the effect of seven 1.5% stock distributions, two 0.75% stock distributions, one 0.585% stock distribution and two 0.5% stock distributions issued to stockholders. Common stock shares issued on the consolidated balance sheets have also been adjusted retroactively for the effect of these 12 distributions. |
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Reclassifications | Reclassifications Certain amounts in the prior year financial statements have been reclassified to conform to the current-year presentation. The impact of the reclassifications made to prior year amounts are not material and did not affect net income (loss). |
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Adoption of New Accounting Standards | Adoption of New Accounting Standards Accounting Standards Issued But Not Yet Effective In May 2014, FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers” ("ASU No. 2014-09"), which will replace most existing revenue recognition guidance in GAAP. Under the new standard, revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred, the fee is fixed or determinable, and collectability is probable. ASU No. 2014-09 requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments. The Company will adopt ASU 2014-09 as of January 1, 2018 using the modified retrospective approach. The majority of the Company’s revenue is derived from residential rental income and other lease income, which are scoped out from this standard and included in the current lease accounting framework, and will be accounted for under ASU No. 2016-02, Leases, as discussed below. Revenue streams that are in the scope of the new standards include (but are not limited to) administrative and late fees and revenue sharing arrangements of cable income from contracts with cable providers at the Company's properties. Due to the nature and timing of the Company’s identified revenue streams as of December 31, 2017, the Company does not anticipate the adoption of the new standards will have a material impact on its financial position or results of operations. In February 2016, FASB issued ASU No. 2016-02, "Leases" ("ASU No. 2016-02"), which is intended to improve financial reporting about leasing transactions and requires organizations that lease assets to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases. In September 2017, the FASB issued ASU 2017-13, "Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842)", which provides additional implementation guidance on the previously issued ASU No. 2016-02 Leases (Topic 842). ASU No. 2016-02 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company is continuing to evaluate this guidance, however, the Company expects that its operating leases where it is the lessor will be accounted for on its balance sheet similar to its current accounting with the underlying leased asset recognized as real estate. The Company expects that executory costs and certain other non-lease components will need to be accounted for separately from the lease component of the lease with the lease component continuing to be recognized on a straight-line basis over the lease term and the executory costs and certain other non-lease components being accounted for under the new revenue recognition guidance in ASU 2014-09. For leases in which the Company is the lessee, primarily consisting of office equipment leases, the Company expects to recognize a right-of-use asset and a lease liability equal to the present value of the minimum lease payments with rental payments being applied to the lease liability and to interest expense and the right-of-use asset being amortized to expense on a straight-line basis over the term of the lease. In June 2016, FASB issued ASU No. 2016-13, “Financial Instruments - Credit Losses”, which requires measurement and recognition of expected credit losses for financial assets held. ASU No. 2016-13 will be effective for the Company beginning January 1, 2019. The Company is evaluating this guidance; however, it does not expect the adoption of ASU No. 2016-13 to have a significant impact on its consolidated financial statements. In August 2016, FASB issued ASU No. 2016-15, "Classification of Certain Cash Receipts and Cash Payments", which addresses eight specific cash flow issues with the objective of reducing existing diversity in practice. The guidance is effective for the Company beginning January 1, 2018. Early application is permitted. The adoption of the new requirements is not expected to have a material impact on the reporting of the Company's consolidated cash flows. In November 2016, the FASB issued ASU No. 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash” (“ASU No. 2016-18”), which provides guidance on the classification of restricted cash in the statement of cash flows. ASU No. 2016-18 is effective for the Company's fiscal year beginning January 1, 2018, and the Company does not expect the adoption of ASU No. 2016-18 to have a material effect on the Company's consolidated financial statements and disclosures. In January 2017, FASB issued ASU No. 2017-01, "Business Combinations (Topic 850): Clarifying the Definition of Business", which clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of businesses. ASU No. 2017-01 is effective for the Company beginning January 1, 2018 but early adoption is allowed. The Company believes all future acquisitions will be accounted for as asset acquisitions, not business acquisitions. In January 2017, FASB issued ASU No. 2017-04, "Intangibles - Goodwill and Other (Topic 350): Simplifying the Accounting for Goodwill Impairment", which alters the current goodwill impairment testing procedures to eliminate Step 2. Step 2 required that, if the carrying amount of a reporting unit exceeded its fair value, the implied fair value of the goodwill must be compared to the carrying amount in order to determine impairment. ASU No. 2017-04 will be effective for the Company beginning December 15, 2019. Early application is permitted. The Company is evaluating this guidance and assessing the impact of this guidance on its consolidated financial statements. In August 2017, FASB issued ASU No. 2017-12, "Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities", which expands and refines hedge accounting for both financial and non-financial risk components, aligns the recognition and presentation of the effects of hedging instruments and hedge items in the financial statements, and includes certain targeted improvements to ease the application of current guidance related to the assessment of hedge effectiveness. The update to the standard is effective for the Company on January 1, 2019, with early adoption permitted in any interim period. The Company is continuing to evaluate this guidance and assessing the impact of this guidance on its consolidated financial statements. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) |
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Wholly Owned Subsidiaries Information | The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries as follows:
N/A - Not Applicable (a) Subsidiary transferred its interest in a portion of the Williamsburg parking lot to RRE Williamsburg Holdings, LLC in 2016. (b) Wholly-owned subsidiary of RRE Charlemagne Holdings, LLC. (c) Underlying investment sold prior to 2016. (d) Underlying investment sold in 2016. (e) Underlying investment resolved in 2016. (f) Subsidiary was dissolved prior to December 31, 2017. (g) Underlying investment sold in 2017. The consolidated financial statements include the accounts of the Company's majority-owned and/or controlled subsidiaries, which are VIEs, as follows:
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Schedule of Estimated Useful Lives of Assets | The Company anticipates the estimated useful lives of its assets by class as follows:
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SUPPLEMENTAL CASH FLOW INFORMATION (Tables) |
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Cash Flow Elements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Supplemental Cash Flow Information | The following table presents the Company's supplemental cash flow information (in thousands):
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RESTRICTED CASH (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash and Cash Equivalents [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Restricted Cash and Cash Equivalents | The following table presents a summary of the components of the Company's restricted cash (in thousands):
