cfit-424b3.htm

This Supplement No. 5 supplements, and should be read in conjunction with, our prospectus dated August 10, 2020, Supplement No. 1, dated August 17, 2020, Supplement No. 2, dated September 15, 2020, Supplement No. 3, dated October 15, 2020 and Supplement No. 4, dated November 17, 2020. Defined terms used in this Supplement No. 5 shall have the meaning given to them in the prospectus unless the context otherwise requires. The purposes of this Supplement are as follows:

The transaction price for each share class of our common stock for subscriptions accepted as of January 1, 2021 (and repurchases as of December 31, 2020) is as follows:

We calculate NAV per share in accordance with the valuation guidelines that have been approved by our board of directors. Our NAV per share, which is updated as of the last calendar day of each month, is posted on our website at www.cfincometrust.com and is made available on our toll-free, automated telephone line at 855-9-CANTOR. Please refer to “Net Asset Value Calculation and Valuation Guidelines” in the prospectus for how our NAV is determined. We have engaged Robert A. Stanger & Co., Inc. (“Stanger”) to serve as our independent valuation firm. Our advisor is ultimately responsible for determining our NAV.

The following table provides a breakdown of the major components of our NAV pursuant to our valuation guidelines:

Components of NAV	November 30, 2020		October 31, 2020
Investment in real estate	$	178,970,000	$	178,970,000
Investments in real estate-related assets		32,662,438		23,709,105
Cash and cash equivalents⁽¹⁾		31,336,877		38,268,964
Other assets		860,554		875,591
Debt obligations (at Fair Market Value)		(86,737,036)		(86,371,454	)
Due to related parties⁽²⁾		(460,442)		(454,866	)
Accounts payable and other liabilities		(2,095,638)		(2,705,359	)
Distribution fee payable the following month⁽³⁾		(28,887)		(29,952	)
Non-controlling interests in subsidiaries		(3,230,245)		(3,262,914	)
Sponsor Support repayment / special unit holder interest in liquidation		—		—
Net Asset Value	$	151,277,621	$	148,999,115
Number of outstanding shares		6,315,700		6,249,658

Note:	(1) Net of a reserve of $150,000 for anticipated near-term capital needs at our SF Property that was not deducted in its appraised value.
	(2) Excluding the full distribution fee liability of $765,038 and, pursuant to our valuation guidelines, $293,131 due to our advisor for reimbursement of organization and offering costs ($366,413 less the current liability due of $73,282). Distribution fee only relates to Class TX, Class T, Class S and Class D shares of common stock.
	(3) The distribution fee that is payable as of November 30, 2020 related to TX, T, S and D shares is shown in the table below. The non-current distribution fee payable of $736,151 is not due as of November 30, 2020.
	Due to rounding, numbers presented throughout this document may not add up to precisely to the totals provided and percentages may not precisely reflect the absolute figures.
NAV Per Share		Class AX, IX and I Shares	Class TX Shares	Class T Shares	Class D Shares	Class S Shares	Total
Total Gross Assets at Fair Value		$ 185,138,511	$ 57,005,198	$ 787,582	$ 838,081	$ 60,497	$ 243,829,869
Distribution fees due and payable		—	(28,415)	(340)	(106)	(26)	(28,887)
Debt obligations (at Fair Market Value)		(65,858,896)	(20,278,327)	(280,165)	(298,128)	(21,520)	(86,737,036)
Due to related parties		(349,611)	(107,647)	(1,488)	(1,582)	(114)	(460,442)
Accounts payable and other liabilities		(1,591,203)	(489,941)	(6,770)	(7,203)	(521)	(2,095,638)
Non-controlling interests in subsidiaries		(2,452,705)	(755,202)	(10,434)	(11,103)	(801)	(3,230,245)
Quarterly NAV		$ 114,886,096	$ 35,345,666	$ 488,385	$ 519,959	$ 37,515	$ 151,277,621
Number of outstanding shares		4,795,472	1,476,553	20,400	21,708	1,567	6,315,700
NAV per share		$ 23.96	$ 23.94	$ 23.94	$ 23.96	$ 23.94

The following table reconciles stockholders’ equity per our unaudited consolidated balance sheet to our NAV:

Reconciliation of Stockholders’ Equity to NAV	November 30, 2020
Stockholders’ equity under U.S. GAAP	$	145,116,607
Adjustments:
Unrealized appreciation of real estate		209,014
Unrealized appreciation of real estate-related assets		688,738
Organization and offering costs		293,131
Acquisition costs		(1,179,154	)
Deferred financing costs, net		(771,217	)
Accrued distribution fee⁽¹⁾		736,150
Accumulated depreciation and amortization		10,961,981
Fair value adjustment of debt obligations		(2,591,852	)
Deferred rent receivable		(1,743,285	)
Deferred maintenance		(150,000	)
Non-controlling interests in subsidiaries		(292,492	)
NAV	$	151,277,621

