þ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the quarterly period ended March 31, 2016 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the transition period from to |
Maryland | 27-0351641 | |
(State or Other Jurisdiction of | (I.R.S. Employer | |
Incorporation or Organization) | Identification No.) | |
18100 Von Karman Avenue, Suite 500 | ||
Irvine, California | 92612 | |
(Address of Principal Executive Offices) | (Zip Code) |
Large Accelerated filer o | Accelerated filer o | Non-Accelerated filer þ (Do not check if smaller reporting company) | Smaller reporting company o |
Page | |
March 31, 2016 | December 31, 2015 | ||||||
(Unaudited) | |||||||
ASSETS | |||||||
Assets: | |||||||
Real Estate: | |||||||
Land | $ | 174,102,422 | $ | 174,102,422 | |||
Building and improvements | 1,491,754,456 | 1,487,961,762 | |||||
Other intangible assets | 2,644,263 | 2,644,263 | |||||
Construction-in-progress | 4,729,835 | 2,192,635 | |||||
Total real estate, cost | 1,673,230,976 | 1,666,901,082 | |||||
Less accumulated depreciation and amortization | (180,393,255 | ) | (163,445,987 | ) | |||
Total real estate, net | 1,492,837,721 | 1,503,455,095 | |||||
Cash and cash equivalents | 36,480,248 | 32,076,582 | |||||
Restricted cash | 17,279,593 | 27,700,811 | |||||
Rents and other receivables | 3,401,197 | 2,742,011 | |||||
Other assets, net | 3,092,748 | 4,328,851 | |||||
Total assets | $ | 1,553,091,507 | $ | 1,570,303,350 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Liabilities: | |||||||
Accounts payable and accrued liabilities | $ | 30,559,977 | $ | 40,752,458 | |||
Notes payable: | |||||||
Mortgage notes payable, net | 1,111,838,945 | 1,115,752,899 | |||||
Revolving credit facility | 16,000,000 | — | |||||
Total notes payable, net | 1,127,838,945 | 1,115,752,899 | |||||
Distributions payable | 4,647,928 | 4,668,261 | |||||
Due to affiliates, net | 1,738,135 | 2,682,209 | |||||
Total liabilities | 1,164,784,985 | 1,163,855,827 | |||||
Commitments and contingencies (Note 10) | |||||||
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, 76,575,259 and 76,674,502 shares issued and outstanding at March 31, 2016 and December 31, 2015, respectively | 765,753 | 766,745 | |||||
Convertible stock, $0.01 par value per share; 1,000 shares issued and outstanding as of March 31, 2016 and December 31, 2015, respectively | 10 | 10 | |||||
Additional paid-in capital | 676,752,303 | 677,624,840 | |||||
Cumulative distributions and net losses | (289,211,544 | ) | (271,944,072 | ) | |||
Total stockholders’ equity | 388,306,522 | 406,447,523 | |||||
Total liabilities and stockholders’ equity | $ | 1,553,091,507 | $ | 1,570,303,350 |
Three Months Ended March 31, | |||||||
2016 | 2015 | ||||||
Revenues: | |||||||
Rental income | $ | 47,170,635 | $ | 45,532,588 | |||
Tenant reimbursements and other | 5,736,273 | 5,518,713 | |||||
Total revenues | 52,906,908 | 51,051,301 | |||||
Expenses: | |||||||
Operating, maintenance and management | 13,709,810 | 12,827,151 | |||||
Real estate taxes and insurance | 8,911,021 | 9,055,399 | |||||
Fees to affiliates | 5,522,423 | 5,368,476 | |||||
Depreciation and amortization | 16,947,268 | 16,154,311 | |||||
Interest expense | 10,046,840 | 9,987,234 | |||||
General and administrative expenses | 1,387,688 | 1,482,231 | |||||
Acquisition costs | — | 7,145 | |||||
Total expenses | 56,525,050 | 54,881,947 | |||||
Net loss | $ | (3,618,142 | ) | $ | (3,830,646 | ) | |
Loss per common share — basic and diluted | $ | (0.05 | ) | $ | (0.05 | ) | |
Weighted average number of common shares outstanding — basic and diluted | 76,350,555 | 76,353,484 | |||||
Distributions declared per common share | $ | 0.178 | $ | 0.177 |
Common Stock | Convertible Stock | Additional Paid- In Capital | Cumulative Distributions & Net Losses | Total Stockholders’ Equity | |||||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||||||||
BALANCE, December 31, 2014 | 76,858,483 | $ | 768,585 | 1,000 | $ | 10 | $ | 680,138,132 | $ | (203,843,497 | ) | $ | 477,063,230 | ||||||||||||
Issuance of common stock | 14,008 | 140 | — | — | (62 | ) | — | 78 | |||||||||||||||||
Transfers to redeemable common stock | — | — | — | — | (1,000,000 | ) | — | (1,000,000 | ) | ||||||||||||||||
Redemption of common stock | (197,989 | ) | (1,980 | ) | — | — | (1,998,020 | ) | — | (2,000,000 | ) | ||||||||||||||
Distributions declared | — | — | — | — | — | (55,076,217 | ) | (55,076,217 | ) | ||||||||||||||||
Amortization of stock-based compensation | — | — | — | — | 184,350 | — | 184,350 | ||||||||||||||||||
Change in value of restricted common stock to Advisor | — | — | — | — | 300,440 | — | 300,440 | ||||||||||||||||||
Net loss for the year ended December 31, 2015 | — | — | — | — | — | (13,024,358 | ) | (13,024,358 | ) | ||||||||||||||||
BALANCE, December 31, 2015 | 76,674,502 | 766,745 | 1,000 | 10 | 677,624,840 | (271,944,072 | ) | 406,447,523 | |||||||||||||||||
Redemption of common stock | (99,243 | ) | (992 | ) | — | — | (999,008 | ) | — | (1,000,000 | ) | ||||||||||||||
Distributions declared | — | — | — | — | — | (13,649,330 | ) | (13,649,330 | ) | ||||||||||||||||
Amortization of stock-based compensation | — | — | — | — | 12,864 | — | 12,864 | ||||||||||||||||||
Change in value of restricted common stock to Advisor | — | — | — | — | 113,607 | — | 113,607 | ||||||||||||||||||
Net loss for the three months ended March 31, 2016 | — | — | — | — | — | (3,618,142 | ) | (3,618,142 | ) | ||||||||||||||||
BALANCE, March 31, 2016 | 76,575,259 | $ | 765,753 | 1,000 | $ | 10 | $ | 676,752,303 | $ | (289,211,544 | ) | $ | 388,306,522 |
Three Months Ended March 31, | |||||||
2016 | 2015 | ||||||
Cash Flows from Operating Activities: | |||||||
Net loss | $ | (3,618,142 | ) | $ | (3,830,646 | ) | |
Adjustments to reconcile net loss to net cash provided by operating activities: | |||||||
Depreciation and amortization | 16,947,268 | 16,154,311 | |||||
Amortization of deferred financing costs | 382,044 | 363,977 | |||||
Amortization of stock-based compensation | 12,864 | 22,884 | |||||
Change in value of restricted common stock to Advisor | 113,607 | 16,907 | |||||
Amortization of loan premiums and discounts | (308,698 | ) | (308,698 | ) | |||
Change in fair value of interest rate cap agreements | 232,712 | 1,021,586 | |||||
Changes in operating assets and liabilities: | |||||||
Restricted cash for operating activities | 9,544,451 | 9,554,428 | |||||
Rents and other receivables | (659,186 | ) | (59,974 | ) | |||
Other assets | 951,635 | 1,100,432 | |||||
Accounts payable and accrued liabilities | (10,840,794 | ) | (11,862,875 | ) | |||
Due to affiliates, net | (814,996 | ) | (1,140,283 | ) | |||
Net cash provided by operating activities | 11,942,765 | 11,032,049 | |||||
Cash Flows from Investing Activities: | |||||||
Additions to real estate investments | (5,810,659 | ) | (7,021,999 | ) | |||
Restricted cash for investing activities | 876,767 | (22,505 | ) | ||||
Net cash used in investing activities | (4,933,892 | ) | (7,044,504 | ) | |||
Cash Flows from Financing Activities: | |||||||
Proceeds from issuance of mortgage notes payable | 162,086 | 2,841,761 | |||||
Principal payments on mortgage notes payable | (4,097,630 | ) | (3,369,182 | ) | |||
Borrowings from credit facility | 16,000,000 | 6,000,000 | |||||
Payment of deferred financing costs | — | (10,000 | ) | ||||
Distributions to common stockholders | (13,669,663 | ) | (13,585,602 | ) | |||
Redemptions of common stock | (1,000,000 | ) | — | ||||
Net cash used in financing activities | (2,605,207 | ) | (8,123,023 | ) | |||
Net increase (decrease) in cash and cash equivalents | 4,403,666 | (4,135,478 | ) | ||||
Cash and cash equivalents, beginning of period | 32,076,582 | 29,529,312 | |||||
Cash and cash equivalents, end of period | $ | 36,480,248 | $ | 25,393,834 | |||
Supplemental Disclosures of Cash Flow Information: | |||||||
Interest paid, net of amounts capitalized of $25,904 and $38,761 for the three months ended March 31, 2016 and 2015, respectively | $ | 9,598,899 | $ | 8,913,815 | |||
Supplemental Disclosure of Noncash Transactions: | |||||||
Distributions paid to common stockholders through common stock issuances pursuant to the distribution reinvestment plan | $ | — | $ | 78 | |||
Increase in accounts payable and accrued liabilities from additions to real estate investments | $ | 648,313 | $ | 195,940 | |||
Decrease in due to affiliates, net from additions to real estate investments | $ | (129,078 | ) | $ | — |
• | Level 1: unadjusted quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities; |
• | Level 2: quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations in which significant inputs and significant value drivers are observable in active markets; and |
• | Level 3: prices or valuation techniques where little or no market data is available that requires inputs that are both significant to the fair value measurement and unobservable. |
March 31, 2016 | ||||||||||||
Fair Value Measurements Using | ||||||||||||
Level 1 | Level 2 | Level 3 | ||||||||||
Assets: | ||||||||||||
Interest rate cap agreements | $ | — | $ | 65,431 | $ | — |
December 31, 2015 | ||||||||||||
Fair Value Measurements Using | ||||||||||||
Level 1 | Level 2 | Level 3 | ||||||||||
Assets: | ||||||||||||
Interest rate cap agreements | $ | — | $ | 298,143 | $ | — |
March 31, 2016 | ||||||||||||||||||||
Assets | ||||||||||||||||||||
Land | Building and Improvements | Other Intangible Assets | Construction-in-Progress | Total Real Estate | ||||||||||||||||
Investments in real estate | $ | 174,102,422 | $ | 1,491,754,456 | $ | 2,644,263 | $ | 4,729,835 | $ | 1,673,230,976 | ||||||||||
Less: Accumulated depreciation and amortization | — | (179,962,100 | ) | (431,155 | ) | — | (180,393,255 | ) | ||||||||||||
Net investments in real estate and related lease intangibles | $ | 174,102,422 | $ | 1,311,792,356 | $ | 2,213,108 | $ | 4,729,835 | $ | 1,492,837,721 |
December 31, 2015 | ||||||||||||||||||||
Assets | ||||||||||||||||||||
Land | Building and Improvements | Other Intangible Assets | Construction-in-Progress | Total Real Estate | ||||||||||||||||
Investments in real estate | $ | 174,102,422 | $ | 1,487,961,762 | $ | 2,644,263 | $ | 2,192,635 | $ | 1,666,901,082 | ||||||||||
Less: Accumulated depreciation and amortization | — | (163,053,124 | ) | (392,863 | ) | — | (163,445,987 | ) | ||||||||||||
Net investments in real estate and related lease intangibles | $ | 174,102,422 | $ | 1,324,908,638 | $ | 2,251,400 | $ | 2,192,635 | $ | 1,503,455,095 |
April 1 through December 31, 2016 | $ | 114,876 | |
2017 | 153,168 | ||
2018 | 153,168 | ||
2019 | 153,168 | ||
2020 | 153,168 | ||
Thereafter | 1,485,560 | ||
$ | 2,213,108 |
April 1 through December 31, 2016 | $ | 56,037 | |
2017 | 67,120 | ||
2018 | 69,136 | ||
2019 | 58,760 | ||
$ | 251,053 |
March 31, 2016 | December 31, 2015 | ||||||
Deferred financing costs | $ | 660,585 | $ | 660,585 | |||
Less: accumulated amortization | (599,158 | ) | (547,402 | ) | |||
61,427 | 113,183 | ||||||
Prepaid expenses | 1,727,750 | 2,648,238 | |||||
Interest rate cap agreements (Note 11) | 65,431 | 298,143 | |||||
Deposits | 1,238,140 | 1,269,287 | |||||
$ | 3,092,748 | $ | 4,328,851 |
5. | Debt |
March 31, 2016 | ||||||||||||||||||
Interest Rate Range | Weighted Average Interest Rate | |||||||||||||||||
Type | Number of Instruments | Maturity Date Range | Minimum | Maximum | Principal Outstanding | |||||||||||||
Mortgage notes payable - fixed | 37 | 10/1/2017 - 1/1/2053 | 3.31 | % | 5.94 | % | 4.32 | % | $ | 475,302,163 | ||||||||
Mortgage notes payable - variable(1) | 30 | 5/16/2017 - 1/1/2026 | 1-Mo LIBOR + 1.62% | 1-Mo LIBOR + 2.75% | 2.78 | % | 639,760,660 | |||||||||||
Total mortgage notes payable, gross | 67 | 3.44 | % | 1,115,062,823 | ||||||||||||||
Premium/discount, net(2) | 3,143,306 | |||||||||||||||||
Deferred financing costs, net(3) | (6,367,184 | ) | ||||||||||||||||
Total mortgage notes payable, net | $ | 1,111,838,945 |
December 31, 2015 | ||||||||||||||||||
Interest Rate Range | Weighted Average Interest Rate | |||||||||||||||||
Type | Number of Instruments | Maturity Date Range | Minimum | Maximum | Principal Outstanding | |||||||||||||
Mortgage notes payable - fixed | 37 | 10/1/2017 - 1/1/2053 | 3.31 | % | 5.94 | % | 4.32 | % | $ | 477,139,001 | ||||||||
Mortgage notes payable - variable(1) | 30 | 5/16/2017 - 1/1/2026 | 1-Mo LIBOR + 1.62% | 1-Mo LIBOR + 2.75% | 2.77 | % | 641,859,365 | |||||||||||
Total mortgage notes payable, gross | 67 | 3.44 | % | 1,118,998,366 | ||||||||||||||
Premium/discount, net(2) | 3,452,005 | |||||||||||||||||
Deferred financing costs, net(3) | (6,697,472 | ) | ||||||||||||||||
Total mortgage notes payable, net | $ | 1,115,752,899 |
(1) | See Note 11 for a discussion of the interest rate cap agreements used to manage the exposure to interest rate movement on the Company’s variable rate loans. |
(2) | The following table summarizes the debt premiums and discounts as of March 31, 2016, including the unamortized portion included in the principal balance as well as amounts amortized as an offset to interest expense in the accompanying consolidated statements of operations: |
Unamortized Portion of Net Debt Premium as of March 31, 2016 | Amortization of Net Debt Premium During the Three Months Ended March 31, | |||||||||
2016 | 2015 | |||||||||
$ | 3,143,306 | $ | 308,698 | $ | 308,698 |
(3) | The following table summarizes the deferred financing costs, net related to mortgage notes payable as of March 31, 2016 and December 31, 2015: |
March 31, 2016 | December 31, 2015 | |||||||
Deferred financing costs | $ | 10,140,097 | $ | 10,140,097 | ||||
Less: accumulated amortization | (3,772,913 | ) | (3,442,625 | ) | ||||
Deferred financing costs, net | $ | 6,367,184 | $ | 6,697,472 |
Maturities During the Years Ending December 31, | ||||||||||||||||||||||||||||
Contractual Obligation | Total | Remainder of 2016 | 2017 | 2018 | 2019 | 2020 | Thereafter | |||||||||||||||||||||
Principal payments on outstanding debt obligations(1) | $ | 1,131,062,823 | $ | 28,684,494 | $ | 52,802,464 | $ | 84,365,561 | $ | 94,045,493 | $ | 291,404,511 | $ | 579,760,300 |
(1) | Projected principal payments on outstanding debt obligations are based on the terms of the notes payable agreements. Amounts exclude the amortization of the deferred financing costs and debt premiums associated with certain notes payable. |
6. | Stockholders’ Equity |
For the Three Months Ended March 31, 2016 | For the years ended December 31, | ||||||||
2015 | 2014 | ||||||||
Nonvested shares at the beginning of the period | 11,250 | 16,875 | 18,750 | ||||||
Granted shares | — | 14,000 | 10,000 | ||||||
Vested shares | — | (19,625 | ) | (11,875 | ) | ||||
Nonvested shares at the end of the period | 11,250 | 11,250 | 16,875 |
Grant Year | Weighted Average Fair Value | |||
2014 | $ | 10.24 | ||
2015 | 10.35 | |||
2016 | n/a |
Share Purchase Anniversary | Repurchase Price on Repurchase Date(1) | |
Less than 1 year | No Repurchase Allowed | |
1 year | 92.5% of Estimated Value per Share(2) | |
2 years | 95.0% of Estimated Value per Share(2) | |
3 years | 97.5% of Estimated Value per Share(2) | |
4 years | 100.0% of Estimated Value per Share(2) | |
In the event of a stockholder’s death or disability(3) | Average Issue Price for Shares(4) |
(1) | As adjusted for any stock dividends, combinations, splits, recapitalizations or any similar transaction with respect to the shares of common stock. |
(2) | For purposes of the share repurchase program, the “Estimated Value per Share” will equal the most recently determined Estimated Value per Share. |
(3) | The required one year holding period to be eligible to redeem shares under the Company’s share repurchase program does not apply in the event of death or disability of a stockholder. |
(4) | The purchase price per share for shares redeemed upon the death or disability of a stockholder will be equal to the average issue price per share for all of the stockholder’s shares. |
7. | Earnings (Loss) Per Share |
Three Months Ended March 31, | ||||||||
2016 | 2015 | |||||||
Net loss attributable to the Company | $ | (3,618,142 | ) | $ | (3,830,646 | ) | ||
Less: dividends declared on participating securities | 45,505 | 89,291 | ||||||
Net loss attributable to common stockholders | (3,663,647 | ) | (3,919,937 | ) | ||||
Weighted average common shares outstanding — basic and diluted | 76,350,555 | 76,353,484 | ||||||
Loss per common share — basic and diluted | $ | (0.05 | ) | $ | (0.05 | ) |
8. | Related Party Arrangements |
Incurred For the Three Months Ended March 31, | Payable as of | ||||||||||||||
2016 | 2015 | March 31, 2016 | December 31, 2015 | ||||||||||||
Consolidated Statements of Operations: | |||||||||||||||
Expensed | |||||||||||||||
Investment management fees(1) | $ | 3,501,124 | $ | 3,441,922 | $ | 5,243 | $ | 1,169,770 | |||||||
Acquisition expenses(2) | — | 7,145 | — | — | |||||||||||
Property management | |||||||||||||||
Fees(1) | 1,571,982 | 1,503,168 | 527,320 | 520,127 | |||||||||||
Reimbursement of onsite personnel(3) | 4,564,368 | 4,465,296 | 938,321 | 703,791 | |||||||||||
Other fees(1) | 449,317 | 423,386 | 50,370 | 52,237 | |||||||||||
Other operating expenses(4) | 346,719 | 313,765 | 134,849 | 51,029 | |||||||||||
Consolidated Balance Sheets: | |||||||||||||||
Capitalized | |||||||||||||||
Construction management | |||||||||||||||
Fees(5) | 245,033 | 265,434 | 73,064 | 71,133 | |||||||||||
Reimbursement of labor costs(5) | 83,050 | 23,091 | 8,968 | 114,122 | |||||||||||
$ | 10,761,593 | $ | 10,443,207 | $ | 1,738,135 | $ | 2,682,209 |
(1) | Included in fees to affiliates in the accompanying consolidated statements of operations. |
(2) | Included in acquisition costs in the accompanying consolidated statements of operations. |
(3) | Included in operating, maintenance and management in the accompanying consolidated statements of operations. |
(4) | Included in general and administrative expenses in the accompanying consolidated statements of operations. |
(5) | Included in building and improvements in the accompanying consolidated balance sheets. |
9. | Incentive Award Plan and Independent Director Compensation |
10. | Commitments and Contingencies |
11. | Derivative Financial Instruments |
March 31, 2016 | |||||||||||||||||||||
Type | Maturity Date Range | Based on | Number of Instruments | Notional Amount | Variable Rate | Weighted Average Rate Cap | Fair Value | ||||||||||||||
Interest rate cap | 11/1/2016 - 10/1/2019 | One-Month LIBOR | 30 | $ | 637,110,000 | 0.44 | % | 2.73 | % | $ | 65,431 |
December 31, 2015 | |||||||||||||||||||||
Type | Maturity Date Range | Based on | Number of Instruments | Notional Amount | Variable Rate | Weighted Average Rate Cap | Fair Value | ||||||||||||||
