Equity

Status of Offerings

On January 20, 2017, the Company closed the primary portion of the IPO; however, the Company continued to offer shares pursuant to the DRP under the IPO registration statement through May 2017. The Company is currently offering shares pursuant to the DRP as part of the Follow-On Offering. The DRP may be terminated at any time upon 10 days’ prior written notice to stockholders, which may be provided through the Company's filings with the SEC.

On September 20, 2017, the Company commenced the Follow-On Offering of up to $2.2 billion of shares, consisting of up to $2.0 billion of shares in the Company's primary offering and $0.2 billion of shares (including Class A, Class AA and Class AAA shares) pursuant to the DRP. The Company reclassified all Class T and Class I shares sold in the IPO as "Class AA" and "Class AAA" shares, respectively. The Company is offering Class T shares, Class S shares, Class D shares and Class I shares in its Follow-On Offering.

Share Classes

Class T shares, Class S shares, Class D shares, Class I shares, Class A shares, Class AA shares and Class AAA shares vote together as a single class, and each share is entitled to one vote on each matter submitted to a vote at a meeting of the Company's stockholders; provided that with respect to any matter that would only have a material adverse effect on the rights of a particular class of common stock, only the holders of such affected class are entitled to vote.

The following table summarizes shares issued and gross proceeds received for each share class as of March 31, 2018 and outstanding shares as of March 31, 2018 and December 31, 2017:



	Class T		Class S		Class D		Class I		Class A			Class AA			Class AAA		Total
Gross proceeds from primary portion of offerings	$	260	$	3	$	8	$	2,613	$	240,780		$	474,858		$	8,379	$	726,901
Gross proceeds from DRP	$	1	$	—	$	—	$	77	$	21,626		$	25,358		$	375	$	47,437
Shares issued in primary portion of offerings	26,234		264		786		275,765		24,199,760			47,562,870			901,226		72,966,905
DRP shares issued	82		7		10		8,080		2,283,665			2,682,572			39,870		5,014,286
Stock distribution shares issued	—		—		—		—		263,641			300,166			4,676		568,483
Restricted stock issued	—		—		—		—		—			—			25,500		25,500
Total redemptions	—		—		—		—		(695,741		)	(312,288		)	—		(1,008,029		)
Total shares outstanding as of March 31, 2018	26,316		271		796		283,845		26,051,325			50,233,320			971,272		77,567,145
Total shares outstanding as of December 31, 2017	4,148		268		268		267,476		25,995,943			49,942,471			964,709		77,175,283

Offering and Organizational Costs

Pursuant to the Advisory Agreement, in no event will the Company be obligated to reimburse the Advisor for organizational and offering costs incurred in connection with the Follow-On Offering totaling in excess of 15% (including selling commissions, dealer manager fees, distribution fees and non-accountable due diligence expense allowance but excluding acquisition expenses or any fees, if ever applicable) of the gross proceeds raised in the Follow-On Offering (excluding gross proceeds from the DRP). If the organizational and offering costs exceed such limits discussed above, within 60 days after the end of the month in which the Follow-On Offering terminates or is completed, the Advisor is obligated to reimburse the Company for any excess amounts. As long as the Company is subject to the Statement of Policy Regarding Real Estate Investment Trusts published by the North American Securities Administrators Association (“NASAA REIT Guidelines”), such limitation discussed above will also apply to any future public offerings. As of March 31, 2018, organizational and offering costs relating to the Follow-On Offering were 82.8% (approximately $2.4 million) of gross offering proceeds ($2.9 million), including selling commissions, dealer manager fees and distribution fees. Therefore, if the Follow-On Offering was terminated on March 31, 2018, the Company would owe the Advisor $0.4 million and the Advisor would be liable for organizational and offering costs incurred by the Company of approximately $2.0 million. Approximately $1.0 million of organizational and offering costs the Advisor is liable for as of March 31, 2018 is deducted from "Due to Affiliates" and the remaining $1.0 million is included in "Other Assets, net" on the consolidated balance sheet.

