x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Maryland | 27-1712193 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
PART I - FINANCIAL INFORMATION | ||||
INDEX | ||||
Item 1. | Financial Statements | Page No. | ||
Item 2. | ||||
Item 3. | ||||
Item 4. | 74 | |||
Item 1. | 74 | |||
Item 1A. | 74 | |||
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 74 | ||
Item 3. | Defaults Upon Senior Securities | 74 | ||
Item 4. | Mine Safety Disclosures | 74 | ||
Item 5. | Other Information | 75 | ||
Item 6. | 75 | |||
76 |
Preferred Apartment Communities, Inc. | ||||||||
Consolidated Balance Sheets | ||||||||
(Unaudited) | ||||||||
September 30, 2017 | December 31, 2016 | |||||||
Assets | ||||||||
Real estate | ||||||||
Land | $ | 345,110,008 | $ | 299,547,501 | ||||
Building and improvements | 1,802,229,802 | 1,513,293,760 | ||||||
Tenant improvements | 45,208,781 | 23,642,361 | ||||||
Furniture, fixtures, and equipment | 183,879,719 | 126,357,742 | ||||||
Construction in progress | 11,946,666 | 2,645,634 | ||||||
Gross real estate | 2,388,374,976 | 1,965,486,998 | ||||||
Less: accumulated depreciation | (147,799,077 | ) | (103,814,894 | ) | ||||
Net real estate | 2,240,575,899 | 1,861,672,104 | ||||||
Real estate loans, net of deferred fee income | 243,974,963 | 201,855,604 | ||||||
Real estate loans to related parties, net | 165,229,952 | 130,905,464 | ||||||
Total real estate and real estate loan investments, net | 2,649,780,814 | 2,194,433,172 | ||||||
Cash and cash equivalents | 17,054,190 | 12,321,787 | ||||||
Restricted cash | 50,645,432 | 55,392,984 | ||||||
Notes receivable | 18,287,857 | 15,499,699 | ||||||
Note receivable and revolving line of credit due from related party | 24,063,639 | 22,115,976 | ||||||
Accrued interest receivable on real estate loans | 27,726,412 | 21,894,549 | ||||||
Acquired intangible assets, net of amortization of $64,043,523 and $46,396,254 | 86,295,192 | 79,156,400 | ||||||
Deferred loan costs on Revolving Line of Credit, net of amortization of $960,072 and $422,873 | 1,548,798 | 1,768,779 | ||||||
Deferred offering costs | 6,025,155 | 2,677,023 | ||||||
Tenant lease inducements, net of amortization of $251,941 and $14,904 | 11,914,367 | 261,492 | ||||||
Tenant receivables (net of allowance of $488,953 and $663,912) and other assets | 34,377,412 | 15,310,741 | ||||||
Total assets | $ | 2,927,719,268 | $ | 2,420,832,602 | ||||
Liabilities and equity | ||||||||
Liabilities | ||||||||
Mortgage notes payable, net of deferred loan costs of $26,994,828 and $22,007,641 | $ | 1,569,569,425 | $ | 1,305,870,471 | ||||
Revolving line of credit | 43,000,000 | 127,500,000 | ||||||
Term note payable, net of deferred loan costs of $5,806 and $40,095 | 10,994,194 | 10,959,905 | ||||||
Real estate loan participation obligation | 17,877,914 | 20,761,819 | ||||||
Deferred revenue | 23,361,489 | — | ||||||
Accounts payable and accrued expenses | 34,298,797 | 20,814,910 | ||||||
Accrued interest payable | 4,099,239 | 3,541,640 | ||||||
Dividends and partnership distributions payable | 13,729,774 | 10,159,629 | ||||||
Acquired below market lease intangibles, net of amortization of $6,858,914 and $3,771,393 | 31,691,040 | 29,774,033 | ||||||
Security deposits and other liabilities | 8,946,216 | 6,189,033 | ||||||
Total liabilities | 1,757,568,088 | 1,535,571,440 | ||||||
Commitments and contingencies (Note 11) | ||||||||
Equity | ||||||||
Stockholders' equity | ||||||||
Series A Redeemable Preferred Stock, $0.01 par value per share; 3,050,000 | ||||||||
shares authorized; 1,141,331 and 924,855 shares issued; 1,115,616 and 914,422 | ||||||||
shares outstanding at September 30, 2017 and December 31, 2016, respectively | 11,156 | 9,144 | ||||||
Series M Redeemable Preferred Stock, $0.01 par value per share; 500,000 | ||||||||
shares authorized; 12,396 and 0 shares issued and outstanding | ||||||||
at September 30, 2017 and December 31, 2016, respectively | 124 | — | ||||||
Common Stock, $0.01 par value per share; 400,066,666 shares authorized; | ||||||||
35,597,744 and 26,498,192 shares issued and outstanding at | ||||||||
September 30, 2017 and December 31, 2016, respectively | 355,977 | 264,982 | ||||||
Additional paid-in capital | 1,157,030,161 | 906,737,470 | ||||||
Accumulated earnings (deficit) | 9,079,810 | (23,231,643 | ) | |||||
Total stockholders' equity | 1,166,477,228 | 883,779,953 | ||||||
Non-controlling interest | 3,673,952 | 1,481,209 | ||||||
Total equity | 1,170,151,180 | 885,261,162 | ||||||
Total liabilities and equity | $ | 2,927,719,268 | $ | 2,420,832,602 |
Preferred Apartment Communities, Inc. | |||||||||||||||
Consolidated Statements of Operations | |||||||||||||||
(Unaudited) | |||||||||||||||
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Revenues: | |||||||||||||||
Rental revenues | $ | 50,072,135 | $ | 37,319,207 | $ | 143,676,962 | $ | 96,541,544 | |||||||
Other property revenues | 9,334,939 | 5,221,887 | 26,592,295 | 13,290,330 | |||||||||||
Interest income on loans and notes receivable | 9,673,536 | 7,194,742 | 26,111,674 | 20,984,625 | |||||||||||
Interest income from related parties | 5,819,589 | 3,801,501 | 15,971,516 | 10,310,563 | |||||||||||
Total revenues | 74,900,199 | 53,537,337 | 212,352,447 | 141,127,062 | |||||||||||
Operating expenses: | |||||||||||||||
Property operating and maintenance | 7,900,753 | 5,504,848 | 21,637,551 | 13,883,133 | |||||||||||
Property salary and benefits (including reimbursements of $3,199,836, | |||||||||||||||
$2,790,335, $8,995,087 and $7,670,403 to related party) | 3,402,623 | 2,808,402 | 9,649,843 | 7,688,470 | |||||||||||
Property management fees (including $1,576,118, $1,444,518, | |||||||||||||||
$4,582,037, and $3,656,209 to related parties) | 2,053,446 | 1,724,411 | 6,016,003 | 4,308,841 | |||||||||||
Real estate taxes | 7,705,706 | 4,789,085 | 23,289,784 | 15,457,134 | |||||||||||
General and administrative | 1,701,574 | 1,144,256 | 4,861,083 | 3,255,728 | |||||||||||
Equity compensation to directors and executives | 863,412 | 638,414 | 2,607,667 | 1,867,706 | |||||||||||
Depreciation and amortization | 28,903,770 | 21,664,363 | 82,186,960 | 54,981,064 | |||||||||||
Acquisition and pursuit costs (including $0, $89,631, | |||||||||||||||
$0 and $141,548 to related party) | — | 1,357,537 | 14,002 | 6,885,864 | |||||||||||
Asset management fees to related party | 5,147,606 | 3,759,084 | 14,524,517 | 9,484,161 | |||||||||||
Insurance, professional fees and other expenses | 1,156,056 | 1,338,343 | 3,820,010 | 4,216,838 | |||||||||||
Total operating expenses | 58,834,946 | 44,728,743 | 168,607,420 | 122,028,939 | |||||||||||
Contingent asset management and general and administrative expense fees | (655,944 | ) | (736,960 | ) | (1,001,864 | ) | (1,458,245 | ) | |||||||
Net operating expenses | 58,179,002 | 43,991,783 | 167,605,556 | 120,570,694 | |||||||||||
Operating income | 16,721,197 | 9,545,554 | 44,746,891 | 20,556,368 | |||||||||||
Interest expense | 16,678,418 | 12,234,174 | 48,085,016 | 30,688,505 | |||||||||||
Loss on extinguishment of debt | — | — | 888,428 | — | |||||||||||
Net income (loss) before gain on sale of real estate | 42,779 | (2,688,620 | ) | (4,226,553 | ) | (10,132,137 | ) | ||||||||
Gain on sale of real estate, net of disposition expenses | — | — | 37,635,014 | 4,271,506 | |||||||||||
Net income (loss) | 42,779 | (2,688,620 | ) | 33,408,461 | (5,860,631 | ) | |||||||||
Consolidated net (income) loss attributable to non-controlling interests | (1,119 | ) | 86,484 | (1,097,008 | ) | 175,045 | |||||||||
Net income (loss) attributable to the Company | 41,660 | (2,602,136 | ) | 32,311,453 | (5,685,586 | ) | |||||||||
Dividends declared to preferred stockholders | (16,420,996 | ) | (11,015,706 | ) | (46,042,181 | ) | (28,341,723 | ) | |||||||
Earnings attributable to unvested restricted stock | (4,302 | ) | (6,159 | ) | (11,743 | ) | (12,434 | ) | |||||||
Net loss attributable to common stockholders | $ | (16,383,638 | ) | $ | (13,624,001 | ) | $ | (13,742,471 | ) | $ | (34,039,743 | ) | |||
Net loss per share of Common Stock available | |||||||||||||||
to common stockholders, basic and diluted | $ | (0.49 | ) | $ | (0.56 | ) | $ | (0.46 | ) | $ | (1.45 | ) | |||
Dividends per share declared on Common Stock | $ | 0.235 | $ | 0.2025 | $ | 0.69 | $ | 0.5975 | |||||||
Weighted average number of shares of Common Stock outstanding, | |||||||||||||||
Basic and diluted | 33,539,920 | 24,340,791 | 30,147,497 | 23,552,951 |
Preferred Apartment Communities, Inc. | ||||||||||||||||||||||||||||
Consolidated Statements of Stockholders' Equity, continued | ||||||||||||||||||||||||||||
For the nine-month periods ended September 30, 2017 and 2016 | ||||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||
Series A and Series M Redeemable Preferred Stock | Common Stock | Additional Paid in Capital | Accumulated Earnings(Deficit) | Total Stockholders' Equity | Non-Controlling Interest | Total Equity | ||||||||||||||||||||||
Balance at January 1, 2017 | $ | 9,144 | $ | 264,982 | $ | 906,737,470 | $ | (23,231,643 | ) | $ | 883,779,953 | $ | 1,481,209 | $ | 885,261,162 | |||||||||||||
Issuance of Units | 2,289 | — | 228,248,476 | — | 228,250,765 | — | 228,250,765 | |||||||||||||||||||||
Redemptions of Series A Preferred Stock | (153 | ) | 5,922 | (4,506,174 | ) | — | (4,500,405 | ) | — | (4,500,405 | ) | |||||||||||||||||
Issuance of Common Stock | — | 49,067 | 76,755,412 | — | 76,804,479 | — | 76,804,479 | |||||||||||||||||||||
Exercises of warrants | — | 33,875 | 43,343,382 | — | 43,377,257 | — | 43,377,257 | |||||||||||||||||||||
Syndication and offering costs | — | — | (26,725,432 | ) | — | (26,725,432 | ) | — | (26,725,432 | ) | ||||||||||||||||||
Equity compensation to executives and directors | — | — | 357,300 | — | 357,300 | — | 357,300 | |||||||||||||||||||||
Vesting of restricted stock | — | 216 | (216 | ) | — | — | — | — | ||||||||||||||||||||
Conversion of Class A Units to Common Stock | — | 1,915 | 1,676,579 | — | 1,678,494 | (1,678,494 | ) | — | ||||||||||||||||||||
Current period amortization of Class B Units | — | — | — | — | — | 2,250,367 | 2,250,367 | |||||||||||||||||||||
Net income | — | — | — | 32,311,453 | 32,311,453 | 1,097,008 | 33,408,461 | |||||||||||||||||||||
Reallocation adjustment to non-controlling interests | — | — | (1,146,165 | ) | — | (1,146,165 | ) | 1,146,165 | — | |||||||||||||||||||
Distributions to non-controlling interests | — | — | — | — | — | (622,303 | ) | (622,303 | ) | |||||||||||||||||||
Dividends to series A preferred stockholders | ||||||||||||||||||||||||||||
($5.00 per share per month) | — | — | (45,791,950 | ) | — | (45,791,950 | ) | — | (45,791,950 | ) | ||||||||||||||||||
Dividends to mShares preferred stockholders | — | — | (250,231 | ) | — | (250,231 | ) | — | (250,231 | ) | ||||||||||||||||||
Dividends to common stockholders ($0.69 per share) | — | — | (21,668,290 | ) | — | (21,668,290 | ) | — | (21,668,290 | ) | ||||||||||||||||||
Balance at September 30, 2017 | $ | 11,280 | $ | 355,977 | $ | 1,157,030,161 | $ | 9,079,810 | $ | 1,166,477,228 | $ | 3,673,952 | $ | 1,170,151,180 |
Preferred Apartment Communities, Inc. | ||||||||||||||||||||||||||||
Consolidated Statements of Stockholders' Equity | ||||||||||||||||||||||||||||
For the nine-month periods ended September 30, 2017 and 2016 | ||||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||
Series A Redeemable Preferred Stock | Common Stock | Additional Paid in Capital | Accumulated (Deficit) | Total Stockholders' Equity | Non-Controlling Interest | Total Equity | ||||||||||||||||||||||
Balance at January 1, 2016 | $ | 4,830 | $ | 227,616 | $ | 536,450,877 | $ | (13,698,520 | ) | $ | 522,984,803 | $ | 2,468,987 | $ | 525,453,790 | |||||||||||||
Issuance of Units | 3,233 | — | 322,937,157 | — | 322,940,390 | — | 322,940,390 | |||||||||||||||||||||
Redemptions of Series A Preferred Stock | (43 | ) | 588 | (3,020,673 | ) | — | (3,020,128 | ) | — | (3,020,128 | ) | |||||||||||||||||
Issuance of common stock | — | 1,973 | 2,858,311 | — | 2,860,284 | — | 2,860,284 | |||||||||||||||||||||
Exercises of Warrants | — | 15,163 | 16,181,146 | — | 16,196,309 | — | 16,196,309 | |||||||||||||||||||||
Syndication and offering costs | — | — | (38,220,013 | ) | — | (38,220,013 | ) | — | (38,220,013 | ) | ||||||||||||||||||
Equity compensation to executives and directors | — | 56 | 352,472 | — | 352,528 | — | 352,528 | |||||||||||||||||||||
Vesting of restricted stock | — | 228 | (228 | ) | — | — | — | — | ||||||||||||||||||||
Conversion of Class A Units to Common Stock | — | 956 | 647,642 | — | 648,598 | (648,598 | ) | — | ||||||||||||||||||||
Current period amortization of Class B Units | — | — | — | — | — | 1,542,182 | 1,542,182 | |||||||||||||||||||||
Net loss | — | — | — | (5,685,586 | ) | (5,685,586 | ) | (175,045 | ) | (5,860,631 | ) | |||||||||||||||||
Class A Units issued for property acquisition | — | — | — | — | — | 5,072,659 | 5,072,659 | |||||||||||||||||||||
Minority interest in joint venture | — | — | — | — | — | 450,000 | 450,000 | |||||||||||||||||||||
Reallocation adjustment to non-controlling interests | — | — | 6,914,403 | — | 6,914,403 | (6,914,403 | ) | — | ||||||||||||||||||||
Distributions to non-controlling interests | — | — | — | — | — | (476,293 | ) | (476,293 | ) | |||||||||||||||||||
Dividends to Series A preferred stockholders | ||||||||||||||||||||||||||||
($5.00 per share per month) | — | — | (28,341,723 | ) | — | (28,341,723 | ) | — | (28,341,723 | ) | ||||||||||||||||||
Dividends to common stockholders ($0.5975 per share) | — | — | (14,200,114 | ) | — | (14,200,114 | ) | — | (14,200,114 | ) | ||||||||||||||||||
Balance at September 30, 2016 | $ | 8,020 | $ | 246,580 | $ | 802,559,257 | $ | (19,384,106 | ) | $ | 783,429,751 | $ | 1,319,489 | $ | 784,749,240 |
Preferred Apartment Communities, Inc. | ||||||||
Consolidated Statements of Cash Flows | ||||||||
(Unaudited) | ||||||||
Nine months ended September 30, | ||||||||
2017 | 2016 | |||||||
Operating activities: | ||||||||
Net income (loss) | $ | 33,408,461 | $ | (5,860,631 | ) | |||
Reconciliation of net income (loss) to net cash provided by operating activities: | ||||||||
Depreciation expense | 60,845,325 | 39,387,351 | ||||||
Amortization expense | 21,341,635 | 15,593,713 | ||||||
Amortization of above and below market leases | (2,394,233 | ) | (1,118,329 | ) | ||||
Deferred revenues and fee income amortization | (1,526,037 | ) | (725,913 | ) | ||||
Amortization of market discount on assumed debt and lease incentives | 364,439 | — | ||||||
Deferred loan cost amortization | 3,906,753 | 2,431,809 | ||||||
(Increase) decrease in accrued interest income on real estate loans | (5,831,863 | ) | (3,374,473 | ) | ||||
Equity compensation to executives and directors | 2,607,667 | 1,867,706 | ||||||
Gain on sale of real estate | (37,635,014 | ) | (4,271,506 | ) | ||||
Loss on extinguishment of debt | 888,428 | — | ||||||
Other | 189,400 | 56,582 | ||||||
Changes in operating assets and liabilities: | ||||||||
(Increase) in tenant receivables and other assets | (7,818,433 | ) | (1,230,183 | ) | ||||
(Increase) in tenant lease incentives | (11,889,912 | ) | — | |||||
Increase in accounts payable and accrued expenses | 11,640,777 | 8,843,052 | ||||||
Increase in accrued interest and other liabilities | 2,349,282 | 2,258,193 | ||||||
Net cash provided by operating activities | 70,446,675 | 53,857,371 | ||||||
Investing activities: | ||||||||
Investments in real estate loans | (119,225,599 | ) | (123,427,150 | ) | ||||
Repayments of real estate loans | 42,495,393 | 36,672,482 | ||||||
Notes receivable issued | (6,249,749 | ) | (8,730,166 | ) | ||||
Notes receivable repaid | 3,506,767 | 12,895,101 | ||||||
Note receivable issued to and draws on line of credit by related party | (25,740,403 | ) | (25,821,121 | ) | ||||
Repayments of line of credit by related party | 23,468,017 | 23,791,676 | ||||||
Origination fees received on real estate loans | 2,592,766 | 2,695,961 | ||||||
Origination fees paid to Manager on real estate loans | (1,296,383 | ) | (1,374,828 | ) | ||||
Acquisition of properties | (455,619,414 | ) | (740,597,973 | ) | ||||
Disposition of properties, net | 118,237,697 | 10,606,386 | ||||||
Additions to real estate assets - improvements | (12,200,993 | ) | (7,613,065 | ) | ||||
Deposits refunded (paid) on acquisitions | 2,428,908 | (3,118,370 | ) | |||||
Decrease (increase) in restricted cash | 5,389,992 | (9,070,073 | ) | |||||
Net cash used in investing activities | (422,213,001 | ) | (833,091,140 | ) | ||||
Financing activities: | ||||||||
Proceeds from mortgage notes payable | 332,427,500 | 479,494,000 | ||||||
Repayments of mortgage notes payable | (121,065,587 | ) | (7,748,011 | ) | ||||
Payments for deposits and other mortgage loan costs | (11,579,899 | ) | (15,400,974 | ) | ||||
Payments for mortgage prepayment costs | (817,313 | ) | — | |||||
Proceeds from real estate loan participants | 224,188 | 5,575,484 | ||||||
Payments to real estate loan participants | (3,466,500 | ) | — | |||||
Proceeds from lines of credit | 190,000,000 | 357,136,020 | ||||||
Payments on lines of credit | (274,500,000 | ) | (309,636,020 | ) | ||||
Proceeds from Term Loan | — | 46,000,000 | ||||||
Repayment of the Term Loan | — | (35,000,000 | ) | |||||
Proceeds from sales of Units, net of offering costs and redemptions | 201,799,430 | 287,830,612 | ||||||
Proceeds from sales of Common Stock | 74,213,118 | 2,810,156 | ||||||
Proceeds from exercises of Warrants | 39,430,314 | 19,831,294 | ||||||
Common Stock dividends paid | (19,250,649 | ) | (13,523,075 | ) | ||||
Preferred stock dividends paid | (44,889,676 | ) | (26,735,870 | ) | ||||
Distributions to non-controlling interests | (605,479 | ) | (350,079 | ) | ||||
Payments for deferred offering costs | (5,420,718 | ) | (3,476,989 | ) | ||||
Contribution from non-controlling interests | — | 450,000 | ||||||
Net cash provided by financing activities | 356,498,729 | 787,256,548 | ||||||
Net increase in cash and cash equivalents | 4,732,403 | 8,022,779 | ||||||
Cash and cash equivalents, beginning of period | 12,321,787 | 2,439,605 | ||||||
Cash and cash equivalents, end of period | $ | 17,054,190 | $ | 10,462,384 | ||||
Preferred Apartment Communities, Inc. | ||||||||
Consolidated Statements of Cash Flows - continued | ||||||||
(Unaudited) | ||||||||
Nine months ended September 30, | ||||||||
2017 | 2016 | |||||||
Supplemental cash flow information: | ||||||||
Cash paid for interest | $ | 43,493,263 | $ | 26,569,933 | ||||
Supplemental disclosure of non-cash activities: | ||||||||
Accrued capital expenditures | $ | 2,531,863 | $ | 1,125,774 | ||||
Writeoff of fully depreciated or amortized assets and liabilities | $ | 620,201 | $ | 149,288 | ||||
Writeoff of fully amortized deferred loan costs | $ | — | $ | 826,359 | ||||
Writeoff of assets due to hurricane damages | $ | 7,939,095 | $ | — | ||||
Lessee-funded tenant improvements, capitalized as landlord assets | $ | 23,818,305 | $ | — | ||||
Dividends payable - Common Stock | $ | 8,158,256 | $ | 4,992,038 | ||||
Dividends payable - Series A Preferred Stock | $ | 5,481,080 | $ | 3,885,123 | ||||
Dividends payable - mShares Preferred Stock | $ | 90,438 | $ | — | ||||
Dividends declared but not yet due and payable | $ | 33,094 | $ | — | ||||
Partnership distributions payable to non-controlling interests | $ | 211,781 | $ | 179,449 | ||||
Accrued and payable deferred offering costs | $ | 479,441 | $ | 690,643 | ||||
Offering cost reimbursement to related party | $ | 324,638 | $ | 482,871 | ||||
Reclass of offering costs from deferred asset to equity | $ | 2,193,139 | $ | 6,080,235 | ||||
Fair value of OP units issued for property | $ | — | $ | 5,072,659 | ||||
Extinguishment of land loan for property | $ | — | $ | 12,500,000 | ||||
Proceeds of like-kind exchange funds for dispositions | $ | 31,288,252 | $ | — | ||||
Use of like-kind exchange funds for acquisitions | $ | 31,288,252 | $ | — | ||||
Fair value issuances of equity compensation | $ | 4,088,499 | $ | 3,152,312 | ||||
Mortgage loans assumed on acquisitions | $ | 57,324,227 | $ | 43,103,275 | ||||
Noncash repayment of mortgages through refinance | $ | 65,000,000 | $ | — |
1. | Organization and Basis of Presentation |
2. | Summary of Significant Accounting Policies |
As of: | ||||||
9/30/17 | 12/31/16 | |||||
Multifamily communities: | ||||||
Properties (1) | 29 | 24 | ||||
Units | 9,086 | 8,049 | ||||
New Market Properties (2) | ||||||
Properties | 37 | 31 | ||||
Gross leasable area (square feet) (3) | 3,854,196 | 3,295,491 | ||||
Student housing properties: | ||||||
Properties | 2 | 1 | ||||
Units | 444 | 219 | ||||
Beds | 1,319 | 679 | ||||
Preferred Office Properties: | ||||||
Properties | 3 | 3 | ||||
Rentable square feet | 1,094,000 | 1,096,834 | ||||
(1) The acquired second phase of the Summit Crossing community is managed in combination with the initial phase and so together are considered a single property, as are the three assets that comprise the Lenox Portfolio. | ||||||
(2) See note 12, Segment information. | ||||||
(3) The Company also owns approximately 47,600 square feet of gross leasable area of ground floor retail space which is embedded within the Lenox Portfolio and not included in the totals above. |
Sandstone Creek | Ashford Park | Enclave at Vista Ridge | ||||||||||
1/20/2017 | 3/7/2017 | 5/25/2017 | ||||||||||
Real estate assets: | ||||||||||||
Land | $ | 2,846,197 | $ | 10,600,000 | $ | 4,704,917 | ||||||
Building and improvements | 41,859,684 | 24,075,263 | 29,915,903 | |||||||||
Furniture, fixtures and equipment | 5,278,268 | 4,222,858 | 2,874,403 | |||||||||
Accumulated depreciation | (4,808,539 | ) | (6,816,193 | ) | (3,556,362 | ) | ||||||
Total assets | $ | 45,175,610 | $ | 32,081,928 | $ | 33,938,861 | ||||||
Liabilities: | ||||||||||||
Mortgage note payable | $ | 30,840,135 | $ | 25,626,000 | $ | 24,862,000 | ||||||
Supplemental mortgage note | $ | — | $ | 6,373,717 | $ | — |
Acquisition date | Property | Location | Approximate purchase price (millions) (1) | Units | |||||||
2/28/2017 | SoL (2) | Tempe, Arizona | $ | 53.3 | 225 | ||||||
3/3/2017 | Broadstone at Citrus Village | Tampa, Florida | $ | 47.4 | 296 | ||||||
3/24/2017 | Retreat at Greystone | Birmingham, Alabama | $ | 50.0 | 312 | ||||||
3/31/2017 | Founders Village | Williamsburg, Virginia | $ | 44.4 | 247 | ||||||
4/26/2017 | Claiborne Crossing | Louisville, Kentucky | $ | 45.2 | 242 | ||||||
7/26/2017 | Luxe at Lakewood Ranch | Sarasota, Florida | $ | 56.1 | 280 | ||||||
9/27/2017 | Adara Overland Park | Kansas City, Kansas | $ | 45.5 | 260 | ||||||
9/29/2017 | Aldridge at Town Village | Atlanta, Georgia | $ | 54.2 | 300 | ||||||
9/29/2017 | The Reserve at Summit Crossing | Atlanta, Georgia | $ | 30.9 | 172 | ||||||
2,334 |
2017 Multifamily Communities acquired | Broadstone at Citrus Village | SoL | Retreat at Greystone | Founders Village | Claiborne Crossing | Luxe at Lakewood Ranch | Adara Overland Park | Aldridge at Town Village | The Reserve at Summit Crossing | |||||||||||||||||||||||||||
Land | $ | 4,809,113 | $ | 7,440,934 | $ | 4,077,262 | $ | 5,314,862 | $ | 2,147,217 | $ | 4,851,844 | $ | 2,854,466 | $ | 7,122,413 | $ | 4,374,721 | ||||||||||||||||||
Buildings and improvements | 34,180,983 | 40,058,727 | 35,336,277 | 32,853,763 | 30,551,646 | 43,694,577 | 31,005,403 | 34,683,056 | 20,968,236 | |||||||||||||||||||||||||||
Furniture, fixtures and equipment | 6,299,645 | 3,771,432 | 9,125,302 | 5,907,345 | 7,027,257 | 7,338,151 | 11,024,144 | 10,735,231 | 4,970,893 | |||||||||||||||||||||||||||
Lease intangibles | 1,624,752 | 2,344,404 | 1,844,476 | 1,421,197 | 1,268,810 | 1,014,150 | 1,279,589 | 2,270,915 | 925,176 | |||||||||||||||||||||||||||
Mark to market debt assumption asset | 893,385 | — | — | — | 4,447,751 | — | — | — | — | |||||||||||||||||||||||||||
Prepaids & other assets | 744,970 | 808,045 | 871,684 | 938,419 | 1,120,728 | 1,387,129 | 604,973 | 779,945 | 384,220 | |||||||||||||||||||||||||||
Escrows | 67,876 | — | 101,503 | — | — | — | — | — | — | |||||||||||||||||||||||||||
Accrued taxes | (108,286 | ) | (71,856 | ) | (139,046 | ) | — | (115,728 | ) | (404,690 | ) | (308,299 | ) | — | — | |||||||||||||||||||||
Security deposits, prepaid rents, and other liabilities | (24,887 | ) | (377,735 | ) | (108,573 | ) | (103,204 | ) | (130,850 | ) | (57,933 | ) | (31,941 | ) | (143,024 | ) | (43,246 | ) | ||||||||||||||||||
Net assets acquired | $ | 48,487,551 | $ | 53,973,951 | $ | 51,108,885 | $ | 46,332,382 | $ | 46,316,831 | $ | 57,823,228 | $ | 46,428,335 | $ | 55,448,536 | $ | 31,580,000 | ||||||||||||||||||
Cash paid | $ | 18,237,551 | $ | 16,488,951 | $ | 1,660,888 | $ | 1,438,320 | $ | 19,242,604 | $ | 18,535,728 | $ | 14,578,335 | $ | 5,185,142 | $ | 3,333,770 | ||||||||||||||||||
Use of 1031 proceeds | — | — | 14,237,997 | 13,289,062 | — | — | — | — | — | |||||||||||||||||||||||||||
Mezzanine loan conversion | — | — | — | — | — | — | — | 12,253,394 | 8,171,230 | |||||||||||||||||||||||||||
Mortgage debt | 30,250,000 | 37,485,000 | 35,210,000 | 31,605,000 | 27,074,227 | 39,287,500 | 31,850,000 | 38,010,000 | 20,075,000 | |||||||||||||||||||||||||||
Total consideration | $ | 48,487,551 | $ | 53,973,951 | $ | 51,108,885 | $ | 46,332,382 | $ | 46,316,831 | $ | 57,823,228 | $ | 46,428,335 | $ | 55,448,536 | $ | 31,580,000 | ||||||||||||||||||
Three months ended September 30, 2017: | ||||||||||||||||||||||||||||||||||||
Revenue | $ | 1,168,000 | $ | 1,412,000 | $ | 1,215,000 | $ | 1,029,000 | $ | 1,035,000 | $ | 877,000 | $ | 32,000 | $ | 1,000 | $ | — | ||||||||||||||||||
Net income (loss) | $ | (621,000 | ) | $ | (1,213,000 | ) | $ | (789,000 | ) | $ | (508,000 | ) | $ | (836,000 | ) | $ | (679,000 | ) | $ | (179,000 | ) | $ | (219,000 | ) | $ | (105,000 | ) | |||||||||
Nine months ended September 30, 2017: | ||||||||||||||||||||||||||||||||||||
Revenue | $ | 2,628,000 | $ | 3,305,000 | $ | 2,513,000 | $ | 2,032,000 | $ | 1,767,000 | $ | 877,000 | $ | 32,000 | $ | 1,000 | $ | — | ||||||||||||||||||
Net income (loss) | $ | (1,414,000 | ) | $ | (3,108,000 | ) | $ | (1,719,000 | ) | $ | (1,213,000 | ) | $ | (1,663,000 | ) | $ | (679,000 | ) | $ | (179,000 | ) | $ | (219,000 | ) | $ | (105,000 | ) | |||||||||
Capitalized acquisition costs incurred by the Company | $ | 458,000 | $ | 290,000 | $ | 383,000 | $ | 1,103,000 | $ | 293,000 | $ | 759,000 | $ | 646,000 | $ | 602,000 | $ | 354,000 | ||||||||||||||||||
Acquisition costs paid to related party (included above) | $ | 24,000 | $ | 60,000 | $ | 56,000 | $ | 8,000 | $ | 22,000 | $ | 561,000 | $ | 455,000 | $ | 542,000 | $ | 309,000 | ||||||||||||||||||
Remaining amortization period of intangible | ||||||||||||||||||||||||||||||||||||
assets and liabilities (months) | 38.4 | 0 | 5.5 | 5.5 | 126.1 | 6.5 | 9.5 | 13.5 | 11.5 | |||||||||||||||||||||||||||
(1) The Company's real estate loan investment in support of Founders Village was repaid in full at the closing of the acquisition of the property. |
2016 Multifamily Communities acquired | North by Northwest | Avalon Park | Overton Rise | Baldwin Park | Crosstown Walk | City Vista | Sorrel | |||||||||||||||||||||
Land | $ | 8,281,054 | $ | 7,410,048 | $ | 8,511,370 | $ | 17,402,882 | $ | 5,178,375 | $ | 4,081,683 | $ | 4,412,164 | ||||||||||||||
Buildings and improvements | 34,355,922 | 80,558,636 | 44,710,034 | 87,105,757 | 33,605,831 | 36,084,007 | 35,512,257 | |||||||||||||||||||||
Furniture, fixtures and equipment | 2,623,916 | 1,790,256 | 6,286,105 | 3,358,589 | 5,726,583 | 5,402,228 | 6,705,040 | |||||||||||||||||||||
Lease intangibles | 799,109 | 2,741,060 | 1,611,314 | 2,882,772 | 1,323,511 | 2,100,866 | 1,495,539 | |||||||||||||||||||||
Prepaids & other assets | 79,626 | 99,297 | 73,754 | 229,972 | 125,706 | 167,797 | — | |||||||||||||||||||||
Escrows | 1,026,419 | 3,477,157 | 354,640 | 2,555,753 | 291,868 | 599,983 | 623,791 | |||||||||||||||||||||
Accrued taxes | (321,437 | ) | (394,731 | ) | (66,422 | ) | (17,421 | ) | (25,983 | ) | (245,326 | ) | (437,510 | ) | ||||||||||||||
Security deposits, prepaid rents, and other liabilities | (159,462 | ) | (207,623 | ) | (90,213 | ) | (226,160 | ) | (53,861 | ) | (141,238 | ) | (68,828 | ) | ||||||||||||||
Net assets acquired | $ | 46,685,147 | $ | 95,474,100 | $ | 61,390,582 | $ | 113,292,144 | $ | 46,172,030 | $ | 48,050,000 | $ | 48,242,453 | ||||||||||||||
Cash paid | $ | 12,831,872 | $ | 30,474,100 | $ | 20,090,582 | $ | 35,492,144 | $ | 13,632,030 | — | $ | 14,642,453 | |||||||||||||||
Real estate loan settled | — | — | — | — | — | 12,500,000 | — | |||||||||||||||||||||
Joint venture partner | — | — | — | — | — | (450,000 | ) | — | ||||||||||||||||||||
Mortgage debt | 33,853,275 | 65,000,000 | 41,300,000 | 77,800,000 | 32,540,000 | 36,000,000 | 33,600,000 | |||||||||||||||||||||
Total consideration | $ | 46,685,147 | $ | 95,474,100 | $ | 61,390,582 | $ | 113,292,144 | $ | 46,172,030 | $ | 48,050,000 | $ | 48,242,453 | ||||||||||||||
Three months ended September 30, 2017: | ||||||||||||||||||||||||||||
Revenue | $ | 1,551,000 | $ | 2,044,000 | $ | 1,309,000 | $ | 2,421,000 | $ | 1,339,000 | $ | 1,143,000 | $ | 1,102,000 | ||||||||||||||
Net income (loss) | $ | (37,000 | ) | $ | (573,000 | ) | $ | (144,000 | ) | $ | (645,000 | ) | $ | (121,000 | ) | $ | (341,000 | ) | $ | (441,000 | ) | |||||||
Nine months ended September 30, 2017: | ||||||||||||||||||||||||||||
Revenue | $ | 4,486,000 | $ | 6,059,000 | $ | 3,888,000 | $ | 7,135,000 | $ | 3,929,000 | $ | 3,311,000 | $ | 3,315,000 | ||||||||||||||
Net income (loss) | $ | (166,000 | ) | $ | (2,853,000 | ) | $ | (411,000 | ) | $ | (1,915,000 | ) | $ | (250,000 | ) | $ | (1,889,000 | ) | $ | (1,668,000 | ) | |||||||
Capitalized acquisition costs incurred by the Company | $ | 40,000 | $ | 1,314,000 | $ | 116,000 | $ | 1,847,000 | $ | 320,000 | $ | 18,000 | $ | 529,000 |
Acquisition date | Property | Location | Approximate purchase price (millions) (1) | Gross leasable area (square feet) | |||||||
4/21/2017 | Castleberry-Southard | Atlanta, Georgia | $ | 17.6 | 80,018 | ||||||
6/6/2017 | Rockbridge Village | Atlanta, Georgia | $ | 20.3 | 102,432 | ||||||
7/26/2017 | Irmo Station | Columbia, SC | $ | 16.0 | 99,384 | ||||||
8/25/2017 | Maynard Crossing | Raleigh, NC | $ | 29.9 | 122,781 | ||||||
9/8/2017 | Woodmont Village | Atlanta, GA | $ | 13.5 | 85,639 | ||||||
9/22/2017 | West Town Market | Charlotte, NC | $ | 14.3 | 67,883 | ||||||
558,137 | |||||||||||
New Market Properties 2017 acquisitions | Castleberry-Southard | Rockbridge Village | Irmo Station | Maynard Crossing | Woodmont Village | West Town Market | ||||||||||||||||||
Land | $ | 3,023,731 | $ | 3,141,325 | $ | 3,602,466 | $ | 6,303,787 | $ | 2,712,907 | $ | 1,936,572 | ||||||||||||
Buildings and improvements | 13,471,240 | 15,666,091 | 11,555,942 | 21,773,900 | 9,836,799 | 12,092,823 | ||||||||||||||||||
Tenant improvements | 670,376 | 278,340 | 303,449 | 791,792 | 193,347 | 205,557 | ||||||||||||||||||
In-place leases | 990,663 | 1,249,694 | 773,530 | 1,479,507 | 1,721,425 | 1,042,631 | ||||||||||||||||||
