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Heath D. Linsky, Esq.
Lauren Burnham Prevost, Esq. Morris, Manning & Martin, LLP 1600 Atlanta Financial Center 3343 Peachtree Road, N.E. Atlanta, Georgia 30326-1044 (404) 233-7000 |
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Rosemarie A. Thurston
Aaron C. Hendricson Alston & Bird LLP 1201 West Peachtree Street Atlanta, Georgia 30309 (404) 881-7000 |
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| Large accelerated filer ☐ | | | Accelerated filer ☐ | |
| Non-accelerated filer ☐ (Do not check if a smaller reporting company) | | | Smaller reporting company ☒ | |
| Emerging growth company ☒ | | |
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Title of Securities Being Registered
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Proposed Maximum
Offering Price Per Share |
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Proposed Maximum
Aggregate Offering Price(1) |
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Amount of
Registration Fee(1) |
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Primary Offering, Common Stock, $0.01 par value per share
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| | | | | | | | | | | $ | 552,375,000 | | | | | | $ | 64,021 | | |
Class A Shares
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| | | | $ | 10.00 | | | | | | | | | | | | | | | | |
Class K Shares
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| | | | $ | 10.00 | | | | | | | | | | | | | | | | |
Class I Shares
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| | | | $ | 9.50 | | | | | | | | | | | | | | | | |
Class T Shares
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| | | | $ | 10.00 | | | | | | | | | | | | | | | | |
Dividend Reinvestment Plan, Common Stock, $0.01 par value per share
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| | | | | | | | | | | $ | 50,000,000 | | | | | | $ | 5,795 | | |
Class K Shares
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| | | | $ | 9.50 | | | | | | | | | | | | | | | | |
Class I Shares
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| | | | $ | 9.50 | | | | | | | | | | | | | | | | |
Class T Shares
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| | | | $ | 9.50 | | | | | | | | | | | | | | | | |
Total, Common Stock, $0.01 par value per share
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| | | | | — | | | | | | $ | 602,375,000 | | | | | | $ | 69,816 | | |
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Aggregate Price
to Public(1) |
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Selling Commissions(2)
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Dealer Manager Fee(2)
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Proceeds Before
Expenses to Us(1)(3) |
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Primary Offering | | | | | | | | | | | |||||||||||||||
Per Common Share(4)
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| | | $ | 10.00 | | | | | $ | 0.50 | | | | | $ | 0.30 | | | | | $ | 9.20 | | |
Per I Share(5)
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| | | $ | 9.50 | | | | | $ | 0.00 | | | | | $ | 0.285 | | | | | $ | 10.00 | | |
Per K Share
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| | | $ | 10.00 | | | | | $ | 0.50 | | | | | $ | 0.30 | | | | | $ | 10.00 | | |
Per T Share(6)
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| | | $ | 10.00 | | | | | $ | 0.30 | | | | | $ | 0.30 | | | | | $ | 10.00 | | |
Maximum Offering(7)
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| | | $ | 552,375,000 | | | | | $ | 15,000,000 | | | | | $ | 12,187,500 | | | | | $ | 550,375,000 | | |
Dividend Reinvestment Plan | | | | | | | | | | | | | | | | ||||||||||
Per I Share
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| | | $ | 9.50 | | | | | | __ | | | | | | __ | | | | | | __ | | |
Per K Share
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| | | $ | 9.50 | | | | | | __ | | | | | | __ | | | | | | __ | | |
Per T Share
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| | | $ | 9.50 | | | | | | __ | | | | | | __ | | | | | | __ | | |
Total Maximum Offering (Primary and Distribution Reinvestment
Plan)(7) |
| | | $ | 602,375,000 | | | | | $ | 15,000,000 | | | | | $ | 12,187,500 | | | | | $ | 600,375,000 | | |
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Litigation | | | | | 239 | | |
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Experts | | | | | 239 | | |
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Appendix C: Subscription Agreement
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Per Common Share(3)
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Per I Share
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Per K Share
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Per T Share
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Primary Offering Price
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| | | $ | 10.00 | | | | | $ | 9.50 | | | | | $ | 10.00 | | | | | $ | 10.00 | | |
Selling Commissions – (1)
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| | | | 5.0% | | | | | | — | | | | | | 5.0% | | | | | | 3.0% | | |
Dealer Manager Fee – (1)
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| | | | 3.0% | | | | | | 3.0% | | | | | | 3.0% | | | | | | 3.0% | | |
Stockholder Servicing Fee – (1)
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| | | | — | | | | | | — | | | | | | — | | | | | | 1.0%(2) | | |
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Type of
Compensation |
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Determination of Amount
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Estimated Amount for
Targeted Maximum Offering |
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Offering/Acquisition/Operating Stage
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Selling commissions — Our Dealer Manager
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| | We will pay our dealer manager selling commissions of up to 5% of the gross offering proceeds from the sale of K Shares and common shares and selling commissions of up to 3% of the gross offering proceeds from the sale of T Shares. No selling commissions are payable in connection with I Shares. The dealer manager will reallow all of such selling commissions to participating broker-dealers. For information on how we will fund the payment of selling commissions with proceeds from the sale of common shares see the answers to the questions entitled “How are your organization and offering expenses being paid in this offering?” and “How will you ensure that sufficient common shares are purchased to fund your organization and offering expenses?”. No selling commissions will be payable on account shares of any class acquired by our advisor, the Service Provider, or their affiliates or I Shares, K Shares and T Shares sold pursuant to our DRIP. The selling commissions may be reduced or waived in connection with certain categories of sales. See “Plan of Distribution — Compensation of Dealer Manager and Participating Broker-Dealers”, “— Share Distribution Channels”, and “— Volume Discounts”. | | | Aggregate selling commissions will equal $26,250,000, assuming (i) we sell the target maximum of $500,000,000 in K Shares in the primary offering, (ii) we sell $25,000,000 in common shares to retail investors in the primary offering, (iii) the maximum selling commission and dealer manager fee is paid for each K Share and common share sold, and (iv) no shares are sold pursuant to the DRIP. | |
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Dealer manager fee — Our Dealer Manager
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| | We will pay our dealer manager a dealer manager fee of up to 3% of the gross offering proceeds from the sale of I Shares, K Shares, T Shares and common shares. The dealer manager may reallow a portion of its dealer manager fees to participating broker-dealers. For information on how we will fund the payment of dealer manager fees with proceeds from the sale of common shares, see the answers to the questions entitled “How are your | | | The aggregate dealer manager fee will equal $15,750,000, assuming (i) we sell the target maximum of $500,000,000 in K Shares in the primary offering, (ii) we sell $25,000,000 in common shares to retail investors in | |
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Type of
Compensation |
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Determination of Amount
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Estimated Amount for
Targeted Maximum Offering |
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| | | | organization and offering expenses being paid in this offering?” and “How will you ensure that sufficient common shares are purchased to fund your organization and offering expenses?” No dealer manager fees will be payable on account of shares of any class acquired by our advisor, the Service Provider or their affiliates or I Shares, K Shares and T Shares sold pursuant to our DRIP. The dealer manager fee may be reduced or waived in connection with certain categories of sales. See “Plan of Distribution — Compensation of Dealer Manager and Participating Broker-Dealers” and “— Share Distribution Channels”. | | | the primary offering, (iii) the maximum selling commission and dealer manager fee is paid for each K Share and common share sold, and (iv) no shares are sold pursuant to the DRIP. | | | ||
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Stockholder Servicing Fee — Our Dealer Manager
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| | With respect to T Shares sold in our primary offering only, will pay our dealer manager a stockholder servicing fee equal to 1/365th of 1.0% of the purchase price per T Share (or, once reported, the amount of our estimated value per T Share) for each T Share purchased in our primary offering. The stockholder servicing fee accrues daily and is payable in arrears. We will cease paying the stockholder servicing fee with respect to a T share sold in our primary offering at the earlier of (i) the date at which the aggregate underwriting compensation paid from all sources with respect to this offering equals 10% of the gross proceeds from the sale of shares in our primary offering (i.e., excluding proceeds from our DRIP); (ii) the third anniversary of the last day of the fiscal quarter in which our initial public offering (excluding our DRIP) terminates; (iii) the end of the month in which our transfer agent, on our behalf, determines that total underwriting compensation, including selling commissions, dealer manager fees, the stockholder servicing fee and other elements of underwriting compensation with respect to such T Share, would be in excess of 10% of the total gross investment amount at the time of purchase of such T Share in our primary offering; (iv) the end of the month in which our transfer agent, on our behalf, determines the stockholder servicing fee with respect to such T Share would be in excess of 3.0% of the total gross investment amount at the time of purchase of such T Share in our primary offering; (v) the date on which such T Share is repurchased by us; (vi) the date on which the holder of such T Share or its agent notifies us or our agent that he or she is represented by a new participating broker-dealer; provided that we will continue paying the stockholder servicing fee, | | | Actual amounts are dependent upon the number of T Shares purchased, and therefore, cannot be determined at the present time. | | | | |
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Type of
Compensation |
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Determination of Amount
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Estimated Amount for
Targeted Maximum Offering |
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| | | | which shall be reallowed to the new participating broker-dealer, if the new participating broker-dealer enters into a participating dealer agreement or otherwise agrees to ongoing services set forth in the dealer manager agreement; and (vii) the listing of our shares of capital stock on a national securities exchange, the sale of our company or the sale of all or substantially all of our assets. We cannot predict if and when this will occur. The dealer manager will reallow a portion of the stockholder servicing fee to participating broker-dealers and servicing broker-dealers. No stockholder servicing fees will be payable on account of T Shares acquired by our advisor, the Service Provider or their affiliates. Please see the answer to the question entitled “Why are you offering four classes of common stock, and what are the similarities and differences among the classes?” for a summary of the ongoing services for which stockholder servicing fees are payable. | | | | | | | |
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Acquisition Fee — Our Advisor
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Pursuant to the advisory agreement, for services in connection with selecting, evaluating, and acquiring investments, we will pay our advisor an acquisition fee equal to 1.5% of the gross contract purchase price of each property, loan, or other real estate-related investment purchased. “Gross contract purchase price” means the amount actually paid or allocated in respect of the purchase of, or budgeted capital expenditures for, a property or the amount actually paid or allocated in respect of the purchase of loans or other real-estate related assets, in each case inclusive of acquisition expenses and any indebtedness assumed or incurred in respect of such investment but exclusive of acquisition fees.
Payment of the acquisition fee to our advisor will be deferred until the occurrence of (i) a liquidation event (i.e., any voluntary or involuntary liquidation or dissolution of us, including as a result of the sale of all or substantially all of our assets for cash or other consideration), (ii) our company’s sale or merger in a transaction that provides our stockholders with cash, securities, or a combination of cash and securities, (iii) the listing of our shares of capital stock on a national securities exchange, or (iv) the termination (not in connection with one of the preceding events) of the advisory agreement, other than for cause, or the non-renewal of the advisory agreement. We
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| | Actual amounts depend upon the amount of proceeds available for investment and the leverage we incur. Assuming we sell the targeted maximum offering amount in this offering of $602,375,000, 99% of the primary offering proceeds (excluding common shares) are available for investment and 100% of the DRIP proceeds and none of the common share proceeds (see “Estimated Use of Proceeds”), we utilize a 50% leverage ratio, and all of said proceeds are used for acquiring assets, our acquisition fees will equal $16,350,000. The amount of any interest that accrues on deferred acquisition fees cannot be determined at this time. | | |
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Type of
Compensation |
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Determination of Amount
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Estimated Amount for
Targeted Maximum Offering |
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refer to the preceding clauses (ii) and (iii) as an “Other Liquidity Event.” The deferred acquisition fees will accrue interest at a cumulative, non-compounded rate of 6.0% per annum.
See the answers to the questions entitled “Upon a liquidation, how are liquidation proceeds to be distributed?,” “If you list your shares, are any payments due to your advisor?,” and “If you are acquired or merge with another entity, are any payments due to your advisor?” for information regarding the payment of deferred acquisition fees (and interest accrued thereon) upon a liquidation and Other Liquidity Events, and the answer to the question entitled “If you terminate the advisory agreement for any other reason (other than for cause), or if you elect not to renew the advisory agreement, are any payments due to your advisor?” for information regarding payment of deferred acquisition fees (and interest accrued thereon) in the event of a Non-cause Advisory Agreement Termination. If we terminate the advisory agreement for cause, the deferred acquisition fees (and interest accrued thereon) will remain our obligation and will continue to accrue interest and will be satisfied upon a later liquidation or Other Liquidity Event if the conditions for their payment, at that time, are met.
The Service Provider (an affiliate of our dealer manager) is entitled to a fee under the Services Agreement equal to 25% of any consideration our advisor receives (including accrued interest) on account of the acquisition fee. See “Conflicts of Interest — Service Provider” for more information.