Organizational and offering costs incurred as of March 31, 2018, including those incurred by the Company and due to the Advisor, for the Follow-On Offering are as follows:



	March 31, 2018
Cumulative offering costs	$	2,028
Cumulative organizational costs	$	360
Organizational and offering costs advanced by the Advisor	$	1,414
Organizational and offering costs paid by the Company	974
Adjustment to organizational and offering costs pursuant to the limitation:
Costs in excess of limit	(1,956		)
Organizational and offering costs incurred	$	432

As of March 31, 2018, organizational and offering costs incurred by the Company related to the IPO were approximately $76.1 million.

Distribution Reinvestment Plan (DRP)

The Company has adopted the DRP, which allows stockholders to have dividends and other distributions otherwise distributable to them invested in additional shares of common stock. No sales commissions or dealer manager fee are paid on shares sold through the DRP. The Company may amend or terminate the DRP for any reason at any time upon 10 days' prior written notice to stockholders, which may be provided through the Company's filings with the SEC.

IPO Share Redemption Program

The Company has a share redemption program for holders of Class A, Class AA, and Class AAA shares ("IPO Shares") who have held their shares for less than four years, which enables IPO stockholders to sell their shares back to the Company in limited circumstances ("IPO Share Redemption Program"). The Company's IPO Share Redemption Program permits stockholders to submit their IPO Shares for redemption after they have held them for at least one year, subject to the significant conditions and limitations described below. On March 30, 2018, the board of directors of the Company amended the IPO Share Redemption Program. The key change to the IPO Share Redemption Program is that after one year from the purchase date, a stockholder will be able to redeem at 100% of the NAV of the applicable share class. The amendment will take effect on May 2, 2018. The redemption price will be equal to the NAV per share of the applicable share class.

There are several restrictions under the IPO Share Redemption Program. A stockholder generally has to hold his or her shares for one year before submitting shares for redemption under the program; however, the Company may waive the one-year holding period in the event of the death, qualifying disability or bankruptcy of a stockholder. In addition, the Company will limit the number of IPO Shares redeemed pursuant to the IPO Share Redemption Program as follows: (1) during any calendar year, the Company will not redeem in excess of 5% of the weighted average number of IPO Shares outstanding during the prior calendar year; and (2) funding for the redemption of shares will be limited to the amount of net proceeds the Company receives from the sale of IPO Shares under the Company's DRP. These limits may prevent the Company from accommodating all requests made in any year. In addition, stockholders holding IPO Shares for four years or longer will be eligible to utilize the New Share Redemption Program, and redeem at 100% of the NAV of the applicable share class. The IPO Share Redemption Program will terminate in January 2021 on the four year anniversary of the termination of the primary portion of the Company's IPO. During the three months ended March 31, 2018 and 2017, the Company redeemed shares of its outstanding common stock as follows:



	Three Months Ended March 31,
Period	2018		2017
Shares of common stock redeemed	217,088		148,675
Weighted average price per share	$	9.15	$	9.49

During the three months ended March 31, 2018, the Company redeemed 217,088 shares of common stock for approximately $0.2 million at a weighted average price per share of $9.15. Since inception, the Company has honored all redemption requests and has redeemed a total of 1,008,028 shares of common stock for approximately $9.4 million at a weighted average price per share of $9.28. The Company has funded all redemptions using proceeds from the sale of IPO Shares pursuant to the DRP.

As long as the common stock is not listed on a national securities exchange or over-the-counter market, stockholders who have held their stock for at least one year may be able to have all or a portion consisting of at least 25% of their shares of stock redeemed by the Company. Share redemption requests must be received by the Company no later than the last business day of the calendar quarter, and shares generally will be redeemed on the last business day of the month following such calendar quarter. The redemption price per IPO Share prior to May 2, 2018 is included in the Company's 2017 Annual Report on Form 10-K filed on March 9, 2018.

Shares redeemed in connection with the death or qualifying disability of a stockholder may be repurchased at the purchase price of such shares. The redemption price per share will be reduced by the aggregate amount of net proceeds per share, if any, distributed to the stockholders prior to the repurchase date as a result of a “special distribution.” While the board of directors does not have specific criteria for determining a special distribution, the Company expects that a special distribution will only occur upon the sale of a property and the subsequent distribution of the net sale proceeds. The redemption price per share is subject to adjustment as determined from time to time by the board of directors. The Company’s board of directors may choose to amend, suspend, or terminate the IPO Share Redemption Program upon 30 days' written notice at any time, which may be provided through the Company’s filings with the SEC.

