Maryland | 333-160748 | 27-0351641 | ||
(State or Other Jurisdiction | (Commission File Number) | (IRS Employer | ||
of Incorporation) | Identification No.) |
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | ||
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | ||
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | ||
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
(a) | Financial Statement of Businesses Acquired. | |||
Cooper Creek Property | ||||
Report of Independent Auditors | F-1 | |||
Statement of Revenues Over Certain Operating Expenses for the Six Months Ended June 30, 2011(unaudited) | F-2 | |||
and the Year Ended December 31, 2010 | ||||
Notes to Statement of Revenues Over Certain Operating Expenses for the Six Months Ended June 30, 2011 | F-3 | |||
(unaudited) and the Year Ended December 31, 2010 | ||||
(b) | Pro Forma Financial Information. | |||
Steadfast Income REIT, Inc. | ||||
Summary of Unaudited Pro Forma Financial Statements | F-5 | |||
Unaudited Pro Forma Balance Sheet as of June 30, 2011 | F-6 | |||
Notes to Unaudited Pro Forma Balance Sheet as of June 30, 2011 | F-7 | |||
Unaudited Pro Forma Statement of Operations for the Six Months Ended June 30, 2011 | F-8 | |||
Notes to Unaudited Pro Forma Statement of Operations for the Six Months Ended June 30, 2011 | F-9 | |||
Unaudited Pro Forma Statement of Operations for the Year Ended December 31, 2010 | F-10 | |||
Notes to Unaudited Pro Forma Statement of Operations for the Year Ended December 31, 2010 | F-11 |
For the Six Months | ||||||||||
Ended | For the Year Ended | |||||||||
June 30, 2011 | December 31, 2010 | |||||||||
(unaudited) | ||||||||||
Revenues: | ||||||||||
Rental income | $ | 591,336 | $ | 1,067,312 | ||||||
Tenant reimbursements and other | 52,204 | 114,964 | ||||||||
Total revenues | 643,540 | 1,182,276 | ||||||||
Expenses: | ||||||||||
Operating, maintenance, and management | 225,747 | 393,634 | ||||||||
Real estate taxes and insurance | 42,459 | 92,227 | ||||||||
General and administrative expenses | 15,580 | 31,095 | ||||||||
Total expenses | 283,786 | 516,956 | ||||||||
Revenues over certain operating expenses | $ | 359,754 | $ | 665,320 | ||||||
Pro Forma Adjustments | |||||||||||||
Steadfast Income REIT, Inc. Historical (a) | Cooper Creek Property (b) | Pro Forma Total | |||||||||||
Assets: | |||||||||||||
Real Estate: | |||||||||||||
Land | $ | 3,112,459 | $ | 593,610 | (b) | $ | 3,706,069 | ||||||
Building and improvements | 30,527,676 | 9,642,180 | (b) | 40,169,856 | |||||||||
Tenant origination and absorption costs | 1,683,022 | 184,210 | (b) | 1,867,232 | |||||||||
Total real estate, cost | 35,323,157 | 10,420,000 | 45,743,157 | ||||||||||
Less accumulated depreciation and amortization | (1,761,525 | ) | — | (1,761,525 | ) | ||||||||
Total real estate, net | 33,561,632 | 10,420,000 | 43,981,632 | ||||||||||
Cash and cash equivalents | 5,737,651 | (3,712,808 | ) | (b) | 2,024,843 | ||||||||
Restricted cash | 392,220 | 69,714 | (b) | 461,934 | |||||||||
Rents and other receivables | 186,594 | — | 186,594 | ||||||||||
Deferred financing costs and other assets, net | 371,756 | 168,991 | (b) | 540,747 | |||||||||
Total assets | $ | 40,249,853 | $ | 6,945,897 | $ | 47,195,750 | |||||||
Liabilities: | |||||||||||||
Accounts payable and accrued liabilities | $ | 1,048,615 | $ | 275,230 | (b) | $ | 1,323,845 | ||||||
Notes payable | 25,822,000 | 6,773,000 | (b) | 32,595,000 | |||||||||
Distributions payable | 114,009 | — | 114,009 | ||||||||||
Due to affiliates, net | 690,156 | — | 690,156 | ||||||||||
Total liabilities | 27,674,780 | 7,048,230 | 34,723,010 | ||||||||||
Commitments and contingencies | |||||||||||||
Redeemable common stock | 220,522 | — | 220,522 | ||||||||||
Equity: | |||||||||||||
Stockholders' equity: | |||||||||||||
Preferred stock, $0.01 par value per share; | |||||||||||||