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Other Organization and Offering Expenses — Our Advisor and its affiliates
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| | We will reimburse our advisor and its affiliates for organization and offering costs they incur on our behalf, either directly or through contract services provided by affiliates, but only to the extent that such reimbursement would not cause the sales commissions, the dealer manager fee, the stockholder servicing fee and the other organization and offering expenses we bear to exceed 15% of the gross proceeds from this offering, in each case as of the date of the reimbursement. Such reimbursement of our advisor or its affiliates may take the form of the issuance of common shares to our advisor or such affiliates, with such common shares valued at $10.00 per common share, or may be funded with proceeds from the sale of common shares to the | | | $7,875,000, assuming (i) we sell the target maximum of $500,000,000 in K Shares in the primary offering, and (ii) we sell $25,000,000 in common shares to retail investors in the primary offering. | |
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Type of
Compensation |
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Determination of Amount
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Estimated Amount for
Targeted Maximum Offering |
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| | | | public in this offering. We estimate that organization and offering expenses (other than selling commissions, the dealer manager fee and stockholder servicing fee) will be approximately 1.5% of primary offering proceeds (excluding proceeds from the sale of common shares to the advisor, the Service Provider or their affiliates). Should such other organization and offering expenses exceed 1.5% of primary offering proceeds (excluding proceeds from the sale of common shares to the advisor, the Service Provider or their affiliates), we will sell additional common shares to pay such excess other organization and offering expenses, subject to the 15% limit discussed above. To the extent that our total organization and offering expenses exceed 15% of offering proceeds, our advisor and its affiliates will bear such expenses, without reimbursement from us. | | | | |
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Asset Management Fees — Our Advisor
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We will pay our advisor a quarterly fee, which we refer to as the asset management fee, equal to one-fourth of 0.75% of the adjusted cost of our assets and amounts actually paid or allocated in respect of the acquisition of loans, before reduction for depreciation, amortization, impairment charges, and cumulative acquisition costs charged to expense in accordance with generally accepted accounting principles (adjusted cost will include the purchase price, acquisition expenses, capital expenditures, and other customarily capitalized costs).
The asset management fee will be payable quarterly in arrears, based on adjusted cost on the last date of the prior quarter, adjusted for appropriate closing dates for individual investments.
Payment of the asset management fee will be deferred on a quarterly basis if at any time all accumulated, accrued, and unpaid dividends have not been paid in full to the holders of the I Shares, K Shares, T Shares, and any parity securities. Any such deferred asset management fees will accrue interest at a cumulative, non-compounded rate of 6.0% per annum.
Before the payment of special dividends on account of any “excess cash” (see “Participation in Excess Cash” below), any deferred and unpaid asset management fees, plus all interest accrued thereon, will be paid, but only after the holders of the I Shares, K Shares, T Shares, and any parity securities have been paid the full amount of any
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| | Not determinable at this time because the asset management fee is based on a fixed percentage of the adjusted cost of our assets and amounts paid or allocated in respect thereof. There is no maximum dollar amount of this fee. | |
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Type of
Compensation |
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Determination of Amount
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Estimated Amount for
Targeted Maximum Offering |
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| | | | accumulated, accrued, and unpaid dividends on the I Shares, K Shares, T Shares, and any parity securities. | | | | |
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See the answers to the questions entitled “Upon a liquidation, how are liquidation proceeds to be distributed?,” “If you list your shares, are any payments due to your advisor?,” and “If you are acquired or merge with another entity, are any payments due to your advisor?” for information regarding the payment of deferred asset management fees (and interest accrued thereon) upon a liquidation and Other Liquidity Events, and the answer to the question entitled “If you terminate the advisory agreement for any other reason (other than for cause), or if you elect not to renew the advisory agreement, are any payments due to your advisor?” for information regarding payment of deferred asset management fees (and interest accrued thereon) in the event of a Non-cause Advisory Agreement Termination. If we terminate the advisory agreement for cause, the deferred asset management fees (and interest accrued thereon) will remain our obligation and will continue to accrue interest and will be satisfied upon a later liquidation or Other Liquidity Event if the conditions for their payment, at that time, are met.
The Service Provider (an affiliate of our dealer manager) is entitled to a fee under the Services Agreement equal to 25% of any consideration our advisor receives (including accrued interest) on account of the asset management fee. See “Conflicts of Interest — Service Provider” for more information.
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Property Management Fee and Reimbursement — Our Property Manager
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| | We will pay hotel property managers selected by our advisor, which we expect to be affiliates of our advisor, monthly property management fees equal to the property managers’ actual costs incurred plus a percentage of the monthly gross revenues of the properties being managed for services in connection with the rental, leasing, operation and management of properties. Such property management fees will be based upon market rates for such fees in the markets in which the properties are located and the nature of the services being performed, as determined by our advisor and approved by a majority of our board, including a majority of its independent directors. | | | Not determinable at this time because the fee is based on actual costs incurred, a fixed percentage of gross revenue, and market rates. There is no maximum dollar amount of this fee. | |
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Type of
Compensation |
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Determination of Amount
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Estimated Amount for
Targeted Maximum Offering |
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Construction Management Fee — Our Property Manager
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| | We will pay our property manager or third parties selected by our advisor, after requesting bids from such parties, a construction management fee (which may include expense reimbursements) based on market rates for such services in the markets in which the properties are located and taking into account the nature of the services being performed, which generally will constitute the supervision or coordination of any construction, improvements, refurbishments, renovations, or restorations of our hotel properties. If our advisor selects our property manager or another affiliate of the sponsor to perform such services, any resulting agreement must be approved by a majority of our board, including a majority of its independent directors. | | | Not determinable at this time because the fee will be determined at a future point in time. There is no maximum dollar amount of this fee. | |
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Acquisition Expenses — Our Advisor, third parties and our Advisor’s Affiliates
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We will reimburse our advisor for expenses actually incurred (excluding personnel costs) related to selecting, evaluating, and making investments on our behalf, regardless of whether we actually consummate the related investment.
Our charter provides that in no event will the total of all acquisition fees and acquisition expenses payable with respect to a particular investment exceed 6.0% of the contract purchase price of the property unless a majority of our independent directors approves the acquisition fees and expenses and determines the transaction to be commercially competitive, fair and reasonable to us.
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| | Not determinable at this time because acquisition expenses are based on actual expenses incurred at the time of the acquisition of each asset or real estate-related investment. | |
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Operating Expenses — Our Advisor and affiliates
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| | We will reimburse our advisor and its affiliates for the costs our advisor and its affiliates incur in providing administrative and other services to us, including an allocable share of overhead, such as rent, employee costs, benefit administration costs, utilities and IT costs; provided, we will not reimburse our advisor and its affiliates for employee costs for persons who serve as our executive officers or for services for which our advisor or its affiliates receive acquisition fees, asset management fees, or disposition fees. Our charter requires compliance with the NASAA REIT Guidelines’ “2%/25% limitation,” which provides that our total operating expenses during any four fiscal quarters following commencement of operations cannot exceed the greater of (1) 2% of average invested assets or (2) 25% of our net income. See footnote (3) to the “Management Compensation” table for more information regarding the “2%/25% limitation.” | | | Not determinable at this time. | |
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Type of
Compensation |
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Determination of Amount
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Estimated Amount for
Targeted Maximum Offering |
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Participation in Excess Cash — Our Advisor or its affiliates
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If our board of directors determines, in any year, that we have “excess cash,” our board will declare a special dividend entitling (a) the holders of I Shares, K Shares, T Shares, and parity securities to share, pro rata accordance with the number of I Shares, K Shares, T Shares and parity securities, 50% of such excess cash (or 87.5% of such excess cash if the common shares have been repurchased in connection with a Non-cause Advisory Agreement Termination, as described under “Payment upon Other Advisory Agreement Termination” below); (b) the holders of B Shares to share, pro rata in accordance with the number of B Shares, 12.5% of any excess cash; and (c) the holders of common shares to share, pro rata in accordance with the number of common shares, 37.5% of such excess cash (unless all such common shares previously have been repurchased in connection with Non-cause Advisory Agreement Termination, in which case the excess cash otherwise apportioned to the common shares would be distributed to the holders of the I Shares, K Shares, T Shares, and parity securities as noted above). See “Conflicts of Interest — Service Provider” for more information about the issuance of B Shares to the Service Provider. See “Description of Capital Stock — Common Shares”.
See the answer to the question entitled “What rights are afforded to stockholders who purchase I Shares, K Shares and T Shares?” for a description of “excess cash.” Our board of directors will authorize dividend payments of any excess cash on an annual basis.
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| | Not determinable at this time. | |
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Additional Service Fees — Our Advisor and affiliates
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| | If we request that our advisor or its affiliates perform other services, including but not limited to, renovation evaluations, the compensation terms for those services shall be approved by a majority of the members of our board of directors, including a majority of the board’s independent directors, on terms that are deemed fair and reasonable to us and not in excess of the amount that would be paid to unaffiliated third parties. | | | Not determinable at this time. | |
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Long-term incentive plan
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| | We established a long-term incentive plan pursuant to which our directors (including independent directors), officers and employees, our advisor and its affiliates and their respective employees, employees of entities that provide services to us, managers of our advisor or directors | | | Not determinable at this time. | |
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Type of
Compensation |
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Determination of Amount
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Estimated Amount for
Targeted Maximum Offering |
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| | | | or managers of entities that provide services to us and their respective employees, certain of our consultants and certain consultants to our advisor and its affiliates or entities that provide services to us and their respective employees may be granted incentive awards in the form of restricted stock, options, and other equity-based awards; see “Management — Long-Term Incentive Plan” of this prospectus. For a description of the awards to be granted to our independent directors, see “Management — Compensation of Our Directors” below. | | | | |
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Liquidation/Listing Stage
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Disposition Fee — Our Advisor or its affiliates
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If our advisor or its affiliates provide a substantial amount of services in connection with our sale of a property or a real estate-related asset, as determined by a majority of our board’s independent directors, we will pay our advisor or such affiliate disposition fee equal to up to one-half of the brokerage commissions paid, but in no event exceeding 1.5% of the sales price of each property or real estate-related asset sold.
Payment of the disposition fee to our advisor will be deferred until the occurrence of (i) a liquidation event, (ii) an Other Liquidity Event, or (iii) a Non-cause Advisory Agreement Termination. The deferred disposition fees will accrue interest at a cumulative, non-compounded rate of 6.0% per annum.
See the answers to the questions entitled “Upon a liquidation, how are liquidation proceeds to be distributed?,” “If you list your shares, are any payments due to your advisor?,” and “If you are acquired or merge with another entity, are any payments due to your advisor?” for information regarding the payment of deferred disposition fees (and interest accrued thereon) upon a liquidation and Other Liquidity Event, and the answer to the question entitled “If you terminate the advisory agreement for any other reason (other than for cause), or if you elect not to renew the advisory agreement, are any payments due to your advisor?” for information regarding payment of deferred disposition fees in the event of a Non-cause Advisory Agreement Termination. If we terminate the advisory agreement for cause, the deferred disposition fees (and interest accrued thereon) will remain our obligation and will continue to accrue interest and will be satisfied upon a later
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| | Not determinable at this time because the disposition fee is based on a fixed percentage of the sales price of each real property or real estate related asset. | |
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Type of
Compensation |
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Determination of Amount
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Estimated Amount for
Targeted Maximum Offering |
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| | | | liquidation or Other Liquidity Event if the conditions for their payment, at that time, are met. | | | | | | ||
| | | | The Service Provider (an affiliate of our dealer manager) is entitled to a fee under the Services Agreement equal to 25% of any consideration our advisor receives (including accrued interest thereon) on account of the disposition fee. See “Conflicts of Interest — Service Provider” for more information. | | | | ||||
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Participation in Remaining Liquidation Cash — Our Advisor or its affiliates
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| | Upon a liquidation event, any “remaining liquidation cash” (as defined in the answer to the question entitled “What rights are afforded to stockholders who purchase I Shares, K Shares and T Shares?”) will be paid as a special dividend (a) to the holders of I Shares, K Shares, T Shares and parity securities, pro rata in accordance with the number of I Shares, K Shares, T Shares and parity securities, in an amount equal to 50% of such remaining liquidation cash (or 87.5% of such remaining liquidation cash if the common shares have been repurchased in connection with a Non-cause Advisory Agreement Termination, as described under “Payment upon Other Advisory Agreement Termination” below); (b) to the holders of B Shares, pro rata in accordance with the number of B Shares, in an amount equal to 12.5% of such remaining liquidation cash; and (c) to the holders of common shares, pro rata in accordance with the number of common shares, in an amount equal to 37.5% of such remaining liquidation cash (unless all such common shares previously have been repurchased in connection with a Non-cause Advisory Agreement Termination, in which case the remaining liquidation cash otherwise apportioned to the common shares would be distributed to the holders of the K Shares as noted above). See “Conflicts of Interest — Service Provider” for more information about the issuance of B Shares to the Service Provider. See “Description of Capital Stock — Common Shares”. | | | Not determinable at this time. | | | ||
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Payment Upon Listing of Our Shares — Our Advisor and its affiliates
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| | Pursuant to our charter, if we list any of our shares of capital stock on a national securities exchange (which automatically results in a termination of the advisory agreement), our board of directors must give prior notice of such listing to the holders of common shares. We expect that if we were to list any of our shares of capital stock on a national securities exchange, we would list K | | | Not determinable at this time. | | | | |
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Type of
Compensation |
| |
Determination of Amount
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| |
Estimated Amount for
Targeted Maximum Offering |
| | ||
| | | |
Shares (or successor securities). In such event, such holders of common shares (including our advisor and its affiliates) will have the right to either (a) receive one K Share (or successor security) in exchange for each common share held as of the date our board gives notice of an intended listing to our holders of common shares (to be effective on the date of such listing) or (b) require us to repurchase each common share for the consideration described in “Description of Capital Stock — Listing Event”.