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RENTAL PROPERTIES, NET (Tables) |
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Real Estate Investments, Net [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Investments in Rental Properties | The following table presents the Company’s investments in rental properties (in thousands):
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OTHER INVESTMENTS (Tables) |
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Terms of Loans Held for Investment | The following table presents details of the balance and terms of the Trail Ridge Note, the Company's remaining loan held for investment at December 31, 2017 and 2016 (in thousands):
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ACQUISITIONS (Tables) |
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Fair Value and Purchase Price Allocation | The table below summarizes the Company's wholly-owned acquisitions during the year ended December 31, 2017 and the respective fair values assigned (dollars in thousands):
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Schedule of Acquisitions | The tables below present the total revenues, net loss, and acquisition costs of the Company's acquisitions during the years ended December 31, 2017, 2016, and 2015 (dollars in thousands):
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DISPOSITION OF PROPERTIES AND DECONSOLIDATION OF INTERESTS (Tables) |
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Results of Discontinued Operations | The following table presents details of our disposition and deconsolidation activity during the years ended December 31, 2017, 2016, and 2015 (in thousands):
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IDENTIFIED INTANGIBLE ASSETS, NET (Tables) |
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||
Schedule of Expected Amortization of Rental and Antennae Leases | The following table presents the Company's expected amortization for the rental and antennae leases for the next five years ending December 31, and thereafter (in thousands):
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GOODWILL (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||
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Dec. 31, 2017 | |||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||
Schedule of Goodwill | The following table presents a rollforward of the Company's activity in goodwill for the years ended December 31, 2017 and 2016 (in thousands):
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MORTGAGE NOTES PAYABLE, NET (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Mortgage Notes Payable | The following table presents a summary of the Company's mortgage notes payable, net (in thousands):
The following table presents additional information about the Company's mortgage notes payable, net, at December 31, 2017 (in thousands, except percentages):
(1) Variable rate based on one-month LIBOR of 1.56425% (as of December 31, 2017) plus applicable margin. (2) Fixed rate. (3) Monthly interest-only payment currently required. (4) Monthly fixed principal plus interest payment required. (5) Fixed monthly principal and interest payment required. (6) New debt placed during the year ended December 31, 2017. (7) Automatic extension to October 1, 2018 occurred on October 1, 2017 at which time the fixed interest rate converted to a variable rate. (8) Automatic extension to February 1, 2019 occurred on February 1, 2018 at which time the fixed interest rate converted to a variable rate. |
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Schedule of Annual Principal Payments on the Mortgage Notes Payable | The following table presents the Company's annual principal payments on outstanding borrowings for each of the next five years ending December 31, and thereafter (in thousands):
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Estimated Amortization Of Deferred Financing Costs | The following table presents the Company's estimated amortization of the existing deferred financing costs for the next five years ending December 31, and thereafter (in thousands):
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ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||
Components of Accumulated Other Comprehensive Loss | The following table presents the changes in each component of the Company's accumulated other comprehensive loss for the years ended December 31, 2017, 2016, and 2015 (dollars in thousands):
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CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Fees Earned From/Expenses Paid to Related Parties | The following table presents the Company's amounts payable to and amounts receivable from such related parties (in thousands):
The following table presents the Company's fees earned by and expenses paid to such related parties (in thousands):
(1) Included in Acquisition costs on the consolidated statements of operations and comprehensive income (loss). (2) Included in Management fees on the consolidated statements of operations and comprehensive income (loss). (3) Included in Net gains on dispositions of properties and joint venture interests on the consolidated statements of operations and comprehensive income (loss). (4) Included in Mortgage notes payable, net on the consolidated balance sheets. (5) Included in General and administrative costs on the consolidated statements of operations and comprehensive income (loss). (6) Included in Rental Properties, net on the consolidated balance sheets. (7) Included in Rental operating expenses on the consolidated statements of operations and comprehensive income (loss). |
EQUITY (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Shares Issued | As of December 31, 2017, the Company had issued an aggregate of 77,457,551 shares of its $0.01 par value common stock as follows (dollars in thousands):
(1) Includes 276,056 shares held by the Advisor. |
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Schedule of Redeemed Shares | During the year ended December 31, 2017, the Company redeemed shares of its outstanding common stock as follows (in thousands, except per share data):
(1) All redemptions of equity securities by the Company during the year ended December 31, 2017 were made pursuant to the Company's share redemption program. |
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Schedule of Distributions | For the year ended December 31, 2017, the Company paid aggregate distributions of $43.0 million, including $15.9 million of distributions paid in cash and $27.1 million of distributions reinvested in shares of common stock through the Company's distribution reinvestment plan, as follows (in thousands, except per share data):
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FAIR VALUE MEASURES AND DISCLOSURES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Assets at Fair Value Measured on Recurring Basis | The following table presents information about the Company's assets measured at fair value on a recurring basis and indicates the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair value as follows (in thousands):
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Schedule of Carrying Value and Fair Value Amounts | The following table presents the carrying and fair values of the Company’s loan held for investment, net, and mortgage notes payable-outstanding borrowings (in thousands):
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DERIVATIVES AND HEDGING ACTIVITIES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Outstanding Interest Rate Derivatives | As of December 31, 2017, the Company had the following outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk (dollars in thousands):
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Fair Value and Balance Sheet Location of Derivatives | The table below presents the fair value of the Company’s derivative financial instruments on the consolidated balance sheets as of December 31, 2017 and 2016 (in thousands):
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QUARTERLY FINANCIAL DATA (UNAUDITED) (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarterly Financial Information | The following tables present the Company's operating results by quarter (in thousands, except share data):
|
NATURE OF BUSINESS AND OPERATIONS (Details) - USD ($) $ in Thousands |
