þ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the quarterly period ended June 30, 2018 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the transition period from to |
Maryland | 27-0351641 | |
(State or Other Jurisdiction of | (I.R.S. Employer | |
Incorporation or Organization) | Identification No.) | |
18100 Von Karman Avenue, Suite 500 | ||
Irvine, California | 92612 | |
(Address of Principal Executive Offices) | (Zip Code) |
Large Accelerated filer o | Accelerated filer o |
Non-Accelerated filer þ | Smaller reporting company o |
Emerging growth company o |
Page | |
June 30, 2018 | December 31, 2017 | ||||||
(Unaudited) | |||||||
ASSETS | |||||||
Assets: | |||||||
Real Estate: | |||||||
Land | $ | 126,002,217 | $ | 106,932,041 | |||
Building and improvements | 1,034,298,414 | 916,068,353 | |||||
Tenant origination and absorption costs | 1,766,904 | — | |||||
Other intangible assets | 2,644,263 | 2,644,263 | |||||
Total real estate held for investment, cost | 1,164,711,798 | 1,025,644,657 | |||||
Less accumulated depreciation and amortization | (204,005,246 | ) | (182,081,988 | ) | |||
Total real estate held for investment, net | 960,706,552 | 843,562,669 | |||||
Real estate held for sale, net | — | 183,152,661 | |||||
Total real estate, net | 960,706,552 | 1,026,715,330 | |||||
Cash and cash equivalents | 91,588,750 | 171,228,485 | |||||
Restricted cash | 24,186,419 | 31,005,231 | |||||
Investment in unconsolidated joint venture | 13,695,764 | 8,133,156 | |||||
Rents and other receivables | 2,544,812 | 2,737,800 | |||||
Assets related to real estate held for sale | — | 2,862,292 | |||||
Other assets | 1,840,492 | 3,258,584 | |||||
Total assets | $ | 1,094,562,789 | $ | 1,245,940,878 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Liabilities: | |||||||
Accounts payable and accrued liabilities | $ | 25,680,565 | $ | 28,004,830 | |||
Notes payable: | |||||||
Mortgage notes payable, net | 719,338,161 | 625,302,105 | |||||
Credit facility, net | 52,303,881 | 90,222,098 | |||||
Notes payable related to real estate held for sale | — | 160,261,735 | |||||
Total notes payable, net | 771,642,042 | 875,785,938 | |||||
Distributions payable | 3,790,856 | 4,595,301 | |||||
Due to affiliates | 1,592,128 | 1,967,129 | |||||
Liabilities related to real estate held for sale | — | 4,939,907 | |||||
Total liabilities | 802,705,591 | 915,293,105 | |||||
Commitments and contingencies (Note 11) | |||||||
Stockholders’ Equity: | |||||||
Preferred stock, $0.01 par value per share; 100,000,000 shares authorized, no shares issued and outstanding | — | — | |||||
Common stock, $0.01 par value per share; 999,999,000 shares authorized, 75,079,994 and 75,479,409 shares issued and outstanding at June 30, 2018 and December 31, 2017, respectively | 750,800 | 754,794 | |||||
Convertible stock, $0.01 par value per share; 1,000 shares authorized, issued and outstanding as of June 30, 2018 and December 31, 2017, respectively | 10 | 10 | |||||
Additional paid-in capital | 660,149,499 | 664,110,915 | |||||
Cumulative distributions and net losses | (369,043,111 | ) | (334,217,946 | ) | |||
Total stockholders’ equity | 291,857,198 | 330,647,773 | |||||
Total liabilities and stockholders’ equity | $ | 1,094,562,789 | $ | 1,245,940,878 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Revenues: | |||||||||||||||
Rental income | $ | 30,062,993 | $ | 48,763,373 | $ | 61,240,920 | $ | 96,979,147 | |||||||
Tenant reimbursements and other | 3,994,015 | 6,355,033 | 8,271,014 | 12,419,523 | |||||||||||
Total revenues | 34,057,008 | 55,118,406 | 69,511,934 | 109,398,670 | |||||||||||
Expenses: | |||||||||||||||
Operating, maintenance and management | 9,059,224 | 14,339,889 | 18,478,862 | 28,416,090 | |||||||||||
Real estate taxes and insurance | 6,809,156 | 9,894,525 | 12,672,478 | 19,707,271 | |||||||||||
Fees to affiliates | 3,809,224 | 5,667,962 | 7,741,290 | 11,289,985 | |||||||||||
Depreciation and amortization | 11,311,894 | 18,048,070 | 22,202,690 | 36,001,793 | |||||||||||
Interest expense | 7,855,662 | 11,260,913 | 15,568,434 | 22,108,949 | |||||||||||
Loss on debt extinguishment | 271,790 | — | 2,282,246 | — | |||||||||||
General and administrative expenses | 1,732,470 | 1,563,620 | 3,683,967 | 3,176,030 | |||||||||||
Total expenses | 40,849,420 | 60,774,979 | 82,629,967 | 120,700,118 | |||||||||||
Loss before other income (expense) | (6,792,412 | ) | (5,656,573 | ) | (13,118,033 | ) | (11,301,448 | ) | |||||||
Other income (expense): | |||||||||||||||
Equity in loss from unconsolidated joint venture | (1,173,099 | ) | — | (2,814,504 | ) | — | |||||||||
Gain on sales of real estate, net | — | — | 81,247,054 | — | |||||||||||
Total other income (expense) | (1,173,099 | ) | — | 78,432,550 | — | ||||||||||
Net income (loss) | $ | (7,965,511 | ) | $ | (5,656,573 | ) | $ | 65,314,517 | $ | (11,301,448 | ) | ||||
Income (loss) per common share — basic and diluted | $ | (0.11 | ) | $ | (0.07 | ) | $ | 0.87 | $ | (0.15 | ) | ||||
Weighted average number of common shares outstanding — basic | 75,212,006 | 75,878,088 | 75,277,570 | 75,969,547 | |||||||||||
Weighted average number of common shares outstanding — diluted | 75,223,881 | 75,878,088 | 75,289,445 | 75,969,547 | |||||||||||
Distributions declared per common share | $ | 1.153 | $ | 0.179 | $ | 1.330 | $ | 0.355 |
Common Stock | Convertible Stock | Additional Paid- In Capital | Cumulative Distributions & Net Losses | Total Stockholders’ Equity | |||||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||||||||
BALANCE, December 31, 2016 | 76,202,862 | $ | 762,029 | 1,000 | $ | 10 | $ | 672,018,194 | $ | (352,351,990 | ) | $ | 320,428,243 | ||||||||||||
Issuance of common stock | 7,500 | 75 | — | — | (75 | ) | — | — | |||||||||||||||||
Redemption of common stock | (730,953 | ) | (7,310 | ) | — | — | (7,992,690 | ) | — | (8,000,000 | ) | ||||||||||||||
Distributions declared | — | — | — | — | — | (54,339,823 | ) | (54,339,823 | ) | ||||||||||||||||
Amortization of stock-based compensation | — | — | — | — | 85,486 | — | 85,486 | ||||||||||||||||||
Net income for the year ended December 31, 2017 | — | — | — | — | — | 72,473,867 | 72,473,867 | ||||||||||||||||||
BALANCE, December 31, 2017 | 75,479,409 | 754,794 | 1,000 | 10 | 664,110,915 | (334,217,946 | ) | 330,647,773 | |||||||||||||||||
Redemption of common stock | (399,415 | ) | (3,994 | ) | — | — | (3,996,006 | ) | — | (4,000,000 | ) | ||||||||||||||
Distributions declared | — | — | — | — | — | (100,139,682 | ) | (100,139,682 | ) | ||||||||||||||||
Amortization of stock-based compensation | — | — | — | — | 34,590 | — | 34,590 | ||||||||||||||||||
Net income for the six months ended June 30, 2018 | — | — | — | — | — | 65,314,517 | 65,314,517 | ||||||||||||||||||
BALANCE, June 30, 2018 | 75,079,994 | $ | 750,800 | 1,000 | $ | 10 | $ | 660,149,499 | $ | (369,043,111 | ) | $ | 291,857,198 |
Six Months Ended June 30, | |||||||
2018 | 2017 | ||||||
Cash Flows from Operating Activities: | |||||||
Net income (loss) | $ | 65,314,517 | $ | (11,301,448 | ) | ||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||
Depreciation and amortization | 22,202,690 | 36,001,793 | |||||
Amortization of deferred financing costs | 536,980 | 938,707 | |||||
Amortization of stock-based compensation | 34,590 | 30,060 | |||||
Amortization of loan premiums | (174,140 | ) | (617,277 | ) | |||
Change in fair value of interest rate cap agreements | (85,307 | ) | 516,089 | ||||
Gain on sales of real estate | (81,247,054 | ) | — | ||||
Loss on debt extinguishment | 2,282,246 | — | |||||
Insurance claim recoveries | — | (45,660 | ) | ||||
Loss on disposal of building and improvements | — | 6,034 | |||||
Gain on short-term investments | — | (181,818 | ) | ||||
Equity in loss from unconsolidated joint venture | 2,814,504 | — | |||||
Changes in operating assets and liabilities: | |||||||
Rents and other receivables | 192,988 | 187,109 | |||||
Other assets | 1,706,699 | 2,474,662 | |||||
Accounts payable and accrued liabilities | (4,033,829 | ) | (7,718,680 | ) | |||
Due to affiliates | (369,005 | ) | (1,269,100 | ) | |||
Net cash provided by operating activities | 9,175,879 | 19,020,471 | |||||
Cash Flows from Investing Activities: | |||||||
Proceeds from short-term investments | — | 169,500 | |||||
Cash contributions to unconsolidated joint venture | (2,521,078 | ) | — | ||||
Cash distributions from unconsolidated joint venture | 530,100 | — | |||||
Acquisition of real estate investments | (67,886,062 | ) | — | ||||
Additions to real estate investments | (3,955,226 | ) | (7,790,236 | ) | |||
Escrow deposits for pending real estate acquisitions | (2,600,000 | ) | — | ||||
Purchase of interest rate cap agreements | (203,300 | ) | — | ||||
Proceeds from sales of real estate, net | 176,926,493 | — | |||||
Proceeds from insurance claims | — | 45,660 | |||||
Net cash provided by (used in) investing activities | 100,290,927 | (7,575,076 | ) | ||||
Cash Flows from Financing Activities: | |||||||
Proceeds from issuance of mortgage notes payable | 94,482,000 | 303,751 | |||||
Principal payments on mortgage notes payable | (148,490,527 | ) | (5,186,154 | ) | |||
Principal payments on credit facility | (38,410,500 | ) | — | ||||
Payment of deferred financing costs | (1,248,916 | ) | — | ||||
Payment of debt extinguishment costs | (175,575 | ) | — | ||||
Distributions to common stockholders | (100,944,127 | ) | (27,167,402 | ) | |||
Repurchase of common stock | (4,000,000 | ) | (4,000,000 | ) | |||
Net cash used in financing activities | (198,787,645 | ) | (36,049,805 | ) | |||
Net decrease in cash, cash equivalents and restricted cash | (89,320,839 | ) | (24,604,410 | ) | |||
Cash, cash equivalents and restricted cash, beginning of period | 205,096,008 | 93,777,878 | |||||
Cash, cash equivalents and restricted cash, end of period | $ | 115,775,169 | $ | 69,173,468 |
Six Months Ended June 30, | |||||||
2018 | 2017 | ||||||
Supplemental Disclosures of Cash Flow Information: | |||||||
Interest paid | $ | 15,427,841 | $ | 21,116,873 | |||
Supplemental Disclosure of Noncash Transactions: | |||||||
Decrease in distributions payable | $ | (804,445 | ) | $ | (156,670 | ) | |
Assumption of mortgage notes payable to acquire real estate | $ | 65,000,000 | $ | — | |||
Application of escrow deposits to acquire real estate | $ | 2,600,000 | $ | — | |||
Mortgage notes payable assumed by buyer in connection with property sales | $ | (67,140,194 | ) | $ | — | ||
Assets and liabilities deconsolidated in connection with the Second Closing Properties: | |||||||
Real estate, net | $ | (98,350,076 | ) | $ | — | ||
Notes payable, net | $ | 76,336,778 | $ | — | |||
Restricted cash | $ | (913,408 | ) | $ | — | ||
Accounts payable and accrued liabilities | $ | 674,912 | $ | — | |||
Decrease in accounts payable and accrued liabilities from additions to investment in unconsolidated joint venture | $ | (398,817 | ) | $ | — | ||
Decrease in accounts payable and accrued liabilities from additions to real estate investments | $ | (174,008 | ) | $ | (763,213 | ) | |
Decrease in due to affiliates from additions to real estate investments | $ | (5,996 | ) | $ | (20,983 | ) |
• | Level 1: unadjusted quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities; |
• | Level 2: quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations in which significant inputs and significant value drivers are observable in active markets; and |
• | Level 3: prices or valuation techniques where little or no market data is available that requires inputs that are both significant to the fair value measurement and unobservable. |
June 30, 2018 | ||||||||||||
Fair Value Measurements Using | ||||||||||||
Level 1 | Level 2 | Level 3 | ||||||||||
Assets: | ||||||||||||
Interest rate cap agreements | $ | — | $ | 340,253 | $ | — | ||||||
December 31, 2017 | ||||||||||||
Fair Value Measurements Using | ||||||||||||
Level 1 | Level 2 | Level 3 | ||||||||||
Assets: | ||||||||||||
Interest rate cap agreements | $ | — | $ | 51,646 | $ | — | ||||||
June 30, | ||||||||
2018 | 2017 | |||||||
Cash and cash equivalents | $ | 91,588,750 | $ | 48,948,868 | ||||
Restricted cash | 24,186,419 | 20,224,600 | ||||||
Total cash, cash equivalents and restricted cash | $ | 115,775,169 | $ | 69,173,468 |
Purchase Price Allocation | |||||||||||||||||||||||
Property Name | Location | Purchase Date | Units | Land | Buildings and Improvements | Tenant Origination and Absorption Costs | Total Purchase Price | ||||||||||||||||
Double Creek Flats | Plainfield, IN | 5/7/2018 | 240 | $ | 1,306,880 | $ | 30,081,288 | $ | 463,911 | $ | 31,852,079 | ||||||||||||
Jefferson at Perimeter Apartments | Dunwoody, GA | 6/11/2018 | 504 | 17,763,296 | 84,567,694 | 1,302,993 | 103,633,983 | ||||||||||||||||
744 | $ | 19,070,176 | $ | 114,648,982 | $ | 1,766,904 | $ | 135,486,062 |
June 30, 2018 | ||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||
Land | Building and Improvements | Tenant Origination and Absorption Costs | Other Intangible Assets | Total Real Estate Held for Investment | Real Estate Held for Sale | |||||||||||||||||||
Investments in real estate | $ | 126,002,217 | $ | 1,034,298,414 | $ | 1,766,904 | $ | 2,644,263 | $ | 1,164,711,798 | $ | — | ||||||||||||
Less: Accumulated depreciation and amortization | — | (202,945,014 | ) | (284,449 | ) | (775,783 | ) | (204,005,246 | ) | — | ||||||||||||||
Net investments in real estate and related lease intangibles | $ | 126,002,217 | $ | 831,353,400 | $ | 1,482,455 | $ | 1,868,480 | $ | 960,706,552 | $ | — |
December 31, 2017 | ||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||
Land | Building and Improvements | Tenant Origination and Absorption Costs | Other Intangible Assets | Total Real Estate Held for Investment | Real Estate Held for Sale | |||||||||||||||||||
Investments in real estate | $ | 106,932,041 | $ | 916,068,353 | $ | — | $ | 2,644,263 | $ | 1,025,644,657 | $ | 222,652,327 | ||||||||||||
Less: Accumulated depreciation and amortization | — | (181,382,789 | ) | — | (699,199 | ) | (182,081,988 | ) | (39,499,666 | ) | ||||||||||||||
Net investments in real estate and related lease intangibles | $ | 106,932,041 | $ | 734,685,564 | $ | — | $ | 1,945,064 | $ | 843,562,669 | $ | 183,152,661 |
July 1 through December 31, 2018 | $ | 76,584 | |
2019 | 153,168 | ||
2020 | 153,168 | ||
2021 | 153,168 | ||
2022 | 153,168 | ||
Thereafter | 1,179,224 | ||
$ | 1,868,480 |
July 1 through December 31, 2018 | $ | 130,002 | |
2019 | 180,858 | ||
2020 | 74,313 | ||
2021 | 76,535 | ||
2022 | 76,535 | ||
Thereafter | 185,501 | ||
$ | 723,744 |
For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Revenues: | |||||||||||||||
Rental income | $ | — | $ | 20,028,065 | $ | 2,534,906 | $ | 39,766,054 | |||||||
Tenant reimbursements and other | 41,924 | 2,731,622 | 420,978 | 5,427,992 | |||||||||||
Total revenues | 41,924 | 22,759,687 | 2,955,884 | 45,194,046 | |||||||||||
Expenses: | |||||||||||||||
Operating, maintenance and management | 139,407 | 6,216,470 | 949,393 | 12,375,306 | |||||||||||
Real estate taxes and insurance | 49,810 | 4,294,378 | 321,054 | 8,552,381 | |||||||||||
Fees to affiliates | 12,667 | 888,988 | 134,307 | 1,756,248 | |||||||||||
Depreciation and amortization | — | 7,462,327 | 279,432 | 14,852,085 | |||||||||||
Interest expense | — | 4,421,560 | 681,322 | 8,597,170 | |||||||||||
Loss on debt extinguishment | — | — | 2,010,457 | — | |||||||||||
General and administrative expenses | 9,916 | 175,897 | 484,494 | 354,344 | |||||||||||
Total expenses | $ | 211,800 | $ | 23,459,620 | $ | 4,860,459 | $ | 46,487,534 |
4. | Investment in Unconsolidated Joint Venture |
June 30, 2018 | December 31, 2017 | |||||||
Assets: | ||||||||
Real estate assets, net | $ | 492,774,957 | $ | 374,277,205 | ||||
Other assets | 22,170,584 | 15,328,440 | ||||||
Total assets | $ | 514,945,541 | $ | 389,605,645 | ||||
Liabilities and equity: | ||||||||
Notes payable, net | $ | 341,211,418 | $ | 264,558,057 | ||||
Other liabilities | 22,211,163 | 11,525,292 | ||||||
Company’s capital | 15,152,291 | 11,352,230 | ||||||
Other partner’s capital | 136,370,669 | 102,170,066 | ||||||
Total liabilities and equity | $ | 514,945,541 | $ | 389,605,645 |
For the Three Months Ended June 30, 2018 | For the Six Months Ended June 30, 2018 | ||||||
Revenues | $ | 15,542,460 | $ | 29,212,188 | |||
Expenses | 25,113,025 | 52,614,244 | |||||
Net loss | $ | (9,570,565 | ) | $ | (23,402,056 | ) | |
Company’s proportional net loss | $ | (957,057 | ) | $ | (2,340,206 | ) | |
Amortization of outside basis | (216,042 | ) | (474,298 | ) | |||
Equity in loss of unconsolidated joint venture | $ | (1,173,099 | ) | $ | (2,814,504 | ) |
June 30, 2018 | December 31, 2017 | ||||||
Prepaid expenses | $ | 491,454 | $ | 2,132,212 | |||
Interest rate cap agreements (Note 12) | 340,253 | 51,646 | |||||
Deposits | 1,008,785 | 1,074,726 | |||||
Other assets | $ | 1,840,492 | $ | 3,258,584 |
June 30, 2018 | ||||||||||||||||||
Interest Rate Range | Weighted Average Interest Rate | |||||||||||||||||
Type | Number of Instruments | Maturity Date Range | Minimum | Maximum | Principal Outstanding | |||||||||||||
Mortgage notes payable - fixed | 24 | 7/1/2018 - 10/1/2056 | 3.19 | % | 5.75 | % | 3.96 | % | $ | 381,990,625 | ||||||||
Mortgage notes payable - variable(1) | 12 | 7/1/2023 - 11/1/2027 | 1-Mo LIBOR + 1.77% | 1-Mo LIBOR + 2.38% | 4.28 | % | 341,562,000 | |||||||||||
Total mortgage notes payable, gross | 36 | 4.12 | % | 723,552,625 | ||||||||||||||
Premium, net(2) | 428,855 | |||||||||||||||||
Deferred financing costs, net(3) | (4,643,319 | ) | ||||||||||||||||
Total mortgage notes payable, net | $ | 719,338,161 |
December 31, 2017 | ||||||||||||||||||
Interest Rate Range | Weighted Average Interest Rate | |||||||||||||||||
Type | Number of Instruments | Maturity Date Range | Minimum | Maximum | Principal Outstanding | |||||||||||||
Mortgage notes payable - fixed | 32 | 4/1/2018 - 10/1/2056 | 3.19 | % | 5.75 | % | 3.89 | % | $ | 416,673,854 | ||||||||
Mortgage notes payable - variable(1) | 14 | 10/1/2018 - 1/1/2026 | 1-Mo LIBOR +2.02% | 1-Mo LIBOR + 2.50% | 3.86 | % | 372,481,000 | |||||||||||
Total mortgage notes payable, gross | 46 | 3.87 | % | 789,154,854 | ||||||||||||||
Premium, net(2) | 673,653 | |||||||||||||||||
Deferred financing costs, net(3) | (4,264,667 | ) | ||||||||||||||||
Total mortgage notes payable, net | $ | 785,563,840 |
(1) | See Note 12 for a discussion of the interest rate cap agreements used to manage the exposure to interest rate movement on the Company’s variable rate loans. |
(2) | Accumulated amortization related to debt premiums as of June 30, 2018 and December 31, 2017 was $951,914 and $2,468,041, respectively. |
(3) | Accumulated amortization related to deferred financing costs as of June 30, 2018 and December 31, 2017 was $3,133,898 and $3,951,049, respectively. |
Amount of Advance as of | ||||||||
Collateralized Property(1) | June 30, 2018 | December 31, 2017 | ||||||
Carrington Park at Huffmeister | $ | — | $ | 20,430,500 | ||||
Carrington Place | 27,535,500 | 27,535,500 | ||||||
Carrington at Champion Forest | 25,121,250 | 25,121,250 | ||||||
Oak Crossing | — | 17,980,000 | ||||||
52,656,750 | 91,067,250 | |||||||
Deferred financing costs, net on Credit Facility(2) | (352,869 | ) | (845,152 | ) | ||||
Credit Facility, net | $ | 52,303,881 | $ | 90,222,098 |
(1) | Each property is pledged as collateral for repayment of all amounts advanced under the credit facility. |
(2) | Accumulated amortization related to deferred financing costs for the credit facility as of June 30, 2018 and December 31, 2017, was $234,670 and $390,241, respectively. |
Remainder of 2018 | Maturities During the Years Ending December 31, | |||||||||||||||||||||||||||
Contractual Obligation | Total | 2019 | 2020 | 2021 | 2022 | Thereafter | ||||||||||||||||||||||
Principal payments on outstanding debt obligations(1) | $ | 776,209,375 | $ | 11,183,085 | $ | 59,094,341 | $ | 53,820,140 | $ | 73,610,006 | $ | 31,899,158 | $ | 546,602,645 |
(1) | Projected principal payments on outstanding debt obligations are based on the terms of the notes payable agreements. Amounts exclude the amortization of the deferred financing costs and debt premiums associated with certain notes payable. |
For the Six Months Ended June 30, 2018 | For the Year Ended December 31, 2017 | |||||
Nonvested shares at the beginning of the period | 11,875 | 11,875 | ||||
Granted shares | — | 7,500 | ||||
Vested shares | — | (7,500 | ) | |||
Nonvested shares at the end of the period | 11,875 | 11,875 |
Grant Year | Weighted Average Fair Value | |||
2017 | $ | 11.65 | ||
2018 | n/a |
Share Purchase Anniversary | Repurchase Price on Repurchase Date(1) | |
Less than 1 year | No Repurchase Allowed | |
1 year | 92.5% of Estimated Value per Share(2) | |
2 years | 95.0% of Estimated Value per Share(2) | |
3 years | 97.5% of Estimated Value per Share(2) | |
4 years | 100.0% of Estimated Value per Share(2) | |
In the event of a stockholder’s death or disability(3) | Average Issue Price for Shares(4) |
Share Purchase Anniversary | Repurchase Price on Repurchase Date(1) | |
Less than 1 year | No Repurchase Allowed | |
1 year | 92.5% of the Share Repurchase Price(2) | |
2 years | 95.0% of the Share Repurchase Price(2) | |
3 years | 97.5% of the Share Repurchase Price(2) | |
4 years | 100.0% of the Share Repurchase Price(2) | |
In the event of a stockholder’s death or disability(3) | Average Issue Price for Shares(4) |
(1) | As adjusted for any stock dividends, combinations, splits, recapitalizations or any similar transaction with respect to the shares of common stock. |
(2) | The “Share Repurchase Price” shall equal 93% of the Estimated Value per Share. The “Estimated Value per Share” equals the most recently determined estimated value per share determined by the Company’s board of directors. |
(3) | The required one year holding period to be eligible to redeem shares under the Company’s share repurchase program does not apply in the event of death or disability of a stockholder. |
(4) | The purchase price per share for shares redeemed upon the death or disability of a stockholder will be equal to the average issue price per share for all of the stockholder’s shares. |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Net income (loss) attributable to the Company | $ | (7,965,511 | ) | $ | (5,656,573 | ) | $ | 65,314,517 | $ | (11,301,448 | ) | |||||
Less: dividends declared on participating securities | 1,819 | 2,122 | 3,618 | 4,221 | ||||||||||||
Net income (loss) attributable to common stockholders | (7,967,330 | ) | (5,658,695 | ) | 65,310,899 | (11,305,669 | ) | |||||||||
Weighted average common shares outstanding — basic | 75,212,006 | 75,878,088 | 75,277,570 | 75,969,547 | ||||||||||||