In accordance with our current valuation procedures, our NAV was based in part upon: (i) the most recent appraised value of the GR Property, the FM Property, the CO Property, the Lewisville Property, the Walgreens DST Properties, the SF Property, and the Buchanan Property; (ii) the fair market value of our Debt Investments (as defined below); (iii) the fair market value of our loans payable; (iv) the estimated non-controlling interest held in our consolidated Battery Street SF JV; (v) the value of our interest in the Station DST based upon a third-party appraisal of the Station DST Property (as defined below), the fair market value of the Station DST Property mortgage and other assets and liabilities of the Station DST, all reflecting our ownership percentage interest in the Station DST; and (vi) the net tangible assets and liabilities of the Company as of November 30, 2020, as outlined in more detail below.

Pursuant to our valuation guidelines we engaged Stanger to provide its appraised market value of the SF Property as of September 30, 2020, the Buchanan Property as of August 31, 2020, the FM Property, the CO Property and the Lewisville Property, all as of June 30, 2020, and the GR Property and the Walgreens DST Properties as of March 31, 2020 (collectively, the “Appraised Properties”). Pursuant to our engagement agreement with Stanger, the appraisals of the Appraised Properties were prepared utilizing the income approach to value, specifically using a direct capitalization analysis for the GR Property and the Walgreens DST Properties and both a direct capitalization analysis and discounted cash flow analysis (“DCF”) for the FM Property, the CO Property, the Lewisville Property, the SF Property and the Buchanan Property. In addition, a sales comparison approach was conducted for the SF Property, given the size of the SF Property. The direct capitalization analysis is based upon the estimated net operating income of the Appraised Properties capitalized at an appropriate capitalization rate considering property characteristics and competitive position, the credit profile of the tenant/guarantor under the leases encumbering the Appraised Properties, the terms of the leases encumbering the Appraised Properties, and market conditions as of the date of value. The DCF analysis is based upon multi-year cash flow projections for each applicable property prepared in accordance with the lease which currently encumbers each property. Each property was assumed to be sold after the expiration of the initial lease term and any renewal terms deemed materially favorable to the tenant, or for which exercise was deemed likely based on other factors. The reversion value of the property which can be realized upon sale is calculated based on the current economic rental rate deemed reasonable for the property, escalated at a rate indicative of current expectations in the marketplace for the property. The projected market rate net operating income of the property for the year following the year of sale is then capitalized at an appropriate capitalization rate reflecting the age and anticipated functional and economic obsolescence and competitive position of the property to determine its reversion value. Net proceeds of sale are determined by deducting estimated costs incurred at the time of sale, estimated at 2% of the gross reversion value. Finally, the discounted present value of the cash flow stream from operations (including any estimated

releasing costs at the end of the assumed current lease term) and the discounted present value of the net proceeds from sale are summed to arrive at a total estimated value for the property. The capitalization rates applied to the Appraised Properties ranged from 5.00% to 6.50%, with a weighted average of approximately 5.99%. The discount rates applied to the estimated net cash flow from operations of the Appraised Properties for which a DCF analysis was conducted ranged from 5.25% to 7.50%, with a weighted average of approximately 6.73%. The discount rates applied to the estimated residual value of the Appraised Properties for which a DCF analysis was conducted ranged from 6.25% to 7.50%, with a weighted average of approximately 7.18%. The residual capitalization rates applied to the Appraised Properties for which a DCF analysis was conducted ranged from 5.50% to 6.75%, with a weighted average of approximately 6.47%. Where both a direct capitalization analysis and DCF was utilized, the indicated value from each approach was reviewed and a final appraised value was concluded. While a sales comparison approach was not conducted, other than for the SF Property, Stanger reviewed regional property sale data for each Appraised Property in order to assist in the selection of capitalization rates applied in the appraisals and to observe transaction prices per square foot in the Appraised Properties’ regional markets. For the SF Property, the sales comparison approach conducted utilized the price per square foot from recent market sales and adjusted such indicated price per square foot to a price per square foot deemed reasonable for the SF Property, taking into account factors such as property size, location, tenancy/occupancy and condition/quality and the date of sale. The aggregate appraised value of the Appraised Properties was $178,970,000. The appraised values of the Appraised Properties are subject to the general assumptions and limiting conditions set forth in the appraisal reports rendered to the Company by Stanger.