In addition, we will be obligated, pursuant to the advisory agreement, to pay our advisor the amount it would be entitled to receive on account of deferred asset management fees, acquisition fees, and disposition fees (and any accrued interest thereon) as if we liquidated and received liquidation proceeds equal to the “market value” of our company (as defined in the question “If you list your shares, are any payments due to your advisor?), which is limited to the excess of the market value over the liquidation preference on I Shares, K Shares, T Shares and parity securities, excluding K Shares issued in exchange for common shares.
The Service Provider (an affiliate of the dealer manager) would be entitled to receive 25% of any such amounts as a fee pursuant to the Services Agreement. These amounts may be payable to our advisor and the Service Provider in the form of a promissory note bearing interest at the then-current rate, as determined in good faith by a majority of our board of directors, including a majority of our independent directors, or in the form of capital stock that was listed on a national securities exchange, valued at the same price per share as that used to determine market value. See footnote (5) to the “Management Compensation” table for information regarding the terms of such promissory notes.
We will repurchase the common shares held by stockholders not electing to exchange their common shares for K Shares (or successor securities) at a repurchase price determined as if we liquidated and received liquidation proceeds equal to the market value. See “Description of Capital Stock — Listing Event” for a description of the consideration that holders of common shares may receive in connection with a listing of our shares of capital stock. We may also
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Type of
Compensation |
| |
Determination of Amount
|
| |
Estimated Amount for
Targeted Maximum Offering |
| | ||
| | | |
repurchase the B Shares for an amount equal to 12.5% of the excess market value over the liquidation preference on I Shares, K Shares, T Shares and parity securities, as described in the answer to the question “If you list your shares, are any payments due to your advisor?” If the market value does not support payment of such amounts, the B Shares will be repurchased and canceled for no consideration. See “Conflicts of Interest — Service Provider” for more information about the issuance of B Shares to the Service Provider.
All payments of the repurchase price, if any, and whether on the common shares or the B Shares, will be in the form of an interest-bearing promissory note or in the form of shares of our capital stock to be listed on a national securities exchange, valued at the same price per share as that used to determine market value. Our board of directors, including a majority of our independent directors, will determine the form of consideration and the interest rate on any promissory note. See footnote (5) to the “Management Compensation” table for information regarding the terms of such promissory notes.
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Payment Upon an M&A Transaction — Our Advisor and its affiliates
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| |
If we terminate the advisory agreement in connection with or in contemplation of a transaction involving a merger or acquisition, we would be obligated to pay our advisor the amount it would be entitled to receive as if we liquidated and received net liquidation proceeds equal to the consideration to be paid to our stockholders in such transaction. See the answer to the question “If you are acquired or merge with another entity, are any payments due to your advisor?” for more information on the payments our advisor is entitled to under the advisory agreement. The Service Provider (an affiliate of the dealer manager) would be entitled to receive 25% of any such amounts as a fee pursuant to the Services Agreement, which may be payable to our advisor and the Service Provider in cash or as a portion of the merger or acquisition consideration.
Also see the answer to the question “If you are acquired or merge with another entity, are any payments due to your advisor?” for information on the merger or acquisition consideration our advisor may be entitled to receive as a holder of common shares.
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| | Not determinable at this time. | | |
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Type of
Compensation |
| |
Determination of Amount
|
| |
Estimated Amount for
Targeted Maximum Offering |
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Payment upon Other Advisory Agreement Termination — Our Advisor and its affiliates
|
| |
We may elect not to renew the advisory agreement. We also have the right to terminate the advisory agreement without “cause,” as defined in the advisory agreement (i.e., we may terminate the advisory agreement other than in connection with a listing of our shares or a transaction involving a merger or acquisition or other than for cause). We refer to any such non-renewal or non-cause termination as a “Non-cause Advisory Agreement Termination.” In case of a Non-cause Advisory Agreement Termination, pursuant to the advisory agreement, we would be obligated to make a cash payment to our advisor in the amount of any deferred asset management fees, plus any interest accrued thereon, the full acquisition fees previously earned, plus any interest accrued thereon, and the full disposition fees previously earned, plus any interest accrued thereon, regardless of the value of our assets or our net assets. The Service Provider (an affiliate of the dealer manager) would be entitled to receive 25% of any such payments as a fee pursuant to the Services Agreement.
In addition, pursuant to our charter, we would be obligated to repurchase our common shares (whether or not held by our advisor or its affiliates) for an amount equal to the greater of: (1) any accrued common ordinary dividends on our common shares plus the stated value of the outstanding common shares ($10.00 per common share) or (2) the amount the holders of common shares would be entitled to receive if we liquidated and received net liquidation proceeds equal to the fair market value (determined by appraisals as of the termination date) of our investments less any loans secured by such investments, limited in the case of non-recourse loans to the value of investments securing such loans. Any B Shares then outstanding would remain outstanding.
The amounts payable on account of the repurchase of common shares may be paid, in the discretion of a majority of our board of directors, including a majority of our independent directors, in the form of promissory notes bearing interest at the then-current rate, as determined in good faith by a majority of our board of directors, including a majority of our independent directors. See footnote (5) to the “Management Compensation” table for information regarding the terms of such promissory notes.
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| | Not determinable at this time. | |
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Type of
Compensation |
| |
Determination of Amount
|
| |
Estimated Amount for
Targeted Maximum Offering |
|
|
Payment Upon Advisory Agreement Termination for Cause — Our Advisor and its affiliates
|
| | If we terminate the advisory agreement for cause (as defined in the advisory agreement), we would not have current obligation to make any payments to our advisor or the Service Provider. However, any common shares and B Shares held by them or their affiliates would remain outstanding. In addition, any deferred asset management fees, plus any interest accrued thereon, the full acquisition fees previously earned, plus any interest accrued there on, and the full disposition fees previously earned, plus any interest accrued thereon, would remain outstanding obligations, and the deferred fees would continue to accrue interest at a non-compounded annual rate of 6.0%. Such deferred fees and interest accrued thereon would be payable upon a liquidation or an Other Liquidity Event in the manners set forth above. In addition, the common shares and B Shares would continue to participate in any excess cash or remaining liquidation cash and would be entitled to the rights upon a listing of our securities on a national securities exchange or to participate in the proceeds upon a liquidation, merger, or acquisition transaction in the manner described above. This includes common shares and B Shares held by our advisor, the Service Provider, and their affiliates. | | |
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Target
Maximum K Shares (Primary Offering) |
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Target
Maximum I Shares (Primary Offering) |
| |
Target
Maximum T Shares (Primary Offering) |
| |
Target
Maximum Common Shares (Primary Offering)(1) |
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Maximum
Offering Including DRIP(9) |
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Gross offering proceeds
|
| | | | | | | | | $ | 125,000,000 | | | | | $ | 125,000,000 | | | | | $ | 250,000,000 | | | | | $ | 52,375,000 | | | | | $ | 602,375,000 | | | | | ||||
Less Offering Expenses: | | | | | | | | | | ||||||||||||||||||||||||||||||||||
Selling commissions – K Shares(2)
|
| | | | 5.0% | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 6,250,000 | | | | | $ | 6,250,000 | | | | | ||||
Dealer manager fee – K Shares(2)
|
| | | | 3.0% | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 3,750,000 | | | | | $ | 3,750,000 | | | | | ||||
Organization and offering expenses – K Shares(2)(7)
|
| | | | 1.5% | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 1,875,000 | | | | | $ | 1,875,000 | | | | | ||||
Selling commissions – I Shares
|
| | | | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | | | | |
Dealer manager fee – I Shares(2)
|
| | | | 3.0% | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 3,750,000 | | | | | $ | 3,750,000 | | | | | | | | |
Organization and offering expenses – I Shares(2)(7)
|
| | | | 1.5% | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 1,875,000 | | | | | $ | 1,875,000 | | | | | | | | |
Additional Common Shares Issued – I Shares(3)
|
| | | | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 6,250,000 | | | | | $ | 6,250,000 | | | | | ||||
Selling commissions – T Shares(2)
|
| | | | 3.0% | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 7,500,000 | | | | | $ | 7,500,000 | | | | | | | | |
Dealer manager fee – T Shares(2)
|
| | | | 3.0% | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 7,500,000 | | | | | $ | 7,500,000 | | | | | ||||
Organization and offering expenses – T Shares(2)(7)
|
| | | | 1.5% | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 3,750,000 | | | | | $ | 3,750,000 | | | | | ||||
Stockholder Servicing Fee – T Shares(2)
|
| | | | 3.0% | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 7,500,000 | | | | | $ | 7,500,000 | | | | | ||||
Selling commissions – common shares – retail(1)(2)
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| | | | 5.0% | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 1,250,000(8) | | | | | $ | 1,250,000(8) | | | | | ||||
Dealer manager fee – common shares – retail(1)(2)
|
| | | | 3.0% | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 750,000(8) | | | | | $ | 750,000(8) | | | | | ||||
Organization and offering expenses – common shares – retail(1)(2)(7)
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| | | | 1.5% | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 375,000(8) | | | | | $ | 375,000(8) | | | | | ||||
Net Proceeds Available for Investment
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| | | | | | | | | $ | 125,000,000 | | | | | $ | 125,000,000 | | | | | $ | 250,000,000 | | | | | $ | — | | | | | $ | 550,000,000 | | | | | ||||
Less: | | | | | | | | | | ||||||||||||||||||||||||||||||||||
Acquisition expenses(4)
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| | | | | | | | | $ | 1,250,000 | | | | | $ | 1,250,000 | | | | | $ | 2,500,000 | | | | | $ | — | | | | | $ | 5,000,000 | | | | | ||||
Initial working capital reserve(5)(6)
|
| | | | | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | ||||
Estimated total proceeds available for investments
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| | | | | | | | | $ | 123,750,000 | | | | | $ | 123,750,000 | | | | | $ | 247,500,000 | | | | | $ | — | | | | | $ | 545,000,000 | | | | | ||||
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Name
|
| |
Age
|
| |
Position(s)
|
|
James Procaccianti | | |
58
|
| | President, Chief Executive Officer, Director, Chairman of the Board of Directors | |
Gregory Vickowski | | |
55
|
| | Chief Financial Officer, Treasurer, Director | |
Lawrence Aubin | | |
72
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| | Independent Director | |
Thomas R. Engel | | |
70
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| | Independent Director | |
Ronald S. Ohsberg | | |
52
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| | Independent Director | |
Name
|
| |
Age
|
| |
Position(s)
|
|
James Procaccianti | | |
58
|
| | President, Chief Executive Officer (see above) | |
Gregory Vickowski | | |
55
|
| | Chief Financial Officer (see above) | |
Elizabeth Procaccianti | | |
67
|
| | Chief Operating Officer | |
Mark Bacon | | |
51
|
| | Chief Construction Officer | |
Robert Leven | | |
48
|
| | Chief Investment Officer | |
Richard MacAdams | | |
66
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| | Chief Legal Counsel | |
Ron Hadar | | |
48
|
| | General Counsel | |
Type of Compensation
|
| |
Determination of Amount
|
| |
Estimated Amount for
Targeted Maximum Offering |
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| | |
Offering/Acquisition/Operating Stage
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| | ||
Selling commissions — Our Dealer Manager
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| |
We will pay our dealer manager selling commissions of up to 5% of the gross offering proceeds from the sale of K Shares and common shares and selling commissions of up to 3% of the gross offering proceeds from the sale of T Shares. No selling commissions are payable in connection with I Shares. The dealer manager will reallow all of such selling commissions to participating broker-dealers. The source of funds to pay these selling commissions will generally be the proceeds from the sale of common shares.(1)
No selling commissions will be payable on account of shares of any class acquired by our advisor, the Service Provider, or their affiliates or I Shares, K Shares and T Shares sold pursuant to our DRIP.
The selling commissions may be reduced or waived in connection with certain categories of sales. See “Plan of Distribution — Compensation of Dealer Manager and Participating Broker-Dealers”, “— Share Distribution Channels”, and “— Volume Discounts”.