If the Company cannot purchase all shares presented for redemption in any quarter, based upon insufficient cash available or the limit on the number of shares the Company may redeem during any calendar year, the Company will attempt to honor redemption requests on a pro rata basis. With respect to any pro rata treatment, redemption requests following the death or qualifying disability of a stockholder will be considered first, as a group, followed by requests where pro rata redemption would result in a stockholder owning less than the minimum balance of $2,500 of shares of common stock, which will be redeemed in full to the extent there are available funds, with any remaining available funds allocated pro rata among all other redemption requests. The Company will treat the unsatisfied portion of the redemption request as a request for redemption the following quarter. Such pending requests will generally be honored on a pro rata basis. Any stockholder request to cancel an outstanding redemption must be sent to the Company's transfer agent prior to the last day of the new quarter. The Company will determine whether sufficient funds are available or the IPO Share Redemption Program has reached the 5% share limit as soon as practicable after the end of each quarter, but in any event prior to the applicable payment date.

As the use of the proceeds from the DRP related to the IPO Shares for redemptions is outside the Company’s control, the net proceeds from the DRP related to the IPO Shares are considered to be temporary equity and are presented as common stock subject to redemption on the accompanying consolidated balance sheets. The cumulative proceeds from the DRP related to the IPO Shares, net of any redemptions, will be computed at each reporting date and will be classified as temporary equity on the Company’s consolidated balance sheets. As noted above, the redemption is limited to proceeds from new permanent equity from the sale of shares pursuant to the Company’s DRP related to the IPO Shares. As of March 31, 2018, $33.5 million of common stock was available for redemption and $4.6 million of common stock was reclassified from redeemable common stock to accrued expenses and other liabilities in the consolidated balance sheet as of March 31, 2018.

New Share Redemption Program

In connection with the Follow-On Offering, the Company’s board of directors adopted the New Share Redemption Program for the New Shares (and IPO Shares that have been held for four years or longer). Under the New Share Redemption Program, the Company will redeem shares as of the last business day of each quarter. The redemption price will be equal to the NAV per share for the applicable class generally on the 13th of the month immediately prior to the end of the applicable quarter. Redemption requests exceeding the quarterly cap will be filled on a pro rata basis.With respect to any pro rata treatment, redemption requests following the death or qualifying disability of a stockholder will be considered first, as a group, followed by requests where pro rata redemption would result in a stockholder owning less than the minimum balance of $2,500 of shares of the Company's common stock, which will be redeemed in full to the extent there are available funds, with any remaining available funds allocated pro rata among all other redemption requests. All unsatisfied redemption requests must be resubmitted after the start of the next quarter, or upon the recommencement of the New Share Redemption Program, as applicable.

There are several restrictions under the New Share Redemption Program. Stockholders generally have to hold their shares for one year before submitting their shares for redemption under the program; however, the Company will waive the one-year holding period in the event of the death or qualifying disability of a stockholder. Shares issued pursuant to the DRP are not subject to the one-year holding period. In addition, the New Share Redemption Program generally imposes a quarterly cap on aggregate redemptions of the New Shares (and IPO shares that have been held for four years or longer) equal to a value of up to 5% of the aggregate NAV of the outstanding shares of such classes as of the last business day of the previous quarter. As the value on the aggregate redemptions of the New Shares is outside the Company's control, the 5% quarterly cap is considered to be temporary equity and is presented as the common stock subject to redemption on the accompanying consolidated balance sheets. As of March 31, 2018, the quarterly cap was approximately $0.1 million.

The Company’s board of directors has the right to modify or suspend the New Share Redemption Program upon 30 days' notice at any time if it deems such action to be in the Company’s best interest and the best interest of the Company’s stockholders. Any such modification or suspension will be communicated to stockholders through the Company’s filings with the SEC.