In accordance with our valuation procedures, the Lancaster PE and the Chicago Jr Mezz (individually a “Debt Investment” and collectively the “Debt Investments”) were included in the determination of NAV at their estimated fair market value as of November 30, 2020, as determined by Stanger, adjusted to reflect the Company’s interest in the Debt Investments. The Debt Investments estimated value was based upon taking, for each Debt Investment, the loan payments over the remaining anticipated term and discounting such payments to present value at a discount rate range equal to the current estimated market interest rate on financing similar to the applicable Debt Investments. To provide their opinion of value of the Debt Investments, Stanger first reviewed the terms of each of the Debt Investments as contained in the loan documents. Stanger then reviewed mezzanine loan market terms at or around November 30, 2020 to ascertain current market interest rate levels for loans similar to the Debt Investments. This review was conducted by (i) recent interviews of participants in the mezzanine / preferred equity market, (ii) reviewing recent mezzanine loan transactions, as available, and (iii) reviewing published surveys available at or around November 30, 2020. Based on Stanger’s reviews above and taking into consideration the Debt Investments’ unique factors, including, but not limited to, loan-to-value (based on the appraised value of the collateral), debt service coverage/debt yield, collateral property type, age and location, financial information pertaining to the lessee of the collateral properties, prepayment terms, and loan origination date, maturity date and extension terms, a market interest rate range was determined for each Debt Investment to utilize in the determination of the fair market value of the Debt Investments. The discount rate applied to the future payments of our Debt Investments was 7.85% for both facilities. The aggregate fair value of the Debt Investments was approximately $25,203,000.

Estimated Market Value of the Non-Controlling Interest in the Battery Street SF JV

In order to determine the net asset value attributable to the non-controlling interest and promote interest in the Battery Street SF JV, Stanger utilized the appraisal of the SF Property, and then, based on the November 30, 2020 Battery Street SF JV balance sheet provided, added tangible assets and deducted tangible liabilities of the Battery Street SF JV, including an adjustment for anticipated near term capital repairs at the SF Property not considered in the property appraisal, and determined any promote due to the Company’s Battery Street SF JV partner. This net asset value was then multiplied by the ownership interest held by parties other than us (25%) to determine the non-controlling interest adjustment related to the Battery Street SF JV utilized in the Company’s November 30, 2020 NAV.

Stanger performed a valuation of the property-level debt by reviewing available market data for comparable liabilities and applying a selected discount rate to the stream of future debt payments. The discount rate was selected based on several factors including U.S. Treasury yields as of the valuation date, as well as loan-specific items such as loan-to-value ratio, debt service coverage ratio, collateral property location, age, type, lease term and lessee credit quality, prepayment terms, and maturity and loan origination date. The discount rates applied to the future debt payments of our long-term debt ranged from 3.70% to 4.25%, with a weighted average of approximately 4.08%. Stanger’s valuation of the long-term debt is based in part on the appraised values of the encumbered Appraised Properties, which represent the collateral associated with the long-term debt as well as certain other assumptions and limiting conditions, including: (i) Stanger was provided with loan documents and other factual loan information by the Advisor and has relied upon and assumed that such information is correct in all material respects and no warranty is given by Stanger as to the accuracy of such information; (ii) each collateral property is assumed to be free and clear of liens (other than the mortgage being valued); (iii) information furnished by others, upon which all or portions of Stanger’s value opinion is based, is believed to be reliable but has not been verified, and no warranty is given as to the accuracy of such information; (iv) no material change has occurred in the value of the collateral properties from the date of last appraisal through the loan valuation date and (v) each mortgage is assumed to be salable, transferable or assumable between parties and is further assumed not to be in default. Stanger’s opinion of the long-term debt value was predicated on the above assumptions.

On November 25, 2020, we acquired, through our operating partnership, beneficial interests in the Station DST (the “Station Interests”), for a purchase price of $7.574 million. The Station Interests were acquired in a private placement offering managed by an affiliate of our Sponsor. The Station Interests held represent 15% of the DST.

On October 29, 2020, the Station DST acquired the fee simple interest in a 444-unit apartment community located in Irving, Texas, or the Station DST Property, for a total purchase price of $106,000,000. The purchase price was comprised of $47,111,000 in equity and $58,889,000 in proceeds from a mortgage loan. At present the Station DST Property is 95.05% occupied. As part of the acquisition, the Station DST received an appraisal of the Station DST Property as of September 15, 2020 with an appraised value of $107,400,000. This appraisal was conducted by a third-party licensed appraiser and was based upon the income approach (a direct capitalization analysis) and sales comparison approach.