12 Months Ended | 36 Months Ended | 54 Months Ended | ||
---|---|---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2017 |
Dec. 13, 2013 |
|
Securities Financing Transaction [Line Items] | |||||
Shares issued and sold, distribution reinvestment plan (in shares) | 8,000,000 | 1,200,000 | |||
Common stock issued through distribution reinvestment plan | $ 27,114 | $ 28,497 | $ 28,959 | $ 84,600 | |
Common Stock | |||||
Securities Financing Transaction [Line Items] | |||||
Proceeds from issuance of stock under private offering | $ 645,800 | ||||
Issuance of common stock (in shares) | 64,900,000 | ||||
Common Stock | Advisor | |||||
Securities Financing Transaction [Line Items] | |||||
Issuance of common stock (in shares) | 276,056 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Rental Property Useful Lives (Details) |
12 Months Ended |
---|---|
Dec. 31, 2017 | |
Buildings | |
Real Estate Properties [Line Items] | |
Estimated useful lives | 27 years 6 months |
Building improvements | Minimum | |
Real Estate Properties [Line Items] | |
Estimated useful lives | 5 years |
Building improvements | Maximum | |
Real Estate Properties [Line Items] | |
Estimated useful lives | 27 years 6 months |
Furniture, fixtures and equipment | Minimum | |
Real Estate Properties [Line Items] | |
Estimated useful lives | 3 years |
Furniture, fixtures and equipment | Maximum | |
Real Estate Properties [Line Items] | |
Estimated useful lives | 5 years |
SUPPLEMENTAL CASH FLOW INFORMATION (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Non-cash financing and investing activities: | |||
Stock issued from distribution reinvestment plan | $ 27,114 | $ 28,497 | $ 28,959 |
Deferred financing costs and escrow deposits funded directly by mortgage notes and credit facility | 2,145 | 2,619 | 11,167 |
Accrual for construction in progress | 1,346 | 1,343 | 896 |
Deconsolidation of subsidiary and removal of related mortgage notes payable and noncontrolling interest | 0 | 35,152 | 0 |
Mortgage notes payable settled directly with proceeds from sale of rental property | 26,976 | 55,720 | 0 |
Non-cash activity related to acquisitions: | |||
Mortgage notes payable and other liabilities assumed in acquisition of rental property | 0 | 0 | 40,284 |
Mortgage notes payable used to acquire real property | 118,705 | 0 | 0 |
Cash paid during the period for: | |||
Interest | $ 26,458 | $ 20,297 | $ 20,752 |
RESTRICTED CASH - Narrative (Details) - USD ($) $ in Millions |
Dec. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Cash and Cash Equivalents [Abstract] | ||
Unrestricted cash designated for capital expenditures | $ 86.9 | $ 101.6 |
RESTRICTED CASH - Schedule of Restricted Cash (Details) - USD ($) $ in Thousands |
Dec. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Restricted cash | $ 13,401 | $ 10,277 |
Real estate taxes | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Restricted cash | 8,877 | 6,853 |
Insurance | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Restricted cash | 1,995 | 1,854 |
Capital improvements | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Restricted cash | $ 2,530 | $ 1,570 |
RENTAL PROPERTIES, NET - Investments (Details) - USD ($) $ in Thousands |
Dec. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Real Estate Investments, Net [Abstract] | ||
Land | $ 196,765 | $ 176,418 |
Building and improvements | 905,739 | 795,665 |
Furniture, fixtures and equipment | 37,796 | 32,198 |
Construction in progress | 6,297 | 5,983 |
Rental properties, gross | 1,146,597 | 1,010,264 |
Less: accumulated depreciation | (147,708) | (107,810) |
Rental properties, net | $ 998,889 | $ 902,454 |
RENTAL PROPERTIES, NET - Narrative (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Real Estate Investments, Net [Abstract] | |||
Depreciation expense | $ 48.7 | $ 44.0 | $ 41.9 |
OTHER INVESTMENTS - Terms of Loans Held for Investment (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Investments, Debt and Equity Securities [Abstract] | ||
Unpaid principal balance | $ 934 | $ 960 |
Unamortized discount and acquisition costs | 152 | 191 |
Net book value | $ 782 | $ 769 |
Interest rate | 7.50% | |
Average monthly payment | $ 8 |
ACQUISITIONS - Acquisitions (Details) |
12 Months Ended |
---|---|
Dec. 31, 2017
Property
| |
Business Combinations [Abstract] | |
Number of real estate properties acquired | 3 |
ACQUISITIONS - Revenues, Losses, and Acquisition Costs - Current Year (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2017 |
Sep. 30, 2017 |
Jun. 30, 2017 |
Mar. 31, 2017 |
Dec. 31, 2016 |
Sep. 30, 2016 |
Jun. 30, 2016 |
Mar. 31, 2016 |
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Business Acquisition [Line Items] | |||||||||||
Total Revenues | $ 32,121 | $ 32,333 | $ 31,030 | $ 30,205 | $ 28,515 | $ 28,575 | $ 30,721 | $ 30,556 | $ 125,689 | $ 118,367 | $ 118,325 |
Net Loss | $ (10,173) | $ 9,637 | $ 2,427 | $ 8,480 | (21,969) | 10,371 | (16,933) | ||||
Green Trails Apartment Homes | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Total Revenues | 4,128 | ||||||||||
Net Loss | (1,920) | ||||||||||
Acquisition Costs | (1,774) | ||||||||||
Terraces at Lake Mary | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Total Revenues | 1,394 | ||||||||||
Net Loss | (1,424) | ||||||||||
Acquisition Costs | (1,290) | ||||||||||
Courtney Meadows Apartments | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Total Revenues | 103 | ||||||||||
Net Loss | (879) | ||||||||||
Acquisition Costs | (1,217) | ||||||||||
Various Properties | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Total Revenues | 0 | 0 | |||||||||
Net Loss | 0 | 0 | |||||||||
Acquisition Costs | (188) | (73) | |||||||||
Multifamily Community | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Total Revenues | 5,625 | 193 | 12,120 | ||||||||
Net Loss | (4,223) | (781) | (9,302) | ||||||||
Acquisition Costs | $ (4,469) | $ (1,582) | $ (5,811) |
IDENTIFIED INTANGIBLE ASSETS, NET - Narrative (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Finite-Lived Intangible Assets [Line Items] | |||
Identified intangible assets, net | $ 1,796 | $ 1,855 | |
Weighted average remaining life | 5 months | 7 months | |
2018 | $ 1,770 | ||
2019 | 13 | ||
2020 | 9 | ||
2021 | 4 | ||
Amortization expense | 3,600 | $ 228 | $ 6,400 |
Acquired in-place leases | |||
Finite-Lived Intangible Assets [Line Items] | |||
Identified intangible assets, net | 1,800 | 1,900 | |
Accumulated amortization | 26,600 | $ 24,300 | |
Antennae leases | |||
Finite-Lived Intangible Assets [Line Items] | |||
2018 | 14 | ||
2019 | 13 | ||
2020 | 9 | ||
2021 | $ 5 |
IDENTIFIED INTANGIBLE ASSETS, NET - Rental and Antennae Leases (Details) - USD ($) $ in Thousands |
Dec. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2018 | $ 1,770 | |
2019 | 13 | |
2020 | 9 | |
2021 | 4 | |
Thereafter | 0 | |
Total | $ 1,796 | $ 1,855 |
GOODWILL (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Goodwill [Roll Forward] | ||
Beginning balance | $ 711 | $ 1,231 |
Ending balance | 670 | 711 |
Conifer Place, Champion Farms and Fieldstone | ||
Goodwill [Roll Forward] | ||
Activity - 2016: Sale of Conifer Place, Champion Farms, and Fieldstone | (520) | |
Activity - 2017: Sale of Stone Ridge | $ (520) | |
Stone Ridge | ||
Goodwill [Roll Forward] | ||
Activity - 2016: Sale of Conifer Place, Champion Farms, and Fieldstone | (41) | |
Activity - 2017: Sale of Stone Ridge | $ (41) |
MORTGAGE NOTES PAYABLE, NET - Annual Principal Payments on the Mortgage Note Payable (Details) - USD ($) $ in Thousands |
Dec. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Debt Disclosure [Abstract] | ||
2018 | $ 14,005 | |
2019 | 64,215 | |
2020 | 144,695 | |
2021 | 102,886 | |
2022 | 35,529 | |
Thereafter | 439,532 | |
Carrying Value | $ 800,862 | $ 627,088 |
MORTGAGE NOTES PAYABLE, NET - Amortization of Existing Deferred Financing Costs (Details) - USD ($) $ in Thousands |
Dec. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Debt Disclosure [Abstract] | ||
2018 | $ 1,683 | |
2019 | 1,580 | |
2020 | 1,302 | |
2021 | 1,067 | |
2022 | 871 | |
Thereafter | 1,412 | |
Deferred financing costs, net | $ 7,915 | $ 7,125 |
CREDIT FACILITY - Narrative (Details) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Line of Credit Facility [Line Items] | |||
Amortization of deferred financing costs | $ 2,014,000 | $ 2,120,000 | $ 1,839,000 |
Revolving credit facility | BAML | |||
Line of Credit Facility [Line Items] | |||