Above market leases | 123,084 | 59,267 | 12,811 | 338,002 | — | — | ||||||||||||||||||
Leasing costs | 464,544 | 301,761 | 214,340 | 465,414 | 413,237 | 315,624 | ||||||||||||||||||
Below market leases | (1,081,145 | ) | (332,725 | ) | (225,228 | ) | (866,380 | ) | (1,521,305 | ) | (1,142,446 | ) | ||||||||||||
Other assets | 67,899 | 7,136 | 132,622 | 258,658 | — | 146,864 | ||||||||||||||||||
Other liabilities | (162,499 | ) | (89,212 | ) | (59,395 | ) | (95,119 | ) | (82,041 | ) | (76,323 | ) | ||||||||||||
Net assets acquired | $ | 17,567,893 | $ | 20,281,677 | $ | 16,310,537 | $ | 30,449,561 | $ | 13,274,369 | $ | 14,521,302 | ||||||||||||
Cash paid | $ | 2,306,703 | $ | 6,031,677 | $ | 5,660,537 | $ | 11,949,561 | $ | 4,499,369 | $ | 5,521,302 | ||||||||||||
Use of 1031 proceeds | 3,761,190 | — | — | — | — | — | ||||||||||||||||||
Mortgage debt | 11,500,000 | 14,250,000 | 10,650,000 | 18,500,000 | 8,775,000 | 9,000,000 | ||||||||||||||||||
Total consideration | $ | 17,567,893 | $ | 20,281,677 | $ | 16,310,537 | $ | 30,449,561 | $ | 13,274,369 | $ | 14,521,302 | ||||||||||||
Three months ended September 30, 2017: | ||||||||||||||||||||||||
Revenue | $ | 394,000 | $ | 408,000 | $ | 248,000 | $ | 229,000 | $ | 88,000 | $ | 32,000 | ||||||||||||
Net income (loss) | $ | 3,000 | $ | (43,000 | ) | $ | (75,000 | ) | $ | (98,000 | ) | $ | 7,000 | $ | (17,000 | ) | ||||||||
Nine months ended September 30, 2017: | ||||||||||||||||||||||||
Revenue | $ | 640,000 | $ | 518,000 | $ | 248,000 | $ | 229,000 | $ | 88,000 | $ | 32,000 | ||||||||||||
Net income (loss) | $ | (85,000 | ) | $ | (35,000 | ) | $ | (75,000 | ) | $ | (98,000 | ) | $ | 7,000 | $ | (17,000 | ) | |||||||
Capitalized acquisition costs incurred by the Company | $ | 78,000 | $ | 131,000 | $ | 226,000 | $ | 379,000 | $ | 200,000 | $ | 201,000 | ||||||||||||
Capitalized acquisition costs paid to related party (included above) | $ | 19,000 | $ | 23,000 | $ | 161,000 | $ | 307,000 | $ | 135,000 | $ | 144,000 | ||||||||||||
Remaining amortization period of intangible | ||||||||||||||||||||||||
assets and liabilities (years) | 9.8 | 7.7 | 2.9 | 5.1 | 7.9 | 8.6 | ||||||||||||||||||
New Market Properties 2016 acquisitions | Market at Victory Village | Southeastern Six Portfolio | Wade Green Village | Lakeland Plaza | Sunbelt 7 Portfolio | |||||||||||||||
Land | $ | 2,271,224 | $ | 14,081,647 | $ | 1,840,284 | $ | 7,079,408 | $ | 36,198,658 | ||||||||||
Buildings and improvements | 11,872,222 | 48,598,731 | 8,159,147 | 32,258,335 | 109,504,038 | |||||||||||||||
Tenant improvements | 402,973 | 993,530 | 251,250 | 828,966 | 2,143,404 | |||||||||||||||
In-place leases | 847,939 | 4,906,398 | 841,785 | 2,947,175 | 11,005,662 | |||||||||||||||
Above-market leases | 100,216 | 86,234 | 107,074 | 1,349,624 | 458,353 | |||||||||||||||
Leasing costs | 253,640 | 992,143 | 167,541 | 1,287,825 | 4,116,560 | |||||||||||||||
Below-market leases | (198,214 | ) | (1,069,877 | ) | — | (797,729 | ) | (7,617,485 | ) | |||||||||||
Other assets | 157,775 | 600,069 | 10,525 | — | 3,409,838 | |||||||||||||||
Other liabilities | (179,546 | ) | (437,008 | ) | (59,264 | ) | (180,331 | ) | (1,196,579 | ) | ||||||||||
Net assets acquired | $ | 15,528,229 | $ | 68,751,867 | $ | 11,318,342 | $ | 44,773,273 | $ | 158,022,449 | ||||||||||
Cash paid | $ | 6,278,229 | $ | 43,751,867 | $ | 6,245,683 | (1) | $ | 14,773,273 | $ | 60,368,449 | |||||||||
Class A OP Units granted | — | — | 5,072,659 | (2) | — | — | ||||||||||||||
Mortgage debt | 9,250,000 | (3) | 25,000,000 | — | (4) | 30,000,000 | 97,654,000 | |||||||||||||
Total consideration | $ | 15,528,229 | $ | 68,751,867 | $ | 11,318,342 | $ | 44,773,273 | $ | 158,022,449 | ||||||||||
Three months ended September 30, 2017: | ||||||||||||||||||||
Revenue | $ | 331,000 | $ | 1,604,000 | $ | 260,000 | $ | 933,000 | $ | 3,278,000 | ||||||||||
Net loss | $ | (36,000 | ) | $ | (52,000 | ) | $ | (79,000 | ) | $ | (100,000 | ) | $ | (248,000 | ) | |||||
Nine months ended September 30, 2017: | ||||||||||||||||||||
Revenue | $ | 1,026,000 | $ | 4,759,000 | $ | 781,000 | $ | 2,822,000 | $ | 9,837,000 | ||||||||||
Net loss | $ | (87,000 | ) | $ | (229,000 | ) | $ | (259,000 | ) | $ | (346,000 | ) | $ | (1,227,000 | ) | |||||
Cumulative acquisition costs incurred by the Company | $ | 111,000 | $ | 633,000 | $ | 297,000 | $ | 255,000 | $ | 691,000 | ||||||||||
Remaining amortization period of intangible | ||||||||||||||||||||
assets and liabilities (years) | 7.9 | 3.9 | 1.7 | 6.9 | 9.0 |
Consolidated balance sheet as of December 31, 2016 | As previously reported | Adjustment | As revised | |||||||||
Real estate | ||||||||||||
Building and improvements | $ | 1,499,129,649 | $ | 14,164,111 | $ | 1,513,293,760 | ||||||
Tenant improvements | $ | 37,806,472 | $ | (14,164,111 | ) | $ | 23,642,361 |
Three Ravinia acquisition | As previously reported | Adjustment | As revised | |||||||||
Real estate | ||||||||||||
Buildings and improvements | $ | 133,323,658 | $ | 14,164,111 | $ | 147,487,769 | ||||||
Tenant improvements | $ | 20,698,893 | $ | (14,164,111 | ) | $ | 6,534,782 |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Depreciation: | ||||||||||||||||
Buildings and improvements | $ | 14,084,126 | $ | 9,637,960 | $ | 39,928,817 | $ | 24,251,696 | ||||||||
Furniture, fixtures, and equipment | 7,697,513 | 5,775,856 | 20,916,508 | 15,135,655 | ||||||||||||
21,781,639 | 15,413,816 | 60,845,325 | 39,387,351 | |||||||||||||
Amortization: | ||||||||||||||||
Acquired intangible assets | 6,724,543 | 6,205,194 | 20,744,743 | 15,523,359 | ||||||||||||
Deferred leasing costs | 381,103 | 38,621 | 562,865 | 53,510 | ||||||||||||
Website development costs | 16,485 | 6,732 | 34,027 | 16,844 | ||||||||||||
Total depreciation and amortization | $ | 28,903,770 | $ | 21,664,363 | $ | 82,186,960 | $ | 54,981,064 |
September 30, 2017 | December 31, 2016 | |||||||
Number of loans | 27 | 26 | ||||||
Drawn amount | $ | 411,300,449 | $ | 334,570,242 | ||||
Deferred loan origination fees | (2,095,534 | ) | (1,809,174 | ) | ||||
Carrying value | $ | 409,204,915 | $ | 332,761,068 | ||||
Unfunded loan commitments | $ | 92,666,156 | $ | 76,546,234 | ||||
Weighted average current interest, per annum (paid monthly) | 8.48 | % | 8.26 | % | ||||
Weighted average accrued interest, per annum | 5.10 | % | 5.26 | % |
Principal balance | Deferred loan origination fees | Carrying value | ||||||||||
Balances as of December 31, 2016 | $ | 334,570,242 | $ | (1,809,174 | ) | $ | 332,761,068 | |||||
Loan fundings | 119,225,599 | — | 119,225,599 | |||||||||
Loan repayments | (42,495,392 | ) | — | (42,495,392 | ) | |||||||
Commitment fees collected | — | (1,281,383 | ) | (1,281,383 | ) | |||||||
Amortization of commitment fees | — | 995,023 | 995,023 | |||||||||
Balances as of September 30, 2017 | $ | 411,300,449 | $ | (2,095,534 | ) | $ | 409,204,915 |
Property type | Number of loans | Carrying value | Commitment amount | Percentage of portfolio | ||||||||||
Multifamily communities | 16 | $ | 234,186,944 | $ | 299,657,110 | 57 | % | |||||||
Student housing properties | 9 | 154,177,450 | 182,952,490 | 38 | % | |||||||||
Grocery-anchored shopping centers | 1 | 12,852,591 | 12,857,005 | 3 | % | |||||||||
Other | 1 | 7,987,930 | 8,500,000 | 2 | % | |||||||||
Balances as of September 30, 2017 | 27 | $ | 409,204,915 | $ | 503,966,605 |
Borrower | Date of loan | Maturity date | Total loan commitments | Outstanding balance as of: | Interest rate | |||||||||||||||
9/30/2017 | 12/31/2016 | |||||||||||||||||||
360 Residential, LLC (1) | 3/20/2013 | 12/31/2017 | $ | 2,000,000 | $ | 1,958,998 | $ | 1,472,571 | 12 | % | ||||||||||
Preferred Capital Marketing Services, LLC (2) | 1/24/2013 | 12/31/2017 | 1,500,000 | 926,422 | 1,082,311 | 10 | % | |||||||||||||
Oxford Contracting, LLC (1) | 8/27/2013 | (3) | -3 | — | 1,475,000 | 8 | % | |||||||||||||
Preferred Apartment Advisors, LLC (1,2,4) | 8/21/2012 | 12/31/2018 | 18,000,000 | 15,812,313 | 13,708,761 | 8 | % | |||||||||||||
Haven Campus Communities, LLC (1,2) | 6/11/2014 | 12/31/2017 | 11,110,000 | 7,324,904 | 7,324,904 | 12 | % | |||||||||||||
Oxford Capital Partners, LLC (1,5) | 10/5/2015 | 12/31/2017 | 10,150,000 | 8,972,378 | 7,870,865 | 12 | % | |||||||||||||
Newport Development Partners, LLC (1) | 6/17/2014 | 6/30/2018 | 3,000,000 | — | — | 12 | % | |||||||||||||
360 Residential, LLC II (1) | 12/30/2015 | 12/31/2017 | 3,255,000 | 3,230,232 | 2,884,845 | 15 | % | |||||||||||||
Mulberry Development Group, LLC (1) | 3/31/2016 | 6/30/2018 | 500,000 | 420,000 | 177,000 | 12 | % | |||||||||||||
Mulberry Alexandria Group, LLC | 7/31/2017 | 12/31/2017 | 1,400,000 | 990,154 | — | 12 | % | |||||||||||||
360 Capital Company, LLC (1) | 5/24/2016 | 12/31/2017 | 3,900,000 | 2,730,499 | 1,678,999 | 12 | % | |||||||||||||
Unamortized loan fees | (14,404 | ) | (59,581 | ) | ||||||||||||||||
$ | 54,815,000 | $ | 42,351,496 | $ | 37,615,675 | |||||||||||||||
(1) The amounts payable under the terms of these revolving credit lines are collateralized by a personal guaranty of repayment by the principals of the borrower. | ||||||||||||||||||||
(2) See related party disclosure in Note 6. | ||||||||||||||||||||
(3) Note was repaid on April 6, 2017 and terminated at its maturity date of April 30, 2017. | ||||||||||||||||||||
(4) The amounts payable under this revolving credit line were collateralized by an assignment of the Manager's rights to fees due under the Sixth Amended and Restated Management Agreement between the Company and the Manager. | ||||||||||||||||||||
(5) The amounts payable under the terms of this revolving credit line, up to the lesser of 25% of the loan balance or $2,000,000 are collateralized by a personal guaranty of repayment by the principals of the borrower. |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Real estate loans: | ||||||||||||||||
Current interest payments | $ | 8,956,012 | $ | 5,902,915 | $ | 23,996,934 | $ | 16,913,037 | ||||||||
Additional accrued interest | 5,005,796 | 3,917,641 | 13,894,268 | 10,633,937 | ||||||||||||
Deferred origination fee amortization | 408,077 | 201,147 | 995,023 | 636,875 | ||||||||||||
Total real estate loan revenue | 14,369,885 | 10,021,703 | 38,886,225 | 28,183,849 | ||||||||||||
Interest income on notes and lines of credit | 1,123,240 | 974,540 | 3,196,965 | 3,111,339 | ||||||||||||
Interest income on loans and notes receivable | $ | 15,493,125 | $ | 10,996,243 | $ | 42,083,190 | $ | 31,295,188 |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||
Type of Compensation | Basis of Compensation | 2017 | 2016 | 2017 | 2016 | |||||||||||||
Acquisition fees | As of July 1, 2017, 1.0% of the gross purchase price of real estate assets | $ | 2,604,551 | $ | — | $ | 2,604,551 | $ | — | |||||||||
Loan origination fees | 1.0% of the maximum commitment of any real estate loan, note or line of credit receivable | 878,939 | 250,602 | 1,296,383 | 1,374,828 | |||||||||||||
Loan coordination fees | As of January 1, 2016, 1.6% of any assumed, new or supplemental debt incurred in connection with an acquired property. Effective July 1, 2017, the fee was reduced to 0.6% of any such debt. | 1,056,885 | 3,493,227 | 4,066,393 | 8,178,836 | |||||||||||||
Asset management fees | Monthly fee equal to one-twelfth of 0.50% of the total book value of assets, as adjusted | 3,191,817 | 2,196,363 | 9,313,759 | 5,708,868 | |||||||||||||
Property management fees | Monthly fee equal to 4% of the monthly gross revenues of the properties managed | 1,569,603 | 1,438,569 | 4,554,880 | 3,629,322 | |||||||||||||
General and administrative expense fees | Monthly fee equal to 2% of the monthly gross revenues of the Company | 1,306,360 | 831,711 | 3,849,481 | 2,343,936 | |||||||||||||
Construction management fees | Quarterly fee for property renovation and takeover projects | 62,130 | 53,935 | 222,539 | 126,446 | |||||||||||||
$ | 10,670,285 | $ | 8,264,407 | $ | 25,907,986 | $ | 21,362,236 |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||
$ | 3,199,836 | $ | 2,790,335 | $ | 8,995,087 | $ | 7,670,403 |
2017 | 2016 | |||||||||||||||
Record date | Number of shares | Aggregate dividends declared | Record date | Number of shares | Aggregate dividends declared | |||||||||||
January 31, 2017 | 932,413 | $ | 4,641,149 | January 30, 2016 | 482,774 | $ | 2,481,086 | |||||||||
February 28, 2017 | 977,267 | 4,849,032 | February 27, 2016 | 516,017 | 2,630,601 | |||||||||||
March 31, 2017 | 979,309 | 4,938,098 | March 31, 2016 | 544,129 | 2,770,048 | |||||||||||
April 28, 2017 | 992,774 | 5,000,060 | April 29, 2016 | 582,720 | 2,979,196 | |||||||||||
May 31, 2017 | 1,019,046 | 5,085,694 | May 31, 2016 | 617,994 | 3,143,567 | |||||||||||
June 30, 2017 | 1,041,187 | 5,237,872 | June 30, 2016 | 651,439 | 3,321,519 | |||||||||||
July 31, 2017 | 1,061,179 | 5,299,654 | July 29, 2016 | 682,392 | 3,458,513 | |||||||||||
August 31, 2017 | 1,086,714 | 5,412,511 | August 31, 2016 | 721,143 | 3,671,020 | |||||||||||
September 29, 2017 | 1,113,896 | 5,545,017 | September 30, 2016 | 765,185 | 3,886,173 | |||||||||||
Total | $ | 46,009,087 | Total | $ | 28,341,723 |
2017 | 2016 | |||||||||||||||||||||||
Record date | Number of shares | Dividend per share | Aggregate dividends paid | Record date | Number of shares | Dividend per share | Aggregate dividends paid | |||||||||||||||||
March 15, 2017 | 27,139,354 | $ | 0.220 | $ | 5,970,658 | March 15, 2016 | 23,041,502 | $ | 0.1925 | $ | 4,435,489 | |||||||||||||
June 15, 2017 | 32,082,451 | 0.235 | 7,539,376 | June 15, 2016 | 23,568,328 | 0.2025 | 4,772,587 | |||||||||||||||||
September 15, 2017 | 34,715,982 | 0.235 | 8,158,256 | September 15, 2016 | 24,652,041 | 0.2025 | 4,992,038 | |||||||||||||||||
$ | 0.69 | $ | 21,668,290 | $ | 0.5975 | $ | 14,200,114 |
2017 | 2016 | |||||||||||||
Record date | Payment date | Aggregate distributions | Record date | Payment date | Aggregate distributions | |||||||||
March 15, 2017 | April 14, 2017 | $ | 198,742 | March 15, 2016 | April 15, 2016 | $ | 117,395 | |||||||
June 15, 2017 | July 14, 2017 | 211,781 | June 15, 2016 | July 15, 2016 | 179,449 | |||||||||
September 15, 2017 | October 16, 2017 | 211,781 | September 15, 2016 | October 14, 2016 | 179,449 | |||||||||
$ | 622,304 | $ | 476,293 |
Three months ended September 30, | Nine months ended September 30, | Unamortized expense as of September 30, | |||||||||||||||||||
2017 | 2016 | 2017 | 2016 | 2017 | |||||||||||||||||
Quarterly board member committee fee grants | $ | — | $ | 18,030 | $ | — | $ | 48,021 | $ | — | |||||||||||
Class B Unit awards: | |||||||||||||||||||||
Executive officers - 2015 | — | — | — | 5,236 | — | ||||||||||||||||
Executive officers - 2016 | 74,470 | 517,884 | 237,714 | 1,536,946 | 374,753 | ||||||||||||||||
Executive officers - 2017 | 678,176 | — | 2,012,653 | — | 1,401,140 | ||||||||||||||||
Restricted stock grants: | |||||||||||||||||||||
2015 | — | — | — | 106,670 | — | ||||||||||||||||
2016 | — | 102,500 | 136,667 | 170,833 | — | ||||||||||||||||
2017 | 90,005 | — | 150,008 | — | 210,011 | ||||||||||||||||
Restricted stock units | 20,761 | — | 70,625 | — | 211,878 | ||||||||||||||||
Total | $ | 863,412 | $ | 638,414 | $ | 2,607,667 | $ | 1,867,706 | $ | 2,197,782 |
Service year | Shares | Fair value per share | Total compensation cost | ||||||||
2015 | 30,133 | $ | 10.62 | $ | 320,012 | ||||||
2016 | 30,990 | $ | 13.23 | $ | 409,998 | ||||||
2017 | 24,408 | $ | 14.75 | $ | 360,018 |
Grant dates | 1/3/2017 | 1/4/2016 | ||||||
Stock price | $ | 14.79 | $ | 12.88 | ||||
Dividend yield | 5.95 | % | 5.98 | % | ||||
Expected volatility | 26.4 | % | 26.10 | % | ||||
Risk-free interest rate | 2.91 | % | 2.81 | % | ||||
Number of Units granted: | ||||||||
One year vesting period | 198,184 | 176,835 | ||||||
Three year vesting period | 88,208 | 89,096 | ||||||
286,392 | 265,931 | |||||||
Calculated fair value per Unit | $ | 11.92 | $ | 10.03 | ||||
Total fair value of Units | $ | 3,413,793 | $ | 2,667,288 | ||||
Target market threshold increase | $ | 4,598,624 | $ | 3,549,000 |
Property | Date | Initial principal amount | Fixed/Variable rate | Rate / spread over 1 month LIBOR | Maturity date | Interest only through date | ||||
SoL | 2/28/2017 | $ | 37,485,000 | Variable | 200 BPS | 3/1/2022 | 3/1/2022 | |||
Citrus Village | 3/3/2017 | 30,250,000 | Fixed | 3.65 | % | 6/10/2023 | 6/9/2017 | |||
Retreat at Greystone | 3/24/2017 | 35,210,000 | Variable | 185 BPS | 3/1/2022 | 3/1/2022 | ||||
Founders Village | 3/31/2017 | 31,605,000 | Fixed | 4.31 | % | 4/1/2027 | N/A | |||
Claiborne Crossing | 4/26/2017 | 28,179,500 | Fixed | 2.89 | % | 6/1/2054 | N/A | |||
Castleberry-Southard | 4/21/2017 | 11,500,000 | Fixed | 3.99 | % | 5/1/2027 | N/A | |||
Rockbridge Village | 6/6/2017 | 14,250,000 | Fixed | 3.73 | % | 7/5/2027 | N/A | |||
Luxe at Lakewood Ranch | 7/26/2017 | 39,287,500 | Fixed | 3.93 | % | 8/1/2027 | N/A | |||
Irmo Station | 7/26/2017 | 10,650,000 | Fixed | 3.94 | % | 8/1/2030 | N/A | |||
Maynard Crossing | 8/25/2017 | 18,500,000 | Fixed | 3.74 | % | 9/1/2032 | N/A | |||
Woodmont Village | 9/8/2017 | 8,775,000 | Fixed | 4.13 | % | 10/1/2027 | N/A | |||
West Town Market | 9/22/2017 | 9,000,000 | Fixed | 3.65 | % | 10/1/2025 | N/A | |||
Adara Overland Park | 9/27/2017 | 31,850,000 | Fixed | 3.90 | % | 4/1/2028 | N/A | |||
Aldridge at Town Village | 9/29/2017 | 38,010,000 | Variable | 185 BPS | 3/1/2022 | (1 | ) | |||
The Reserve at Summit Crossing | 9/29/2017 | 20,075,000 | Fixed | 3.87 | % | 10/1/2024 | N/A | |||
$ | 364,627,000 | |||||||||
(1) The property is temporarily financed through a credit facility sponsored by the Federal Home Loan Mortgage Corporation; the Company intends to obtain permanent mortgage financing in the near future. |
Fixed rate mortgage debt: | Principal balances due | Weighted-average interest rate | Weighted average remaining life | |||||||
Multifamily communities | $ | 744,771,383 | 3.69 | % | 7.6 years | |||||
New Market Properties | 330,701,302 | 3.81 | % | 7.5 years | ||||||
Preferred Office Properties | 153,662,656 | 4.25 | % | 21.4 years | ||||||
Student housing projects | 32,953,789 | 4.02 | % | 4.9 years | ||||||
Total fixed rate mortgage debt | $ | 1,262,089,130 | 3.80 | % | 9.2 years | |||||
Variable rate mortgage debt: | ||||||||||
Multifamily communities | $ | 234,369,810 | 3.24 | % | 4.0 years | |||||
New Market Properties | 62,620,313 | 3.86 | % | 3.9 years | ||||||
Preferred Office Properties | — | — | — | |||||||
Student housing projects | 37,485,000 | 3.23 | % | 4.4 years | ||||||
Total variable rate mortgage debt | $ | 334,475,123 | 3.35 | % | 4.0 years | |||||
Total mortgage debt: | ||||||||||
Multifamily communities | $ | 979,141,193 | 3.58 | % | 6.8 years | |||||
New Market Properties | 393,321,615 | 3.82 | % | 6.9 years | ||||||
Preferred Office Properties | 153,662,656 | 4.25 | % | 21.4 years | ||||||
Student housing projects | 70,438,789 | 3.60 | % | 4.7 years | ||||||
Total principal amount | 1,596,564,253 | 3.71 | % | 8.1 years | ||||||
Deferred loan costs | (26,994,828 | ) | ||||||||
Mortgage notes payable, net | $ | 1,569,569,425 |
Covenant (1) | Requirement | Result | ||
Net worth | Minimum $1,083,509,483 | (2) | $1,170,151,180 | |
Debt yield | Minimum 8.0% | 9.18% | ||
Payout ratio | Maximum 95.0% | (3) | 92.8% | |
Total leverage ratio | Maximum 65.0% | 60% | ||
Debt service coverage ratio | Minimum 1.50x | 2.04x |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Multifamily communities | $ | 9,515,838 | $ | 7,852,145 | $ | 26,620,941 | $ | 21,006,486 | ||||||||
New Market Properties | 3,858,588 | 2,615,924 | 10,699,043 | 5,588,947 | ||||||||||||
Preferred Office Properties | 1,676,933 | 133,681 | 5,030,560 | 133,681 | ||||||||||||
Interest paid to real estate loan participants | 569,141 | 482,246 | 1,825,470 | 1,341,104 | ||||||||||||
Total | 15,620,500 | 11,083,996 | 44,176,014 | 28,070,218 | ||||||||||||
Credit Facility and Acquisition Facility | 1,057,918 | 1,150,178 | 3,909,002 | 2,618,287 | ||||||||||||
Interest Expense | $ | 16,678,418 | $ | 12,234,174 | $ | 48,085,016 | $ | 30,688,505 |
Period | Future principal payments | ||||
2017 | $ | 59,940,046 | (1) | ||
2018 | 45,147,144 | ||||
2019 | 242,834,004 | ||||
2020 | 64,621,789 | ||||
2021 | 121,250,100 | ||||
thereafter | 1,116,771,170 | ||||
Total | $ | 1,650,564,253 | |||
(1) Includes the principal amount due on the Company's Revolving Line of Credit of $43.0 million and Term Note of $11.0 million. |
September 30, 2017 | December 31, 2016 | |||||||
Assets: | ||||||||
Multifamily communities | $ | 1,452,181,360 | $ | 1,166,766,664 | ||||
Financing | 465,505,478 | 379,070,918 | ||||||
New Market Properties | 683,712,963 | 579,738,707 | ||||||
Preferred Office Properties | 309,351,565 | 285,229,700 | ||||||
Other | 16,967,902 | 10,026,613 | ||||||
Consolidated assets | $ | 2,927,719,268 | $ | 2,420,832,602 |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Capitalized expenditures: | |||||||||||||||
Multifamily communities | $ | 2,897,758 | $ | 2,674,743 | $ | 9,006,194 | $ | 6,762,650 | |||||||
New Market Properties | 1,225,189 | 565,010 | 2,763,764 | 1,679,766 | |||||||||||
Total | $ | 4,122,947 | $ | 3,239,753 | $ | 11,769,958 | $ | 8,442,416 |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Revenues | |||||||||||||||
Rental revenues: | |||||||||||||||
Multifamily communities | $ | 32,366,025 | $ | 29,059,716 | $ | 92,947,516 | $ | 79,330,404 | |||||||
New Market Properties | 11,051,695 | 7,767,052 | 30,967,411 | 16,718,701 | |||||||||||
Preferred Office Properties (1) | 6,654,415 | 492,439 | 19,762,035 | 492,439 | |||||||||||
Total rental revenues | $ | 50,072,135 | $ | 37,319,207 | $ | 143,676,962 | $ | 96,541,544 | |||||||
Other revenues: | |||||||||||||||
Multifamily communities | $ | 3,624,000 | $ | 3,195,237 | $ | 10,173,457 | $ | 8,611,136 | |||||||
New Market Properties | 3,918,486 | 2,426,791 | 11,203,483 | 5,996,759 | |||||||||||
Preferred Office Properties | 2,236,918 | 20,507 | 6,529,078 | 20,506 | |||||||||||
Total other revenues | 9,779,404 | 5,642,535 | 27,906,018 | 14,628,401 | |||||||||||
Financing | 15,048,660 | 10,575,595 | 40,769,467 | 29,957,117 | |||||||||||
Consolidated revenues | $ | 74,900,199 | $ | 53,537,337 | $ | 212,352,447 | $ | 141,127,062 | |||||||
(1) Included in rental revenues for our Preferred Office Properties segment is the amortization of deferred revenue for tenant-funded leasehold improvements from a major tenant in our Three Ravinia office building. As of September 30, 2017, the Company has deferred a total of $23.8 million of such improvements. The remaining balance to be recognized is approximately $23.4 million which is included in the deferred revenues line on the consolidated balance sheets at September 30, 2017. These total costs will be amortized over the lesser of the useful lives of the improvements or the individual lease terms. The Company recorded noncash revenue of approximately $287,000 and $457,000 for the three-month and nine-month periods ended September 30, 2017. |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Property operating and maintenance expense | |||||||||||||||
Multifamily communities | $ | 5,566,320 | $ | 4,552,744 | $ | 14,602,003 | $ | 11,757,778 | |||||||
New Market Properties | 1,260,108 | 904,877 | 4,037,922 | 2,078,128 | |||||||||||
Preferred Office Properties | 1,074,325 | 47,227 | 2,997,626 | 47,227 | |||||||||||
Total | $ | 7,900,753 | $ | 5,504,848 | $ | 21,637,551 | $ | 13,883,133 |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Salary and benefits reimbursement | |||||||||||||||
Multifamily communities | $ | 3,199,836 | $ | 2,790,335 | $ | 8,995,087 | $ | 7,670,403 | |||||||
New Market Properties | — | — | — | — | |||||||||||
Preferred Office Properties | 202,787 | 18,067 | 654,756 | 18,067 | |||||||||||
Total | $ | 3,402,623 | $ | 2,808,402 | $ | 9,649,843 | $ | 7,688,470 |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Property management fees | |||||||||||||||
Multifamily communities | $ | 1,412,908 | $ | 1,366,159 | $ | 4,154,123 | $ | 3,542,237 | |||||||
New Market Properties | 459,884 | 332,869 | 1,381,404 | 741,221 | |||||||||||
Preferred Office Properties | 180,654 | 25,383 | 480,476 | 25,383 | |||||||||||
Total | $ | 2,053,446 | $ | 1,724,411 | $ | 6,016,003 | $ | 4,308,841 |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Real estate taxes | |||||||||||||||
Multifamily communities | $ | 4,808,502 | $ | 3,792,370 | $ | 14,872,841 | $ | 13,034,764 | |||||||
New Market Properties | 2,034,030 | 950,444 | 5,889,820 | 2,376,099 | |||||||||||
Preferred Office Properties | 863,174 | 46,271 | 2,527,123 | 46,271 | |||||||||||
Total | $ | 7,705,706 | $ | 4,789,085 | $ | 23,289,784 | $ | 15,457,134 |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Segment net operating income (Segment NOI) | |||||||||||||||
Multifamily communities | $ | 19,410,732 | $ | 18,413,797 | $ | 55,995,891 | $ | 48,169,241 | |||||||
Financing | 15,048,659 | 10,575,595 | 40,769,467 | 29,957,116 | |||||||||||
New Market Properties | 10,928,364 | 7,795,476 | 29,990,860 | 17,048,716 | |||||||||||
Preferred Office Properties | 6,211,853 | 373,454 | 18,715,713 | 373,454 | |||||||||||
Consolidated segment net operating income | 51,599,608 | 37,158,322 | 145,471,931 | 95,548,527 | |||||||||||
Interest and loss on early debt extinguishment: | |||||||||||||||
Multifamily communities | 9,515,838 | 7,852,145 | 26,620,941 | 21,006,486 | |||||||||||
New Market Properties | 3,858,588 | 2,615,924 | 10,699,043 | 5,588,947 | |||||||||||
Preferred Office Properties | 1,676,934 | 133,681 | 5,030,560 | 133,681 | |||||||||||
Financing | 1,627,058 | 1,632,424 | 5,734,472 | 3,959,391 | |||||||||||
Depreciation and amortization: | |||||||||||||||
Multifamily communities | 18,018,869 | 16,028,880 | 50,850,768 | 42,800,401 | |||||||||||
New Market Properties | 7,611,979 | 5,452,490 | 21,714,453 | 11,997,670 | |||||||||||
Preferred Office Properties | 3,272,922 | 182,993 | 9,621,739 | 182,993 | |||||||||||
Professional fees | 525,539 | 593,623 | 1,551,192 | 2,176,510 | |||||||||||
Management fees, net of forfeitures | 4,491,662 | 3,022,124 | 13,522,653 | 8,025,916 | |||||||||||
Acquisition costs: | |||||||||||||||
Multifamily communities | — | 601,033 | (20,559 | ) | 4,645,530 | ||||||||||
New Market Properties | — | 396,679 | 25,402 | 1,856,933 | |||||||||||
Preferred Office Properties | — | 359,825 | 9,159 | 383,401 | |||||||||||
Equity compensation to directors and executives | 863,412 | 638,414 | 2,607,667 | 1,867,706 | |||||||||||
Gain on sale of real estate | — | — | 37,635,014 | 4,271,506 | |||||||||||
Loss on extinguishment of debt | — | — | (888,428 | ) | — | ||||||||||
Other | 94,028 | 336,707 | 842,566 | 1,055,099 | |||||||||||
Net income (loss) | $ | 42,779 | $ | (2,688,620 | ) | $ | 33,408,461 | $ | (5,860,631 | ) |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||||
Numerator: | |||||||||||||||||
Net income (loss) before gain on sale of real estate | $ | 42,779 | $ | (2,688,620 | ) | $ | (4,226,553 | ) | $ | (10,132,137 | ) | ||||||
Gain on sale of real estate, net of disposition expenses | — | — | 37,635,014 | 4,271,506 | |||||||||||||
Net income (loss) | 42,779 | (2,688,620 | ) | 33,408,461 | (5,860,631 | ) | |||||||||||
Consolidated net (income) loss attributable to non-controlling | (1,119 | ) | 86,484 | (1,097,008 | ) | 175,045 | |||||||||||
interests (A) | |||||||||||||||||
Net income (loss) attributable to the Company | 41,660 | (2,602,136 | ) | 32,311,453 | (5,685,586 | ) | |||||||||||
Dividends declared to preferred stockholders (B) | (16,420,996 | ) | (11,015,706 | ) | (46,042,181 | ) | (28,341,723 | ) | |||||||||
Earnings attributable to unvested restricted stock (C) | (4,302 | ) | (6,159 | ) | (11,743 | ) | (12,434 | ) | |||||||||
Net income (loss) attributable to common stockholders | $ | (16,383,638 | ) | $ | (13,624,001 | ) | $ | (13,742,471 | ) | $ | (34,039,743 | ) | |||||
Denominator: | |||||||||||||||||
Weighted average number of shares of Common Stock - basic | 33,539,920 | 24,340,791 | 30,147,497 | 23,552,951 | |||||||||||||
Effect of dilutive securities: (D) | — | — | — | — | |||||||||||||
Weighted average number of shares of Common Stock, | |||||||||||||||||
basic and diluted | 33,539,920 | 24,340,791 | 30,147,497 | 23,552,951 | |||||||||||||
Net loss per share of Common Stock attributable to | |||||||||||||||||
common stockholders, basic and diluted | $ | (0.49 | ) | $ | (0.56 | ) | $ | (0.46 | ) | $ | (1.45 | ) |
Baldwin Park | City Vista |
Crosstown Walk | Sorrel |
Overton Rise | Lakeland Plaza |
525 Avalon Park | Sunbelt Seven Portfolio |
North by Northwest | Champions Village |
Wade Green Village | Brookwood Office |
Southeastern Six Portfolio | Galleria 75 |
The Market at Victory Village | Three Ravinia |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||||
Pro forma: | ||||||||||||||||||
Revenues | $ | 74,970,784 | $ | 63,754,083 | $ | 212,542,233 | $ | 189,494,650 | ||||||||||
Net income (loss) | $ | 996,408 | $ | (255,917 | ) | $ | 38,270,000 | $ | (5,957,523 | ) | ||||||||
Net income (loss) attributable to the Company | $ | 958,120 | $ | (240,446 | ) | $ | 37,029,878 | $ | (5,799,045 | ) | ||||||||
Net income (loss) attributable to common stockholders | $ | (15,467,178 | ) | $ | (11,262,311 | ) | $ | (9,024,046 | ) | $ | (34,205,524 | ) | ||||||
Net income (loss) per share of Common Stock | ||||||||||||||||||
attributable to common stockholders, | ||||||||||||||||||
Basic and diluted | $ | (0.46 | ) | $ | (0.46 | ) | $ | (0.30 | ) | $ | (1.45 | ) | ||||||
Weighted average number of shares of Common Stock | ||||||||||||||||||
outstanding, basic and diluted | 33,539,920 | 24,340,791 | 30,147,497 | 23,522,951 |
As of September 30, 2017 | |||||||||||||||||||
Carrying value | Fair value measurements using fair value hierarchy | ||||||||||||||||||
Fair Value | Level 1 | Level 2 | Level 3 | ||||||||||||||||
Financial Assets: | |||||||||||||||||||
Real estate loans (1) | $ | 409,204,915 | $ | 455,909,983 | $ | — | $ | — | $ | 455,909,983 | |||||||||
Notes receivable and line of credit receivable | 42,351,496 | 42,351,496 | — | — | 42,351,496 | ||||||||||||||
$ | 451,556,411 | $ | 498,261,479 | $ | — | $ | — | $ | 498,261,479 | ||||||||||
Financial Liabilities: | |||||||||||||||||||
Mortgage notes payable | $ | 1,596,564,253 | $ | 1,595,108,853 | $ | — | $ | — | $ | 1,595,108,853 | |||||||||
Revolving credit facility | 43,000,000 | 43,000,000 | — | — | 43,000,000 | ||||||||||||||
Term loan | 11,000,000 | 11,000,000 | — | — | 11,000,000 | ||||||||||||||
Loan participation obligations | 17,877,914 | 18,218,715 | — | — | 18,218,715 | ||||||||||||||
$ | 1,668,442,167 | $ | 1,667,327,568 | $ | — | $ | — | $ | 1,667,327,568 |
As of December 31, 2016 | |||||||||||||||||||
Carrying value | Fair value measurements using fair value hierarchy | ||||||||||||||||||
Fair Value | Level 1 | Level 2 | Level 3 | ||||||||||||||||
Financial Assets: | |||||||||||||||||||
Real estate loans (1) | $ | 332,761,068 | $ | 374,856,749 | $ | — | $ | — | $ | 374,856,749 | |||||||||