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| | Aggregate selling commissions will equal $26,250,000, assuming (i) we sell the target maximum of $500,000,000 in K Shares in the primary offering, (ii) we sell $25,000,000 in common shares to retail investors in the primary offering, (iii) the maximum selling commission and dealer manager fee is paid for each K Share and common share sold, and (iv) no shares are sold pursuant to the DRIP. | |
Dealer manager fee — Our Dealer Manager
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| |
We will pay our dealer manager a dealer manager fee of up to 3% of the gross offering proceeds from the sale of I Shares, T Shares, K Shares, and common shares. The dealer manager may reallow a portion of its dealer manager fees to participating broker-dealers. The source of funds to pay these dealer manager fees will generally be the proceeds from the sale of common shares.(1)
No dealer manager fees will be payable on account of shares of any class purchased by our advisor, the Service Provider or their affiliates or I Shares, K Shares and T Shares sold pursuant to our DRIP.
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| | The aggregate dealer manager fee will equal $15,750,000, assuming (i) we sell the target maximum of $500,000,000 in K Shares in the primary offering, (ii) we sell $25,000,000 in common shares to retail investors in the primary offering, (iii) the maximum selling commission and dealer | |
Type of Compensation
|
| |
Determination of Amount
|
| |
Estimated Amount for
Targeted Maximum Offering |
|
| | | The dealer manager fee may be reduced or waived in connection with certain categories of sales. See “Plan of Distribution — Compensation of Dealer Manager and Participating Broker-Dealers” and “— Share Distribution Channels”. | | | manager fee is paid for each K Share and common share sold, and (iv) no shares are sold pursuant to the DRIP. | |
Stockholder Servicing Fee — Our Dealer Manager
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| | With respect to T Shares sold in our primary offering only, will pay our dealer manager a stockholder servicing fee equal to 1/365th of 1.0% of the purchase price per T Share (or, once reported, the amount of our estimated value per T Share) for each T Share purchased in our primary offering. The stockholder servicing fee accrues daily and is payable in arrears. We will cease paying the stockholder servicing fee with respect to a T share sold in our primary offering at the earlier of (i) the date at which the aggregate underwriting compensation paid from all sources with respect to this offering equals 10% of the gross proceeds from the sale of shares in our primary offering (i.e., excluding proceeds from our DRIP); (ii) the third anniversary of the last day of the fiscal quarter in which our initial public offering (excluding our DRIP) terminates; (iii) the end of the month in which our transfer agent, on our behalf, determines that total underwriting compensation, including selling commissions, dealer manager fees, the stockholder servicing fee and other elements of underwriting compensation with respect to such T Share, would be in excess of 10% of the total gross investment amount at the time of purchase of such T Share in our primary offering; (iv) the end of the month in which our transfer agent, on our behalf, determines the stockholder servicing fee with respect to such T Share would be in excess of 3.0% of the total gross investment amount at the time of purchase of such T Share in our primary offering; (v) the date on which such T Share is repurchased by us; (vi) the date on which the holder of such T Share or its agent notifies us or our agent that he or she is represented by a new participating broker-dealer; provided that we will continue paying the stockholder servicing fee, which shall be reallowed to the new participating broker-dealer, if the new participating broker-dealer enters into a participating dealer agreement or otherwise agrees to ongoing services set forth in the dealer manager agreement; and (vii) the listing of our shares on a national securities exchange, the sale of the company or the sale of all or substantially all of our assets. No stockholder servicing fees will be payable on account of T Shares acquired by our advisor, the Service Provider or their affiliates. We cannot | | | Actual amounts are dependent upon the number of T Shares purchased, and therefore, cannot be determined at the present time. | |
Type of Compensation
|
| |
Determination of Amount
|
| |
Estimated Amount for
Targeted Maximum Offering |
|
| | | predict if and when this will occur. The dealer manager may reallow a portion of the stockholder servicing fee to participating broker-dealers and servicing broker-dealers. Please see the answer to the question entitled “Why are you offering four classes of common stock, and what are the similarities and differences among the classes?” for a summary of the ongoing services for which stockholder servicing fees are payable. | | | | |
Acquisition Fee — Our Advisor
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| |
Pursuant to the advisory agreement, for services in connection with selecting, evaluating, and acquiring investments, we will pay our advisor an acquisition fee equal to 1.5% of the gross contract purchase price of each property, loan, or other real estate-related investment purchased. “Gross contract purchase price” means the amount actually paid or allocated in respect of the purchase of, or budgeted capital expenditures for, a property or the amount actually paid or allocated in respect of the purchase of loans or other real-estate related assets, in each case inclusive of acquisition expenses and any indebtedness assumed or incurred in respect of such investment but exclusive of acquisition fees.
Payment of the acquisition fee to our advisor will be deferred until the occurrence of (i) a liquidation event (i.e., any voluntary or involuntary liquidation or dissolution of us, including as a result of the sale of all or substantially all of our assets for cash or other consideration), (ii) our company’s sale or merger in a transaction that provides our stockholders with cash, securities, or a combination of cash and securities, (iii) the listing of our shares on a national securities exchange, or (iv) the termination (not in connection with one of the preceding events) of the advisory agreement, other than for cause, or the non-renewal of the advisory agreement. We refer to the preceding clauses (ii) and (iii) as an “Other Liquidity Event.” The deferred acquisition fees will accrue interest at a cumulative, non-compounded rate of 6.0% per annum.
Upon a liquidation event, all of the deferred acquisition fees, plus all interest accrued thereon, will be paid only after the liquidation preference on our I Shares, K Shares, T Shares and parity securities(6) has been paid in full to all holders of I Shares, K Shares, T Shares and parity securities, and all accrued and unpaid asset management fees (as defined below) and all accrued interest thereon have been paid in full.
Upon an Other Liquidity Event, if certain conditions have been met, our advisor will receive
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| | Actual amounts depend upon the amount of proceeds available for investment and the leverage we incur. Assuming we sell the targeted maximum offering amount in this offering of $602,375,000, 99% of the primary offering proceeds (excluding common shares) are available for investment and 100% of the DRIP proceeds and none of the common share proceeds (see “Estimated Use of Proceeds”), we utilize a 50% leverage ratio, and all of said proceeds are used for acquiring assets, our acquisition fees will equal $16,350,000. The amount of any interest that accrues on deferred acquisition fees cannot be determined at this time. | |
Type of Compensation
|
| |
Determination of Amount
|
| |
Estimated Amount for
Targeted Maximum Offering |
|
| | |
consideration equal to all of the deferred acquisition fees, plus all interest accrued thereon, as described in more detail below under “Payment Upon Listing of Our Shares” and “Payment Upon an M&A Transaction.” In the case of a Non-cause Advisory Agreement Termination, we will pay, at the time of such Non-cause Advisory Agreement Termination, the deferred acquisition fees, plus all interest accrued thereon. See also “Payment upon Other Advisory Agreement Termination” below. If we terminate the advisory agreement for cause, the deferred acquisition fees (and interest accrued thereon) will remain our obligation and will continue to accrue interest and will be satisfied upon a later liquidation or Other Liquidity Event if the conditions for their payment, at that time, are met.
The Service Provider is entitled to a fee under the Services Agreement equal to 25% of any consideration our advisor receives (including accrued interest) on account of the acquisition fee. See “Conflicts of Interest — Service Provider” for more information. The Service Provider is an affiliate of our dealer manager.
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| | | |
Other Organization and Offering Expenses — Our Advisor and its affiliates
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| | We will reimburse our advisor and its affiliates for organization and offering costs they incur on our behalf, either directly or through contract services provided by affiliates, but only to the extent that such reimbursement would not cause the sales commissions, the dealer manager fee, the stockholder servicing fee and the other organization and offering expenses we bear to exceed 15% of the gross proceeds from this offering, in each case as of the date of the reimbursement. Such reimbursement of our advisor or its affiliates may take the form of the issuance of common shares to our advisor or such affiliates, with such common shares valued at $10.00 per common share, or may be funded with proceeds from the sale of common shares to the public in this offering. We estimate that organization and offering expenses (other than selling commissions, the dealer manager fee and stockholder servicing fee) will be approximately 1.5% of primary offering proceeds (excluding proceeds from the sale of common shares to the advisor, the Service Provider or their affiliates). Should such other organization and offering expenses exceed 1.5% of primary offering proceeds (excluding proceeds from the sale of common shares to the advisor, the Service Provider or their affiliates), we will sell additional common shares to pay such excess other organization and offering | | | $7,875,000, assuming (i) we sell the target maximum of $500,000,000 in K Shares in the primary offering, and (ii) we sell $25,000,000 in common shares to retail investors in the primary offering.(4) | |
Type of Compensation
|
| |
Determination of Amount
|
| |
Estimated Amount for
Targeted Maximum Offering |
|
| | | expenses, subject to the 15% limit discussed above. To the extent that our total organization and offering expenses exceed 15% of offering proceeds, our advisor and its affiliates will bear such expenses, without reimbursement from us. | | | | |
Asset Management Fees — Our Advisor
|
| |
We will pay our advisor a quarterly fee, which we refer to as the asset management fee, equal to one-fourth of 0.75% of the adjusted cost of our assets and amounts actually paid or allocated in respect of the acquisition of loans, before reduction for depreciation, amortization, impairment charges, and cumulative acquisition costs charged to expense in accordance with generally accepted accounting principles (adjusted cost will include the purchase price, acquisition expenses, capital expenditures, and other customarily capitalized costs).
The asset management fee will be payable quarterly in arrears, based on adjusted cost on the last date of the prior quarter, adjusted for appropriate closing dates for individual investments.
Payment of the asset management fee will be deferred on a quarterly basis if at any time all accumulated, accrued, and unpaid dividends have not been paid in full to the holders of the I Shares, K Shares, T Shares and parity securities. Any such deferred asset management fees will accrue interest at a cumulative, non-compounded rate of 6.0% per annum.
Before the payment of special dividends on account of any “excess cash” (see “Participation in Excess Cash” below), any deferred and unpaid asset management fees, plus all interest accrued thereon, will be paid, but only after the holders of the I Shares, K Shares, T Shares and parity securities have been paid the full amount of any accumulated, accrued, and unpaid dividends on the I Shares, K Shares, T Shares and parity securities.
Upon a liquidation event, any deferred and unpaid asset management fees, plus all interest accrued thereon, will be paid, but only after the holders of the I Shares, K Shares, T Shares and parity securities have been paid the full liquidation preference due on I Shares, K Shares, T Shares and parity securities.(6)
Upon an Other Liquidity Event, if the deemed liquidation value of our company exceeds the liquidation preference payable to the holders of I Shares, K Shares, T Shares and parity securities, our advisor will receive consideration equal to all of the deferred asset management fees, plus all interest
|
| | Not determinable at this time because the asset management fee is based on a fixed percentage of the adjusted cost of our assets and amounts paid or allocated in respect thereof. There is no maximum dollar amount of this fee. | |
Type of Compensation
|
| |
Determination of Amount
|
| |
Estimated Amount for
Targeted Maximum Offering |
|
| | |
accrued thereon, as described in more detail below under “Payment Upon Listing of Our Shares” and “Payment Upon an M&A Transaction.” In the case of a Non-cause Advisory Agreement Termination, we will pay, at the time of such Non-cause Advisory Agreement Termination, the deferred asset management fees, plus all interest accrued thereon. See also “Payment upon Other Advisory Agreement Termination” below. If we terminate the advisory agreement for cause, the deferred asset management fees (and interest accrued thereon) will remain our obligation and will continue to accrue interest and will be satisfied upon a later liquidation or Other Liquidity Event if the conditions for their payment, at that time, are met.
The Service Provider is entitled to a fee under the Services Agreement equal to 25% of any consideration our advisor receives (including accrued interest) on account of the asset management fee. See “Conflicts of Interest — Service Provider” for more information. The Service Provider is an affiliate of our dealer manager.
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| | | |
Property Management Fee and
Reimbursement — Our Property Manager |
| | We will pay hotel property managers selected by our advisor, which we expect to be affiliates of our advisor, monthly property management fees equal to the property managers’ actual costs incurred plus a percentage of the monthly gross revenues of the properties being managed for services in connection with the rental, leasing, operation and management of properties. Such property management fees will be based upon market rates for such fees in the markets in which the properties are located and the nature of the services being performed, as determined by our advisor and approved by a majority of our board, including a majority of its independent directors. | | | Not determinable at this time because the fee is based on actual costs incurred, a fixed percentage of gross revenue, and market rates. There is no maximum dollar amount of this fee. | |
Construction Management Fee — Our Property Manager
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| | We will pay our property manager or third parties selected by our advisor, after requesting bids from such parties, a construction management fee (which may include expense reimbursements) based on market rates for such services in the markets in which the properties are located and taking into account the nature of the services being performed, which generally will constitute the supervision or coordination of any construction, improvements, refurbishments, renovations, or restorations of our hotel properties. If our advisor selects our property manager or another affiliate of the sponsor to perform such services, any resulting agreement must | | | Not determinable at this time because the fee will be determined at a future point in time. There is no maximum dollar amount of this fee. | |
Type of Compensation
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| |
Determination of Amount
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Estimated Amount for
Targeted Maximum Offering |
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| | | be approved by a majority of our board, including a majority of its independent directors. | | | | |
Acquisition Expenses — Our Advisor, third parties and our Advisor’s Affiliates
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| |
We will reimburse our advisor for expenses actually incurred (excluding personnel costs) related to selecting, evaluating, and making investments on our behalf, regardless of whether we actually consummate the related investment.