Interest rate cap | 11/1/2016 - 10/1/2019 | One-Month LIBOR | 30 | $ | 637,110,000 | 0.43 | % | 2.68 | % | $ | 298,143 |
• | the fact that we have had a net loss for each quarterly and annual period since inception; |
• | changes in economic conditions generally and the real estate and debt markets specifically; |
• | our ability to successfully dispose of real estate on terms that are favorable to us; |
• | risks inherent in the real estate business, including tenant defaults, tenant vacancies, potential liability relating to environmental matters and liquidity of real estate investments; |
• | the fact we pay fees and expenses to our advisor and its affiliates that were not negotiated on an arm’s length basis and the payment of these fees and expenses increases the risk that our stockholders will not earn a profit on their investment in us; |
• | legislative or regulatory changes (including changes to the laws governing the taxation of real estate investment trusts, or REITs); |
• | the availability of capital; |
• | changes in interest rates; and |
• | changes to generally accepted accounting principles, or GAAP. |
Contract Purchase Price(1) | Mortgage Debt Outstanding at March 31, 2016 | Average Occupancy as of | Average Monthly Rent(2) as of | ||||||||||||||||||||||||||||
Property Name | Location | Purchase Date | Number of Units | Mar 31, 2016 | Dec 31, 2015 | Mar 31, 2016 | Dec 31, 2015 | ||||||||||||||||||||||||
1 | Park Place Condominiums | Des Moines, IA | 12/22/2010 | 151 | $ | 8,323,400 | $ | 4,759,429 | 94.7 | % | 94.7 | % | $ | 908 | $ | 877 | |||||||||||||||
2 | Clarion Park Apartments | Olathe, KS | 6/28/2011 | 220 | 11,215,000 | 8,252,961 | 97.7 | % | 95.0 | % | 797 | 781 | |||||||||||||||||||
3 | Cooper Creek Village Apartments | Louisville, KY | 8/24/2011 | 123 | 10,420,000 | 6,318,194 | 95.1 | % | 94.3 | % | 929 | 903 | |||||||||||||||||||
4 | Truman Farm Villas | Grandview, MO | 12/22/2011 | 200 | 9,100,000 | 5,547,057 | 98.5 | % | 98.5 | % | 712 | 697 | |||||||||||||||||||
5 | EBT Lofts | Kansas City, MO | 12/30/2011 | 102 | 8,575,000 | 5,244,485 | 98.0 | % | 95.1 | % | 1,020 | 1,009 | |||||||||||||||||||
6 | Windsor on the River Apartments | Cedar Rapids, IA | 1/26/2012 | 424 | 33,000,000 | 22,955,209 | 93.6 | % | 92.2 | % | 699 | 688 | |||||||||||||||||||
7 | Renaissance at St. Andrews | Louisville, KY | 2/17/2012 | 216 | 12,500,000 | 8,627,140 | 97.7 | % | 94.9 | % | 707 | 705 | |||||||||||||||||||
8 | Spring Creek Apartments | Edmond, OK | 3/9/2012 | 252 | 19,350,000 | 13,108,481 | 95.2 | % | 95.6 | % | 904 | 842 | |||||||||||||||||||
9 | Montclair Parc Apartment Homes | Oklahoma City, OK | 4/26/2012 | 360 | 35,750,000 | 23,140,000 | 94.7 | % | 94.7 | % | 861 | 864 | |||||||||||||||||||
10 | Sonoma Grande Apartments | Tulsa, OK | 5/24/2012 | 336 | 32,200,000 | 21,698,083 | 95.2 | % | 93.8 | % | 952 | 956 | |||||||||||||||||||
11 | Estancia Apartments | Tulsa, OK | 6/29/2012 | 294 | 27,900,000 | 20,978,141 | 93.5 | % | 93.9 | % | 948 | 967 | |||||||||||||||||||
12 | Montelena Apartments | Round Rock, TX | 7/13/2012 | 232 | 18,350,000 | 11,872,939 | 94.4 | % | 93.5 | % | 1,084 | 1,071 | |||||||||||||||||||
13 | Valley Farms Apartment Homes | Louisville, KY | 8/30/2012 | 160 | 15,100,000 | 9,690,971 | 93.8 | % | 93.8 | % | 859 | 857 | |||||||||||||||||||
14 | Hilliard Park Apartments | Columbus, OH | 9/11/2012 | 201 | 19,800,000 | 13,126,180 | 95.0 | % | 91.5 | % | 1,005 | 998 | |||||||||||||||||||
15 | Sycamore Terrace Apartments | Terre Haute, IN | 9/20/2012 & 3/5/2014 | 250 | 23,174,157 | 17,771,500 | 93.2 | % | 97.6 | % | 1,115 | 1,154 | |||||||||||||||||||
16 | Hilliard Summit Apartments | Columbus, OH | 9/28/2012 | 208 | 24,100,000 | 15,950,533 | 93.8 | % | 92.8 | % | 1,140 | 1,105 | |||||||||||||||||||
17 | Springmarc Apartments | San Marcos, TX | 10/19/2012 | 240 | 21,850,000 | 14,676,026 | 97.5 | % | 97.9 | % | 945 | 956 | |||||||||||||||||||
18 | Renaissance at St. Andrews Condominiums | Louisville, KY | 10/31/2012 | 29 | 1,375,000 | — | 100.0 | % | 100.0 | % | 696 | 689 | |||||||||||||||||||
19 | Ashley Oaks Apartment Homes | San Antonio, TX | 11/29/2012 | 462 | 30,790,000 | 20,689,583 | 95.9 | % | 95.2 | % | 792 | 793 | |||||||||||||||||||
20 | Arrowhead Apartment Homes | Palatine, IL | 11/30/2012 | 200 | 16,750,000 | 11,961,757 | 96.0 | % | 93.5 | % | 1,024 | 1,061 | |||||||||||||||||||
21 | The Moorings Apartments | Roselle, IL | 11/30/2012 | 216 | 20,250,000 | 14,460,157 | 97.2 | % | 95.8 | % | 1,060 | 1,080 |
Contract Purchase Price(1) | Mortgage Debt Outstanding at March 31, 2016 | Average Occupancy as of | Average Monthly Rent(2) as of | ||||||||||||||||||||||||||||
Property Name | Location | Purchase Date | Number of Units | Mar 31, 2016 | Dec 31, 2015 | Mar 31, 2016 | Dec 31, 2015 | ||||||||||||||||||||||||
22 | Forty 57 Apartments | Lexington, KY | 12/20/2012 | 436 | $ | 52,500,000 | $ | 37,546,621 | 95.9 | % | 95.2 | % | $ | 868 | $ | 881 | |||||||||||||||
23 | Keystone Farms Apartments | Nashville, TN | 12/28/2012 | 90 | 8,400,000 | 5,920,981 | 97.8 | % | 100.0 | % | 1,144 | 1,138 | |||||||||||||||||||
24 | Riverford Crossing Apartments | Frankfort, KY | 12/28/2012 | 300 | 30,000,000 | 21,334,735 | 96.3 | % | 95.3 | % | 845 | 835 | |||||||||||||||||||
25 | Valley Farms North(3) | Louisville, KY | 12/28/2012 | 128 | 14,709,984 | 9,654,584 | 87.5 | % | 74.2 | % | 952 | 885 | |||||||||||||||||||
26 | Montecito Apartments | Austin, TX | 12/31/2012 | 268 | 19,000,000 | 13,600,387 | 96.6 | % | 97.0 | % | 921 | 908 | |||||||||||||||||||
27 | Hilliard Grand Apartments | Dublin, OH | 12/31/2012 | 314 | 40,500,000 | 28,425,847 | 94.9 | % | 94.9 | % | 1,224 | 1,252 | |||||||||||||||||||
28 | The Hills at Fair Oaks | Fair Oaks Ranch, TX | 1/31/2013 | 288 | 34,560,000 | 24,184,756 | 94.4 | % | 91.7 | % | 1,013 | 1,032 | |||||||||||||||||||
29 | Library Lofts East | Kansas City, MO | 2/28/2013 | 118 | 12,750,000 | 8,638,971 | 91.5 | % | 95.8 | % | 958 | 981 | |||||||||||||||||||
30 | Trails at Buda Ranch | Buda, TX | 3/28/2013 | 264 | 23,000,000 | 16,341,368 | 95.8 | % | 97.0 | % | 1,008 | 1,003 | |||||||||||||||||||
31 | Deep Deuce at Bricktown | Oklahoma City, OK | 3/28/2013 | 294 | 38,220,000 | 25,564,937 | 90.8 | % | 92.5 | % | 1,321 | 1,349 | |||||||||||||||||||
32 | Deer Valley Apartments | Lake Bluff, IL | 4/30/2013 | 224 | 28,600,000 | 20,049,415 | 94.2 | % | 92.4 | % | 1,262 | 1,262 | |||||||||||||||||||
33 | Grayson Ridge Apartment Homes | North Richland Hills, TX | 5/31/2013 | 240 | 14,300,000 | 10,259,378 | 97.5 | % | 95.4 | % | 813 | 815 | |||||||||||||||||||
34 | Rosemont at Olmos Park | San Antonio, TX | 5/31/2013 | 144 | 22,050,000 | 14,308,820 | 93.8 | % | 93.8 | % | 1,219 | 1,218 | |||||||||||||||||||
35 | Retreat at Quail North | Oklahoma City, OK | 6/12/2013 | 240 | 25,250,000 | 16,817,943 | 97.5 | % | 94.6 | % | 983 | 948 | |||||||||||||||||||
36 | Lodge at Trails Edge | Indianapolis, IN | 6/18/2013 | 268 | 18,400,000 | 12,233,455 | 94.8 | % | 94.8 | % | 717 | 714 | |||||||||||||||||||
37 | Arbors of Carrollton | Carrollton, TX | 7/3/2013 | 131 | 8,800,000 | 6,062,161 | 96.2 | % | 95.4 | % | 911 | 893 | |||||||||||||||||||
38 | Waterford on the Meadow | Plano, TX | 7/3/2013 | 350 | 23,100,000 | 16,086,164 | 95.7 | % | 96.6 | % | 907 | 885 | |||||||||||||||||||
39 | The Belmont | Grand Prairie, TX | 7/26/2013 | 260 | 12,100,000 | 8,969,894 | 95.8 | % | 95.4 | % | 758 | 767 | |||||||||||||||||||
40 | Meritage at Steiner Ranch | Austin, TX | 8/6/2013 | 502 | 80,000,000 | 53,518,990 | 94.0 | % | 94.0 | % | 1,391 | 1,368 | |||||||||||||||||||
41 | Tapestry Park Apartments | Birmingham, AL | 8/13/2013 & 12/1/2014 | 354 | 50,285,000 | 34,335,198 | 92.9 | % | 95.2 | % | 1,276 | 1,273 | |||||||||||||||||||
42 | Dawntree Apartments | Carrollton, TX | 8/15/2013 | 400 | 24,000,000 | 15,379,934 | 96.5 | % | 96.0 | % | 862 | 836 | |||||||||||||||||||
43 | Stuart Hall Lofts | Kansas City, MO | 8/27/2013 | 115 | 16,850,000 | 12,078,074 | 96.5 | % | 96.5 | % | 1,255 | 1,274 | |||||||||||||||||||
44 | BriceGrove Park Apartments | Canal Winchester, OH | 8/29/2013 | 240 | 20,100,000 | 14,405,682 | 95.8 | % | 95.0 | % | 830 | 815 | |||||||||||||||||||
45 | Retreat at Hamburg Place | Lexington, KY | 9/5/2013 | 150 | 16,300,000 | 12,015,810 | 95.3 | % | 94.0 | % | 970 | 953 |
Contract Purchase Price(1) | Mortgage Debt Outstanding at March 31, 2016 | Average Occupancy as of | Average Monthly Rent(2) as of | ||||||||||||||||||||||||||||
Property Name | Location | Purchase Date | Number of Units | Mar 31, 2016 | Dec 31, 2015 | Mar 31, 2016 | Dec 31, 2015 | ||||||||||||||||||||||||
46 | Cantare at Indian Lake Village | Hendersonville, TN | 9/24/2013 | 206 | $ | 29,000,000 | $ | 18,666,148 | 94.7 | % | 96.1 | % | $ | 1,149 | $ | 1,164 | |||||||||||||||
47 | The Landing at Mansfield | Mansfield, TX | 9/27/2013 | 336 | 30,900,000 | 21,971,455 | 96.4 | % | 97.0 | % | 981 | 949 | |||||||||||||||||||
48 | Heights at 2121 | Houston, TX | 9/30/2013 | 504 | 37,000,000 | 28,016,025 | 92.3 | % | 92.5 | % | 967 | 957 | |||||||||||||||||||
49 | Villas at Huffmeister | Houston, TX | 10/10/2013 | 294 | 37,600,000 | 25,133,182 | 90.5 | % | 92.9 | % | 1,190 | 1,145 | |||||||||||||||||||
50 | Villas at Kingwood | Kingwood, TX | 10/10/2013 | 330 | 40,150,000 | 27,206,720 | 95.2 | % | 90.6 | % | 1,226 | 1,241 | |||||||||||||||||||
51 | Waterford Place at Riata Ranch | Cypress, TX | 10/10/2013 | 228 | 23,400,000 | 15,809,447 | 91.7 | % | 91.7 | % | 1,104 | 1,093 | |||||||||||||||||||
52 | Carrington Place | Houston, TX | 11/7/2013 | 324 | 32,900,000 | 22,150,882 | 93.2 | % | 92.0 | % | 1,092 | 1,054 | |||||||||||||||||||
53 | Carrington at Champion Forest | Houston, TX | 11/7/2013 | 284 | 33,000,000 | 22,730,540 | 95.1 | % | 96.1 | % | 1,097 | 1,099 | |||||||||||||||||||
54 | Carrington Park at Huffmeister | Cypress, TX | 11/7/2013 | 232 | 25,150,000 | 17,527,446 | 93.1 | % | 93.5 | % | 1,159 | 1,126 | |||||||||||||||||||
55 | Willow Crossing Apartments | Elk Grove, IL | 11/20/2013 | 579 | 58,000,000 | 57,558,740 | 92.6 | % | 94.8 | % | 1,052 | 1,062 | |||||||||||||||||||
56 | Echo at Katy Ranch | Katy, TX | 12/19/2013 | 260 | 35,100,000 | — | 84.6 | % | 86.9 | % | 1,350 | 1,236 | |||||||||||||||||||
57 | Heritage Grand at Sienna Plantation | Missouri City, TX | 12/20/2013 | 240 | 27,000,000 | 16,500,960 | 94.2 | % | 92.5 | % | 1,184 | 1,190 | |||||||||||||||||||
58 | Audubon Park Apartments | Nashville, TN | 12/27/2013 | 256 | 16,750,000 | 11,657,770 | 92.2 | % | 91.8 | % | 765 | 895 | |||||||||||||||||||
59 | Mallard Crossing Apartments | Loveland, OH | 12/27/2013 | 350 | 39,800,000 | 27,041,341 | 93.7 | % | 90.6 | % | 1,053 | 986 | |||||||||||||||||||
60 | Renaissance at Carol Stream | Carol Stream, IL | 12/31/2013 | 293 | 29,150,000 | 19,850,261 | 92.5 | % | 92.5 | % | 994 | 1,008 | |||||||||||||||||||
61 | Reserve at Creekside | Chattanooga, TN | 3/28/2014 | 192 | 18,875,000 | 14,169,660 | 94.3 | % | 95.3 | % | 974 | 959 | |||||||||||||||||||
62 | Mapleshade Park | Dallas, TX | 3/31/2014 | 148 | 23,325,000 | 15,082,470 | 95.9 | % | 91.2 | % | 1,526 | 1,474 | |||||||||||||||||||
63 | Richland Falls(4) | Murfreesboro, TN | 5/16/2014 | 190 | 21,000,000 | 13,774,062 | 98.4 | % | 96.8 | % | 955 | 924 | |||||||||||||||||||
64 | Oak Crossing | Fort Wayne, IN | 6/3/2014 | 222 | 24,230,000 | 15,662,682 | 90.1 | % | 89.6 | % | 956 | 950 | |||||||||||||||||||
65 | Park Shore Apartments | St. Charles, IL | 9/12/2014 | 160 | 18,350,000 | 12,766,223 | 93.1 | % | 90.6 | % | 1,149 | 1,152 | |||||||||||||||||||
16,622 | $ | 1,634,327,541 | $ | 1,111,838,945 | 94.5 | % | 94.0 | % | $ | 1,005 | $ | 999 |
(1) | The contract purchase price is comprised of the purchase price upon acquisition and the development and construction costs of apartment homes we have constructed, as applicable. |
(2) | Average monthly rent is based upon the effective rental income after considering the effect of vacancies, concessions and write-offs. |
(3) | Valley Farms North was acquired by the Company on December 28, 2012, comprised of 32 apartment homes, and is entitled for an additional 224 apartment homes. During 2014, construction began on an additional 96 of the entitled 224 apartment homes at Valley Farms North. During 2015, all 96 additional apartment homes were completed and available to be leased. |
(4) | Richland Falls was acquired by the Company on May 16, 2014, and included improved land zoned for an additional 86 apartment homes. During 2015, construction began on an additional 86 apartment homes at Richland Falls, none of which were completed as of March 31, 2016. |
Period | Distributions Declared(1) | Distributions Declared Per Share(1)(2) | Distributions Paid(3) | Sources of Distributions Paid | Net Cash Provided By Operating Activities | |||||||||||||||||||||||||||
Cash Flow From Operations | Revolving Credit Facility | |||||||||||||||||||||||||||||||
Cash | Reinvested | Total | ||||||||||||||||||||||||||||||
First Quarter 2015 | $ | 13,585,679 | $ | 0.177 | $ | 13,585,602 | $ | 78 | $ | 13,585,680 | $ | 11,032,049 | $ | 2,553,631 | $ | 11,032,049 | ||||||||||||||||
Second Quarter 2015 | 13,736,290 | 0.179 | 13,887,241 | — | 13,887,241 | 11,382,294 | 2,504,947 | 11,382,294 | ||||||||||||||||||||||||
Third Quarter 2015 | 13,888,802 | 0.181 | 13,887,973 | — | 13,887,973 | 13,887,973 | — | 14,287,719 | ||||||||||||||||||||||||
Fourth Quarter 2015 | 13,865,446 | 0.181 | 13,726,517 | — | 13,726,517 | 13,726,517 | — | 14,722,025 | ||||||||||||||||||||||||
First Quarter 2016 | 13,649,330 | 0.178 | 13,669,663 | — | 13,669,663 | 11,942,765 | 1,726,898 | 11,942,765 | ||||||||||||||||||||||||
$ | 68,725,547 | $ | 0.896 | $ | 68,756,996 | $ | 78 | $ | 68,757,074 | $ | 61,971,598 | $ | 6,785,476 | $ | 63,366,852 |
(1) | Distributions are based on daily record dates and calculated at a rate of $0.001964 per share per day during the year ended December 31, 2015 and three months ended March 31, 2016. |
(2) | Assumes each share was issued and outstanding each day during the periods presented. |
(3) | Distributions are paid on a monthly basis. Distributions for all record dates of a given month are paid approximately three days following month end. |
• | current cash balances; |
• | various forms of secured and unsecured financing; |
• | equity capital from joint venture partners; and |
• | cash from operations. |
• | $5,810,659 of cash used for improvements to real estate investments; and |
• | $876,767 of cash provided by restricted cash accounts related to replacement reserves. |
• | $3,935,544 of principal payments on mortgage notes payable, net of proceeds of $162,086; |
• | $16,000,000 from borrowings on our credit facility; |
• | $1,000,000 of cash paid for the redemption of common stock; and |
• | $13,669,663 of cash distributions. |
Payments due by period | ||||||||||||||||||||
Contractual Obligations | Total | Less than 1 year | 1-3 years | 3-5 years | More than 5 years | |||||||||||||||
Interest payments on outstanding debt obligations(1) | $ | 279,195,631 | $ | 29,969,630 | $ | 79,437,562 | $ | 65,378,049 | $ | 104,410,390 | ||||||||||
Principal payments on outstanding debt obligations(2) | 1,131,062,823 | 28,684,494 | 137,168,025 | 385,450,004 | 579,760,300 | |||||||||||||||
Total | $ | 1,410,258,454 | $ | 58,654,124 | $ | 216,605,587 | $ | 450,828,053 | $ | 684,170,690 |
(1) | Projected interest payments on outstanding debt obligations are based on the outstanding principal amounts and interest rates in effect at March 31, 2016. We incurred interest of $10,072,744 during the three months ended March 31, 2016, including amortization of deferred financing costs totaling $382,044, amortization of loan premiums of $308,698, net unrealized losses from the change in fair value of interest rate cap agreements of $232,712 and capitalized interest of $25,904. |
(2) | Projected principal payments on outstanding debt obligations are based on the terms of the notes payable agreements. Amounts exclude the amortization of the debt premiums and discounts in addition to net deferred financing costs associated with certain notes payable. |
For the Three Months Ended March 31, | |||||||||||||||
2016 | 2015 | Change $ | Change % | ||||||||||||
Total revenues | $ | 52,906,908 | $ | 51,051,301 | $ | 1,855,607 | 4 | % | |||||||
Operating, maintenance and management | (13,709,810 | ) | (12,827,151 | ) | (882,659 | ) | 7 | % | |||||||
Real estate taxes and insurance | (8,911,021 | ) | (9,055,399 | ) | 144,378 | (2 | )% | ||||||||
Fees to affiliates | (5,522,423 | ) | (5,368,476 | ) | (153,947 | ) | 3 | % | |||||||
Depreciation and amortization | (16,947,268 | ) | (16,154,311 | ) | (792,957 | ) | 5 | % | |||||||
Interest expense | (10,046,840 | ) | (9,987,234 | ) | (59,606 | ) | 1 | % | |||||||
General and administrative expenses | (1,387,688 | ) | (1,482,231 | ) | 94,543 | (6 | )% | ||||||||
Acquisition costs | — | (7,145 | ) | 7,145 | (100 | )% | |||||||||
Net loss | $ | (3,618,142 | ) | $ | (3,830,646 | ) | $ | 212,504 | (6 | )% | |||||
NOI(1) | $ | 28,264,778 | $ | 27,242,197 | $ | 1,022,581 | 4 | % | |||||||
FFO(2) | $ | 13,329,126 | $ | 12,323,665 | $ | 1,005,461 | 8 | % | |||||||
MFFO(2) | $ | 13,675,445 | $ | 13,369,303 | $ | 306,142 | 2 | % |
(1) | NOI is a non-GAAP financial measure used by investors and our management to evaluate and compare the performance of our properties and to determine trends in earnings. However, the usefulness of NOI is limited because it excludes general and administrative costs, interest expense, interest income and other expense, acquisition costs, certain fees to affiliates, depreciation and amortization expense and gains or losses from the sale of our properties and other gains and losses as stipulated by GAAP, the level of capital expenditures and leasing costs, all of which are significant economic costs. For additional information on how we calculate NOI and a reconciliation of NOI to net loss, see “—Net Operating Income.” |
(2) | GAAP basis accounting for real estate assets utilizes historical cost accounting and assumes real estate values diminish over time. In an effort to overcome the difference between real estate values and historical cost accounting for real estate assets, the Board of Governors of NAREIT established the measurement tool of FFO. Since its introduction, FFO has become a widely used non-GAAP financial measure among REITs. Additionally, we use modified funds from operations, or MFFO, as defined by the Investment Program Association as a supplemental measure to evaluate our operating performance. MFFO is based on FFO but includes certain adjustments we believe are necessary due to changes in accounting and reporting under GAAP since the establishment of FFO. Neither FFO nor MFFO should be considered as alternatives to net loss or other measurements under GAAP as indicators of our operating performance, nor should they be considered as alternatives to cash flow from operating activities or other measurements under GAAP as indicators of liquidity. For additional information on how we calculate FFO and MFFO and a reconciliation of FFO and MFFO to net loss, see “—Funds From Operations and Modified Funds From Operations.” |