We acquired the Station Interests in a private placement. Cantor Fitzgerald & Co. is the dealer manager in connection with the private placement, but did not receive any compensation in connection with our acquisition of the Station Interests. The proceeds from the purchase of the Station Interests will be paid by the DST to an affiliate of CFI. The acquisition of the Station Interests and the related transactions were unanimously approved by our board of directors, including our independent directors. We funded the acquisition of the Station Interests with cash from this offering. The Station DST is managed by its trust manager, CF Station Manager, LLC, an affiliate of CFI.

The value of the Station Interests was based upon the Station DST Property appraisal, the fair market value of the mortgage loan encumbering the Station DST Property as of November 30, 2020 conducted in accordance with the methodology outlined in Fair Value of Long Term Debt above, the other tangible assets and liabilities of the Station DST such as cash and reserves, each reflecting our ownership interest in the Station DST (15%). While the other asset and liabilities balances were as of October 31, 2020 because November 30, 2020 balances were not yet available, there has been no material change in the net other assets amount of the Station DST through the November 30, 2020 net asset valuation date.

Assuming all other factors remain unchanged, the table below presents the estimated increase or decrease to our November 30, 2020 NAV for a change in the going-in capitalization rate and, where a DCF analysis was utilized, discount rates and terminal capitalization rates used in the Appraised Properties’ appraisals and the Station DST Property appraisal, a 5% change in the discount rates used to value our Debt Investments and a 5% change in the discount rates used to value our long-term debt and the mortgage debt encumbering the Station DST Property.

Sensitivity Analysis	Range of NAV (Class AX, IX, & I)									Range of NAV (Class TX)									Range of NAV (Class T)
	Low			Con- cluded			High			Low			Con- Cluded			High			Low			Con- cluded			High
Estimated Per Share NAV	$	22.14		$	23.96		$	25.91		$	22.12		$	23.94		$	25.89		$	22.13		$	23.94		$	25.89
Capitalization Rate - Appraised Properties / Station DST Property		6.18	%		5.88	%		5.59	%		6.18	%		5.88	%		5.59	%		6.18	%		5.88	%		5.59	%
Cash Flow Discount Rate - Appraised Properties		7.10	%		6.76	%		6.42	%		7.10	%		6.76	%		6.42	%		7.10	%		6.76	%		6.42	%
Residual Discount Rate - Appraised Properties		7.57	%		7.21	%		6.85	%		7.57	%		7.21	%		6.85	%		7.57	%		7.21	%		6.85	%
Terminal Capitalization Rate - Appraised Properties		6.82	%		6.49	%		6.17	%		6.82	%		6.49	%		6.17	%		6.82	%		6.49	%		6.17	%
Discount Rate - Debt Investments		8.24	%		7.85	%		7.46	%		8.24	%		7.85	%		7.46	%		8.24	%		7.85	%		7.46	%
Discount Rate - Long-Term Debt Consolidated / Station DST Debt		3.76	%		3.96	%		4.15	%		3.76	%		3.96	%		4.15	%		3.76	%		3.96	%		4.15	%

Sensitivity Analysis	Range of NAV (Class D)									Range of NAV (Class S)
	Low			Con- cluded			High			Low			Con- Cluded			High
Estimated Per Share NAV	$	22.14		$	23.96		$	25.90		$	22.13		$	23.94		$	25.89
Capitalization Rate - Appraised Properties / Station DST Property		6.18	%		5.88	%		5.59	%		6.18	%		5.88	%		5.59	%
Cash Flow Discount Rate - Appraised Properties		7.10	%		6.76	%		6.42	%		7.10	%		6.76	%		6.42	%
Residual Discount Rate - Appraised Properties		7.57	%		7.21	%		6.85	%		7.57	%		7.21	%		6.85	%
Terminal Capitalization Rate - Appraised Properties		6.82	%		6.49	%		6.17	%		6.82	%		6.49	%		6.17	%
Discount Rate - Debt Investments		8.24	%		7.85	%		7.46	%		8.24	%		7.85	%		7.46	%
Discount Rate - Long-Term Debt Consolidated / Station DST Debt		3.76	%		3.96	%		4.15	%		3.76	%		3.96	%		4.15	%

	•		An industrial property located in Phoenix, Arizona (the “Buchanan Property”).

	•		Interests (15%) in a Delaware Statutory Trust, CF Station Multifamily DST (the “Station DST”).

	Transaction Price (per share)
Class S	$	23.94
Class I	$	23.96
Class T	$	23.94
Class D	$	23.96