Notes receivable and line of credit receivable | 37,615,675 | 37,615,675 | — | — | 37,615,675 | ||||||||||||||
$ | 370,376,743 | $ | 412,472,424 | $ | — | $ | — | $ | 412,472,424 | ||||||||||
Financial Liabilities: | |||||||||||||||||||
Mortgage notes payable (2) | $ | 1,327,878,112 | 1,314,966,652 | $ | — | $ | — | $ | 1,314,966,652 | ||||||||||
Revolving credit facility | 127,500,000 | 127,500,000 | — | — | 127,500,000 | ||||||||||||||
Term loan | 11,000,000 | 11,000,000 | — | — | 11,000,000 | ||||||||||||||
Loan participation obligations | 20,761,819 | 21,500,448 | — | — | 21,500,448 | ||||||||||||||
$ | 1,487,139,931 | $ | 1,474,967,100 | $ | — | $ | — | $ | 1,474,967,100 |
• | actions and initiatives of the U.S. Government and changes to U.S. Government policies and the execution and impact of these actions, initiatives and policies; |
• | our ability to obtain and maintain financing arrangements, including through the Federal National Mortgage Association, or Fannie Mae, and the Federal Home Loan Mortgage Corporation, or Freddie Mac; |
• | weakness in the national, regional and local economies, which could adversely impact consumer spending and retail sales and in turn tenant demand for space and could lead to increased store closings; |
• | changes in market rental rates; |
• | changes in demographics (including the number of households and average household income) surrounding our shopping centers; |
• | adverse financial conditions for grocery anchors and other retail, service, medical or restaurant tenants; |
• | continued consolidation in the grocery-anchored shopping center sector; |
• | excess amount of retail space in our markets; |
• | reduction in the demand by tenants to occupy our shopping centers as a result of reduced consumer demand for certain retail formats; |
• | the growth of super-centers and warehouse club retailers, such as those operated by Wal-Mart and Costco, and their adverse effect on traditional grocery chains; |
• | the entry of new market participants into the food sales business, such as Amazon's acquisition of Whole Foods, the growth of online food delivery services and online supermarket retailers and their collective adverse effect on traditional grocery chains; |
• | our ability to aggregate a critical mass of grocery-anchored shopping centers or to spin-off, sell or distribute them; |
• | the impact of an increase in energy costs on consumers and its consequential effect on the number of shopping visits to our centers; and |
• | consequences of any armed conflict involving, or terrorist attack against, the United States. |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
2017 | 2016 | % change | 2017 | 2016 | % change | ||||||||||||||||||
Revenues | $ | 74,900,199 | $ | 53,537,337 | 39.9 | % | $ | 212,352,447 | $ | 141,127,062 | 50.5 | % | |||||||||||
Per share data: | |||||||||||||||||||||||
Net income (loss) (1) | $ | (0.49 | ) | $ | (0.56 | ) | (12.5 | )% | $ | (0.46 | ) | $ | (1.45 | ) | (68.3 | )% | |||||||
FFO (2) | $ | 0.36 | $ | 0.31 | 16.1 | % | $ | 1.01 | $ | 0.66 | 53.0 | % | |||||||||||
Core FFO (2) | $ | 0.38 | $ | 0.38 | — | % | $ | 1.11 | $ | 0.99 | 12.1 | % | |||||||||||
Dividends (3) | $ | 0.235 | $ | 0.2025 | 16.0 | % | $ | 0.69 | $ | 0.5975 | 15.5 | % | |||||||||||
• | For the third quarter 2017, our Core FFO payout ratio to our Common Stockholders and Unitholders was approximately 64.5% and our AFFO payout ratio to Common Stockholders and Unitholders was approximately 88.2%. (1) |
• | For the third quarter 2017, our Core FFO payout ratio (before the deduction of preferred dividends) to our Series A Preferred Stockholders was approximately 55.9% and our AFFO payout ratio (before the deduction of preferred dividends) to our Series A Preferred Stockholders was approximately 63.4%. (1) |
• | As of September 30, 2017, our total assets were approximately $2.9 billion compared to approximately $2.1 billion as of September 30, 2016, an increase of approximately $0.8 billion, or approximately 37.9%. This growth was driven primarily by the net addition of 15 real estate properties and an increase of approximately $104.3 million of the funded amount of our real estate loan investment portfolio since September 30, 2016. |
• | As of September 30, 2017, the average age of our multifamily communities was approximately 5.9 years, which we believe is among the youngest in the multifamily REIT industry. |
• | At September 30, 2017, our leverage, as measured by the ratio of our debt to the undepreciated book value of our total assets, was approximately 54.3%. |
• | Cash flow from operations for the quarter ended September 30, 2017 was approximately $28.1 million, an increase of approximately $7.0 million, or 33.8%, compared to approximately $21 million for the quarter ended September 30, 2016. |
• | We sustained damages at our Stone Creek multifamily community from Hurricane Harvey in the third quarter. The resulting impact required us to write off approximately $6.9 million in depreciated real estate assets. We expect our property insurance to cover all losses. Our income for the three-month period ended September 30, 2017 was impacted by approximately $217,000 for our insurance deductible, lost rent, and other related costs. Hurricane Irma also impacted our portfolio of multifamily and grocery-anchored shopping center properties in Florida. We anticipate costs associated with this storm to total approximately $300,000 to $500,000, which will be recognized during the fourth quarter 2017 and beyond. |
• | During the first three quarters 2017, we acquired the following properties: |
Property | Location | Units | Beds | Leasable square feet | |||||||||
Multifamily communities: | |||||||||||||
Broadstone at Citrus Village | Tampa, FL | 296 | n/a | n/a | |||||||||
Retreat at Greystone | Birmingham, AL | 312 | n/a | n/a | |||||||||
Founders Village | Williamsburg, VA | 247 | n/a | n/a | |||||||||
Claiborne Crossing | Louisville, KY | 242 | n/a | n/a | |||||||||
Luxe at Lakewood Ranch | Sarasota, FL | 280 | n/a | n/a | |||||||||
Adara Overland Park | Kansas City, KS | 260 | n/a | n/a | |||||||||
Aldridge at Town Village | Atlanta, GA | 300 | n/a | n/a | |||||||||
The Reserve at Summit Crossing | Atlanta, GA | 172 | n/a | n/a | |||||||||
Grocery-anchored shopping centers: | |||||||||||||
Castleberry-Southard | Atlanta, GA | n/a | n/a | 80,018 | |||||||||
Rockbridge Village | Atlanta, GA | n/a | n/a | 102,432 | |||||||||
Irmo Station | Columbia, SC | n/a | n/a | 99,384 | |||||||||
Maynard Crossing | Raleigh, NC | n/a | n/a | 122,781 | |||||||||
Woodmont Village | Atlanta, GA | n/a | n/a | 85,639 | |||||||||
West Town Market | Charlotte, NC | n/a | n/a | 67,883 | |||||||||
Student housing property: | |||||||||||||
SoL | Tempe, AZ | 225 | 640 | n/a | |||||||||
2,334 | 558,137 | ||||||||||||
• | During the nine-month period ended September 30, 2017, we sold our Sandstone Creek, Ashford Park and Enclave at Vista Ridge multifamily communities located in Kansas City, Kansas, Atlanta, Georgia and Dallas, Texas respectively, which included an aggregate number of 1,072 units. |
• | During the nine-month period ended September 30, 2017, we closed on the following real estate loan investments in support of the development and construction of multifamily communities and one student housing property. For each loan in the following table, we hold an option to purchase the property at a discount to market value, once stabilized. In addition, in the event the loan is refinanced or if the property is sold to a third party, we are entitled to receive the amount of the discount in cash. |
Date | Location (MSA) | Underlying Units | Maximum principal amount (millions) | |||||||||
7/11/2017 | Atlanta, GA | 356 | $ | 22.4 | ||||||||
7/31/2017 | Atlanta, GA | 258 | 17.9 | |||||||||
8/3/2017 | Fort Myers, FL | 224 | 15.6 | |||||||||
8/18/2017 | Charlotte, NC | 338 | 17.7 | |||||||||
9/27/2017 | Atlanta, GA | 248 | (1 | ) | 20.7 | |||||||
1,424 | $ | 94.3 | ||||||||||
(1) An 816-bed student housing property adjacent to the campus of Kennesaw State University in Atlanta, Georgia. | ||||||||||||
• | On April 20, 2017, we closed on a loan investment of up to approximately $31.5 million to acquire a 6.5 acre site located in San Jose, California that is currently zoned to provide for up to 551 multifamily units and approximately 37,000 square feet of commercial space. On June 5, 2017, we closed on a loan investment of up to approximately $2.4 million to acquire a 26 acre site located in Nashville, Tennessee in support of a proposed 301 unit multifamily community. |
• | On June 15, 2017, we refinanced the existing $61.75 million mortgage on our 525 Avalon multifamily community which bore interest at a variable rate of 1 Month LIBOR plus 200 basis points per annum and the secondary financing note of $3.25 million which bore interest at a variable rate of 1 Month LIBOR plus 1100 basis points per annum (both of which were to |
• | On June 22, 2017, we refinanced the existing $16.3 million mortgage on our Stone Creek multifamily community which bore interest at a fixed 3.75% rate per annum and was 29 years from maturity into a mortgage of $20.6 million, which bears interest at a fixed rate of 3.22% per annum and matures in 35 years. |
Owned as of September 30, 2017 | Potential additions from real estate loan investment portfolio (1) | Potential total | ||||||
Multifamily communities: | ||||||||
Properties | 29 | 16 | 45 | |||||
Units | 9,086 | 4,836 | 13,922 | |||||
Grocery-anchored shopping centers: | ||||||||
Properties | 37 | — | (2) | 37 | ||||
Gross leasable area (square feet) | 3,854,196 | — | 3,854,196 | |||||
Student housing properties: | ||||||||
Properties | 2 | 9 | 11 | |||||
Units | 444 | 2,122 | 2,566 | |||||
Beds | 1,319 | 6,509 | 7,828 | |||||
Preferred Office Properties: | ||||||||
Properties | 3 | — | 3 | |||||
Rentable square feet | 1,094,000 | — | 1,094,000 | |||||
(1) We evaluate each project individually and we make no assurance that we will acquire any of the underlying properties from our real estate loan investment portfolio. | ||||||||
(2) Effective as of September 29, 2017, we negotiated the cancellation of the purchase option on our real estate investment loan supporting the Dawsonville grocery-anchored shopping center in exchange for a fee of $250,000. |
Total units upon | Purchase option window | ||||||||
Project/Property | Location | completion (1) | Begin | End | |||||
Multifamily communities: | |||||||||
Encore | Atlanta, GA | 339 | 1/8/2018 | 5/8/2018 | |||||
Palisades | Northern VA | 304 | 3/1/2018 | 7/31/2018 | |||||
Fusion | Irvine, CA | 280 | 1/1/2018 | 4/1/2018 | |||||
Green Park | Atlanta, GA | 310 | 3/1/2018 | 6/30/2018 | (2) | ||||
Overture | Tampa, FL | 180 | 1/1/2018 | 5/1/2018 | |||||
Bishop Street | Atlanta, GA | 232 | 10/1/2018 | 12/31/2018 | |||||
Hidden River | Tampa, FL | 300 | 9/1/2018 | 12/31/2018 | |||||
CityPark II | Charlotte, NC | 200 | 5/1/2018 | 8/31/2018 | |||||
Park 35 on Clairmont | Birmingham, AL | 271 | S + 90 days (3) | S + 150 days (3) | |||||
Fort Myers | Fort Myers, FL | 224 | S + 90 days (3) | S + 150 days (3) | |||||
Wiregrass | Tampa, FL | 392 | S + 90 days (3) | S + 150 days (3) | |||||
360 Forsyth | Atlanta, GA | 356 | S + 90 days (3) | S + 150 days (3) | |||||
Morosgo | Atlanta, GA | 258 | S + 90 days (3) | S + 150 days (3) | |||||
University City Gateway | Charlotte, NC | 338 | S + 90 days (3) | S + 150 days (3) | |||||
Berryessa | San Jose, CA | 551 | N/A | N/A | |||||
Brentwood | Nashville, TN | 301 | N/A | N/A | |||||
Student housing properties: | |||||||||
Haven 12 | Starkville, MS | 152 | 4/1/2018 | 6/30/2018 | |||||
Stadium Village | Atlanta, GA | 198 | 11/1/2017 | (4) | 1/31/2018 | ||||
18 Nineteen | Lubbock, TX | 217 | 4/1/2018 | 6/30/2018 | |||||
Haven South | Waco, TX | 250 | 4/1/2018 | 6/30/2018 | |||||
Haven46 | Tampa, FL | 158 | 11/1/2018 | 1/31/2019 | |||||
Haven Northgate | College Station, TX | 427 | 10/1/2018 | 12/31/2018 | |||||
Lubbock II | Lubbock, TX | 140 | 11/1/2018 | 1/31/2019 | |||||
Haven Charlotte | Charlotte, NC | 332 | 12/1/2019 | 2/28/2020 | |||||
Solis Kennesaw | Atlanta, GA | 248 | (5) | (5) | |||||
6,958 | |||||||||
(1) We evaluate each project individually and we make no assurance that we will acquire any of the underlying properties from our real estate loan investment portfolio. | |||||||||
(2) Effective as of October 26, 2017, the purchase option window on the property was amended as shown. | |||||||||
(3) The option period window begins and ends at the number of days indicated beyond the achievement of a 93% stabilization rate by the underlying property. | |||||||||
(4) On October 27, 2017, we acquired an approximate 98% interest in a joint venture that owns the Stadium Village student housing property in Atlanta, Georgia. | |||||||||
(5) The option period begins on October 1 of the second academic year following project completion and ends on the following December 31. The developer may elect to expedite the option period to begin December 1, 2019 and end on December 31, 2019. |
Preferred Apartment Communities, Inc. | Three months ended September 30, | Change inc (dec) | |||||||||||||
2017 | 2016 | Amount | Percentage | ||||||||||||
Revenues: | |||||||||||||||
Rental revenues | $ | 50,072,135 | $ | 37,319,207 | $ | 12,752,928 | 34.2 | % | |||||||
Other property revenues | 9,334,939 | 5,221,887 | 4,113,052 | 78.8 | % | ||||||||||
Interest income on loans and notes receivable | 9,673,536 | 7,194,742 | 2,478,794 | 34.5 | % | ||||||||||
Interest income from related parties | 5,819,589 | 3,801,501 | 2,018,088 | 53.1 | % | ||||||||||
Total revenues | 74,900,199 | 53,537,337 | 21,362,862 | 39.9 | % | ||||||||||
Operating expenses: | |||||||||||||||
Property operating and maintenance | 7,900,753 | 5,504,848 | 2,395,905 | 43.5 | % | ||||||||||
Property salary and benefits reimbursement to related party | 3,402,623 | 2,808,402 | 594,221 | 21.2 | % | ||||||||||
Property management fees | 2,053,446 | 1,724,411 | 329,035 | 19.1 | % | ||||||||||
Real estate taxes | 7,705,706 | 4,789,085 | 2,916,621 | 60.9 | % | ||||||||||
General and administrative | 1,701,574 | 1,144,256 | 557,318 | 48.7 | % | ||||||||||
Equity compensation to directors and executives | 863,412 | 638,414 | 224,998 | 35.2 | % | ||||||||||
Depreciation and amortization | 28,903,770 | 21,664,363 | 7,239,407 | 33.4 | % | ||||||||||
Acquisition and pursuit costs | — | 1,357,537 | (1,357,537 | ) | — | ||||||||||
Asset management fees to related parties | 5,147,606 | 3,759,084 | 1,388,522 | 36.9 | % | ||||||||||
Insurance, professional fees and other expenses | 1,156,056 | 1,338,343 | (182,287 | ) | (13.6 | )% | |||||||||
Total operating expenses | 58,834,946 | 44,728,743 | 14,106,203 | 31.5 | % | ||||||||||
Contingent asset management and general and administrative | |||||||||||||||
expense fees | (655,944 | ) | (736,960 | ) | 81,016 | (11.0 | )% | ||||||||
Net operating expenses | 58,179,002 | 43,991,783 | 14,187,219 | 32.2 | % | ||||||||||
Operating income | 16,721,197 | 9,545,554 | 7,175,643 | 75.2 | % | ||||||||||
Interest expense | 16,678,418 | 12,234,174 | 4,444,244 | 36.3 | % | ||||||||||
Net income (loss) | $ | 42,779 | $ | (2,688,620 | ) | $ | 2,731,399 | (101.6 | )% |
Preferred Apartment Communities, Inc. | Nine months ended September 30, | Change inc (dec) | |||||||||||||
2017 | 2016 | Amount | Percentage | ||||||||||||
Revenues: | |||||||||||||||
Rental revenues | $ | 143,676,962 | $ | 96,541,544 | $ | 47,135,418 | 48.8 | % | |||||||
Other property revenues | 26,592,295 | 13,290,330 | 13,301,965 | 100.1 | % | ||||||||||
Interest income on loans and notes receivable | 26,111,674 | 20,984,625 | 5,127,049 | 24.4 | % | ||||||||||
Interest income from related parties | 15,971,516 | 10,310,563 | 5,660,953 | 54.9 | % | ||||||||||
Total revenues | 212,352,447 | 141,127,062 | 71,225,385 | 50.5 | % | ||||||||||
Operating expenses: | |||||||||||||||
Property operating and maintenance | 21,637,551 | 13,883,133 | 7,754,418 | 55.9 | % | ||||||||||
Property salary and benefits reimbursement to related party | 9,649,843 | 7,688,470 | 1,961,373 | 25.5 | % | ||||||||||
Property management fees | 6,016,003 | 4,308,841 | 1,707,162 | 39.6 | % | ||||||||||
Real estate taxes | 23,289,784 | 15,457,134 | 7,832,650 | 50.7 | % | ||||||||||
General and administrative | 4,861,083 | 3,255,728 | 1,605,355 | 49.3 | % | ||||||||||
Equity compensation to directors and executives | 2,607,667 | 1,867,706 | 739,961 | 39.6 | % | ||||||||||
Depreciation and amortization | 82,186,960 | 54,981,064 | 27,205,896 | 49.5 | % | ||||||||||
Acquisition and pursuit costs | 14,002 | 6,885,864 | (6,871,862 | ) | (99.8 | )% | |||||||||
Asset management fees to related parties | 14,524,517 | 9,484,161 | 5,040,356 | 53.1 | % | ||||||||||
Insurance, professional fees and other expenses | 3,820,010 | 4,216,838 | (396,828 | ) | (9.4 | )% | |||||||||
Total operating expenses | 168,607,420 | 122,028,939 | 46,578,481 | 38.2 | % | ||||||||||
Contingent asset management and general and administrative | |||||||||||||||
expense fees | (1,001,864 | ) | (1,458,245 | ) | 456,381 | (31.3 | )% | ||||||||
Net operating expenses | 167,605,556 | 120,570,694 | 47,034,862 | 39.0 | % | ||||||||||
Operating income | 44,746,891 | 20,556,368 | 24,190,523 | 117.7 | % | ||||||||||
Interest expense | 48,085,016 | 30,688,505 | 17,396,511 | 56.7 | % | ||||||||||
Loss on extinguishment of debt | 888,428 | — | 888,428 | — | |||||||||||
Net loss before gain on sale of real estate | (4,226,553 | ) | (10,132,137 | ) | 5,905,584 | (58.3 | )% | ||||||||
Gain on sale of real estate | 37,635,014 | 4,271,506 | 33,363,508 | 781.1 | % | ||||||||||
Net income (loss) | $ | 33,408,461 | $ | (5,860,631 | ) | $ | 39,269,092 | — |
New Market Properties, LLC | Three months ended September 30, | Change inc (dec) | |||||||||||||
2017 | 2016 | Amount | Percentage | ||||||||||||
Revenues: | |||||||||||||||
Rental revenues | $ | 11,051,695 | $ | 7,767,052 | $ | 3,284,643 | 42.3 | % | |||||||
Other property revenues | 3,474,020 | 2,006,143 | 1,467,877 | 73.2 | % | ||||||||||
Interest income on loans and notes receivable | 444,466 | 420,648 | 23,818 | 5.7 | % | ||||||||||
Total revenues | 14,970,181 | 10,193,843 | 4,776,338 | 46.9 | % | ||||||||||
Operating expenses: | |||||||||||||||
Property operating and maintenance | 1,260,108 | 904,877 | 355,231 | 39.3 | % | ||||||||||
Property management fees | 459,884 | 332,869 | 127,015 | 38.2 | % | ||||||||||
Real estate taxes | 2,034,030 | 950,444 | 1,083,586 | 114.0 | % | ||||||||||
General and administrative | 159,419 | 150,039 | 9,380 | 6.3 | % | ||||||||||
Equity compensation to directors and executives | 106,949 | 20,356 | 86,593 | 425.4 | % | ||||||||||
Depreciation and amortization | 7,611,979 | 5,452,491 | 2,159,488 | 39.6 | % | ||||||||||
Acquisition and pursuit costs | — | 396,679 | (396,679 | ) | (100.0 | )% | |||||||||
Asset management fees to related parties | 1,138,609 | 775,794 | 362,815 | 46.8 | % | ||||||||||
Insurance, professional fees and other expenses | 51,338 | 148,656 | (97,318 | ) | (65.5 | )% | |||||||||
Total operating expenses | 12,822,316 | 9,132,205 | 3,690,111 | 40.4 | % | ||||||||||
Contingent asset management and general and administrative | |||||||||||||||
expense fees | (21,313 | ) | (88,097 | ) | 66,784 | (75.8 | )% | ||||||||
Net operating expenses | 12,801,003 | 9,044,108 | 3,756,895 | 41.5 | % | ||||||||||
Operating income | 2,169,178 | 1,149,735 | 1,019,443 | 88.7 | % | ||||||||||
Interest expense | 3,858,588 | 2,615,925 | 1,242,663 | 47.5 | % | ||||||||||
Net loss | $ | (1,689,410 | ) | $ | (1,466,190 | ) | $ | (223,220 | ) | 15.2 | % |
New Market Properties, LLC | Nine months ended September 30, | Change inc (dec) | |||||||||||||
2017 | 2016 | Amount | Percentage | ||||||||||||
Revenues: | |||||||||||||||
Rental revenues | $ | 30,967,411 | $ | 16,718,701 | $ | 14,248,710 | 85.2 | % | |||||||
Other property revenues | 9,889,760 | 4,658,688 | 5,231,072 | 112.3 | % | ||||||||||
Interest income on loans and notes receivable | 1,313,723 | 1,338,071 | (24,348 | ) | (1.8 | )% | |||||||||
Total revenues | 42,170,894 | 22,715,460 | 19,455,434 | 85.6 | % | ||||||||||
Operating expenses: | |||||||||||||||
Property operating and maintenance | 4,037,922 | 2,078,128 | 1,959,794 | 94.3 | % | ||||||||||
Property management fees | 1,381,404 | 741,221 | 640,183 | 86.4 | % | ||||||||||
Real estate taxes | 5,889,820 | 2,376,099 | 3,513,721 | 147.9 | % | ||||||||||
General and administrative | 477,420 | 350,930 | 126,490 | 36.0 | % | ||||||||||
Equity compensation to directors and executives | 318,054 | 60,289 | 257,765 | 427.5 | % | ||||||||||
Depreciation and amortization | 21,714,453 | 11,997,671 | 9,716,782 | 81.0 | % | ||||||||||
Acquisition and pursuit costs | 25,402 | 1,856,933 | (1,831,531 | ) | (98.6 | )% | |||||||||
Asset management fees to related parties | 3,178,074 | 1,689,601 | 1,488,473 | 88.1 | % | ||||||||||
Insurance, professional fees and other expenses | 454,394 | 353,835 | 100,559 | 28.4 | % | ||||||||||
Total operating expenses | 37,476,943 | 21,504,707 | 15,972,236 | 74.3 | % | ||||||||||
Contingent asset management and general and administrative | |||||||||||||||
expense fees | (69,557 | ) | (255,281 | ) | 185,724 | (72.8 | )% | ||||||||
Net operating expenses | 37,407,386 | 21,249,426 | 16,157,960 | 76.0 | % | ||||||||||
Operating income | 4,763,508 | 1,466,034 | 3,297,474 | 224.9 | % | ||||||||||
Interest expense | 10,699,043 | 5,588,947 | 5,110,096 | 91.4 | % | ||||||||||
Net loss | $ | (5,935,535 | ) | $ | (4,122,913 | ) | $ | (1,812,622 | ) | 44.0 | % |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||
2017 versus 2016 | 2017 versus 2016 | ||||||||||||
Increase | Increase | ||||||||||||
Rental revenues | Amount (rounded to 000s): | Percent of increase | Amount (rounded to 000s): | Percent of increase | |||||||||
Multifamily and student housing communities: | |||||||||||||
Acquired during 2016-2017 | $ | 5,412,000 | 42.4 | % | $ | 22,097,000 | 46.9 | % | |||||
Acquired during 2011-2015 | 1,305,000 | 10.2 | % | 348,000 | 0.7 | % | |||||||
Properties sold | (3,411,000 | ) | (26.7 | )% | (8,829,000 | ) | (18.7 | )% | |||||
New Market Properties | 3,285,000 | 25.8 | % | 14,249,000 | 30.2 | % | |||||||
Preferred Office Properties | 6,162,000 | 48.3 | % | 19,270,000 | 40.9 | % | |||||||
Total | $ | 12,753,000 | 100.0 | % | $ | 47,135,000 | 100.0 | % |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||
2017 versus 2016 | 2017 versus 2016 | ||||||||||||
Increase | Increase | ||||||||||||
Property operating and maintenance | Amount (rounded to 000s): | Percent of increase | Amount (rounded to 000s): | Percent of increase | |||||||||
Multifamily and student housing communities: | |||||||||||||
Acquired during 2016-2017 | $ | 1,543,000 | 64.4 | % | $ | 4,305,000 | 55.5 | % | |||||
Acquired during 2011-2015 | 85,000 | 3.5 | % | 133,000 | 1.7 | % | |||||||
Properties sold | (614,000 | ) | (25.6 | )% | (1,595,000 | ) | (20.6 | )% | |||||
New Market Properties | 355,000 | 14.8 | % | 1,960,000 | 25.3 | % | |||||||
Preferred Office Properties | 1,027,000 | 42.9 | % | 2,951,000 | 38.1 | % | |||||||
Total | $ | 2,396,000 | 100.0 | % | $ | 7,754,000 | 100.0 | % |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||
2017 versus 2016 | 2017 versus 2016 | ||||||||||||
Increase | Increase | ||||||||||||
Property salary and benefits reimbursement | Amount (rounded to 000s): | Percent of increase | Amount (rounded to 000s): | Percent of increase | |||||||||
Multifamily and student housing communities: | |||||||||||||
Acquired during 2016-2017 | $ | 812,000 | 136.7 | % | $ | 2,248,000 | 114.6 | % | |||||
Acquired during 2011-2015 | (3,000 | ) | (0.5 | )% | 32,000 | 1.6 | % | ||||||
Properties sold | (400,000 | ) | (67.3 | )% | (956,000 | ) | (48.8 | )% | |||||
Preferred Office Properties | 185,000 | 31.1 | % | 637,000 | 32.6 | % | |||||||
Total | $ | 594,000 | 100.0 | % | $ | 1,961,000 | 100.0 | % |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||
2017 versus 2016 | 2017 versus 2016 | ||||||||||||
Increase | Increase | ||||||||||||
Property management fees | Amount (rounded to 000s): | Percent of increase | Amount (rounded to 000s): | Percent of increase | |||||||||
Multifamily and student housing communities: | |||||||||||||
Acquired during 2016-2017 | $ | 206,000 | 62.6 | % | $ | 947,000 | 55.5 | % | |||||
Acquired during 2011-2015 | (3,000 | ) | (0.9 | )% | 36,000 | 2.1 | % | ||||||
Properties sold | (157,000 | ) | (47.7 | )% | (371,000 | ) | (21.7 | )% | |||||
New Market Properties | 127,000 | 38.6 | % | 640,000 | 37.5 | % | |||||||
Preferred Office Properties | 156,000 | 47.4 | % | 455,000 | 26.6 | % | |||||||
Total | $ | 329,000 | 100.0 | % | $ | 1,707,000 | 100.0 | % |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||
2017 versus 2016 | 2017 versus 2016 | ||||||||||||
Increase | Increase | ||||||||||||
Real estate taxes | Amount (rounded to 000s): | Percent of increase | Amount (rounded to 000s): | Percent of increase | |||||||||
Multifamily and student housing communities: | |||||||||||||
Acquired during 2016-2017 | $ | 980,000 | 33.6 | % | $ | 3,277,000 | 41.8 | % | |||||
Acquired during 2011-2015 | 590,000 | 20.2 | % | (42,000 | ) | (0.5 | )% | ||||||
Properties sold | (553,000 | ) | (19.0 | )% | (1,397,000 | ) | (17.8 | )% | |||||
New Market Properties | 1,083,000 | 37.1 | % | 3,514,000 | 44.9 | % | |||||||
Preferred Office Properties | 817,000 | 28.1 | % | 2,481,000 | 31.6 | % | |||||||
Total | $ | 2,917,000 | 100.0 | % | $ | 7,833,000 | 100.0 | % |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||
2017 versus 2016 | 2017 versus 2016 | ||||||||||||
Increase | Increase | ||||||||||||
General and administrative expense | Amount (rounded to 000s): | Percent of increase | Amount (rounded to 000s): | Percent of increase | |||||||||
Multifamily and student housing communities: | |||||||||||||
Acquired during 2016-2017 | $ | 260,000 | 46.7 | % | $ | 722,000 | 45.0 | % | |||||
Acquired during 2011-2015 | 71,000 | 12.7 | % | 188,000 | 11.7 | % | |||||||
Properties sold | (96,000 | ) | (17.2 | )% | (230,000 | ) | (14.3 | )% | |||||
Taxes, licenses & fees | (2,000 | ) | (0.4 | )% | (44,000 | ) | (2.7 | )% | |||||
New Market Properties | 9,000 | 1.6 | % | 127,000 | 7.9 | % | |||||||
Preferred Office Properties | 315,000 | 56.6 | % | 842,000 | 52.4 | % | |||||||
Total | $ | 557,000 | 100.0 | % | $ | 1,605,000 | 100.0 | % |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||
2017 versus 2016 | 2017 versus 2016 | ||||||||||||
Increase | Increase | ||||||||||||
Depreciation and amortization | Amount (rounded to 000s): | Percent of increase | Amount (rounded to 000s): | Percent of increase | |||||||||
Multifamily and student housing communities: | |||||||||||||
Acquired during 2016-2017 | $ | 3,309,000 | 45.7 | % | $ | 13,929,000 | 51.2 | % | |||||
Acquired during 2011-2015 | (103,000 | ) | (1.4 | )% | (2,621,000 | ) | (9.6 | )% | |||||
Properties sold | (1,217,000 | ) | (16.8 | )% | (3,258,000 | ) | (12.0 | )% | |||||
New Market Properties | 2,160,000 | 29.8 | % | 9,717,000 | 35.7 | % | |||||||
Preferred Office Properties | 3,090,000 | 42.7 | % | 9,439,000 | 34.7 | % | |||||||
Total | $ | 7,239,000 | 100.0 | % | $ | 27,206,000 | 100.0 | % |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||
2017 versus 2016 | 2017 versus 2016 | ||||||||||||
increase | increase | ||||||||||||
Revenues | Amount (rounded to 000s): | Percent of increase | Amount (rounded to 000s): | Percent of increase | |||||||||
Multifamily and student housing communities: | |||||||||||||
Acquired during 2016-2017 | $ | 7,556,000 | 35.4 | % | $ | 24,625,000 | 34.6 | % | |||||
Acquired during 2011-2015 | 15,000 | 0.1 | % | 328,000 | 0.5 | % | |||||||
Properties sold | (3,836,000 | ) | (18.0 | )% | (9,774,000 | ) | (13.7 | )% | |||||
New Market Properties | 4,777,000 | 22.4 | % | 19,456,000 | 27.3 | % | |||||||
Preferred Office Properties | 8,378,000 | 39.2 | % | 25,778,000 | 36.2 | % | |||||||
Real estate loan investments | 4,473,000 | 20.9 | % | 10,812,000 | 15.1 | % | |||||||
Total | $ | 21,363,000 | 100.0 | % | $ | 71,225,000 | 100.0 | % |
September 30, | ||||||
2017 versus 2016 | ||||||
increase | ||||||
Gross real estate and real estate loans | Amount (rounded to 000s): | Percent of increase | ||||
Multifamily and student housing communities: | ||||||
Acquired during 2016-2017 | $ | 418,814,000 | 55.3 | % | ||
Acquired during 2011-2015 | (4,652,000 | ) | (0.6 | )% | ||
Properties sold | (125,695,000 | ) | (16.6 | )% | ||
New Market Properties | 158,297,000 | 20.9 | % | |||
Preferred Office Properties | 206,410,000 | 27.3 | % | |||
Real estate loan investments | 103,817,000 | 13.7 | % | |||
Total | $ | 756,991,000 | 100.0 | % |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||
2017 versus 2016 | 2017 versus 2016 | ||||||||||||
increase | increase | ||||||||||||
Insurance, professional fees, and other | Amount (rounded to 000s): | Percent of increase | Amount (rounded to 000s): | Percent of increase | |||||||||
Audit and tax fees | $ | (87,000 | ) | 46.8 | % | $ | (161,000 | ) | 40.6 | % | |||
Insurance premiums | 21,000 | (11.3 | )% | 315,000 | (79.3 | )% | |||||||
Software implementation fees | (56,000 | ) | 30.1 | % | (216,000 | ) | 54.4 | % | |||||
Board of directors fees | 43,000 | (23.1 | )% | 128,000 | (32.2 | )% | |||||||
Legal and other professional fees | (107,000 | ) | 57.5 | % | (463,000 | ) | 116.5 | % | |||||
Total | $ | (186,000 | ) | 100.0 | % | $ | (397,000 | ) | 100.0 | % |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||
2017 versus 2016 | 2017 versus 2016 | ||||||||||||
Increase | Increase | ||||||||||||
Interest expense | Amount (rounded to 000s): | Percent of increase | Amount (rounded to 000s): | Percent of increase | |||||||||
Multifamily and student housing communities: | |||||||||||||
Acquired during 2016-2017 | $ | 2,366,000 | 53.2 | % | $ | 7,648,000 | 44.0 | % | |||||
Acquired during 2011-2015 | 102,000 | 2.3 | % | 150,000 | 0.9 | % | |||||||
Properties sold | (807,000 | ) | (18.2 | )% | (2,183,000 | ) | (12.5 | )% | |||||
New Market Properties | 1,243,000 | 28.0 | % | 5,110,000 | 29.4 | % | |||||||
Preferred Office Properties | 1,543,000 | 34.8 | % | 4,897,000 | 28.1 | % | |||||||
KeyBank operating LOC and Term notes | (3,000 | ) | (0.1 | )% | 1,775,000 | 10.1 | % | ||||||
Total | $ | 4,444,000 | 100.0 | % | $ | 17,397,000 | 100.0 | % |
• | excluding impairment charges on and gains/losses from sales of depreciable property; |
• | plus depreciation and amortization of real estate assets and deferred leasing costs; and |
• | after adjustments for the Company's proportionate share of unconsolidated partnerships and joint ventures. |
Reconciliation of FFO, Core FFO, and AFFO | |||||||||||
to Net Income (Loss) Attributable to Common Stockholders (A) | |||||||||||
Three months ended September 30, | |||||||||||
2017 | 2016 | ||||||||||