For the Three Months Ended March 31, | |||||||||||||||
2016 | 2015 | Change $ | Change % | ||||||||||||
Same-store properties: | |||||||||||||||
Revenues | $ | 52,906,909 | $ | 51,043,313 | $ | 1,863,596 | 4 | % | |||||||
Operating expenses | 24,642,131 | 23,828,594 | 813,537 | 3 | % | ||||||||||
Net operating income | 28,264,778 | 27,214,719 | 1,050,059 | 4 | % | ||||||||||
Non-same-store properties: | |||||||||||||||
Net operating income | — | 27,478 | (27,478 | ) | |||||||||||
Total net operating income(1) | $ | 28,264,778 | $ | 27,242,197 | $ | 1,022,581 |
(1) | See “—Net Operating Income” below for a reconciliation of NOI to net income (loss). |
For the Three Months Ended March 31, | ||||||||
2016 | 2015 | |||||||
Net loss | $ | (3,618,142 | ) | $ | (3,830,646 | ) | ||
Fees to affiliates(1) | 3,501,124 | 3,441,922 | ||||||
Depreciation and amortization | 16,947,268 | 16,154,311 | ||||||
Interest expense | 10,046,840 | 9,987,234 | ||||||
General and administrative expenses | 1,387,688 | 1,482,231 | ||||||
Acquisition costs | — | 7,145 | ||||||
Net operating income | $ | 28,264,778 | $ | 27,242,197 |
(1) | Fees to affiliates for the three months ended March 31, 2016 and 2015 excludes property management fees of $1,571,982 and $1,503,168 and other fees of $449,317 and $423,386, respectively, that are included in NOI. |
For the Three Months Ended March 31, | ||||||||
Reconciliation of net loss to MFFO: | 2016 | 2015 | ||||||
Net loss | $ | (3,618,142 | ) | $ | (3,830,646 | ) | ||
Depreciation of real estate assets | 16,908,976 | 15,905,614 | ||||||
Amortization of lease-related costs | 38,292 | 248,697 | ||||||
FFO | 13,329,126 | 12,323,665 | ||||||
Acquisition fees and expenses(1)(2) | — | 7,145 | ||||||
Unrealized loss on derivative instruments | 232,712 | 1,021,586 | ||||||
Change in value of restricted common stock to Advisor | 113,607 | 16,907 | ||||||
MFFO | $ | 13,675,445 | $ | 13,369,303 |
(1) | By excluding acquisition fees and expenses, management believes 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 fees and expenses include payments to our advisor or third parties. Acquisition fees and expenses under GAAP are considered operating expenses and as expenses included in the determination of net income (loss) and income (loss) from continuing operations, both of which are performance measures under GAAP. All paid and accrued acquisition fees and expenses will have negative effects on returns to investors, the potential for future distributions, and cash flows generated by us, unless earnings from operations or net sales proceeds from the disposition of properties are generated to cover the purchase price of the property, these fees and expenses and other costs related to the property. In the event that operational earnings and cash flows are not available to fund our reimbursement of acquisition fees and expenses incurred by our advisor, such fees and expenses will need to be reimbursed to the advisor from other sources, including debt, net proceeds from the sale of properties, or from ancillary cash flows. |
(2) | Acquisition fees and expenses for the three months ended March 31, 2016 and 2015 includes acquisition expenses of $0 and $7,145, respectively, that are recorded in acquisition costs in the accompanying consolidated statements of operations. No acquisition fees were incurred for the three months ended March 31, 2016 and 2015. |
Total Number of Shares Requested to be Redeemed(1) | Total Number of Shares Redeemed(2) | Average Price Paid per Share(3) | Approximate Dollar Value of Shares Available That May Yet Be Redeemed Under the Program | |||||||||
January 2016 | 95,406 | 99,243 | $ | 10.08 | (4) | |||||||
February 2016 | 45,778 | — | — | (4) | ||||||||
March 2016 | 206,328 | — | — | (4) | ||||||||
347,512 | 99,243 |
(1) | We generally redeem shares on the last business day of the month following the end of each fiscal quarter in which requests were received. On April 29, 2016, we redeemed 96,215 shares of our common stock for a total redemption value of $1,000,000, or $10.39 per share, pursuant to our share repurchase program. |
(2) | We are not obligated to repurchase shares under the share repurchase program. |
(3) | Pursuant to the program, as amended, we currently redeem shares at prices determined as follows: |
• | 97.5% of the estimated value per share for stockholders who have held their shares for at least three years; and |
(4) | The number of shares that may be redeemed pursuant to the share repurchase program during any calendar year is limited to 5% of the weighted-average number of shares outstanding during the prior calendar year and the value of the shares repurchased shall not exceed $2 million during the quarter beginning July 1, 2015, with shares repurchased each subsequent quarter not to exceed $1 million. |
Steadfast Income REIT, Inc. | |||
Date: | May 12, 2016 | By: | /s/ Rodney F. Emery |
Rodney F. Emery | |||
Chief Executive Officer and Chairman of the Board (Principal Executive Officer) | |||
Date: | May 12, 2016 | By: | /s/ Kevin J. Keating |
Kevin J. Keating | |||
Treasurer (Principal Financial and Accounting Officer) |
3.1 | Third Articles of Amendment and Restatement of Steadfast Income REIT, Inc. (included as Exhibit 3.1 to the Company’s Current Report on Form 8-K filed August 6, 2014 and incorporated herein by reference). |
3.2 | Bylaws of Steadfast Secure Income REIT, Inc. (included as Exhibit 3.2 to the Company’s Registration Statement on Form S-11 (File No. 333-160748) filed July 23, 2009 and incorporated herein by reference). |
31.1* | Certification of the Principal Executive Officer pursuant to Exchange Act Rule 13a-14(a) or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
31.2* | Certification of the Principal Financial Officer pursuant to Exchange Act Rule 13a-14(a) or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
32.1** | Certification of the Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
32.2** | Certification of the Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
101.INS* | XBRL Instance Document. |
101.SCH* | XBRL Taxonomy Extension Schema Document. |
101.CAL* | XBRL Taxonomy Extension Calculation Linkbase Document. |
101.LAB* | XBRL Taxonomy Extension Labels Linkbase Document. |
101.PRE* | XBRL Taxonomy Extension Presentation Linkbase Document. |
101.DEF* | XBRL Taxonomy Extension Definition Linkbase Document. |
* | Filed herewith. |
** | In accordance with Item 601(b)(32) of Regulation S-K, this Exhibit is not deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section. Such certifications will not be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference. |
1. | I have reviewed this quarterly report on Form 10-Q of Steadfast Income 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 and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
By: | /s/ Rodney F. Emery | |
Rodney F. Emery | ||
Chief Executive Officer and Chairman of the Board (Principal Executive Officer) |
1. | I have reviewed this quarterly report on Form 10-Q of Steadfast Income 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 and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
By: | /s/ Kevin J. Keating | |
Kevin J. Keating | ||
Treasurer (Principal Financial and Accounting Officer) |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
By: | /s/ Rodney F. Emery | |
Rodney F. Emery | ||
Chief Executive Officer and Chairman of the Board (Principal Executive Officer) |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
By: | /s/ Kevin J. Keating | |
Kevin J. Keating | ||
Treasurer (Principal Financial and Accounting Officer) |
Document and Entity Information Document - shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
May. 06, 2016 |
|
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Steadfast Income REIT, Inc. | |
Entity Central Index Key | 0001468010 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2016 | |
Document Fiscal Year Focus | 2016 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding (in shares) | 76,479,192 |
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares |
Mar. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Stockholders’ Equity: | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Common Stock [Member] | ||
Stockholders’ Equity: | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 999,999,000 | 999,999,000 |
Common stock, shares issued (in shares) | 76,575,259 | 76,674,502 |
Common stock, shares outstanding (in shares) | 76,575,259 | 76,674,502 |
Convertible Stock [Member] | ||
Stockholders’ Equity: | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 1,000 | 1,000 |
Common stock, shares issued (in shares) | 1,000 | 1,000 |
Common stock, shares outstanding (in shares) | 1,000 | 1,000 |
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Revenues: | ||
Rental income | $ 47,170,635 | $ 45,532,588 |
Tenant reimbursements and other | 5,736,273 | 5,518,713 |
Total revenues | 52,906,908 | 51,051,301 |
Expenses: | ||
Operating, maintenance and management | 13,709,810 | 12,827,151 |
Real estate taxes and insurance | 8,911,021 | 9,055,399 |
Fees to affiliates | 5,522,423 | 5,368,476 |
Depreciation and amortization | 16,947,268 | 16,154,311 |
Interest expense | 10,046,840 | 9,987,234 |
General and administrative expenses | 1,387,688 | 1,482,231 |
Acquisition costs | 0 | 7,145 |
Total expenses | 56,525,050 | 54,881,947 |
Net loss | $ (3,618,142) | $ (3,830,646) |
Loss per common share - basic and diluted (in dollars per share) | $ (0.05) | $ (0.05) |
Weighted average number of common shares outstanding — basic and diluted (in shares) | 76,350,555 | 76,353,484 |
Distributions declared per common share (in dollars per share) | $ 0.178 | $ 0.177 |
CONSOLIDATED STATEMENT OF CASH FLOWS (Parenthetical) - USD ($) |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Statement of Cash Flows [Abstract] | ||
Interest capitalized | $ 25,904 | $ 38,761 |
Organization and Business |
3 Months Ended |
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Mar. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Business | Organization and Business Steadfast Income REIT, Inc. (the “Company”) was formed on May 4, 2009, as a Maryland corporation that has elected to be treated as, and currently qualifies as, a real estate investment trust (“REIT”). On June 12, 2009, the Company was initially capitalized pursuant to the sale of 22,223 shares of common stock to Steadfast REIT Investments, LLC (the “Sponsor”) at a purchase price of $9.00 per share for an aggregate purchase price of $200,007. On July 10, 2009, Steadfast Income Advisor, LLC (the “Advisor”), a Delaware limited liability company formed on May 1, 2009, invested $1,000 in the Company in exchange for 1,000 shares of convertible stock (the “Convertible Stock”) as described in Note 6. Substantially all of the Company’s business is conducted through Steadfast Income REIT Operating Partnership, L.P., a Delaware limited partnership formed on July 6, 2009 (the “Operating Partnership”). The Company is the sole general partner of the Operating Partnership. As the Company accepted subscriptions for shares of its common stock in the Public Offering (as defined below), the Company transferred substantially all of the net offering proceeds to the Operating Partnership in exchange for partnership interests and the Company’s percentage ownership in the Operating Partnership increased proportionately. The Company and Advisor entered into an Amended and Restated Limited Partnership Agreement of the Operating Partnership (the “Partnership Agreement”) on September 28, 2009. As of March 31, 2016, the Company owned 65 multifamily properties comprising a total of 16,622 apartment homes and an additional 25,973 square feet of rentable commercial space at three properties. Private Offering On October 13, 2009, the Company commenced a private offering of up to $94,000,000 in shares of the Company’s common stock at a purchase price of $9.40 per share (with discounts available for certain categories of purchasers) (the “Private Offering”). The Company offered its shares of common stock for sale in the Private Offering pursuant to a confidential private placement memorandum and only to persons that were “accredited investors,” as that term is defined under the Securities Act of 1933, as amended (the “Securities Act”), and Regulation D promulgated thereunder. On July 9, 2010, the Company terminated the Private Offering and on July 19, 2010, the Company commenced its registered public offering described below. The Company sold 637,279 shares of common stock in the Private Offering for gross offering proceeds of $5,844,325. Public Offering On July 23, 2009, the Company filed a registration statement on Form S-11 with the Securities and Exchange Commission (the “SEC”) to offer a maximum of 150,000,000 shares of common stock for sale to the public at an initial price of $10.00 per share (with discounts available for certain categories of purchasers) (the “Primary Offering”). The Company also registered up to 15,789,474 shares of common stock for sale pursuant to the Company’s distribution reinvestment plan (the “DRP,” and together with the Primary Offering, the “Public Offering”) at an initial price of $9.50 per share. The SEC declared the Company’s registration statement effective on July 9, 2010. The Company commenced the Public Offering on July 19, 2010. The Company could reallocate shares of common stock registered in the Public Offering between the Primary Offering and the DRP. On July 12, 2012, the Company’s board of directors determined an estimated value per share of the Company’s common stock as of March 31, 2012 of $10.24. As a result of the determination of the estimated value per share of the Company’s common stock as of March 31, 2012, effective September 10, 2012, the offering price of the Company’s common stock to the public in the Primary Offering increased from the previous price of $10.00 per share to $10.24 per share. Additionally, effective September 10, 2012, the price of shares of the Company’s common stock issued pursuant to the DRP increased from a price of $9.50 per share to a price of $9.73 per share, or 95% of the new Primary Offering price of $10.24 per share. Effective September 10, 2012, the Company’s board of directors increased the amount of distributions paid on each share of the Company’s common stock from $0.001917 per share per day to $0.001964 per share per day, which, if paid each day over a 365-day period, is equivalent to a 7.0% annualized distribution rate based on the new offering price of $10.24 per share. The Company terminated its Public Offering on December 20, 2013. Following termination of the Public Offering, the Company continued to offer shares of common stock pursuant to the DRP until the Company’s board of directors suspended the DRP effective for distributions earned beginning on December 1, 2014. Through December 20, 2013, the Company sold 73,608,337 shares of common stock in the Public Offering for gross proceeds of $745,389,748, including 1,588,289 shares of common stock issued pursuant to the DRP for gross offering proceeds of $15,397,232. On March 10, 2015, the Company’s board of directors determined an estimated value per share of the Company’s common stock of $10.35 as of December 31, 2014. On February 25, 2016, the Company’s board of directors determined an estimated value per share of the Company’s common stock of $11.44 as of December 31, 2015. The business of the Company is externally managed by the Advisor, pursuant to the Advisory Agreement by and among the Company, the Operating Partnership and the Advisor (as amended, the “Advisory Agreement”), which is subject to annual renewal by the Company’s board of directors. The current term of the Advisory Agreement expires on November 15, 2016. Subject to certain restrictions and limitations, the Advisor manages the Company’s day-to-day operations, manages the Company’s portfolio of properties and real estate-related assets, sources and presents investment opportunities to the Company’s board of directors and provides investment management services on the Company’s behalf. Steadfast Capital Markets Group, LLC (the “Dealer Manager”), an affiliate of the Advisor, served as the dealer manager for the Public Offering. The Dealer Manager was responsible for marketing the Company’s shares of common stock being offered pursuant to the Public Offering. The Advisor, along with the Dealer Manager, also provides marketing, investor relations and other administrative services on the Company’s behalf. The Partnership Agreement provides that the Operating Partnership is operated in a manner that will enable the Company to (1) satisfy the requirements for being classified as a REIT for tax purposes, (2) avoid any federal income or excise tax liability and (3) ensure that the Operating Partnership will not be classified as a “publicly traded partnership” for purposes of Section 7704 of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), which classification could result in the Operating Partnership being taxed as a corporation, rather than as a partnership. In addition to the administrative and operating costs and expenses incurred by the Operating Partnership in acquiring and operating real properties, the Operating Partnership may pay all of the Company’s administrative costs and expenses, and such expenses will be treated as expenses of the Operating Partnership. |