Our charter provides that in no event will the total of all acquisition fees and acquisition expenses payable with respect to a particular investment exceed 6.0% of the contract purchase price of the property unless a majority of our independent directors approves the acquisition fees and expenses and determines the transaction to be commercially competitive, fair and reasonable to us.
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| | Not determinable at this time because acquisition expenses are based on actual expenses incurred at the time of the acquisition of each asset or real estate-related investment. | |
Operating Expenses — Our Advisor and affiliates
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| | We will reimburse our advisor and its affiliates for the costs our advisor and its affiliates incur in providing administrative and other services to us, including an allocable share of overhead, such as rent, employee costs, benefit administration costs, utilities and IT costs; provided, we will not reimburse our advisor and its affiliates for employee costs for persons who serve as our executive officers or for services for which our advisor or its affiliates receive acquisition fees, asset management fees, or disposition fees.(3) | | | Not determinable at this time. | |
Participation in Excess Cash — Our Advisor or its affiliates
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| | If our board of directors determines, in any year, that we have “excess cash” (as defined below), our board will declare a special dividend entitling (a) the holders of I Shares, K Shares, T Shares and parity securities to share, pro rata in accordance with the number of I Shares, K Shares, T Shares and parity securities, 50% of such excess cash (or 87.5% of such excess cash if the common shares have been repurchased in connection with a Non-cause Advisory Agreement Termination, as described under “Payment upon Other Advisory Agreement Termination” below); (b) the holders of B Shares to share, pro rata in accordance with the number of B Shares, 12.5% of any excess cash; and (c) the holders of common shares to share, pro rata in accordance with the number of common shares, 37.5% of such excess cash (unless all such common shares previously have been repurchased in connection with a Non-cause Advisory Agreement Termination, in which case the excess cash otherwise apportioned to the common shares would be distributed to the holders of the I Shares, K Shares, T Shares and parity securities as noted above). See “Conflicts of Interest — Service | | | Not determinable at this time. | |
Type of Compensation
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| |
Determination of Amount
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Estimated Amount for
Targeted Maximum Offering |
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| | |
Provider” for more information about the issuance of B Shares to the Service Provider. Initially our advisor and its affiliates will be the only holders of common shares. However, our common shares might be purchased and held by stockholders other than our advisor and its affiliates. See “Description of Capital Stock — Common Shares”.
Our board of directors, will determine annually, other than upon a liquidation, the amount, if any, of “excess cash,” which will equal any cash available for distribution after the board establishes any working capital reserves or other reserves it deems necessary and after the full payment of (i) all accumulated, accrued, and unpaid dividends on our I Shares, K Shares, T Shares and parity securities; (ii) the full asset management fees payable to our advisor, including any deferred amounts and interest accrued thereon; and (iii) all accumulated, accrued, and unpaid common ordinary dividends. Our board of directors will authorize dividend payments of any excess cash on an annual basis.
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Additional Service Fees — Our Advisor and affiliates
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| | If we request that our advisor or its affiliates perform other services, including but not limited to, renovation evaluations, the compensation terms for those services shall be approved by a majority of the members of our board of directors, including a majority of the board’s independent directors, on terms that are deemed fair and reasonable to us and not in excess of the amount that would be paid to unaffiliated third parties. | | | Not determinable at this time. | |
Long-term incentive plan
|
| | We established a long-term incentive plan pursuant to which our directors (including independent directors), officers and employees, our advisor and its affiliates and their respective employees, employees of entities that provide services to us, managers of our advisor or directors or managers of entities that provide services to us and their respective employees, certain of our consultants and certain consultants to our advisor and its affiliates or entities that provide services to us and their respective employees may be granted incentive awards in the form of restricted stock, options, and other equity-based awards; see “Management — Long-Term Incentive Plan”. For a description of the awards to be granted to our independent directors, see “Management — Compensation of Our Directors” above. | | | Not determinable at this time. | |
Type of Compensation
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Determination of Amount
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Estimated Amount for
Targeted Maximum Offering |
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Liquidation/Listing Stage
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Disposition Fee — Our Advisor or its affiliates
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If our advisor or its affiliates provide a substantial amount of services in connection with our sale of a property or a real estate-related asset, as determined by a majority of our board’s independent directors, we will pay our advisor or such affiliate a disposition fee equal to up to one-half of the brokerage commissions paid, but in no event exceeding 1.5% of the sales price of each property or real estate-related asset sold.
Payment of the disposition fee to our advisor will be deferred until the occurrence of (i) a liquidation event, (ii) an Other Liquidity Event, or (iii) a Non-cause Advisory Agreement Termination. The deferred disposition fees will accrue interest at a cumulative, non-compounded rate of 6.0% per annum. Upon a liquidation event, all of the deferred disposition fees, plus all interest accrued thereon, will be paid only after the liquidation preference on our I Shares, K Shares, T Shares and any parity securities(6) has been paid in full to all holders of I Shares, K Shares, T Shares and any parity securities and all accrued and unpaid asset management fees and all accrued interest thereon have been paid in full, and all accrued and unpaid acquisition fees (including interest thereon) have been paid in full.
Upon an Other Liquidity Event, if certain conditions have been met, our advisor will receive consideration equal to all of the deferred disposition fees, plus all interest accrued thereon, as described in more detail below under “Payment Upon Listing of Our Shares” and “Payment Upon an M&A Transaction.” In the case of a Non-cause Advisory Agreement Termination, we will pay, at the time of such Non-cause Advisory Agreement Termination, the deferred disposition fees, plus all interest accrued thereon. See also “Payment upon Other Advisory Agreement Termination” below. If we terminate the advisory agreement for cause, the deferred disposition fees (and interest accrued thereon) will remain our obligation and will continue to accrue interest and will be satisfied upon a later liquidation or Other Liquidity Event if the conditions for their payment, at that time, are met.
The Service Provider is entitled to a fee under the Services Agreement equal to 25% of any consideration our advisor receives (including accrued interest thereon) on account of the
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| | Not determinable at this time because the disposition fee is based on a fixed percentage of the sales price of each real property or real estate related asset. | |
Type of Compensation
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| |
Determination of Amount
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Estimated Amount for
Targeted Maximum Offering |
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| | | disposition fee. See “Conflicts of Interest — Service Provider” for more information. The Service Provider is an affiliate of our dealer manager. | | | | |
Participation in Remaining Liquidation Cash — Our Advisor or its affiliates
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Upon a liquidation event, any “remaining liquidation cash” (as defined below) will be paid as a special dividend (a) to the holders of I Shares, K Shares, T Shares and parity securities, pro rata in accordance with the number of I Shares, K Shares, T Shares and parity securities, in an amount equal to 50% of such remaining liquidation cash (or 87.5% of such remaining liquidation cash if the common shares have been repurchased in connection with a Non-cause Advisory Agreement Termination, as described under “Payment upon Other Advisory Agreement Termination” below); (b) to the holders of B Shares, pro rata in accordance with the number of B Shares, in an amount equal to 12.5% of such remaining liquidation cash; and (c) to the holders of common shares, pro rata in accordance with the number of common shares, in an amount equal to 37.5% of such remaining liquidation cash (unless all such common shares previously have been repurchased in connection with a Non-cause Advisory Agreement Termination, in which case the remaining liquidation cash otherwise apportioned to the common shares would be distributed to the holders of the I Shares, K Shares, T Shares and parity securities as noted above). See “Conflicts of Interest — Service Provider” on for more information about the issuance of B Shares to the Service Provider.
Initially our advisor and its affiliates will be the only holders of common shares. However, our common shares might be purchased and held by stockholders other than our advisor and its affiliates. See “Description of Capital Stock — Common Shares”.
“Remaining liquidation cash” means all cash available for distribution, as determined by our board after (i) payment in full of, or the setting aside of reserves for, all of our debts and liabilities, limited, in the case of non-recourse liabilities secured by properties, to the value of those properties, and excluding liabilities for the payment of deferred asset management fees, acquisition fees, and disposition fees (and any interest accrued thereon); (ii) payment in full of the liquidation preference on all outstanding I Shares, K Shares, T Shares and any parity securities(6); (iii) the full asset management fees are paid, including any deferred
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| | Not determinable at this time. | |
Type of Compensation
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Determination of Amount
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Estimated Amount for
Targeted Maximum Offering |
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| | | amounts and any interest accrued thereon; (iv) the full acquisition fees and disposition fees are paid, including any interest accrued thereon; (v) all accrued common ordinary dividends on our common shares (as described below) are paid; and (vi) payment in full of the stated value of all outstanding common shares. | | | | |
Payment Upon Listing of Our Shares — Our Advisor and its affiliates
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| |
Pursuant to our charter, if we list any of our shares of capital stock on a national securities exchange (which automatically results in a termination of the advisory agreement), our board of directors must give prior notice of such listing to the holders of common shares. If we were to list any of our shares of capital stock on a national securities exchange, we expect that we would list K Shares (or successor securities). In such event, holders of common shares (including our advisor and its affiliates) will have the right to either (a) receive one K Share (or successor security) in exchange for each common share held as of the date our board gives notice of an intended listing to our holders of common shares (to be effective on the date of such listing) or (b) require us to repurchase each common share for the consideration described below, which will equal the amount each common share would be entitled to receive if we liquidated and received liquidation proceeds equal to the “market value” of our company (as defined below). Each holder of common shares will have at least 20 days to make such election.
In addition, we will be obligated, pursuant to the advisory agreement, to pay our advisor the amount it would be entitled to receive on account of deferred asset management fees, acquisition fees, and disposition fees (and any accrued interest thereon) as if we liquidated and received liquidation proceeds equal to the “market value” of our company, which is limited to the excess of the market value over the liquidation preference on I Shares, K Shares, T Shares, and any parity securities, excluding any K Shares issued in exchange for common shares. “Market value” means the sum of (i) the value of the capital stock listed on a national securities exchange based on the average market value of the shares of such stock issued and outstanding at the listing over the 30 days beginning 180 days after the shares of our stock are listed or included for quotation plus (ii) the value of any capital stock not listed on an exchange, if any, for the same period, as determined in good faith by our board of directors, including a majority of our independent directors. The Service
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| | Not determinable at this time. | |
Type of Compensation
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Determination of Amount
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Estimated Amount for
Targeted Maximum Offering |
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Provider (an affiliate of the dealer manager) would be entitled to receive 25% of any such amounts as a fee pursuant to the Services Agreement. These amounts may be payable to our advisor and the Service Provider in the form of a promissory note bearing interest at the then-current rate, as determined in good faith by a majority of our board of directors, including a majority of our independent directors, or in the form of capital stock that was listed on a national securities exchange, valued at the same price per share as that used to determine market value. See footnote (5) below for information regarding the terms of such promissory notes.
We will repurchase the common shares held by stockholders not electing to exchange their common shares for K Shares (or successor securities) at a repurchase price determined as if we liquidated and received liquidation proceeds equal to the market value. See “Description of Capital Stock — Listing Event” for a description of the consideration that holders of common shares may receive in connection with a listing of our shares of capital stock. As also described that section, if the market value exceeds the aggregate of (a) the liquidation preference(6) on our I Shares, K Shares, T Shares and any parity securities outstanding as of the listing (excluding K Shares issued in exchange for common shares), plus (b) the deferred asset management, acquisition, and disposition fees and interest thereon, plus (c) the accrued common ordinary dividends on our common shares (excluding common shares exchanged or to be exchanged for K Shares), plus (d) the stated value of the outstanding common shares (not otherwise exchanged for K Shares) immediately prior to the listing, we will repurchase the B shares for an amount equal to 12.5% of such excess, payable to such holders of B Shares pro rata in accordance with the number of B Shares. If the market value does not support payment of such amounts, the B Shares will be repurchased and canceled for no consideration. See “Conflicts of Interest — Service Provider” for more information about the issuance of B Shares to the Service Provider.
All payments of the repurchase price, if any, and whether on the common shares or the B Shares, will be in the form of an interest-bearing promissory note or in the form of shares of our capital stock to be listed on a national securities exchange, valued at the same price per share as that used to determine market value. Our board of directors, including a majority of our independent directors, will
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Type of Compensation
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Determination of Amount
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Estimated Amount for
Targeted Maximum Offering |
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determine the form of consideration and the interest rate on any promissory note. See footnote (5) below for information regarding the terms of such promissory notes.
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Payment Upon an M&A Transaction — Our Advisor and its affiliates
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If we terminate the advisory agreement in connection with or in contemplation of a transaction involving a merger or acquisition, we would be obligated to pay our advisor the amount it would be entitled to receive as if we liquidated and received net liquidation proceeds equal to the consideration to be paid to our stockholders in such transaction.