Weighted average borrowings | $ 0 | $ 6,800,000 | |
Margin over LIBOR | 3.00% | ||
Weighted average interest rate | 3.44% | ||
Revolving credit facility | Interest Expense | BAML | |||
Line of Credit Facility [Line Items] | |||
Payment of unused line of credit fee | $ 250,000 | ||
BAML | |||
Line of Credit Facility [Line Items] | |||
Accumulated amortization, deferred finance costs | 0 | $ 857,000 | |
BAML | Interest Expense | |||
Line of Credit Facility [Line Items] | |||
Amortization of deferred financing costs | $ 0 | $ 321,000 | $ 327,000 |
ACCUMULATED OTHER COMPREHENSIVE LOSS (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Accumulated Other Comprehensive Income [Rollforward] | |||
Beginning balance | $ (345) | ||
Ending balance | (562) | $ (345) | |
Net unrealized gain (loss) on derivatives | |||
Accumulated Other Comprehensive Income [Rollforward] | |||
Beginning balance | (345) | (440) | $ (266) |
Unrealized loss on designated derivatives | (380) | (10) | (174) |
Reclassification adjustment for realized loss on designated derivatives | 163 | 105 | |
Ending balance | $ (562) | $ (345) | $ (440) |
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS - Relationship with RAI (Details) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Apr. 22, 2017 |
|
Related Party Transaction [Line Items] | |||
Payment for insurance premiums | $ 1,000,000 | $ 1,800,000 | |
RAI | |||
Related Party Transaction [Line Items] | |||
Amount of losses covered by the insurance pool | 2,500,000.0 | ||
Property loss insurance pool, deductible amount per incident | 25,000 | ||
Amount of property insurance covered by catastrophic insurance | 250,000,000 | ||
Amount of general liability covered by catastrophic insurance per incident | 25,000 | ||
General liability pool, deductible amount per incident | 25,000 | $ 50,000 | |
General liability insurance, loss covered in excess of insurance pool, limit | 76,000,000 | ||
Liability insurance program, maximum amount covered | 100,000,000.0 | ||
Liability insurance program, amount paid | $ 304,047 |
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS - Relationship with the Advisor (Details) - Advisor |
12 Months Ended |
---|---|
Dec. 31, 2017 | |
Related Party Transaction [Line Items] | |
Agreement term | 1 year |
Percentage acquisition fee paid to advisor | 2.00% |
Multiple for calculating monthly asset management fee | 8.33% |
Percentage annual asset management fee | 1.00% |
Disposition fee | 50.00% |
Disposition fee, as a percentage of the contract sales price | 2.75% |
Debt financing fee | 0.50% |
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS - Relationship with Resource Real Estate Opportunity Manager (Details) - Resource Real Estate Opportunity Manager, LLC |
12 Months Ended |
---|---|
Dec. 31, 2017 | |
Related Party Transaction [Line Items] | |
Percentage earned on gross receipts | 4.50% |
Condition of occupancy percentage to receive minimum fee | 75.00% |
Period to receive minimum fee | 12 months |
Construction management fee percentage | 5.00% |
Debt servicing fee percentage | 2.75% |
EQUITY - Convertible Stock (Details) |
12 Months Ended | |
---|---|---|
Dec. 31, 2017
Event
$ / shares
shares
|
Dec. 31, 2016
$ / shares
shares
|
|
Equity [Abstract] | ||
Convertible stock shares outstanding (in shares) | 49,995 | 50,000 |
Convertible stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 |
Convertible stock held by advisor and affiliated persons (in shares) | 49,063 | |
Convertible stock held by outside investors (in shares) | 932 | |
Convertible stock repurchased and retired during period (in shares) | 5 | |
Percentage on original share price | 100.00% | |
Percentage non-compounded annual return | 10.00% | |
Aggregate percentage return | 10.00% | |
Number of triggering events | Event | 2 | |
Triggering event - lessor of option one (as a percent) | 25.00% | |
Triggering event - lessor of option two (as a percent) | 15.00% | |
Percentage non-compounded annual return, option two | 6.00% |
EQUITY - Redemption of Securities (Details) - $ / shares shares in Thousands |
1 Months Ended | 12 Months Ended | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2017 |
Nov. 30, 2017 |
Oct. 31, 2017 |
Sep. 30, 2017 |
Aug. 31, 2017 |
Jul. 31, 2017 |
Jun. 30, 2017 |
May 31, 2017 |
Apr. 30, 2017 |
Mar. 31, 2017 |
Feb. 28, 2017 |
Jan. 31, 2017 |
Dec. 31, 2017 |
|
Equity [Abstract] | |||||||||||||
Shares redeemed (in shares) | 856 | 0 | 0 | 681 | 0 | 0 | 957 | 0 | 0 | 696 | 0 | 0 | 3,190 |
Average Price Paid per Share (in dollars per share) | $ 10.94 | $ 0.00 | $ 0.00 | $ 10.94 | $ 0.00 | $ 0.00 | $ 10.94 | $ 0.00 | $ 0.00 | $ 10.83 | $ 0.00 | $ 0.00 | |
Percentage of weighted-average number of outstanding shares during the 12-month period immediately prior to the effective date of the redemption that company will not redeem in excess of 5% | 5.00% | 5.00% | |||||||||||
Period of time shares are outstanding prior to the effective date of repurchase | 12 months | ||||||||||||
Cash available for redemption, percentage of previous fiscal year operating cash flow | 1.00% | ||||||||||||
Number of days' notice required to suspend, terminate or amend share redemption program | 30 days |
EQUITY - Distributions (Details) $ / shares in Units, $ in Thousands |
12 Months Ended | 36 Months Ended | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 29, 2017
USD ($)
$ / shares
|
Nov. 30, 2017
USD ($)
$ / shares
|
Oct. 31, 2017
USD ($)
$ / shares
|
Sep. 29, 2017
USD ($)
$ / shares
|
Aug. 31, 2017
USD ($)
$ / shares
|
Jul. 31, 2017
USD ($)
$ / shares
|
Jun. 30, 2017
USD ($)
$ / shares
|
May 31, 2017
USD ($)
$ / shares
|
Apr. 28, 2017
USD ($)
$ / shares
|
Mar. 31, 2017
USD ($)
$ / shares
|
Feb. 28, 2017
USD ($)
$ / shares
|
Jan. 31, 2017
USD ($)
$ / shares
|
Dec. 31, 2017
USD ($)
Distribution
$ / shares
shares
|
Dec. 31, 2016
USD ($)
|
Dec. 31, 2015
USD ($)
|
Dec. 31, 2017
USD ($)
|
|
Securities Financing Transaction [Line Items] | ||||||||||||||||
Total Aggregate Distributions | $ 43,033 | |||||||||||||||
Net Cash Distributions | 15,919 | |||||||||||||||
Distributions Reinvested in Shares of Common Stock | $ 27,114 | $ 28,497 | $ 28,959 | $ 84,600 | ||||||||||||
Per Common Share (in dollars per share) | $ / shares | $ 0.6000 | |||||||||||||||
Number of stock distributions (in distributions) | Distribution | 12 | |||||||||||||||
1/30/2017 | ||||||||||||||||
Securities Financing Transaction [Line Items] | ||||||||||||||||
Total Aggregate Distributions | $ 3,601 | |||||||||||||||
Net Cash Distributions | 1,272 | |||||||||||||||
Distributions Reinvested in Shares of Common Stock | $ 2,329 | |||||||||||||||
Per Common Share (in dollars per share) | $ / shares | $ 0.05 | |||||||||||||||
2/27/2017 | ||||||||||||||||
Securities Financing Transaction [Line Items] | ||||||||||||||||
Total Aggregate Distributions | $ 3,611 | |||||||||||||||
Net Cash Distributions | 1,303 | |||||||||||||||
Distributions Reinvested in Shares of Common Stock | $ 2,308 | |||||||||||||||
Per Common Share (in dollars per share) | $ / shares | $ 0.05 | |||||||||||||||
3/30/2017 | ||||||||||||||||
Securities Financing Transaction [Line Items] | ||||||||||||||||
Total Aggregate Distributions | $ 3,588 | |||||||||||||||
Net Cash Distributions | 1,314 | |||||||||||||||
Distributions Reinvested in Shares of Common Stock | $ 2,274 | |||||||||||||||
Per Common Share (in dollars per share) | $ / shares | $ 0.05 | |||||||||||||||
4/27/2017 | ||||||||||||||||
Securities Financing Transaction [Line Items] | ||||||||||||||||
Total Aggregate Distributions | $ 3,597 | |||||||||||||||
Net Cash Distributions | 1,324 | |||||||||||||||
Distributions Reinvested in Shares of Common Stock | $ 2,273 | |||||||||||||||
Per Common Share (in dollars per share) | $ / shares | $ 0.050 | |||||||||||||||
5/30/2017 | ||||||||||||||||
Securities Financing Transaction [Line Items] | ||||||||||||||||
Total Aggregate Distributions | $ 3,608 | |||||||||||||||
Net Cash Distributions | 1,350 | |||||||||||||||
Distributions Reinvested in Shares of Common Stock | $ 2,258 | |||||||||||||||
Per Common Share (in dollars per share) | $ / shares | $ 0.050 | |||||||||||||||
6/29/2017 | ||||||||||||||||
Securities Financing Transaction [Line Items] | ||||||||||||||||
Total Aggregate Distributions | $ 3,571 | |||||||||||||||
Net Cash Distributions | 1,322 | |||||||||||||||
Distributions Reinvested in Shares of Common Stock | $ 2,249 | |||||||||||||||