Net loss attributable to common stockholders (See note 1) | $ | (16,383,638 | ) | $ | (13,624,001 | ) | |||||
Add: | Loss attributable to non-controlling interests (See note 2) | 1,119 | (86,484 | ) | |||||||
Depreciation of real estate assets | 21,596,586 | 15,283,505 | |||||||||
Amortization of acquired real estate intangible assets and deferred leasing costs | 7,105,646 | 6,243,815 | |||||||||
FFO | 12,319,713 | 7,816,835 | |||||||||
Add: | Acquisition and pursuit costs | — | 1,357,537 | ||||||||
Loan cost amortization on acquisition term note (See note 3) | 28,977 | 26,937 | |||||||||
Amortization of loan coordination fees paid to the Manager (See note 4) | 407,050 | 288,127 | |||||||||
Weather-related property operating losses (See note 5) | 216,734 | — | |||||||||
Core FFO | 12,972,474 | 9,489,436 | |||||||||
Add: | Non-cash equity compensation to directors and executives | 863,412 | 638,414 | ||||||||
Amortization of loan closing costs (See note 6) | 905,371 | 723,426 | |||||||||
Depreciation/amortization of non-real estate assets | 201,538 | 137,043 | |||||||||
Net loan fees received (See note 7) | 878,940 | 250,602 | |||||||||
Accrued interest income received (See note 8) | 1,796,789 | — | |||||||||
Non-cash dividends on Series M Preferred Stock | 33,094 | — | |||||||||
Amortization of lease inducements (See note 9) | 144,566 | — | |||||||||
Less: | Non-cash loan interest income (See note 7) | (4,859,509 | ) | (3,950,676 | ) | ||||||
Amortization of acquired above and below market lease intangibles | |||||||||||
and straight-line rental revenues (See note 10) | (1,940,912 | ) | (643,123 | ) | |||||||
Amortization of deferred revenues (See note 11) | (286,926 | ) | — | ||||||||
Normally recurring capital expenditures and leasing costs (See note 12) | (1,214,309 | ) | (993,684 | ) | |||||||
AFFO | $ | 9,494,528 | $ | 5,651,438 | |||||||
Common Stock dividends and distributions to Unitholders declared: | |||||||||||
Common Stock dividends | $ | 8,158,256 | $ | 4,992,038 | |||||||
Distributions to Unitholders (See note 2) | 211,781 | 179,449 | |||||||||
Total | $ | 8,370,037 | $ | 5,171,487 | |||||||
Common Stock dividends and Unitholder distributions per share | $ | 0.235 | $ | 0.2025 | |||||||
FFO per weighted average basic share of Common Stock and Unit outstanding | $ | 0.36 | $ | 0.31 | |||||||
Core FFO per weighted average basic share of Common Stock and Unit outstanding | $ | 0.38 | $ | 0.38 | |||||||
AFFO per weighted average basic share of Common Stock and Unit outstanding | $ | 0.28 | $ | 0.22 | |||||||
Weighted average shares of Common Stock and Units outstanding: (A) | |||||||||||
Basic: | |||||||||||
Common Stock | 33,539,920 | 24,340,791 | |||||||||
Class A Units | 901,195 | 886,168 | |||||||||
Common Stock and Class A Units | 34,441,115 | 25,226,959 | |||||||||
Diluted Common Stock and Class A Units (B) | 37,819,923 | 27,032,093 | |||||||||
Actual shares of Common Stock outstanding, including 18,306 and 23,247 unvested shares | |||||||||||
of restricted Common Stock at September 30, 2017 and 2016, respectively | 35,616,050 | 24,681,281 | |||||||||
Actual Class A Units outstanding | 901,195 | 886,168 | |||||||||
Total | 36,517,245 | 25,567,449 | |||||||||
(A) Units and Unitholders refer to Class A Units in our Operating Partnership, or Class A Units, and holders of Class A Units, respectively. Unitholders include recipients of awards of Class B Units in our Operating Partnership, or Class B Units, for annual service which became vested and earned and automatically converted to Class A Units. Unitholders also include the entity that contributed the Wade Green grocery-anchored shopping center. The Class A Units collectively represent an approximate 2.62% weighted average non-controlling interest in the Operating Partnership for the three-month period ended September 30, 2017. | |||||||||||
(B) Since our Core FFO and AFFO results are positive for the periods reflected above, we are presenting recalculated diluted weighted average shares of Common Stock and Class A Units for these periods for purposes of this table, which includes the dilutive effect of common stock equivalents from grants of the Class B Units, warrants included in units of Series A Preferred Stock issued, as well as annual grants of restricted Common Stock. The weighted average shares of Common Stock outstanding presented on the Consolidated Statements of Operations are the same for basic and diluted for any period for which we recorded a net loss available to common stockholders. |
Reconciliation of FFO, Core FFO, and AFFO | |||||||||||
to Net Income (Loss) Attributable to Common Stockholders (A) | |||||||||||
Nine months ended September 30, | |||||||||||
2017 | 2016 | ||||||||||
Net loss attributable to common stockholders (See note 1) | $ | (13,742,471 | ) | $ | (34,039,743 | ) | |||||
Less: | Gain on sale of real estate | (37,635,014 | ) | (4,271,506 | ) | ||||||
Add: | Income (loss) attributable to non-controlling interests (See note 2) | 1,097,008 | (175,045 | ) | |||||||
Depreciation of real estate assets | 60,344,386 | 39,006,354 | |||||||||
Amortization of acquired real estate intangible assets and deferred leasing costs | 21,307,608 | 15,576,868 | |||||||||
FFO | 31,371,517 | 16,096,928 | |||||||||
Add: | Acquisition and pursuit costs | 14,002 | 6,885,864 | ||||||||
Loan cost amortization on acquisition term note (See note 3) | 99,145 | 139,744 | |||||||||
Amortization of loan coordination fees paid to the Manager (See note 4) | 1,178,491 | 551,654 | |||||||||
Mortgage loan refinancing and extinguishment costs (See note 13) | 1,058,055 | — | |||||||||
Costs incurred from extension of management agreement with advisor (See note 14) | — | 421,387 | |||||||||
Weather-related property operating losses (See note 5) | 216,734 | — | |||||||||
Contingent fees paid on sale of real estate (See note 15) | 386,570 | — | |||||||||
Core FFO | 34,324,514 | 24,095,577 | |||||||||
Add: | Non-cash equity compensation to directors and executives | 2,607,667 | 1,867,706 | ||||||||
Amortization of loan closing costs (See note 6) | 2,756,519 | 1,740,411 | |||||||||
Depreciation/amortization of non-real estate assets | 534,966 | 397,843 | |||||||||
Net loan fees received (See note 7) | 1,296,384 | 1,374,828 | |||||||||
Accrued interest income received (See note 8) | 7,115,597 | 6,875,957 | |||||||||
Non-cash dividends on Series M Preferred Stock | 33,094 | — | |||||||||
Amortization of lease inducements (See note 9) | 237,037 | — | |||||||||
Less: | Non-cash loan interest income (See note 7) | (13,507,054 | ) | (10,457,754 | ) | ||||||
Cash paid for loan closing costs | — | (13,276 | ) | ||||||||
Amortization of acquired above and below market lease intangibles | |||||||||||
and straight-line rental revenues (See note 10) | (5,497,183 | ) | (1,714,792 | ) | |||||||
Amortization of deferred revenues (See note 11) | (456,815 | ) | — | ||||||||
Normally recurring capital expenditures and leasing costs (See note 12) | (3,031,820 | ) | (2,180,123 | ) | |||||||
AFFO | $ | 26,412,906 | $ | 21,986,377 | |||||||
Common Stock dividends and distributions to Unitholders declared: | |||||||||||
Common Stock dividends | $ | 21,668,290 | $ | 14,200,114 | |||||||
Distributions to Unitholders (See note 2) | 622,304 | 476,293 | |||||||||
Total | $ | 22,290,594 | $ | 14,676,407 | |||||||
Common Stock dividends and Unitholder distributions per share | $ | 0.69 | $ | 0.5975 | |||||||
FFO per weighted average basic share of Common Stock and Unit outstanding | $ | 1.01 | $ | 0.66 | |||||||
Core FFO per weighted average basic share of Common Stock and Unit outstanding | $ | 1.11 | $ | 0.99 | |||||||
AFFO per weighted average basic share of Common Stock and Unit outstanding | $ | 0.85 | $ | 0.90 | |||||||
Weighted average shares of Common Stock and Units outstanding: (A) | |||||||||||
Basic: | |||||||||||
Common Stock | 30,147,497 | 23,552,951 | |||||||||
Class A Units | 909,771 | 796,710 | |||||||||
Common Stock and Class A Units | 31,057,268 | 24,349,661 | |||||||||
Diluted Common Stock and Class A Units (B) | 33,644,520 | 25,854,478 | |||||||||
Actual shares of Common Stock outstanding, including 18,306 and 23,247 unvested shares | |||||||||||
of restricted Common Stock at September 30, 2017 and 2016, respectively | 35,616,050 | 24,681,281 | |||||||||
Actual Class A Units outstanding | 901,195 | 886,168 | |||||||||
Total | 36,517,245 | 25,567,449 | |||||||||
(A) Units and Unitholders refer to Class A Units in our Operating Partnership, or Class A Units, and holders of Class A Units, respectively. Unitholders include recipients of awards of Class B Units in our Operating Partnership, or Class B Units, for annual service which became vested and earned and automatically converted to Class A Units. Unitholders also include the entity that contributed the Wade Green grocery-anchored shopping center. The Class A Units collectively represent an approximate 2.93% weighted average non-controlling interest in the Operating Partnership for the nine-month period ended September 30, 2017. | |||||||||||
(B) Since our Core FFO and AFFO results are positive for the periods reflected above, we are presenting recalculated diluted weighted average shares of Common Stock and Class A Units for these periods for purposes of this table, which includes the dilutive effect of common stock equivalents from grants of the Class B Units, warrants included in units of Series A Preferred Stock issued, as well as annual grants of restricted Common Stock. The weighted average shares of Common Stock outstanding presented on the Consolidated Statements of Operations are the same for basic and diluted for any period for which we recorded a net loss available to common stockholders. |
1) | Rental and other property revenues and expenses for the three-month and nine-month periods ended September 30, 2017 include activity for the four multifamily communities and four grocery-anchored shopping centers acquired during the third quarter 2017 only from their respective dates of acquisition. In addition, the third quarter 2017 period includes a full quarter of activity for the four multifamily communities, three grocery-anchored shopping centers, one student housing property and two office buildings acquired during the fourth quarter of 2016 and first two quarters of 2017. Rental and other property revenues and expenses for the three-month period ended September 30, 2016 include activity for the two multifamily communities, one student housing property, one office building and eight grocery-anchored shopping centers only from their respective dates of acquisition during the third quarter 2016. |
2) | Non-controlling interests in our Operating Partnership consisted of a total of 901,195 Class A Units as of September 30, 2017. Included in this total are 419,228 Class A Units which were granted as partial consideration to the seller in conjunction with the seller's contribution to us on February 29, 2016 of the Wade Green grocery-anchored shopping center. The remaining Class A units were awarded primarily to our key executive officers. The Class A Units are apportioned a percentage of our financial results as non-controlling interests. The weighted average ownership percentage of these holders of Class A Units was calculated to be 2.62% and 3.51% for the three-month periods ended September 30, 2017 and 2016, respectively. |
3) | We incurred loan closing costs for the acquisition of the Village at Baldwin Park multifamily community during the first quarter 2016, which were funded by our $35 million acquisition term loan facility, or 2016 Term Loan, and on our $11 million term note, which we used to finance the acquisition of our Anderson Central grocery-anchored shopping center. These costs were deferred and are being amortized over the lives of the two instruments. The amortization expense of these deferred costs is an additive adjustment in the calculation of Core FFO. |
4) | As of January 1, 2016, we pay loan coordination fees to Preferred Apartment Advisors, LLC, our Manager, related to obtaining mortgage financing for acquired properties. Loan coordination fees were introduced to more accurately reflect the administrative effort involved in arranging debt financing for acquired properties. The portion of the loan coordination fees paid up until July 1, 2017 attributable to the financing were amortized over the lives of the respective mortgage loans, and this non-cash amortization expense is an addition to FFO in the calculation of Core FFO. Beginning effective July 1, 2017, the loan coordination fee was lowered from 1.6% to 0.6% of the amount of any mortgage indebtedness on newly-acquired properties. All of the loan coordination fees paid to our Manager subsequent to July 1, 2017 are amortized over the life of the debt. At September 30, 2017, aggregate unamortized loan coordination fees were approximately $11.3 million, which will be amortized over a weighted average remaining loan life of approximately 10.8 years. |
5) | We sustained operating losses, consisting primarily of lost rental income, at certain of our properties due to Hurricane Harvey and Hurricane Irma during the third quarter 2017; these costs are added back to FFO in our calculation of Core FFO. |
6) | We incur loan closing costs on our existing mortgage loans, which are secured on a property-by-property basis by each of our acquired real estate assets, and also for occasional amendments to our $150 million syndicated revolving line of credit with Key Bank National Association, or our Revolving Line of Credit. These loan closing costs are also amortized over the lives of the respective loans and the Revolving Line of Credit, and this non-cash amortization expense is an addition to Core FFO in the calculation of AFFO. Neither we nor the Operating Partnership have any recourse liability in connection with any of the mortgage loans, nor do we have any cross-collateralization arrangements with respect to the assets securing the mortgage loans, other than security interests in 49% of the equity interests of the subsidiaries owning such assets, granted in connection with our Revolving Line of Credit, which provides for full recourse liability. At September 30, 2017, aggregate unamortized loan costs were approximately $17.2 million, which will be amortized over a weighted average remaining loan life of approximately 7.9 years. |
7) | We receive loan origination fees in conjunction with the origination of certain real estate loan investments. These fees are then recognized as revenue over the lives of the applicable loans as adjustments of yield using the effective interest method. The total fees received after the payment of loan origination fees to our Manager are additive adjustments in the calculation of AFFO. Correspondingly, the amortized non-cash income is a deduction in the calculation of AFFO. We also accrue over the lives of certain loans additional interest amounts that become due to us at the time of repayment of the loan or refinancing of the property, or when the property is sold to a third party. |
8) | The Company records deferred interest revenue over the lives of certain of its real estate loans. This adjustment reflects the receipt during the periods presented of interest income which was earned and accrued prior to those periods presented on various real estate loans. |
9) | This adjustment removes the non-cash amortization of costs incurred to induce tenants to lease space in our office buildings and grocery-anchored shopping centers. |
10) | This adjustment reflects straight-line rent adjustments and the reversal of the non-cash amortization of below-market and above-market lease intangibles, which were recognized in conjunction with the Company’s acquisitions and which are amortized over the estimated average remaining lease terms from the acquisition date for multifamily communities and over the remaining lease terms for grocery-anchored shopping center assets and office buildings. At September 30, 2017, the balance of unamortized below-market lease intangibles was approximately $31.7 million, which will be recognized over a weighted average remaining lease period of approximately 8.9 years. |
11) | This adjustment removes the non-cash amortization of deferred revenue recorded by us in conjunction with Company-owned lessee-funded tenant improvements in our office buildings. |
12) | We deduct from Core FFO normally recurring capital expenditures that are necessary to maintain our assets’ revenue streams in the calculation of AFFO. This adjustment also deducts from Core FFO capitalized amounts for third party costs during the period to originate or renew leases in our grocery-anchored shopping centers and office buildings. No adjustment is made in the calculation of AFFO for nonrecurring capital expenditures. |
13) | The adjustment consists of a loan prepayment penalty and other charges related to the refinancing of our Stone Creek multifamily community which totaled $888,428 and for the refinancing of our 525 Avalon multifamily community of $169,627. |
14) | We incurred legal costs pertaining to the extension of our management agreement with our Manager. The three-year extension was effective as of June 3, 2016. |
15) | On May 25, 2017,we closed on the sale of our Enclave at Vista Ridge multifamily community to an unrelated third party. At such date, our Manager collected a cumulative total of approximately $390,000 of contingent fees. The sales transaction, and the fact that the Company’s capital contributions for the Enclave at Vista Ridge property achieved an annual rate of return which exceeded 7%, which triggered the fees to become immediately due and payable to the Manager at the closing of the sale transaction. The recognition of these fees are added to FFO in the calculation of Core FFO as they are not likely to occur on a regular basis. |
• | operating expenses directly related to our portfolio of multifamily communities, grocery-anchored shopping centers and office buildings (including regular maintenance items); |
• | capital expenditures incurred to lease our multifamily communities, grocery-anchored shopping centers and office buildings; |
• | interest expense on our outstanding property level debt; |
• | amounts due on our Credit Facility; |
• | distributions that we pay to our preferred stockholders, common stockholders, and unitholders; |
• | cash redemptions that we may pay to our preferred stockholders, and |
• | committed investments. |
Nonrecurring/first generation capital expenditures | Recurring / second generation capital expenditures | ||||||||||||||||||
Budgeted at acquisition | Other | Total | Total | ||||||||||||||||
Multifamily communities: | |||||||||||||||||||
Summit Crossing | $ | — | $ | 65,953 | $ | 65,953 | $ | 114,510 | $ | 180,463 | |||||||||
Stone Rise | — | 8,273 | 8,273 | 28,870 | 37,143 | ||||||||||||||
Ashford Park | — | 19,800 | 19,800 | 11,208 | 31,008 | ||||||||||||||
McNeil Ranch | — | 24,402 | 24,402 | 60,705 | 85,107 | ||||||||||||||
Lake Cameron | — | 42,412 | 42,412 | 126,105 | 168,517 | ||||||||||||||
Stoneridge Farms at the Hunt Club | — | 265,634 | 265,634 | 116,823 | 382,457 | ||||||||||||||
Vineyards | — | 31,639 | 31,639 | 162,811 | 194,450 | ||||||||||||||
Enclave | 29,770 | 29,770 | 73,011 | 102,781 | |||||||||||||||
Sandstone Creek | — | — | 5,938 | 5,938 | |||||||||||||||
Cypress | — | 25,813 | 25,813 | 46,978 | 72,791 | ||||||||||||||
Northpointe | — | 39,488 | 39,488 | 82,540 | 122,028 | ||||||||||||||
Venue at Lakewood Ranch | — | 2,470 | 2,470 | 60,969 | 63,439 | ||||||||||||||
Aster at Lely | 147,205 | 13,806 | 161,011 | 46,053 | 207,064 | ||||||||||||||
CityPark View | — | 59,847 | 59,847 | 5,483 | 65,330 | ||||||||||||||
Avenues at Creekside | — | 86,635 | 86,635 | 74,807 | 161,442 | ||||||||||||||
Citilakes | — | 18,314 | 18,314 | 98,559 | 116,873 | ||||||||||||||
Stone Creek | — | 2,974 | 2,974 | 63,915 | 66,889 | ||||||||||||||
Lenox Portfolio | 235,137 | 86,213 | 321,350 | 90,669 | 412,019 | ||||||||||||||
Village at Baldwin Park | 2,375,284 | 13,604 | 2,388,888 | 111,523 | 2,500,411 | ||||||||||||||
Crosstown Walk | — | 27,293 | 27,293 | 59,864 | 87,157 | ||||||||||||||
Overton Rise | 10,568 | 16,253 | 26,821 | 30,041 | 56,862 | ||||||||||||||
525 Avalon Park | 126,129 | 8,613 | 134,742 | 149,101 | 283,843 | ||||||||||||||
City Vista | 41,367 | 10,916 | 52,283 | 12,889 | 65,172 | ||||||||||||||
Sorrel | 133,572 | 238,903 | 372,475 | 19,292 | 391,767 | ||||||||||||||
Citrus Village | — | 45,112 | 45,112 | 39,466 | 84,578 | ||||||||||||||
Retreat at Greystone | 7,489 | 14,671 | 22,160 | 13,398 | 35,558 | ||||||||||||||
Founders Village | 13,548 | (3,766 | ) | 9,782 | 13,862 | 23,644 | |||||||||||||
Claiborne Crossing | 30,499 | 5,244 | 35,743 | 20,345 | 56,088 | ||||||||||||||
Luxe at Lakewood Ranch | — | 14,215 | 14,215 | — | 14,215 | ||||||||||||||
3,120,798 | 1,214,501 | 4,335,299 | 1,739,735 | 6,075,034 | |||||||||||||||
Student Housing: | |||||||||||||||||||
North by Northwest | 308,956 | 123,931 | 432,887 | 70,988 | 503,875 | ||||||||||||||
SoL | — | 48,481 | 48,481 | 36,729 | 85,210 | ||||||||||||||
308,956 | 172,412 | 481,368 | 107,717 | 589,085 | |||||||||||||||
Total | $ | 3,429,754 | $ | 1,386,913 | $ | 4,816,667 | $ | 1,847,452 | $ | 6,664,119 |
Nonrecurring capital expenditures | Recurring capital expenditures | ||||||||||||||||||
Budgeted at acquisition | Other | Total | Total | ||||||||||||||||
Multifamily communities: | |||||||||||||||||||
Summit Crossing | $ | — | $ | 96,109 | $ | 96,109 | $ | 98,571 | $ | 194,680 | |||||||||
Trail Creek | 23,908 | 23,908 | 44,386 | 68,294 | |||||||||||||||
Stone Rise | 60,737 | 60,737 | 56,003 | 116,740 | |||||||||||||||
Ashford Park | — | 165,476 | 165,476 | 137,478 | 302,954 | ||||||||||||||
McNeil Ranch | — | 10,554 | 10,554 | 63,220 | 73,774 | ||||||||||||||
Lake Cameron | — | 71,845 | 71,845 | 83,241 | 155,086 | ||||||||||||||
Stoneridge Farms at the Hunt Club | 197,895 | 58,716 | 256,611 | 128,774 | 385,385 | ||||||||||||||
Vineyards | 45,222 | 68,649 | 113,871 | 132,466 | 246,337 | ||||||||||||||
Enclave | 159,576 | 18,320 | 177,896 | 111,351 | 289,247 | ||||||||||||||
Sandstone | 89,857 | 70,300 | 160,157 | 137,320 | 297,477 | ||||||||||||||
Cypress | 77,666 | 7,500 | 85,166 | 25,883 | 111,049 | ||||||||||||||
Northpointe | 25,121 | 36,001 | 61,122 | 56,635 | 117,757 | ||||||||||||||
Venue at Lakewood Ranch | 94,869 | 2,881 | 97,750 | 18,814 | 116,564 | ||||||||||||||
Aster at Lely | — | 8,902 | 8,902 | 40,292 | 49,194 | ||||||||||||||
CityPark View | — | 2,641 | 2,641 | 8,540 | 11,181 | ||||||||||||||
Avenues at Creekside | 104,366 | 7,986 | 112,352 | 94,992 | 207,344 | ||||||||||||||
Citilakes | 247,941 | 15,095 | 263,036 | 38,759 | 301,795 | ||||||||||||||
Stone Creek | 118,923 | 3,675 | 122,598 | 41,975 | 164,573 | ||||||||||||||
Lenox Portfolio | 28,246 | 3,049 | 31,295 | 82,954 | 114,249 | ||||||||||||||
Village at Baldwin | 812,219 | 3,649 | 815,868 | 197,764 | 1,013,632 | ||||||||||||||
Crosstown Walk | — | 24,053 | 24,053 | 42,134 | 66,187 | ||||||||||||||
Overton Rise | 54,742 | 7,565 | 62,307 | 23,574 | 85,881 | ||||||||||||||
Avalon Park | 29,572 | 7,221 | 36,793 | 83,366 | 120,159 | ||||||||||||||
City Vista | — | — | — | — | — | ||||||||||||||
Sorrel | 26,036 | — | 26,036 | 255 | 26,291 | ||||||||||||||
2,112,251 | 774,832 | 2,887,083 | 1,748,747 | 4,635,830 | |||||||||||||||
Student Housing: | |||||||||||||||||||
North by Northwest | — | — | — | 22,609 | 22,609 | ||||||||||||||
Total | $ | 2,112,251 | $ | 774,832 | $ | 2,887,083 | $ | 1,771,356 | $ | 4,658,439 |
• | the principal amount of our long-term debt as it becomes due or matures; |
• | capital expenditures needed for our multifamily communities and retail shopping centers; |
• | costs associated with current and future capital raising activities; |
• | costs to acquire additional multifamily communities, retail assets or other real estate and enter into new and fund existing lending opportunities; and |
• | our minimum distributions necessary to maintain our REIT status. |
Total | Less than one year | 1-3 years | 3-5 years | More than five years | ||||||||||||||||
Mortgage debt obligations: | ||||||||||||||||||||
Interest | $ | 427,358,809 | $ | 58,401,787 | $ | 103,679,620 | $ | 86,059,735 | $ | 179,217,667 | ||||||||||
Principal | 1,596,564,254 | 44,595,725 | 308,077,749 | 392,027,375 | 851,863,405 | |||||||||||||||
Line of Credit: | ||||||||||||||||||||
Interest | 17,438 | 17,438 | — | — | — | |||||||||||||||
Principal | 43,000,000 | 43,000,000 | — | — | — | |||||||||||||||
Term note: | ||||||||||||||||||||
Interest | 50,646 | 50,646 | — | — | — | |||||||||||||||
Principal | 11,000,000 | 11,000,000 | — | — | — | |||||||||||||||
Total | $ | 2,077,991,147 | $ | 157,065,596 | $ | 411,757,369 | $ | 478,087,110 | $ | 1,031,081,072 |
Item 3. | Quantitative and Qualitative Disclosures About Market Risk |
• | maintain a reasonable ratio of fixed-rate, long-term debt to total debt so that floating-rate exposure is kept at an acceptable level; |
• | place interest rate caps on floating-rate debt where appropriate; and |
• | take advantage of favorable market conditions for long-term debt and/or equity financings. |
Item 4. | Controls and Procedures |
Item 1. | Legal Proceedings |
Item 1A. | Risk Factors |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds |
Item 3. | Defaults Upon Senior Securities |
Item 4. | Mine Safety Disclosures |
Item 5. | Other Information |
Item 6. | Exhibits |
EXHIBIT INDEX | ||
Exhibit Number | Description | |
10.1 | (1) | |
10.2 | (1) | |
10.3 | (1) | |
10.4 | (1) | |
10.5 | (2) | |
12.1 | * | |
31.1 | * | |
31.2 | * | |
32.1 | * | |
32.2 | * | |
101 | * | XBRL (eXtensible Business Reporting Language). The following materials from Preferred Apartment Communities, Inc.’s Quarterly Report on Form 10-Q for the period ended September 30, 2017, formatted in XBRL: (i) Consolidated balance sheets at September 30, 2017 and December 31, 2016, (ii) consolidated statements of operations for the three months and six months ended September 30, 2017 and 2016, (iii) consolidated statement of stockholders' equity, (iv) consolidated statement of cash flows and (v) notes to consolidated financial statements. |
* | Filed herewith | |
(1) | Previously filed with the Current Report on Form 8-K filed by the Registrant with the Securities and Exchange Commission on July 10, 2017 | |
(2) | Previously filed with the Current Report on Form 8-K filed by the Registrant with the Securities and Exchange Commission on September 1, 2017 |
SIGNATURES | |||||||
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. | |||||||
PREFERRED APARTMENT COMMUNITIES, INC. | |||||||
Date: November 6, 2017 | By: | /s/ John A. Williams | |||||
John A. Williams | |||||||
Chief Executive Officer | |||||||
Date: November 6, 2017 | By: | /s/ Michael J. Cronin | |||||
Michael J. Cronin | |||||||
Executive Vice President, Chief Accounting Officer and Treasurer | |||||||
Exhibit 12 | ||||||||||||||||||||||||
Statement of Ratios | ||||||||||||||||||||||||
Preferred Apartment Communities, Inc. | ||||||||||||||||||||||||
Ratio of Earnings to Combined Fixed Charges and Preferred Dividends | ||||||||||||||||||||||||
Nine months ended September 30, | Year ended December 31, | |||||||||||||||||||||||
2017 | 2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||||||||
Earnings: | ||||||||||||||||||||||||
Net income (loss) | $ | 33,408,461 | $ | (9,843,414 | ) | $ | (2,425,989 | ) | $ | 2,127,203 | $ | (4,205,492 | ) | $ | (146,630 | ) | ||||||||
Add: | ||||||||||||||||||||||||
Fixed charges | 48,085,016 | 44,284,144 | 21,315,731 | 10,188,187 | 5,780,526 | 2,504,679 | ||||||||||||||||||
Less: Net (income) loss attributable to | ||||||||||||||||||||||||
non-controlling interests | (1,097,008 | ) | 310,291 | 25,321 | (33,714 | ) | 222,404 | — | ||||||||||||||||
Total earnings | $ | 80,396,469 | $ | 34,751,021 | $ | 18,915,063 | $ | 12,281,676 | $ | 1,797,438 | $ | 2,358,049 | ||||||||||||
Fixed charges: | ||||||||||||||||||||||||
Interest expense | $ | 44,178,263 | $ | 40,688,714 | $ | 19,841,455 | $ | 9,183,128 | $ | 4,921,797 | $ | 2,310,667 | ||||||||||||
Amortization of deferred loan costs | ||||||||||||||||||||||||
related to mortgage indebtedness | 3,906,753 | 3,595,429 | 1,474,276 | 1,005,059 | 858,729 | 194,012 | ||||||||||||||||||
Total fixed charges | 48,085,016 | 44,284,143 | 21,315,731 | 10,188,187 | 5,780,526 | 2,504,679 | ||||||||||||||||||
Preferred dividends | 46,042,181 | 41,080,645 | 18,751,934 | 7,382,320 | 3,963,146 | 450,806 | ||||||||||||||||||
Total Combined fixed charges and | ||||||||||||||||||||||||
preferred dividends | $ | 94,127,197 | $ | 85,364,788 | $ | 40,067,665 | $ | 17,570,507 | $ | 9,743,672 | $ | 2,955,485 | ||||||||||||
Ratio of Earnings to Combined fixed | ||||||||||||||||||||||||
charges and preferred dividends (A) | 0.85 | 0.41 | 0.47 | 0.7 | 0.18 | 0.80 | ||||||||||||||||||
1. | I have reviewed this quarterly report on Form 10-Q of Preferred Apartment Communities, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: November 6, 2017 | /s/ John A. Williams |
John A. Williams | |
Chief Executive Officer |
Date: November 6, 2017 | /s/ Michael J. Cronin |
Michael J. Cronin | |
Executive Vice President, Chief Accounting Officer and Treasurer |
Date: November 6, 2017 | /s/ John A. Williams | |
John A. Williams | ||
Chief Executive Officer |
Date: November 6, 2017 | /s/ Michael J. Cronin | |
Michael J. Cronin | ||
Executive Vice President, Chief Accounting Officer and Treasurer |
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Document and Entity Information Document - shares |
9 Months Ended | |
---|---|---|
Sep. 30, 2017 |
Oct. 31, 2017 |
|
Document and Entity Information | ||
entity registrant name | PREFERRED APARTMENT COMMUNITIES INC | |
entity CIK | 0001481832 | |
Current fiscal year end date | --12-31 | |
document type | 10-Q | |
document period end date | Sep. 30, 2017 | |
document fiscal year focus | 2017 | |
entity filer category | Accelerated Filer | |
document fiscal period focus | Q3 | |
Entity Well-known Seasoned Issuer | No | |
Entity Current Reporting Status | Yes | |
Entity Voluntary Filers | No | |
amendment flag | false | |
entity common stock, shares outstanding | 36,692,002 |
Statements of Operations - USD ($) |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Revenues: | ||||
Rental revenues | $ 50,072,135 | $ 37,319,207 | $ 143,676,962 | $ 96,541,544 |
Other property revenues | 9,334,939 | 5,221,887 | 26,592,295 | 13,290,330 |
Interest income on loan and note receivable | 9,673,536 | 7,194,742 | 26,111,674 | 20,984,625 |
Revenue from Related Parties | 5,819,589 | 3,801,501 | 15,971,516 | 10,310,563 |
Total revenues | 74,900,199 | 53,537,337 | 212,352,447 | 141,127,062 |
Operating expenses: | ||||
Property operating and maintenance | 7,900,753 | 5,504,848 | 21,637,551 | 13,883,133 |
property salaries related party | 3,402,623 | 2,808,402 | 9,649,843 | 7,688,470 |
Property management fees | 2,053,446 | 1,724,411 | 6,016,003 | 4,308,841 |