Summary of Significant Accounting Policies |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies There have been no significant changes to the Company’s accounting policies since it filed its audited financial statements in its Annual Report on Form 10-K for the year ended December 31, 2015, other than Accounting Standard Updates (“ASU”) 2015-03, as amended by ASU 2015-15, as further described below. For further information about the Company’s accounting policies, refer to the Company’s consolidated financial statements and notes thereto for the year ended December 31, 2015 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 18, 2016. Principles of Consolidation and Basis of Presentation The consolidated financial statements include the accounts of the Company, the Operating Partnership and its subsidiaries. All significant intercompany balances and transactions are eliminated in consolidation. The financial statements of the Company’s subsidiaries are prepared using accounting policies consistent with those of the Company. The accompanying unaudited consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information as contained within the Financial Accounting Standards Board (“FASB”), Accounting Standards Codification (“ASC”) and the rules and regulations of the SEC, including the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, the unaudited consolidated financial statements do not include all of the information and footnotes required by GAAP for audited financial statements. In the opinion of management, the financial statements for the unaudited interim periods presented include all adjustments that are of a normal and recurring nature and necessary for a fair and consistent presentation of the results of such periods. Operating results for the three months ended March 31, 2016 are not necessarily indicative of the results that may be expected for the year ending December 31, 2016. The unaudited consolidated financial statements herein should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015. Use of Estimates The preparation of the consolidated financial statements in conformity with GAAP requires the Company to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could materially differ from those estimates. Reclassifications Certain prior year amounts in the consolidated financial statements have been reclassified to conform with the current year presentation. These reclassifications have not changed the results of operations of prior periods. During the three months ended March 31, 2016, the Company adopted new accounting guidance to simplify the presentation of debt issuance costs. As a result, net deferred financing costs of $6,697,472 related to mortgage notes payable as of December 31, 2015, were reclassified from other assets, net to mortgage notes payable, net on the consolidated balance sheets. Fair Value Measurements Under GAAP, the Company is required to measure certain financial instruments at fair value on a recurring basis. In addition, the Company is required to measure other assets and liabilities at fair value on a non-recurring basis (e.g., carrying value of impaired real estate loans receivable and long-lived assets). Fair value is defined as the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The GAAP fair value framework uses a three-tiered approach. Fair value measurements are classified and disclosed in one of the following three categories:
When available, the Company utilizes quoted market prices from an independent third-party source to determine fair value and will classify such items in Level 1 or Level 2. In instances where the market is not active, regardless of the availability of a nonbinding quoted market price, observable inputs might not be relevant and could require the Company to make a significant adjustment to derive a fair value measurement. Additionally, in an inactive market, a market price quoted from an independent third party may rely more on models with inputs based on information available only to that independent third party. When the Company determines the market for a financial instrument owned by the Company to be illiquid or when market transactions for similar instruments do not appear orderly, the Company uses several valuation sources (including internal valuations, discounted cash flow analysis and quoted market prices) and will establish a fair value by assigning weights to the various valuation sources. The following describes the valuation methodologies used by the Company to measure fair value, including an indication of the level in the fair value hierarchy in which each asset or liability is generally classified. Interest rate cap agreements — These derivatives did not qualify as fair value hedges and are recorded at fair value. Fair value was based on a model-driven valuation using the associated variable rate curve and an implied market volatility, both of which were observable at commonly quoted intervals for the full term of the interest rate cap agreements. Therefore, the Company’s interest rate cap agreements were classified within Level 2 of the fair value hierarchy and are included in other assets, net in the accompanying consolidated balance sheets. The following table reflects the Company’s assets required to be measured at fair value on a recurring basis on the consolidated balance sheets:
Changes in assumptions or estimation methodologies can have a material effect on these estimated fair values. In this regard, the derived fair value estimates cannot be substantiated by comparison to independent markets and, in many cases, may not be realized in an immediate settlement of the instrument. Fair Value of Financial Instruments The accompanying consolidated balance sheets include the following financial instruments: cash and cash equivalents, restricted cash, rents and other receivables, accounts payable and accrued liabilities, distributions payable, due to affiliates and notes payable. The Company considers the carrying value of cash and cash equivalents, restricted cash, rents and other receivables, accounts payable and accrued liabilities and distributions payable to approximate the fair value of these financial instruments based on the short duration between origination of the instruments and their expected realization. The Company considers the carrying value of the revolving line of credit to approximate fair value based on time to maturity. The fair value of amounts due to affiliates is not determinable due to the related party nature of such amounts. The fair value of the mortgage notes payable is estimated using a discounted cash flow analysis using borrowing rates available to the Company for debt instruments with similar terms and maturities. As of March 31, 2016 and December 31, 2015, the fair value of the mortgage notes payable was $1,130,001,965 and $1,118,126,231, respectively, compared to the carrying value of $1,111,838,945 and $1,115,752,899, respectively. The Company has determined that its mortgage notes payable are classified as Level 3 within the fair value hierarchy. Distribution Policy The Company has elected to be taxed as a REIT and to operate as a REIT beginning with its taxable year ending December 31, 2010. To maintain its qualification as a REIT, the Company intends to make distributions each taxable year equal to at least 90% of its REIT taxable income (which is determined without regard to the dividends paid deduction or net capital gain and which does not necessarily equal net income as calculated in accordance with GAAP). Distributions were based on daily record dates and calculated at a rate of $0.001964 per share per day during the year ended December 31, 2015 and three months ended March 31, 2016. Each day during the three months ended March 31, 2016 and 2015 was a record date for distributions. Distributions to stockholders are determined by the board of directors of the Company and are dependent upon a number of factors relating to the Company, including funds available for the payment of distributions, financial condition, the timing of property acquisitions, capital expenditure requirements and annual distribution requirements in order for the Company to qualify as a REIT under the Internal Revenue Code. During the three months ended March 31, 2016 and 2015, the Company declared distributions of $0.178 and $0.177 per common share, respectively. Per Share Data Basic earnings (loss) per share attributable for all periods presented are computed by dividing net income (loss) attributable to controlling interest by the weighted average number of shares of the Company’s common stock outstanding during the period. Diluted earnings (loss) per share are computed based on the weighted average number of shares of the Company’s common stock and all potentially dilutive securities, if any. Distributions declared per common share assumes each share was issued and outstanding each day during the period. The Company’s unvested shares of restricted common stock contain non-forfeitable rights to dividends and are considered to be participating securities in accordance with GAAP and, therefore, are included in the computation of earnings (loss) per share under the two-class method. Under the two-class method, net losses are not allocated to participating securities unless the holder of the security has a contractual obligation to share in the losses. The unvested shares of restricted common stock are not allocated losses as the awards do not have a contractual obligation to share in the losses of the Company. The two-class method is an earnings (loss) allocation formula that determines earnings (loss) per share for each class of common shares and participating securities according to dividends declared and participation rights in undistributed earnings. Segment Disclosure The Company has determined that it has one reportable segment with activities related to investing in multifamily properties. The Company’s investments in real estate are in different geographic regions, and management evaluates operating performance on an individual asset level. However, as each of the Company’s assets has similar economic characteristics, tenants and products and services, its assets have been aggregated into one reportable segment. Recent Accounting Pronouncements In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). The new guidance requires an entity to recognize the revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. The new guidance supersedes the revenue requirements in Revenue Recognition (Topic 605) and most industry-specific guidance throughout the Industry Topics of the Codification. The new guidance does not apply to lease contracts within the scope of Leases (Topic 840). In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606), which delayed the effective date of the new guidance by one year, which will result in the new guidance being effective for fiscal years, and interim periods within those years, beginning after December 15, 2017, and is to be applied retrospectively. Early adoption is permitted, but can be no earlier than the original public entity effective date of fiscal years, and interim periods within those years, beginning after December 15, 2016. The Company is still evaluating the impact of adopting the new guidance on its financial statements, but does not expect the adoption to have a material impact on its financial statements. In August 2014, the FASB issued ASU 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, that requires management to evaluate whether there are conditions and events that raise substantial doubt about an entity’s ability to continue as a going concern. Until now, the requirement to perform a going concern evaluation existed only in auditing standards. The new guidance requires management to evaluate relevant conditions, events and certain management plans that are known or reasonably knowable as of the evaluation date when determining whether substantial doubt about an entity’s ability to continue as a going concern exists. Management will be required to make this evaluation for both annual and interim reporting periods. The standard states substantial doubt about an entity’s ability to continue as a going concern exists when relevant conditions and events, considered in the aggregate, indicate that it is probable that the entity will be unable to meet its obligations as they become due within one year after the date that the financial statements are issued. The guidance is effective for annual periods ending after December 15, 2016 and for annual periods and interim periods thereafter. Early adoption is permitted. The Company does not expect there to be a material impact from adopting this new guidance. In January 2015, the FASB issued ASU 2015-01, Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items, that eliminates the concept of the extraordinary items from GAAP. The objective of the new guidance is to simplify the income statement presentation requirements of GAAP by altogether removing the concept of extraordinary items from consideration. The guidance is effective for annual periods, including interim periods within that period, beginning after December 15, 2015. The Company did not experience a material impact from adopting this new guidance. In February 2015, the FASB issued ASU 2015-02, Consolidation, which makes changes to both the variable interest model and the voting model of consolidation. Under ASU 2015-02, companies will need to re-evaluate whether an entity meets the criteria to be considered a variable interest entity (“VIE”) or whether the consolidation of an entity should be assessed under the voting model. The new standard specifically eliminates the presumption in the current voting model that a general partner controls a limited partnership or similar entity unless that presumption can be overcome. The new standard was effective for the Company beginning on January 1, 2016. The adoption of the new standard did not result in the consolidation of entities not previously consolidated or the deconsolidation of any entities previously consolidated. Upon adopting the new standard, the Operating Partnership became a VIE as the limited partner lacks substantive kick-out rights and substantive participating rights. The Company is the primary beneficiary of, and continues to consolidate, the Operating Partnership determined to be a VIE. In April 2015, the FASB issued ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs, as amended in August 2015 by ASU 2015-15, Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements, that will require that debt issuance costs be presented in the balance sheet as a direct deduction from the carrying amount of debt liability, consistent with debt discounts or premiums. The FASB will permit debt issuance costs related to line-of-credit arrangements to be deferred and presented as an asset and subsequently amortized over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement.The recognition and measurement guidance for debt issuance costs will not be affected by the new guidance. The guidance requires retrospective application and is effective for annual periods, including interim periods within that period, beginning after December 15, 2015. Early adoption is permitted. Upon adoption, the Company reclassified net debt issuance costs of $6,367,184 and $6,697,472 as of March 31, 2016 and December 31, 2015, respectively, related to mortgage notes payable from other assets, net to mortgage notes payable, net on the consolidated balance sheets. In February 2016, the FASB issued ASU 2016-02, Leases, amending the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets and making targeted changes to lessor accounting. The new standard requires a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief. The guidance will be effective in the first quarter of 2019 and allows for early adoption. The Company is assessing whether the new standard will have a material effect on its financial position or results of operations. |
Real Estate |
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Real Estate [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Real Estate | Real Estate As of March 31, 2016, the Company owned 65 multifamily properties, encompassing in the aggregate 16,622 apartment homes and 25,973 square feet of rentable commercial space. The total purchase price of the Company’s real estate portfolio was $1,634,327,541, inclusive of development and construction costs for apartment homes constructed by the Company. As of March 31, 2016 and December 31, 2015, the Company’s portfolio was approximately 94.5% and 94.0% occupied and the average monthly rent was $1,005 and $999, respectively. As of March 31, 2016 and December 31, 2015, accumulated depreciation and amortization related to the Company’s consolidated real estate properties and related intangibles were as follows:
Depreciation and amortization expenses were $16,947,268 and $16,154,311 for the three months ended March 31, 2016 and 2015, respectively. Depreciation of the Company’s buildings and improvements were $16,908,976 and $15,905,614 for the three months ended March 31, 2016 and 2015, respectively. Amortization of the Company’s tenant origination and absorption costs for the three months ended March 31, 2016 and 2015 were $0 and $210,405, respectively. Tenant origination and absorption costs had a weighted-average amortization period as of the date of acquisition of less than one year. At December 31, 2015, all tenant origination and absorption costs were fully amortized and written off. Amortization of the Company’s other intangible assets for the three months ended March 31, 2016 and 2015 were $38,292 and $38,292, respectively. The future amortization of the Company’s acquired other intangible assets as of March 31, 2016 and thereafter is as follows:
Operating Leases As of March 31, 2016, the Company’s real estate portfolio was comprised of 16,622 apartment homes and was 96.6% leased by a diverse group of residents. For each of the three months ended March 31, 2016 and 2015, the Company’s real estate portfolio earned approximately 99% of its rental income from residential tenants and approximately 1% of its rental income from commercial office tenants, respectively. The residential tenant lease terms consist of lease durations equal to 12 months or less. The commercial office tenant leases consist of remaining lease durations varying from 0.08 to 3.59 years. Some residential and commercial leases contain provisions to extend the lease agreements, options for early termination after paying a specified penalty and other terms and conditions as negotiated. The Company retains substantially all of the risks and benefits of ownership of the real estate assets leased to tenants. Generally, upon the execution of a lease, the Company requires security deposits from tenants in the form of a cash deposit and/or a letter of credit for commercial tenants. Amounts required as security deposits vary depending upon the terms of the respective leases and the creditworthiness of the tenant, but generally are not significant amounts. Therefore, exposure to credit risk exists to the extent that a receivable from a tenant exceeds the amount of its security deposit. Security deposits received in cash related to tenant leases are included in accounts payable and accrued liabilities in the accompanying consolidated balance sheets and totaled $4,821,956 and $4,672,961 as of March 31, 2016 and December 31, 2015, respectively. The future minimum rental receipts from the Company’s properties under non-cancelable operating leases attributable to commercial office tenants as of March 31, 2016 and thereafter is as follows:
As of March 31, 2016 and December 31, 2015, no tenant represented over 10% of the Company’s annualized base rent and there were no significant industry concentrations with respect to its commercial leases. |
Other Assets, Net |
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Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Assets, Net | Other Assets, Net As of March 31, 2016 and December 31, 2015, other assets, net of accumulated amortization, consisted of:
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Debt |
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | Debt Mortgage Notes Payable The following is a summary of mortgage notes payable, net secured by real property as of March 31, 2016 and December 31, 2015:
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Revolving Credit Facility The Company entered into a revolving credit facility with PNC Bank, N.A. (“PNC Bank”) to borrow up to $20,000,000. On July 18, 2014, the Company and PNC Bank amended the revolving credit facility to, among other things, increase the potential borrowing limit from $20,000,000 to $35,000,000. The amended and restated credit facility consists of a Tranche A and a Tranche B, and provides certain security for borrowings under the credit facility. The maximum amount that may be borrowed under Tranche A and Tranche B are $20,000,000 and $15,000,000, respectively. The amended and restated credit facility has a maturity date of July 17, 2016, subject to extension. For each advance under the amended and restated credit facility, the Company has the option to select the interest rate from the following options: (1) Base Rate Option (as defined in the amended and restated credit facility) plus (i) with respect to Tranche A, 0.75% and (ii) with respect to Tranche B, 2.0%; or (2) LIBOR Option, which is a rate per annum fixed for the LIBOR Interest Period (as defined in the amended and restated credit facility) equal to the sum of LIBOR plus (i) with respect to Tranche A, 1.6% and (ii) with respect to Tranche B, 3.0%. The Company elected the LIBOR Option and the in-place interest rate was 2.04% as of March 31, 2016. As of March 31, 2016, $16,000,000 was outstanding under the credit facility. No amounts were outstanding under the credit facility as of December 31, 2015. The following is a summary of the Company’s aggregate maturities as of March 31, 2016:
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The Company’s notes payable contain customary financial and non-financial debt covenants. As of March 31, 2016 and December 31, 2015, the Company was in compliance with all financial and non-financial debt covenants. For the three months ended March 31, 2016 and 2015, the Company incurred interest of $10,072,744 and $10,025,995. Interest expense for the three months ended March 31, 2016 and 2015 includes amortization of deferred financing costs of $382,044 and $363,977, amortization of loan premiums and discounts of $308,698 and $308,698, net unrealized loss from the change in fair value of interest rate cap agreements of $232,712 and $1,021,586 and capitalized interest of $25,904 and $38,761, respectively. The capitalized interest is included in real estate on the consolidated balance sheets. Interest expense of $3,074,805 and $2,932,922 was payable as of March 31, 2016 and December 31, 2015, respectively, and is included in accounts payable and accrued liabilities in the accompanying consolidated balance sheets. |
Stockholders' Equity |
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Stockholders' Equity | Stockholders’ Equity General Under the Company’s Third Articles of Amendment and Restatement (the “Charter”), the total number of shares of capital stock authorized for issuance is 1,100,000,000 shares, consisting of 999,999,000 shares of common stock with a par value of $0.01 per share, 1,000 shares of convertible stock with a par value of $0.01 per share and 100,000,000 shares designated as preferred stock with a par value of $0.01 per share. Common Stock The shares of the Company’s common stock entitle the holders to one vote per share on all matters upon which stockholders are entitled to vote, to receive dividends and other distributions as authorized by the Company’s board of directors in accordance with the Maryland General Corporation Law and to all rights of a stockholder pursuant to the Maryland General Corporation Law. The common stock has no preferences or preemptive, conversion or exchange rights. During 2009, the Company issued 22,223 shares of common stock to the Sponsor for $200,007. As of March 31, 2016, the Company had issued 76,732,395 shares of common stock in its Private Offering and Public Offering for offering proceeds of $679,572,220, net of offering costs of $95,845,468, including 4,073,759 shares of common stock pursuant to the DRP, for total proceeds of $39,580,847. Offering costs primarily consist of selling commissions and dealer manager fees. The Company terminated its Public Offering on December 20, 2013, but continued to offer shares pursuant to the DRP through November 30, 2014. The issuance and vesting activity for the three months ended March 31, 2016 and for the years ended December 31, 2015 and 2014 for the restricted stock issued to the Company’s independent directors as compensation for services in connection with their initial election or re-election to the board of directors at the Company’s annual meeting, upon their departure from the board of directors, or in appreciation of their service and commitment to the Company is as follows:
Additionally, the weighted average fair value of restricted stock issued to the Company’s independent directors for the three months ended March 31, 2016 and for the years ended December 31, 2015 and 2014 is as follows:
The shares of restricted common stock vest and become non-forfeitable in four equal annual installments beginning on the date of grant and ending on the third anniversary of the date of grant and will become fully vested and become non-forfeitable on the earlier to occur of (1) the termination of the independent director’s service as a director due to his or her death or disability, or (2) a change in control of the Company and as otherwise provided in the Incentive Award Plan, as defined below. Included in general and administrative expenses is $12,864 and $22,884 for the three months ended March 31, 2016 and 2015, respectively, for compensation expense related to the issuance of restricted common stock. The weighted average remaining term of the restricted common stock is 1.61 years as of March 31, 2016. As of March 31, 2016, the compensation expense related to the issuance of the restricted common stock not vested was $82,739. On June 11, 2014, the Company entered into a restricted stock agreement with the Advisor whereby the Company issued to the Advisor 488,281.25 restricted shares of the Company’s common stock at a fair market value of $10.24 per share in satisfaction of certain deferred fees due to the Advisor in the aggregate amount of $5,000,000. The shares of restricted stock vest and become non-forfeitable upon the earliest to occur of (i) 50% at December 31, 2015 and 50% at December 31, 2016, (ii) certain liquidity events of the Company, (iii) the Company’s cumulative modified funds from operations exceed the lesser of (a) the cumulative amount of distributions paid to the Company’s stockholders or (b) an amount that is equal to a 7.0% cumulative, non-compounded annual return on the Company’s stockholders’ invested capital, or (iv) the Company’s termination of, or failure to renew, the Advisory Agreement other than for “cause” (as defined in the Advisory Agreement). The shares of restricted stock shall be forfeited if the Advisor is terminated for any reason other than (iv) above. The fair value of the shares of unvested restricted stock was $2,792,969 as of March 31, 2016. As of March 31, 2016, 244,141 shares were vested. The fair value of the vested common stock and unvested restricted common stock as of March 31, 2016 and December 31, 2015 of $5,585,938 and $5,493,164, respectively, are recorded in stockholders’ equity in the accompanying consolidated balance sheets. Included in general and administrative expenses on the accompanying consolidated statements of operations is $113,607 and $16,907 for the three months ended March 31, 2016 and 2015, respectively, for the change in value of restricted common stock issued to the Advisor. Convertible Stock The Company issued 1,000 shares of Convertible Stock to the Advisor for $1,000. The Convertible Stock will convert into shares of the Company’s common stock if and when: (A) the Company has made total distributions on the then outstanding shares of common stock equal to the original issue price of those shares plus an 8.0% cumulative, non-compounded, annual return on the original issue price of those shares, (B) subject to specified conditions, the Company lists the common stock for trading on a national securities exchange or (C) the Advisory Agreement is terminated or not renewed by the Company (other than for “cause” as defined in the Advisory Agreement). A “listing” will also be deemed to have occurred on the effective date of any merger of the Company in which the consideration received by the holders of the Company’s common stock is the securities of another issuer that are listed on a national securities exchange. Upon conversion, each share of Convertible Stock will convert into a number of shares of common stock equal to 1/1000 of the quotient of (A) 10% of the amount, if any, by which (1) the Company’s “enterprise value” (as defined in the Charter) plus the aggregate value of distributions paid to date on the outstanding shares of common stock exceeds (2) the aggregate purchase price paid by the stockholders for those shares plus an 8.0% cumulative, non-compounded, annual return on the original issue price of those shares, divided by (B) the Company’s enterprise value divided by the number of outstanding shares of common stock, in each case calculated as of the date of the conversion. In the event of a termination or non-renewal of the Advisory Agreement by the Company for cause, the Convertible Stock will be redeemed by the Company for $1.00. Preferred Stock The Charter also provides the Company’s board of directors with the authority to issue one or more classes or series of preferred stock, and prior to the issuance of such shares of preferred stock, the board of directors shall have the power from time to time to classify or reclassify, in one or more series, any unissued shares and designate the preferences, rights and privileges of such shares of preferred stock. The Company’s board of directors is authorized to amend the Charter, without the approval of the stockholders, to increase the aggregate number of authorized shares of capital stock or the number of shares of any class or series that the Company has authority to issue. As of March 31, 2016 and December 31, 2015, no shares of the Company’s preferred stock were issued and outstanding. Distribution Reinvestment Plan In connection with the Public Offering, the Company’s board of directors approved the DRP through which common stockholders could elect to reinvest an amount equal to the distributions declared on their shares of common stock in additional shares of the Company’s common stock in lieu of receiving cash distributions. The initial purchase price per share under the DRP was $9.50. Effective September 10, 2012, in connection with the change in the Public Offering price, shares of the Company’s common stock were issued pursuant to the DRP at a price of $9.73 per share. Effective with distributions earned beginning on December 1, 2014, the Company’s board of directors elected to suspend the DRP. As a result, all distributions are paid in cash and not reinvested in shares of the Company’s common stock. The Company’s board of directors may, in its sole discretion, from time to time, reinstate the DRP at a price based upon the Company’s estimated value per share and other factors that the Company’s board of directors deems relevant, although there is no assurance as to if or when this will happen. No sales commissions or dealer manager fees were payable on shares sold through the DRP. Share Repurchase Program and Redeemable Common Stock The Company’s share repurchase program may provide an opportunity for stockholders to have their shares of common stock repurchased by the Company, subject to certain restrictions and limitations. No shares can be repurchased under the Company’s share repurchase program until after the first anniversary of the date of purchase of such shares; provided, however, that this holding period shall not apply to repurchases requested within two years after the death or disability of a stockholder. The purchase price for shares repurchased under the Company’s share repurchase program is as follows:
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The purchase price per share for shares repurchased pursuant to the share repurchase program will be further reduced by the aggregate amount of net proceeds per share, if any, distributed to the Company’s stockholders prior to the repurchase date as a result of the sale of one or more of the Company’s assets that constitutes a return of capital distribution as a result of such sales. Repurchases of shares of the Company’s common stock are made quarterly upon written request to the Company at least 15 days prior to the end of the applicable quarter for which the share repurchase program is in effect. Repurchase requests are honored approximately 30 days following the end of the applicable quarter (the “Repurchase Date”). Stockholders may withdraw their repurchase request at any time up to three business days prior the Repurchase Date. On October 21, 2014, the Company’s board of directors elected to suspend the Company’s share repurchase program, effective November 20, 2014. On May 12, 2015, the Company’s board of directors elected to reinstate the share repurchase program effective July 1, 2015. During the three months ended March 31, 2016, the Company redeemed a total of 99,243 shares with a total redemption value of $1,000,000 and received net requests for the redemption of 347,512 shares with a total net redemption value of $3,763,312. No amounts were requested or redeemed during the three months ended March 31, 2015. The Company cannot guarantee that the funds set aside for the share repurchase program will be sufficient to accommodate all repurchase requests made in any quarter. In the event that the redemption requests exceed the Company’s restrictions on limitation or the Company does not have sufficient funds available to repurchase all of the shares of the Company’s common stock for which repurchase requests have been submitted in any quarter, priority will be given to redemption requests in the case of the death or disability of a stockholder. If the Company repurchases less than all of the shares subject to a repurchase request in any quarter, with respect to any shares which have not been repurchased, the requesting stockholder could (1) withdraw the request for repurchase or (2) ask that the Company honor the request in a future quarter, if any, when such repurchases may be made pursuant to the limitations of the share repurchase program and when sufficient funds are available. Such pending requests would be honored among all requests for redemptions in any given redemption period as follows: first, pro rata as to redemptions sought upon a stockholder’s death or disability; and, next, pro rata as to other redemption requests. The Company is not obligated to repurchase shares of the Company’s common stock under the share repurchase program. In no event shall redemptions under the share repurchase program exceed 5% of the weighted average number of shares of the Company’s common stock outstanding during the prior calendar year. Effective July 1, 2015, in no event shall the value of the shares repurchased pursuant to the share repurchase program exceed $2,000,000 during the quarter beginning July 1, 2015, with each subsequent quarter not to exceed $1,000,000. There is no fee in connection with a repurchase of shares of the Company’s common stock. As of March 31, 2016, the Company has recognized redemptions payable of $1,000,000, which is included in accounts payable and accrued liabilities on the accompanying consolidated balance sheets. In addition, the Company’s board of directors may, in its sole discretion, amend, suspend, or terminate the share repurchase program at any time upon 30 days notice to the Company’s stockholders if it determines that the funds available to fund the share repurchase program are needed for other business or operational purposes or that amendment, suspension or termination of the share repurchase program is in the best interest of the Company’s stockholders. Therefore, stockholders may not have the opportunity to make a repurchase request prior to any potential termination of the Company’s share repurchase program. Pursuant to the share repurchase program, for the three months ended March 31, 2016 and 2015, the Company reclassified $0 and $0, net of $1,000,000 and $0 of fulfilled redemption requests, respectively, from permanent equity to temporary equity, which is included as redeemable common stock on the accompanying consolidated balance sheets. Distributions Declared Distributions declared to date (1) accrue daily to stockholders of record as of the close of business on each day, (2) are payable in cumulative amounts on or before the third day of each calendar month with respect to the prior month and (3) are calculated at a rate of $0.001964 per share per day during the three months ended March 31, 2016 and 2015. Distributions declared for the three months ended March 31, 2016 and 2015 were $13,649,330 and $13,585,679, including $0 and $78, or 0 shares and 8 shares, respectively, of common stock attributable to the DRP. As of March 31, 2016 and December 31, 2015, $4,647,928 and $4,668,261 distributions declared were payable, none of which was reinvested pursuant to the DRP. Distributions Paid For the three months ended March 31, 2016 and 2015, the Company paid cash distributions of $13,669,663 and $13,585,602, which related to distributions declared for each day in the period from December 1, 2015 through February 29, 2016 and December 1, 2014 through February 28, 2015, respectively. Additionally, for the three months ended March 31, 2016 and 2015, 0 and 8 shares of common stock were issued pursuant to the DRP for gross offering proceeds of $0 and $78, respectively. For the three months ended March 31, 2016 and 2015, the Company paid total distributions of $13,669,663 and $13,585,680, respectively. |