100,000,000 shares authorized, no shares issued and outstanding | — | — | — | ||||||||||
Common stock, $0.01 par value per share; | |||||||||||||
999,999,000 shares authorized, 2,103,227 shares issued and outstanding and 2,103,227 pro forma shares as of June 30, 2011 | 21,032 | — | 21,032 | ||||||||||
Convertible stock, $0.01 par value per share; | |||||||||||||
1,000 shares issued and outstanding as of June 30, 2011 | 10 | — | 10 | ||||||||||
Additional paid-in capital | 17,201,054 | — | 17,201,054 | ||||||||||
Cumulative distributions and net losses | (4,867,545 | ) | (102,333 | ) | (c) | (4,969,878 | ) | ||||||
Total stockholders' equity | 12,354,551 | (102,333 | ) | 12,252,218 | |||||||||
Noncontrolling interest | — | — | — | ||||||||||
Total equity | 12,354,551 | (102,333 | ) | 12,252,218 | |||||||||
Total liabilities and equity | $ | 40,249,853 | $ | 6,945,897 | $ | 47,195,750 |
(a) | Historical financial information as of June 30, 2011, derived from the Company's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2011. | |
(b) | Represents adjustments to the balance sheet of the Company to give effect to the acquisition of the Cooper Creek Property and related cash, other assets and liabilities as if the acquisition had occurred on June 30, 2011. The purchase price of the Cooper Creek Property, exclusive of closing and other acquisition costs, was $10.4 million and was funded with proceeds from the Company's initial public offering and bank financing in the amount of $6.8 million. | |
(c) | Amount represents the acquisition related expenses incurred in connection with the acquisition of the Cooper Creek Property not included in the historical results. | |
Pro Forma Adjustments | ||||||||||||||||||||||||
Steadfast | ||||||||||||||||||||||||
Income REIT, Inc. | Arbor Pointe | Clarion Park | Cooper Creek | Pro Forma | ||||||||||||||||||||
Historical (a) | Property (b) | Property (b) | Property (b) | Total | ||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||
Rental income | $ | 1,738,142 | $ | 374,627 | (c) | $ | 840,923 | (c) | $ | 591,336 | (c) | $ | 3,545,028 | |||||||||||
Tenant reimbursements and other | 217,404 | 14,892 | (d) | 12,372 | (d) | 52,204 | (d) | 296,872 | ||||||||||||||||
Total revenues | 1,955,546 | 389,519 | 853,295 | 643,540 | 3,841,900 | |||||||||||||||||||
Expenses: | ||||||||||||||||||||||||
Operating, maintenance and management | 694,038 | 189,685 | (e) | 248,987 | (e) | 205,751 | (e) | 1,338,461 | ||||||||||||||||
Real estate taxes and insurance | 211,693 | 41,438 | (f) | 98,453 | (f) | 65,318 | (f) | 416,902 | ||||||||||||||||
Fees to affiliates | 512,684 | (101,553 | ) | (g) | (153,938 | ) | (g) | 65,029 | (g) | 322,222 | ||||||||||||||
Depreciation and amortization | 1,220,953 | 18,428 | (h) | 181,428 | (h) | 187,158 | (h) | 1,607,967 | ||||||||||||||||
Interest expense | 384,085 | 86,442 | (i) | 205,325 | (i) | 138,178 | (i) | 814,030 | ||||||||||||||||
General and administrative expenses | 523,416 | 11,250 | (j) | 28,043 | (j) | 15,580 | (j) | 578,289 | ||||||||||||||||
Other acquisition costs | 338,191 | (129,649 | ) | (k) | (151,256 | ) | (k) | (18,420 | ) | (k) | 38,866 | |||||||||||||
3,885,060 | 116,041 | 457,042 | 658,594 | 5,116,737 | ||||||||||||||||||||
Net loss | (1,929,514 | ) | $ | 273,478 | $ | 396,253 | $ | (15,054 | ) | (1,274,837 | ) | |||||||||||||
Net loss attributable to noncontrolling interest | — | — | ||||||||||||||||||||||
Net loss attributable to common stockholders | $ | (1,929,514 | ) | $ | (1,274,837 | ) | ||||||||||||||||||
Net loss per common share - basic and diluted | $ | (1.22 | ) | $ | (0.61 | ) | ||||||||||||||||||
Weighted-average number of common shares outstanding, basic and diluted | 1,577,250 | 2,103,227 | (l) | |||||||||||||||||||||
(a) | Historical financial information for the six months ended June 30, 2011, derived from the Company's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2011. | ||