Real estate taxes | 7,705,706 | 4,789,085 | 23,289,784 | 15,457,134 |
General and administrative | 1,701,574 | 1,144,256 | 4,861,083 | 3,255,728 |
Share-based Compensation | 863,412 | 638,414 | 2,607,667 | 1,867,706 |
Depreciation and amortization | 28,903,770 | 21,664,363 | 82,186,960 | 54,981,064 |
Acquisition costs | 0 | 1,357,537 | 14,002 | 6,885,864 |
Management fees | 5,147,606 | 3,759,084 | 14,524,517 | 9,484,161 |
Other Expenses | 1,156,056 | 1,338,343 | 3,820,010 | 4,216,838 |
Total operating expenses | 58,834,946 | 44,728,743 | 168,607,420 | 122,028,939 |
manager's fees deferred | (655,944) | (736,960) | (1,001,864) | (1,458,245) |
Operating Expenses | 58,179,002 | 43,991,783 | 167,605,556 | 120,570,694 |
Operating Income (Loss) | 16,721,197 | 9,545,554 | 44,746,891 | 20,556,368 |
Interest Expense | 16,678,418 | 12,234,174 | 48,085,016 | 30,688,505 |
Gain (Loss) on Extinguishment of Debt | 0 | 0 | 888,428 | 0 |
Gains (Losses) on Sales of Investment Real Estate | 0 | 0 | 37,635,014 | 4,271,506 |
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | 42,779 | (2,688,620) | 33,408,461 | (5,860,631) |
Income (Loss) from Continuing Operations, Including Portion Attributable to Noncontrolling Interest | 42,779 | (2,688,620) | 33,408,461 | (5,860,631) |
net loss attributable to non-controlling interests | (1,119) | 86,484 | (1,097,008) | 175,045 |
Net loss attributable to the Company | 41,660 | (2,602,136) | 32,311,453 | (5,685,586) |
Dividends to preferred stockholders | (16,420,996) | (11,015,706) | (46,042,181) | (28,341,723) |
Deemed noncash dividend | 33,094 | 0 | ||
NetIncomeAllocatedToUnvestedRestrictedShares | (4,302) | (6,159) | (11,743) | (12,434) |
Net Income (Loss) Available to Common Stockholders, Basic | $ (16,383,638) | $ (13,624,001) | $ (13,742,471) | $ (34,039,743) |
Earnings Per Share, Basic | $ (0.49) | $ (0.56) | $ (0.46) | $ (1.45) |
Dividends, Common Stock, Cash | $ 21,668,290 | |||
Common Stock, Dividends, Per Share, Declared | $ 0.235 | $ 0.2025 | $ 0.69 | $ 0.5975 |
Weighted Average Number of Shares Outstanding, Basic and Diluted | 33,539,920 | 24,340,791 | 30,147,497 | 23,552,951 |
Weighted Average Number of Shares Outstanding, Diluted | 33,539,920 | 24,340,791 | 30,147,497 | 23,552,951 |
Statements of Operations (Parenthetical) - USD ($) |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Income Statement Parentheticals [Abstract] | ||||
property management fees paid to related party | $ 1,571,448 | $ 1,140,603 | $ 3,005,919 | $ 2,211,691 |
acquisition fees paid to related party | $ 0 | $ 313,398 | $ 0 | $ 491,409 |
Statements of Equity and Accumulated Deficit - 9 months ended Sep. 30, 2017 - USD ($) |
Total |
Series A Preferred Stock [Member] |
Series M Preferred Stock [Member] |
Common Stock [Member] |
Common Stock [Member]
Series A Preferred Stock [Member]
|
Common Stock [Member]
Series M Preferred Stock [Member]
|
Additional Paid-in Capital [Member] |
Additional Paid-in Capital [Member]
Series A Preferred Stock [Member]
|
Additional Paid-in Capital [Member]
Series M Preferred Stock [Member]
|
Accumulated Deficit [Member] |
Accumulated Deficit [Member]
Series A Preferred Stock [Member]
|
Accumulated Deficit [Member]
Series M Preferred Stock [Member]
|
Total Stockholders' Equity [Member] |
Total Stockholders' Equity [Member]
Series A Preferred Stock [Member]
|
Total Stockholders' Equity [Member]
Series M Preferred Stock [Member]
|
Noncontrolling Interest [Member] |
Noncontrolling Interest [Member]
Series A Preferred Stock [Member]
|
Noncontrolling Interest [Member]
Series M Preferred Stock [Member]
|
Preferred Stock [Member]
Series A Preferred Stock [Member]
|
Preferred Stock [Member]
Series M Preferred Stock [Member]
|
ClassBUnits [Member] |
ClassBUnits [Member]
Common Stock [Member]
|
ClassBUnits [Member]
Additional Paid-in Capital [Member]
|
ClassBUnits [Member]
Accumulated Deficit [Member]
|
ClassBUnits [Member]
Total Stockholders' Equity [Member]
|
ClassBUnits [Member]
Noncontrolling Interest [Member]
|
ClassBUnits [Member]
Preferred Stock [Member]
Series A Preferred Stock [Member]
|
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Proceeds from Issuance of Preferred Stock and Preference Stock | $ 228,250,765 | $ 228,248,476 | $ 228,250,765 | $ 2,289 | |||||||||||||||||||||||
Balance at Dec. 31, 2016 | 885,261,162 | $ 264,982 | 906,737,470 | $ (23,231,643) | 883,779,953 | $ 1,481,209 | 9,144 | ||||||||||||||||||||
Stock Redeemed or Called During Period, Value | (4,500,405) | 5,922 | (4,506,174) | (4,500,405) | (153) | ||||||||||||||||||||||
Stock Issued During Period, Value, New Issues | 76,804,479 | 49,067 | 76,755,412 | 76,804,479 | |||||||||||||||||||||||
exercise of warrants | 43,377,257 | 33,875 | 43,343,382 | 0 | 43,377,257 | 0 | 0 | ||||||||||||||||||||
restricted stock vesting | 0 | 216 | (216) | 0 | 0 | 0 | 0 | ||||||||||||||||||||
Stock Issued During Period, Value, Conversion of Units | 0 | 1,915 | 1,676,579 | 0 | 1,678,494 | (1,678,494) | 0 | ||||||||||||||||||||
amortization of Class A Unit awards | $ 2,250,367 | $ 0 | $ 0 | $ 0 | $ 0 | $ 2,250,367 | $ 0 | ||||||||||||||||||||
Syndication and offering costs | (26,725,432) | 0 | (26,725,432) | 0 | (26,725,432) | 0 | 0 | ||||||||||||||||||||
Stock Issued During Period, Value, Share-based Compensation, Gross | 357,300 | 0 | 357,300 | 0 | 357,300 | 0 | 0 | ||||||||||||||||||||
Dividends, Common Stock, Cash | (21,668,290) | (21,668,290) | (21,668,290) | ||||||||||||||||||||||||
Balance at Sep. 30, 2017 | 1,170,151,180 | 355,977 | 1,157,030,161 | 9,079,810 | 1,166,477,228 | 3,673,952 | 11,280 | ||||||||||||||||||||
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | 33,408,461 | 0 | 0 | 32,311,453 | 32,311,453 | 1,097,008 | 0 | ||||||||||||||||||||
non-controlling interest equity adjustment | 0 | 0 | (1,146,165) | 0 | (1,146,165) | 1,146,165 | 0 | ||||||||||||||||||||
Payments to Noncontrolling Interests | $ (622,303) | $ 0 | $ 0 | $ 0 | $ 0 | $ (622,303) | 0 | ||||||||||||||||||||
Dividends, Preferred Stock | $ (45,791,950) | $ (250,231) | $ 0 | $ 0 | $ (45,791,950) | $ (250,231) | $ 0 | $ 0 | $ (45,791,950) | $ (250,231) | $ 0 | $ 0 | $ 0 | $ 0 |
Statements of Equity and Accumulated Deficit Parenthetical |
9 Months Ended |
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Sep. 30, 2017
$ / shares
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Common Stock, Dividends, Per Share, Declared | $ 0.69 |
Series A Preferred Stock [Member] | |
Preferred Stock, Dividends Per Share, Declared | $ 5.00 |
Organization |
9 Months Ended |
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Sep. 30, 2017 | |
Organization [Abstract] | |
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] | Organization and Basis of Presentation Preferred Apartment Communities, Inc. was formed as a Maryland corporation on September 18, 2009, and elected to be taxed as a real estate investment trust, or REIT, under the Internal Revenue Code of 1986, as amended, or the Code, effective with its tax year ended December 31, 2011. Unless the context otherwise requires, references to the "Company", "we", "us", or "our" refer to Preferred Apartment Communities, Inc., together with its consolidated subsidiaries, including Preferred Apartment Communities Operating Partnership, L.P., or the Operating Partnership. The Company was formed primarily to acquire and operate multifamily properties in select targeted markets throughout the United States. As part of its business strategy, the Company may enter into forward purchase contracts or purchase options for to-be-built multifamily communities and may make real estate related loans, provide deposit arrangements, or provide performance assurances, as may be necessary or appropriate, in connection with the development of multifamily communities and other properties. As a secondary strategy, the Company also may acquire or originate senior mortgage loans, subordinate loans or real estate loan investments secured by interests in multifamily properties, membership or partnership interests in multifamily properties and other multifamily related assets and invest a lesser portion of its assets in other real estate related investments, including other income-producing property types, senior mortgage loans, subordinate loans or real estate loan investments secured by interests in other income-producing property types, or membership or partnership interests in other income-producing property types as determined by its Manager (as defined below) as appropriate for the Company. The Company is externally managed and advised by Preferred Apartment Advisors, LLC, or its Manager, a Delaware limited liability company and related party (see Note 6). As of September 30, 2017, the Company had 35,597,744 shares of common stock, par value $0.01 per share, or Common Stock, issued and outstanding and was the approximate 97.5% owner of the Operating Partnership at that date. The number of partnership units not owned by the Company totaled 901,195 at September 30, 2017 and represented Class A OP Units of the Operating Partnership, or Class A OP Units. The Class A OP Units are convertible at any time at the option of the holder into the Operating Partnership's choice of either cash or Common Stock. In the case of cash, the value is determined based upon the trailing 20-day volume weighted average price of the Company's Common Stock. The Company controls the Operating Partnership through its sole general partner interest and conducts substantially all of its business through the Operating Partnership. The Company has determined the Operating Partnership is a variable interest entity, or VIE, of which the Company is the primary beneficiary. New Market Properties, LLC owns and conducts the business of our portfolio of grocery-anchored shopping centers. Preferred Office Properties, LLC owns and conducts the business of our portfolio of office buildings. Preferred Campus Communities, LLC owns and conducts the business of our portfolio of off-campus student housing communities. Each of these entities are wholly-owned subsidiaries of the Operating Partnership. Basis of Presentation These consolidated financial statements include all of the accounts of the Company and the Operating Partnership presented in accordance with accounting principles generally accepted in the United States of America, or GAAP. All significant intercompany transactions have been eliminated in consolidation. Certain adjustments have been made consisting of normal recurring accruals, which, in the opinion of management, are necessary for a fair presentation of the Company's financial condition and results of operations. The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. The year end condensed balance sheet data was derived from audited financial statements, but does not include all the disclosures required by GAAP. These financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Company's 2016 Annual Report on Form 10-K filed with the Securities and Exchange Commission, or the SEC, on March 1, 2017. |
Significant Accounting Policies |
9 Months Ended |
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Sep. 30, 2017 | |
Summary of Significant Accounting Policies [Abstract] | |
Significant Accounting Policies [Text Block] | Summary of Significant Accounting Policies Acquisitions and Impairments of Real Estate Assets When the Company acquires property, it allocates the aggregate purchase price to tangible assets, consisting of land, building, site improvements and furniture, fixtures and equipment, and identifiable intangible assets, consisting of the value of in- place leases and above-market and below-market leases as described further below, using estimated fair values of each component at the time of purchase. The Company follows the guidance as outlined in ASC 805-10, Business Combinations, as amended by ASU-2017-01. Tangible assets The fair values of land acquired is calculated under the highest and best use model, using formal appraisals and comparable land sales, among other inputs. Building value is determined by valuing the property on a “go-dark” basis as if it were vacant, and also using a replacement cost approach, which two results are then reconciled. Site improvements are valued using replacement cost. Management determines the as-if-vacant fair value of a property using methods similar to those used by independent appraisers. Factors considered by management in performing these analyses include an estimate of carrying costs during the expected lease-up periods considering current market conditions and costs to execute similar leases, including leasing commissions and other related costs. The values of furniture, fixtures, and equipment are estimated by calculating their replacement cost and reducing that value by factors based upon estimates of their remaining useful lives. Identifiable intangible assets In-place leases Multifamily communities and student housing properties The fair value of in-place leases are estimated by calculating the estimated time to fill a hypothetically empty apartment complex to its stabilization level (estimated to be 93% occupancy) based on historical observed move-in rates for each property, and which approximate market rates. Carrying costs during these hypothetical expected lease-up periods are estimated, considering current market conditions and include real estate taxes, insurance and other operating expenses and estimates of lost rentals at market rates. The intangible assets are calculated by estimating the net cash flows of the in-place leases to be realized, as compared to the net cash flows that would have occurred had the property been vacant at the time of acquisition and subject to lease-up. The acquired in-place lease values are amortized to operating expense over the average remaining non-cancelable term of the respective in-place leases. Grocery-anchored shopping centers and office buildings The fair value of in-place leases represent the value of direct costs associated with leasing, including opportunity costs associated with lost rentals that are avoided by acquiring in-place leases. Direct costs associated with obtaining a new tenant include commissions, legal and marketing costs, incentives such as tenant improvement allowances and other direct costs. Such direct costs are estimated based on our consideration of current market costs to execute a similar lease. The value of opportunity costs is calculated using the estimated market lease rates and the estimated absorption period of the space. These direct costs and opportunity costs are included in the accompanying consolidated balance sheets as acquired intangible assets and are amortized to expense over the remaining term of the respective leases. Above-market and below-market lease values Multifamily communities and student housing properties These values are usually not significant or are not applicable for these properties. Grocery-anchored shopping centers and office buildings The values of above-market and below-market leases are developed by comparing the Company's estimate of the average market rents and expense reimbursements to the average contract rent at the property acquisition date. The amount by which contract rent and expense reimbursements exceed estimated market rent are summed for each individual lease and discounted for a singular aggregate above-market lease intangible asset for the property. The amount by which estimated market rent exceeds contract rent and expense reimbursements are summed for each individual lease and discounted for a singular aggregate below-market lease intangible liability. The above-market or below-market lease values are recorded as a reduction or increase, respectively, to rental revenue over the remaining noncancelable term of the respective leases, plus any below-market probable renewal options. Impairment assessment The Company evaluates its tangible and identifiable intangible real estate assets for impairment when events such as declines in a property’s operating performance, deteriorating market conditions, or environmental or legal concerns bring recoverability of the carrying value of one or more assets into question. When qualitative factors indicate the possibility of impairment, the total undiscounted cash flows of the asset group, including proceeds from disposition, are compared to the net book value of the asset group. If this test indicates that impairment exists, an impairment loss is recorded in earnings equal to the shortage of the book value to fair value, calculated as the discounted net cash flows of the asset group. Revenue Recognition Multifamily communities and student housing properties Rental revenue is recognized when earned from residents of the Company's multifamily communities, which is over the terms of rental agreements, typically of 12 months’ duration. The Company evaluates the collectability of amounts due from residents and maintains an allowance for doubtful accounts for estimated losses resulting from the inability of residents to make required payments then due under lease agreements. The balance of amounts due from residents are generally deemed uncollectible 30 days beyond the due date, at which point they are fully reserved. Grocery-anchored shopping centers and office buildings Rental revenue from tenants' operating leases in the Company's grocery-anchored shopping centers and office buildings is recognized on a straight-line basis over the term of the lease. Revenue based on "percentage rent" provisions that provide for additional rents that become due upon achievement of specified sales revenue targets (as specified in each lease agreement) is recognized only after the tenant exceeds its specified sales revenue target. Revenue from reimbursements of the tenants' share of real estate taxes, insurance and common area maintenance, or CAM, costs are recognized in the period in which the related expenses are incurred. Lease termination revenues are recognized ratably over the revised remaining lease term after giving effect to the termination notice or when tenant vacates and the Company has no further obligations under the lease. Rents and tenant reimbursements collected in advance are recorded as prepaid rent within other liabilities in the accompanying consolidated balance sheets. The Company estimates the collectability of the tenant receivable related to rental and reimbursement billings due from tenants and straight-line rent receivables, which represent the cumulative amount of future adjustments necessary to present rental revenue on a straight-line basis, by taking into consideration the Company's historical write-off experience, tenant credit-worthiness, current economic trends, and remaining lease terms. The Company may provide retail and office building tenants an allowance for the construction of leasehold improvements. These leasehold improvements are capitalized and depreciated over the shorter of the useful life of the improvements or the remaining lease term. If the allowance represents a payment for a purpose other than funding leasehold improvements, or in the event the Company is not considered the owner of the improvements, the allowance is considered to be a lease incentive and is recognized over the lease term as a reduction of rental revenue. Determination of the appropriate accounting for the payment of a tenant allowance is made on a lease-by-lease basis, considering the facts and circumstances of the individual tenant lease. When the Company is the owner of the leasehold improvements, recognition of rental revenue commences when the lessee is given possession of the leased space upon completion of tenant improvements. However, when the leasehold improvements are owned by the tenant, the lease inception date is the date the tenant obtains possession of the leased space for purposes of constructing its leasehold improvements. For our Preferred Office Properties, if the improvement is deemed to be a “landlord asset,” and the tenant funded the tenant improvements, the cost is amortized over the term of the underlying lease as rental revenues. In order to qualify as a landlord asset, the specifics of the tenant’s assets are reviewed, including the Company's approval of the tenant’s detailed expenditures, whether such assets may be usable by other future tenants, whether the Company has consent to alter or remove the assets from the premises and generally remain the Company's property at the end of the lease. Acquisition Costs Through December 31, 2016, the Company expensed property acquisition costs as incurred, which include costs such as due diligence, legal, certain accounting, environmental and consulting, when the acquisition constituted a business combination. As described below in the section entitled New Accounting Pronouncements, Accounting Standards Update 2017-01 was adopted by the Company effective January 1, 2017, which changed the definition of a business. Under this new guidance, most property acquisitions made by the Company will fall within the category of acquired assets rather than acquired businesses. This distinction will cause the Company to capitalize its costs for acquisitions (including, effective July 1, 2017, a 1% acquisition fee), allocate them to the fair value of acquired assets and liabilities and amortize these costs over the remaining useful lives of those assets and liabilities. New Accounting Pronouncements In May 2014, the FASB issued Accounting Standards Update 2014-09 ("ASU 2014-09"), Revenue from Contracts with Customers (Topic 606). ASU 2014-09 provides a single comprehensive revenue recognition model for contracts with customers (excluding certain contracts, such as lease contracts) to improve comparability within industries. ASU 2014-09 requires an entity to recognize revenue to reflect the transfer of goods or services to customers at an amount the entity expects to be paid in exchange for those goods and services and provide enhanced disclosures, all to provide more comprehensive guidance for transactions such as service revenue and contract modifications. The new standard may be applied retrospectively to each prior period presented or prospectively with the cumulative effect, if any, recognized as of the date of adoption. The Company anticipates selecting the modified retrospective transition method with a cumulative effect recognized as of the date of adoption and will adopt the new standard effective January 1, 2018, when effective. In addition, the evaluation of non-lease components under ASU 2014-09 will not be effective until Accounting Standards Update No. 2016-02, Leases (Topic 842), ("ASU 2016-02") becomes effective (see further discussion below), which will be first quarter of 2019 for the Company. The Company has determined that approximately 90% of its revenues from its New Market Properties and office building segments are derived from either long-term leases with its tenants or reimbursement of property tax and insurance expenses, which are excluded from the scope of the ASU 2014-09. Of the remaining 10% of New Market Properties and office building segment revenues, the majority is comprised of common area maintenance (“CAM”) reimbursements, which is a non-lease component under ASU 2014-09 and therefore within its scope of adoption. Based on management's assessment to date, the Company does not expect the timing of the recognition of reimbursement revenue and other miscellaneous income to change as a result of the new guidance, though certain classifications will change between rental revenue and tenant reimbursements. Similarly, the Company's multifamily communities segment derives the majority of its revenues from rental operations, to which this standard is not applicable. However, the Company does provide non-rental services to its residents related to ancillary services and is currently evaluating the various revenue streams to identify any potential sources which may require bifurcation and reclassification. The Company is continuing to evaluate the impact the adoption of ASU 2014-09 will have on its results of operations and financial condition. In January 2016, the FASB issued Accounting Standards Update 2016-01 ("ASU 2016-01"), Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Liabilities. The new standard's applicable provisions to the Company include an elimination of the disclosure requirement of the significant inputs and assumptions underlying the fair value calculations of its financial instruments which are carried at amortized cost. The standard is effective on January 1, 2018, and early adoption is not permitted. The adoption of ASU 2016-01 will not impact the Company's results of operations or financial condition. In February 2016, the FASB issued Accounting Standards Update 2016-02 ("ASU 2016-02"), Leases (ASC 842), which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e. lessees and lessors). The new standard requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales-type leases, direct financing leases and operating leases and supersedes the previous standard, ASC 840 Leases. The standard is effective on January 1, 2019, with early adoption permitted. The Company anticipates adopting ASC 842 utilizing the modified retrospective method and is continuing to evaluate the impacts this standard will have on its results of operations and financial condition. In June 2016, the FASB issued Accounting Standards Update 2016-13 ("ASU 2016-13"), Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The new standard requires financial instruments carried at amortized cost to be presented at the net amount expected to be collected, utilizing a valuation account which reflects the cumulative net adjustments from the gross amortized cost value. Under existing GAAP, entities would not record a valuation allowance until a loss was probable of occurring. The standard is effective for the Company on January 1, 2020. The Company is currently evaluating methods of deriving initial valuation accounts to be applied to its real estate loan portfolio. The Company is continuing to evaluate the pending guidance but does not believe the adoption of ASU 2016-13 will have a material impact on its results of operations or financial condition, since the Company has not yet experienced a credit loss related to any of its financial instruments. In August 2016, the FASB issued Accounting Standards Update 2016-15 ("ASU 2016-15"), Statement of Cash Flows—(Topic 326): Classification of Certain Cash Receipts and Cash Payments. The new standard clarifies or establishes guidance for the presentation of various cash transactions on the statement of cash flows. The portion of the guidance applicable to the Company's business activities include the requirement that cash payments for debt prepayment or debt extinguishment costs be presented as cash out flows for financing activities. The standard is effective for the Company on January 1, 2018. The adoption of ASU 2016-15 will not impact the Company’s consolidated financial statements, since its current policy is to classify such costs as cash out flows for financing activities. In November 2016, the FASB issued Accounting Standards Update 2016-18 ("ASU 2016-18"), Statement of Cash Flows—(Topic 230): Restricted Cash, which requires restricted cash to be presented with cash and cash equivalents when reconciling the beginning and ending amounts in the statements of cash flows. ASU 2016-18 is effective for interim and annual periods beginning after December 15, 2017, and early adoption is permitted. The Company plans to adopt ASU 2016-18 on January 1, 2018. The Company currently reports changes in restricted cash within the investing activities section of its consolidated statements of cash flows and does not expect the adoption of ASU 2016-18 to impact its results of operations and financial condition. In January 2017, the FASB issued Accounting Standards Update 2017-01 ("ASU 2017-01"), Business Combinations - (Topic 805): Clarifying the Definition of a Business. ASU 2017-01 clarifies the definition of a business and provides further guidance for evaluating whether a transaction will be accounted for as an acquisition of an asset or a business. ASU 2017-01 is effective for interim and annual periods beginning after December 15, 2017, and early adoption is permitted. The Company adopted ASU 2017-01 as of January 1, 2017. The Company believes its future acquisitions of multifamily communities, office buildings, grocery-anchored shopping centers, and student housing properties will generally qualify as asset acquisitions. To the extent acquisitions are deemed to be asset acquisitions, acquisition costs have been and will be capitalized and amortized rather than expensed as incurred. The impact of the adoption of ASU 2017-01 was an decrease of approximately $3.4 million of the Company's reported net income available to common stockholders for the three-month period ended September 30, 2017 and a decrease of approximately $6.1 million of the Company's reported net loss available to common stockholders for the nine-month period ended September 30, 2017 than it would have under previous guidance. In February 2017, the FASB issued Accounting Standards Update 2017-05 (“ASU 2017-05”), Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets, which provides guidance for recognizing gains and losses from the transfer of nonfinancial assets and for partial sales of nonfinancial assets, and is effective for financial statements issued for fiscal years and interim periods beginning after December 15, 2017. The new standard may be applied retrospectively to each prior period presented or under the modified retrospective method, with the cumulative effect recognized as of the date of adoption. The Company currently expects to adopt ASU 2017-05 utilizing the modified retrospective method and is continuing to evaluate the effect the adoption of ASU 2017-05 will have on its results of operations and financial condition. |
Real Estate Assets (Notes) |
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Real Estate Assets [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combination Disclosure | Real Estate Assets The Company's real estate assets consisted of:
Storm-related costs The Company sustained damages at its Stone Creek multifamily community from Hurricane Harvey during the third quarter. The resulting impact required the write-off of approximately $6.9 million in depreciated real estate assets. Additional storm-related costs included approximately $217,000 during the three-month period ended September 30, 2017 for the related insurance deductible, lost rent, and other related costs. Multifamily communities sold On January 20, 2017, the Company closed on the sale of its 364-unit multifamily community in Kansas City, Kansas, or Sandstone Creek, to an unrelated third party for a purchase price of $48.1 million, exclusive of closing costs and resulting in a gain of $0.3 million, which is net of disposition expenses including $1.4 million of debt defeasance related costs. Sandstone Creek contributed approximately $1.2 million and $(0.9) million of net income (loss) to the consolidated operating results of the Company for the nine-month periods ended September 30, 2017 and 2016, respectively. On March 7, 2017, the Company closed on the sale of its 408-unit multifamily community in Atlanta, Georgia, or Ashford Park, to an unrelated third party for a purchase price of $65.5 million, exclusive of closing costs and resulting in a gain of $30.4 million, which is net of disposition expenses including $1.1 million of debt defeasance related costs plus a prepayment premium of approximately $0.4 million. Ashford Park contributed approximately $2.3 million and $0.6 million of net income to the consolidated operating results of the Company for the nine-month periods ended September 30, 2017 and 2016, respectively. On May 25, 2017, the Company closed on the sale of its 300-unit multifamily community in Dallas, Texas, or Enclave at Vista Ridge, to an unrelated third party for a purchase price of $44.0 million, exclusive of closing costs and resulting in a gain of $6.9 million, net of disposition expenses including $2.1 million of debt defeasance related costs. Enclave at Vista Ridge contributed approximately $9.8 million and $(0.2) million of net income (loss) to the consolidated operating results of the Company for the nine-month periods ended September 30, 2017 and 2016, respectively. The carrying amounts of the significant assets and liabilities of the disposed properties at the dates of sale were:
Multifamily communities acquired During the nine-month period ended September 30, 2017, the Company completed the acquisition of the following multifamily communities and student housing property:
(1) Purchase prices shown are exclusive of acquired escrows, security deposits, prepaids, capitalized acquisition costs and other miscellaneous assets and assumed liabilities. (2) A 640-bed student housing community located adjacent to the campus of Arizona State University in Tempe, Arizona. Grocery-anchored shopping centers acquired During the nine months ended September 30, 2017, the Company completed the acquisition of the following grocery-anchored shopping centers:
(1) Purchase prices shown are exclusive of acquired escrows, security deposits, prepaids, capitalized acquisition costs and other miscellaneous assets and assumed liabilities. The Company allocated the purchase prices to the acquired assets and liabilities based upon their fair values, as shown in the following table. The purchase price allocation was based upon the Company's best estimates of the fair values of the acquired assets and liabilities. |
Real Estate Loans, Notes Receivable, and Lines of Credit |
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Receivables [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans, Notes, Trade and Other Receivables Disclosure [Text Block] | he Palisades, Green Park and Stadium Village (see note 16) loans are subject to a loan participation agreement with a syndicate of unaffiliated third parties, under which the syndicate is to fund approximately 25% of the loan commitment amount and collectively receive approximately 25% of interest payments, returns of principal and purchase option discount (if applicable). The Company's Encore loan is subject to a loan participation agreement of 49% of the loan commitment amount, interest payments, and return of principal. The aggregate amount of the Company's liability under the loan participation agreements at September 30, 2017 was approximately $17.9 million. The Company's real estate loans are collateralized by 100% of the membership interests of the underlying project entity, and, where considered necessary, by unconditional joint and several repayment guaranties and performance guaranties by the principal(s) of the borrowers. These guaranties generally remain in effect until the receipt of a final certificate of occupancy. All of the guaranties are subject to the rights held by the senior lender pursuant to a standard intercreditor agreement. The Crescent Avenue, Haven Northgate, Brentwood, and Berryessa loans are also collateralized by the acquired land or property. The18 Nineteen and Haven South loans are additionally collateralized by an assignment by the developer of security interests in unrelated projects. Prepayment of the real estate loans are permitted in whole, but not in part, without the Company's consent. Management monitors the credit quality of the obligors under each of the Company's real estate loans by tracking the timeliness of scheduled interest and principal payments relative to the due dates as specified in the loan documents, as well as draw requests on the loans relative to the project budgets. In addition, management monitors the actual progress of development and construction relative to the construction plan, as well as local, regional and national economic conditions that may bear on our current and target markets. The credit quality of the Company’s borrowers is primarily based on their payment history on an individual loan basis, and as such, the Company does not assign quantitative credit value measures or categories to its real estate loans and notes receivable in credit quality categories. At September 30, 2017, none of the Company's real estate loans were delinquent. Our portfolio of notes and lines of credit receivable consisted of:
The Company recorded interest income and other revenue from these instruments as follows:
The Company extends loans for purposes such as to partially finance the development of multifamily residential communities, to acquire land in anticipation of developing and constructing multifamily residential communities, and for other real estate or real estate related projects. Certain of these loans include characteristics such as exclusive options to purchase the project within a specific time window following project completion and stabilization, the sufficiency of the borrowers' investment at risk and the existence of payment and performance guaranties provided by the borrowers, can cause the loans to create variable interests to the Company and require further evaluation as to whether the variable interest creates a variable interest entity, or VIE, which would necessitate consolidation of the project. The Company considers the facts and circumstances pertinent to each entity borrowing under the loan, including the relative amount of financing the Company is contributing to the overall project cost, decision making rights or control held by the Company, guarantees provided by third parties, and rights to expected residual gains or obligations to absorb expected residual losses that could be significant from the project. If the Company is deemed to be the primary beneficiary of a VIE, consolidation treatment would be required. The Company has no decision making authority or power to direct activity, except normal lender rights, which are subordinate to the senior loans on the projects. The Company has concluded that it is not the primary beneficiary of the borrowing entities and therefore it has not consolidated these entities in its consolidated financial statements. The Company's maximum exposure to loss from these loans is their drawn amount as of September 30, 2017 of approximately $371.3 million. The maximum aggregate amount of loans to be funded as of September 30, 2017 was approximately $461.6 million. The Company has evaluated its real estate loans, where appropriate, for accounting treatment as loans versus real estate development projects, as required by ASC 310. For each loan, the characteristics and the facts and circumstances indicate that loan accounting treatment is appropriate. The Company is also subject to a geographic concentration of risk that could be considered significant with regard to the Encore, Encore Capital, Green Park, Stadium Village, Bishop Street, Dawsonville Marketplace, Crescent Avenue, 360 Forsyth, Morosgo and TP Kennesaw loans, all of which are partially supporting proposed various real estate projects in or near Atlanta, Georgia. The drawn amount of these loans as of September 30, 2017 totaled approximately $98.4 million (with a total commitment amount of approximately $142.7 million) and in the event of a total failure to perform by the borrowers and guarantors, would subject the Company to a total possible loss of that amount. |
Redeemable Preferred Stock |
9 Months Ended |
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Sep. 30, 2017 | |
Redeemable Stock, Preferred [Abstract] | |
Preferred Stock [Text Block] | Redeemable Preferred Stock and Equity Offerings On February 14, 2017, the Company terminated its offering of up to 900,000 Units, or Follow-on Offering, and on the same day, the Company’s registration statement on Form S-3 (Registration No. 333-211924) (the “$1.5 Billion Follow-on Registration Statement”) was declared effective by the SEC. This $1.5 Billion Follow-on Registration Statement allows us to offer up to a maximum of 1,500,000 Units, with each Unit consisting of one share of Series A Redeemable Preferred Stock and one Warrant to purchase up to 20 shares of Common Stock (the "$1.5 Billion Unit Offering"). The price per Unit is $1,000, subject to adjustment if a participating broker-dealer reduces its commission. Each share of Preferred Stock ranks senior to Common Stock with respect to dividend rights and carries a cumulative annual 6% dividend of the stated per share value of $1,000, payable monthly as declared by the Company’s board of directors. Dividends begin accruing on the date of issuance. The redemption schedule of the Preferred Stock allows redemptions at the option of the holder from the date of issuance of the Preferred Stock through the first year subject to a 13% redemption fee. After year one, the redemption fee decreases to 10%, after year three it decreases to 5%, after year four it decreases to 3%, and after year five there is no redemption fee. Any redeemed shares of Preferred Stock are entitled to any accrued but unpaid dividends at the time of redemption and any redemptions may be in cash or Common Stock, at the Company’s discretion. The Warrant is exercisable by the holder at an exercise price of 120% of the current market price per share of the Common Stock on the date of issuance of such warrant with a minimum exercise price of $19.50 per share. The current market price per share of the Common Stock is determined using the closing price of the common stock immediately preceding the issuance of such Warrant. The Warrants are not exercisable until one year following the date of issuance and expire four years following the date of issuance. The Units are being offered by Preferred Capital Securities, LLC, or PCS, an affiliate of the Company, on a "reasonable best efforts" basis. The Company intends to invest substantially all the net proceeds of the $1.5 Billion Unit Offering in connection with the acquisition of multifamily communities, other real estate-related investments and general working capital purposes. Except as described in the $1.5 Billion Follow-on Registration Statement, the terms of the $1.5 Billion Unit Offering are substantially similar to those under the Follow-on Offering. As of February 14, 2017, which was the final closing of the Follow-on Offering, offering costs specifically identifiable to Unit offering closing transactions, such as commissions, dealer manager fees, and other registration fees, totaled approximately $97.2 million. These costs are reflected as a reduction of stockholders' equity at the time of closing. In addition, the costs related to the offering not related to a specific closing transaction totaled approximately $15.0 million. As of February 14, 2017, the Company had issued all available Units under the Primary Series A Offering and the Follow-on Offering and collected net proceeds of approximately $891.2 million after commissions. Since the maximum number of Units available to be issued under the Primary Series A Offering and the Follow-on Offering were issued, the Company consequently recognized 100.0% of the approximate $15.0 million deferred offering costs as a reduction of stockholders' equity. For the $1.5 Billion Unit Offering, as of September 30, 2017, offering costs specifically identifiable to Unit offering closing transactions, such as commissions, dealer manager fees, and other registration fees, totaled approximately $14.9 million. These costs are reflected as a reduction of stockholders' equity at the time of closing. In addition, the costs related to the offering not related to a specific closing transaction totaled approximately $3.0 million. As of September 30, 2017, the Company had issued 151,923 Units and collected net proceeds of approximately $136.5 million after commissions under the $1.5 Billion Unit Offering. The number of Units issued was approximately 10.1% of the maximum number of Units anticipated to be issued under the $1.5 Billion Unit Offering. Consequently, the Company cumulatively recognized approximately 10.1% of the approximate $3.0 million deferred to date, or approximately $300,000 as a reduction of stockholders' equity. The remaining balance of offering costs not yet reflected as a reduction of stockholder's equity, approximately $2.7 million, are reflected in the asset section of the consolidated balance sheet as deferred offering costs at September 30, 2017. The remainder of current and future deferred offering costs related to the $1.5 Billion Unit Offering will likewise be recognized as a reduction of stockholders' equity in the proportion of the number of Units issued to the maximum number of Units anticipated to be issued. Offering costs not related to a specific closing transaction are subject to an overall cap of approximately 1.5% (discussed further below) of the total gross proceeds raised during the Unit offerings. Cumulatively, a total of 25,715 shares of Preferred Stock have been subsequently redeemed from the Primary Series A Offering, the Follow-on Offering, and the $1.5 Billion Unit Offering. Aggregate offering expenses, including selling commissions and dealer manager fees, will be capped at 11.5% of the aggregate gross proceeds of the $1.5 Billion Unit Offering, of which the Company will reimburse its Manager up to 1.5% of the gross proceeds of such offering for all organization and offering expenses incurred, excluding selling commissions and dealer manager fees; however, upon approval by the conflicts committee of the board of directors, the Company may reimburse its Manager for any such expenses incurred above the 1.5% amount as permitted by the Financial Industry Regulatory Authority. On May 5, 2016, the Company filed a registration statement on Form S-3 (File No. 333-211178), or the New Shelf Registration Statement, for an offering of up to $300 million of equity or debt securities, or the Shelf Offering, which was declared effective by the SEC on May 17, 2016. Deferred offering costs related to this Shelf Registration Statement totaled approximately $1.9 million as of September 30, 2017, of which $628,000 has been reflected as a reduction of stockholders' equity. The remaining balance of offering costs not yet reflected as a reduction of stockholder's equity, approximately $1.3 million, are reflected in the asset section of the consolidated balance sheet as deferred offering costs at September 30, 2017. On May 12, 2017, the Company sold 2,750,000 shares of its Common Stock at a price of $15.25 per share pursuant to an underwritten public offering. On May 30, 2017, the Company sold an additional 412,500 shares of Common Stock at $15.25 per share pursuant to the exercise in full of an option received in connection with the public offering. The combined gross proceeds of the two sales was approximately $48.2 million before deducting underwriting discounts and commissions and other estimated offering expenses. The Company filed a prospectus to issue and sell up to $150 million of Common Stock from time to time in an "at the market" offering (the "2016 ATM Offering") through the sales agents named in the prospectus. The Company intends to use any proceeds from the 2016 ATM Offering to repay outstanding amounts under our existing senior secured revolving credit facility and for other general corporate purposes, which includes making investments in accordance with the Company's investment objectives. Through September 30, 2017, the Company cumulatively sold 3.4 million shares of common stock through the ATM Offering and collected net proceeds of approximately $51.0 million. On December 2, 2016, the Company’s registration statement on Form S-3 (Registration No. 333-214531) (the “mShares Registration Statement”) was declared effective by the SEC. The mShares Registration Statement allows us to offer up to a maximum of 500,000 shares of Series M Redeemable Preferred Stock (“mShares”), par value $0.01 per share (the “mShares Offering”). The mShares are being offered by PCS on a "reasonable best efforts" basis. The price per mShare is $1,000. Each mShare ranks senior to Common Stock and on parity with the Series A Preferred Stock with respect to dividend rights and carries a cumulative annual dividend of 5.75% per annum. Beginning one year from the date of original issuance of each mShare, and on each one year anniversary thereafter, the dividend rate increases by 0.25% per annum, up to a maximum of 7.5% per annum. Dividends are payable monthly as declared by the Company’s board of directors and begin accruing on the date of issuance. The redemption schedule of the mShares allows redemptions at the option of the holder from the date of issuance of the Preferred Stock through the first year subject to a 2% redemption fee. After year one, the redemption fee decreases to 1% and after year two there is no redemption fee. Any redeemed mShares are entitled to any accrued but unpaid dividends at the time of redemption and any redemptions may be in cash or Common Stock, at the Company’s discretion. The Company intends to invest substantially all the net proceeds of the mShares Offering in connection with the acquisition of multifamily communities, other real estate-related investments and general working capital purposes. As of September 30, 2017, offering costs specifically identifiable to mShares Offering closing transactions, such as commissions, dealer manager fees, and other registration fees, totaled approximately $0.6 million. These costs are reflected as a reduction of stockholders' equity at the time of closing. In addition, the costs related to the offering not related to a specific closing transaction totaled approximately $2.2 million. As of September 30, 2017, the Company had issued 12,396 mShares and collected net proceeds of approximately $11.8 million after commissions under the mShares Offering. The number of mShares issued was approximately 2.5% of the maximum number of mShares anticipated to be issued under the mShares Offering. Consequently, the Company cumulatively recognized approximately 2.5% of the approximate $2.2 million deferred to date, or approximately $54,000 as a reduction of stockholders' equity. The remaining balance of offering costs not yet reflected as a reduction of stockholder's equity, approximately $2.1 million are reflected in the asset section of the consolidated balance sheet as deferred offering costs at September 30, 2017. The remainder of current and future deferred offering costs related to the mShares Offering will likewise be recognized as a reduction of stockholders' equity in the proportion of the number of mShares issued to the maximum number of mShares anticipated to be issued. Offering costs not related to a specific closing transaction are subject to an overall cap of approximately 1.5% (discussed further below) of the total gross proceeds raised during the mShares Offering. Aggregate offering expenses, including dealer manager fees, are capped at 11.5% of the aggregate gross proceeds of the mShares Offering, of which the Company will reimburse its Manager up to 1.5% of the gross proceeds of such offering for all organization and offering expenses incurred, excluding dealer manager fees; however, upon approval by the conflicts committee of the board of directors, the Company may reimburse its Manager for any such expenses incurred above the 1.5% amount as permitted by the Financial Industry Regulatory Authority. The Company's Series A Preferred Stock and mShares are redeemable at the option of the holder in either cash or the Company's Common Stock, at the Company's option. Since the Company controls the form of redemption, it presents its Series A Preferred Stock and mShares as components of permanent rather than temporary or mezzanine equity on its Consolidated Balance Sheets. |
Related Party Transactions |
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Related Party Transactions Disclosure [Text Block] | Related Party Transactions John A. Williams, the Company's Chief Executive Officer and Chairman of the Board, and Leonard A. Silverstein, the Company's President and Chief Operating Officer and a member of the Board, are also executive officers and directors of NELL Partners, Inc., which controls the Manager. Mr. Williams, Mr. Silverstein, and Daniel M. DuPree comprise the board of directors of Nell Partners, Inc. Mr. Williams is the Chief Executive Officer and Mr. Silverstein is the President and Chief Operating Officer of the Manager. Mr. DuPree is the Chief Investment Officer of the Manager. Mr. Williams, Mr. Silverstein and Michael J. Cronin, the Company's Executive Vice President, Chief Accounting Officer and Treasurer are executive officers of Williams Realty Advisors, LLC, or WRA, which is the manager of the day-to-day operations of Williams Opportunity Fund, LLC, or WOF, as well as Williams Realty Fund I, LLC, or WRF. The Management Agreement entitles the Manager to receive compensation for various services it performs related to acquiring assets and managing properties on the Company's behalf:
The Manager may, in its discretion, forfeit some or all of the asset management, property management, or general and administrative fees for properties owned by the Company. The forfeited fees are converted at the time of forfeiture into contingent fees, which are earned by the Manger only in the event of a sales transaction, and whereby the Company’s capital contributions for the property being sold exceed a 7% annual rate of return. The Company will recognize in future periods to the extent, if any, it determines that the sales transaction is probable, and that the estimated net sale proceeds would exceed the annual rate of return hurdle. As of July 1, 2017, the Manager reduced the loan coordination fee from 1.6% to 0.6% of the amount of assumed, new or incremental debt which leverages acquired real estate assets. In addition, the Manager reinstated a 1% acquisition fee charged on the cost of acquired real estate assets, which had historically been charged prior to its replacement effective January 1, 2016 by the 1.6% loan coordination fee. These changes were put in place to reflect a shift in the efforts of the Manager in property acquisitions. On May 25, 2017,we closed on the sale of our Enclave at Vista Ridge multifamily community to an unrelated third party. At such date, the Manager collected a cumulative total of approximately $390,000 of contingent fees. The sales transaction, and the fact that the Company’s capital contributions for the Enclave at Vista Ridge property achieved a greater than 7% annual rate of return. The Company will recognize in future periods to the extent, if any, it determines that the sales transaction is probable, and that the estimated net sale proceeds would exceed the annual rate of return hurdle. A cumulative total of approximately $5.1 million of combined asset management and general and administrative fees related to acquired properties as of September 30, 2017 have been forfeited by the Manager. A total of $4.3 million remains contingent and could possibly be earned by the Manager in the future. In addition to property management fees, the Company incurred the following reimbursable on-site personnel salary and related benefits expenses at the properties, which are listed on the Consolidated Statements of Operations:
The Manager utilizes its own and its affiliates' personnel to accomplish certain tasks related to raising capital that would typically be performed by third parties, including, but not limited to, legal and marketing functions. As permitted under the Management Agreement, the Manager was reimbursed $324,638 and $356,752 for the nine-month periods ended September 30, 2017 and 2016, respectively and PCS was reimbursed $790,804 and $768,869 for the nine-month periods ended September 30, 2017 and 2016, respectively. These costs are recorded as deferred offering costs until such time as additional closings occur on the $1.5 Billion Unit Offering, mShares Offering or the Shelf Offering, at which time they are reclassified on a pro-rata basis as a reduction of offering proceeds within stockholders’ equity. The Company's Haven 12, Stadium Village, 18 Nineteen, Haven South, Haven 46, Lubbock II, Haven Northgate and Haven Charlotte real estate loans and the Haven Campus Communities' line of credit are supported in part by guaranties of repayment and performance by John A. Williams, Jr., our Chief Executive Officer's son, a principal of the borrowers and a related party of the Company under GAAP. In addition to the fees described above, the Management Agreement also entitles the Manager to other potential fees, including a disposition fee of 1% of the sale price of a real estate asset. The Manager earned disposition fees totaling $1,576,000 for the nine-month period ended September 30, 2017 on the sale of the Ashford Park, Sandstone Creek and Enclave at Vista Ridge properties, and $390,000 for the nine-month period ended September 30, 2016 on the sale of the Trail Creek property. These fees are included in the Gain on sale of real estate, net of disposition expenses line on the Consolidated Statements of Operations. The Manager also receives leasing commission fees. Retail leasing commission fees (a) for new retail leases are equal to the greater of (i) $4.00 per square foot, and (ii) 4.0% of the aggregate base rental payments to be made by the tenant for the first 10 years of the original lease term; and (b) for lease renewals are equal to the greater of (i) $2.00 per square foot, and (ii) 2.0% of the aggregate base rental payments to be made by the tenant for the first 10 years of the newly renewed lease term. There are no commissions payable on retail lease renewals thereafter. Office leasing commission fees (a) for new office leases are equal to 50.0% of the first month’s gross rent plus 2.0% of the remaining fixed gross rent on the guaranteed lease term, (b) in the event of co-broker participation in a new lease, the leasing commission determined for a new lease are equal to 150.0% of the first month’s gross rent plus 6% of the remaining fixed gross rent of the guaranteed lease term, and (c) for lease renewals, are equal to 2% of the fixed gross rent of the guaranteed lease term or, in the event of a co-broker, 6% of the fixed gross rent of the guaranteed lease term. Office leasing commission fees may not exceed market rates for office leasing services. The Company holds a promissory note in the amount of $926,422 due from Preferred Capital Marketing Services, LLC, or PCMS, which is a wholly-owned subsidiary of NELL Partners. The Company has extended a revolving line of credit with a maximum borrowing amount of $18.0 million to its Manager. |
Dividends |
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Dividends [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Dividends [Text Block] | Dividends and Distributions The Company declares and pays monthly cash dividend distributions on its Series A Preferred Stock in the amount of $5.00 per share per month and beginning in March 2017, on its Series M Preferred Stock, on an escalating scale of $4.79 per month in year one, increasing to $6.25 per month in year eight and beyond. All preferred stock dividends are prorated for partial months at issuance as necessary. The Company's cash distributions on its Preferred Stock were:
The Company's dividend activity on its Common Stock for the nine-month periods ended September 30, 2017 and 2016 was:
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dividends and distributions [Text Block] | Dividends and Distributions The Company declares and pays monthly cash dividend distributions on its Series A Preferred Stock in the amount of $5.00 per share per month and beginning in March 2017, on its Series M Preferred Stock, on an escalating scale of $4.79 per month in year one, increasing to $6.25 per month in year eight and beyond. All preferred stock dividends are prorated for partial months at issuance as necessary. The Company's cash distributions on its Preferred Stock were:
The Company's dividend activity on its Common Stock for the nine-month periods ended September 30, 2017 and 2016 was:
The holders of Class A OP Units of the Operating Partnership are entitled to equivalent distributions as those declared on the Common Stock. At September 30, 2017, the Company had 901,195 Class A OP Units outstanding, which are exchangeable on a one-for-one basis for shares of Common Stock or the equivalent amount of cash. Distribution activity by the Operating Partnership was:
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Equity Compensation |
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Equity Compensation [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Text Block] | Equity Compensation Stock Incentive Plan On February 25, 2011, the Company’s board of directors adopted, and the Company’s stockholders approved, the Preferred Apartment Communities, Inc. 2011 Stock Incentive Plan to incentivize, compensate and retain eligible officers, consultants, and non-employee directors. On May 7, 2015, the Company's stockholders approved the third amendment to the Preferred Apartment Communities, Inc. 2011 Stock Incentive Plan, or, as amended, the 2011 Plan, which amendment increased the aggregate number of shares of Common Stock authorized for issuance under the 2011 Plan from 1,317,500 to 2,617,500 and extended the expiration date of the 2011 Plan to December 31, 2019. Equity compensation expense by award type for the Company was:
Restricted Stock Grants The following annual grants of restricted stock were made to members of the Company's independent directors, as payment of the annual retainer fees. The restricted stock grants for the 2015 and 2016 service years vested (or are scheduled to vest) on a pro-rata basis over the four consecutive 90-day periods following the date of grant.