Per Common Share (in dollars per share) | $ / shares | $ 0.050 | |||||||||||||||
7/28/2017 | ||||||||||||||||
Securities Financing Transaction [Line Items] | ||||||||||||||||
Total Aggregate Distributions | $ 3,580 | |||||||||||||||
Net Cash Distributions | 1,333 | |||||||||||||||
Distributions Reinvested in Shares of Common Stock | $ 2,247 | |||||||||||||||
Per Common Share (in dollars per share) | $ / shares | $ 0.05 | |||||||||||||||
8/30/2017 | ||||||||||||||||
Securities Financing Transaction [Line Items] | ||||||||||||||||
Total Aggregate Distributions | $ 3,590 | |||||||||||||||
Net Cash Distributions | 1,340 | |||||||||||||||
Distributions Reinvested in Shares of Common Stock | $ 2,250 | |||||||||||||||
Per Common Share (in dollars per share) | $ / shares | $ 0.05 | |||||||||||||||
9/28/2017 | ||||||||||||||||
Securities Financing Transaction [Line Items] | ||||||||||||||||
Total Aggregate Distributions | $ 3,568 | |||||||||||||||
Net Cash Distributions | 1,335 | |||||||||||||||
Distributions Reinvested in Shares of Common Stock | $ 2,233 | |||||||||||||||
Per Common Share (in dollars per share) | $ / shares | $ 0.05 | |||||||||||||||
10/30/2017 | ||||||||||||||||
Securities Financing Transaction [Line Items] | ||||||||||||||||
Total Aggregate Distributions | $ 3,576 | |||||||||||||||
Net Cash Distributions | 1,339 | |||||||||||||||
Distributions Reinvested in Shares of Common Stock | $ 2,237 | |||||||||||||||
Per Common Share (in dollars per share) | $ / shares | $ 0.050 | |||||||||||||||
11/29/2017 | ||||||||||||||||
Securities Financing Transaction [Line Items] | ||||||||||||||||
Total Aggregate Distributions | $ 3,588 | |||||||||||||||
Net Cash Distributions | 1,349 | |||||||||||||||
Distributions Reinvested in Shares of Common Stock | $ 2,239 | |||||||||||||||
Per Common Share (in dollars per share) | $ / shares | $ 0.050 | |||||||||||||||
12/28/2017 | ||||||||||||||||
Securities Financing Transaction [Line Items] | ||||||||||||||||
Total Aggregate Distributions | $ 3,555 | |||||||||||||||
Net Cash Distributions | 1,338 | |||||||||||||||
Distributions Reinvested in Shares of Common Stock | $ 2,217 | |||||||||||||||
Per Common Share (in dollars per share) | $ / shares | $ 0.050 | |||||||||||||||
Dividend distribution one | Common Stock | ||||||||||||||||
Securities Financing Transaction [Line Items] | ||||||||||||||||
Number of stock distributions (in distributions) | Distribution | 7 | |||||||||||||||
Stock distributions (in shares) | shares | 0.015 | |||||||||||||||
Dividend distribution two | Common Stock | ||||||||||||||||
Securities Financing Transaction [Line Items] | ||||||||||||||||
Number of stock distributions (in distributions) | Distribution | 2 | |||||||||||||||
Stock distributions (in shares) | shares | 0.0075 | |||||||||||||||
Dividend distribution three | Common Stock | ||||||||||||||||
Securities Financing Transaction [Line Items] | ||||||||||||||||
Number of stock distributions (in distributions) | Distribution | 1 | |||||||||||||||
Stock distributions (in shares) | shares | 0.00585 | |||||||||||||||
Dividend distribution four | Common Stock | ||||||||||||||||
Securities Financing Transaction [Line Items] | ||||||||||||||||
Number of stock distributions (in distributions) | Distribution | 2 | |||||||||||||||
Stock distributions (in shares) | shares | 0.005 |
FAIR VALUE MEASURES AND DISCLOSURES - Assets Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands |
Dec. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Assets: | ||
Interest rate caps | $ 49 | $ 242 |
Assets, Fair Value Disclosure | 49 | 242 |
Level 1 | ||
Assets: | ||
Interest rate caps | 0 | 0 |
Assets, Fair Value Disclosure | 0 | 0 |
Level 2 | ||
Assets: | ||
Interest rate caps | 49 | 242 |
Assets, Fair Value Disclosure | 49 | 242 |
Level 3 | ||
Assets: | ||
Interest rate caps | 0 | 0 |
Assets, Fair Value Disclosure | $ 0 | $ 0 |
FAIR VALUE MEASURES AND DISCLOSURES - Schedule of Carrying and Fair Values (Details) - USD ($) $ in Thousands |
Dec. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Carrying Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Loan held for investment, net | $ 782 | $ 769 |
Mortgage notes payable- outstanding borrowings | (800,862) | (627,088) |
Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Loan held for investment, net | 1,057 | 1,104 |
Mortgage notes payable- outstanding borrowings | $ (802,523) | $ (620,578) |
DERIVATIVES AND HEDGING ACTIVITIES (Details) |
12 Months Ended | |
---|---|---|
Dec. 31, 2017
USD ($)
derivative
|
Dec. 31, 2016
USD ($)
|
|
Prepaid expenses and other assets | ||
Derivatives, Fair Value [Line Items] | ||
Asset derivatives, fair value | $ 49,000 | $ 242,000 |
Cash flow hedging | ||
Derivatives, Fair Value [Line Items] | ||
Loss due to cash flow hedge ineffectiveness | 162,636 | |
Interest rate hedge to be reclassified during next 12 months | $ 203,188 | |
Cash flow hedging | Nesbit Palisades and Ivy at Clear Creek | ||
Derivatives, Fair Value [Line Items] | ||
Loss due to cash flow hedge ineffectiveness | $ 104,941 | |
Cash flow hedging | Interest Rate Cap | ||
Derivatives, Fair Value [Line Items] | ||
Number of Instruments | derivative | 18 | |
Notional | $ 477,825,000 |
OPERATING EXPENSES (Details) |
Dec. 31, 2017
Quarter
|
---|---|
Operating Expenses [Abstract] | |
Average invested assets | 2.00% |
Net income of operating expense | 25.00% |
Number of most recently completed fiscal quarters for which Company must limit its operating expenses | 4 |
INSURANCE PROCEEDS IN EXCESS OF COST BASIS (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Business Acquisition [Line Items] | |||
Insurance proceeds in excess of cost basis | $ 150 | $ 985 | $ 407 |
Insurance proceeds received for casualty losses | $ 248 | 3,171 | 794 |
Deerfield, The Westside Apartments, and Chisholm Place | |||
Business Acquisition [Line Items] | |||
Insurance proceeds received for casualty losses | 735 | ||
Verona Apartment Homes, Skyview Apartment Homes, Meridian Pointe, and Stone Ridge | |||
Business Acquisition [Line Items] | |||
Insurance proceeds received for casualty losses | $ 250 | ||
Stone Ridge | |||
Business Acquisition [Line Items] | |||
Insurance proceeds received for casualty losses | 247 | ||
Chisholm Place | |||
Business Acquisition [Line Items] | |||
Insurance proceeds received for casualty losses | $ 160 |
QUARTERLY FINANCIAL DATA (UNAUDITED) (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2017 |
Sep. 30, 2017 |
Jun. 30, 2017 |
Mar. 31, 2017 |
Dec. 31, 2016 |
Sep. 30, 2016 |
Jun. 30, 2016 |
Mar. 31, 2016 |
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Revenues | $ 32,121 | $ 32,333 | $ 31,030 | $ 30,205 | $ 28,515 | $ 28,575 | $ 30,721 | $ 30,556 | $ 125,689 | $ 118,367 | $ 118,325 |
Net (loss) income | (10,173) | 9,637 | 2,427 | 8,480 | (21,969) | 10,371 | (16,933) | ||||
Less: net (income) loss attributable to noncontrolling interests | 0 | 0 | (25) | (6,281) | 0 | (6,306) | 38 | ||||
Net (loss) income attributable to common stockholders | $ (12,132) | $ 2,191 | $ (3,162) | $ (8,866) | $ (10,173) | $ 9,637 | $ 2,402 | $ 2,199 | $ (21,969) | $ 4,065 | $ (16,895) |
Net income (loss) per common share (in dollars per share) | $ (0.18) | $ 0.03 | $ (0.04) | $ (0.12) | $ (0.14) | $ 0.14 | $ 0.03 | $ 0.03 | $ (0.31) | $ 0.06 | $ (0.24) |
SUBSEQUENT EVENTS (Details) $ / shares in Units, $ in Millions |
Mar. 12, 2018
USD ($)
units
|
Feb. 12, 2018
USD ($)
units
|
Feb. 01, 2018
$ / shares
|
Jan. 29, 2018
$ / shares
|
Mar. 28, 2018 |
Mar. 26, 2018
USD ($)
|
Dec. 31, 2017
Unit
|
---|---|---|---|---|---|---|---|
Subsequent Event [Line Items] | |||||||
Number of units in community | Unit | 9,500 | ||||||
Subsequent event | |||||||
Subsequent Event [Line Items] | |||||||
Declared divident per common share (USD per share) | $ / shares | $ 0.05 | $ 0.05 | |||||
Redemption requests | $ 11.0 | ||||||
New redemption price percentage of the net asset value per share redeemed | 95.00% | ||||||
Distributions reinvestment as percentage of net asset value per share | 95.00% | ||||||
Subsequent event | Addison at Sandy Spring Apartments | |||||||
Subsequent Event [Line Items] | |||||||
Number of units in community | units | 236 | ||||||
Contractual purchase price | $ 34.0 | ||||||
Subsequent event | Bristol at Grapevine Apartments | |||||||
Subsequent Event [Line Items] | |||||||
Number of units in community | units | 376 | ||||||
Contractual purchase price | $ 44.7 |