The merger or acquisition consideration would first be payable to holders of I Shares, K Shares, T Shares and any parity securities in an amount equal to the liquidation preference due on our outstanding I Shares, K Shares, T Shares and any parity securities. Assuming the merger or acquisition consideration was at least equal to the liquidation preference(6) due on our outstanding I Shares, K Shares, T Shares and any parity securities, our advisor would be entitled to receive an amount equal to (a) any deferred asset management fees, plus any interest accrued thereon and (b) the full acquisition fees and disposition fees previously earned, plus any interest accrued thereon, limited to the excess of the merger or acquisition consideration over the liquidation preference due on our outstanding I Shares, K Shares, T Shares and any parity securities.
The Service Provider (an affiliate of the dealer manager) would be entitled to receive 25% of any such amounts as a fee pursuant to the Services Agreement. These amounts may be payable to our advisor and the Service Provider in cash or as a portion of the merger or acquisition consideration. In addition, to the extent the merger or acquisition consideration was at least equal to the liquidation preference due on our outstanding I Shares, K Shares, T Shares and any parity securities plus such deferred fees and interest thereon, the holders of common shares (including our advisor and its affiliates holding common shares) would be entitled to receive a portion of the merger or acquisition consideration equal to any accrued common ordinary dividends on our common shares, limited to the excess of such consideration over the sum of the liquidation preference due on our outstanding I Shares, K Shares, T Shares and any parity securities plus such deferred fees and interest thereon.
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| | Not determinable at this time. | |
Type of Compensation
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Determination of Amount
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Estimated Amount for
Targeted Maximum Offering |
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| | | The holders of common shares will also be entitled to share in the merger or acquisition consideration in an amount equal to the stated value of the outstanding common shares, limited to the excess of the merger or acquisition consideration over the sum of (a) the liquidation preference on our outstanding I Shares, K Shares, T Shares and any parity securities, plus (b) the above-described deferred fees and interest thereon, plus (c) the accrued common ordinary dividends on our common shares. If the merger or acquisition consideration exceeds the aggregate of (a) the liquidation preference on our outstanding I Shares, K Shares, T Shares and any parity securities, plus (b) the above-described deferred asset management, acquisition, and disposition fees and interest thereon, plus (c) the accrued common ordinary dividends on our common shares, plus (d) the stated value of the outstanding common shares, such excess merger or acquisition consideration would be distributed (i) to the holders of I Shares, K Shares, T Shares and any parity securities, pro rata in accordance with the number of I Shares, K Shares, T Shares and parity securities, in an amount equal to 50% of such excess (or 87.5% of such excess if the common shares have been repurchased in connection with a Non-cause Advisory Agreement Termination, as described under “Payment upon Other Advisory Agreement Termination” below); (ii) to the holders of B Shares, pro rata in accordance with the number of B Shares, in an amount equal to 12.5% of such excess; and (iii) to the holders of common shares, pro rata in accordance with the number of common shares, in an amount equal to 37.5% of such excess (unless all such common shares previously have been repurchased in connection with a Non-cause Advisory Agreement Termination, in which case such excess merger or acquisition consideration otherwise apportioned to the common shares would be distributed to the holders of the I Shares, K Shares, T Shares and any parity securities as noted above). See “Conflicts of Interest — Service Provider” for more information about the issuance of B Shares to the Service Provider. Initially our advisor and its affiliates will be the only holders of common shares. However, our common shares might be purchased and held by stockholders other than our advisor and its affiliates. See “Description of Capital Stock — Common Shares” as well as “— Service Provider’s Backstop Obligation to Purchase Common Shares”. |
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Type of Compensation
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Determination of Amount
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Estimated Amount for
Targeted Maximum Offering |
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Payment upon Other Advisory Agreement Termination — Our Advisor and its affiliates
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We may elect not to renew the advisory agreement. We also have the right to terminate the advisory agreement without “cause,” as defined in the advisory agreement (i.e., we may terminate the advisory agreement other than in connection with a listing of our shares or a transaction involving a merger or acquisition or other than for cause). We refer to any such non-renewal or non-cause termination as a “Non-cause Advisory Agreement Termination.” In case of a Non-cause Advisory Agreement Termination, pursuant to the advisory agreement, we would be obligated to make a cash payment to our advisor in the amount of any deferred asset management fees, plus any interest accrued thereon, the full acquisition fees previously earned, plus any interest accrued thereon, and the full disposition fees previously earned, plus any interest accrued thereon, regardless of the value of our assets or our net assets. The Service Provider (an affiliate of the dealer manager) would be entitled to receive 25% of any such payments as a fee pursuant to the Services Agreement.
In addition, pursuant to our charter, we would be obligated to repurchase our common shares (whether or not held by our advisor or its affiliates) for an amount equal to the greater of: (1) any accrued common ordinary dividends on our common shares plus the stated value of the outstanding common shares ($10.00 per common share) or (2) the amount the holders of common shares would be entitled to receive if we liquidated and received net liquidation proceeds equal to the fair market value (determined by appraisals as of the termination date) of our investments less any loans secured by such investments, limited in the case of non-recourse loans to the value of investments securing such loans. Any B Shares then outstanding would remain outstanding.
The amounts payable on account of the repurchase of common shares may be paid, in the discretion of a majority of our board of directors, including a majority of our independent directors, in the form of promissory notes bearing interest at the then-current rate, as determined in good faith by a majority of our board of directors, including a majority of our independent directors. See footnote (5) below for information regarding the terms of such promissory notes.
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| | Not determinable at this time. | |
Type of Compensation
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Determination of Amount
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Estimated Amount for
Targeted Maximum Offering |
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Payment Upon Advisory Agreement Termination for Cause — Our Advisor and its affiliates
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| | If we terminate the advisory agreement for cause (as defined in the advisory agreement), we would not have a current obligation to make any payments to our advisor or the Service Provider. However, any common shares and B Shares held by them or their affiliates would remain outstanding. In addition, any deferred asset management fees, plus any interest accrued thereon, the full acquisition fees previously earned, plus any interest accrued thereon, and the full disposition fees previously earned, plus any interest accrued thereon, would remain outstanding obligations, and the deferred fees would continue to accrue interest at a non-compounded annual rate of 6.0%. Such deferred fees and interest accrued thereon would be payable upon a liquidation or an Other Liquidity Event in the manners set forth above. In addition, the common shares and B Shares would continue to participate in any excess cash or remaining liquidation cash and would be entitled to the rights upon a listing of our securities on a national securities exchange or to participate in the proceeds upon a liquidation, merger, or acquisition transaction in the manner described above. This includes common shares and B Shares held by our advisor, the Service Provider, and their affiliates. | | | Not determinable at this time. | |
Beneficial Owner(1)
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Number of Shares
Beneficially Owned |
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Percent of Class
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| | | | | | | | | | | 100% | | |
Directors | | | | ||||||||||
| | | | | | | | | | | 100% | | |
| | | | | | | | | | | 100% | | |
Executive Officers | | | | ||||||||||
| | | | | | | | | | 100% | | | |
All executive officers and directors as a group ( persons)
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| | | | | | | | | 100% | | | |
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Name of Program
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Property Acquired
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PNY IV, LLC | | | Holiday Inn SoHo | |
PMO IV, LLC | | | Sheraton Kansas City | |
PIL IV, LLC | | | Sheraton Elk Grove | |
PTX IV, LLC | | | Sheraton Dallas | |
PKY I, LLC | | | Hyatt Lexington | |
PFL VI, LLC | | | Marriott Fort Lauderdale | |
PFL V, LLC | | | Renaissance Boca Raton | |
OHIB Hotel, LLC | | | Holiday Inn Inner Harbor | |
TPG KC MO I JV, LLC | | | Intercontinental Kansas City | |
TPG LA Commerce JV, LLC | | | Doubletree Commerce | |
Harry G. Pappas & Sons, LLC | | | Holiday Inn Inner Harbor | |
TPG BLFL JV, LLC | | | Hyatt Lexington | |
TPG BLFL JV, LLC | | | Marriott Fort Lauderdale | |
TPG BLFL JV, LLC | | | Renaissance Boca Raton | |
TPG Reno, LLC | | | Marriott Courtyard Reno | |
RP Providence, LLC | | | Renaissance Providence | |
PMD I, LLC | | | Doubletree BWI | |
PNY II, LP | | | Marriott Buffalo | |
RP-TPG Chicago North Shore, LLC | | | Westin North Shore | |
POH I, LLC | | | Sheraton Columbus | |
PEH III, LLC | | | Holiday Inn East Hartford | |
TPG Waterford, LLC | | | Marriott Waterford OKC | |
NWM, LLC | | | Marriott Waterside Norfolk | |
PVA V, LLC | | | Sheraton Alexandria | |
PDE I, LLC | | | Sheraton Wilmington | |
Procaccianti AZ II, LP | | | Hilton Scottsdale | |
PMO III, LP | | | Marriott St. Louis | |
PRI Warwick Airport, LLC | | | Sheraton Warwick | |
PFL VII, LLC | | | Westin Fort Lauderdale | |
PRI I, LP | | | Hilton Providence | |
RPAP Eastgate LLC | | | Eastgate Hotel | |
380 Luckie St. JV, LLC | | | Hyatt House Atlanta | |
Sheffield Apts TT, LLC | | | Sheffield Apartments | |
| Total Number of Programs: | | | 33 | |
| Total Equity raised: | | | $554,856,891 | |
| Total Investors: | | | 85 | |
| Total number of Properties Purchased: | | | 33 | |
| Location of Properties Purchased: | | | United States | |
| Aggregate Purchase Price of Properties: | | | $1,054,687,653 | |
| % of Commercial (Lodging)(1): | | | 97% | |
| % Residential(1): | | | 3% | |
| % new(1): | | | 0% | |
| % used(1): | | | 98% | |
| % construction(1): | | | 2% | |
| Properties Sold: | | | 10 | |
Underwriting Compensation
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Dollar Amount
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Percentage of Gross Proceeds(3)
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Selling Commissions(1)