Weighted average common shares outstanding — diluted | 75,223,881 | 75,878,088 | 75,289,445 | 75,969,547 | ||||||||||||
Earnings (loss) per common share — basic and diluted | $ | (0.11 | ) | $ | (0.07 | ) | $ | 0.87 | $ | (0.15 | ) |
Incurred (Received) For the | Incurred (Received) For the | Payable (Prepaid) as of | |||||||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2018 | 2017 | 2018 | 2017 | June 30, 2018 | December 31, 2017 | ||||||||||||||||||
Consolidated Statements of Operations: | |||||||||||||||||||||||
Expensed | |||||||||||||||||||||||
Investment management fees(1) | $ | 2,343,430 | $ | 3,567,979 | $ | 4,766,441 | $ | 7,149,134 | $ | 755 | $ | — | |||||||||||
Acquisition expenses(2) | 25,438 | — | 223,317 | — | — | — | |||||||||||||||||
Property management: | |||||||||||||||||||||||
Fees(1) | 978,620 | 1,624,548 | 2,003,352 | 3,231,084 | 330,642 | 402,315 | |||||||||||||||||
Reimbursement of onsite personnel(3) | 2,969,457 | 4,660,447 | 6,086,367 | 9,339,177 | 1,081,387 | 772,584 | |||||||||||||||||
Other fees(1) | 286,264 | 475,435 | 609,337 | 909,767 | 33,223 | 44,981 | |||||||||||||||||
Other fees - property operations(3) | 18,414 | 36,070 | 42,393 | 82,906 | — | — | |||||||||||||||||
Other fees - G&A(2) | 13,438 | 29,844 | 34,726 | 70,425 | — | — | |||||||||||||||||
Other operating expenses(2) | 291,236 | 215,565 | 675,749 | 650,443 | 143,551 | 87,221 | |||||||||||||||||
Disposition fees(4) | — | — | 3,841,050 | — | — | 566,625 | |||||||||||||||||
Disposition transaction costs(4) | — | — | 67,464 | — | — | — | |||||||||||||||||
Loan coordination fee(1) | 200,910 | — | 362,160 | — | — | 86,675 | |||||||||||||||||
Property insurance(5) | 314,077 | 62,093 | 628,181 | 124,185 | — | (160,942 | ) | ||||||||||||||||
Insurance proceeds(6) | — | (102,147 | ) | — | (102,147 | ) | — | — | |||||||||||||||
Consolidated Balance Sheets: | |||||||||||||||||||||||
Capitalized | |||||||||||||||||||||||
Construction management: | |||||||||||||||||||||||
Fees(7) | 59,328 | 63,839 | 65,473 | 261,718 | 2,370 | 6,431 | |||||||||||||||||
Reimbursement of labor costs(7) | 19,087 | 65,393 | 35,437 | 130,864 | 200 | 297 | |||||||||||||||||
Capital expenditures(7) | 11,178 | 30,799 | 38,180 | 38,680 | — | — | |||||||||||||||||
Capitalized costs on investment in unconsolidated joint venture(8) | — | — | 58,386 | — | — | — | |||||||||||||||||
Acquisition expenses(9) | 235,847 | — | 245,048 | — | — | — | |||||||||||||||||
Acquisition fees(9) | 705,722 | — | 705,722 | — | — | — | |||||||||||||||||
$ | 8,472,446 | $ | 10,729,865 | $ | 20,488,783 | $ | 21,886,236 | $ | 1,592,128 | $ | 1,806,187 |
(1) | Included in fees to affiliates in the accompanying consolidated statements of operations. |
(2) | Included in general and administrative expenses in the accompanying consolidated statements of operations. Reflects acquisition expenses that did not meet the capitalization criteria under ASU 2017-01. |
(3) | Included in operating, maintenance and management in the accompanying consolidated statements of operations. |
(4) | Included in gain on sales of real estate, net in the accompanying consolidated statements of operations. |
(5) | Property related insurance expense and the amortization of the prepaid insurance deductible account are included in general and administrative expenses in the accompanying consolidated statements of operations. The amortization of the prepaid property insurance is included in operating, maintenance and management expenses in the accompanying consolidated statements of operations. The prepaid insurance is included in other assets in the accompanying consolidated balance sheets upon payment. |
(6) | Included in tenant reimbursements and other in the accompanying consolidated statements of operations. |
(7) | Included in building and improvements in the accompanying consolidated balance sheets. |
(8) | Included in investment in unconsolidated joint venture in the accompanying consolidated balance sheets. |
(9) | Included in total real estate, cost in the accompanying consolidated balance sheets. Reflects acquisition expenses that did meet the capitalization criteria under ASU 2017-01. |
June 30, 2018 | |||||||||||||||||||||
Type | Maturity Date Range | Based on | Number of Instruments | Notional Amount | Variable Rate | Weighted Average Rate Cap | Fair Value | ||||||||||||||
Interest rate cap | 12/1/2018 - 7/1/2021 | One-Month LIBOR | 14 | $ | 386,897,000 | 2.09 | % | 2.91 | % | $ | 340,253 |
December 31, 2017 | |||||||||||||||||||||
Type | Maturity Date Range | Based on | Number of Instruments | Notional Amount | Variable Rate | Weighted Average Rate Cap | Fair Value | ||||||||||||||
Interest rate cap | 1/1/2018 - 10/1/2019 | One-Month LIBOR | 18 | $ | 458,655,000 | 1.56 | % | 2.89 | % | $ | 51,646 |
• | changes in economic conditions generally and the real estate and debt markets specifically; |
• | risks inherent in the real estate business, including tenant defaults, tenant vacancies, potential liability relating to environmental matters and liquidity of real estate investments; |
• | our ability to secure resident leases at favorable rental rates; |
• | our ability to execute on our value-enhancement strategy; |
• | risks related to owning investments with joint venture partners; |
• | our ability to identify and acquire multifamily properties; |
• | changes to our share repurchase program, distribution rate and similar matters; |
• | the fact we pay fees and expenses to our advisor and its affiliates that were not negotiated on an arm’s length basis and the payment of these fees and expenses increases the risk that our stockholders will not earn a profit on their investment in us; |
• | our ability to retain our executive officers and other key personnel of our advisor, our property manager and our affiliates; |
• | legislative or regulatory changes (including changes to the laws governing the taxation of real estate investment trusts, or REITs); |
• | our ability to generate sufficient cash flows to pay distributions to our stockholders; |
• | the availability of capital; |
• | changes in interest rates; and |
• | changes to generally accepted accounting principles, or GAAP. |
Number of Units | Total Purchase Price | Mortgage Debt Outstanding at June 30, 2018(1) | Average Occupancy(2) as of | Average Monthly Rent(3) as of | ||||||||||||||||||||||||||
Property Name | Location | Purchase Date | Jun 30, 2018 | Dec 31, 2017 | Jun 30, 2018 | Dec 31, 2017 | ||||||||||||||||||||||||
1 | Clarion Park Apartments | Olathe, KS | 6/28/2011 | 220 | $ | 11,215,000 | $ | 7,884,808 | 92.3 | % | 89.5 | % | $ | 810 | $ | 832 | ||||||||||||||
2 | Truman Farm Villas | Grandview, MO | 12/22/2011 | 200 | 9,100,000 | 5,291,014 | 97.5 | % | 99.0 | % | 760 | 743 | ||||||||||||||||||
3 | EBT Lofts | Kansas City, MO | 12/30/2011 | 102 | 8,575,000 | 5,004,082 | 97.1 | % | 89.2 | % | 1,105 | 1,064 | ||||||||||||||||||
4 | Spring Creek Apartments | Edmond, OK | 3/9/2012 | 252 | 19,350,000 | 17,091,506 | 94.4 | % | 93.3 | % | 863 | 844 | ||||||||||||||||||
5 | Montclair Parc Apartment Homes | Oklahoma City, OK | 4/26/2012 | 360 | 35,750,000 | 21,989,079 | 95.6 | % | 94.7 | % | 839 | 849 | ||||||||||||||||||
6 | Sonoma Grande Apartments | Tulsa, OK | 5/24/2012 | 336 | 32,200,000 | 20,687,011 | 95.5 | % | 92.6 | % | 900 | 902 | ||||||||||||||||||
7 | Estancia Apartments | Tulsa, OK | 6/29/2012 | 294 | 27,900,000 | — | 94.2 | % | 94.9 | % | 882 | 919 | ||||||||||||||||||
8 | Hilliard Park Apartments | Columbus, OH | 9/11/2012 | 201 | 19,800,000 | 12,530,171 | 97.5 | % | 93.0 | % | 1,067 | 1,030 | ||||||||||||||||||
9 | Sycamore Terrace Apartments | Terre Haute, IN | 9/20/2012 & 3/5/2014 | 250 | 23,174,157 | 17,834,044 | 95.2 | % | 93.2 | % | 1,086 | 1,107 | ||||||||||||||||||
10 | Hilliard Summit Apartments | Columbus, OH | 9/28/2012 | 208 | 24,100,000 | 15,202,146 | 95.7 | % | 94.7 | % | 1,214 | 1,191 | ||||||||||||||||||
11 | Forty 57 Apartments | Lexington, KY | 12/20/2012 | 436 | 52,500,000 | 35,940,534 | 96.3 | % | 95.0 | % | 926 | 923 | ||||||||||||||||||
12 | Riverford Crossing Apartments | Frankfort, KY | 12/28/2012 | 300 | 30,000,000 | 20,439,196 | 97.0 | % | 95.0 | % | 899 | 903 | ||||||||||||||||||
13 | Montecito Apartments | Austin, TX | 12/31/2012 | 268 | 19,000,000 | 12,971,049 | 96.3 | % | 90.7 | % | 986 | 981 | ||||||||||||||||||
14 | Hilliard Grand Apartments | Dublin, OH | 12/31/2012 | 314 | 40,500,000 | 28,576,982 | 97.5 | % | 94.6 | % | 1,250 | 1,240 | ||||||||||||||||||
15 | Library Lofts East | Kansas City, MO | 2/28/2013 | 118 | 12,750,000 | 8,256,656 | 95.8 | % | 87.3 | % | 1,053 | 1,059 | ||||||||||||||||||
16 | Deep Deuce at Bricktown(4) | Oklahoma City, OK | 3/28/2013 | 294 | 38,271,000 | 32,057,049 | 94.2 | % | 91.5 | % | 1,213 | 1,157 | ||||||||||||||||||
17 | Retreat at Quail North | Oklahoma City, OK | 6/12/2013 | 240 | 25,250,000 | 16,375,433 | 94.6 | % | 94.6 | % | 962 | 942 | ||||||||||||||||||
18 | Lodge at Trails Edge | Indianapolis, IN | 6/18/2013 | 268 | 18,400,000 | 11,665,467 | 95.1 | % | 95.1 | % | 743 | 759 | ||||||||||||||||||
19 | Waterford on the Meadow | Plano, TX | 7/3/2013 | 350 | 23,100,000 | 15,348,615 | 95.1 | % | 94.3 | % | 1,040 | 1,028 | ||||||||||||||||||
20 | Tapestry Park Apartments | Birmingham, AL | 8/13/2013 & 12/1/2014 | 354 | 50,285,000 | 43,683,606 | 94.6 | % | 93.2 | % | 1,310 | 1,291 | ||||||||||||||||||
21 | Dawntree Apartments | Carrollton, TX | 8/15/2013 | 400 | 24,000,000 | 14,625,942 | 94.8 | % | 93.0 | % | 982 | 990 | ||||||||||||||||||
22 | Stuart Hall Lofts | Kansas City, MO | 8/27/2013 | 115 | 16,850,000 | 16,027,413 | 96.5 | % | 90.4 | % | 1,340 | 1,282 | ||||||||||||||||||
23 | BriceGrove Park Apartments | Canal Winchester, OH | 8/29/2013 | 240 | 20,100,000 | 17,118,463 | 95.0 | % | 93.8 | % | 868 | 868 |
Number of Units | Total Purchase Price | Mortgage Debt Outstanding at June 30, 2018(1) | Average Occupancy(2) as of | Average Monthly Rent(3) as of | ||||||||||||||||||||||||||
Property Name | Location | Purchase Date | Jun 30, 2018 | Dec 31, 2017 | Jun 30, 2018 | Dec 31, 2017 | ||||||||||||||||||||||||
24 | Retreat at Hamburg Place | Lexington, KY | 9/5/2013 | 150 | $ | 16,300,000 | $ | 12,062,232 | 96.0 | % | 92.7 | % | $ | 1,004 | $ | 1,011 | ||||||||||||||
25 | Heights at 2121 | Houston, TX | 9/30/2013 | 504 | 37,000,000 | 38,301,978 | 93.8 | % | 94.0 | % | 884 | 896 | ||||||||||||||||||
26 | Villas at Huffmeister | Houston, TX | 10/10/2013 | 294 | 37,600,000 | 27,207,713 | 93.2 | % | 92.9 | % | 1,201 | 1,149 | ||||||||||||||||||
27 | Villas of Kingwood | Kingwood, TX | 10/10/2013 | 330 | 40,150,000 | 35,352,799 | 94.5 | % | 96.7 | % | 1,219 | 1,240 | ||||||||||||||||||
28 | Waterford Place at Riata Ranch | Cypress, TX | 10/10/2013 | 228 | 23,400,000 | — | 95.2 | % | 92.5 | % | 1,090 | 1,075 | ||||||||||||||||||
29 | Carrington Place | Houston, TX | 11/7/2013 | 324 | 32,900,000 | 27,354,150 | 91.4 | % | 93.2 | % | 1,062 | 1,077 | ||||||||||||||||||
30 | Carrington at Champion Forest | Houston, TX | 11/7/2013 | 284 | 33,000,000 | 24,949,731 | 95.4 | % | 97.2 | % | 1,103 | 1,091 | ||||||||||||||||||
31 | Carrington Park at Huffmeister | Cypress, TX | 11/7/2013 | 232 | 25,150,000 | 19,417,794 | 94.8 | % | 94.0 | % | 1,168 | 1,157 | ||||||||||||||||||
32 | Echo at Katy Ranch | Katy, TX | 12/19/2013 | 260 | 35,100,000 | — | 91.2 | % | 96.5 | % | 1,160 | 1,354 | ||||||||||||||||||
33 | Heritage Grand at Sienna Plantation | Missouri City, TX | 12/20/2013 | 240 | 27,000,000 | 16,931,384 | 93.8 | % | 94.2 | % | 1,144 | 1,151 | ||||||||||||||||||
34 | Mallard Crossing Apartments | Loveland, OH | 12/27/2013 | 350 | 39,800,000 | 33,557,459 | 95.7 | % | 95.4 | % | 1,095 | 1,073 | ||||||||||||||||||
35 | Reserve at Creekside | Chattanooga, TN | 3/28/2014 | 192 | 18,875,000 | 14,228,725 | 94.8 | % | 90.6 | % | 986 | 950 | ||||||||||||||||||
36 | Mapleshade Park | Dallas, TX | 3/31/2014 | 148 | 23,325,000 | 19,280,140 | 97.3 | % | 95.3 | % | 1,549 | 1,648 | ||||||||||||||||||
37 | Oak Crossing Apartments | Fort Wayne, IN | 6/3/2014 | 222 | 24,230,000 | 20,183,955 | 95.9 | % | 96.8 | % | 981 | 987 | ||||||||||||||||||
38 | Double Creek Flats | Plainfield, IN | 5/7/2018 | 240 | 31,852,079 | 21,866,993 | 87.5 | % | — | % | 1,046 | — | ||||||||||||||||||
39 | Jefferson at Perimeter Apartments | Dunwoody, GA | 6/11/2018 | 504 | 103,633,983 | 64,346,723 | 94.2 | % | — | % | 1,344 | — | ||||||||||||||||||
10,622 | $ | 1,131,486,219 | $ | 771,642,042 | 94.8 | % | 93.8 | % | $ | 1,049 | $ | 1,037 |
(1) | Mortgage debt outstanding is net of deferred financing costs associated with the loans for the properties listed above. |
(2) | At June 30, 2018, our portfolio was approximately 96.6% leased, calculated using the number of occupied and contractually leased units divided by total units. |
(3) | Average monthly rent is based upon the effective rental income after considering the effect of vacancies, concessions and write-offs. |
Legal Owner | Property | Units | Metro | |||
SIR Arbors, LLC | Arbors of Carrollton | 131 | DFW | |||
SIR Ashley Oaks, LLC | Ashley Oaks | 462 | San Antonio | |||
SIR Audubon Park, LLC | Audubon Park | 256 | Nashville | |||
SIR Belmont Apartments, LLC | Belmont | 260 | DFW | |||
SIR Cantare, LLC | Cantare at ILV | 206 | Nashville | |||
SIR Cooper Creek, LLC | Cooper Creek | 123 | Louisville | |||
SIR Grayson Ridge, LLC | Grayson Ridge | 240 | DFW | |||
SIR Fairmarc, LLC | Hills at Fair Oaks | 288 | San Antonio | |||
SIR Keystone, LLC | Keystone Farms | 90 | Nashville | |||
SIR Mansfield Landing, LLC | Landing at Mansfield | 336 | DFW | |||
SIR Steiner Ranch Apartments, LLC | Meritage at Steiner Ranch | 502 | Austin | |||
SIR Montelena, LLC | Montelena | 232 | Austin | |||
SIR Renaissance, LLC | Renaissance St. Andrews | 216 | Louisville | |||
SIR Richland, LLC | Richland Falls | 276 | Nashville | |||
SIR Rosemont, LLC | Rosemont at Olmos Park | 144 | San Antonio | |||
SIR Renaissance Condos, LLC | RSA - Condos | 30 | Louisville | |||
SIR SM Apartments, LLC | Springmarc Apartments | 240 | Austin | |||
SIR Buda Ranch, LLC | Trails at Buda Ranch | 264 | Austin | |||
SIR Valley Farms, LLC | Valley Farms | 160 | Louisville | |||
SIR Valley Farms North, LLC | Valley Farms North | 128 | Louisville | |||
SIR Valley Farms Clubhouse, LLC | Valley Farms | — | Louisville |
Period | Distributions Declared(1) | Distributions Declared Per Share(1)(2) | Distributions Paid(3) | Sources of Distributions Paid | Net Cash (Used in) Provided By Operating Activities | |||||||||||||||||||||||
Cash Flow From Operations | Cash and Cash Equivalents | Sale of Real Estate Investments | ||||||||||||||||||||||||||
First Quarter 2018 | $ | 13,320,570 | $ | 0.177 | $ | 13,331,421 | $ | — | $ | 13,331,421 | $ | — | $ | (1,457,476 | ) | |||||||||||||
Second Quarter 2018 | 86,819,112 | 1.153 | 87,612,706 | 10,633,355 | 1,681,188 | 75,298,163 | 10,633,355 | |||||||||||||||||||||
$ | 100,139,682 | $ | 1.330 | $ | 100,944,127 | $ | 10,633,355 | $ | 15,012,609 | $ | 75,298,163 | $ | 9,175,879 |
(1) | Distributions are based on daily record dates and calculated at a rate of $0.001683 per share per day during the three months ended June 30, 2018 and at a rate of $0.001964 per share per day during the three months ended March 31, 2018. Additionally, on April 16, 2018, our board of directors declared a special distribution in the amount of $1.00 per share to stockholders of record as of the close of business on April 20, 2018, which was paid on May 2, 2018. |
(2) | Assumes each share was issued and outstanding each day during the periods presented. |
(3) | Distributions are paid on a monthly basis. Distributions for all record dates of a given month are paid approximately three days following month end. All distributions were paid in cash. |
• | current unrestricted cash balances, which was $91,588,750 as of June 30, 2018; |
• | various forms of secured and unsecured financing; and |
• | equity capital from joint venture partners. |
• | $1,990,978 of cash used for the investment in an unconsolidated joint venture, net of distributions received from the unconsolidated joint venture of $530,100; |
• | $67,886,062 of cash used relating to the acquisition of our multifamily properties; |
• | $3,955,226 of cash used for improvements to real estate investments; |
• | $2,600,000 of cash used for deposits for potential real estate acquisitions; |
• | $203,300 of cash used for the acquisition of interest rate cap agreements; and |
• | $176,926,493 of cash provided by the sales of real estate investments. |
• | $55,257,443 of net cash used for mortgage notes payable, comprised of $148,490,527 of cash used for principal repayments, $94,482,000 of proceeds from mortgage notes payable and the payment of deferred financing costs of $1,248,916; |
• | $38,410,500 of cash used for principal payments of the credit facility; |
• | $175,575 of cash paid for the extinguishment of debt; |
• | $100,944,127 of cash distributions; and |
• | $4,000,000 of cash paid for the redemption of common stock. |
Payments due by period | ||||||||||||||||||||
Contractual Obligations | Total | Less than 1 year | 1-3 years | 3-5 years | More than 5 years | |||||||||||||||
Interest payments on outstanding debt obligations(1) | $ | 211,818,596 | $ | 15,910,344 | $ | 59,382,410 | $ | 50,111,139 | $ | 86,414,703 | ||||||||||
Principal payments on outstanding debt obligations(2) | 776,209,375 | 11,183,085 | 112,914,481 | 105,509,164 | 546,602,645 | |||||||||||||||
Total | $ | 988,027,971 | $ | 27,093,429 | $ | 172,296,891 | $ | 155,620,303 | $ | 633,017,348 |
(1) | Projected interest payments on outstanding debt obligations are based on the outstanding principal amounts and interest rates in effect at June 30, 2018. We incurred interest expense of $7,855,662 and $15,568,434 during the three and six months ended June 30, 2018, including amortization of deferred financing costs totaling $256,743 and $536,980, amortization of loan premiums of $48,326 and $174,140 and net unrealized losses (gains) from the change in fair value of interest rate cap agreements of $41,953 and $(85,307). |
(2) | Projected principal payments on outstanding debt obligations are based on the terms of the notes payable agreements. Amounts exclude the amortization of the debt premiums in addition to net deferred financing costs associated with certain notes payable. |
For the Three Months Ended June 30, | $ Change Due to Acquisitions and Dispositions(1) | $ Change Due to Properties Held Throughout Both Periods(2) | |||||||||||||||||||||
2018 | 2017 | Change $ | Change % | ||||||||||||||||||||
Total revenues | $ | 34,057,008 | $ | 55,118,406 | $ | (21,061,398 | ) | (38 | )% | $ | (21,798,412 | ) | $ | 737,014 | |||||||||
Operating, maintenance and management | (9,059,224 | ) | (14,339,889 | ) | 5,280,665 | 37 | % | 5,926,722 | (646,057 | ) | |||||||||||||
Real estate taxes and insurance | (6,809,156 | ) | (9,894,525 | ) | 3,085,369 | 31 | % | 4,086,875 | (1,001,506 | ) | |||||||||||||
Fees to affiliates | (3,809,224 | ) | (5,667,962 | ) | 1,858,738 | 33 | % | 2,190,140 | (331,402 | ) | |||||||||||||
Depreciation and amortization | (11,311,894 | ) | (18,048,070 | ) | 6,736,176 | 37 | % | 6,794,663 | (58,487 | ) | |||||||||||||
Interest expense | (7,855,662 | ) | (11,260,913 | ) | 3,405,251 | 30 | % | 4,121,677 | (716,426 | ) | |||||||||||||
Loss on debt extinguishment | (271,790 | ) | — | (271,790 | ) | (100 | )% | — | (271,790 | ) | |||||||||||||
General and administrative expenses | (1,732,470 | ) | (1,563,620 | ) | (168,850 | ) | (11 | )% | 164,581 | (333,431 | ) | ||||||||||||
Equity in loss from unconsolidated joint venture | (1,173,099 | ) | — | (1,173,099 | ) | 100 | % | (1,173,099 | ) | — | |||||||||||||
Net loss | $ | (7,965,511 | ) | $ | (5,656,573 | ) | $ | (2,308,938 | ) | (41 | )% | ||||||||||||
NOI(3) | $ | 17,235,069 | $ | 28,586,322 | $ | (11,351,253 | ) | (40 | )% | ||||||||||||||
FFO(4) | $ | 4,908,722 | $ | 12,391,497 | $ | (7,482,775 | ) | (60 | )% | ||||||||||||||
MFFO(4) | $ | 5,324,783 | $ | 12,587,633 | $ | (7,262,850 | ) | (58 | )% |
(1) | Represents the favorable (unfavorable) dollar amount change for the three months ended June 30, 2018, compared to the three months ended June 30, 2017, related to multifamily properties acquired or disposed of on or after April 1, 2017. |
(2) | Represents the favorable (unfavorable) dollar amount change for the three months ended June 30, 2018, compared to the three months ended June 30, 2017, related to multifamily properties owned by us throughout both periods presented. |
(3) | NOI is a non-GAAP financial measure used by investors and our management to evaluate and compare the performance of our properties and to determine trends in earnings. However, the usefulness of NOI is limited because it excludes general and administrative costs, interest expense, interest income and other expense, acquisition costs, certain fees to affiliates, depreciation and amortization expense and gains or losses from the sale of our properties and other gains and losses as stipulated by GAAP, the level of capital expenditures and leasing costs, all of which are significant economic costs. For additional information on how we calculate NOI and a reconciliation of NOI to net loss, see “—Net Operating Income.” |
(4) | GAAP basis accounting for real estate assets utilizes historical cost accounting and assumes real estate values diminish over time. In an effort to overcome the difference between real estate values and historical cost accounting for real estate assets, the Board of Governors of the National Association of Real Estate Investment Trusts, or NAREIT, established the measurement tool of FFO. Since its introduction, FFO has become a widely used non-GAAP financial measure among REITs. Additionally, we use modified funds from operations, or MFFO, as defined by the Institute for Portfolio Alternatives (formerly known as the Investment Program Association), or the IPA, as a supplemental measure to evaluate our operating performance. MFFO is based on FFO but includes certain adjustments we believe are necessary due to changes in accounting and reporting under GAAP since the establishment of FFO. Neither FFO nor MFFO should be considered as alternatives to net loss or other measurements under GAAP as indicators of our operating performance, nor should they be considered as alternatives to cash flow from operating activities or other measurements under GAAP as indicators of liquidity. For additional information on how we calculate FFO and MFFO and a reconciliation of FFO and MFFO to net loss, see “—Funds From Operations and Modified Funds From Operations.” |
For the Six Months Ended June 30, | $ Change Due to Acquisitions and Dispositions(1) | $ Change Due to Properties Held Throughout Both Periods(2) | |||||||||||||||||||||