SCHEDULE III Real Estate and Accumulated Depreciation (Details) - USD ($) $ in Thousands |
12 Months Ended | |||
---|---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2017 |
|
Real Estate and Accumulated Depreciation [Line Items] | ||||
Encumbrances | $ 800,862 | |||
Initial cost to Company | 1,031,611 | |||
Cost capitalized subsequent to acquisition | 114,986 | |||
Gross Amount at which carried at close of period | $ 1,010,264 | $ 1,063,211 | $ 857,151 | 1,146,597 |
Accumulated Depreciation | (107,810) | (77,363) | (45,133) | (147,708) |
Investments in Rental Properties: | ||||
Balance, beginning of the period | 1,010,264 | 1,063,211 | 857,151 | |
Acquisitions | 160,767 | 61,490 | 224,841 | |
Improvements, etc. | 21,592 | 28,024 | 43,018 | |
Dispositions during the period | (46,026) | (142,461) | (61,799) | |
Balance, at close of period | 1,146,597 | 1,010,264 | 1,063,211 | |
Accumulated depreciation: | ||||
Balance, beginning of period | (107,810) | (77,363) | (45,133) | |
Sales | 8,146 | 12,737 | 9,031 | |
Disposals | 685 | 819 | 652 | |
Depreciation | (48,729) | (44,003) | (41,913) | |
Balance, end of period | (147,708) | $ (107,810) | $ (77,363) | |
Philadelphia, PA | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Encumbrances | 14,897 | |||
Initial cost to Company | 11,076 | |||
Cost capitalized subsequent to acquisition | 4,508 | |||
Gross Amount at which carried at close of period | 15,584 | 15,584 | ||
Accumulated Depreciation | (4,734) | (4,734) | ||
Investments in Rental Properties: | ||||
Balance, at close of period | 15,584 | |||
Accumulated depreciation: | ||||
Balance, end of period | $ (4,734) | |||
Philadelphia, PA | Minimum | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Life on which depreciation in latest income is computed | 3 years | |||
Philadelphia, PA | Maximum | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Life on which depreciation in latest income is computed | 27 years 6 months | |||
Dayton, OH | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Encumbrances | 13,100 | |||
Initial cost to Company | 8,273 | |||
Cost capitalized subsequent to acquisition | 1,759 | |||
Gross Amount at which carried at close of period | $ 10,032 | 10,032 | ||
Accumulated Depreciation | (2,640) | (2,640) | ||
Investments in Rental Properties: | ||||
Balance, at close of period | 10,032 | |||
Accumulated depreciation: | ||||
Balance, end of period | $ (2,640) | |||
Dayton, OH | Minimum | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Life on which depreciation in latest income is computed | 3 years | |||
Dayton, OH | Maximum | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Life on which depreciation in latest income is computed | 27 years 6 months | |||
Cincinnati, OH | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Encumbrances | 53,995 | |||
Initial cost to Company | 39,341 | |||
Cost capitalized subsequent to acquisition | 13,008 | |||
Gross Amount at which carried at close of period | $ 52,349 | 52,349 | ||
Accumulated Depreciation | (16,531) | (16,531) | ||
Investments in Rental Properties: | ||||
Balance, at close of period | 52,349 | |||
Accumulated depreciation: | ||||
Balance, end of period | $ (16,531) | |||
Cincinnati, OH | Minimum | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Life on which depreciation in latest income is computed | 3 years | |||
Cincinnati, OH | Maximum | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Life on which depreciation in latest income is computed | 27 years 6 months | |||
Hoover, AL | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Encumbrances | 11,375 | |||
Initial cost to Company | 8,064 | |||
Cost capitalized subsequent to acquisition | 3,672 | |||
Gross Amount at which carried at close of period | $ 11,736 | 11,736 | ||
Accumulated Depreciation | (2,796) | (2,796) | ||
Investments in Rental Properties: | ||||
Balance, at close of period | 11,736 | |||
Accumulated depreciation: | ||||
Balance, end of period | $ (2,796) | |||
Hoover, AL | Minimum | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Life on which depreciation in latest income is computed | 3 years | |||
Hoover, AL | Maximum | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Life on which depreciation in latest income is computed | 27 years 6 months | |||
Houston, TX | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Encumbrances | 18,368 | |||
Initial cost to Company | 26,496 | |||
Cost capitalized subsequent to acquisition | 4,075 | |||
Gross Amount at which carried at close of period | $ 30,571 | 30,571 | ||
Accumulated Depreciation | (6,631) | (6,631) | ||
Investments in Rental Properties: | ||||
Balance, at close of period | 30,571 | |||
Accumulated depreciation: | ||||
Balance, end of period | $ (6,631) | |||
Houston, TX | Minimum | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Life on which depreciation in latest income is computed | 3 years | |||
Houston, TX | Maximum | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Life on which depreciation in latest income is computed | 27 years 6 months | |||
Plano, TX | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Encumbrances | 36,820 | |||
Initial cost to Company | 31,001 | |||
Cost capitalized subsequent to acquisition | 5,438 | |||
Gross Amount at which carried at close of period | $ 36,439 | 36,439 | ||
Accumulated Depreciation | (6,876) | (6,876) | ||
Investments in Rental Properties: | ||||
Balance, at close of period | 36,439 | |||
Accumulated depreciation: | ||||
Balance, end of period | $ (6,876) | |||
Plano, TX | Minimum | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Life on which depreciation in latest income is computed | 3 years | |||
Plano, TX | Maximum | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Life on which depreciation in latest income is computed | 27 years 6 months | |||
Newport News, VA | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Encumbrances | 12,141 | |||
Initial cost to Company | 17,583 | |||
Cost capitalized subsequent to acquisition | 2,759 | |||
Gross Amount at which carried at close of period | $ 20,342 | 20,342 | ||
Accumulated Depreciation | (4,038) | (4,038) | ||
Investments in Rental Properties: | ||||
Balance, at close of period | 20,342 | |||
Accumulated depreciation: | ||||
Balance, end of period | $ (4,038) | |||
Newport News, VA | Minimum | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Life on which depreciation in latest income is computed | 3 years | |||
Newport News, VA | Maximum | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Life on which depreciation in latest income is computed | 27 years 6 months | |||
Littleton, CO | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Encumbrances | 32,970 | |||
Initial cost to Company | 23,321 | |||
Cost capitalized subsequent to acquisition | 10,091 | |||
Gross Amount at which carried at close of period | $ 33,412 | 33,412 | ||
Accumulated Depreciation | (5,565) | (5,565) | ||
Investments in Rental Properties: | ||||
Balance, at close of period | 33,412 | |||
Accumulated depreciation: | ||||
Balance, end of period | $ (5,565) | |||
Littleton, CO | Minimum | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Life on which depreciation in latest income is computed | 3 years | |||
Littleton, CO | Maximum | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Life on which depreciation in latest income is computed | 27 years 6 months | |||
Westminster, CO | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Encumbrances | 28,400 | |||
Initial cost to Company | 29,509 | |||
Cost capitalized subsequent to acquisition | (1,735) | |||
Gross Amount at which carried at close of period | $ 27,774 | 27,774 | ||
Accumulated Depreciation | (4,958) | (4,958) | ||
Investments in Rental Properties: | ||||
Balance, at close of period | 27,774 | |||
Accumulated depreciation: | ||||
Balance, end of period | $ (4,958) | |||
Westminster, CO | Minimum | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Life on which depreciation in latest income is computed | 3 years | |||
Westminster, CO | Maximum | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Life on which depreciation in latest income is computed | 27 years 6 months | |||
San Antonio, TX | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Encumbrances | 13,342 | |||
Initial cost to Company | 21,831 | |||
Cost capitalized subsequent to acquisition | 6,359 | |||
Gross Amount at which carried at close of period | $ 28,190 | 28,190 | ||