Class B OP Units On January 2, 2015, the Company caused the Operating Partnership to grant 176,835 Class B Units of the Operating Partnership, or Class B OP Units, for service to be rendered during 2015. On January 4, 2016, the Company caused the Operating Partnership to grant 265,931 Class B OP Units for service to be rendered during 2016, 2017 and 2018. On January 3, 2017, the Company caused the Operating Partnership to grant 286,392 Class B OP Units for service to be rendered during 2017, 2018 and 2019. Prior to January 4, 2016, the Class B Units became Vested Class B Units at the Initial Valuation Date, which was generally one year from the date of grant. Beginning with the 2016 grant, certain Class B Units vest in three equal consecutive one-year tranches from the date of grant. For each grant, on the Initial Valuation Date, the market capitalization of the number of shares of Common Stock at the date of grant is compared to the market capitalization of the same number of shares of Common Stock at the Initial Valuation Date. If the market capitalization measure results in an increase which exceeds the target market threshold, the Vested Class B Units become earned Class B Units and automatically convert into Class A Units of the Operating Partnership (as long as the capital accounts have achieved economic equivalence), which are henceforth entitled to distributions from the Operating Partnership and become exchangeable for Common Stock on a one-to-one basis at the option of the holder. Vested Class B Units may become Earned Class B Units on a pro-rata basis should the result of the market capitalization test be an increase of less than the target market threshold. Any Vested Class B Units that do not become Earned Class B Units on the Initial Valuation Date are subsequently remeasured on a quarterly basis until such time as all Vested Class B Units become Earned Class B Units or are forfeited due to termination of continuous service due to an event other than as a result of a qualified event, which is generally the death or disability of the holder. Continuous service through the final valuation date is required for the Vested Class B Units to qualify to become fully Earned Class B Units. Because of the market condition vesting requirement that determines the transition of the Vested Class B Units to Earned Class B Units, a Monte Carlo simulation was utilized to calculate the total fair values, which will be amortized as compensation expense over the one-year periods beginning on the grant dates through the Initial Valuation Dates. On January 2, 2016, the 176,835 outstanding Class B Units for 2015 became fully vested and earned and automatically converted to Class A Units of the Operating Partnership. On January 4, 2017, all of the 265,931 Class B Units granted on January 4, 2016 became earned and 206,534 automatically vested and converted to Class A Units. Of the remaining earned Class B Units, 29,699 will vest and automatically convert to Class A Units on January 4, 2018 and the final 29,698 earned Class B Units will vest and automatically convert to Class A Units on January 4, 2019, assuming each grantee fulfills the requisite service requirement. The underlying valuation assumptions and results for the Class B OP Unit awards were:
The expected dividend yield assumptions were derived from the Company’s closing prices of the Common Stock on the grant dates and the projected future quarterly dividend payments per share of $0.22 for the 2017 awards and $0.1925 for the 2016 awards. For the 2017 and 2016 awards, the Company's own stock price history was utilized as the basis for deriving the expected volatility assumption. The risk-free rate assumptions were obtained from the Federal Reserve yield table and were calculated as the interpolated rate between the 20 and 30 year yield percentages on U. S. Treasury securities on the grant dates. Since the Class B OP Units have no expiration date, a derived service period of one year was utilized, which equals the period of time from the grant date to the initial valuation date. Restricted Stock Units On January 3, 2017, the Company caused the Operating Partnership to grant 26,900 restricted stock units, or RSUs, for service to be rendered during 2017, 2018 and 2019. The RSUs vest in three equal consecutive one-year tranches from the date of grant. For each grant, on the Initial Valuation Date, the market capitalization of the number of shares of Common Stock at the date of grant is compared to the market capitalization of the same number of shares of Common Stock at the Initial Valuation Date. If the market capitalization measure results in an increase which exceeds the target market threshold, the Vested RSUs become earned RSUs and automatically convert into Common Stock on a one-to-one basis. Vested RSUs may become Earned RSUs on a pro-rata basis should the result of the market capitalization test be an increase of less than the target market threshold. Any Vested RSUs that do not become Earned RSUs on the Initial Valuation Date are subsequently remeasured on a quarterly basis until such time as all Vested RSUs become Earned RSUs or are forfeited due to termination of continuous service due to an event other than as a result of a qualified event, which is generally the death or disability of the holder. Continuous service through the final valuation date is required for the Vested RSUs to qualify to become fully Earned RSUs. Because RSUs are valued using the identical market condition vesting requirement that determines the transition of the Vested Class B Units to Earned Class B Units, the same valuation assumptions and Monte Carlo result of $11.92 per RSU were utilized to calculate the total fair value of the RSUs of $320,648. Grants of RSUs, net of forfeitures, are amortized as compensation expense over the three one-year periods ending on each of January 2, 2018, 2019 and 2020. As of September 30, 2017, a total of 3,200 RSUs had been forfeited. |
Indebtedness |
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Text Block] | Indebtedness Mortgage Notes Payable Mortgage Financing of Property Acquisitions The Company partially financed the real estate properties acquired during the nine-month period ended September 30, 2017 with mortgage debt as shown in the following table:
Repayments and Refinancings In conjunction with the sale of the Enclave at Vista Ridge multifamily community, the Company recorded a defeasance fee of approximately $2.06 million, the effect of which is recorded as an offset against the gain on sale of real estate line of the Consolidated Statements of operations for the nine-month period ended September 30, 2017. In doing so, the Company extinguished the existing mortgage debt with a principal amount due of $24.86 million. On June 22, 2017, the Company refinanced the existing $16.3 million mortgage on its Stone Creek multifamily community which bore interest at a fixed 3.75% rate per annum into a mortgage of $20.6 million, which bears interest at a fixed rate of 3.22% per annum. In doing so, the Company recorded a prepayment penalty of approximately $817,000, which is included on the Loss on extinguishment of debt on the Consolidated Statements of operations. On June 15, 2017, the Company refinanced the existing $61.75 million mortgage on its 525 Avalon multifamily community which bore interest at a variable rate of 1 Month LIBOR plus 200 basis points per annum and the secondary financing note of $3.25 million which bore interest at a variable rate of 1 Month LIBOR plus 1100 basis points per annum into a single mortgage of $67.38 million, which bears interest at a fixed rate of 3.98% per annum. Fees paid of approximately $170,000 in conjunction with this debt modification were recorded as debt origination costs and will be amortized into interest expense over the life of the new mortgage. See note 16 for additional refinancing activity which occurred subsequent to September 30, 2017. The following table summarizes our mortgage notes payable at September 30, 2017:
The Company has placed interest rate caps on the variable rate mortgages on its Avenues at Creekside and Citi Lakes multifamily communities. Under guidance provided by ASC 815-10, these interest rate caps fall under the definition of derivatives, which are embedded in their debt hosts. Because these interest rate caps are deemed to be clearly and closely related to their debt hosts, bifurcation and fair value accounting treatment is not required. The mortgage note secured by our Independence Square property is a seven year term with an anticipated repayment date of September 1, 2022. If the Company elects not to pay its principal balance at the anticipated repayment date, the term will be extended for an additional five years, maturing on September 1, 2027. The interest rate from September 1, 2022 to September 1, 2027 will be the greater of (i) the Initial Interest Rate of 3.93% plus 200 basis points or (ii) the yield on the seven year U.S. treasury security rate plus approximately 400 basis points. The mortgage note secured by our Royal Lakes Marketplace property has a maximum commitment of $11,050,000. As of September 30, 2017, the Company has an outstanding principal balance of $9.7 million on this loan. Additional advances of the mortgage commitment will be drawn as the Company achieves incremental leasing benchmarks specified under the loan agreement. This mortgage has a variable interest of 1 Month LIBOR plus 250 basis points, which was 3.74% as of September 30, 2017. The mortgage note secured by our Champions Village property has a maximum commitment of $34.16 million. As of September 30, 2017, the Company has an outstanding principal balance of $27.4 million. Additional advances of the mortgage commitment will be drawn as the Company achieves leasing activity. Additional advances are available through October 2019. This mortgage note has a variable interest of the greater of (i) 3.25% or (ii) the sum of the 3.00% plus the LIBOR Rate, which was 4.24% as of September 30, 2017. As of September 30, 2017, the weighted-average remaining life of deferred loan costs related to the Company's mortgage indebtedness was approximately 9.0 years. Credit Facility The Company has a credit facility, or Credit Facility, with KeyBank National Association, or KeyBank, which defines a revolving line of credit, or Revolving Line of Credit, which is used to fund investments, capital expenditures, dividends (with consent of KeyBank), working capital and other general corporate purposes on an as needed basis. The maximum borrowing capacity on the Revolving Line of Credit was increased to $150,000,000 pursuant to the Fourth Amended and Restated Credit Agreement, as amended effective December 27, 2016, or the Amended and Restated Credit Agreement. The Revolving Line of Credit accrues interest at a variable rate of one month LIBOR plus 3.25% per annum and matures on August 5, 2019, with an option to extend the maturity date to August 5, 2020, subject to certain conditions described therein. The weighted average interest rate for the Revolving Line of Credit was 4.51% for the nine-month period ended September 30, 2017. The Revolving Line of Credit also bears a commitment fee on the average daily unused portion of the Revolving Line of Credit of 0.35% per annum. On January 5, 2016, we entered into a $35.0 million term loan with KeyBank under the Credit Facility, or the 2016 Term Loan, to partially finance the acquisition of the Baldwin Park multifamily community. The Term Loan accrued interest at a rate of LIBOR plus 3.75% per annum. On August 5, 2016, the Company repaid the 2016 Term Loan in full. On May 26, 2016, the Company entered into a $11.0 million interim term loan with KeyBank, or the Interim Term Loan, to partially finance the acquisition of Anderson Central, a grocery-anchored shopping center located in Anderson, South Carolina. The Interim Term Loan accrues interest at a rate of LIBOR plus 2.5% per annum and the maturity date was extended to November 21, 2017 during the third quarter 2017. The weighted average interest rate for the Interim Term Loan was 3.66% for the nine-month period ended September 30, 2017. The Fourth Amended and Restated Credit Agreement contains certain affirmative and negative covenants, including negative covenants that limit or restrict secured and unsecured indebtedness, mergers and fundamental changes, investments and acquisitions, liens and encumbrances, dividends, transactions with affiliates, burdensome agreements, changes in fiscal year and other matters customarily restricted in such agreements. The amount of dividends that may be paid out by the Company is restricted to a maximum of 95% of AFFO for the trailing rolling four quarters without the lender's consent; solely for purposes of this covenant, AFFO is calculated as earnings before interest, taxes, depreciation and amortization expense, plus reserves for capital expenditures, less normally recurring capital expenditures, less consolidated interest expense. As of September 30, 2017, the Company was in compliance with all covenants related to the Revolving Line of Credit, as shown in the following table:
(1) All covenants are as defined in the credit agreement for the Revolving Line of Credit. (2) Minimum $687 million plus 75% of the net proceeds of any equity offering, which totaled approximately $1.1 billion as of September 30, 2017. (3)Calculated on a trailing four-quarter basis. For the twelve-month period ended September 30, 2017, the maximum dividends and distributions allowed under this covenant was approximately $89.0 million. Loan fees and closing costs for the establishment and subsequent amendments of the Credit Facility are amortized utilizing the straight line method over the life of the Credit Facility. At September 30, 2017, unamortized loan fees and closing costs for the Credit Facility were approximately $1.2 million, which will be amortized over a remaining loan life of approximately 1.9 years. Loan fees and closing costs for the mortgage debt on the Company's properties are amortized utilizing the effective interest rate method over the lives of the loans. Acquisition Facility On February 28, 2017, the Company entered into a credit agreement, or Acquisition Credit Agreement, with Freddie Mac through KeyBank to obtain an acquisition revolving credit facility, or Acquisition Facility, with a maximum borrowing capacity of $200 million. The purpose of the Acquisition Facility is to finance acquisitions of multifamily communities and student housing communities. The maximum borrowing capacity on the Acquisition Facility may be increased at the Company's request up to $300 million at any time prior to March 1, 2021. The Acquisition Facility accrues interest at a variable rate of one month LIBOR plus a margin of between 1.75% per annum and 2.20% per annum, depending on the type of assets acquired and the resulting property debt service coverage ratio. The Acquisition Facility has a maturity date of March 1, 2022 and has two one-year extension options, subject to certain conditions described therein. At September 30, 2017, unamortized loan fees and closing costs for the establishment of the Acquisition Facility were approximately $0.3 million, which will be amortized over a remaining loan life of approximately 4.5 years. As of September 30, 2017, the Acquisition Facility financed the SoL student housing property and the Retreat at Greystone and Aldridge at Town Village multifamily communities, totaling approximately $110.7 million. Interest Expense Interest expense, including amortization of deferred loan costs was:
Future Principal Payments The Company’s estimated future principal payments due on its debt instruments as of September 30, 2017 were:
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Income Taxes |
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Sep. 30, 2017 | |
Income Taxes [Abstract] | |
Income Tax Disclosure [Text Block] | Income Taxes The Company elected to be taxed as a REIT effective with its tax year ended December 31, 2011, and therefore, the Company will not be subject to federal and state income taxes after this effective date, so long as it distributes 100% of the Company's annual REIT taxable income (which does not equal net income as calculated in accordance with GAAP and determined without regard for the deduction for dividends paid and excluding net capital gains) to its shareholders. For the period preceding this election date, the Company's operations resulted in a tax loss. As of December 31, 2010, the Company had deferred federal and state tax assets totaling approximately $298,100, none of which were based upon tax positions deemed to be uncertain. These deferred tax assets will most likely not be used since the Company elected REIT status; therefore, management has determined that a 100% valuation allowance is appropriate as of September 30, 2017 and December 31, 2016. |
Commitments and Contingencies |
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Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies Disclosure [Text Block] | Commitments and Contingencies On March 28, 2014, the Company entered into a payment guaranty in support of its Manager's new eleven-year office lease, which began on October 9, 2014. As of September 30, 2017, the amount guarantied by the Company was $6.7 million and is reduced by $619,304 per lease year over the term of the lease. Certain officers and employees of the Manager have been assigned company credit cards. As of September 30, 2017, the Company guarantied up to $640,000 on these credit cards. The Company is otherwise currently subject to neither any known material commitments or contingencies from its business operations, nor any material known or threatened litigation. A total of approximately $5.1 million of asset management and general and administrative fees related to acquired properties as of September 30, 2017 have been forfeited by the Manager. The forfeited fees are converted at the time of forfeiture into contingent fees, which are earned by the Manger only in the event of a sales transaction, and whereby the Company’s capital contributions for the property being sold exceed a 7% annual rate of return. The Company will recognize in future periods to the extent, if any, it determines that the sales transaction is probable, and that the estimated net sale proceeds would exceed the annual rate of return hurdle. As of September 30, 2017, a total of $4.3 million remains contingent and could possibly be earned by the Manager in the future. At September 30, 2017, the Company had unfunded balances on its real estate loan portfolio of approximately $92.7 million. |
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Segment Information [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting Disclosure [Text Block] |
Segment Information The Company's Chief Operating Decision Maker, or CODM, evaluates the performance of the Company's business operations and allocates financial and other resources by assessing the financial results and outlook for future performance across four distinct segments: multifamily communities, real estate related financing, New Market Properties and Preferred Office Properties. Multifamily Communities - consists of the Company's portfolio of owned residential multifamily communities and student housing properties. Financing - consists of the Company's portfolio of real estate loans, bridge loans, and other instruments deployed by the Company to partially finance the development, construction, and prestabilization carrying costs of new multifamily communities and other real estate and real estate related assets. Excluded from the financing segment are financial results of the Company's Dawson Marketplace grocery-anchored shopping center real estate loan. New Market Properties - consists of the Company's portfolio of grocery-anchored shopping centers, which are owned by New Market Properties, LLC, a wholly-owned subsidiary of the Company, as well as the financial results from the Company's grocery-anchored shopping center real estate loans. Preferred Office Properties - consists of the Company's portfolio of office buildings. The CODM monitors net operating income (“NOI”) on a segment and a consolidated basis as a key performance measure for its operating segments. NOI is defined as rental and other property revenue from real estate assets plus interest income from its loan portfolio less total property operating and maintenance expenses, property management fees, real estate taxes, property insurance, and general and administrative expenses. The CODM uses NOI as a measure of operating performance because it provides a measure of the core operations, rather than factoring in depreciation and amortization, financing costs, acquisition expenses, and other expenses generally incurred at the corporate level. The following tables present the Company's assets, revenues, and NOI results by reportable segment, as well as a reconciliation from NOI to net income (loss). The assets attributable to 'Other' primarily consist of deferred offering costs recorded but not yet reclassified as reductions of stockholders' equity and cash balances at the Company and Operating Partnership levels.
Total capitalized expenditures (inclusive of additions to construction in progress, but exclusive of the purchase price of acquisitions) for the three months and nine months ended September 30, 2017 and 2016 were as follows:
The Company also recognized second-generation capital expenditures within its office building portfolio of $25,883 for Brookwood Center and $78,593 for Galleria 75 during the third quarter 2017. Second-generation capital expenditures exclude those expenditures made in our office building portfolio (i) to lease space to "first generation" tenants (i.e. leasing capital for existing vacancies and known move-outs at the time of acquisition), (ii) to bring recently acquired properties up to our Class A ownership standards (and which amounts were underwritten into the total investment at the time of acquisition), (iii) for property re-developments and repositionings and (iv) for building improvements that are recoverable from future operating cost savings.
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Loss per Share |
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Loss per share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Text Block] | The following is a reconciliation of weighted average basic and diluted shares outstanding used in the calculation of income (loss) per share of Common Stock:
(A) The Company's outstanding Class A Units of the Operating Partnership (901,195 and 886,168 Units at September 30, 2017 and 2016, respectively) contain rights to distributions in the same amount per unit as for dividends declared on the Company's Common Stock. The impact of the Class A Unit distributions on earnings per share has been calculated using the two-class method whereby earnings are allocated to the Class A Units based on dividends declared and the Class A Units' participation rights in undistributed earnings. (B) The Company’s shares of Series A Preferred Stock outstanding accrue dividends at an annual rate of 6% of the stated value of $1,000 per share, payable monthly. The Company had 1,115,616 and 802,032 outstanding shares of Series A Preferred Stock at September 30, 2017 and 2016, respectively. The Company's shares of Series M preferred stock, or mshares, accrue dividends at an escalating rate of 5.75% in year one to 7.5% in year eight and thereafter. The Company had 12,396 mshares outstanding at September 30, 2017. (C) The Company's outstanding unvested restricted share awards (18,306 and 23,247 shares of Common Stock at September 30, 2017 and 2016, respectively) contain non-forfeitable rights to distributions or distribution equivalents. The impact of the unvested restricted share awards on earnings per share has been calculated using the two-class method whereby earnings are allocated to the unvested restricted share awards based on dividends declared and the unvested restricted shares' participation rights in undistributed earnings. Given the Company incurred a net loss from continuing operations for the three-month and nine-month periods ended September 30, 2017 and 2016, the dividends declared for that period are adjusted in determining the calculation of loss per share of Common Stock since the unvested restricted share awards are defined as participating securities. (D) Potential dilution from (i) warrants outstanding from issuances of Units from our Series A Preferred Stock offerings that are potentially exercisable into 16,931,180 shares of Common Stock; (ii) 345,789 Class B Units; (iii) 18,306 shares of unvested restricted common stock; and (iv) 23,700 outstanding Restricted Stock Units are excluded from the diluted shares calculations because the effect was antidilutive. Class A Units were excluded from the denominator because earnings were allocated to non-controlling interests in the calculation of the numerator. |
Pro Forma Financial Information |
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Pro Forma Financial Information [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Subsequent Event, Pro Forma Business Combinations [Text Block] | Pro Forma Financial Information (unaudited) The Company’s condensed pro forma financial results assume the following acquisitions were hypothetically completed on January 1, 2015:
The Company’s condensed pro forma financial results were:
Material nonrecurring pro forma adjustments which were directly attributable to these business combinations included the pro forma removal of all acquisition costs incurred from the actual historical periods of recognition of approximately $1.3 million and $6.8 million for the three-month and nine-month periods ended September 30, 2016. Effective January 1, 2017, we adopted Accounting Standard Update 2017-01, which requires acquisition costs for asset acquisitions to be capitalized and and amortized rather than expensed as incurred. These pro forma results are not necessarily indicative of what historical performance would have been had these business combinations been effective as of the hypothetical acquisition dates listed above, nor should they be interpreted as expectations of future results. |
Fair Values of Financial Instruments |
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Fair Values of Financial Instruments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Text Block] | Fair Values of Financial Instruments Fair value is defined as the price at which an asset or liability is exchanged between market participants in an orderly transaction at the reporting date. The Company’s cash equivalents, notes receivable, accounts receivable and payables and accrued expenses all approximate fair value due to their short term nature. The following tables provide estimated fair values of the Company’s financial instruments. The carrying values of the Company's real estate loans include accrued interest receivable from additional interest or exit fee provisions and are presented net of deferred loan fee revenue, where applicable.