2018 | 2017 | Change $ | Change % | ||||||||||||||||||||
Total revenues | $ | 69,511,934 | $ | 109,398,670 | $ | (39,886,736 | ) | (36 | )% | $ | (41,318,811 | ) | $ | 1,432,075 | |||||||||
Operating, maintenance and management | (18,478,862 | ) | (28,416,090 | ) | 9,937,228 | 35 | % | 11,275,572 | (1,338,344 | ) | |||||||||||||
Real estate taxes and insurance | (12,672,478 | ) | (19,707,271 | ) | 7,034,793 | 36 | % | 8,073,634 | (1,038,841 | ) | |||||||||||||
Fees to affiliates | (7,741,290 | ) | (11,289,985 | ) | 3,548,695 | 31 | % | 4,174,588 | (625,893 | ) | |||||||||||||
Depreciation and amortization | (22,202,690 | ) | (36,001,793 | ) | 13,799,103 | 38 | % | 13,904,989 | (105,886 | ) | |||||||||||||
Interest expense | (15,568,434 | ) | (22,108,949 | ) | 6,540,515 | 30 | % | 7,615,965 | (1,075,450 | ) | |||||||||||||
Loss on debt extinguishment | (2,282,246 | ) | — | (2,282,246 | ) | (100 | )% | (2,010,457 | ) | (271,789 | ) | ||||||||||||
General and administrative expenses | (3,683,967 | ) | (3,176,030 | ) | (507,937 | ) | (16 | )% | (131,550 | ) | (376,387 | ) | |||||||||||
Equity in loss from unconsolidated joint venture | (2,814,504 | ) | — | (2,814,504 | ) | (100%) | (2,814,504 | ) | — | ||||||||||||||
Gain on sales of real estate, net | 81,247,054 | — | 81,247,054 | 100% | 81,247,054 | — | |||||||||||||||||
Net income (loss) | $ | 65,314,517 | $ | (11,301,448 | ) | $ | 76,615,965 | 678 | % | ||||||||||||||
NOI(3) | $ | 36,297,996 | $ | 56,862,628 | $ | (20,564,632 | ) | (36 | )% | ||||||||||||||
FFO(4) | $ | 9,836,858 | $ | 24,700,345 | $ | (14,863,487 | ) | (60 | )% | ||||||||||||||
MFFO(4) | $ | 12,334,929 | $ | 25,216,434 | $ | (12,881,505 | ) | (51 | )% |
(1) | Represents the favorable (unfavorable) dollar amount change for the six months ended June 30, 2018, compared to the six months ended June 30, 2017, related to multifamily properties acquired or disposed of on or after January 1, 2017. |
(2) | Represents the favorable (unfavorable) dollar amount change for the six months ended June 30, 2018, compared to the six months ended June 30, 2017, related to multifamily properties owned by us throughout both periods presented. |
(3) | See “—Net Operating Income” below for a reconciliation of NOI to net income (loss). |
(4) | See “—Funds From Operations and Modified Funds From Operations” below for a reconciliation FFO and MFFO to net income (loss). |
For the Three Months Ended June 30, | |||||||||||||||
2018 | 2017 | Change $ | Change % | ||||||||||||
Same-store properties: | |||||||||||||||
Revenues | $ | 32,669,519 | $ | 32,188,862 | $ | 480,657 | 1 | % | |||||||
Operating expenses | 16,595,276 | 14,934,560 | 1,660,716 | 11 | % | ||||||||||
NOI | 16,074,243 | 17,254,302 | (1,180,059 | ) | (7 | )% | |||||||||
Non-same-store properties: | |||||||||||||||
NOI | 1,160,826 | 11,332,020 | (10,171,194 | ) | |||||||||||
Total NOI(1) | $ | 17,235,069 | $ | 28,586,322 | $ | (11,351,253 | ) |
(1) | See “—Net Operating Income” below for a reconciliation of NOI to net loss. |
For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Net income (loss) | $ | (7,965,511 | ) | $ | (5,656,573 | ) | $ | 65,314,517 | $ | (11,301,448 | ) | |||||
Fees to affiliates(1) | 2,544,340 | 3,567,979 | 5,128,601 | 7,149,134 | ||||||||||||
Depreciation and amortization | 11,311,894 | 18,048,070 | 22,202,690 | 36,001,793 | ||||||||||||
Interest expense | 7,855,662 | 11,260,913 | 15,568,434 | 22,108,949 | ||||||||||||
Loss on debt extinguishment | 271,790 | — | 2,282,246 | — | ||||||||||||
General and administrative expenses | 1,732,470 | 1,563,620 | 3,683,967 | 3,176,030 | ||||||||||||
Gain on sales of real estate, net | — | — | (81,247,054 | ) | — | |||||||||||
Adjustments for investment in unconsolidated joint venture(2) | 1,917,326 | — | 4,234,502 | — | ||||||||||||
Other gains(3) | (432,902 | ) | (197,687 | ) | (869,907 | ) | (271,830 | ) | ||||||||
Net operating income | $ | 17,235,069 | $ | 28,586,322 | $ | 36,297,996 | $ | 56,862,628 |
(1) | Fees to affiliates for the three and six months ended June 30, 2018, excludes property management fees of $978,620 and $2,003,352 and other fees of $286,264 and $609,337, respectively, that are included in NOI. Fees to affiliates for |
(2) | Reflects adjustments to add back our noncontrolling interest share of the adjustments to reconcile our net income (loss) attributable to common stockholders to NOI for our equity investment in the unconsolidated joint venture, which principally consists of depreciation, amortization and interest expense incurred by the joint venture. |
(3) | Other gains for the three and six months ended June 30, 2018 and 2017 include non-recurring insurance proceeds and interest income that are not included in NOI. |
For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||
Reconciliation of net loss to MFFO: | 2018 | 2017 | 2018 | 2017 | ||||||||||||
Net income (loss) | $ | (7,965,511 | ) | $ | (5,656,573 | ) | $ | 65,314,517 | $ | (11,301,448 | ) | |||||
Depreciation of real estate assets | 10,989,153 | 18,009,778 | 21,841,657 | 35,925,209 | ||||||||||||
Amortization of lease-related costs | 322,741 | 38,292 | 361,033 | 76,584 | ||||||||||||
Gain on sales of real estate, net | — | — | (81,247,054 | ) | — | |||||||||||
Adjustments for investment in unconsolidated joint venture(1) | 1,562,339 | — | 3,566,705 | — | ||||||||||||
FFO | 4,908,722 | 12,391,497 | 9,836,858 | 24,700,345 | ||||||||||||
Acquisition expenses(2)(3) | 102,318 | — | 301,132 | — | ||||||||||||
Unrealized loss (gain) on derivative instruments | 41,953 | 196,136 | (85,307 | ) | 516,089 | |||||||||||
Loss on debt extinguishment | 271,790 | — | 2,282,246 | — | ||||||||||||
MFFO | $ | 5,324,783 | $ | 12,587,633 | $ | 12,334,929 | $ | 25,216,434 |
(1) | Reflects adjustments to add back our noncontrolling interest share of the adjustments to reconcile our net income (loss) attributable to common stockholders to FFO for our equity investment in the unconsolidated joint venture, which principally consists of depreciation and amortization incurred by the joint venture. |
(2) | By excluding acquisition expenses, management believes MFFO provides useful supplemental information that is comparable for each type of real estate investment and is consistent with management’s analysis of the investing and operating performance of our properties. Acquisition expenses include payments to our advisor or third parties. Historically, acquisition expenses under GAAP were considered operating expenses and as expenses included in the determination of net income (loss) and income (loss) from continuing operations, both of which are performance measures under GAAP. Following the recent publication of ASU 2017-01, acquisition expenses are capitalized and depreciated under certain conditions. We elected to early adopt ASU 2017-01 resulting in a substantial part of our acquisition expenses being capitalized and therefore not excluded from the calculation of MFFO but are captured as depreciation in calculating FFO. All paid and accrued acquisition expenses will have negative effects on returns to investors, the potential for future distributions, and cash flows generated by us, unless earnings from operations or net sales proceeds from the disposition of properties are generated to cover the purchase price of the property, these expenses and other costs related to the property. In the event that proceeds from our initial public offering are not available to fund our reimbursement of acquisition expenses incurred by our advisor, such expenses will need to be reimbursed to the advisor from other sources, including debt, operational earnings or cash flow, net proceeds from the sale of properties, or from ancillary cash flows. |
(3) | Acquisition expenses for the three and six months ended June 30, 2018 of $102,318 and $301,132 did not meet the criteria for capitalization under ASU 2017-01 and are recorded in general and administrative expenses in the accompanying condensed consolidated unaudited statements of operations. No acquisition expenses were incurred for each of the three and six months ended June 30, 2017. |
Total Number of Shares Requested to be Redeemed(1) | Total Number of Shares Redeemed(2) | Average Price Paid per Share(3)(4) | Approximate Dollar Value of Shares Available That May Be /Redeemed Under the Program | |||||||||
April 2018 | 113,202 | — | $ | — | (5) | |||||||
May 2018 | 541,610 | 218,011 | 9.17 | (5) | ||||||||
June 2018 | 300,481 | — | — | (5) | ||||||||
955,293 | 218,011 | $ | 9.17 |
(1) | We generally redeem shares on the last business day of the month following the end of each fiscal quarter in which requests were received. We suspended our share repurchase program effective April 28, 2018. Our board of directors subsequently decided to reinstate and amend the share repurchase program effective May 20, 2018. Due to the suspension and subsequent reinstatement of the share repurchase program, valid repurchase requests received during the three months ended March 31, 2018, were honored on May 31, 2018. On July 31, 2018, we repurchased 218,555 shares of our common stock for a total repurchase value of $2,000,000, or $9.15 per share, pursuant to our share repurchase program. |
(3) | Pursuant to the program, as amended, we currently redeem shares at prices determined as follows: |
• | 92.5% of the share repurchase price for stockholders who have held their shares for at least one year; |
• | 95.0% of the share repurchase price for stockholders who have held their shares for at least two years; |
• | 97.5% of the share repurchase price for stockholders who have held their shares for at least three years; and |
• | 100.0% of the share repurchase price for stockholders who have held their shares for at least four years. |
(4) | For the three months ended June 30, 2018, the sources of the cash used to redeem shares were 100% from existing cash and cash equivalents. |
3.1 |
3.2 |
4.1 |
4.2 |
10.1 |
10.2 |
10.3 |
10.4 |
10.5 |
10.6 |
10.7 |
10.8 |
10.9 |
10.10 |
10.11 |
10.12 |
10.13 |
10.14 |
10.15 |
10.16 |
10.17 |
10.18 |
10.19 |
10.20 |
10.21 |
10.22 |
10.23 |
31.1* |
31.2* |
32.1** |
32.2** |
* | Filed herewith. |
** | In accordance with Item 601(b)(32) of Regulation S-K, this Exhibit is not deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section. Such certifications will not be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference. |
Steadfast Income REIT, Inc. | |||
Date: | August 10, 2018 | By: | /s/ Rodney F. Emery |
Rodney F. Emery | |||
Chief Executive Officer and Chairman of the Board (Principal Executive Officer) | |||
Date: | August 10, 2018 | By: | /s/ Kevin J. Keating |
Kevin J. Keating | |||
Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer) |
1. | I have reviewed this quarterly report on Form 10-Q of Steadfast Income REIT, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
By: | /s/ Rodney F. Emery | |
Rodney F. Emery | ||
Chief Executive Officer and Chairman of the Board (Principal Executive Officer) |
1. | I have reviewed this quarterly report on Form 10-Q of Steadfast Income REIT, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
By: | /s/ Kevin J. Keating | |
Kevin J. Keating | ||
Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer) |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
By: | /s/ Rodney F. Emery | |
Rodney F. Emery | ||
Chief Executive Officer and Chairman of the Board (Principal Executive Officer) |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
By: | /s/ Kevin J. Keating | |
Kevin J. Keating | ||
Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer) |
Document and Entity Information - shares |
6 Months Ended | |
---|---|---|
Jun. 30, 2018 |
Aug. 03, 2018 |
|
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Steadfast Income REIT, Inc. | |
Entity Central Index Key | 0001468010 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2018 | |
Document Fiscal Year Focus | 2018 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 74,861,588 |
Consolidated Balance Sheets (Parentheticals) - $ / shares |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Stockholders’ Equity: | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Common Stock [Member] | ||
Stockholders’ Equity: | ||
Stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Stock, shares authorized (in shares) | 999,999,000 | 999,999,000 |
Stock, shares issued (in shares) | 75,079,993 | 76,202,862 |
Stock, shares outstanding (in shares) | 75,079,993 | 76,202,862 |
Convertible Stock [Member] | ||
Stockholders’ Equity: | ||
Stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Stock, shares authorized (in shares) | 1,000 | 1,000 |
Stock, shares issued (in shares) | 1,000 | 1,000 |
Stock, shares outstanding (in shares) | 1,000 | 1,000 |
Consolidated Statements of Operations (Unaudited) - USD ($) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Revenues: | ||||
Rental income | $ 30,062,993 | $ 48,763,373 | $ 61,240,920 | $ 96,979,147 |
Tenant reimbursements and other | 3,994,015 | 6,355,033 | 8,271,014 | 12,419,523 |
Total revenues | 34,057,008 | 55,118,406 | 69,511,934 | 109,398,670 |
Expenses: | ||||
Operating, maintenance and management | 9,059,224 | 14,339,889 | 18,478,862 | 28,416,090 |
Real estate taxes and insurance | 6,809,156 | 9,894,525 | 12,672,478 | 19,707,271 |
Fees to affiliates | 3,809,224 | 5,667,962 | 7,741,290 | 11,289,985 |
Depreciation and amortization | 11,311,894 | 18,048,070 | 22,202,690 | 36,001,793 |
Interest expense | 7,855,662 | 11,260,913 | 15,568,434 | 22,108,949 |
Loss on debt extinguishment | 271,790 | 0 | 2,282,246 | 0 |
General and administrative expenses | 1,732,470 | 1,563,620 | 3,683,967 | 3,176,030 |
Total expenses | 40,849,420 | 60,774,979 | 82,629,967 | 120,700,118 |
Loss before other income (expense) | (6,792,412) | (5,656,573) | (13,118,033) | (11,301,448) |
Other Income and Expenses [Abstract] | ||||
Equity in loss from unconsolidated joint venture | (1,173,099) | 0 | (2,814,504) | 0 |
Gain on sales of real estate, net | 0 | 0 | 81,247,054 | 0 |
Total other income (expense) | (1,173,099) | 0 | 78,432,550 | 0 |
Net income (loss) | $ (7,965,511) | $ (5,656,573) | $ 65,314,517 | $ (11,301,448) |
Income (loss) per common share — basic and diluted (in dollars per share) | $ (0.11) | $ (0.07) | $ 0.87 | $ (0.15) |
Weighted average number of common shares outstanding — basic (in shares) | 75,212,006 | 75,878,088 | 75,277,570 | 75,969,547 |
Weighted average number of common shares outstanding — diluted (in shares) | 75,223,881 | 75,878,088 | 75,289,445 | 75,969,547 |
Distributions declared per common share (in dollars per share) | $ 1.153 | $ 0.179 | $ 1.33 | $ 0.355 |
Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) |
Total |
Common Stock [Member] |
Stock [Member]
Common Stock [Member]
|
Stock [Member]
Convertible Stock [Member]
|
Additional Paid-In Capital [Member] |
Cumulative Distributions & Net Losses [Member] |
---|---|---|---|---|---|---|
Beginning balance (in shares) at Dec. 31, 2016 | 76,202,862 | 1,000 | ||||
Beginning balance at Dec. 31, 2016 | $ 320,428,243 | $ 762,029 | $ 10 | $ 672,018,194 | $ (352,351,990) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock (in shares) | 7,500 | |||||
Issuance of common stock | 0 | $ 75 | (75) | |||
Redemption of common stock (in shares) | (730,953) | |||||
Redemption of common stock | (8,000,000) | $ (7,310) | (7,992,690) | |||
Distributions declared | (54,339,823) | (54,339,823) | ||||
Amortization of stock-based compensation | 85,486 | 85,486 | ||||
Net income | 72,473,867 | 72,473,867 | ||||
Ending balance (in shares) at Dec. 31, 2017 | 75,479,409 | 1,000 | ||||
Ending balance at Dec. 31, 2017 | 330,647,773 | $ 754,794 | $ 10 | 664,110,915 | (334,217,946) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock | (2,814,504) | |||||
Redemption of common stock (in shares) | (399,415) | |||||
Redemption of common stock | (4,000,000) | $ (3,994) | (3,996,006) | |||
Distributions declared | (100,139,682) | $ (100,139,682) | (100,139,682) | |||
Amortization of stock-based compensation | 34,590 | 34,590 | ||||
Net income | 65,314,517 | 65,314,517 | ||||
Ending balance (in shares) at Jun. 30, 2018 | 75,079,994 | 1,000 | ||||
Ending balance at Jun. 30, 2018 | $ 291,857,198 | $ 750,800 | $ 10 | $ 660,149,499 | $ (369,043,111) |
Organization and Business |
6 Months Ended |
---|---|
Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Business | Organization and Business Steadfast Income REIT, Inc. (the “Company”) was formed on May 4, 2009, as a Maryland corporation that elected to be taxed as, and currently qualifies as, a real estate investment trust (“REIT”). On June 12, 2009, the Company was initially capitalized pursuant to the sale of 22,223 shares of common stock to Steadfast REIT Investments, LLC (the “Sponsor”) at a purchase price of $9.00 per share for an aggregate purchase price of $200,007. On July 10, 2009, Steadfast Income Advisor, LLC (the “Advisor”), a Delaware limited liability company formed on May 1, 2009, invested $1,000 in the Company in exchange for 1,000 shares of convertible stock (the “Convertible Stock”) as described in Note 7. The Company owns a diverse portfolio of real estate investments, primarily in the multifamily sector, located throughout the United States. As of June 30, 2018, the Company owned 39 multifamily properties comprising a total of 10,622 apartment homes, an additional 21,130 square feet of rentable commercial space at two properties, and a 10% interest in one unconsolidated joint venture that owned 20 multifamily properties with a total of 4,584 apartment homes. Private Offering On October 13, 2009, the Company commenced a private offering of up to $94,000,000 in shares of the Company’s common stock at a purchase price of $9.40 per share (with discounts available for certain categories of purchasers) (the “Private Offering”). The Company offered its shares of common stock for sale in the Private Offering pursuant to a confidential private placement memorandum and only to persons that were “accredited investors,” as that term is defined under the Securities Act of 1933, as amended (the “Securities Act”), and Regulation D promulgated thereunder. On July 9, 2010, the Company terminated the Private Offering and on July 19, 2010, the Company commenced its registered Public Offering (defined and described below). The Company sold 637,279 shares of common stock in the Private Offering for gross offering proceeds of $5,844,325. Public Offering On July 19, 2010, the Company commenced its initial public offering of up to a maximum of 150,000,000 shares of common stock for sale to the public at an initial price of $10.00 per share (with discounts available for certain categories of purchasers) (the “Primary Offering”). The Company also offered up to 15,789,474 shares of common stock for sale pursuant to the Company’s distribution reinvestment plan (the “DRP,” and together with the Primary Offering, the “Public Offering”) at an initial price of $9.50 per share. The Company terminated its Public Offering on December 20, 2013. Following termination of the Public Offering, the Company continued to offer shares of common stock pursuant to the DRP until the Company’s board of directors suspended the DRP effective with distributions earned beginning on December 1, 2014. Through December 20, 2013, the Company sold 73,608,337 shares of common stock in the Public Offering for gross proceeds of $745,389,748, including 1,588,289 shares of common stock issued pursuant to the DRP for gross offering proceeds of $15,397,232. On March 10, 2015, the Company’s board of directors determined an estimated value per share of the Company’s common stock of $10.35 as of December 31, 2014. On February 25, 2016, the Company’s board of directors determined an estimated value per share of the Company’s common stock of $11.44 as of December 31, 2015. On February 15, 2017, the Company’s board of directors determined an estimated value per share of the Company’s common stock of $11.65 as of December 31, 2016. On March 13, 2018, the Company’s board of directors determined an estimated value per share of the Company’s common stock of $10.84 as of December 31, 2017. On May 9, 2018, the Company’s board of directors determined an estimated value per share of the Company’s common stock of $9.84, which represents the estimated value per share of the Company’s common stock of $10.84 as of December 31, 2017, less the special distribution of $1.00 per share of common stock that was paid to stockholders of record as of the close of business on April 20, 2018. The business of the Company is externally managed by the Advisor, pursuant to the Advisory Agreement by and among the Company, Steadfast Income REIT Operating Partnership, L.P., a Delaware limited partnership formed on July 6, 2009 (the “Operating Partnership”) and the Advisor (as amended, the “Advisory Agreement”), which is subject to annual renewal by the Company’s board of directors. The current term of the Advisory Agreement expires on November 15, 2018. Subject to certain restrictions and limitations, the Advisor manages the Company’s day-to-day operations, manages the Company’s portfolio of properties and real estate-related assets, sources and presents investment opportunities to the Company’s board of directors and provides investment management services on the Company’s behalf. Stira Capital Markets Group, LLC (formerly known as Steadfast Capital Markets Group, LLC) (the “Dealer Manager”), an affiliate of the Advisor, served as the dealer manager for the Public Offering. The Advisor, along with the Dealer Manager, also provides marketing, investor relations and other administrative services on the Company’s behalf. Substantially all of the Company’s business is conducted through the Operating Partnership. The Company is the sole general partner of the Operating Partnership. The Company and Advisor entered into an Amended and Restated Limited Partnership Agreement of the Operating Partnership (the “Partnership Agreement”) on September 28, 2009. The Partnership Agreement provides that the Operating Partnership is operated in a manner that will enable the Company to (1) satisfy the requirements for being classified as a REIT for tax purposes, (2) avoid any federal income or excise tax liability and (3) ensure that the Operating Partnership will not be classified as a “publicly traded partnership” for purposes of Section 7704 of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), which classification could result in the Operating Partnership being taxed as a corporation, rather than as a partnership. In addition to the administrative and operating costs and expenses incurred by the Operating Partnership in acquiring and operating real properties, the Operating Partnership will pay all of the Company’s administrative costs and expenses, and such expenses will be treated as expenses of the Operating Partnership. |