(b) | Represents adjustments to historical operations of the Company to give effect to the acquisition of the Arbor Pointe Property, the Clarion Park Property and the Cooper Creek Property as if these assets had been acquired on January 1, 2010. | ||
(c) | Represents base rental income (not reflected in the historical statement of operations of the Company) for the six months ended June 30, 2011, based on the historical operations of the previous owners of the properties. | ||
(d) | Represents operating cost reimbursements and other operating income from tenants (not reflected in the historical statement of operations of the Company) for the six months ended June 30, 2011, based on historical operations of the previous owners of the properties. | ||
(e) | Represents operating, maintenance and management expenses, excluding property management fees of $19,478, $42,917 and $19,996 for the Arbor Pointe Property, the Clarion Park Property and the Cooper Creek Property, respectively, (not reflected in the historical statement of operations of the Company) for the six months ended June 30, 2011, based on historical operations of the previous owners of the properties. | ||
(f) | Represents real estate taxes and insurance expense (not reflected in the historical statement of operations of the Company) for the six months ended June 30, 2011, based on management estimates. | ||
(g) | Represents adjustments made to fees to affiliates for the six months ended June 30, 2011 in order to eliminate acquisition fees incurred by the Company that are included in the historical financial information for the six months ended June 30, 2011 that were attributable to the Arbor Pointe Property and the Clarion Park Property and to include the fees to affiliates (not reflected in the historical statement of operations of the Company) that would be due to affiliates had the Arbor Pointe Property, the Clarion Park Property and the Cooper Creek Property been acquired on January 1, 2010. The pro forma total fees to affiliates for the six months ended June 30, 2011 are as follows: | ||
* | Investment Management Fees: Investment management fees are payable to the Company's external advisor, Steadfast Income Advisor, LLC ("Advisor") based on an annual fee, payable monthly, of 0.80% of the acquisition cost of the the Company's properties, including acquisition fees and acquisition expenses, as defined in the Advisory Agreement by and among the Company, its operating partnership and Advisor ("the Advisory Agreement"). The investment management fees payable to Advisor attributable to the acquisition costs of the Arbor Pointe Property, the Clarion Park Property and the Cooper Creek Property for the six months ended June 30, 2011 were $26,709, $45,824 and $42,505, respectively; and | ||
* | Property Management Fees: Property management fees are payable to the Company's affiliated property manager based on 3.5% of the monthly gross revenues of each of the Company's properties, as defined in the Property Management Agreements, for each property. The property management fees payable to the property manager for the Arbor Pointe Property, the Clarion Park Property and the Cooper Creek Property for the six months ended June 30, 2011 were $19,889, $30,201 and $22,524, respectively. | ||
(h) | Represents depreciation expense (not reflected in the historical statement of operations of the Company) for the six months ended June 30, 2011. Depreciation expense on the purchase price of building and furnitures and fixtures is recognized using the straight-line method over an estimated useful life of 27.5 years and 15 years, respectively. Depreciation expense on the purchase price of tenant improvements is recognized using the straight-line method over the life of the lease. Amortization expense on lease intangible costs is recognized using the straight-line method over the remaining life of the lease. | ||