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| | | $ | 26,250,000 | | | | | | 4.75% | | |
Dealer Manager Fees(1)
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| | | | 15,750,000 | | | | | | 2.85 | | |
Other Reimbursements(1)(2)
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| | | | 13,235,000 | | | | | | 2.4 | | |
Total | | | | $ | 55,235,000 | | | | | | 10.0% | | |
Dollar Amount of K Shares Purchased
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Selling Commission
Percentage |
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Dealer
Manager Fee |
| |
Purchase Price Per
K Share to Investor |
| |||||||||
$500,000 or less
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| | | | 5.0% | | | | | | 3.0% | | | | | $ | 10.00 | | |
$500,001 – $1,000,000
|
| | | | 4.0% | | | | | | 3.0% | | | | | $ | 9.90 | | |
$1,000,001 – $2,000,000
|
| | | | 3.5% | | | | | | 3.0% | | | | | $ | 9.85 | | |
$2,000,001 – $3,000,000
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| | | | 3.0% | | | | | | 3.0% | | | | | $ | 9.80 | | |
$3,000,001 – $5,000,000
|
| | | | 2.5% | | | | | | 3.0% | | | | | $ | 9.76 | | |
$5,000,001 – $10,000,000
|
| | | | 2.0% | | | | | | 3.0% | | | | | $ | 9.71 | | |
$10,000,001 and above
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| | | | 1.0% | | | | | | 3.0% | | | | | $ | 9.62 | | |
Dollar Amount of T Shares Purchased
|
| |
Selling Commission
Percentage |
| |
Dealer
Manager Fee |
| |
Purchase Price per
T Share to Investor |
| |||||||||
$500,000 or less
|
| | | | 3.0% | | | | | | 3.0% | | | | | $ | 10.00 | | |
$500,001 – $1,000,000
|
| | | | 2.5% | | | | | | 3.0% | | | | | $ | 9.95 | | |
$1,000,001 – $2,000,000
|
| | | | 2.0% | | | | | | 3.0% | | | | | $ | 9.90 | | |
$2,000,001 – $3,000,000
|
| | | | 1.5% | | | | | | 3.0% | | | | | $ | 9.85 | | |
$3,000,001 – $5,000,000
|
| | | | 1.0% | | | | | | 3.0% | | | | | $ | 9.80 | | |
$5,000,001 and above
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| | | | 0.5% | | | | | | 3.0% | | | | | $ | 9.75 | | |
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Page
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Report of Independent Registered Public Accounting Firm
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F-2
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Audited Financial Statement: | | | | | | | |
Balance Sheet
|
| | | | F-3 | | |
Notes to Balance Sheet
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| | | | F-4 | | |
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TPG KC
MO I JV, LLC |
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TPG LA
Commerce JV, LLC |
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Harry G. Pappas
& Sons, LLC |
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TPG
BLFL JV, LLC |
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TPG Reno,
LLC |
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Intercontinental
Kansas City |
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Doubletree
Commerce |
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Holiday Inn
Inner Harbor |
| |
Marriott
Fort Lauderdale, Hyatt Lexington and Renaissance Boca Raton |
| |
Marriott
Courtyard Reno |
| |||||||||||||||
Dollar Amount Offered
|
| | | $ | 31,222,032 | | | | | $ | 9,098,109 | | | | | $ | 15,280,000 | | | | | $ | 19,956,257 | | | | | $ | 4,868,991 | | |
Dollar amount raised (100%)
|
| | | $ | 31,222,032 | | | | | $ | 9,098,109 | | | | | $ | 15,280,000 | | | | | $ | 19,956,257 | | | | | $ | 4,868,991 | | |
Less offering expenses: | | | | | | | |||||||||||||||||||||||||
Selling commissions and discounts
retained by affiliates |
| | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | (150,000) | | |
Organizational expenses
|
| | | $ | (140,440) | | | | | $ | (144,143) | | | | | $ | (300,000) | | | | | $ | (371,484) | | | | | $ | (85,177) | | |
Other (explain)
|
| | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | |
Reserves
|
| | | $ | (245,115) | | | | | $ | (180,348) | | | | | $ | (280,772) | | | | | $ | (717,990) | | | | | $ | (85,000) | | |
Percent available for investment
|
| | | | 99% | | | | | | 96% | | | | | | 96% | | | | | | 95% | | | | | | 93% | | |
Acquisition costs: | | | | | | | |||||||||||||||||||||||||
Prepaid items and fees related to purchase of property
|
| | | $ | 375,700 | | | | | $ | 336,400 | | | | | $ | — | | | | | $ | 432,000 | | | | | $ | 123,000 | | |
Cash down payment (purchase price and capex less debt financing & fees)
|
| | | $ | 30,028,677 | | | | | $ | 8,000,000 | | | | | $ | 13,480,000 | | | | | $ | 17,599,000 | | | | | $ | 4,000,000 | | |
Acquisition fees
|
| | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | |
Other (explain) – Closing Costs
|
| | | $ | 432,100 | | | | | $ | 437,218 | | | | | $ | 1,218,418 | | | | | $ | 835,783 | | | | | $ | 425,814 | | |
Total acquisition cost
|
| | | $ | 30,836,477 | | | | | $ | 8,773,618 | | | | | $ | 14,698,418 | | | | | $ | 18,866,783 | | | | | $ | 4,548,814 | | |
Percent leverage (mortgage financing
divided by acquisition cost) |
| | | | 71% | | | | | | 73% | | | | | | 75% | | | | | | 83% | | | | | | 75% | | |
Date offering began
|
| | | | 11/15/2015 | | | | | | 8/20/2015 | | | | | | 9/24/2015 | | | | | | 9/14/2014 | | | | | | 7/12/2014 | | |
Length of offering (in months)
|
| | | | 2 | | | | | | 2 | | | | | | 2 | | | | | | 2 | | | | | | 2 | | |
Months to invest 90% of amount
available for investment (measured from beginning of offering) |
| | | | 2 | | | | | | 2 | | | | | | 2 | | | | | | 2 | | | | | | 2 | | |
| | |
TPG KC MO I JV, LLC
|
| |
TPG LA Commerce JV, LLC
|
| |
Harry G. Pappas & Sons, LLC
|
| |
TPG BLFL JV, LLC
|
| |
TPG Reno, LLC
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| | |
Intercontinental Kansas City
|
| |
Doubletree Commerce
|
| |
Holiday Inn Inner Harbor
|
| |
Marriott Fort Lauderdale, Hyatt Lexington and
Renaissance Boca Raton |
| |
Marriott Courtyard Reno
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| | |
Year 1
|
| |
Year 2
|
| |
Year 1
|
| |
Year 2
|
| |
Year 1
|
| |
Year 2
|
| |
Year 1
|
| |
Year 2
|
| |
Year 3
|
| |
Year 1
|
| |
Year 2
|
| |
Year 3
|
| ||||||||||||||||||||||||||||||||||||
Gross Revenues
|
| | | $ | 27,758,880 | | | | | $ | 4,068,264 | | | | | $ | 11,972,919 | | | | | $ | 5,732,625 | | | | | $ | 11,632,643 | | | | | $ | 4,124,023 | | | | | $ | 41,901,263 | | | | | $ | 43,286,804 | | | | | $ | 21,091,952 | | | | | $ | 4,205,954 | | | | | $ | 4,999,864 | | | | | $ | 2,490,356 | | |
Profit on sale of properties
|
| | | $ | — | | | | | $ | — | | | | | $ | — | | | | | | | | | | | $ | — | | | | | | | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | |
Less:
Operating expenses
|
| | | $ | 18,595,926 | | | | | $ | 3,536,789 | | | | | $ | 8,358,320 | | | | | $ | 4,352,197 | | | | | $ | 8,450,822 | | | | | $ | 3,367,837 | | | | | $ | 30,077,996 | | | | | $ | 32,098,754 | | | | | $ | 14,408,622 | | | | | $ | 2,351,817 | | | | | $ | 2,675,720 | | | | | $ | 1,500,453 | | |
Interest expense
|
| | | $ | 3,489,014 | | | | | $ | 639,003 | | | | | $ | 944,580 | | | | | $ | 496,860 | | | | | $ | 1,843,334 | | | | | $ | 803,625 | | | | | $ | 4,548,113 | | | | | $ | 4,721,775 | | | | | $ | 1,948,639 | | | | | $ | 315,168 | | | | | $ | 350,402 | | | | | $ | 243,096 | | |
Depreciation
|
| | | $ | 7,570,615 | | | | | $ | 760,500 | | | | | $ | 839,645 | | | | | $ | 552,919 | | | | | $ | 1,498,311 | | | | | $ | 629,277 | | | | | $ | 3,519,364 | | | | | $ | 5,420,077 | | | | | $ | 3,198,120 | | | | | $ | 539,902 | | | | | $ | 586,420 | | | | | $ | 383,078 | | |
Net Income – GAAP Basis
|
| | | $ | (1,896,675) | | | | | $ | (868,028) | | | | | $ | 1,830,374 | | | | | $ | 330,649 | | | | | $ | (159,824) | | | | | $ | (676,716) | | | | | $ | 3,755,790 | | | | | $ | 1,046,198 | | | | | $ | 1,536,571 | | | | | $ | 999,067 | | | | | $ | 1,387,322 | | | | | $ | 363,729 | | |
FF&E Reserve
|
| | | $ | 900,105 | | | | | $ | 270,032 | | | | | $ | 435,786 | | | | | $ | 633,871 | | | | | $ | 391,391 | | | | | $ | 232,727 | | | | | $ | 1,323,871 | | | | | $ | 1,590,375 | | | | | $ | 911,062 | | | | | $ | 142,073 | | | | | $ | 233,435 | | | | | $ | 144,034 | | |
Principal
|
| | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 457,570 | | | | | $ | 297,493 | | | | | $ | — | | | | | $ | — | | | | | $ | 378,013 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | |
Cash generated from operations
|
| | | $ | 4,773,835 | | | | | $ | (377,560) | | | | | $ | 2,234,233 | | | | | $ | 249,697 | | | | | $ | 489,526 | | | | | $ | (577,659) | | | | | $ | 5,951,282 | | | | | $ | 4,875,900 | | | | | $ | 3,445,616 | | | | | $ | 1,396,897 | | | | | $ | 1,740,307 | | | | | $ | 602,773 | | |
Cash generated from sales
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Cash generated from refinancing
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 300,000 | | | | | | — | | |
Cash generated from operations, sales and
refinancing |
| | | $ | 4,773,835 | | | | | $ | (377,560) | | | | | $ | 2,234,233 | | | | | $ | 249,697 | | | | | $ | 489,526 | | | | | $ | (577,659) | | | | | $ | 5,951,282 | | | | | $ | 4,875,900 | | | | | $ | 3,445,616 | | | | | $ | 1,396,897 | | | | | $ | 2,040,307 | | | | | $ | 602,773 | | |
Less:
Cash distributions to investors (Net
of operating contributions)
|
| | | | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
– from operating cash flow
|
| | | $ | 4,340,000 | | | | | $ | 290,000 | | | | | $ | 1,900,000 | | | | | $ | 650,000 | | | | | $ | 1,271,745 | | | | | $ | 260,850 | | | | | $ | 4,650,000 | | | | | $ | 5,105,000 | | | | | $ | 2,534,000 | | | | | $ | 1,385,000 | | | | | $ | 1,975,000 | | | | | $ | 700,000 | | |
– from sales and refinancing
|
| | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 300,000 | | | | | $ | — | | |
– from other
|
| | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | |
Cash generated (deficiency) after cash distributions
|
| | | $ | 433,835 | | | | | $ | (667,560) | | | | | $ | 334,233 | | | | | $ | (400,303) | | | | | $ | (782,220) | | | | | $ | (838,509) | | | | | $ | 1,301,282 | | | | | $ | (229,100) | | | | | $ | 911,616 | | | | | $ | 11,897 | | | | | $ | 65,307 | | | | | $ | (97,227) | | |
Less:
Special items (not including sales and refinancing)(identify and quantify)
|
| | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | |
–
Operating Contributions by investors
|
| | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 549,900 | | | | | $ | 800,000 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | |
Cash generated (deficiency) after cash distributions and special items
|
| | | $ | 433,835 | | | | | $ | (667,560) | | | | | $ | 334,233 | | | | | $ | (400,303) | | | | | $ | (782,220) | | | | | $ | (288,609) | | | | | $ | 2,101,282 | | | | | $ | (229,100) | | | | | $ | 911,616 | | | | | $ | 11,897 | | | | | $ | 65,307 | | | | | $ | (97,227) | | |
Tax and Distribution Data Per $1000 Invested
|
| | | | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Federal Income Tax Results: | | | | | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity as of End of Year listed
|
| | | $ | 31,222,032 | | | | | $ | 31,222,033 | | | | | $ | 9,098,109 | | | | | $ | 9,248,109 | | | | | $ | 15,280,000 | | | | | $ | 15,829,900 | | | | | $ | 20,506,257 | | | | | $ | 20,506,257 | | | | | $ | 20,506,257 | | | | | $ | 5,492,231 | | | | | $ | 5,492,231 | | | | | $ | 5,492,231 | | |
Ordinary income (loss) | | | | | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
–
Investment income (Operating Income)
|
| | | | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
– Return of capital
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | |
TPG KC MO I JV, LLC
|
| |
TPG LA Commerce JV, LLC
|
| |
Harry G. Pappas & Sons, LLC
|
| |
TPG BLFL JV, LLC
|
| |
TPG Reno, LLC
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| | |
Intercontinental Kansas City
|
| |
Doubletree Commerce
|
| |
Holiday Inn Inner Harbor
|
| |
Marriott Fort Lauderdale, Hyatt Lexington and
Renaissance Boca Raton |
| |
Marriott Courtyard Reno
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| | |
Year 1
|
| |
Year 2
|
| |
Year 1
|
| |
Year 2
|
| |
Year 1
|
| |
Year 2
|
| |
Year 1
|
| |
Year 2
|
| |
Year 3
|
| |
Year 1
|
| |
Year 2
|
| |
Year 3
|
| ||||||||||||||||||||||||||||||||||||