Summary of Significant Accounting Policies |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies There have been no significant changes to the Company’s accounting policies since it filed its audited financial statements in its Annual Report on Form 10-K for the year ended December 31, 2017, other than the adoption of Accounting Standards Update (“ASU”) 2014-09, ASU 2016-18 and ASU 2017-05, as further described below. For further information about the Company’s accounting policies, refer to the Company’s consolidated financial statements and notes thereto for the year ended December 31, 2017, included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on March 29, 2018. Principles of Consolidation and Basis of Presentation The consolidated financial statements include the accounts of the Company, the consolidated variable interest entity (“VIE”) that the Company controls and of which the Company is the primary beneficiary, and the Operating Partnership’s subsidiaries. All significant intercompany balances and transactions are eliminated in consolidation. The financial statements of the Company’s subsidiaries are prepared using accounting policies consistent with those of the Company. The Operating Partnership is a VIE as the limited partner lacks substantive kick-out rights and substantive participating rights. The Company is the primary beneficiary of, and consolidates, the Operating Partnership. The accompanying unaudited consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information as contained within the Financial Accounting Standards Board (“FASB”), Accounting Standards Codification (“ASC”) and the rules and regulations of the SEC, including the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, the unaudited consolidated financial statements do not include all of the information and footnotes required by GAAP for audited financial statements. In the opinion of management, the financial statements for the unaudited interim periods presented include all adjustments that are of a normal and recurring nature and necessary for a fair and consistent presentation of the results of such periods. Operating results for the three and six months ended June 30, 2018, are not necessarily indicative of the results that may be expected for the year ending December 31, 2018. The unaudited consolidated financial statements herein should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017. Use of Estimates The preparation of the consolidated financial statements in conformity with GAAP requires the Company to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could materially differ from those estimates. Fair Value Measurements Under GAAP, the Company is required to measure certain financial instruments at fair value on a recurring basis. In addition, the Company is required to measure other assets and liabilities at fair value on a non-recurring basis (e.g., carrying value of impaired real estate loans receivable and long-lived assets). Fair value is defined as the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The GAAP fair value framework uses a three-tiered approach. Fair value measurements are classified and disclosed in one of the following three categories:
When available, the Company utilizes quoted market prices from an independent third-party source to determine fair value and will classify such items in Level 1 or Level 2. In instances where the market is not active, regardless of the availability of a nonbinding quoted market price, observable inputs might not be relevant and could require the Company to make a significant adjustment to derive a fair value measurement. Additionally, in an inactive market, a market price quoted from an independent third party may rely more on models with inputs based on information available only to that independent third party. When the Company determines the market for a financial instrument owned by the Company to be illiquid or when market transactions for similar instruments do not appear orderly, the Company uses several valuation sources (including internal valuations, discounted cash flow analysis and quoted market prices) and will establish a fair value by assigning weights to the various valuation sources. The following describes the valuation methodologies used by the Company to measure fair value, including an indication of the level in the fair value hierarchy in which each asset or liability is generally classified. Interest rate cap agreements - The Company has entered into certain interest rate cap agreements. These derivatives did not qualify as fair value hedges. Fair value was based on a model-driven valuation using the associated variable rate curve and an implied market volatility, both of which were observable at commonly quoted intervals for the full term of the interest rate cap agreements. Therefore, the Company’s interest rate cap agreements were classified within Level 2 of the fair value hierarchy and are included in other assets in the accompanying consolidated balance sheets. The following table reflects the Company’s assets required to be measured at fair value on a recurring basis on the consolidated balance sheets:
Changes in assumptions or estimation methodologies can have a material effect on these estimated fair values. In this regard, the derived fair value estimates cannot be substantiated by comparison to independent markets and, in many cases, may not be realized in an immediate settlement of the instrument. Fair Value of Financial Instruments The accompanying consolidated balance sheets include the following financial instruments: cash and cash equivalents, restricted cash, rents and other receivables, accounts payable and accrued liabilities, distributions payable, due to affiliates and notes payable. The Company considers the carrying value of cash and cash equivalents, restricted cash, rents and other receivables, accounts payable and accrued liabilities and distributions payable to approximate the fair value of these financial instruments based on the short duration between origination of the instruments and their expected realization. The fair value of amounts due to affiliates is not determinable due to the related party nature of such amounts. The fair value of the notes payable is estimated using a discounted cash flow analysis using borrowing rates available to the Company for debt instruments with similar terms and maturities. As of June 30, 2018 and December 31, 2017, the fair value of the notes payable was $764,503,455 and $878,004,294, respectively, compared to the carrying value of $771,642,042 and $875,785,938, respectively. The Company has determined that its notes payable are classified as Level 3 within the fair value hierarchy. Restricted Cash Restricted cash represents those cash accounts for which the use of funds is restricted by loan covenants and cash placed with a qualified intermediary for reinvestment under Section 1031 of the Internal Revenue Code. As of June 30, 2018 and December 31, 2017, the Company had a restricted cash balance of $24,186,419 and $31,005,231, respectively, which represents $12,276,118 and $17,197,810 of cash proceeds from property sales that are being held by qualified intermediaries as of June 30, 2018 and December 31, 2017, respectively, and $11,910,301 and $13,807,421 set aside as impounds for future property tax payments, property insurance payments and tenant improvement payments as required by agreements with the Company’s lenders as of June 30, 2018 and December 31, 2017, respectively. The following table represents the components of the cash, cash equivalents and restricted cash presented on the accompanying consolidated statements of cash flows for the six months ended June 30, 2018 and 2017:
The beginning of period restricted cash balance for the six months ended June 30, 2018, includes $2,862,292 that is included in assets related to real estate held for sale as of December 31, 2017, on the accompanying consolidated balance sheet. All such amounts were disposed of in conjunction with the property sales during the six months ended June 30, 2018. Investments in Unconsolidated Joint Ventures The Company accounts for investments in unconsolidated joint venture entities in which it may exercise significant influence over, but does not control, using the equity method of accounting. Under the equity method, the investment is initially recorded at cost and subsequently adjusted to reflect additional contributions or distributions and the Company’s proportionate share of equity in the joint venture’s income (loss). The Company recognizes its proportionate share of the ongoing income or loss of the unconsolidated joint venture as equity in income (loss) of unconsolidated joint venture on the consolidated statements of operations. On a quarterly basis, the Company evaluates its investment in an unconsolidated joint venture for other-than-temporary impairments. The Company has elected the cumulative earnings approach to classify cash receipts from the unconsolidated joint venture on the accompanying consolidated statements of cash flows. Distribution Policy The Company has elected to be taxed as, and qualifies as, a REIT beginning with its taxable year ending December 31, 2010. To maintain its qualification as a REIT, the Company intends to make distributions each taxable year equal to at least 90% of its REIT taxable income (which is determined without regard to the dividends paid deduction or net capital gain and which does not necessarily equal net income as calculated in accordance with GAAP). Distributions during the three months ended June 30, 2018 were based on daily record dates and calculated at a rate of $0.001683 per share per day. Distributions were based on daily record dates and calculated at a rate of $0.001964 per share per day during the three months ended March 31, 2018 and six months ended June 30, 2017. Each day during the six months ended June 30, 2018 and 2017, was a distribution record date. Distributions to stockholders are determined by the board of directors of the Company and are dependent upon a number of factors relating to the Company, including funds available for the payment of distributions, financial condition, the timing of property acquisitions, capital expenditure requirements and annual distribution requirements in order for the Company to qualify as a REIT under the Internal Revenue Code. During the three and six months ended June 30, 2018, the Company declared aggregate distributions of $1.153 and $1.330 per common share, respectively, including a special distribution the Company’s board of directors declared in the amount $1.00 per share of common stock to stockholders of record as of the close of business on April 20, 2018. During the three and six months ended June 30, 2017, the Company declared distributions of $0.179 and $0.355 per common share, respectively. Per Share Data Basic earnings (loss) per share attributable to common stockholders for all periods presented are computed by dividing net income (loss) by the weighted average number of shares of the Company’s common stock outstanding during the period. Diluted earnings (loss) per share is computed based on the weighted average number of shares of the Company’s common stock and all potentially dilutive securities, if any. Distributions declared per common share assume each share was issued and outstanding each day during the period. Nonvested shares of the Company’s restricted common stock give rise to potentially dilutive shares of the Company’s common stock. In accordance with FASB ASC Topic 260-10-45, Earnings Per Share, the Company uses the two-class method to calculate earnings (loss) per share. Basic earnings (loss) per share is calculated based on dividends declared and the rights of common shares and participating securities in any undistributed earnings, which represents net income (loss) remaining after deduction of dividends declared during the period. The undistributed earnings (loss) are allocated to all outstanding common shares based on the relative percentage of each class of shares. The Company does not have any participating securities outstanding other than the shares of common stock and the unvested restricted common stock during the periods presented. Earnings (loss) attributable to the unvested restricted common stock are deducted from earnings (loss) in the computation of per share amounts where applicable. Reclassifications Certain amounts in the Company’s prior period condensed consolidated unaudited financial statements were reclassified to conform to the current period presentation. These reclassifications did not change the results of operations of prior periods. On January 1, 2018, the Company adopted ASU 2016-18, as further described below. As a result, the Company no longer presents transfers between cash and restricted cash in the consolidated statements of cash flows. Instead, restricted cash is included with cash and cash equivalents when reconciling the beginning of the period and end of the period total amounts shown on the consolidated statements of cash flows. Segment Disclosure The Company has determined that it has one reportable segment with activities related to investing in multifamily properties. The Company’s investments in real estate are in different geographic regions, and management evaluates operating performance on an individual asset level. However, as each of the Company’s assets has similar economic characteristics, tenants and products and services, its assets have been aggregated into one reportable segment. Recent Accounting Pronouncements In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”). ASU 2014-09 requires an entity to recognize the revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. ASU 2014-09 supersedes the revenue requirements in Revenue Recognition (Topic 605) and most industry-specific guidance throughout the Industry Topics of the Codification. ASU 2014-09 does not apply to lease contracts within the scope of Leases (Topic 840). In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606), which delayed the effective date of ASU 2014-09 by one year, which resulted in ASU 2014-09 being effective for fiscal years, and interim periods within those years, beginning after December 15, 2017, and is to be applied retrospectively. Early adoption is permitted, but can be no earlier than the original public entity effective date of fiscal years, and interim periods within those years, beginning after December 15, 2016. The Company selected the modified retrospective transition method with a cumulative effect recognized as of the date of adoption and adopted ASU 2014-09 effective January 1, 2018. The Company identified limited sources of revenues from non-lease components, and the Company did not experience a material impact on its revenue recognition in the consolidated financial statements upon adoption. Additionally, there was no impact to the Company’s recognition of rental revenue, as rental revenue from leasing arrangements was specifically excluded from ASU 2014-09. In February 2016, the FASB issued ASU 2016-02, Leases, (“ASU 2016-02”), amending the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets and making targeted changes to lessor accounting. ASU 2016-02 requires a modified retrospective transition approach. ASU 2016-02 will be effective in the first quarter of 2019 and allows for early adoption. The Company is evaluating the impact of ASU 2016-02 on its leases both as it relates to the Company acting as a lessor and as a lessee. Based on the preliminary results of its evaluation, as it relates to the former, the Company does not expect any material impact on the recognition of leases in the consolidated financial statements because under ASU 2016-02, lessors will continue to account for leases using an approach that is substantially equivalent to existing guidance for sales-type leases, direct financing leases, and operating leases. As it relates to the latter, the Company does not expect a material impact on the recognition of leases in the consolidated financial statements because the quantity of leased equipment by the Company is limited. The Company is finalizing its evaluation of ASU 2016-02 and plans to adopt ASU 2016-02 on January 1, 2019. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (“ASU 2016-18”). ASU 2016-18 requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, restricted cash and restricted cash equivalents. Therefore, amounts generally described as restricted cash should be included with cash and cash equivalents when reconciling the beginning of period and end of period total amounts shown on the statement of cash flows. ASU 2016-18 is effective for annual periods beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption is permitted. The Company adopted this guidance January 1, 2018 and applied it retrospectively. As a result of adopting ASU 2016-18, the Company began presenting restricted cash along with cash and cash equivalents in its consolidated statements of cash flows. In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the definition of business (“ASU 2017-01”), that clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of businesses. ASU 2017-01 provides a screen to determine when a set is not a business. If the screen is not met, it (1) requires that to be considered a business, a set must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create output and (2) removes the evaluation of whether a market participant could replace the missing elements. Upon adoption of ASU 2017-01 during the year ended December 31, 2017, the Company did not experience a material impact. The Company capitalized $1,186,062 of acquisition fees and expenses on the consolidated balance sheet as of June 30, 2018 related to its multifamily property acquisitions in 2018. Acquisition fees and acquisition expenses were included in fees to affiliates and acquisition costs, respectively, on the consolidated statements of operations prior to the adoption of this guidance. Upon adoption of ASU 2017-01, all such costs are included in the purchase price that is allocated between land, buildings and improvements and tenant origination and absorption costs on the consolidated balance sheets. In February 2017, the FASB issued ASU 2017-05, Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (“Subtopic 610-20”): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets (“ASU 2017-05”), that clarifies that a financial asset is within the scope of Subtopic 610-20 if it meets the definition of an in substance nonfinancial asset and defines the term in substance nonfinancial asset. ASU 2017-05 also clarifies that nonfinancial assets within the scope of Subtopic 610-20 may include nonfinancial assets transferred within a legal entity to a counterparty. Subtopic 610-20, which was issued in May 2014 as part of ASU 2014-09 (discussed above), provides guidance for recognizing gains and losses from the transfer of nonfinancial assets in contracts with noncustomers. An entity is required to apply amendments in ASU 2017-05 at the same time it applies the amendments in ASU 2014-09 (discussed above). ASU 2017-05 requires modified retrospective application and is effective for fiscal years beginning after December 15, 2017, including interim reporting periods within those fiscal years. Early adoption is permitted. The Company adopted ASU 2014-09 and ASU 2017-05 on January 1, 2018, and experienced an impact on the gain recognized related to the sale of the Second Closing Properties (as defined in Note 3). The sale of the Second Closing Properties is considered a partial sale and the Company no longer controls the Second Closing Properties after the sale. The retained noncontrolling interest was recognized at fair value and a full gain on sale was recognized under the new guidance. In May 2017, the FASB issued ASU 2017-09, Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting (“ASU 2017-09”). The FASB issued ASU 2017-09 to provide clarity and reduce both (1) diversity in practice and (2) cost and complexity when applying the guidance in Topic 718, Compensation - Stock Compensation, to a change to the terms or conditions of a share-based payment award. The amendments in ASU 2017-09 provide guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. ASU 2017-09 requires prospective application and is effective for annual periods beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption is permitted. Upon adoption of ASU 2017-09 on January 1, 2018, the Company did not experience a material impact. In July 2018, the FASB issued ASU 2018-11, Leases (Topic 842): Targeted Improvements (“ASU 2018-11”). The FASB issued ASU 2018-11 to clarify ASU 2016-02. The amendments in ASU 2018-11 provide entities with an additional (and optional) transition method to adopt the new leases standard. Under this new transition method, an entity initially applies ASU 2016-02 at the adoption date and recognizes a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. ASU 2018-11 also provides lessors with a practical expedient, by class of underlying asset, to not separate nonlease components from the associated lease component and, instead, to account for those components as a single component if the nonlease components otherwise would be accounted for under the new revenue guidance (Topic 606) and both of the following are met: (1) the timing and pattern of transfer of the nonlease components and associated lease component are the same, and (2) the lease component, if accounted for separately, would be classified as an operating lease. If the nonlease components associated with the lease component are the predominant component of the combined component, an entity is required to account for the combined component in accordance with Topic 606. Otherwise, the entity must account for the combined component as an operating lease in accordance with Topic 842. For entities that have not adopted Topic 842 before the issuance of ASU 2018-11, the effective date and transition requirements for ASU 2018-11 related to separating components of a contract are the same as the effective date and transition requirements in ASU 2016-02. |
Real Estate |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Real Estate [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Real Estate | Real Estate Property Acquisitions During the six months ended June 30, 2018, the Company acquired the following two properties:
As of June 30, 2018, the Company owned 39 multifamily properties, encompassing in the aggregate 10,622 apartment homes and an additional 21,130 square feet of rentable commercial space at two properties. The total purchase price of the Company’s real estate portfolio was $1,131,486,219. As of June 30, 2018 and December 31, 2017, the Company’s portfolio was approximately 94.8% and 93.8% occupied and the average monthly rent was $1,049 and $1,037, respectively. As of June 30, 2018 and December 31, 2017, accumulated depreciation and amortization related to the Company’s consolidated real estate properties and related intangibles were as follows:
Depreciation and amortization expenses were $11,311,894 and $22,202,690 for the three and six months ended June 30, 2018, and $18,048,070 and $36,001,793 for the three and six months ended June 30, 2017, respectively. Depreciation of the Company’s buildings and improvements were $10,989,153 and $21,841,657 for the three and six months ended June 30, 2018, and $18,009,778 and $35,925,209 for the three and six months ended June 30, 2017, respectively. Amortization of the Company’s tenant origination and absorption costs was $284,449 and $284,449 for the three and six months ended June 30, 2018, respectively. There was no amortization of the Company’s tenant origination and absorption costs for the three and six months ended June 30, 2017. Tenant origination and absorption costs had a weighted-average amortization period as of the date of acquisition of less than one year. Amortization of the Company’s other intangible assets was $38,292 and $76,584 for the three and six months ended June 30, 2018, and $38,292 and $76,584 for the three and six months ended June 30, 2017, respectively. The future amortization of the Company’s acquired other intangible assets as of June 30, 2018, and thereafter is as follows:
Operating Leases As of June 30, 2018, the Company’s real estate portfolio comprised 10,622 residential apartment homes and was 96.6% leased by a diverse group of residents. For each of the three and six months ended June 30, 2018 and 2017, the Company’s real estate portfolio earned in excess of 99% and less than 1% of its rental income from residential tenants and commercial office tenants, respectively. The residential tenant lease terms consist of lease durations equal to 12 months or less. The commercial office tenant leases consist of remaining lease durations varying from 0.92 to 6.76 years. Some residential and commercial leases contain provisions to extend the lease agreements, options for early termination after paying a specified penalty and other terms and conditions as negotiated. The Company retains substantially all of the risks and benefits of ownership of the real estate assets leased to tenants. Generally, upon the execution of a lease, the Company requires security deposits from tenants in the form of a cash deposit and/or a letter of credit for commercial tenants. Amounts required as security deposits vary depending upon the terms of the respective leases and the creditworthiness of the tenant, but generally are not significant amounts. Therefore, exposure to credit risk exists to the extent that a receivable from a tenant exceeds the amount of its security deposit. Security deposits received in cash related to tenant leases are included in accounts payable and accrued liabilities in the accompanying consolidated balance sheets and totaled $3,067,404 and $3,339,602 as of June 30, 2018 and December 31, 2017, respectively. The future minimum rental receipts from the Company’s properties under non-cancelable operating leases attributable to commercial office tenants as of June 30, 2018, and thereafter is as follows:
As of June 30, 2018 and December 31, 2017, no tenant represented over 10% of the Company’s annualized base rent and there were no significant industry concentrations with respect to its commercial leases. Joint Venture Arrangement with Blackstone Real Estate Income Trust, Inc. On November 10, 2017, the Company, BREIT Steadfast MF JV LP (the “Joint Venture”), BREIT Steadfast MF Parent LLC (“BREIT LP”) and BREIT Steadfast MF GP LLC (“BREIT GP”, and together with BREIT LP, “BREIT”), executed a Contribution Agreement (the “Contribution Agreement”) whereby the Company agreed to contribute a portfolio of 20 properties owned by the Company to the Joint Venture in exchange for a combination of cash and a 10% ownership interest in the Joint Venture (the “Transaction”). BREIT LP owns a 90% interest in the Joint Venture and BREIT GP serves as the general partner of the Joint Venture. Each of BREIT LP and BREIT GP is a wholly-owned subsidiary of Blackstone Real Estate Income Trust, Inc. SIR LANDS Holdings, LLC, a wholly-owned subsidiary of the Company, holds the Company’s 10% interest in the Joint Venture. The 20 properties contributed by the Company to the Joint Venture consist of properties located in Austin, Dallas and San Antonio, Texas, Nashville, Tennessee and Louisville, Kentucky (the “LANDS Portfolio”). On November 15, 2017 (the “First Closing Date”), the Company, through certain indirect wholly-owned subsidiaries, contributed 12 apartment communities (the “First Closing Properties”) to indirect, wholly-owned subsidiaries of the Joint Venture. On January 31, 2018 (the “Second Closing Date”), the Company, through certain indirect wholly-owned subsidiaries, contributed eight apartment communities (the “Second Closing Properties”) to indirect, wholly-owned subsidiaries of the Joint Venture. For additional information on the Transaction, see Note 4 (Investment in Unconsolidated Joint Venture). The aggregate purchase price of the First Closing Properties was $318,576,792, exclusive of closing costs. On the First Closing Date, the Company sold a 90% interest in the First Closing Properties for $335,430,000, resulting in a gain of $76,135,530, which includes reductions to the net book value of the properties due to historical depreciation and amortization expense. The aggregate purchase price of the Second Closing Properties was $117,240,032, exclusive of closing costs. On the Second Closing Date, the Company sold a 90% interest in the Second Closing Properties for $125,370,000, resulting in a gain of $38,523,427, which includes reductions to the net book value of the properties due to historical depreciation and amortization expense. The purchaser of the First Closing Properties and Second Closing Properties was the Joint Venture. 2018 Property Dispositions The Moorings Apartments On November 30, 2012, the Company, through an indirect wholly owned subsidiary, acquired The Moorings Apartments, a multifamily property located in Roselle, Illinois, containing 216 apartment homes. The purchase price of The Moorings Apartments was $20,250,000, exclusive of closing costs. On January 5, 2018, the Company sold The Moorings Apartments for $28,100,000, resulting in a gain of $9,658,823, which includes reductions to the net book value of the property due to historical depreciation and amortization expense. The purchaser of The Moorings Apartments was not affiliated with the Company or the Advisor. Arrowhead Apartment Homes On November 30, 2012, the Company, through an indirect wholly owned subsidiary, acquired Arrowhead Apartment Homes, a multifamily property located in Palatine, Illinois, containing 200 apartment homes. The purchase price of the Arrowhead Apartment Homes was $16,750,000, exclusive of closing costs. On January 31, 2018, the Company sold the Arrowhead Apartment Homes for $23,600,000, resulting in a gain of $8,928,691, which includes reductions to the net book value of the property due to historical depreciation and amortization expense. The purchaser of the Arrowhead Apartment Homes was not affiliated with the Company or the Advisor. Willow Crossing Apartments On November 20, 2013, the Company, through an indirect wholly owned subsidiary, acquired Willow Crossing Apartments, a multifamily property located in Elk Grove, Illinois, containing 579 apartment homes. The purchase price of the Willow Crossing Apartments was $58,000,000, exclusive of closing costs. On February 28, 2018, the Company sold the Willow Crossing Apartments for $79,000,000, resulting in a gain of $24,136,113, which includes reductions to the net book value of the property due to historical depreciation and amortization expense. The purchaser of the Willow Crossing Apartments was not affiliated with the Company or the Advisor. The results of operations for the three and six months ended June 30, 2018 and 2017, for the disposed properties through the date of sale, including the properties contributed to the Joint Venture, were included in continuing operations on the Company’s consolidated statements of operations and are as follows:
|
Investment in Unconsolidated Joint Venture |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity Method Investments and Joint Ventures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment in Unconsolidated Joint Venture | Investment in Unconsolidated Joint Venture On November 10, 2017, the Company, the Joint Venture, BREIT LP and BREIT GP executed the Contribution Agreement whereby the Company agreed to contribute the LANDS Portfolio to the Joint Venture in exchange for a combination of cash and a 10% ownership interest in the Joint Venture. BREIT LP owns a 90% interest in the Joint Venture and BREIT GP serves as the general partner of the Joint Venture. Each of BREIT LP and BREIT GP is a wholly-owned subsidiary of Blackstone Real Estate Income Trust, Inc. SIR LANDS Holdings, LLC, holds the Company’s 10% interest in the Joint Venture. The Company exercises significant influence, but does not control the Joint Venture. Accordingly, as of the First Closing Date and Second Closing Date, the Company deconsolidated the First Closing Properties and Second Closing Properties and has accounted for its investment in the Joint Venture under the equity method of accounting. Income, losses, contributions and distributions are generally allocated based on the members’ respective equity interests. As of June 30, 2018 and December 31, 2017, the book value of the Company’s investment in the Joint Venture was $13,695,764 and $8,133,156, respectively, which includes $7,640,166 and $5,515,754 of outside basis difference. The outside basis difference represents the Company’s transaction costs related to entering into the Joint Venture. During the three and six months ended June 30, 2018, $216,042 and $474,298 of amortization of this basis difference was included in equity in loss from unconsolidated joint venture on the accompanying consolidated statements of operations. There was no amortization of the outside basis difference during the three and six months ended June 30, 2017. During the three and six months ended June 30, 2018, the Company received distributions of $263,500 and $530,100 related to its investment in the Joint Venture, respectively. No distributions were received during the three and six months ended June 30, 2017. Unaudited financial information for the Joint Venture as of June 30, 2018 and December 31, 2017, and for the three and six months ended June 30, 2018, is summarized below:
|
Other Assets |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Assets | Other Assets As of June 30, 2018 and December 31, 2017, other assets consisted of:
|
Debt |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | Debt Mortgage Notes Payable The following is a summary of mortgage notes payable secured by real property as of June 30, 2018 and December 31, 2017:
_____________________________
Credit Facility On July 29, 2016, nine wholly-owned subsidiaries of the Company entered into the Credit Agreement and a multifamily note with PNC Bank (the Credit Agreement, multifamily note, loan and security agreements, mortgages and guaranty, collectively referred to herein as the “Loan Documents”) that provide for a new credit facility in an amount not to exceed $350,000,000 to refinance certain of the Company’s existing mortgage loans. The credit facility has a maturity date of August 1, 2021, subject to extension, as further described in the Credit Agreement. Advances made under the credit facility are secured by the properties set out in the schedule below (the “Collateral Pool Property”), pursuant to a mortgage deed of trust with the nine wholly-owned subsidiaries of the Company in favor of PNC Bank. The credit facility accrues interest at the one-month London Inter-bank Offered Rate plus (1) the servicing spread of 0.05% and (2) the net spread, based on the debt service coverage ratio, of between 1.73% and 1.93%, as further described in the Credit Agreement. Interest only payments on the credit facility are payable monthly in arrears and are due and payable on the first day of each month, commencing September 1, 2016. The entire outstanding principal balance and any accrued and unpaid interest on the credit facility are due on the maturity date. The Company’s nine wholly-owned subsidiaries may voluntarily prepay all or a portion of the amounts advanced under the Loan Documents. Notwithstanding the foregoing, in the event a Collateral Pool Property is released or the Credit Agreement is terminated, a termination fee is due and payable by the Company’s nine wholly-owned subsidiaries. In certain instances of a breach of the Credit Agreement, the Company guarantees to PNC Bank the full and prompt payment and performance when due of all amounts for which the Company’s nine wholly-owned subsidiaries are personally liable under the Loan Documents, in addition to all costs and expenses incurred by PNC Bank in enforcing such guaranty. Between November 15, 2017 and May 31, 2018, seven of the Collateral Pool Properties were either disposed or refinanced, with the advances made to each of the seven Collateral Pool Properties being repaid in full. As of June 30, 2018 and December 31, 2017, the advances obtained under the credit facility are summarized in the following table:
___________
Maturity and Interest The following is a summary of the Company’s aggregate maturities as of June 30, 2018:
_____________________________
The Company’s notes payable contain customary financial and non-financial debt covenants. As of June 30, 2018 and December 31, 2017, the Company was in compliance with all financial and non-financial debt covenants. For the three and six months ended June 30, 2018, the Company incurred interest expense of $7,855,662 and $15,568,434, respectively. Interest expense for the three and six months ended June 30, 2018, includes amortization of deferred financing costs of $256,743 and $536,980, amortization of loan premiums of $48,326 and $174,140 and net unrealized loss (gain) from the change in fair value of interest rate cap agreements of $41,953 and $(85,307), respectively. For the three and six months ended June 30, 2017, the Company incurred interest expense of $11,260,913 and $22,108,949, respectively. Interest expense for the three and six months ended June 30, 2017 includes amortization of deferred financing costs of $468,011 and $938,707, amortization of loan premiums of $308,639 and $617,277 and net unrealized gain from the change in fair value of interest rate cap agreements of $196,136 and $516,089, respectively. Interest expense of $2,629,096 and $2,766,036 was payable as of June 30, 2018 and December 31, 2017, respectively, and is included in accounts payable and accrued liabilities in the accompanying consolidated balance sheets. |
Stockholders' Equity |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity | Stockholders’ Equity General Under the Company’s Third Articles of Amendment and Restatement (the “Charter”), the total number of shares of capital stock authorized for issuance is 1,100,000,000 shares, consisting of 999,999,000 shares of common stock with a par value of $0.01 per share, 1,000 shares of convertible stock with a par value of $0.01 per share and 100,000,000 shares designated as preferred stock with a par value of $0.01 per share. Common Stock The shares of the Company’s common stock entitle the holders to one vote per share on all matters upon which stockholders are entitled to vote, to receive dividends and other distributions as authorized by the Company’s board of directors in accordance with the Maryland General Corporation Law and to all rights of a stockholder pursuant to the Maryland General Corporation Law. The common stock has no preferences or preemptive, conversion or exchange rights. During 2009, the Company issued 22,223 shares of common stock to the Sponsor for $200,007. From inception to June 30, 2018, the Company had issued 76,732,395 shares of common stock in its Private Offering and Public Offering for offering proceeds of $679,572,220, net of offering costs of $95,845,468, including 4,073,759 shares of common stock pursuant to the DRP, for total proceeds of $39,580,847. Offering costs primarily consisted of selling commissions and dealer manager fees. The Company terminated its Public Offering on December 20, 2013, but continued to offer shares pursuant to the DRP through November 30, 2014. The issuance and vesting activity for the six months ended June 30, 2018, and for the year ended December 31, 2017, for the restricted stock issued to the Company’s independent directors as compensation for services in connection with their re-election to the board of directors at the Company’s annual meeting is as follows:
The weighted average fair value of restricted stock issued to the Company’s independent directors for the six months ended June 30, 2018 and for the year ended December 31, 2017 is as follows:
The shares of restricted common stock vest and become non-forfeitable in four equal annual installments beginning on the date of grant and ending on the third anniversary of the date of grant and will become fully vested and become non-forfeitable on the earlier to occur of (1) the termination of the independent director’s service as a director due to death or disability or (2) a change in control of the Company and as otherwise provided in the Incentive Award Plan, as defined below. Included in general and administrative expenses is $17,295 and $34,590 for the three and six months ended June 30, 2018, and $15,030 and $30,060 for the three and six months ended June 30, 2017, respectively, for compensation expense related to the issuance of restricted common stock. The weighted average remaining term of the restricted common stock is 1.01 years as of June 30, 2018. As of June 30, 2018, the compensation expense related to the issuance of the restricted common stock not vested was $72,418. Convertible Stock During 2009, the Company issued 1,000 shares of Convertible Stock to the Advisor for $1,000. The Convertible Stock will convert into shares of the Company’s common stock if and when: (A) the Company has made total distributions on the then outstanding shares of common stock equal to the original issue price of those shares plus an 8.0% cumulative, non-compounded, annual return on the original issue price of those shares, (B) subject to specified conditions, the Company lists the common stock for trading on a national securities exchange or (C) the Advisory Agreement is terminated or not renewed by the Company (other than for “cause” as defined in the Advisory Agreement). A “listing” will also be deemed to have occurred on the effective date of any merger of the Company in which the consideration received by the holders of the Company’s common stock is the securities of another issuer that are listed on a national securities exchange. Upon conversion, each share of Convertible Stock will convert into a number of shares of common stock equal to 1/1000 of the quotient of (A) 10% of the amount, if any, by which (1) the Company’s “enterprise value” (as defined in the Charter) plus the aggregate value of distributions paid to date on the outstanding shares of common stock exceeds (2) the aggregate purchase price paid by the stockholders for those shares plus an 8.0% cumulative, non-compounded, annual return on the original issue price of those shares, divided by (B) the Company’s enterprise value divided by the number of outstanding shares of common stock, in each case calculated as of the date of the conversion. In the event of a termination or non-renewal of the Advisory Agreement by the Company for cause, the Convertible Stock will be redeemed by the Company for $1.00. Preferred Stock The Charter also provides the Company’s board of directors with the authority to issue one or more classes or series of preferred stock, and prior to the issuance of such shares of preferred stock, the board of directors shall have the power from time to time to classify or reclassify, in one or more series, any unissued shares and designate the preferences, rights and privileges of such shares of preferred stock. The Company’s board of directors is authorized to amend the Charter, without the approval of the stockholders, to increase the aggregate number of authorized shares of capital stock or the number of shares of any class or series that the Company has authority to issue. As of June 30, 2018 and December 31, 2017, no shares of the Company’s preferred stock were issued and outstanding. Distribution Reinvestment Plan The Company’s board of directors had approved the DRP through which common stockholders could elect to reinvest an amount equal to the distributions declared on their shares of common stock in additional shares of the Company’s common stock in lieu of receiving cash distributions. The initial purchase price per share under the DRP was $9.50. Effective September 10, 2012, shares of the Company’s common stock were issued pursuant to the DRP at a price of $9.73 per share. Effective with distributions earned beginning on December 1, 2014, the Company’s board of directors elected to suspend the DRP. As a result, all distributions are paid in cash and not reinvested in shares of the Company’s common stock. The Company’s board of directors may, in its sole discretion, from time to time, reinstate the DRP, although there is no assurance as to if or when this will happen, and change the DRP price based upon changes in the Company’s estimated value per share and other factors that the Company’s board of directors deems relevant. No sales commissions or dealer manager fees were payable on shares sold through the DRP. Share Repurchase Program and Redeemable Common Stock The Company’s share repurchase program may provide an opportunity for stockholders to have their shares of common stock repurchased by the Company, subject to certain restrictions and limitations. No shares can be repurchased under the Company’s share repurchase program until after the first anniversary of the date of purchase of such shares; provided, however, that this holding period does not apply to repurchases requested within two years after the death or disability of a stockholder. The purchase price for shares repurchased under the Company’s share repurchase program prior to April 28, 2018, was as follows:
The Company’s board of directors elected to suspend the Company’s share repurchase program, effective April 28, 2018. The board of directors of the Company subsequently determined to reinstate and amend the terms of the Company’s share repurchase program, effective May 20, 2018. Pursuant to the amended and reinstated share repurchase program, the revised repurchase price is equal to 93% of the most recently publicly disclosed estimated value per share. From May 20, 2018 to June 30, 2018, the share repurchase price was $9.15 per share, which represents 93% of the estimated value per share of $9.84. The share repurchase price is further reduced based on how long the stockholder has held the shares as follows:
________________
The purchase price per share for shares repurchased pursuant to the share repurchase program is further reduced by the aggregate amount of net proceeds per share, if any, distributed to the Company’s stockholders prior to the repurchase date as a result of the sale of one or more of the Company’s assets that constitutes a return of capital distribution as a result of such sales. Repurchases of shares of the Company’s common stock are made quarterly upon written request to the Company at least 15 days prior to the end of the applicable quarter during which the share repurchase program is in effect. Repurchase requests are honored approximately 30 days following the end of the applicable quarter (the “Repurchase Date”). Stockholders may withdraw their repurchase request at any time up to three business days prior to the end of the applicable quarter. During the three and six months ended June 30, 2018, the Company redeemed a total of 218,011 and 399,415 shares with a total redemption value of $2,000,000 and $4,000,000, respectively, and received net requests for the redemption of 955,293 and 1,571,654 shares with a total net redemption value of $8,270,898 and $13,863,033, respectively. During the three and six months ended June 30, 2017, the Company redeemed a total of 180,226 and 364,181 shares with a total redemption value of $2,000,000 and $4,000,000, respectively, and received net requests for the repurchase of 503,205 and 1,022,901 shares with a total net repurchase value of $5,774,695 and $11,741,716. As of June 30, 2018 and 2017, the Company’s total outstanding redemption requests received that were subject to the Company’s limitations on redemptions (discussed below) were 4,272,959 shares and 1,969,057 shares, respectively, with a total net redemption value of $39,527,939 and $22,862,852, respectively. The Company cannot guarantee that the funds set aside for the share repurchase program will be sufficient to accommodate all repurchase requests made in any quarter. To the extent that redemption requests exceed the Company’s limitations on redemptions or the Company does not have sufficient funds available to repurchase all of the shares of the Company’s common stock for which repurchase requests have been submitted in any quarter, priority is given to redemption requests in the case of the death or disability of a stockholder. If the Company repurchases less than all of the shares subject to a repurchase request in any quarter, with respect to any shares which have not been repurchased, the requesting stockholder could (1) withdraw the request for repurchase or (2) ask that the Company honor the request in a future quarter, if any, when such repurchases may be made pursuant to the limitations of the share repurchase program and when sufficient funds were available. Such pending requests are honored among all requests for redemptions in any given redemption period as follows: first, pro rata as to redemptions sought upon a stockholder’s death or disability; and, next, pro rata as to other redemption requests. The Company is not obligated to repurchase shares of the Company’s common stock under the share repurchase program. In no event shall redemptions under the share repurchase program exceed 5% of the weighted average number of shares of the Company’s common stock outstanding during the prior calendar year or the $2,000,000 limit for any quarter put in place by the Company’s board of directors. There is no fee in connection with a repurchase of shares of the Company’s common stock. As of June 30, 2018, the Company has recognized redemptions payable of $2,000,000, which is included in accounts payable and accrued liabilities on the accompanying consolidated balance sheets. The Company’s board of directors may, in its sole discretion, amend, suspend or terminate the share repurchase program at any time upon 30 days’ notice to the Company’s stockholders if it determines that the funds available to fund the share repurchase program are needed for other business or operational purposes or that amendment, suspension or termination of the share repurchase program is in the best interest of the Company’s stockholders. Therefore, stockholders may not have the opportunity to make a repurchase request prior to any potential termination of the Company’s share repurchase program. Distributions Declared Distributions declared (1) accrued daily to stockholders of record as of the close of business on each day, (2) were payable in cumulative amounts on or before the third day of each calendar month with respect to the prior month and (3) were calculated at a rate of $0.001683 per share per day during the three months ended June 30, 2018, which if paid each day over a 365-day period, is equivalent to a 6.0% annualized distribution rate based on a purchase price of $10.24 per share of common stock and were calculated at a rate of $0.001964 per share per day during the three months ended March 31, 2018, which if paid each day over a 365-day period, is equivalent to a 7.0% annualized distribution rate based on a purchase price of $10.24 per share of common stock. Additionally, on April 16, 2018, the Company’s board of directors declared a special distribution in the amount of $1.00 per share, or $75,298,163 in the aggregate, to stockholders of record as of the close of business on April 20, 2018. Distributions declared for the three and six months ended June 30, 2018, were $86,819,112 and $100,139,682, all of which were attributable to cash distributions. Distributions declared for the three and six months ended June 30, 2017, were $13,563,610 and $27,010,732, all of which were attributable to cash distributions. As of June 30, 2018 and December 31, 2017, $3,790,856 and $4,595,301 in distributions declared were payable. Distributions Paid For the three and six months ended June 30, 2018, the Company paid cash distributions of $87,612,706 and $100,944,127, which related to distributions declared for each day in the period from March 1, 2018 through May 31, 2018, and December 1, 2017 through May 31, 2018, respectively, inclusive of the special distribution in the amount of $75,298,163 paid on May 2, 2018, to stockholders of record as of the close of business on April 20, 2018. All such distributions were paid in cash. For the three and six months ended June 30, 2017, the Company paid cash distributions of $13,722,790 and $27,167,402, which related to distributions declared for each day in the period from March 1, 2017 through May 31, 2017, and December 1, 2016 through May 31, 2017, respectively. All such distributions were paid in cash. |
Earnings (Loss) Per Share |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings (Loss) Per Share | Earnings (Loss) Per Share The following table presents a reconciliation of net income (loss) attributable to common stockholders and shares used in calculating basic and diluted earnings (loss) per share (“EPS”) for the three and six months ended June 30, 2018 and 2017:
For the three and six months ended June 30, 2017, the Company excluded all unvested restricted common shares outstanding issued to the Advisor and the Company’s independent directors from the calculation of diluted loss per common share as the effect would have been antidilutive. |
Related Party Arrangements |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Arrangements | Related Party Arrangements The Company has entered into the Advisory Agreement with the Advisor. Pursuant to the Advisory Agreement, the Company is obligated to pay the Advisor specified fees upon the provision of certain services related to the investment of funds in real estate and real estate-related investments, the management of the Company’s investments and for other services (including, but not limited to, the disposition of investments). Subject to the limitations described below, the Company is also obligated to reimburse the Advisor and its affiliates for organization and offering costs incurred by the Advisor and its affiliates on behalf of the Company, and the Company is obligated to reimburse the Advisor and its affiliates for acquisition and origination expenses and certain operating expenses incurred on behalf of the Company or incurred in connection with providing services to the Company. Amounts attributable to the Advisor and its affiliates incurred for the three and six months ended June 30, 2018 and 2017, and amounts that are payable (prepaid) to the Advisor and its affiliates as of June 30, 2018 and December 31, 2017, are as follows:
_____________________________
Investment Management Fee The Company pays the Advisor a monthly investment management fee equal to one-twelfth of 0.80% of (1) the cost of real properties and real estate-related assets acquired directly by the Company or (2) the Company’s allocable cost of each real property or real estate-related asset acquired through a joint venture. The investment management fee is calculated including acquisition fees, acquisition expenses and any debt attributable to such investments, or the Company’s proportionate share thereof in the case of investments made through joint ventures. The cost of real properties and real estate-related assets that have been sold by the Company during the applicable month is excluded from the fee. Acquisition Fees and Expenses The Company pays the Advisor an acquisition fee equal to 2.0% of (1) the cost of investment, as defined in the Advisory Agreement, in connection with the acquisition or origination of any type of real property or real estate-related asset acquired directly by the Company or (2) the Company’s allocable portion of the purchase price in connection with the acquisition or origination of any type of real property or real estate-related asset acquired through a joint venture, including any acquisition and origination expenses and any debt attributable to such investments. In some instances, the Advisor has agreed to reduce the acquisition fee to 0.5% of the cost of investment when funds from the disposition of a prior property are used to fund the acquisition of a real property. In addition to acquisition fees, the Company reimburses the Advisor for amounts directly incurred by the Advisor or its affiliates, including personnel-related costs for acquisition due diligence, legal and non-recurring management services, and amounts the Advisor pays to third parties in connection with the selection, acquisition or development of a property or acquisition of real estate-related assets, whether or not the Company ultimately acquires the property or the real estate-related assets. The Charter limits the Company’s ability to pay acquisition fees if the total of all acquisition fees and expenses relating to the purchase would exceed 6.0% of the contract purchase price. Under the Charter, a majority of the Company’s board of directors, including a majority of the independent directors, is required to approve any acquisition fees (or portion thereof) that would cause the total of all acquisition fees and expenses relating to an acquisition to exceed 6.0% of the contract purchase price. In connection with the purchase of securities, the acquisition fee may be paid to an affiliate of the Advisor that is registered as a Financial Industry Regulatory Authority (“FINRA”) member broker-dealer if applicable FINRA rules would prohibit the payment of the acquisition fee to a firm that is not a registered broker-dealer. Property Management Fees and Expenses The Company has entered into Property Management Agreements with Steadfast Management Company, Inc., an affiliate of the Sponsor (the “Property Manager”), in connection with the acquisition of each of the Company’s properties (other than EBT Lofts, Library Lofts and Stuart Hall Lofts, which are managed by an unaffiliated third-party management company). As of June 30, 2018, the property management fee payable with respect to each property under the Property Management Agreements (each a “Property Management Agreement”) ranged from 2.50% to 3.50% of the annual gross revenue collected, which is usual and customary for comparable property management services rendered to similar properties in similar geographic markets, as determined by the Advisor and approved by a majority of the members of the Company’s board of directors, including a majority of the independent directors. The Property Manager also receives an oversight fee of 1% of gross revenues at certain of the properties at which it does not serve as a property manager. Generally, each Property Management Agreement has an initial one year term and will continue thereafter on a month-to-month basis unless either party gives 60-days’ prior notice of its desire to terminate the Property Management Agreement, provided that the Company may terminate the Property Management Agreement at any time upon a determination of gross negligence, willful misconduct or bad acts of the Property Manager or its employees or upon an uncured breach of the Property Management Agreement upon 30 days’ prior written notice to the Property Manager. In addition to the property management fee, the Property Management Agreements also specify certain other fees payable to the Property Manager or its affiliates, including fees for benefit administration, information technology infrastructure, licenses, support and training services and capital expenditures. The Company also reimburses the Property Manager for the salaries and related benefits of on-site property management employees. Construction Management The Company has entered into Construction Management Agreements with Pacific Coast Land and Construction, Inc., an affiliate of the Sponsor (the “Construction Manager”), in connection with the planned capital improvements and renovation for certain of the Company’s properties. As of June 30, 2018, the construction management fee payable with respect to each property pursuant to the Construction Management Agreements (each a “Construction Management Agreement”) ranged from 6.0% to 12.0% of the costs of the improvements for which the Construction Manager has planning and oversight authority. Generally, each Construction Management Agreement can be terminated by either party with 30 days’ prior written notice to the other party. Construction management fees are capitalized to the respective real estate properties in the period in which they are incurred, as such costs relate to capital improvements and renovations for units taken out of service while they undergo the planned renovation. The Company may also reimburse the Construction Manager for the salaries and related benefits of certain of its employees for time spent working on capital improvements and renovations at its properties. Property Insurance The Company deposits amounts with an affiliate of the Sponsor to fund a prepaid insurance deductible account to cover the cost of required insurance deductibles across all properties of the Company and other affiliated entities. Upon filing a major claim, proceeds from the insurance deductible account may be used by the Company or another affiliate of the Sponsor. In addition, the Company deposits amounts with an affiliate of the Sponsor to cover the cost of property insurance across certain properties of the Company. Other Operating Expense Reimbursement In addition to the various fees paid to the Advisor, the Company is obligated to pay directly or reimburse all expenses incurred by the Advisor in providing services to the Company, including the Company’s allocable share of the Advisor’s overhead, such as rent, employee costs, utilities and information technology costs. The Company will not reimburse the Advisor for employee costs in connection with services for which the Advisor or its affiliates receive acquisition fees or disposition fees or for the salaries the Advisor pays to the Company’s executive officers. The Charter limits the Company’s total operating expenses during any four fiscal quarters to the greater of 2% of the Company’s average invested assets or 25% of the Company’s net income for the same period (the “2%/25% Limitation”). The Company may reimburse the Advisor, at the end of each fiscal quarter, for operating expenses incurred by the Advisor; provided, however, that the Company shall not reimburse the Advisor at the end of any fiscal quarter for operating expenses that exceed the 2%/25% Limitation unless the independent directors have determined that such excess expenses were justified based on unusual and non-recurring factors. The Advisor must reimburse the Company for the amount by which the Company’s operating expenses for the preceding four fiscal quarters then ended exceed the 2%/25% Limitation unless the independent directors have determined that such excess expenses were justified. For purposes of determining the 2%/25% Limitation amount, “average invested assets” means the average monthly book value of the Company’s assets invested directly or indirectly in equity interests and loans secured by real estate during the 12-month period before deducting depreciation, bad debts or other non-cash reserves. “Total operating expenses” means all expenses paid or incurred by the Company that are in any way related to the Company’s operation, including the Company’s allocable share of Advisor overhead and investment management fees, but excluding (a) the expenses of raising capital such as organization and offering expenses, legal, audit, accounting, underwriting, brokerage, listing, registration and other fees, printing and other such expenses and taxes incurred in connection with the issuance, distribution, transfer, listing and registration of shares of the Company’s common stock; (b) interest payments; (c) taxes; (d) non-cash expenditures such as depreciation, amortization and bad debt reserves; (e) reasonable incentive fees based on the gain in the sale of the Company’s assets; (f) acquisition fees and acquisition expenses (including expenses relating to potential acquisitions that the Company does not close); (g) real estate commissions on the resale of investments; and (h) other expenses connected with the acquisition, disposition, management and ownership of investments (including the costs of foreclosure, insurance premiums, legal services, maintenance, repair and improvement of real property). At June 30, 2018, the Company’s total operating expenses, as defined above, did not exceed the 2%/25% Limitation. Disposition Fee The Company pays the Advisor a disposition fee in connection with a sale of a property or real estate-related asset and in the event of the sale of the entire Company (a “Final Liquidity Event”), in either case when the Advisor or its affiliates provides a substantial amount of services as determined by a majority of the Company’s independent directors. With respect to a sale of a property or real estate-related asset, the Company pays the Advisor a disposition fee equal to 1.5% of the contract sales price of the investment sold. With respect to a Final Liquidity Event, the Company will pay the Advisor a disposition fee equal to (i) 0.5% of the total consideration paid in a Final Liquidity Event if the price per share paid to stockholders is less than or equal to $9.00; (ii) 0.75% of the total consideration paid in a Final Liquidity Event if the price per share paid to stockholders is between $9.01 and $10.24; (iii) 1.00% of the total consideration paid in a Final Liquidity Event if the price per share paid to stockholders is between $10.25 and $11.24; (iv) 1.25% of the total consideration paid in a Final Liquidity Event if the price per share paid to stockholders is between $11.25 and $12.00; and (v) 1.50% of the total consideration paid in a Final Liquidity Event if the price per share paid to stockholders is greater than or equal to $12.01. To the extent the disposition fee is paid upon the sale of any assets other than real property, it will be included as an operating expense for purposes of the 2%/25% Limitation. In connection with the sale of securities, the disposition fee may be paid to an affiliate of the Advisor that is registered as a FINRA member broker-dealer if applicable FINRA rules would prohibit the payment of the disposition fee to a firm that is not a registered broker-dealer. The Charter limits the maximum amount of the disposition fees payable to the Advisor for the sale of any real property to the lesser of one-half of the brokerage commission paid or 3% of the contract sales price, but in no event shall the total real estate commissions paid, including any disposition fees payable to the Advisor, exceed 6% of the contract sales price. Loan Coordination Fee From time to time, upon the approval of a majority of independent directors, the Company pays the Advisor a loan coordination fee equal to 0.50% of the amount of debt refinanced. Contribution, Settlement and Release Agreements Certain of the Company’s subsidiaries and the Property Manager were named as defendants in two Texas class action lawsuits alleging violations of the Texas Water Code (collectively, the “Actions”). The Company’s subsidiaries and the Property Manager disputed plaintiffs’ claims in the Actions; however, to avoid the time and expense associated with defending the Actions, the Company’s subsidiaries and other affiliated Steadfast entities (collectively, the “Steadfast Parties”) entered into Settlement Agreements with the plaintiffs that provided for a settlement payment to the class members and a release of claims by plaintiffs and class members against the Steadfast Parties. In connection with the settlement agreements, on April 17, 2017, the Steadfast Parties entered into a contribution, settlement and release agreement whereby all agreed to an allocation of all costs related to the actions and their settlements and a release of all claims a Steadfast Party may have against any other Steadfast Party. The Company’s proportionate share of the settlements was $378,405, which consisted of funds used to pay a portion of (1) the settlement payments to the plaintiffs and class members in the actions and (2) legal costs, less insurance proceeds. |