(i) | Represents interest expense (not reflected in the historical operations of the Company) on $5.2 million in debt related to the Arbor Pointe Property pursuant to a promissory note bearing interest at a rate of 4.86%, interest expense on $9.0 million in debt related to the Clarion Park Property pursuant to the promissory note bearing interest at a rate of 4.58%, and interest expense on $6.8 million in debt related to the Cooper Creek Property pursuant to the promissory note bearing interest at a rate of 3.89%. | ||
(j) | Represents general and administrative expenses (not reflected in the historical statement of operations of the Company) for the six months ended June 30, 2011 based on historical operations of the previous owners of the Arbor Pointe Property, the Clarion Park Property and the Cooper Creek Property. | ||
(k) | Represents adjustments made to acquisition costs for the six months ended June 30, 2011 in order to eliminate those amounts incurred by the Company that are included in the historical financial information for the six months ended June 30, 2011 that were attributable to the Arbor Pointe Property, the Clarion Park Property and the Cooper Creek Property during the six months ended June 30, 2011, as if the assets had been acquired on January 1, 2010. | ||
(l) | Represents the actual number of shares of the Company's common stock outstanding as of June 30, 2011. The calculation assumes that these shares were issued and the related proceeds were raised as of January 1, 2010. |
Pro Forma Adjustments | |||||||||||||||||||||||||
Steadfast Income | |||||||||||||||||||||||||
REIT, Inc. | 2010 | Arbor Pointe | Clarion Park | Cooper Creek | Pro Forma | ||||||||||||||||||||
Historical (a) | Acquisitions (b) | Property (c) | Property (c) | Property (c) | Total | ||||||||||||||||||||
Revenues: | |||||||||||||||||||||||||
Rental income | $ | 778,387 | $ | 2,309,937 | (d) | $ | 1,127,420 | (d) | $ | 1,628,500 | (d) | $ | 1,067,312 | (d) | $ | 6,911,556 | |||||||||
Tenant reimbursements and other | 49,843 | 278,038 | (e) | 30,389 | (e) | 29,302 | (e) | 114,964 | (e) | 502,536 | |||||||||||||||
Total revenues | 828,230 | 2,587,975 | 1,157,809 | 1,657,802 | 1,182,276 | 7,414,092 | |||||||||||||||||||
Expenses: | |||||||||||||||||||||||||
Operating, maintenance and management | 297,251 | 823,816 | (f) | 472,303 | (f) | 550,900 | (f) | 355,601 | (f) | 2,499,871 | |||||||||||||||
Real estate taxes and insurance | 138,181 | 492,790 | (g) | 120,304 | (g) | 198,255 | (g) | 131,836 | (g) | 1,081,366 | |||||||||||||||
Fees to affiliates | 419,694 | 200,565 | (h) | 227,487 | (h) | 378,788 | (h) | 338,916 | (h) | 1,565,450 | |||||||||||||||
Depreciation and amortization | 540,572 | 410,477 | (i) | 392,407 | (i) | 654,545 | (i) | 558,526 | (i) | 2,556,527 | |||||||||||||||
Interest expense | 163,987 | 511,313 | (j) | 259,918 | (j) | 423,281 | (j) | 278,450 | (j) | 1,636,949 | |||||||||||||||
General and administrative expenses | 1,108,220 | 260,962 | (k) | 44,309 | (k) | 23,124 | (k) | 31,095 | (k) | 1,467,710 | |||||||||||||||
Other acquisition costs | 323,906 | 46,433 | (l) | 125,264 | (l) | 151,159 | (l) | 138,563 | (l) | 785,325 | |||||||||||||||
2,991,811 | 2,746,356 | 1,641,992 | 2,380,052 | 1,832,987 | 11,593,198 | ||||||||||||||||||||
Net loss | (2,163,581 | ) | $ | (158,381 | ) | $ | (484,183 | ) | $ | (722,250 | ) | $ | (650,711 | ) | (4,179,106 | ) | |||||||||
Net loss attributable to noncontrolling interest | 1,000 | 1,000 | |||||||||||||||||||||||
Net loss attributable to common stockholders | $ | (2,162,581 | ) | $ | (4,178,106 | ) | |||||||||||||||||||
Net loss per common share - basic and diluted | $ | (4.27 | ) | $ | (1.99 | ) | |||||||||||||||||||
Weighted-average number of common shares outstanding, basic and diluted | 506,003 | 2,103,227 | (m) | ||||||||||||||||||||||