Earnings (Loss) Per Share |
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Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings (Loss) Per Share | Earnings (Loss) Per Share The following table presents a reconciliation of net loss attributable to common stockholders and shares used in calculating basic and diluted earnings (loss) per share, or EPS, for the three months ended March 31, 2016 and 2015:
The Company excluded all unvested restricted common shares outstanding issued to the Advisor and the Company’s independent directors from the calculation of diluted loss per common share as the effect would have been antidilutive. |
Related Party Arrangements |
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Related Party Arrangements | Related Party Arrangements The Company has entered into the Advisory Agreement with the Advisor. Pursuant to the Advisory Agreement, the Company is obligated to pay the Advisor specified fees upon the provision of certain services related to the investment of funds in real estate and real estate-related investments, the management of the Company’s investments and for other services (including, but not limited to, the disposition of investments). Subject to the limitations described below, the Company is also obligated to reimburse the Advisor and its affiliates for organization and offering costs incurred by the Advisor and its affiliates on behalf of the Company, and the Company is obligated to reimburse the Advisor and its affiliates for acquisition and origination expenses and certain operating expenses incurred on behalf of the Company or incurred in connection with providing services to the Company. Amounts attributable to the Advisor and its affiliates incurred for the three months ended March 31, 2016 and 2015 and amounts outstanding to the Advisor and its affiliates as of March 31, 2016 and December 31, 2015 are as follows:
Investment Management Fee The Company pays the Advisor a monthly investment management fee equal to one-twelfth of 0.80% of (1) the cost of real properties and real estate-related assets acquired directly by the Company or (2) the Company’s allocable cost of each real property or real estate-related asset acquired through a joint venture. Such fee is calculated including acquisition fees, acquisition expenses and any debt attributable to such investments, or the Company’s proportionate share thereof in the case of investments made through joint ventures. Acquisition Fees and Expenses The Company pays the Advisor an acquisition fee equal to 2.0% of (1) the cost of investment, as defined in the Advisory Agreement, in connection with the acquisition or origination of any type of real property or real estate-related asset acquired directly by the Company or (2) the Company’s allocable portion of the purchase price in connection with the acquisition or origination of any type of real property or real estate-related asset acquired through a joint venture, including any acquisition and origination expenses and any debt attributable to such investments. In addition to acquisition fees, the Company reimburses the Advisor for amounts directly incurred by the Advisor or its affiliates, including personnel-related costs for acquisition due diligence, legal and non-recurring management services, and amounts the Advisor pays to third parties in connection with the selection, acquisition or development of a property or acquisition of real estate-related assets, whether or not the Company ultimately acquires the property or the real estate-related assets. The Charter limits the Company’s ability to pay acquisition fees if the total of all acquisition fees and expenses relating to the purchase would exceed 6.0% of the contract purchase price. Under the Charter, a majority of the Company’s board of directors, including a majority of the independent directors, is required to approve any acquisition fees (or portion thereof) that would cause the total of all acquisition fees and expenses relating to an acquisition to exceed 6.0% of the contract purchase price. In connection with the purchase of securities, the acquisition fee may be paid to an affiliate of the Advisor that is registered as a FINRA member broker-dealer if applicable FINRA rules would prohibit the payment of the acquisition fee to a firm that is not a registered broker-dealer. Property Management Fees and Expenses The Company has entered into Property Management Agreements with Steadfast Management Company, Inc., an affiliate of the Sponsor (the “Property Manager”), in connection with the acquisition of each of the Company’s properties (other than EBT Lofts, Library Lofts and Stuart Hall Lofts, which are managed by an unaffiliated third-party management company). The property management fee payable with respect to each property under the Property Management Agreements (each a “Property Management Agreement”) ranges from 2.50% to 3.75% of the annual gross revenue collected, which is usual and customary for comparable property management services rendered to similar properties in similar geographic markets, as determined by the Advisor and approved by a majority of the Company’s board of directors, including a majority of the independent directors. The Property Manager also receives an oversight fee of 1% of gross revenues at certain of the properties at which it does not serve as a property manager. Generally, each Property Management Agreement has an initial one year term and will continue thereafter on a month-to-month basis unless either party gives a 60 day prior notice of its desire to terminate the Property Management Agreement, provided that the Company may terminate the Property Management Agreement at any time without cause or upon an uncured breach of the Property Management Agreement upon 30 days prior written notice to the Property Manager. In addition to the property management fee, the Property Management Agreements also specify certain other fees payable to the Property Manager or its affiliates, including fees for benefit administration, information technology infrastructure, licenses, and support and training services. The Company also reimburses the Property Manager for the salaries and related benefits of on-site property management employees. Construction Management Fees The Company has entered into Construction Management Agreements with Pacific Coast Land and Construction, Inc., an affiliate of the Sponsor (the “Construction Manager”), in connection with the planned capital improvements and renovation for certain of the Company’s properties. The construction management fee payable with respect to each property under the Construction Management Agreements (each a “Construction Management Agreement”) ranges from 5.0% to 12.0% of the costs of the improvements for which the Construction Manager has planning and oversight authority. Generally, each Construction Management Agreement has a term equal to the planned renovation timeline unless either party gives a 30 day prior notice of its desire to terminate the Construction Management Agreement. Construction management fees are capitalized to the respective real estate properties in the period in which they are incurred, as such costs relate to capital improvements and renovations for units taken out of service while they undergo the planned renovation. Other Operating Expense Reimbursement In addition to the various fees paid to the Advisor, the Company is obligated to pay directly or reimburse all expenses incurred by the Advisor in providing services to the Company, including the Company’s allocable share of the Advisor’s overhead, such as rent, employee costs, utilities and information technology costs. The Company will not reimburse the Advisor for employee costs in connection with services for which the Advisor or its affiliates receive acquisition fees or disposition fees or for the salaries the Advisor pays to the Company’s executive officers. The Charter limits the Company’s total operating expenses during any four fiscal quarters to the greater of 2% of the Company’s average invested assets or 25% of the Company’s net income for the same period (the “2% 25% Limitation”). The Company may reimburse the Advisor, at the end of each fiscal quarter, for operating expenses incurred by the Advisor; provided, however, that the Company shall not reimburse the Advisor at the end of any fiscal quarter for operating expenses that exceed the 2%/25% Limitation unless the independent directors have determined that such excess expenses were justified based on unusual and non-recurring factors. The Advisor must reimburse the Company for the amount by which the Company’s operating expenses for the preceding four fiscal quarters then ended exceed the 2%/25% Limitation unless the independent directors have determined that such excess expenses were justified. For purposes of determining the 2%/25% Limitation amount, “average invested assets” means the average monthly book value of the Company’s assets invested directly or indirectly in equity interests and loans secured by real estate during the 12-month period before deducting depreciation, bad debts or other non-cash reserves. “Total operating expenses” means all expenses paid or incurred by the Company that are in any way related to the Company’s operation, including the Company’s allocable share of Advisor overhead and investment management fees, but excluding (a) the expenses of raising capital such as organization and offering expenses, legal, audit, accounting, underwriting, brokerage, listing, registration and other fees, printing and other such expenses and taxes incurred in connection with the issuance, distribution, transfer, listing and registration of shares of the Company’s common stock; (b) interest payments; (c) taxes; (d) non-cash expenditures such as depreciation, amortization and bad debt reserves; (e) reasonable incentive fees based on the gain in the sale of the Company’s assets; (f) acquisition fees and acquisition expenses (including expenses relating to potential acquisitions that the Company does not close); (g) real estate commissions on the resale of investments; and (h) other expenses connected with the acquisition, disposition, management and ownership of investments (including the costs of foreclosure, insurance premiums, legal services, maintenance, repair and improvement of real property). At March 31, 2016, the Company’s allocable share of the Advisor’s overhead expenses did not exceed the 2%/25% Limitation test. Disposition Fee The Company will pay the Advisor a disposition fee in connection with a sale of a property or real estate-related asset and in the event of the sale of the entire Company, in either case when the Advisor or its affiliates provides a substantial amount of services as determined by a majority of the Company’s independent directors. With respect to a sale of a property or real estate-related asset, the Company will pay the Advisor a disposition fee equal to 1.5% of the contract sales price of the investment sold. With respect to a final liquidity event, the Company will pay the Advisor a disposition fee equal to (i) 0.5% of the total consideration paid in a final liquidity event if the price per share paid to stockholders is less than or equal to $9.00; (ii) 0.75% of the total consideration paid in a final liquidity event if the price per share paid to stockholders is between $9.01 and $10.24; (iii) 1.00% of the total consideration paid in a final liquidity event if the price per share paid to stockholders is between $10.25 and $11.24; (iv) 1.25% of the total consideration paid in a final liquidity event if the price per share paid to stockholders is between $11.25 and $12.00; and (v) 1.50% of the total consideration paid in a final liquidity event if the price per share paid to stockholders is greater than or equal to $12.01. To the extent the disposition fee is paid upon the sale of any assets other than real property, it will be included as an operating expense for purposes of the 2%/25% Limitation. In connection with the sale of securities, the disposition fee may be paid to an affiliate of the Advisor that is registered as a FINRA member broker-dealer if applicable FINRA rules would prohibit the payment of the disposition fee to a firm that is not a registered broker-dealer. The Charter limits the maximum amount of the disposition fees payable to the Advisor for the sale of any real property to the lesser of one-half of the brokerage commission paid or 3% of the contract sales price, but in no event shall the total real estate commissions paid, including any disposition fees payable to the Advisor, exceed 6% of the contract sales price. Restricted Stock Agreement On June 11, 2014, the Company entered into a restricted stock agreement with the Advisor whereby the Company issued to the Advisor 488,281.25 restricted shares of the Company’s common stock at a fair market value of $10.24 per share in satisfaction of certain deferred fees due to the Advisor in the aggregate amount of $5,000,000. The shares of restricted stock vest and become non-forfeitable upon the earliest to occur of (i) 50% at December 31, 2015 and 50% at December 31, 2016, (ii) certain liquidity events of the Company, (iii) the Company’s cumulative modified funds from operations exceed the lesser of (a) the cumulative amount of distributions paid to the Company’s stockholders or (b) an amount that is equal to a 7.0% cumulative, non-compounded annual return on the Company’s stockholders’ invested capital, or (iv) the Company’s termination of, or failure to renew, the Advisory Agreement other than for “cause” (as defined in the Advisory Agreement). The shares of restricted stock shall be forfeited if the Advisor is terminated for any reason other than (iv) above. |
Incentive Award Plan and Independent Director Compensation |
3 Months Ended |
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Mar. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Incentive Award Plan and Independent Director Compensation | Incentive Award Plan and Independent Director Compensation The Company has adopted an incentive plan (the “Incentive Award Plan”) that provides for the grant of equity awards to its employees, directors and consultants and those of the Company’s affiliates. The Incentive Award Plan authorizes the grant of non-qualified and incentive stock options, restricted stock awards, restricted stock units, stock appreciation rights, dividend equivalents and other stock-based awards or cash-based awards. No awards have been granted under the Incentive Award Plan as of March 31, 2016 and December 31, 2015, except those awards granted to the independent directors as described below. Under the Company’s independent directors’ compensation plan, which is a sub-plan of the Incentive Award Plan, each of the Company’s independent directors was entitled to receive 5,000 shares of restricted common stock in connection with the initial meeting of the Company’s full board of directors. The Company’s board of directors, and each of the independent directors, agreed to delay the initial grant of restricted stock until the Company raised $2,000,000 in gross offering proceeds in the Private Offering. Each subsequent independent director that joins the Company’s board of directors receives 5,000 of restricted common stock upon election to the Company’s board of directors. In addition, on the date following an independent director’s re-election to the Company’s board of directors, he or she receives 2,500 shares of restricted common stock. One-fourth of the shares of restricted common stock generally vest and become non-forfeitable upon issuance and the remaining portion will vest in three equal annual installments beginning on the date of grant and ending on the third anniversary of the date of grant; provided, however, that the restricted stock will become fully vested and become non-forfeitable on the earlier to occur of (1) the termination of the independent director’s service as a director due to his or her death or disability, or (2) a change in control of the Company and as otherwise provided in the Incentive Award Plan. On August 10, 2015, the Company’s board of directors granted 2,000 shares of restricted common stock pursuant to the Incentive Award Plan to each of Larry H. Dale and Kerry D. Vandell in appreciation for their service as independent directors and commitment to the Company for their prior years of service as independent directors, all of which vested immediately. On August 11, 2015, the Company granted 5,000 shares of restricted common stock to its new independent director. The Company recorded stock-based compensation expense of $12,864 and $22,884 for the three months ended March 31, 2016 and 2015, respectively. |
Commitments and Contingencies |
3 Months Ended |
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Mar. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Economic Dependency The Company is dependent on the Advisor and its affiliates for certain services that are essential to the Company, including the identification, evaluation, negotiation, purchase, and disposition of real estate and real estate-related investments; management of the daily operations of the Company’s real estate and real estate-related investment portfolio; and other general and administrative responsibilities. In the event that these companies are unable to provide the respective services, the Company will be required to obtain such services from other sources. Concentration of Credit Risk The geographic concentration of the Company’s portfolio makes it particularly susceptible to adverse economic developments in the Houston, Texas, Chicago, Illinois and Austin, Texas apartment markets. Any adverse economic or real estate developments in these markets, such as business layoffs or downsizing, relocations of businesses, increased competition from other apartment communities, decrease in demand for apartments or any other changes, could adversely affect the Company’s operating results and its ability to make distributions to stockholders. Environmental As an owner of real estate, the Company is subject to various environmental laws of federal, state and local governments. The Company is not aware of any environmental liability that could have a material adverse effect on its financial condition or results of operations. However, changes in applicable environmental laws and regulations, the uses and conditions of properties in the vicinity of the Company’s properties, the activities of its tenants and other environmental conditions of which the Company is unaware with respect to the properties could result in future environmental liabilities. Legal Matters From time to time, the Company is subject, or party, to legal proceedings that arise in the ordinary course of its business. Management is not aware of any legal proceedings of which the outcome is reasonably likely to have a material adverse effect on the Company’s results of operations or financial condition nor is the Company aware of any such legal proceedings contemplated by government agencies. |