Incentive Award Plan and Independent Director Compensation |
6 Months Ended |
---|---|
Jun. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Incentive Award Plan and Independent Director Compensation | Incentive Award Plan and Independent Director Compensation The Company has adopted an incentive plan (the “Incentive Award Plan”) that provides for the grant of equity awards to its employees, directors and consultants and those of the Company’s affiliates. The Incentive Award Plan authorizes the grant of non-qualified and incentive stock options, restricted stock awards, restricted stock units, stock appreciation rights, dividend equivalents and other stock-based awards or cash-based awards. No awards have been granted under the Incentive Award Plan as of June 30, 2018 and December 31, 2017, except those awards granted to the independent directors as described below. Under the Company’s independent directors’ compensation plan, which is a sub-plan of the Incentive Award Plan, each of the Company’s then independent directors was entitled to receive 5,000 shares of restricted common stock in connection with the initial meeting of the Company’s full board of directors. The Company’s initial board of directors, and each of the independent directors, agreed to delay the initial grant of restricted stock until the Company raised $2,000,000 in gross offering proceeds in the Private Offering. Each subsequent independent director, if any, that joins the Company’s board of directors would receive 5,000 shares of restricted common stock upon election to the Company’s board of directors. In addition, on the date following an independent director’s re-election to the Company’s board of directors, he or she receives 2,500 shares of restricted common stock. One-fourth of the shares of restricted common stock generally vest and become non-forfeitable upon issuance and the remaining portion will vest in three equal annual installments beginning on the first anniversary of the date of grant and ending on the third anniversary of the date of grant; provided, however, that the restricted stock will become fully vested and become non-forfeitable on the earlier to occur of (1) the termination of the independent director’s service as a director due to his or her death or disability or (2) a change in control of the Company and as otherwise provided in the Incentive Award Plan. The Company recorded stock-based compensation expense of $17,295 and $34,590 for the three and six months ended June 30, 2018, and $15,030 and $30,060 for the three and six months ended June 30, 2017, respectively. |
Commitments and Contingencies |
6 Months Ended |
---|---|
Jun. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Economic Dependency The Company is dependent on the Advisor and its affiliates for certain services that are essential to the Company, including the identification, evaluation, negotiation, purchase and disposition of real estate and real estate-related investments; management of the daily operations of the Company’s real estate and real estate-related investment portfolio; and other general and administrative responsibilities. In the event that these companies are unable to provide the respective services, the Company will be required to obtain such services from other sources. Concentration of Credit Risk The geographic concentration of the Company’s portfolio makes it particularly susceptible to adverse economic developments in the Houston, Texas and Oklahoma City, Oklahoma apartment markets. Any adverse economic or real estate developments in these markets, such as business layoffs or downsizing, relocations of businesses, increased competition from other apartment communities, decrease in demand for apartments or any other changes, could adversely affect the Company’s operating results and its ability to make distributions to stockholders. Environmental As an owner of real estate, the Company is subject to various environmental laws of federal, state and local governments. The Company is not aware of any environmental liability that could have a material adverse effect on its financial condition or results of operations. However, changes in applicable environmental laws and regulations, the uses and conditions of properties in the vicinity of the Company’s properties, the activities of its tenants and other environmental conditions of which the Company is unaware with respect to the properties could result in future environmental liabilities. Legal Matters From time to time, the Company is subject, or party, to legal proceedings that arise in the ordinary course of its business. Management is not aware of any legal proceedings of which the outcome is reasonably likely to have a material adverse effect on the Company’s results of operations or financial condition nor is the Company aware of any such legal proceedings contemplated by government agencies. |
Derivative Financial Instruments |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Financial Instruments | Derivative Financial Instruments The Company uses interest rate derivatives with the objective of managing exposure to interest rate movements thereby minimizing the effect of interest rate changes and the effect they could have on future cash flows. Interest rate cap agreements are used to accomplish this objective. The following table provides the terms of the Company’s interest rate derivative instruments that were in effect at June 30, 2018 and December 31, 2017:
The interest rate cap agreements are not designated as cash flow hedges. Accordingly, the Company records any changes in the fair value of the interest rate cap agreements as interest expense. The change in the fair value of the interest rate cap agreements for the three and six months ended June 30, 2018, resulted in an unrealized (loss) gain of $(41,953) and $85,307, respectively, which is included in interest expense in the accompanying consolidated statements of operations. During the three and six months ended June 30, 2018, the Company acquired interest rate cap agreements of $203,300. No interest rate cap agreements were acquired during the three and six months ended June 30, 2017. The fair value of the interest rate cap agreements of $340,253 and $51,646 as of June 30, 2018 and December 31, 2017, respectively, are included in other assets on the accompanying consolidated balance sheets. |
Subsequent Events |
6 Months Ended |
---|---|
Jun. 30, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Distributions Paid On July 2, 2018, the Company paid distributions of $3,790,856, which related to distributions declared for each day in the period from June 1, 2018 through June 30, 2018. All such distributions were paid in cash. On August 1, 2018, the Company paid distributions of $3,535,232, which related to distributions declared for each day in the period from July 1, 2018 through July 31, 2018. All such distributions were paid in cash. Shares Repurchased On July 31, 2018, the Company repurchased 218,555 shares of its common stock for a total repurchase value of $2,000,000, or $9.15 per share, pursuant to the Company’s share repurchase program. Distributions Declared On August 8, 2018, the Company’s board of directors approved and authorized a daily distribution to stockholders of record as of the close of business on each day of the period commencing on October 1, 2018 and ending on December 31, 2018. The distributions will be equal to $0.001519 per share of the Company’s common stock. The distributions for each record date in October 2018, November 2018 and December 2018 will be paid in November 2018, December 2018 and January 2019, respectively. The distributions will be payable to stockholders from legally available funds therefor. Restricted Stock Grant On August 9, 2018, the Company granted 2,500 shares of restricted common stock to each of its three independent directors upon their re-election to the Company’s board of directors at the 2018 annual meeting of stockholders. |
Summary of Significant Accounting Policies (Policies) |
6 Months Ended | ||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2018 | |||||||||||||
Accounting Policies [Abstract] | |||||||||||||
Principles of Consolidation | Principles of Consolidation and Basis of Presentation The consolidated financial statements include the accounts of the Company, the consolidated variable interest entity (“VIE”) that the Company controls and of which the Company is the primary beneficiary, and the Operating Partnership’s subsidiaries. All significant intercompany balances and transactions are eliminated in consolidation. The financial statements of the Company’s subsidiaries are prepared using accounting policies consistent with those of the Company. The Operating Partnership is a VIE as the limited partner lacks substantive kick-out rights and substantive participating rights. The Company is the primary beneficiary of, and consolidates, the Operating Partnership. |
||||||||||||
Basis of Presentation | The accompanying unaudited consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information as contained within the Financial Accounting Standards Board (“FASB”), Accounting Standards Codification (“ASC”) and the rules and regulations of the SEC, including the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, the unaudited consolidated financial statements do not include all of the information and footnotes required by GAAP for audited financial statements. In the opinion of management, the financial statements for the unaudited interim periods presented include all adjustments that are of a normal and recurring nature and necessary for a fair and consistent presentation of the results of such periods. Operating results for the three and six months ended June 30, 2018, are not necessarily indicative of the results that may be expected for the year ending December 31, 2018. The unaudited consolidated financial statements herein should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017. |
||||||||||||
Use of Estimates | Use of Estimates The preparation of the consolidated financial statements in conformity with GAAP requires the Company to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could materially differ from those estimates. |
||||||||||||
Fair Value Measurements | Fair Value Measurements Under GAAP, the Company is required to measure certain financial instruments at fair value on a recurring basis. In addition, the Company is required to measure other assets and liabilities at fair value on a non-recurring basis (e.g., carrying value of impaired real estate loans receivable and long-lived assets). Fair value is defined as the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The GAAP fair value framework uses a three-tiered approach. Fair value measurements are classified and disclosed in one of the following three categories:
When available, the Company utilizes quoted market prices from an independent third-party source to determine fair value and will classify such items in Level 1 or Level 2. In instances where the market is not active, regardless of the availability of a nonbinding quoted market price, observable inputs might not be relevant and could require the Company to make a significant adjustment to derive a fair value measurement. Additionally, in an inactive market, a market price quoted from an independent third party may rely more on models with inputs based on information available only to that independent third party. When the Company determines the market for a financial instrument owned by the Company to be illiquid or when market transactions for similar instruments do not appear orderly, the Company uses several valuation sources (including internal valuations, discounted cash flow analysis and quoted market prices) and will establish a fair value by assigning weights to the various valuation sources. The following describes the valuation methodologies used by the Company to measure fair value, including an indication of the level in the fair value hierarchy in which each asset or liability is generally classified. Interest rate cap agreements - The Company has entered into certain interest rate cap agreements. These derivatives did not qualify as fair value hedges. Fair value was based on a model-driven valuation using the associated variable rate curve and an implied market volatility, both of which were observable at commonly quoted intervals for the full term of the interest rate cap agreements. Therefore, the Company’s interest rate cap agreements were classified within Level 2 of the fair value hierarchy and are included in other assets in the accompanying consolidated balance sheets. |
||||||||||||
Fair Value of Financial Instruments | Fair Value of Financial Instruments The accompanying consolidated balance sheets include the following financial instruments: cash and cash equivalents, restricted cash, rents and other receivables, accounts payable and accrued liabilities, distributions payable, due to affiliates and notes payable. The Company considers the carrying value of cash and cash equivalents, restricted cash, rents and other receivables, accounts payable and accrued liabilities and distributions payable to approximate the fair value of these financial instruments based on the short duration between origination of the instruments and their expected realization. The fair value of amounts due to affiliates is not determinable due to the related party nature of such amounts. The fair value of the notes payable is estimated using a discounted cash flow analysis using borrowing rates available to the Company for debt instruments with similar terms and maturities. |
||||||||||||
Distribution Policy | Distribution Policy The Company has elected to be taxed as, and qualifies as, a REIT beginning with its taxable year ending December 31, 2010. To maintain its qualification as a REIT, the Company intends to make distributions each taxable year equal to at least 90% of its REIT taxable income (which is determined without regard to the dividends paid deduction or net capital gain and which does not necessarily equal net income as calculated in accordance with GAAP). Distributions during the three months ended June 30, 2018 were based on daily record dates and calculated at a rate of $0.001683 per share per day. Distributions were based on daily record dates and calculated at a rate of $0.001964 per share per day during the three months ended March 31, 2018 and six months ended June 30, 2017. Each day during the six months ended June 30, 2018 and 2017, was a distribution record date. Distributions to stockholders are determined by the board of directors of the Company and are dependent upon a number of factors relating to the Company, including funds available for the payment of distributions, financial condition, the timing of property acquisitions, capital expenditure requirements and annual distribution requirements in order for the Company to qualify as a REIT under the Internal Revenue Code. |
||||||||||||
Per Share Data | Per Share Data Basic earnings (loss) per share attributable to common stockholders for all periods presented are computed by dividing net income (loss) by the weighted average number of shares of the Company’s common stock outstanding during the period. Diluted earnings (loss) per share is computed based on the weighted average number of shares of the Company’s common stock and all potentially dilutive securities, if any. Distributions declared per common share assume each share was issued and outstanding each day during the period. Nonvested shares of the Company’s restricted common stock give rise to potentially dilutive shares of the Company’s common stock. In accordance with FASB ASC Topic 260-10-45, Earnings Per Share, the Company uses the two-class method to calculate earnings (loss) per share. Basic earnings (loss) per share is calculated based on dividends declared and the rights of common shares and participating securities in any undistributed earnings, which represents net income (loss) remaining after deduction of dividends declared during the period. The undistributed earnings (loss) are allocated to all outstanding common shares based on the relative percentage of each class of shares. The Company does not have any participating securities outstanding other than the shares of common stock and the unvested restricted common stock during the periods presented. Earnings (loss) attributable to the unvested restricted common stock are deducted from earnings (loss) in the computation of per share amounts where applicable. |
||||||||||||
Segment Disclosure | Segment Disclosure The Company has determined that it has one reportable segment with activities related to investing in multifamily properties. The Company’s investments in real estate are in different geographic regions, and management evaluates operating performance on an individual asset level. However, as each of the Company’s assets has similar economic characteristics, tenants and products and services, its assets have been aggregated into one reportable segment. |
||||||||||||
Recently Issued Accounting Standards Updates | Recent Accounting Pronouncements In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”). ASU 2014-09 requires an entity to recognize the revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. ASU 2014-09 supersedes the revenue requirements in Revenue Recognition (Topic 605) and most industry-specific guidance throughout the Industry Topics of the Codification. ASU 2014-09 does not apply to lease contracts within the scope of Leases (Topic 840). In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606), which delayed the effective date of ASU 2014-09 by one year, which resulted in ASU 2014-09 being effective for fiscal years, and interim periods within those years, beginning after December 15, 2017, and is to be applied retrospectively. Early adoption is permitted, but can be no earlier than the original public entity effective date of fiscal years, and interim periods within those years, beginning after December 15, 2016. The Company selected the modified retrospective transition method with a cumulative effect recognized as of the date of adoption and adopted ASU 2014-09 effective January 1, 2018. The Company identified limited sources of revenues from non-lease components, and the Company did not experience a material impact on its revenue recognition in the consolidated financial statements upon adoption. Additionally, there was no impact to the Company’s recognition of rental revenue, as rental revenue from leasing arrangements was specifically excluded from ASU 2014-09. In February 2016, the FASB issued ASU 2016-02, Leases, (“ASU 2016-02”), amending the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets and making targeted changes to lessor accounting. ASU 2016-02 requires a modified retrospective transition approach. ASU 2016-02 will be effective in the first quarter of 2019 and allows for early adoption. The Company is evaluating the impact of ASU 2016-02 on its leases both as it relates to the Company acting as a lessor and as a lessee. Based on the preliminary results of its evaluation, as it relates to the former, the Company does not expect any material impact on the recognition of leases in the consolidated financial statements because under ASU 2016-02, lessors will continue to account for leases using an approach that is substantially equivalent to existing guidance for sales-type leases, direct financing leases, and operating leases. As it relates to the latter, the Company does not expect a material impact on the recognition of leases in the consolidated financial statements because the quantity of leased equipment by the Company is limited. The Company is finalizing its evaluation of ASU 2016-02 and plans to adopt ASU 2016-02 on January 1, 2019. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (“ASU 2016-18”). ASU 2016-18 requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, restricted cash and restricted cash equivalents. Therefore, amounts generally described as restricted cash should be included with cash and cash equivalents when reconciling the beginning of period and end of period total amounts shown on the statement of cash flows. ASU 2016-18 is effective for annual periods beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption is permitted. The Company adopted this guidance January 1, 2018 and applied it retrospectively. As a result of adopting ASU 2016-18, the Company began presenting restricted cash along with cash and cash equivalents in its consolidated statements of cash flows. In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the definition of business (“ASU 2017-01”), that clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of businesses. ASU 2017-01 provides a screen to determine when a set is not a business. If the screen is not met, it (1) requires that to be considered a business, a set must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create output and (2) removes the evaluation of whether a market participant could replace the missing elements. Upon adoption of ASU 2017-01 during the year ended December 31, 2017, the Company did not experience a material impact. The Company capitalized $1,186,062 of acquisition fees and expenses on the consolidated balance sheet as of June 30, 2018 related to its multifamily property acquisitions in 2018. Acquisition fees and acquisition expenses were included in fees to affiliates and acquisition costs, respectively, on the consolidated statements of operations prior to the adoption of this guidance. Upon adoption of ASU 2017-01, all such costs are included in the purchase price that is allocated between land, buildings and improvements and tenant origination and absorption costs on the consolidated balance sheets. In February 2017, the FASB issued ASU 2017-05, Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (“Subtopic 610-20”): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets (“ASU 2017-05”), that clarifies that a financial asset is within the scope of Subtopic 610-20 if it meets the definition of an in substance nonfinancial asset and defines the term in substance nonfinancial asset. ASU 2017-05 also clarifies that nonfinancial assets within the scope of Subtopic 610-20 may include nonfinancial assets transferred within a legal entity to a counterparty. Subtopic 610-20, which was issued in May 2014 as part of ASU 2014-09 (discussed above), provides guidance for recognizing gains and losses from the transfer of nonfinancial assets in contracts with noncustomers. An entity is required to apply amendments in ASU 2017-05 at the same time it applies the amendments in ASU 2014-09 (discussed above). ASU 2017-05 requires modified retrospective application and is effective for fiscal years beginning after December 15, 2017, including interim reporting periods within those fiscal years. Early adoption is permitted. The Company adopted ASU 2014-09 and ASU 2017-05 on January 1, 2018, and experienced an impact on the gain recognized related to the sale of the Second Closing Properties (as defined in Note 3). The sale of the Second Closing Properties is considered a partial sale and the Company no longer controls the Second Closing Properties after the sale. The retained noncontrolling interest was recognized at fair value and a full gain on sale was recognized under the new guidance. In May 2017, the FASB issued ASU 2017-09, Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting (“ASU 2017-09”). The FASB issued ASU 2017-09 to provide clarity and reduce both (1) diversity in practice and (2) cost and complexity when applying the guidance in Topic 718, Compensation - Stock Compensation, to a change to the terms or conditions of a share-based payment award. The amendments in ASU 2017-09 provide guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. ASU 2017-09 requires prospective application and is effective for annual periods beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption is permitted. Upon adoption of ASU 2017-09 on January 1, 2018, the Company did not experience a material impact. In July 2018, the FASB issued ASU 2018-11, Leases (Topic 842): Targeted Improvements (“ASU 2018-11”). The FASB issued ASU 2018-11 to clarify ASU 2016-02. The amendments in ASU 2018-11 provide entities with an additional (and optional) transition method to adopt the new leases standard. Under this new transition method, an entity initially applies ASU 2016-02 at the adoption date and recognizes a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. ASU 2018-11 also provides lessors with a practical expedient, by class of underlying asset, to not separate nonlease components from the associated lease component and, instead, to account for those components as a single component if the nonlease components otherwise would be accounted for under the new revenue guidance (Topic 606) and both of the following are met: (1) the timing and pattern of transfer of the nonlease components and associated lease component are the same, and (2) the lease component, if accounted for separately, would be classified as an operating lease. If the nonlease components associated with the lease component are the predominant component of the combined component, an entity is required to account for the combined component in accordance with Topic 606. Otherwise, the entity must account for the combined component as an operating lease in accordance with Topic 842. For entities that have not adopted Topic 842 before the issuance of ASU 2018-11, the effective date and transition requirements for ASU 2018-11 related to separating components of a contract are the same as the effective date and transition requirements in ASU 2016-02. |