(1) The carrying value of real estate assets includes the Company's balance of the Palisades, Green Park, Encore and Stadium Village real estate loans, which includes the amounts funded by unrelated participants. The loan participation obligations are the amounts due to the participants under these arrangements. Accrued interest included in the carrying values of the Company's real estate loans was approximately $27.7 million and $21.9 million at September 30, 2017 and December 31, 2016, respectively. The fair value of the real estate loans within the level 3 hierarchy are comprised of estimates of the fair value of the notes, which were developed utilizing a discounted cash flow model over the remaining terms of the notes until their maturity dates and utilizing discount rates believed to approximate the market risk factor for notes of similar type and duration. The fair values also contain a separately-calculated estimate of any applicable additional interest payment due the Company at the maturity date of the loan, based on the outstanding loan balances at September 30, 2017, discounted to the reporting date utilizing a discount rate believed to be appropriate for multifamily development projects. The fair values of the fixed rate mortgages on the Company’s properties were developed using market quotes of the fixed rate yield index and spread for four, five, seven, ten and 35 year notes as of the reporting date. The present values of the cash flows were calculated using the original interest rate in place on the fixed rate mortgages and again at the current market rate. The difference between the two results was applied as a fair market adjustment to the carrying value of the mortgages. |
Subsequent Events |
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Sep. 30, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | Subsequent Events Between October 1, 2017 and October 31, 2017, the Company issued 31,122 Units and collected net proceeds of approximately $28.0 million after commissions and fees under its $1.5 Billion Unit Offering. Between October 1, 2017 and October 31, 2017, the Company issued 841 shares of Series M Preferred Stock and collected net proceeds of approximately $816,000 after commissions and fees under the mShares offering. On October 23, 2017 the Company declared a quarterly dividend on its Common Stock of $0.25 per share, payable on January 16, 2018 to stockholders of record on December 15, 2017. On October 27, 2017, the Company acquired a 98% interest in a joint venture which owns the Stadium Village student housing property in Atlanta, Georgia. The Company's real estate loan with an outstanding principal amount of approximately $13.3 million was repaid in conjunction with this transaction. On October 27, 2017, the Company's real estate loan supporting the 18 Nineteen property in Lubbock, Texas with an outstanding principal amount of approximately $15.6 million was repaid in full. The 18 Nineteen property was sold to a third party on October 19, 2017. On October 31, 2017, the Company refinanced the mortgage on the Aldridge at Town Village multifamily community from its Acquisition Facility into a permanent mortgage with a principal amount of $37.9 million and which bears interest at a fixed rate of 4.19% per annum. On October 31, 2017, the Company refinanced the mortgage on the Summit Crossing multifamily community with a remaining principal amount of $24.7 million into a new mortgage of $39.1 million which bears interest at a fixed rate of 3.99% per annum. |
Significant Accounting Policies Basis of Presentation (Policies) |
9 Months Ended |
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Sep. 30, 2017 | |
Summary of Significant Accounting Policies [Abstract] | |
Impairment or Disposal of Long-Lived Assets, Policy [Policy Text Block] | Impairment assessment The Company evaluates its tangible and identifiable intangible real estate assets for impairment when events such as declines in a property’s operating performance, deteriorating market conditions, or environmental or legal concerns bring recoverability of the carrying value of one or more assets into question. When qualitative factors indicate the possibility of impairment, the total undiscounted cash flows of the asset group, including proceeds from disposition, are compared to the net book value of the asset group. If this test indicates that impairment exists, an impairment loss is recorded in earnings equal to the shortage of the book value to fair value, calculated as the discounted net cash flows of the asset group. |
Discontinued Operations, Policy [Policy Text Block] | Acquisition Costs Through December 31, 2016, the Company expensed property acquisition costs as incurred, which include costs such as due diligence, legal, certain accounting, environmental and consulting, when the acquisition constituted a business combination. As described below in the section entitled New Accounting Pronouncements, Accounting Standards Update 2017-01 was adopted by the Company effective January 1, 2017, which changed the definition of a business. Under this new guidance, most property acquisitions made by the Company will fall within the category of acquired assets rather than acquired businesses. This distinction will cause the Company to capitalize its costs for acquisitions (including, effective July 1, 2017, a 1% acquisition fee), allocate them to the fair value of acquired assets and liabilities and amortize these costs over the remaining useful lives of those assets and liabilities. |
Goodwill and Intangible Assets, Policy [Policy Text Block] | Identifiable intangible assets In-place leases Multifamily communities and student housing properties The fair value of in-place leases are estimated by calculating the estimated time to fill a hypothetically empty apartment complex to its stabilization level (estimated to be 93% occupancy) based on historical observed move-in rates for each property, and which approximate market rates. Carrying costs during these hypothetical expected lease-up periods are estimated, considering current market conditions and include real estate taxes, insurance and other operating expenses and estimates of lost rentals at market rates. The intangible assets are calculated by estimating the net cash flows of the in-place leases to be realized, as compared to the net cash flows that would have occurred had the property been vacant at the time of acquisition and subject to lease-up. The acquired in-place lease values are amortized to operating expense over the average remaining non-cancelable term of the respective in-place leases. Grocery-anchored shopping centers and office buildings The fair value of in-place leases represent the value of direct costs associated with leasing, including opportunity costs associated with lost rentals that are avoided by acquiring in-place leases. Direct costs associated with obtaining a new tenant include commissions, legal and marketing costs, incentives such as tenant improvement allowances and other direct costs. Such direct costs are estimated based on our consideration of current market costs to execute a similar lease. The value of opportunity costs is calculated using the estimated market lease rates and the estimated absorption period of the space. These direct costs and opportunity costs are included in the accompanying consolidated balance sheets as acquired intangible assets and are amortized to expense over the remaining term of the respective leases. Above-market and below-market lease values Multifamily communities and student housing properties These values are usually not significant or are not applicable for these properties. Grocery-anchored shopping centers and office buildings The values of above-market and below-market leases are developed by comparing the Company's estimate of the average market rents and expense reimbursements to the average contract rent at the property acquisition date. The amount by which contract rent and expense reimbursements exceed estimated market rent are summed for each individual lease and discounted for a singular aggregate above-market lease intangible asset for the property. The amount by which estimated market rent exceeds contract rent and expense reimbursements are summed for each individual lease and discounted for a singular aggregate below-market lease intangible liability. The above-market or below-market lease values are recorded as a reduction or increase, respectively, to rental revenue over the remaining noncancelable term of the respective leases, plus any below-market probable renewal options. |
Revenue Recognition Leases, Operating [Policy Text Block] | Revenue Recognition Multifamily communities and student housing properties Rental revenue is recognized when earned from residents of the Company's multifamily communities, which is over the terms of rental agreements, typically of 12 months’ duration. The Company evaluates the collectability of amounts due from residents and maintains an allowance for doubtful accounts for estimated losses resulting from the inability of residents to make required payments then due under lease agreements. The balance of amounts due from residents are generally deemed uncollectible 30 days beyond the due date, at which point they are fully reserved. Grocery-anchored shopping centers and office buildings Rental revenue from tenants' operating leases in the Company's grocery-anchored shopping centers and office buildings is recognized on a straight-line basis over the term of the lease. Revenue based on "percentage rent" provisions that provide for additional rents that become due upon achievement of specified sales revenue targets (as specified in each lease agreement) is recognized only after the tenant exceeds its specified sales revenue target. Revenue from reimbursements of the tenants' share of real estate taxes, insurance and common area maintenance, or CAM, costs are recognized in the period in which the related expenses are incurred. Lease termination revenues are recognized ratably over the revised remaining lease term after giving effect to the termination notice or when tenant vacates and the Company has no further obligations under the lease. Rents and tenant reimbursements collected in advance are recorded as prepaid rent within other liabilities in the accompanying consolidated balance sheets. The Company estimates the collectability of the tenant receivable related to rental and reimbursement billings due from tenants and straight-line rent receivables, which represent the cumulative amount of future adjustments necessary to present rental revenue on a straight-line basis, by taking into consideration the Company's historical write-off experience, tenant credit-worthiness, current economic trends, and remaining lease terms. The Company may provide retail and office building tenants an allowance for the construction of leasehold improvements. These leasehold improvements are capitalized and depreciated over the shorter of the useful life of the improvements or the remaining lease term. If the allowance represents a payment for a purpose other than funding leasehold improvements, or in the event the Company is not considered the owner of the improvements, the allowance is considered to be a lease incentive and is recognized over the lease term as a reduction of rental revenue. Determination of the appropriate accounting for the payment of a tenant allowance is made on a lease-by-lease basis, considering the facts and circumstances of the individual tenant lease. When the Company is the owner of the leasehold improvements, recognition of rental revenue commences when the lessee is given possession of the leased space upon completion of tenant improvements. However, when the leasehold improvements are owned by the tenant, the lease inception date is the date the tenant obtains possession of the leased space for purposes of constructing its leasehold improvements. For our Preferred Office Properties, if the improvement is deemed to be a “landlord asset,” and the tenant funded the tenant improvements, the cost is amortized over the term of the underlying lease as rental revenues. In order to qualify as a landlord asset, the specifics of the tenant’s assets are reviewed, including the Company's approval of the tenant’s detailed expenditures, whether such assets may be usable by other future tenants, whether the Company has consent to alter or remove the assets from the premises and generally remain the Company's property at the end of the lease. |
New Accounting Pronouncements, Policy [Policy Text Block] | New Accounting Pronouncements In May 2014, the FASB issued Accounting Standards Update 2014-09 ("ASU 2014-09"), Revenue from Contracts with Customers (Topic 606). ASU 2014-09 provides a single comprehensive revenue recognition model for contracts with customers (excluding certain contracts, such as lease contracts) to improve comparability within industries. ASU 2014-09 requires an entity to recognize revenue to reflect the transfer of goods or services to customers at an amount the entity expects to be paid in exchange for those goods and services and provide enhanced disclosures, all to provide more comprehensive guidance for transactions such as service revenue and contract modifications. The new standard may be applied retrospectively to each prior period presented or prospectively with the cumulative effect, if any, recognized as of the date of adoption. The Company anticipates selecting the modified retrospective transition method with a cumulative effect recognized as of the date of adoption and will adopt the new standard effective January 1, 2018, when effective. In addition, the evaluation of non-lease components under ASU 2014-09 will not be effective until Accounting Standards Update No. 2016-02, Leases (Topic 842), ("ASU 2016-02") becomes effective (see further discussion below), which will be first quarter of 2019 for the Company. The Company has determined that approximately 90% of its revenues from its New Market Properties and office building segments are derived from either long-term leases with its tenants or reimbursement of property tax and insurance expenses, which are excluded from the scope of the ASU 2014-09. Of the remaining 10% of New Market Properties and office building segment revenues, the majority is comprised of common area maintenance (“CAM”) reimbursements, which is a non-lease component under ASU 2014-09 and therefore within its scope of adoption. Based on management's assessment to date, the Company does not expect the timing of the recognition of reimbursement revenue and other miscellaneous income to change as a result of the new guidance, though certain classifications will change between rental revenue and tenant reimbursements. Similarly, the Company's multifamily communities segment derives the majority of its revenues from rental operations, to which this standard is not applicable. However, the Company does provide non-rental services to its residents related to ancillary services and is currently evaluating the various revenue streams to identify any potential sources which may require bifurcation and reclassification. The Company is continuing to evaluate the impact the adoption of ASU 2014-09 will have on its results of operations and financial condition. In January 2016, the FASB issued Accounting Standards Update 2016-01 ("ASU 2016-01"), Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Liabilities. The new standard's applicable provisions to the Company include an elimination of the disclosure requirement of the significant inputs and assumptions underlying the fair value calculations of its financial instruments which are carried at amortized cost. The standard is effective on January 1, 2018, and early adoption is not permitted. The adoption of ASU 2016-01 will not impact the Company's results of operations or financial condition. In February 2016, the FASB issued Accounting Standards Update 2016-02 ("ASU 2016-02"), Leases (ASC 842), which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e. lessees and lessors). The new standard requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales-type leases, direct financing leases and operating leases and supersedes the previous standard, ASC 840 Leases. The standard is effective on January 1, 2019, with early adoption permitted. The Company anticipates adopting ASC 842 utilizing the modified retrospective method and is continuing to evaluate the impacts this standard will have on its results of operations and financial condition. In June 2016, the FASB issued Accounting Standards Update 2016-13 ("ASU 2016-13"), Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The new standard requires financial instruments carried at amortized cost to be presented at the net amount expected to be collected, utilizing a valuation account which reflects the cumulative net adjustments from the gross amortized cost value. Under existing GAAP, entities would not record a valuation allowance until a loss was probable of occurring. The standard is effective for the Company on January 1, 2020. The Company is currently evaluating methods of deriving initial valuation accounts to be applied to its real estate loan portfolio. The Company is continuing to evaluate the pending guidance but does not believe the adoption of ASU 2016-13 will have a material impact on its results of operations or financial condition, since the Company has not yet experienced a credit loss related to any of its financial instruments. In August 2016, the FASB issued Accounting Standards Update 2016-15 ("ASU 2016-15"), Statement of Cash Flows—(Topic 326): Classification of Certain Cash Receipts and Cash Payments. The new standard clarifies or establishes guidance for the presentation of various cash transactions on the statement of cash flows. The portion of the guidance applicable to the Company's business activities include the requirement that cash payments for debt prepayment or debt extinguishment costs be presented as cash out flows for financing activities. The standard is effective for the Company on January 1, 2018. The adoption of ASU 2016-15 will not impact the Company’s consolidated financial statements, since its current policy is to classify such costs as cash out flows for financing activities. In November 2016, the FASB issued Accounting Standards Update 2016-18 ("ASU 2016-18"), Statement of Cash Flows—(Topic 230): Restricted Cash, which requires restricted cash to be presented with cash and cash equivalents when reconciling the beginning and ending amounts in the statements of cash flows. ASU 2016-18 is effective for interim and annual periods beginning after December 15, 2017, and early adoption is permitted. The Company plans to adopt ASU 2016-18 on January 1, 2018. The Company currently reports changes in restricted cash within the investing activities section of its consolidated statements of cash flows and does not expect the adoption of ASU 2016-18 to impact its results of operations and financial condition. In January 2017, the FASB issued Accounting Standards Update 2017-01 ("ASU 2017-01"), Business Combinations - (Topic 805): Clarifying the Definition of a Business. ASU 2017-01 clarifies the definition of a business and provides further guidance for evaluating whether a transaction will be accounted for as an acquisition of an asset or a business. ASU 2017-01 is effective for interim and annual periods beginning after December 15, 2017, and early adoption is permitted. The Company adopted ASU 2017-01 as of January 1, 2017. The Company believes its future acquisitions of multifamily communities, office buildings, grocery-anchored shopping centers, and student housing properties will generally qualify as asset acquisitions. To the extent acquisitions are deemed to be asset acquisitions, acquisition costs have been and will be capitalized and amortized rather than expensed as incurred. The impact of the adoption of ASU 2017-01 was an decrease of approximately $3.4 million of the Company's reported net income available to common stockholders for the three-month period ended September 30, 2017 and a decrease of approximately $6.1 million of the Company's reported net loss available to common stockholders for the nine-month period ended September 30, 2017 than it would have under previous guidance. In February 2017, the FASB issued Accounting Standards Update 2017-05 (“ASU 2017-05”), Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets, which provides guidance for recognizing gains and losses from the transfer of nonfinancial assets and for partial sales of nonfinancial assets, and is effective for financial statements issued for fiscal years and interim periods beginning after December 15, 2017. The new standard may be applied retrospectively to each prior period presented or under the modified retrospective method, with the cumulative effect recognized as of the date of adoption. The Company currently expects to adopt ASU 2017-05 utilizing the modified retrospective method and is continuing to evaluate the effect the adoption of ASU 2017-05 will have on its results of operations and financial condition. |
Real Estate Assets (Tables) |
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real estate sold [Table Text Block] | The carrying amounts of the significant assets and liabilities of the disposed properties at the dates of sale were:
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real estate owned [Table Text Block] | The Company's real estate assets consisted of:
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Table of Properties Acquired | During the nine-month period ended September 30, 2017, the Company completed the acquisition of the following multifamily communities and student housing property:
(1) Purchase prices shown are exclusive of acquired escrows, security deposits, prepaids, capitalized acquisition costs and other miscellaneous assets and assumed liabilities. (2) A 640-bed student housing community located adjacent to the campus of Arizona State University in Tempe, Arizona. |
Real Estate Loans, Notes Receivable, and Lines of Credit Real estate loans (Tables) |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Real Estate Owned [Text Block] |
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Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block] |
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Notes receivable [Table Text Block] | ur portfolio of notes and lines of credit receivable consisted of:
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interest income [Table Text Block] | The Company recorded interest income and other revenue from these instruments as follows:
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Related Party Transactions (Tables) |
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Related Party Transactions [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Related Party Transactions [Table Text Block] |
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Dividends (Tables) |
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Dividends Payable [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
dividend activity [Table Text Block] | The Company's cash distributions on its Preferred Stock were:
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Dividends Series A Preferred Stock (Tables) |
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Series A Preferred Stock [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
dividend activity [Table Text Block] | The Company's cash distributions on its Preferred Stock were:
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Dividends Class A Distributions (Tables) |
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partnership unit distributions [Table Text Block] | The holders of Class A OP Units of the Operating Partnership are entitled to equivalent distributions as those declared on the Common Stock. At September 30, 2017, the Company had 901,195 Class A OP Units outstanding, which are exchangeable on a one-for-one basis for shares of Common Stock or the equivalent amount of cash. Distribution activity by the Operating Partnership was:
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Dividends Dividend characterization (Tables) |
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Dividend characterization [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
dividends and distributions [Text Block] | Dividends and Distributions The Company declares and pays monthly cash dividend distributions on its Series A Preferred Stock in the amount of $5.00 per share per month and beginning in March 2017, on its Series M Preferred Stock, on an escalating scale of $4.79 per month in year one, increasing to $6.25 per month in year eight and beyond. All preferred stock dividends are prorated for partial months at issuance as necessary. The Company's cash distributions on its Preferred Stock were:
The Company's dividend activity on its Common Stock for the nine-month periods ended September 30, 2017 and 2016 was:
The holders of Class A OP Units of the Operating Partnership are entitled to equivalent distributions as those declared on the Common Stock. At September 30, 2017, the Company had 901,195 Class A OP Units outstanding, which are exchangeable on a one-for-one basis for shares of Common Stock or the equivalent amount of cash. Distribution activity by the Operating Partnership was:
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Equity Compensation (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Equity Compensation [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block] | The underlying valuation assumptions and results for the Class B OP Unit awards were:
The expected dividend yield assumptions were derived from the Company’s closing prices of the Common Stock on the grant dates and the projected future quarterly dividend payments per share of $0.22 for the 2017 awards and $0.1925 for the 2016 awards. For the 2017 and 2016 awards, the Company's own stock price history was utilized as the basis for deriving the expected volatility assumption. The risk-free rate assumptions were obtained from the Federal Reserve yield table and were calculated as the interpolated rate between the 20 and 30 year yield percentages on U. S. Treasury securities on the grant dates. Since the Class B OP Units have no expiration date, a derived service period of one year was utilized, which equals the period of time from the grant date to the initial valuation date. Restricted Stock Units On January 3, 2017, the Company caused the Operating Partnership to grant 26,900 restricted stock units, or RSUs, for service to be rendered during 2017, 2018 and 2019. The RSUs vest in three equal consecutive one-year tranches from the date of grant. For each grant, on the Initial Valuation Date, the market capitalization of the number of shares of Common Stock at the date of grant is compared to the market capitalization of the same number of shares of Common Stock at the Initial Valuation Date. If the market capitalization measure results in an increase which exceeds the target market threshold, the Vested RSUs become earned RSUs and automatically convert into Common Stock on a one-to-one basis. Vested RSUs may become Earned RSUs on a pro-rata basis should the result of the market capitalization test be an increase of less than the target market threshold. Any Vested RSUs that do not become Earned RSUs on the Initial Valuation Date are subsequently remeasured on a quarterly basis until such time as all Vested RSUs become Earned RSUs or are forfeited due to termination of continuous service due to an event other than as a result of a qualified event, which is generally the death or disability of the holder. Continuous service through the final valuation date is required for the Vested RSUs to qualify to become fully Earned RSUs. Because RSUs are valued using the identical market condition vesting requirement that determines the transition of the Vested Class B Units to Earned Class B Units, the same valuation assumptions and Monte Carlo result of $11.92 per RSU were utilized to calculate the total fair value of the RSUs of $320,648. Grants of RSUs, net of forfeitures, are amortized as compensation expense over the three one-year periods ending on each of January 2, 2018, 2019 and 2020. As of September 30, 2017, a total of 3,200 RSUs had been forfeited. |
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equity compensation expense [Table Text Block] |
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ClassBUnitGrantsvaluationassumptions [Table Text Block] | The underlying valuation assumptions and results for the Class B OP Unit awards were:
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Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity [Table Text Block] | Restricted Stock Grants The following annual grants of restricted stock were made to members of the Company's independent directors, as payment of the annual retainer fees. The restricted stock grants for the 2015 and 2016 service years vested (or are scheduled to vest) on a pro-rata basis over the four consecutive 90-day periods following the date of grant.
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Indebtedness (Tables) |
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Long-term Debt Instruments [Table Text Block] | The following table summarizes our mortgage notes payable at September 30, 2017:
Mortgage Financing of Property Acquisitions The Company partially financed the real estate properties acquired during the nine-month period ended September 30, 2017 with mortgage debt as shown in the following table:
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mortgage debt summary by segment [Table Text Block] |
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debt covenant [Table Text Block] | As of September 30, 2017, the Company was in compliance with all covenants related to the Revolving Line of Credit, as shown in the following table:
(1) All covenants are as defined in the credit agreement for the Revolving Line of Credit. (2) Minimum $687 million plus 75% of the net proceeds of any equity offering, which totaled approximately $1.1 billion as of September 30, 2017. (3)Calculated on a trailing four-quarter basis. For the twelve-month period ended September 30, 2017, the maximum dividends and distributions allowed under this covenant was approximately $89.0 million. |
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mortgage interest [Table Text Block] |
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Schedule of Maturities of Long-term Debt [Table Text Block] |
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Schedule of Debt [Table Text Block] |
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Segment information (Tables) |
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Reconciliation of Revenue from Segments to Consolidated [Table Text Block] |
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Segment Reporting Disclosure [Text Block] |
Segment Information The Company's Chief Operating Decision Maker, or CODM, evaluates the performance of the Company's business operations and allocates financial and other resources by assessing the financial results and outlook for future performance across four distinct segments: multifamily communities, real estate related financing, New Market Properties and Preferred Office Properties. Multifamily Communities - consists of the Company's portfolio of owned residential multifamily communities and student housing properties. Financing - consists of the Company's portfolio of real estate loans, bridge loans, and other instruments deployed by the Company to partially finance the development, construction, and prestabilization carrying costs of new multifamily communities and other real estate and real estate related assets. Excluded from the financing segment are financial results of the Company's Dawson Marketplace grocery-anchored shopping center real estate loan. New Market Properties - consists of the Company's portfolio of grocery-anchored shopping centers, which are owned by New Market Properties, LLC, a wholly-owned subsidiary of the Company, as well as the financial results from the Company's grocery-anchored shopping center real estate loans. Preferred Office Properties - consists of the Company's portfolio of office buildings. The CODM monitors net operating income (“NOI”) on a segment and a consolidated basis as a key performance measure for its operating segments. NOI is defined as rental and other property revenue from real estate assets plus interest income from its loan portfolio less total property operating and maintenance expenses, property management fees, real estate taxes, property insurance, and general and administrative expenses. The CODM uses NOI as a measure of operating performance because it provides a measure of the core operations, rather than factoring in depreciation and amortization, financing costs, acquisition expenses, and other expenses generally incurred at the corporate level. The following tables present the Company's assets, revenues, and NOI results by reportable segment, as well as a reconciliation from NOI to net income (loss). The assets attributable to 'Other' primarily consist of deferred offering costs recorded but not yet reclassified as reductions of stockholders' equity and cash balances at the Company and Operating Partnership levels.
Total capitalized expenditures (inclusive of additions to construction in progress, but exclusive of the purchase price of acquisitions) for the three months and nine months ended September 30, 2017 and 2016 were as follows:
The Company also recognized second-generation capital expenditures within its office building portfolio of $25,883 for Brookwood Center and $78,593 for Galleria 75 during the third quarter 2017. Second-generation capital expenditures exclude those expenditures made in our office building portfolio (i) to lease space to "first generation" tenants (i.e. leasing capital for existing vacancies and known move-outs at the time of acquisition), (ii) to bring recently acquired properties up to our Class A ownership standards (and which amounts were underwritten into the total investment at the time of acquisition), (iii) for property re-developments and repositionings and (iv) for building improvements that are recoverable from future operating cost savings.
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segment assets [Table Text Block] |
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Schedule of Segment Reporting Information, by Segment [Table Text Block] |
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Loss per Share (Tables) |
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earnings loss per share [Table Text Block] |
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Pro Forma Financial Information pro forma (Tables) |
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segment operating results [Table Text Block] |
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Fair Values of Financial Instruments (Tables) |
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Sep. 30, 2016 |
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Fair Values of Financial Instruments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements, Nonrecurring [Table Text Block] |
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Organization (Details) |
Sep. 30, 2017
$ / shares
shares
|
Dec. 31, 2016
$ / shares
shares
|
Sep. 30, 2016
shares
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Jun. 30, 2016
shares
|
Mar. 15, 2016
shares
|
---|---|---|---|---|---|
Class of Stock [Line Items] | |||||
Common Stock, Par or Stated Value Per Share | $ / shares | $ 0.01 | ||||
Common Stock, Shares, Outstanding | 35,597,744 | 24,652,041 | 23,568,328 | 23,041,502 | |
Noncontrolling Interest, Ownership Percentage by Parent | 97.50% | ||||
minority interest partnership units outstanding | 901,195 | 886,168 | |||
daycountvolweightedavgcalcformarketvalue | 20 | ||||
Common Stock [Member] | |||||
Class of Stock [Line Items] | |||||
Common Stock, Par or Stated Value Per Share | $ / shares | $ 0.01 | $ 0.01 | |||
Common Stock, Shares, Outstanding | 35,597,744 | 26,498,192 |
Significant Accounting Policies (Details) |
9 Months Ended |
---|---|
Sep. 30, 2017
USD ($)
| |
Real Estate Properties [Line Items] | |
contingent fees | $ 390,000 |
stabilization level | 93.00% |
Real Estate Assets - Depreciation and Amortization (Details) - USD ($) |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
Dec. 31, 2016 |
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Depreciation: | |||||
Depreciation | $ 60,845,325 | $ 39,387,351 | |||
Amortization: | |||||
Depreciation and amortization | $ 28,903,770 | $ 21,664,363 | 82,186,960 | $ 54,981,064 | |
Below Market Lease, Accumulated Amortization | $ 6,858,914 | $ 6,858,914 | $ 3,771,393 |
Real Estate Assets Contributions to revenue and net income (Details) - USD ($) |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Business Combination, Separately Recognized Transactions [Line Items] | ||||
Revenues | $ 74,900,199 | $ 53,537,337 | $ 212,352,447 | $ 141,127,062 |
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | $ 42,779 | $ (2,688,620) | $ 33,408,461 | $ (5,860,631) |
Real Estate Assets Real estate assets correction (Details) - USD ($) |
Sep. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Property, Plant and Equipment [Line Items] | ||
Investment Building and Building Improvements | $ 1,802,229,802 | $ 1,513,293,760 |
Tenant Improvements | $ 45,208,781 | $ 23,642,361 |
Real Estate Loans, Notes Receivable, and Lines of Credit Interest income (Details) - USD ($) |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Interest income [Abstract] | ||||
interest revenue current pay | $ 8,956,012 | $ 5,902,915 | $ 23,996,934 | $ 16,913,037 |
Accrued exit fee revenue | 5,005,796 | 3,917,641 | 13,894,268 | 10,633,937 |
Deferred Revenue, Revenue Recognized | 408,077 | 201,147 | 995,023 | 636,875 |
Net loan fee revenue | 14,369,885 | 10,021,703 | 38,886,225 | 28,183,849 |
interest revenue notes receivable | 1,123,240 | 974,540 | 3,196,965 | 3,111,339 |
Interest revenue on real estate loans | $ 15,493,125 | $ 10,996,243 | $ 42,083,190 | $ 31,295,188 |
Real Estate Loans, Notes Receivable, and Lines of Credit Real Estate Loans Narrative (Details) - USD ($) |
Sep. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Mortgage Loans on Real Estate [Line Items] | ||
real estate loan participation percentage | 25.00% | |
Variable Interest Entity, Reporting Entity Involvement, Maximum Loss Exposure, Amount | $ 371,300,000 | |
variable interest entity loans amount to be funded | 461,600,000 | |
Participating Mortgage Loans, Participation Liabilities, Amount | $ 17,877,914 | $ 20,761,819 |
Encore [Member] | ||
Mortgage Loans on Real Estate [Line Items] | ||
real estate loan participation percentage | 49.00% | |
Geographic Concentration Risk [Member] | Oxford [Member] | ||
Mortgage Loans on Real Estate [Line Items] | ||
amount drawn under loan agreement | $ 98,400,000 | |
loan commitment amount | $ 142,700,000 |
Real Estate Loans, Notes Receivable, and Lines of Credit phantom facts (Details) - USD ($) |
9 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Dec. 31, 2016 |
Jul. 15, 2016 |
Jun. 15, 2016 |
|
Mortgage Loans on Real Estate [Line Items] | ||||
loan commitment guaranty limit amount | $ 2,000,000 | |||
line of credit receivable | $ 42,351,496 | |||
Deferred interest rate | 5.10% | 5.26% | ||
current interest rate | 8.48% | 8.26% | ||
loan commitment guaranty percent | 25.00% | |||
Oxford Capital Partners LLC [Member] | ||||
Mortgage Loans on Real Estate [Line Items] | ||||
line of credit receivable | $ 10,150,000 | $ 10,150,000 | $ 10,650,000 | |
interest rate note receivable | 12.00% |
Dividends (Details) - USD ($) |
1 Months Ended | 3 Months Ended | 9 Months Ended | ||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 03, 2016 |
Sep. 30, 2017 |
Aug. 31, 2017 |
Jul. 31, 2017 |
Jun. 30, 2017 |
May 31, 2017 |
Apr. 30, 2017 |
Mar. 31, 2017 |
Feb. 28, 2017 |
Jan. 31, 2017 |
Aug. 31, 2016 |
Jul. 31, 2016 |
Jun. 30, 2016 |
May 31, 2016 |
Apr. 30, 2016 |
Mar. 31, 2016 |
Feb. 28, 2016 |
Jan. 31, 2016 |
Sep. 30, 2017 |
Jun. 30, 2017 |
Mar. 31, 2017 |
Dec. 31, 2016 |
Sep. 30, 2016 |
Jun. 30, 2016 |
Mar. 31, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
Mar. 15, 2017 |
Mar. 15, 2016 |
|
Dividends Payable [Line Items] | |||||||||||||||||||||||||||||
minority interest partnership units outstanding | 901,195 | 901,195 | 886,168 | 901,195 | 886,168 | ||||||||||||||||||||||||
Common Stock, Dividends, Per Share, Declared | $ 0.235 | $ 0.235 | $ 0.22 | $ 0.2025 | $ 0.2025 | $ 0.1925 | $ 0.69 | $ 0.5975 | |||||||||||||||||||||
dividends common stock declared | $ 8,158,256 | $ 7,539,376 | $ 5,970,658 | $ 4,992,038 | $ 4,772,587 | $ 4,435,489 | $ 21,668,290 | $ 14,200,114 | |||||||||||||||||||||
common stock shares entitled to dividends | 34,715,982 | 32,082,451 | 34,715,982 | 32,082,451 | 34,715,982 | 27,139,354 | |||||||||||||||||||||||
Dividends, Preferred Stock, Cash | $ 3,886,173 | $ 5,545,017 | $ 5,412,511 | $ 5,299,654 | $ 5,237,872 | $ 5,085,694 | $ 5,000,060 | $ 4,938,098 | $ 4,849,032 | $ 4,641,149 | $ 3,671,020 | $ 3,458,513 | $ 3,321,519 | $ 3,143,567 | $ 2,979,196 | $ 2,770,048 | $ 2,630,601 | $ 2,481,086 | $ 46,009,087 | ||||||||||
Common Stock, Shares, Outstanding | 35,597,744 | 23,568,328 | 35,597,744 | 24,652,041 | 23,568,328 | 35,597,744 | 24,652,041 | 23,041,502 | |||||||||||||||||||||
Series A Preferred Stock [Member] | |||||||||||||||||||||||||||||
Dividends Payable [Line Items] | |||||||||||||||||||||||||||||
Preferred Stock, Dividend Rate, Per-Dollar-Amount | $ 5.00 | ||||||||||||||||||||||||||||
Minimum [Member] | mShares [Domain] | |||||||||||||||||||||||||||||
Dividends Payable [Line Items] | |||||||||||||||||||||||||||||
Preferred Stock, Dividend Rate, Per-Dollar-Amount | 4.79 | ||||||||||||||||||||||||||||
Maximum [Member] | mShares [Domain] | |||||||||||||||||||||||||||||
Dividends Payable [Line Items] | |||||||||||||||||||||||||||||
Preferred Stock, Dividend Rate, Per-Dollar-Amount | $ 6.25 |
Dividends Series A Preferred Dividends (Details) - USD ($) |
1 Months Ended | 9 Months Ended | ||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 03, 2016 |
Sep. 30, 2017 |
Aug. 31, 2017 |
Jul. 31, 2017 |
Jun. 30, 2017 |
May 31, 2017 |
Apr. 30, 2017 |
Mar. 31, 2017 |
Feb. 28, 2017 |
Jan. 31, 2017 |
Aug. 31, 2016 |
Jul. 31, 2016 |
Jun. 30, 2016 |
May 31, 2016 |
Apr. 30, 2016 |
Mar. 31, 2016 |
Feb. 28, 2016 |
Jan. 31, 2016 |
Sep. 30, 2017 |
Apr. 28, 2017 |
Sep. 30, 2016 |
Jul. 29, 2016 |
Feb. 27, 2016 |
Jan. 30, 2016 |
|
Dividends Payable [Line Items] | ||||||||||||||||||||||||
Dividends, Preferred Stock, Cash | $ 3,886,173 | $ 5,545,017 | $ 5,412,511 | $ 5,299,654 | $ 5,237,872 | $ 5,085,694 | $ 5,000,060 | $ 4,938,098 | $ 4,849,032 | $ 4,641,149 | $ 3,671,020 | $ 3,458,513 | $ 3,321,519 | $ 3,143,567 | $ 2,979,196 | $ 2,770,048 | $ 2,630,601 | $ 2,481,086 | $ 46,009,087 | |||||
Preferred Stock entitled to dividend payments | 1,113,896 | 1,086,714 | 1,061,179 | 1,041,187 | 1,019,046 | 979,309 | 977,267 | 932,413 | 721,143 | 651,439 | 617,994 | 582,720 | 544,129 | 1,113,896 | 992,774 | 765,185 | 682,392 | 516,017 | 482,774 |
Dividends NCI (Details) - USD ($) |
3 Months Ended | 9 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
Sep. 30, 2017 |
Jun. 30, 2017 |
Mar. 31, 2017 |
Sep. 30, 2016 |
Jun. 30, 2016 |
Mar. 31, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Equity [Abstract] | ||||||||
Distribution Made to Limited Partner, Cash Distributions Declared | $ 211,781 | $ 211,781 | $ 198,742 | $ 179,449 | $ 179,449 | $ 117,395 | $ 622,304 | $ 476,293 |
Equity Compensation Warrant (Details) - $ / shares |
3 Months Ended | 9 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
Sep. 30, 2017 |
Jun. 30, 2017 |
Mar. 31, 2017 |
Sep. 30, 2016 |
Jun. 30, 2016 |
Mar. 31, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Common Stock, Dividends, Per Share, Declared | $ 0.235 | $ 0.235 | $ 0.22 | $ 0.2025 | $ 0.2025 | $ 0.1925 | $ 0.69 | $ 0.5975 |
warrant exercise price as percent of gross ipo price | 120.00% | 120.00% |
Indebtedness debt covenants (Details) - USD ($) |
3 Months Ended | 9 Months Ended | |
---|---|---|---|
Dec. 31, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
debt covenants [Line Items] | |||
dividend restriction AFFO | 95.00% | ||
Line of Credit Facility, Maximum Borrowing Capacity | $ 150,000,000 | ||
minimum equity debt covenants | $ 687,000,000 | ||
equity raise above min equity required | 75.00% | ||
total debt covenant min equity | $ 1,100,000,000 | ||
maximum dividends debt covenant | $ 89,000,000 | ||
Minimum Net Worth Required for Compliance | $ 1,170,151,180 | ||
debt yield | 9.18% | ||
payout ratio | 92.80% | ||
Total leverage ratio | 60.00% |
Income Taxes (Details) - USD ($) |
Sep. 30, 2017 |
Dec. 31, 2010 |
---|---|---|
Operating Loss Carryforwards [Line Items] | ||
Deferred Tax Assets, Net of Valuation Allowance | $ 298,100 | |
DeferredTaxAssetsValuationAllowancePercentage | 100.00% |
Commitments and Contingencies (Details) - USD ($) |
3 Months Ended | 9 Months Ended | 21 Months Ended | ||
---|---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
|
Commitments and Contingencies Disclosure [Abstract] | |||||
lease term | 11 years | ||||
guaranty cap amount | $ 6,700,000 | $ 6,700,000 | $ 6,700,000 | ||
Annual reduction in guaranty cap | 619,304 | 619,304 | 619,304 | ||
guaranty cap amount credit cards | 640,000 | ||||
manager's fees deferred | 655,944 | $ 736,960 | 1,001,864 | $ 1,458,245 | 4,300,000 |
cumulative manager's fees deferred | 5,100,000 | ||||
real estate loan balances unfunded | $ 92,700,000 | $ 92,700,000 | $ 92,700,000 |
Pro Forma Financial Information (Details) - USD ($) |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | ||||
pro forma acquisition cost adjustment | $ 1,300,000 | $ 6,800,000 | ||
Revenues | $ 74,900,199 | 53,537,337 | $ 212,352,447 | 141,127,062 |
pro forma net income common stockholders | $ (15,467,178) | $ (11,262,311) | $ (9,024,046) | $ (34,205,524) |
Weighted average number of shares of Common Stock outstanding, basic and diluted | 33,539,920 | 24,340,791 | 30,147,497 | 23,552,951 |
Weighted Average Number of Shares Outstanding, Diluted | 33,539,920 | 24,340,791 | 30,147,497 | 23,552,951 |
Pro Forma [Member] | ||||
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | ||||
Revenues | $ 74,970,784 | $ 63,754,083 | $ 212,542,233 | $ 189,494,650 |
Business Acquisition, Pro Forma Net Income (Loss) | 996,408 | (255,917) | 38,270,000 | (5,957,523) |
pro forma net income company | $ 958,120 | $ (240,446) | $ 37,029,878 | $ (5,799,045) |
Business Acquisition, Pro Forma Earnings Per Share, Basic | $ (0.46) | $ (0.46) | $ (0.30) | $ (1.45) |
Weighted Average Number of Shares Outstanding, Basic | 33,539,920 | 24,340,791 | 30,147,497 | 23,522,951 |
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