Derivative Financial Instruments |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Financial Instruments | Derivative Financial Instruments The Company uses interest rate derivatives with the objective of managing exposure to interest rate movements thereby minimizing the effect of interest rate changes and the effect they could have on future cash flows. Interest rate cap agreements are used to accomplish this objective. The following table provides the terms of the Company’s interest rate derivative instruments that were in effect at March 31, 2016 and December 31, 2015:
The interest rate cap agreements are not designated as cash flow hedges. Accordingly, the Company records any changes in the fair value of the interest rate cap agreements as interest expense. The change in the fair value of the interest rate cap agreements for the three months ended March 31, 2016 and 2015 resulted in an unrealized loss of $232,712 and $1,021,586, respectively, which is included in interest expense in the accompanying consolidated statements of operations. The fair value of interest rate cap agreements of $65,431 and $298,143 are included in other assets, net on the accompanying consolidated balance sheets. |
Subsequent Events |
3 Months Ended |
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Mar. 31, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Distributions Paid On April 1, 2016, the Company paid distributions of $4,647,928, which related to distributions declared for each day in the period from March 1, 2016 through March 31, 2016. All such distributions were paid in cash. On May 2, 2016, the Company paid distributions of $4,497,565, which related to distributions declared for each day in the period from April 1, 2016 through April 30, 2016. All such distributions were paid in cash. Redemption On April 29, 2016, the Company redeemed 96,215 shares of its common stock for a total redemption value of $1,000,000, or $10.39 per share, pursuant to the Company’s share repurchase program. Distributions Declared On May 10, 2016, the Company’s board of directors approved and authorized a daily distribution to stockholders of record as of the close of business on each day of the period commencing on July 1, 2016 and ending on September 30, 2016. The distributions will be equal to $0.001958 per share of the Company’s common stock. The distributions for each record date in July 2016, August 2016 and September 2016 will be paid in August 2016, September 2016 and October 2016, respectively. The distributions will be payable to stockholders from legally available funds therefor. |
Summary of Significant Accounting Policies (Policies) |
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Mar. 31, 2016 | |||||||||||||
Accounting Policies [Abstract] | |||||||||||||
Principles of Consolidation | Principles of Consolidation and Basis of Presentation The consolidated financial statements include the accounts of the Company, the Operating Partnership and its subsidiaries. All significant intercompany balances and transactions are eliminated in consolidation. The financial statements of the Company’s subsidiaries are prepared using accounting policies consistent with those of the Company. |
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Basis of Presentation | The accompanying unaudited consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information as contained within the Financial Accounting Standards Board (“FASB”), Accounting Standards Codification (“ASC”) and the rules and regulations of the SEC, including the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, the unaudited consolidated financial statements do not include all of the information and footnotes required by GAAP for audited financial statements. In the opinion of management, the financial statements for the unaudited interim periods presented include all adjustments that are of a normal and recurring nature and necessary for a fair and consistent presentation of the results of such periods. Operating results for the three months ended March 31, 2016 are not necessarily indicative of the results that may be expected for the year ending December 31, 2016. The unaudited consolidated financial statements herein should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015. |
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Use of Estimates | Use of Estimates The preparation of the consolidated financial statements in conformity with GAAP requires the Company to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could materially differ from those estimates. |
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Reclassification | Reclassifications Certain prior year amounts in the consolidated financial statements have been reclassified to conform with the current year presentation. These reclassifications have not changed the results of operations of prior periods. During the three months ended March 31, 2016, the Company adopted new accounting guidance to simplify the presentation of debt issuance costs. As a result, net deferred financing costs of $6,697,472 related to mortgage notes payable as of December 31, 2015, were reclassified from other assets, net to mortgage notes payable, net on the consolidated balance sheets. |
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Fair Value Measurements | Fair Value Measurements Under GAAP, the Company is required to measure certain financial instruments at fair value on a recurring basis. In addition, the Company is required to measure other assets and liabilities at fair value on a non-recurring basis (e.g., carrying value of impaired real estate loans receivable and long-lived assets). Fair value is defined as the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The GAAP fair value framework uses a three-tiered approach. Fair value measurements are classified and disclosed in one of the following three categories:
When available, the Company utilizes quoted market prices from an independent third-party source to determine fair value and will classify such items in Level 1 or Level 2. In instances where the market is not active, regardless of the availability of a nonbinding quoted market price, observable inputs might not be relevant and could require the Company to make a significant adjustment to derive a fair value measurement. Additionally, in an inactive market, a market price quoted from an independent third party may rely more on models with inputs based on information available only to that independent third party. When the Company determines the market for a financial instrument owned by the Company to be illiquid or when market transactions for similar instruments do not appear orderly, the Company uses several valuation sources (including internal valuations, discounted cash flow analysis and quoted market prices) and will establish a fair value by assigning weights to the various valuation sources. The following describes the valuation methodologies used by the Company to measure fair value, including an indication of the level in the fair value hierarchy in which each asset or liability is generally classified. Interest rate cap agreements — These derivatives did not qualify as fair value hedges and are recorded at fair value. Fair value was based on a model-driven valuation using the associated variable rate curve and an implied market volatility, both of which were observable at commonly quoted intervals for the full term of the interest rate cap agreements. Therefore, the Company’s interest rate cap agreements were classified within Level 2 of the fair value hierarchy and are included in other assets, net in the accompanying consolidated balance sheets. |
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Fair Value of Financial Instruments | Fair Value of Financial Instruments The accompanying consolidated balance sheets include the following financial instruments: cash and cash equivalents, restricted cash, rents and other receivables, accounts payable and accrued liabilities, distributions payable, due to affiliates and notes payable. The Company considers the carrying value of cash and cash equivalents, restricted cash, rents and other receivables, accounts payable and accrued liabilities and distributions payable to approximate the fair value of these financial instruments based on the short duration between origination of the instruments and their expected realization. The Company considers the carrying value of the revolving line of credit to approximate fair value based on time to maturity. The fair value of amounts due to affiliates is not determinable due to the related party nature of such amounts. The fair value of the mortgage notes payable is estimated using a discounted cash flow analysis using borrowing rates available to the Company for debt instruments with similar terms and maturities. |
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Distribution Policy | Distributions to stockholders are determined by the board of directors of the Company and are dependent upon a number of factors relating to the Company, including funds available for the payment of distributions, financial condition, the timing of property acquisitions, capital expenditure requirements and annual distribution requirements in order for the Company to qualify as a REIT under the Internal Revenue Code. Distribution Policy The Company has elected to be taxed as a REIT and to operate as a REIT beginning with its taxable year ending December 31, 2010. To maintain its qualification as a REIT, the Company intends to make distributions each taxable year equal to at least 90% of its REIT taxable income (which is determined without regard to the dividends paid deduction or net capital gain and which does not necessarily equal net income as calculated in accordance with GAAP). |
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Per Share Data | Per Share Data Basic earnings (loss) per share attributable for all periods presented are computed by dividing net income (loss) attributable to controlling interest by the weighted average number of shares of the Company’s common stock outstanding during the period. Diluted earnings (loss) per share are computed based on the weighted average number of shares of the Company’s common stock and all potentially dilutive securities, if any. Distributions declared per common share assumes each share was issued and outstanding each day during the period. The Company’s unvested shares of restricted common stock contain non-forfeitable rights to dividends and are considered to be participating securities in accordance with GAAP and, therefore, are included in the computation of earnings (loss) per share under the two-class method. Under the two-class method, net losses are not allocated to participating securities unless the holder of the security has a contractual obligation to share in the losses. The unvested shares of restricted common stock are not allocated losses as the awards do not have a contractual obligation to share in the losses of the Company. The two-class method is an earnings (loss) allocation formula that determines earnings (loss) per share for each class of common shares and participating securities according to dividends declared and participation rights in undistributed earnings. |
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Segment Disclosure | Segment Disclosure The Company has determined that it has one reportable segment with activities related to investing in multifamily properties. The Company’s investments in real estate are in different geographic regions, and management evaluates operating performance on an individual asset level. However, as each of the Company’s assets has similar economic characteristics, tenants and products and services, its assets have been aggregated into one reportable segment. |
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Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). The new guidance requires an entity to recognize the revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. The new guidance supersedes the revenue requirements in Revenue Recognition (Topic 605) and most industry-specific guidance throughout the Industry Topics of the Codification. The new guidance does not apply to lease contracts within the scope of Leases (Topic 840). In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606), which delayed the effective date of the new guidance by one year, which will result in the new guidance being effective for fiscal years, and interim periods within those years, beginning after December 15, 2017, and is to be applied retrospectively. Early adoption is permitted, but can be no earlier than the original public entity effective date of fiscal years, and interim periods within those years, beginning after December 15, 2016. The Company is still evaluating the impact of adopting the new guidance on its financial statements, but does not expect the adoption to have a material impact on its financial statements. In August 2014, the FASB issued ASU 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, that requires management to evaluate whether there are conditions and events that raise substantial doubt about an entity’s ability to continue as a going concern. Until now, the requirement to perform a going concern evaluation existed only in auditing standards. The new guidance requires management to evaluate relevant conditions, events and certain management plans that are known or reasonably knowable as of the evaluation date when determining whether substantial doubt about an entity’s ability to continue as a going concern exists. Management will be required to make this evaluation for both annual and interim reporting periods. The standard states substantial doubt about an entity’s ability to continue as a going concern exists when relevant conditions and events, considered in the aggregate, indicate that it is probable that the entity will be unable to meet its obligations as they become due within one year after the date that the financial statements are issued. The guidance is effective for annual periods ending after December 15, 2016 and for annual periods and interim periods thereafter. Early adoption is permitted. The Company does not expect there to be a material impact from adopting this new guidance. In January 2015, the FASB issued ASU 2015-01, Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items, that eliminates the concept of the extraordinary items from GAAP. The objective of the new guidance is to simplify the income statement presentation requirements of GAAP by altogether removing the concept of extraordinary items from consideration. The guidance is effective for annual periods, including interim periods within that period, beginning after December 15, 2015. The Company did not experience a material impact from adopting this new guidance. In February 2015, the FASB issued ASU 2015-02, Consolidation, which makes changes to both the variable interest model and the voting model of consolidation. Under ASU 2015-02, companies will need to re-evaluate whether an entity meets the criteria to be considered a variable interest entity (“VIE”) or whether the consolidation of an entity should be assessed under the voting model. The new standard specifically eliminates the presumption in the current voting model that a general partner controls a limited partnership or similar entity unless that presumption can be overcome. The new standard was effective for the Company beginning on January 1, 2016. The adoption of the new standard did not result in the consolidation of entities not previously consolidated or the deconsolidation of any entities previously consolidated. Upon adopting the new standard, the Operating Partnership became a VIE as the limited partner lacks substantive kick-out rights and substantive participating rights. The Company is the primary beneficiary of, and continues to consolidate, the Operating Partnership determined to be a VIE. In April 2015, the FASB issued ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs, as amended in August 2015 by ASU 2015-15, Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements, that will require that debt issuance costs be presented in the balance sheet as a direct deduction from the carrying amount of debt liability, consistent with debt discounts or premiums. The FASB will permit debt issuance costs related to line-of-credit arrangements to be deferred and presented as an asset and subsequently amortized over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement.The recognition and measurement guidance for debt issuance costs will not be affected by the new guidance. The guidance requires retrospective application and is effective for annual periods, including interim periods within that period, beginning after December 15, 2015. Early adoption is permitted. Upon adoption, the Company reclassified net debt issuance costs of $6,367,184 and $6,697,472 as of March 31, 2016 and December 31, 2015, respectively, related to mortgage notes payable from other assets, net to mortgage notes payable, net on the consolidated balance sheets. In February 2016, the FASB issued ASU 2016-02, Leases, amending the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets and making targeted changes to lessor accounting. The new standard requires a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief. The guidance will be effective in the first quarter of 2019 and allows for early adoption. The Company is assessing whether the new standard will have a material effect on its financial position or results of operations. |
Summary of Significant Accounting Policies (Tables) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Assets Required to be Measured at Fair Value on a Recurring Basis | The following table reflects the Company’s assets required to be measured at fair value on a recurring basis on the consolidated balance sheets:
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Real Estate (Tables) |