(a) | Historical financial information derived from the Company's Annual Report on Form 10-K for the year ended December 31, 2010. | ||
(b) | Represents adjustments to historical operations of the Company to give effect to the acquisition of the Lincoln Tower Property and the Park Place Property, which were acquired on August 11, 2010 and December 22, 2010, respectively, as if these assets had been acquired on January 1, 2010. Detailed pro forma information for the Lincoln Tower Property and the Park Place Property is contained in the Company's prior filings with the SEC. | ||
(c) | Represents adjustments to historical operations of the Company to give effect to the acquisition of the Arbor Pointe Property, the Clarion Park Property and the Cooper Creek Property as if these assets had been acquired on January 1, 2010. | ||
(d) | Represents the estimated base rental income (not reflected in the historical statement of operations of the Company) for the year ended December 31, 2010, based on the historical operations of the previous owners of the Company's properties as if the Lincoln Tower Property, the Park Place Property, the Arbor Pointe Property, the Clarion Park Property and the Cooper Creek Property had been acquired on January 1, 2010. | ||
(e) | Represents operating cost reimbursements and other operating income from tenants (not reflected in the historical statement of operations of the Company) for the year ended December 31, 2010, based on historical operations of the previous owners of the Company's properties as if the Lincoln Tower Property, the Park Place Property, the Arbor Pointe Property, the Clarion Park Property and the Cooper Creek Property had been acquired on January 1, 2010. | ||
(f) | Represents operating, maintenance and management expenses, excluding management fees of $99,965 and incentive management fees of $125,000 for the Clarion Park Property and management fees of $38,033 for the Cooper Creek Property, (not reflected in the historical statement of operations of the Company) for the year ended December 31, 2010, based on historical operations of the previous owners of the Company's properties as if the Lincoln Tower Property, the Park Place Property, the Arbor Pointe Property, the Clarion Park Property and the Cooper Creek Property had been acquired on January 1, 2010. | ||
(g) | Represents real estate taxes and insurance expense for the Lincoln Tower Property, the Park Place Property, the Arbor Pointe Property, the Clarion Park Property and the Cooper Creek Property (not reflected in the historical statement of operations of the Company) for the year ended December 31, 2010, based on management estimates. | ||
(h) | Represents fees to affiliates (not reflected in the historical statement of operations of the Company) for the year ended December 31, 2010 that would be due to affiliates had the Lincoln Tower Property, the Park Place Property, the Arbor Pointe Property, the Clarion Park Property and the Cooper Creek Property been acquired on January 1, 2010. The pro forma total fees to affiliates are as follows: | ||
* | Acquisition Fees: Acquisition fees are payable based on 2% of the sum of the acquisition cost of the Lincoln Tower Property, the Park Place Property, the Arbor Pointe Property, the Clarion Park Property and the Cooper Creek Property, including acquisition expenses (with the total acquisition fees and acquisition expenses payable to the Advisor being subject to a limitation of 6% of the contract purchase price), as defined in the Advisory Agreement. The acquisition fee payable to Advisor attributable to the acquisitions of the Lincoln Tower Property, the Park Place Property, the Arbor Pointe Property, the Clarion Park Property and the Cooper Creek Property for the year ended December 31, 2010 was $192,858, $164,779, $133,545, $229,118 and $212,525, respectively; | ||