Accumulated Depreciation | (6,295) | (6,295) | ||
Investments in Rental Properties: | ||||
Balance, at close of period | 28,190 | |||
Accumulated depreciation: | ||||
Balance, end of period | $ (6,295) | |||
San Antonio, TX | Minimum | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Life on which depreciation in latest income is computed | 3 years | |||
San Antonio, TX | Maximum | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Life on which depreciation in latest income is computed | 27 years 6 months | |||
Burnsville, MN | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Encumbrances | 39,500 | |||
Initial cost to Company | 32,142 | |||
Cost capitalized subsequent to acquisition | 5,354 | |||
Gross Amount at which carried at close of period | $ 37,496 | 37,496 | ||
Accumulated Depreciation | (6,396) | (6,396) | ||
Investments in Rental Properties: | ||||
Balance, at close of period | 37,496 | |||
Accumulated depreciation: | ||||
Balance, end of period | $ (6,396) | |||
Burnsville, MN | Minimum | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Life on which depreciation in latest income is computed | 3 years | |||
Burnsville, MN | Maximum | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Life on which depreciation in latest income is computed | 27 years 6 months | |||
Alpharetta, GA | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Encumbrances | 48,603 | |||
Initial cost to Company | 69,111 | |||
Cost capitalized subsequent to acquisition | 8,946 | |||
Gross Amount at which carried at close of period | $ 78,057 | 78,057 | ||
Accumulated Depreciation | (12,336) | (12,336) | ||
Investments in Rental Properties: | ||||
Balance, at close of period | 78,057 | |||
Accumulated depreciation: | ||||
Balance, end of period | $ (12,336) | |||
Alpharetta, GA | Minimum | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Life on which depreciation in latest income is computed | 3 years | |||
Alpharetta, GA | Maximum | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Life on which depreciation in latest income is computed | 27 years 6 months | |||
Baton Rouge, LA | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Encumbrances | 26,639 | |||
Initial cost to Company | 42,001 | |||
Cost capitalized subsequent to acquisition | 1,075 | |||
Gross Amount at which carried at close of period | $ 43,076 | 43,076 | ||
Accumulated Depreciation | (7,048) | (7,048) | ||
Investments in Rental Properties: | ||||
Balance, at close of period | 43,076 | |||
Accumulated depreciation: | ||||
Balance, end of period | $ (7,048) | |||
Baton Rouge, LA | Minimum | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Life on which depreciation in latest income is computed | 3 years | |||
Baton Rouge, LA | Maximum | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Life on which depreciation in latest income is computed | 27 years 6 months | |||
Atlanta, GA | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Encumbrances | 16,923 | |||
Initial cost to Company | 28,911 | |||
Cost capitalized subsequent to acquisition | 3,199 | |||
Gross Amount at which carried at close of period | $ 32,110 | 32,110 | ||
Accumulated Depreciation | (4,620) | (4,620) | ||
Investments in Rental Properties: | ||||
Balance, at close of period | 32,110 | |||
Accumulated depreciation: | ||||
Balance, end of period | $ (4,620) | |||
Atlanta, GA | Minimum | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Life on which depreciation in latest income is computed | 3 years | |||
Atlanta, GA | Maximum | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Life on which depreciation in latest income is computed | 27 years 6 months | |||
Atlanta, GA | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Encumbrances | 13,356 | |||
Initial cost to Company | 21,796 | |||
Cost capitalized subsequent to acquisition | 3,214 | |||
Gross Amount at which carried at close of period | $ 25,010 | 25,010 | ||
Accumulated Depreciation | (3,622) | (3,622) | ||
Investments in Rental Properties: | ||||
Balance, at close of period | 25,010 | |||
Accumulated depreciation: | ||||
Balance, end of period | $ (3,622) | |||
Atlanta, GA | Minimum | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Life on which depreciation in latest income is computed | 3 years | |||
Atlanta, GA | Maximum | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Life on which depreciation in latest income is computed | 27 years 6 months | |||
Katy, TX | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Encumbrances | 22,942 | |||
Initial cost to Company | 31,385 | |||
Cost capitalized subsequent to acquisition | 3,147 | |||
Gross Amount at which carried at close of period | $ 34,532 | 34,532 | ||
Accumulated Depreciation | (4,992) | (4,992) | ||
Investments in Rental Properties: | ||||
Balance, at close of period | 34,532 | |||
Accumulated depreciation: | ||||
Balance, end of period | $ (4,992) | |||
Katy, TX | Minimum | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Life on which depreciation in latest income is computed | 3 years | |||
Katy, TX | Maximum | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Life on which depreciation in latest income is computed | 27 years 6 months | |||
Shawnee, KS | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Encumbrances | 12,682 | |||
Initial cost to Company | 18,250 | |||
Cost capitalized subsequent to acquisition | 1,222 | |||
Gross Amount at which carried at close of period | $ 19,472 | 19,472 | ||
Accumulated Depreciation | (3,645) | (3,645) | ||
Investments in Rental Properties: | ||||
Balance, at close of period | 19,472 | |||
Accumulated depreciation: | ||||
Balance, end of period | $ (3,645) | |||
Shawnee, KS | Minimum | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Life on which depreciation in latest income is computed | 3 years | |||
Shawnee, KS | Maximum | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Life on which depreciation in latest income is computed | 27 years 6 months | |||
Lee's Summit, MO | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Encumbrances | 6,250 | |||
Initial cost to Company | 11,898 | |||
Cost capitalized subsequent to acquisition | 583 | |||
Gross Amount at which carried at close of period | $ 12,481 | 12,481 | ||
Accumulated Depreciation | (2,374) | (2,374) | ||
Investments in Rental Properties: | ||||
Balance, at close of period | 12,481 | |||
Accumulated depreciation: | ||||
Balance, end of period | $ (2,374) | |||
Lee's Summit, MO | Minimum | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Life on which depreciation in latest income is computed | 3 years | |||
Lee's Summit, MO | Maximum | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Life on which depreciation in latest income is computed | 27 years 6 months | |||
Kansas City, MO | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Encumbrances | 7,338 | |||
Initial cost to Company | 9,691 | |||
Cost capitalized subsequent to acquisition | 799 | |||
Gross Amount at which carried at close of period | $ 10,490 | 10,490 | ||
Accumulated Depreciation | (2,024) | (2,024) | ||
Investments in Rental Properties: | ||||
Balance, at close of period | 10,490 | |||
Accumulated depreciation: | ||||
Balance, end of period | $ (2,024) | |||
Kansas City, MO | Minimum | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Life on which depreciation in latest income is computed | 3 years | |||
Kansas City, MO | Maximum | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Life on which depreciation in latest income is computed | 27 years 6 months | |||
San Antonio, TX | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Encumbrances | 22,145 | |||
Initial cost to Company | 34,554 | |||
Cost capitalized subsequent to acquisition | 5,952 | |||
Gross Amount at which carried at close of period | $ 40,506 | 40,506 | ||
Accumulated Depreciation | (5,064) | (5,064) | ||
Investments in Rental Properties: | ||||
Balance, at close of period | 40,506 | |||
Accumulated depreciation: | ||||
Balance, end of period | $ (5,064) | |||
San Antonio, TX | Minimum | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Life on which depreciation in latest income is computed | 3 years | |||
San Antonio, TX | Maximum | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Life on which depreciation in latest income is computed | 27 years 6 months | |||
Irving, TX | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Encumbrances | 34,395 | |||
Initial cost to Company | 47,075 | |||