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Real Estate [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accumulated Depreciation and Amortization Related to the Consolidated Real Estate Properties and Related Intangibles | As of March 31, 2016 and December 31, 2015, accumulated depreciation and amortization related to the Company’s consolidated real estate properties and related intangibles were as follows:
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Schedule of Future Amortization of Acquired Other Intangible Assets | The future amortization of the Company’s acquired other intangible assets as of March 31, 2016 and thereafter is as follows:
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Schedule of Future Minimum Rental Receipts from Properties under Non-cancelable Operating Leases Attributable to Commercial Office Tenants | The future minimum rental receipts from the Company’s properties under non-cancelable operating leases attributable to commercial office tenants as of March 31, 2016 and thereafter is as follows:
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Other Assets, Net (Tables) |
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Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Deferred Financing Costs and Other Assets, Net of Accumulated Amortization | As of March 31, 2016 and December 31, 2015, other assets, net of accumulated amortization, consisted of:
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Debt (Tables) |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Notes Payable Secured by Real Property | The following is a summary of mortgage notes payable, net secured by real property as of March 31, 2016 and December 31, 2015:
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Summary of Debt Premiums and Discounts | The following table summarizes the debt premiums and discounts as of March 31, 2016, including the unamortized portion included in the principal balance as well as amounts amortized as an offset to interest expense in the accompanying consolidated statements of operations:
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Summary of Deferred Financing Costs | The following table summarizes the deferred financing costs, net related to mortgage notes payable as of March 31, 2016 and December 31, 2015:
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Summary of Aggregate Maturities | The following is a summary of the Company’s aggregate maturities as of March 31, 2016:
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Stockholders' Equity (Tables) |
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Schedule of Restricted Stock Issued to Independent Directors as Compensation | The issuance and vesting activity for the three months ended March 31, 2016 and for the years ended December 31, 2015 and 2014 for the restricted stock issued to the Company’s independent directors as compensation for services in connection with their initial election or re-election to the board of directors at the Company’s annual meeting, upon their departure from the board of directors, or in appreciation of their service and commitment to the Company is as follows:
Additionally, the weighted average fair value of restricted stock issued to the Company’s independent directors for the three months ended March 31, 2016 and for the years ended December 31, 2015 and 2014 is as follows:
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Schedule of Repurchase Prices Under Share Repurchase Plan | The purchase price for shares repurchased under the Company’s share repurchase program is as follows:
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Earnings (Loss) Per Share (Tables) |
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Schedule of Reconciliation of Net Loss Attributable to Common Stockholders and Shares used in Calculating Basic and Diluted Earnings (Loss) Per Share | The following table presents a reconciliation of net loss attributable to common stockholders and shares used in calculating basic and diluted earnings (loss) per share, or EPS, for the three months ended March 31, 2016 and 2015:
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Related Party Arrangements (Tables) |
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Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Amounts Attributable to the Advisor and its Affiliates | Amounts attributable to the Advisor and its affiliates incurred for the three months ended March 31, 2016 and 2015 and amounts outstanding to the Advisor and its affiliates as of March 31, 2016 and December 31, 2015 are as follows:
|
Derivative Financial Instruments (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Interest Rate Derivative Instruments | The following table provides the terms of the Company’s interest rate derivative instruments that were in effect at March 31, 2016 and December 31, 2015:
|
Organization and Business - Narrative - Private Offering (Details) - Private Offering [Member] - USD ($) |
3 Months Ended | 9 Months Ended | |
---|---|---|---|
Mar. 31, 2016 |
Jul. 09, 2010 |
Oct. 13, 2009 |
|
Class of Stock [Line Items] | |||
Value of shares in private offering | $ 94,000,000 | ||
Share price (in dollars per share) | $ 9.40 | ||
Issuance of common stock (in shares) | 637,279 | ||
Proceeds from issuance of common stock | $ 2,000,000 | $ 5,844,325 |
Summary of Significant Accounting Policies - Narrative - Reclassifications (Details) - USD ($) |
Mar. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Deferred financing costs, net | $ 61,427 | $ 113,183 |
Other Assets [Member] | Accounting Standards Update 2015-03 [Member] | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Deferred financing costs, net | (6,367,184) | (6,697,472) |
Mortgage Notes Payable [Member] | Accounting Standards Update 2015-03 [Member] | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Deferred financing costs, net | $ 6,367,184 | $ 6,697,472 |
Summary of Significant Accounting Policies - Summary of Assets Required to be Measured at Fair Value on a Recurring Basis (Details) - Interest Rate Cap [Member] - Fair Value, Measurements, Recurring [Member] - USD ($) |
Mar. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Level 1 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Interest rate cap agreements | $ 0 | $ 0 |
Level 2 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Interest rate cap agreements | 65,431 | 298,143 |
Level 3 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Interest rate cap agreements | $ 0 | $ 0 |
Summary of Significant Accounting Policies - Narrative - Fair Value of Financial Instruments (Details) - USD ($) |
Mar. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Mortgage notes payable, net | $ 1,111,838,945 | $ 1,115,752,899 |
Estimate of Fair Value Measurement [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Mortgage notes payable at fair value | 1,130,001,965 | 1,118,126,231 |
Reported Value Measurement [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Mortgage notes payable, net | $ 1,111,838,945 | $ 1,115,752,899 |
Summary of Significant Accounting Policies - Narrative - Distribution Policy (Details) - $ / shares |
3 Months Ended | 12 Months Ended | |
---|---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
Dec. 31, 2015 |
|
Accounting Policies [Abstract] | |||
Common share, distribution rate per share per day, declared (in dollars per share) | $ 0.001964 | $ 0.001964 | |
Distributions declared per common share (in dollars per share) | $ 0.178 | $ 0.177 |
Summary of Significant Accounting Policies - Narrative - Segment Disclosure (Details) |
3 Months Ended |
---|---|
Mar. 31, 2016
segment
| |
Accounting Policies [Abstract] | |
Number of reportable segments | 1 |
Real Estate - Schedule of Future Amortization of Acquired Other Intangible Assets (Details) - Other Intangible Assets [Member] |
Mar. 31, 2016
USD ($)
|
---|---|
Finite-Lived Intangible Assets [Line Items] | |
July 1 through December 31, 2016 | $ 114,876 |
2017 | 153,168 |
2018 | 153,168 |
2019 | 153,168 |
2020 | 153,168 |
Thereafter | 1,485,560 |
Future amortization of acquired other intangible assets | $ 2,213,108 |
Real Estate - Schedule of Future Minimum Rental Receipts from Properties under Non-cancelable Operating Leases Attributable to Commercial Office Tenants (Details) |
Mar. 31, 2016
USD ($)
|
---|---|
Real Estate [Abstract] | |
July 1 through December 31, 2016 | $ 56,037 |
2017 | 67,120 |
2018 | 69,136 |
2019 | 58,760 |
Total future minimum rental receipts | $ 251,053 |
Other Assets, Net - Schedule of Deferred Financing Costs and Other Assets, Net of Accumulated Amortization (Details) - USD ($) |
Mar. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Deferred financing costs | $ 660,585 | $ 660,585 |
Less: accumulated amortization | (599,158) | (547,402) |
Deferred financing costs, net | 61,427 | 113,183 |
Prepaid expenses | 1,727,750 | 2,648,238 |
Interest rate caps | 65,431 | 298,143 |
Deposits | 1,238,140 | 1,269,287 |
Deferred financing costs and other assets, net | $ 3,092,748 | $ 4,328,851 |
Debt - Summary of Debt Premiums and Discounts (Details) - USD ($) |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
Dec. 31, 2015 |
|
Debt Instrument [Line Items] | |||
Amortization of debt premium (discount) | $ 308,698 | $ 308,698 | |
Notes Payable to Banks [Member] | |||
Debt Instrument [Line Items] | |||
Premium/discount, net | 3,143,306 | $ 3,452,005 | |
Amortization of debt premium (discount) | $ 308,698 | $ (308,698) |
Debt - Summary of Deferred Financing Costs (Details) - USD ($) |
Mar. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Debt Instrument [Line Items] | ||
Deferred financing costs | $ 660,585 | $ 660,585 |
Less: accumulated amortization | (599,158) | (547,402) |
Deferred financing costs, net | 61,427 | 113,183 |
Notes Payable to Banks [Member] | ||
Debt Instrument [Line Items] | ||
Deferred financing costs | 10,140,097 | 10,140,097 |
Less: accumulated amortization | (3,772,913) | (3,442,625) |
Deferred financing costs, net | $ 6,367,184 | $ 6,697,472 |
Debt - Summary of Aggregate Maturities (Details) |
Mar. 31, 2016
USD ($)
|
---|---|
Debt Disclosure [Abstract] | |
Total notes payable, net | $ 1,131,062,823 |
Remainder of 2016 | 28,684,494 |
2017 | 52,802,464 |
2018 | 84,365,561 |
2019 | 94,045,493 |
2020 | 291,404,511 |
Thereafter | $ 579,760,300 |
Stockholders' Equity - Narrative - General (Details) - $ / shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Dec. 31, 2015 |
|
Class of Stock [Line Items] | ||
Common and preferred stock, shares authorized (in shares) | 1,100,000,000 | |
Preferred stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common Stock [Member] | ||
Class of Stock [Line Items] | ||
Common stock, shares authorized (in shares) | 999,999,000 | 999,999,000 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Convertible Stock [Member] | ||
Class of Stock [Line Items] | ||
Common stock, shares authorized (in shares) | 1,000 | 1,000 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Steadfast Income Advisor, LLC [Member] | Convertible Stock [Member] | ||
Class of Stock [Line Items] | ||
Stock issued during period, shares, new issues (in shares) | 1,000 |
Stockholders' Equity - Schedule of Restricted Stock Issued to Independent Directors as Compensation (Details) - Restricted Stock [Member] - $ / shares |
3 Months Ended | 12 Months Ended | |
---|---|---|---|
Mar. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |||
Nonvested shares at the beginning of the year (in shares) | 11,250 | 16,875 | 18,750 |
Granted shares (in shares) | 0 | 14,000 | 10,000 |
Vested shares (in shares) | 0 | (19,625) | (11,875) |
Nonvested shares at the end of the year (in shares) | 11,250 | 11,250 | 16,875 |
Director [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |||
Weighted Average Fair Value (in dollars per share) | $ 10.35 | $ 10.24 |
Stockholders' Equity - Narrative - Preferred Stock (Details) |
3 Months Ended | |
---|---|---|
Mar. 31, 2016
class
shares
|
Dec. 31, 2015
shares
|
|
Equity [Abstract] | ||
Preferred stock, number of classes or series the Board of Directors is authorized to classify or reclassify | class | 1 | |
Preferred stock, number of classes or series the Board of Directors is authorized to issue | class | 1 | |
Preferred stock, shares outstanding (in shares) | shares | 0 | 0 |
Preferred stock, shares issued (in shares) | shares | 0 | 0 |
Stockholders' Equity - Narrative - Distribution Reinvestment Plan (Details) - Distribution Reinvestment Plan [Member] - USD ($) |
Mar. 31, 2016 |
Sep. 10, 2012 |
Jul. 23, 2009 |
---|---|---|---|
Class of Stock [Line Items] | |||
Share price (in dollars per share) | $ 9.73 | $ 9.5 | |
Sales commissions or dealer manager fees payable | $ 0 |
Stockholders' Equity - Schedule of Repurchase Prices Under Share Repurchase Plan (Details) - Share Repurchase Plan [Member] - Common Stock [Member] |
3 Months Ended |
---|---|
Mar. 31, 2016 | |
Class of Stock [Line Items] | |
Stock repurchase plan, repurchase price percentage, after primary offering, less than 1 year | 0.00% |
Stock repurchase plan, repurchase price percentage, after primary offering, anniversary year 1 | 92.50% |
Stock repurchase plan, repurchase price percentage, after primary offering, anniversary year 2 | 95.00% |
Stock repurchase plan, repurchase price percentage, after primary offering, anniversary year 3 | 97.50% |
Stock repurchase plan, repurchase price percentage, after primary offering, anniversary year 4 | 100.00% |
Required holding period to be eligible to redeem shares under share repurchase plan | 1 year |
Stockholders' Equity - Narrative - Distributions Declared (Details) - USD ($) |
3 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|
Sep. 10, 2012 |
Sep. 09, 2012 |
Mar. 31, 2016 |
Mar. 31, 2015 |
Dec. 31, 2015 |
|
Class of Stock [Line Items] | |||||
Common share, distribution rate per share per day, declared (in dollars per share) | $ 0.001964 | $ 0.001964 | |||
Distributions payable | $ 4,647,928 | $ 4,668,261 | |||
Common Stock [Member] | |||||
Class of Stock [Line Items] | |||||
Common share, distribution rate per share per day, declared (in dollars per share) | $ 0.001964 | $ 0.001917 | $ 0.001964 | $ 0.001964 | |
Less: dividends declared on participating securities | $ 13,649,330 | $ 13,585,679 | |||
Common stock, distributions declared pursuant to DRP | $ 0 | $ 78 | |||
Common stock, distributions declared pursuant to DRP (in shares) | 0 | 8 | |||
Distributions payable | $ 4,647,928 | $ 4,668,261 |
Stockholders' Equity - Narrative - Distributions Paid (Details) - USD ($) |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Class of Stock [Line Items] | ||
Distributions to common stockholders | $ 13,669,663 | $ 13,585,602 |
Distributions paid, common stock, including distribution reinvestment plan | $ 13,669,663 | $ 13,585,680 |
Common Stock [Member] | ||
Class of Stock [Line Items] | ||
Common stock, distributions for DRP (in shares) | 0 | 8 |
Distributions declared, DRP | $ 0 | $ 78 |
Earnings (Loss) Per Share - Schedule of Reconciliation of Net Loss Attributable to Common Stockholders and Shares used in Calculating Basic and Diluted Earnings (Loss) Per Share (Details) - USD ($) |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Earnings Per Share [Abstract] | ||
Net loss attributable to the Company | $ (3,618,142) | $ (3,830,646) |
Less: dividends declared on participating securities | 45,505 | 89,291 |
Net loss attributable to common stockholders | $ (3,663,647) | $ (3,919,937) |
Weighted average common shares outstanding - basic and diluted (in shares) | 76,350,555 | 76,353,484 |
Loss per common share - basic and diluted (in dollars per share) | $ (0.05) | $ (0.05) |
Related Party Arrangements - Narrative - Acquisition Fees and Expenses (Details) - Steadfast Income Advisor, LLC [Member] - Steadfast Income Advisor, LLC [Member] |
3 Months Ended |
---|---|
Mar. 31, 2016 | |
Investment Management Fees [Member] | |
Related Party Transaction [Line Items] | |
Investment management fee, percentage | 0.0667% |
Acquisition Fees and Expenses [Member] | |
Related Party Transaction [Line Items] | |
Acquisition fee, percentage of purchase price of real property or related asset | 2.00% |
Acquisition fees and expenses, maximum, percentage of contract purchase price | 6.00% |
Related Party Arrangements - Narrative - Construction Management Fees (Details) - Pacific Coast Land & Construction, Inc. [Member] - Affiliated Entity [Member] - Construction Management Agreement [Member] |
3 Months Ended |
---|---|
Mar. 31, 2016 | |
Related Party Transaction [Line Items] | |
Construction management agreement, termination notification period | 30 days |
Minimum [Member] | |
Related Party Transaction [Line Items] | |
Construction management fee, percent | 5.00% |
Maximum [Member] | |
Related Party Transaction [Line Items] | |
Construction management fee, percent | 12.00% |
Related Party Arrangements - Narrative - Other Operating Expense Reimbursements (Details) - Steadfast Income Advisor, LLC [Member] - Steadfast Income Advisor, LLC [Member] - Other Operating Expense Reimbursement [Member] |
3 Months Ended |
---|---|
Mar. 31, 2016
quarter
| |
Related Party Transaction [Line Items] | |
Operating expenses limited, number of quarters | 4 |
Other operating expense reimbursement, percentage of average invested assets, threshold | 2.00% |
Other operating expense reimbursement, percentage of net income, threshold | 25.00% |
Average invested assets calculation period | 12 months |
Derivative Financial Instruments - Schedule of Interest Rate Derivative Instruments (Details) - Cash Flow Hedging [Member] - Not Designated as Hedging Instrument [Member] - Interest Rate Cap [Member] |
Mar. 31, 2016
USD ($)
instrument
|
Dec. 31, 2015
USD ($)
instrument
|
---|---|---|
Derivative [Line Items] | ||
Number of Instruments | instrument | 30 | 30 |
Notional Amount | $ 637,110,000 | $ 637,110,000 |
Weighted Average Rate Cap | 2.73% | 2.68% |
Interest rate derivative assets, fair value | $ 65,431 | $ 298,143 |
LIBOR [Member] | ||
Derivative [Line Items] | ||
Variable Rate | 0.44% | 0.43% |
Derivative Financial Instruments - Narrative (Details) - USD ($) |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
Dec. 31, 2015 |
|
Derivative [Line Items] | |||
Unrealized loss on derivatives | $ 232,712 | $ 1,021,586 | |
Interest Rate Cap [Member] | |||
Derivative [Line Items] | |||
Unrealized loss on derivatives | 232,712 | 1,021,586 | |
Interest Rate Cap [Member] | Deferred Financing Costs and Other Assets, Net [Member] | |||
Derivative [Line Items] | |||
Interest rate derivative assets, fair value | 65,431 | $ 298,143 | |
Interest Expense [Member] | Interest Rate Cap [Member] | |||
Derivative [Line Items] | |||
Unrealized loss on derivatives | $ 232,712 | $ 1,021,586 |
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