* | Investment Management Fees: Investment management fees are payable to Advisor based on an annual fee, payable monthly, of 0.80% of the acquisition cost of the Lincoln Tower Property, the Park Place Property, the Arbor Pointe Property, the Clarion Park Property and the Cooper Creek Property, including acquisition fees and acquisition expenses, as defined in the Advisory Agreement. The investment management fees payable to Advisor attributable to the acquisition costs of the Lincoln Tower Property, the Park Place Property, the Arbor Pointe Property, the Clarion Park Property and the Cooper Creek Property for the year ended December 31, 2010 were $77,143, $65,912, $53,419, $91,647 and $85,010, respectively; and | ||
* | Property Management Fees: Property management fees are payable to the Company's affiliated property manager based on 3.5% of the monthly gross revenues of the Lincoln Tower Property, the Park Place Property, the Arbor Pointe Property, the Clarion Park Property and the Cooper Creek Property, as defined in the Property Management Agreements for each property. The property management fees payable to the property manager of the Lincoln Tower Property, the Park Place Property, the Arbor Pointe Property, the Clarion Park Property and the Cooper Creek Property for the year ended December 31, 2010 were $68,782, $50,785, $40,523, $58,023 and $41,380, respectively. | ||
(i) | Represents depreciation expense (not reflected in the historical statement of operations of the Company) for the year ended December 31, 2010. Depreciation expense on the purchase price of building and furnitures and fixtures is recognized using the straight-line method over an estimated useful life of 27.5 years and 15 years, respectively. Depreciation expense on the purchase price of tenant improvements is recognized using the straight-line method over the life of the lease. Amortization expense on lease intangible costs is recognized using the straight-line method over the remaining life of the lease. | ||
F-11 |
(j) | Represents interest expense (not reflected in the historical statement of operations of the Company) on $6.7 million in seller financing from the seller of the Lincoln Tower Property pursuant to a promissory note bearing interest at a rate of 6%, interest expense on $5.0 million in debt related to the Park Place Property pursuant to a promissory note bearing interest at a rate of 5.25%, interest expense on $5.2 million in debt related to the Arbor Pointe Property pursuant to a promissory note bearing interest at a rate of 4.86%, interest expense on $9.0 million in debt related to the Clarion Park Property pursuant to a promissory note bearing interest at a rate of 4.58%, and interest expense on $6.8 million in debt related to the Cooper Creek Property pursuant to a promissory note bearing interest at a rate of 3.89%. | ||
(k) | Represents general and administrative expenses (not reflected in the historical statement of operations of the Company) for the year ended December 31, 2010, based on historical operations of the previous owners of the Lincoln Tower Property, the Park Place Property, the Arbor Pointe Property, the Clarion Park Property and the Cooper Creek Property. | ||
(l) | Represents adjustments made to acquisition costs for the year ended December 31, 2010, to include those amounts incurred by the Company that were attributable to the Lincoln Tower Property, the Park Place Property, the Arbor Pointe Property, the Clarion Park Property and the Cooper Creek Property, as if the assets had been acquired on January 1, 2010. | ||
(m) | Represents the actual number of shares of the Company's common stock outstanding as of June 30, 2011. The calculation assumes that these shares were issued and the related proceeds were raised as of January 1, 2010. |
STEADFAST INCOME REIT, INC. | |||||
Date: October 28, 2011 | By: | /s/ Kevin J Keating | |||
Kevin J Keating | |||||
Principal Financial and Accounting Officer |