Source (on cash basis) | | | | | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
– Sales
|
| | | | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
– Refinancing
|
| | | | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
– Operations
|
| | | $ | 139.00 | | | | | $ | 9.29 | | | | | $ | 208.83 | | | | | $ | 70.28 | | | | | $ | 83.23 | | | | | $ | 16.48 | | | | | $ | 226.76 | | | | | $ | 248.95 | | | | | $ | 123.57 | | | | | $ | 252.17 | | | | | $ | 359.60 | | | | | $ | 127.45 | | |
– other
|
| | | | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Amount (in percentage terms) remaining
invested in program properties at the end of the last year reported in the Table (original total acquisition cost of properties retained divided by original total acquisition cost of all properties in program). |
| | | | 100% | | | | | | 100% | | | | | | 100% | | | | | | 100% | | | | | | 100% | | | | | | 100% | | | | | | 100% | | | | | | 100% | | | | | | 100% | | | | | | 100% | | | | | | 100% | | | | | | 200% | | |
| | |
PCO I, LP
|
| |
PRI Warwick
Airport, LLC |
| |
OHIB Hotel, LLC
|
| |
PMO II, LP
|
| |
PKY I, LLC
|
| |
PFL VI, LLC
|
| |
PFL V, LLC
|
| |||||||||||||||||||||
| | |
Marriott
Colorado Springs |
| |
Sheraton
Warwick |
| |
Holiday Inn
Inner Harbor |
| |
Intercontinental
Kansas City |
| |
Hyatt
Lexington |
| |
Marriott
Fort Lauderdale |
| |
Renaissance
Boca Raton |
| |||||||||||||||||||||
Date Closed
|
| | | | 1/31/2017 | | | | | | 5/19/2016 | | | | | | 11/24/2015 | | | | | | 1/11/2016 | | | | | | 11/14/2014 | | | | | | 11/14/2014 | | | | | | 11/14/2014 | | |
Duration (months)
|
| | | | 133 | | | | | | 114 | | | | | | 46 | | | | | | 120 | | | | | | 96 | | | | | | 98 | | | | | | 98 | | |
Aggregate dollar amount raised
|
| | | $ | 16,763,877 | | | | | $ | 1,528,800 | | | | | $ | 7,402,409 | | | | | $ | 31,419,798 | | | | | $ | 10,206,278 | | | | | $ | 28,120,904 | | | | | $ | 24,219,044 | | |
Annualized return on investment
|
| | | | 5.51% | | | | | | 1.19% | | | | | | 75.81% | | | | | | 6.40% | | | | | | 24.97% | | | | | | 4.12% | | | | | | 3.59% | | |
Median annual leverage
|
| | | | 60% | | | | | | 119% | | | | | | 73% | | | | | | 73% | | | | | | 49% | | | | | | 45% | | | | | | 52% | | |
Sponsor Total Compensation(1)
|
| | | $ | — | | | | | $ | — | | | | | $ | 2,703,479 | | | | | $ | 1,086,709 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | |
Legal Entity
|
| |
Property
|
| |
Date
Acquired |
| |
Date of
Sale |
| |
Cash received
net of closing costs |
| |
Selling Price, Net of Closing Costs and GAAP Adjustments
|
| |
Cost of Properties Including Closing and Soft Costs
|
| | ||||||||||||||||||||||||||||||||||||||||||||||||||
|
Mortgage
balance at time of sale |
| |
Purchase
money mortgage taken back by program |
| |
Adjustments
resulting from application of GAAP |
| |
Total
|
| |
Original
mortgage financing |
| |
Total
acquisition cost, capital improvement closing and soft costs |
| |
Total
|
| |
Excess
(Deficiency) of Property Operating Cash Receipts Over Cash Expenditures |
| |||||||||||||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Hotel West I , LP
|
| | Holiday Inn Lubbock Towers |
| | | | 2/8/2006 | | | | | | 9/12/2013 | | | | | $ | — | | | | | $ | 5,914,135 | | | | | $ | — | | | | | $ | — | | | | | $ | 5,914,135 | | | | | $ | 7,000,000 | | | | | $ | 7,825,976 | | | | | $ | 14,825,976 | | | | | $ | 3,159,556 | | |
Hotel West II, LP
|
| | Holiday Inn Lubbock Plaza |
| | | | 2/8/2006 | | | | | | 7/10/2014 | | | | | $ | (498,038) | | | | | $ | 4,469,000 | | | | | $ | — | | | | | $ | — | | | | | $ | 4,469,000 | | | | | $ | 6,100,000 | | | | | $ | 7,888,388 | | | | | $ | 13,988,388 | | | | | $ | 2,006,857 | | |
PNY IV, LLC
|
| | Holiday Inn SoHo |
| | | | 9/10/2007 | | | | | | 7/30/2014 | | | | | $ | 6,152,999 | | | | | $ | 97,368,684 | | | | | $ | — | | | | | $ | — | | | | | $ | 97,368,684 | | | | | $ | 99,619,375 | | | | | $ | 36,145,791 | | | | | $ | 135,765,166 | | | | | $ | 7,556,007 | | |
Hotel West II, LP
|
| | Holiday Inn Fort Smith |
| | | | 2/8/2006 | | | | | | 11/20/2014 | | | | | $ | — | | | | | $ | 5,846,386 | | | | | $ | — | | | | | $ | — | | | | | $ | 5,846,386 | | | | | $ | 7,700,000 | | | | | $ | 4,529,564 | | | | | $ | 12,229,564 | | | | | $ | 860,757 | | |
PMO IV, LLC
|
| | Sheraton Kansas City |
| | | | 6/7/2007 | | | | | | 11/20/2014 | | | | | $ | 7,701,073 | | | | | $ | 30,331,781 | | | | | $ | — | | | | | $ | — | | | | | $ | 30,331,781 | | | | | $ | 31,237,500 | | | | | $ | 9,431,088 | | | | | $ | 40,668,588 | | | | | $ | 9,902,188 | | |
PVA IV, LP
|
| | Westin Tyson’s Corner |
| | | | 10/5/2005 | | | | | | 6/8/2015 | | | | | $ | — | | | | | $ | 62,000,975 | | | | | $ | — | | | | | $ | — | | | | | $ | 62,000,975 | | | | | $ | 77,040,116 | | | | | $ | 32,896,529 | | | | | $ | 109,936,645 | | | | | $ | 6,412,107 | | |
PIL IV, LLC
|
| | Sheraton Elk Grove |
| | | | 6/7/2007 | | | | | | 7/7/2015 | | | | | $ | — | | | | | $ | 8,562,399 | | | | | $ | — | | | | | $ | — | | | | | $ | 8,562,399 | | | | | $ | 19,875,000 | | | | | $ | 7,017,608 | | | | | $ | 26,892,608 | | | | | $ | (600,485) | | |
PTX IV, LLC
|
| | Sheraton Dallas |
| | | | 6/7/2007 | | | | | | 9/30/2015 | | | | | $ | 971,949 | | | | | $ | 18,680,358 | | | | | $ | — | | | | | $ | — | | | | | $ | 18,680,358 | | | | | $ | 22,050,000 | | | | | $ | 9,473,078 | | | | | $ | 31,523,078 | | | | | $ | 2,253,164 | | |
Hotel West II, LP
|
| | Holiday Inn Billings |
| | | | 2/8/2006 | | | | | | 12/22/2015 | | | | | $ | (1,714,438) | | | | | $ | 10,022,637 | | | | | $ | — | | | | | $ | — | | | | | $ | 10,022,637 | | | | | $ | 11,000,000 | | | | | $ | 5,700,321 | | | | | $ | 16,700,321 | | | | | $ | 8,802,864 | | |
Hotel West I, LP
|
| | Holiday Inn Cheyenne |
| | | | 2/8/2006 | | | | | | 12/22/2015 | | | | | $ | 6,237,826 | | | | | $ | 6,903,504 | | | | | $ | — | | | | | $ | — | | | | | $ | 6,903,504 | | | | | $ | 8,300,000 | | | | | $ | 4,906,615 | | | | | $ | 13,206,615 | | | | | $ | 13,883,643 | | |
Hotel West I, LP
|
| | Holiday Inn Fresno |
| | | | 2/8/2006 | | | | | | 1/5/2016 | | | | | $ | 5,172,863 | | | | | $ | 2,644,837 | | | | | $ | — | | | | | $ | — | | | | | $ | 2,644,837 | | | | | $ | 4,900,000 | | | | | $ | 6,704,089 | | | | | $ | 11,604,089 | | | | | $ | 6,198,996 | | |
PMO II, LP
|
| | Intercontinental Kansas City |
| | | | 1/12/2006 | | | | | | 1/11/2016(1) | | | | | $ | 22,361,821 | | | | | $ | 66,979,342 | | | | | $ | — | | | | | $ | — | | | | | $ | 66,979,342 | | | | | $ | 68,906,085 | | | | | $ | 39,964,904 | | | | | $ | 108,870,988 | | | | | $ | 36,544,720 | | |
PKY I, LLC
|
| | Hyatt Lexington |
| | | | 11/30/2006 | | | | | | 11/14/2014(1) | | | | | $ | 13,688,091 | | | | | $ | 19,767,353 | | | | | $ | — | | | | | $ | — | | | | | $ | 19,767,353 | | | | | $ | 9,967,813 | | | | | $ | 19,556,069 | | | | | $ | 29,523,882 | | | | | $ | 20,783,466 | | |
PFL VI, LLC
|
| | Marriott Fort Lauderdale |
| | | | 9/13/2006 | | | | | | 11/14/2014(1) | | | | | $ | 10,802,912 | | | | | $ | 16,201,239 | | | | | $ | — | | | | | $ | — | | | | | $ | 16,201,239 | | | | | $ | 20,310,939 | | | | | $ | 24,536,258 | | | | | $ | 44,847,197 | | | | | $ | 15,092,509 | | |
PFL V, LLC
|
| | Renaissance Boca Raton |
| | | | 9/13/2006 | | | | | | 11/14/2014(1) | | | | | $ | 7,745,412 | | | | | $ | 14,449,754 | | | | | $ | — | | | | | $ | — | | | | | $ | 14,449,754 | | | | | $ | 14,689,061 | | | | | $ | 23,507,156 | | | | | $ | 38,196,217 | | | | | $ | 9,752,022 | | |
OHIB Hotel, LLC
|
| | Holiday Inn Inner Harbor |
| | | | 2/3/2012 | | | | | | 11/24/2015(1) | | | | | $ | 5,683,226 | | | | | $ | 29,210,266 | | | | | $ | — | | | | | $ | — | | | | | $ | 29,210,266 | | | | | $ | 18,250,000 | | | | | $ | 6,633,576 | | | | | $ | 24,883,576 | | | | | $ | 10,621,083 | | |
PRI Warwick Airport, LLC
|
| | Sheraton Warwick |
| | | | 1/11/2007 | | | | | | 5/19/2016 | | | | | $ | 4,341,960 | | | | | $ | 6,125,577 | | | | | $ | — | | | | | $ | — | | | | | $ | 6,125,577 | | | | | $ | 18,000,000 | | | | | $ | 216,684 | | | | | $ | 18,216,684 | | | | | $ | 50,373 | | |
PCO I, LP
|
| | Marriott Colorado |
| | | | 2/15/2006 | | | | | | 1/31/2017 | | | | | $ | 12,960,517 | | | | | $ | 16,315,543 | | | | | $ | — | | | | | $ | — | | | | | $ | 16,315,543 | | | | | $ | 20,895,000 | | | | | $ | 15,303,977 | | | | | $ | 36,198,977 | | | | | $ | 15,303,473 | | |
|
SEC registration fee
|
| | | $ | 69,816 | | |
|
FINRA filing fee
|
| | | $ | 90,856 | | |
|
Seminars
|
| | | $ | 165,000 | | |
|
Printing and mailing expenses
|
| | | $ | 600,000 | | |
|
Blue sky filing fees and expenses
|
| | | $ | 800,000 | | |
|
Legal fees and expenses
|
| | | $ | 750,000 | | |
|
Accounting fees and expenses
|
| | | $ | 850,000 | | |
| Literature | | | | $ | 825,000 | | |
|
Advertising and sales
|
| | | $ | 800,000 | | |
|
Investor relations, technology and administrative support expenses
|
| | | $ | 1,824,328 | | |
|
Due diligence expenses
|
| | | $ | 1,100,000 | | |
|
Total
|
| | | $ | 7,875,000 | | |
|
| | | | PROCACCIANTI HOTEL REIT, INC. | | |||
| | | | | ||||
| | | | By: | | |
/s/ James A. Procaccianti
James A. Procaccianti
Chief Executive Officer and President |
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Name
|
| |
Capacity
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| |
Date
|
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/s/ James A. Procaccianti
James A. Procaccianti
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| |
Chief Executive Officer, President and Chairman of the Board of Directors
(Principal Executive Officer) |
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May 1, 2017
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/s/ Gregory Vickowski
Gregory Vickowski
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Chief Financial Officer, Treasurer and Director
(Principal Accounting Officer and Principal Financial Officer) |
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May 1, 2017
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/s/ Lawrence Aubin
Lawrence Aubin
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Independent Director
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May 1, 2017
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/s/ Thomas R. Engel
Thomas R. Engel
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Independent Director
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May 1, 2017
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/s/ Ronald S. Ohsberg
Ronald S. Ohsberg
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Independent Director
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May 1, 2017
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Exhibit No.
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| |
Description
|
|
1.1(1) | | | Amended and Restated Dealer Manager Agreement by and between Procaccianti Hotel REIT, Inc., Procaccianti Hotel Advisors, LLC and S2K Financial LLC. | |
1.2(1) | | | Form of Participating Broker-Dealer Agreement by and between S2K Financial LLC and the Participating Broker-Dealers. | |
3.1* | | | Form of Articles of Amendment and Restatement of Procaccianti Hotel REIT, Inc. | |
3.2* | | | Bylaws of Procaccianti Hotel REIT, Inc. | |
4.1(1) | | | Form of Subscription Agreement and Subscription Agreement Signature Page (included as Appendix C to the prospectus). | |
4.2* | | | Form of Dividend Reinvestment Plan (included as Appendix B to the prospectus). | |
4.3(1) | | | Form of Additional Subscription Agreement and Subscription Agreement Signature Page. | |
5.1(1) | | | Opinion of Venable LLP as to legality. | |
8.1(1) | | | Opinion of Morris, Manning & Martin, LLP as to tax matters. | |
10.1(1) | | | Advisory Agreement by and between Procaccianti Hotel REIT, Inc. and Procaccianti Hotel Advisors, LLC. | |
10.2(1) | | | Form of Procaccianti Hotel REIT, Inc. 2016 Restricted Share Plan. | |
10.3(1) | | | Agreement of Limited Partnership of Procaccianti Hotel REIT, L.P. | |
21.1(1) | | | List of Subsidiaries. | |
23.1(1) | | | Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm | |
23.2(1) | | | Consent of Venable LLP (included in Exhibit 5.1). | |
23.3(1) | | | Consent of Morris, Manning & Martin, LLP (included in Exhibit 8.1). | |
24.1* | | | Power of Attorney (included on signature page) | |