Cost capitalized subsequent to acquisition | 6,691 | |||
Gross Amount at which carried at close of period | $ 53,766 | 53,766 | ||
Accumulated Depreciation | (7,329) | (7,329) | ||
Investments in Rental Properties: | ||||
Balance, at close of period | 53,766 | |||
Accumulated depreciation: | ||||
Balance, end of period | $ (7,329) | |||
Irving, TX | Minimum | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Life on which depreciation in latest income is computed | 3 years | |||
Irving, TX | Maximum | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Life on which depreciation in latest income is computed | 27 years 6 months | |||
Yorktown, VA | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Encumbrances | 14,717 | |||
Initial cost to Company | 21,204 | |||
Cost capitalized subsequent to acquisition | 580 | |||
Gross Amount at which carried at close of period | $ 21,784 | 21,784 | ||
Accumulated Depreciation | (3,153) | (3,153) | ||
Investments in Rental Properties: | ||||
Balance, at close of period | 21,784 | |||
Accumulated depreciation: | ||||
Balance, end of period | $ (3,153) | |||
Yorktown, VA | Minimum | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Life on which depreciation in latest income is computed | 3 years | |||
Yorktown, VA | Maximum | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Life on which depreciation in latest income is computed | 27 years 6 months | |||
Austin, TX | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Encumbrances | 12,177 | |||
Initial cost to Company | 23,370 | |||
Cost capitalized subsequent to acquisition | 5,192 | |||
Gross Amount at which carried at close of period | $ 28,562 | 28,562 | ||
Accumulated Depreciation | (3,307) | (3,307) | ||
Investments in Rental Properties: | ||||
Balance, at close of period | 28,562 | |||
Accumulated depreciation: | ||||
Balance, end of period | $ (3,307) | |||
Austin, TX | Minimum | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Life on which depreciation in latest income is computed | 3 years | |||
Austin, TX | Maximum | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Life on which depreciation in latest income is computed | 27 years 6 months | |||
Gilbert, AZ | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Encumbrances | 25,912 | |||
Initial cost to Company | 35,070 | |||
Cost capitalized subsequent to acquisition | 5,773 | |||
Gross Amount at which carried at close of period | $ 40,843 | 40,843 | ||
Accumulated Depreciation | (4,318) | (4,318) | ||
Investments in Rental Properties: | ||||
Balance, at close of period | 40,843 | |||
Accumulated depreciation: | ||||
Balance, end of period | $ (4,318) | |||
Gilbert, AZ | Minimum | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Life on which depreciation in latest income is computed | 3 years | |||
Gilbert, AZ | Maximum | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Life on which depreciation in latest income is computed | 27 years 6 months | |||
Orange County, CA | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Encumbrances | 67,500 | |||
Initial cost to Company | 116,036 | |||
Cost capitalized subsequent to acquisition | 8,177 | |||
Gross Amount at which carried at close of period | $ 124,213 | 124,213 | ||
Accumulated Depreciation | (8,459) | (8,459) | ||
Investments in Rental Properties: | ||||
Balance, at close of period | 124,213 | |||
Accumulated depreciation: | ||||
Balance, end of period | $ (8,459) | |||
Orange County, CA | Minimum | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Life on which depreciation in latest income is computed | 3 years | |||
Orange County, CA | Maximum | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Life on which depreciation in latest income is computed | 27 years 6 months | |||
Chula Vista, CA | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Encumbrances | 26,525 | |||
Initial cost to Company | 50,365 | |||
Cost capitalized subsequent to acquisition | 4,542 | |||
Gross Amount at which carried at close of period | $ 54,907 | 54,907 | ||
Accumulated Depreciation | (3,633) | (3,633) | ||
Investments in Rental Properties: | ||||
Balance, at close of period | 54,907 | |||
Accumulated depreciation: | ||||
Balance, end of period | $ (3,633) | |||
Chula Vista, CA | Minimum | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Life on which depreciation in latest income is computed | 3 years | |||
Chula Vista, CA | Maximum | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Life on which depreciation in latest income is computed | 27 years 6 months | |||
Arlington, TX | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Encumbrances | 47,000 | |||
Initial cost to Company | 61,490 | |||
Cost capitalized subsequent to acquisition | 1,304 | |||
Gross Amount at which carried at close of period | $ 62,794 | 62,794 | ||
Accumulated Depreciation | (2,317) | (2,317) | ||
Investments in Rental Properties: | ||||
Balance, at close of period | 62,794 | |||
Accumulated depreciation: | ||||
Balance, end of period | $ (2,317) | |||
Arlington, TX | Minimum | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Life on which depreciation in latest income is computed | 3 years | |||
Arlington, TX | Maximum | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Life on which depreciation in latest income is computed | 27 years 6 months | |||
Lisle, IL | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Encumbrances | 61,500 | |||
Initial cost to Company | 77,127 | |||
Cost capitalized subsequent to acquisition | 259 | |||
Gross Amount at which carried at close of period | $ 77,386 | 77,386 | ||
Accumulated Depreciation | (1,506) | (1,506) | ||
Investments in Rental Properties: | ||||
Balance, at close of period | 77,386 | |||
Accumulated depreciation: | ||||
Balance, end of period | $ (1,506) | |||
Lisle, IL | Minimum | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Life on which depreciation in latest income is computed | 3 years | |||
Lisle, IL | Maximum | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Life on which depreciation in latest income is computed | 27 years 6 months | |||
Lake Mary, FL | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Encumbrances | 32,250 | |||
Initial cost to Company | 43,132 | |||
Cost capitalized subsequent to acquisition | (396) | |||
Gross Amount at which carried at close of period | $ 42,736 | 42,736 | ||
Accumulated Depreciation | (501) | (501) | ||
Investments in Rental Properties: | ||||
Balance, at close of period | 42,736 | |||
Accumulated depreciation: | ||||
Balance, end of period | $ (501) | |||
Lake Mary, FL | Minimum | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Life on which depreciation in latest income is computed | 3 years | |||
Lake Mary, FL | Maximum | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Life on which depreciation in latest income is computed | 27 years 6 months | |||
Jacksonville, FL | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Encumbrances | 27,100 | |||
Initial cost to Company | 40,508 | |||
Cost capitalized subsequent to acquisition | (561) | |||
Gross Amount at which carried at close of period | $ 39,947 | 39,947 | ||
Accumulated Depreciation | 0 | $ 0 | ||
Investments in Rental Properties: | ||||
Balance, at close of period | 39,947 | |||
Accumulated depreciation: | ||||
Balance, end of period | $ 0 | |||
Jacksonville, FL | Minimum | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Life on which depreciation in latest income is computed | 3 years | |||
Jacksonville, FL | Maximum | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Life on which depreciation in latest income is computed | 27 years 6 months |
SCHEDULE IV Mortgage Loans on Real Estate (Details) $ in Thousands |
12 Months Ended |
---|---|
Dec. 31, 2017
USD ($)
| |
Mortgage Loans on Real Estate [Line Items] | |
Face amount of mortgages | $ 1,058 |
Carrying amount of mortgages | 782 |
Principal amount of loans subject to delinquent principal or interest | $ 0 |
Interest Rate | 7.50% |
Movement in Mortgage Loans on Real Estate [Roll Forward] | |
Balance, beginning of the period | $ 769 |
Interest accretion | 39 |
Principal reductions | (26) |
Balance, end of the period | 782 |
Residential Columbia City, IN | |
Mortgage Loans on Real Estate [Line Items] | |
Face amount of mortgages | 1,058 |
Carrying amount of mortgages | 782 |
Principal amount of loans subject to delinquent principal or interest | $ 0 |
Interest Rate | 7.50% |