Summary of Significant Accounting Policies (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restrictions on Cash and Cash Equivalents [Table Text Block] | The following table represents the components of the cash, cash equivalents and restricted cash presented on the accompanying consolidated statements of cash flows for the six months ended June 30, 2018 and 2017:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Assets Required to be Measured at Fair Value on a Recurring Basis | The following table reflects the Company’s assets required to be measured at fair value on a recurring basis on the consolidated balance sheets:
|
Real Estate (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Real Estate [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block] | During the six months ended June 30, 2018, the Company acquired the following two properties:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accumulated Depreciation and Amortization Related to the Consolidated Real Estate Properties and Related Intangibles | As of June 30, 2018 and December 31, 2017, accumulated depreciation and amortization related to the Company’s consolidated real estate properties and related intangibles were as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Future Amortization of Acquired Other Intangible Assets | The future amortization of the Company’s acquired other intangible assets as of June 30, 2018, and thereafter is as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Future Minimum Rental Receipts from Properties under Non-cancelable Operating Leases Attributable to Commercial Office Tenants | The future minimum rental receipts from the Company’s properties under non-cancelable operating leases attributable to commercial office tenants as of June 30, 2018, and thereafter is as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Property Dispositions | The results of operations for the three and six months ended June 30, 2018 and 2017, for the disposed properties through the date of sale, including the properties contributed to the Joint Venture, were included in continuing operations on the Company’s consolidated statements of operations and are as follows:
|
Investment in Unconsolidated Joint Venture (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity Method Investments and Joint Ventures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summarized Financial Information of Joint Venture | Unaudited financial information for the Joint Venture as of June 30, 2018 and December 31, 2017, and for the three and six months ended June 30, 2018, is summarized below:
|
Other Assets (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Deferred Financing Costs and Other Assets, Net of Accumulated Amortization | As of June 30, 2018 and December 31, 2017, other assets consisted of:
|
Debt (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Notes Payable Secured by Real Property | The following is a summary of mortgage notes payable secured by real property as of June 30, 2018 and December 31, 2017:
_____________________________
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Revolving Credit Facility Advances | As of June 30, 2018 and December 31, 2017, the advances obtained under the credit facility are summarized in the following table:
___________
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Aggregate Maturities | The following is a summary of the Company’s aggregate maturities as of June 30, 2018:
_____________________________
|
Stockholders' Equity (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Restricted Stock Issued to Independent Directors as Compensation | The issuance and vesting activity for the six months ended June 30, 2018, and for the year ended December 31, 2017, for the restricted stock issued to the Company’s independent directors as compensation for services in connection with their re-election to the board of directors at the Company’s annual meeting is as follows:
The weighted average fair value of restricted stock issued to the Company’s independent directors for the six months ended June 30, 2018 and for the year ended December 31, 2017 is as follows:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Repurchase Prices Under Share Repurchase Plan | The purchase price for shares repurchased under the Company’s share repurchase program prior to April 28, 2018, was as follows:
The Company’s board of directors elected to suspend the Company’s share repurchase program, effective April 28, 2018. The board of directors of the Company subsequently determined to reinstate and amend the terms of the Company’s share repurchase program, effective May 20, 2018. Pursuant to the amended and reinstated share repurchase program, the revised repurchase price is equal to 93% of the most recently publicly disclosed estimated value per share. From May 20, 2018 to June 30, 2018, the share repurchase price was $9.15 per share, which represents 93% of the estimated value per share of $9.84. The share repurchase price is further reduced based on how long the stockholder has held the shares as follows:
________________
|
Earnings (Loss) Per Share (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Reconciliation of Net Loss Attributable to Common Stockholders and Shares used in Calculating Basic and Diluted Earnings (Loss) Per Share | The following table presents a reconciliation of net income (loss) attributable to common stockholders and shares used in calculating basic and diluted earnings (loss) per share (“EPS”) for the three and six months ended June 30, 2018 and 2017:
|
Related Party Arrangements (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Amounts Attributable to the Advisor and its Affiliates | Amounts attributable to the Advisor and its affiliates incurred for the three and six months ended June 30, 2018 and 2017, and amounts that are payable (prepaid) to the Advisor and its affiliates as of June 30, 2018 and December 31, 2017, are as follows:
_____________________________
|
Derivative Financial Instruments (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Interest Rate Derivative Instruments | The following table provides the terms of the Company’s interest rate derivative instruments that were in effect at June 30, 2018 and December 31, 2017:
|
Organization and Business - Private Offering (Details) - USD ($) |
6 Months Ended | 9 Months Ended | |
---|---|---|---|
Jun. 30, 2018 |
Jul. 09, 2010 |
Oct. 13, 2009 |
|
Private Offering [Member] | |||
Class of Stock [Line Items] | |||
Issuance of common stock | $ 2,000,000 | ||
Common Stock [Member] | |||
Class of Stock [Line Items] | |||
Share price (in dollars per share) | $ 10.24 | ||
Common Stock [Member] | Private Offering [Member] | |||
Class of Stock [Line Items] | |||
Value of shares in private offering | $ 94,000,000 | ||
Share price (in dollars per share) | $ 9.4 | ||
Issuance of common stock (in shares) | 637,279 | ||
Issuance of common stock | $ 5,844,325 |
Summary of Significant Accounting Policies - Summary of Assets Required to be Measured at Fair Value on a Recurring Basis (Details) - Interest Rate Cap [Member] - Fair Value, Measurements, Recurring [Member] - USD ($) |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Level 1 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Interest rate cap agreements | $ 0 | $ 0 |
Level 2 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Interest rate cap agreements | 340,253 | 51,646 |
Level 3 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Interest rate cap agreements | $ 0 | $ 0 |
Summary of Significant Accounting Policies - Fair Value of Financial Instruments (Details) - USD ($) |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Mortgage notes payable, net | $ 719,338,161 | $ 625,302,105 |
Estimate of Fair Value Measurement [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Mortgage notes payable at fair value | 764,503,455 | 878,004,294 |
Reported Value Measurement [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Mortgage notes payable, net | $ 771,642,042 | $ 875,785,938 |
Summary of Significant Accounting Policies - Restricted Cash (Details) - USD ($) |
Jun. 30, 2018 |
Dec. 31, 2017 |
Jun. 30, 2017 |
Dec. 31, 2016 |
---|---|---|---|---|
Accounting Policies [Abstract] | ||||
Restricted cash | $ 24,186,419 | $ 31,005,231 | $ 20,224,600 | |
Restricted cash held in qualified intermediaries | 12,276,118 | 17,197,810 | ||
Restricted cash impounds set aside for future property taxes, property insurance payments, and tenant improvements as required by lenders | 11,910,301 | 13,807,421 | ||
Restricted held in real estate assets held for sale | 2,862,292 | |||
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents [Abstract] | ||||
Cash and cash equivalents | 91,588,750 | 171,228,485 | 48,948,868 | |
Restricted cash | 24,186,419 | 31,005,231 | 20,224,600 | |
Total cash, cash equivalents and restricted cash | $ 115,775,169 | $ 205,096,008 | $ 69,173,468 | $ 93,777,878 |
Summary of Significant Accounting Policies - Distribution Policy (Details) - $ / shares |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2018 |
Mar. 31, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Accounting Policies [Abstract] | |||||
Common share, distribution rate per share per day, declared (in dollars per share) | $ 0.001683 | $ 0.001964 | $ 0.001964 | ||
Distributions declared per common share (in dollars per share) | $ 1.153 | $ 0.179 | $ 1.33 | $ 0.355 |
Summary of Significant Accounting Policies - Segment Disclosure (Details) |
6 Months Ended |
---|---|
Jun. 30, 2018
segment
| |
Accounting Policies [Abstract] | |
Number of reportable segments | 1 |
Summary of Significant Accounting Policies - Recently Issued Accounting Standards (Details) - USD ($) |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Tenant origination and absorption costs | $ 1,766,904 | $ 0 |
Accounting Standards Update 2017-01 [Member] | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Tenant origination and absorption costs | $ 1,186,062 |
Real Estate - Schedule of Purchase Price Allocation (Details) |
Jun. 30, 2018
USD ($)
apartment
|
---|---|
Business Acquisition [Line Items] | |
Units | apartment | 744 |
Land | $ 19,070,176 |
Buildings and Improvements | 114,648,982 |
Tenant Origination and Absorption Costs | 1,766,904 |
Total Purchase Price | $ 135,486,062 |
Double Creek Flats [Member] | |
Business Acquisition [Line Items] | |
Units | apartment | 240 |
Land | $ 1,306,880 |
Buildings and Improvements | 30,081,288 |
Tenant Origination and Absorption Costs | 463,911 |
Total Purchase Price | $ 31,852,079 |
Jefferson at Perimeter Apartments [Member] | |
Business Acquisition [Line Items] | |
Units | apartment | 504 |
Land | $ 17,763,296 |
Buildings and Improvements | 84,567,694 |
Tenant Origination and Absorption Costs | 1,302,993 |
Total Purchase Price | $ 103,633,983 |
Real Estate - Schedule of Future Amortization of Acquired Other Intangible Assets (Details) - Other Intangible Assets [Member] |
Jun. 30, 2018
USD ($)
|
---|---|
Finite-Lived Intangible Assets [Line Items] | |
July 1 through December 31, 2018 | $ 76,584 |
2018 | 153,168 |
2019 | 153,168 |
2020 | 153,168 |
2021 | 153,168 |
Thereafter | 1,179,224 |
Future amortization of acquired other intangible assets | $ 1,868,480 |
Real Estate - Schedule of Future Minimum Rental Receipts from Properties under Non-cancelable Operating Leases Attributable to Commercial Office Tenants (Details) |
Jun. 30, 2018
USD ($)
|
---|---|
Real Estate [Abstract] | |
July 1 through December 31, 2018 | $ 130,002 |
2018 | 180,858 |
2019 | 74,313 |
2020 | 76,535 |
2021 | 76,535 |
Thereafter | 185,501 |
Total future minimum rental receipts | $ 723,744 |
Investment in Unconsolidated Joint Venture - Narrative (Details) - USD ($) |
3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
Nov. 10, 2017 |
Jun. 30, 2018 |
Mar. 31, 2018 |
Jun. 30, 2018 |
Jun. 30, 2017 |
Dec. 31, 2017 |
|
Schedule of Equity Method Investments [Line Items] | ||||||
Cash distributions from unconsolidated joint venture | $ 263,500 | $ 530,100 | $ 0 | |||
BREIT Steadfast MF JV LP [Member] | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Noncash or Part Noncash Acquisition, Interest Acquired | 10.00% | |||||
Book value of joint venture | $ 13,695,764 | 13,695,764 | $ 8,133,156 | |||
Outside difference | 7,640,166 | 7,640,166 | $ 5,515,754 | |||
Amortization of the basis difference | $ 216,042 | $ 216,042 | $ 474,298 | |||
BREIT LP [Member] | BREIT Steadfast MF JV LP [Member] | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Noncash or Part Noncash Acquisition, Interest Acquired | 90.00% |
Other Assets (Details) - USD ($) |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Prepaid expenses | $ 491,454 | $ 2,132,212 |
Interest rate cap agreements | 340,253 | 51,646 |
Deposits | 1,008,785 | 1,074,726 |
Other assets | $ 1,840,492 | $ 3,258,584 |
Investment in Unconsolidated Joint Venture - Schedule of Financial Information of Joint Venture (Details) - USD ($) |
3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
Jun. 30, 2018 |
Mar. 31, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
Dec. 31, 2017 |
|
Company's Proportional Share: | ||||||
Equity in loss of unconsolidated joint venture | $ (1,173,099) | $ 0 | $ (2,814,504) | $ 0 | ||
BREIT Steadfast MF JV LP [Member] | ||||||
Assets: | ||||||
Real estate assets, net | 492,774,957 | 492,774,957 | $ 374,277,205 | |||
Other assets | 22,170,584 | 22,170,584 | 15,328,440 | |||
Total assets | 514,945,541 | 514,945,541 | 389,605,645 | |||
Liabilities and equity: | ||||||
Notes payable, net | 341,211,418 | 341,211,418 | 264,558,057 | |||
Other liabilities | 22,211,163 | 22,211,163 | 11,525,292 | |||
Company’s capital | 15,152,291 | 15,152,291 | 11,352,230 | |||
Other partner’s capital | 136,370,669 | 136,370,669 | 102,170,066 | |||
Total liabilities and equity | 514,945,541 | 514,945,541 | $ 389,605,645 | |||
Income Statement: | ||||||
Revenues | 15,542,460 | 29,212,188 | ||||
Expenses | 25,113,025 | 52,614,244 | ||||
Net loss | (9,570,565) | (23,402,056) | ||||
Company's Proportional Share: | ||||||
Company’s proportional net loss | (957,057) | (2,340,206) | ||||
Amortization of outside basis | (216,042) | $ (216,042) | (474,298) | |||
Equity in loss of unconsolidated joint venture | $ (1,173,099) | $ (2,814,504) |
Debt - Summary of Debt Premiums and Discounts (Details) - Notes Payable to Banks [Member] - USD ($) |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Debt Instrument [Line Items] | ||
Accumulated amortization, debt premiums | $ 951,914 | $ 2,468,041 |
Accumulated amortization, debt issuance costs | $ 3,133,898 | $ 3,951,049 |
Debt - Summary of Aggregate Maturities (Details) |
Jun. 30, 2018
USD ($)
|
---|---|
Debt Disclosure [Abstract] | |
Total | $ 776,209,375 |
Remainder of 2018 | 11,183,085 |
2017 | 59,094,341 |
2018 | 53,820,140 |
2019 | 73,610,006 |
2020 | 31,899,158 |
Thereafter | $ 546,602,645 |
Stockholders' Equity - General (Details) - $ / shares |
6 Months Ended | 12 Months Ended | |
---|---|---|---|
Jun. 30, 2018 |
Dec. 31, 2009 |
Dec. 31, 2017 |
|
Class of Stock [Line Items] | |||
Common and preferred stock, shares authorized (in shares) | 1,100,000,000 | ||
Preferred stock, shares authorized (in shares) | 100,000,000 | 100,000,000 | |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | |
Common Stock [Member] | |||
Class of Stock [Line Items] | |||
Common stock, shares authorized (in shares) | 999,999,000 | 999,999,000 | |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | |
Convertible Stock [Member] | |||
Class of Stock [Line Items] | |||
Common stock, shares authorized (in shares) | 1,000 | 1,000 | |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | |
Convertible Stock [Member] | Steadfast Income Advisor, LLC [Member] | |||
Class of Stock [Line Items] | |||
Issuance of common stock (in shares) | 1,000 | 1,000 |
Stockholders' Equity - Schedule of Restricted Stock Issued to Independent Directors as Compensation (Details) - Restricted Stock [Member] - $ / shares |
6 Months Ended | |
---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||
Nonvested shares at the beginning of the period (in shares) | 11,875 | 11,875 |
Granted shares (in shares) | 0 | 7,500 |
Vested shares (in shares) | 0 | (7,500) |
Nonvested shares at the end of the period (in shares) | 11,875 | |
Director [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||
Weighted Average Fair Value (in dollars per share) | $ 11.65 |
Stockholders' Equity - Convertible Stock (Details) - USD ($) |
6 Months Ended | 12 Months Ended |
---|---|---|
Jun. 30, 2018 |
Dec. 31, 2009 |
|
Class of Stock [Line Items] | ||
Common stock, basis of conversion, percentage of annual return on original issue price of shares | 8.00% | |
Common stock, conversion basis, percent enterprise value | 10.00% | |
Steadfast Income Advisor, LLC [Member] | Convertible Stock [Member] | ||
Class of Stock [Line Items] | ||
Issuance of common stock (in shares) | 1,000 | 1,000 |
Steadfast Income Advisor, LLC [Member] | Steadfast Income Advisor, LLC [Member] | Convertible Stock [Member] | ||
Class of Stock [Line Items] | ||
Common stock, basis of conversion, percentage of annual return on original issue price of shares | 8.00% | |
Conversion basis, multiplier | 0.001 | |
Convertible common stock, redemption amount | $ 1 |
Stockholders' Equity - Preferred Stock (Details) |
6 Months Ended | |
---|---|---|
Jun. 30, 2018
class
shares
|
Dec. 31, 2017
shares
|
|
Equity [Abstract] | ||
Preferred stock, number of classes or series the Board of Directors is authorized to classify or reclassify | class | 1 | |
Preferred stock, number of classes or series the Board of Directors is authorized to issue | class | 1 | |
Preferred stock, shares outstanding (in shares) | shares | 0 | 0 |
Preferred stock, shares issued (in shares) | shares | 0 | 0 |
Stockholders' Equity - Distribution Reinvestment Plan (Details) - Distribution Reinvestment Plan [Member] - USD ($) |
Jun. 30, 2018 |
Sep. 10, 2012 |
Jul. 23, 2009 |
---|---|---|---|
Class of Stock [Line Items] | |||
Share price (in dollars per share) | $ 9.73 | $ 9.5 | |
Sales commissions or dealer manager fees payable on shares sold under the plan | $ 0 |
Stockholders' Equity - Schedule of Repurchase Prices Under Share Repurchase Program (Details) - Share Repurchase Program [Member] - Common Stock [Member] |
6 Months Ended |
---|---|
Jun. 30, 2018 | |
Class of Stock [Line Items] | |
Stock repurchase plan, repurchase price percentage, after primary offering, less than 1 year | 0.00% |
Stock repurchase plan, repurchase price percentage, after primary offering, anniversary year 1 | 92.50% |
Stock repurchase plan, repurchase price percentage, after primary offering, anniversary year 2 | 95.00% |
Stock repurchase plan, repurchase price percentage, after primary offering, anniversary year 3 | 97.50% |
Stock repurchase plan, repurchase price percentage, after primary offering, anniversary year 4 | 100.00% |
Stockholders' Equity - Schedule of Repurchase Prices Under Share Repurchase Program (Footnote) (Details) |
6 Months Ended |
---|---|
Jun. 30, 2018 | |
Common Stock [Member] | Share Repurchase Program [Member] | |
Class of Stock [Line Items] | |
Required holding period to be eligible to redeem shares under share repurchase plan | 1 year |
Stockholders' Equity - Distributions Paid (Details) - USD ($) |
3 Months Ended | 6 Months Ended | 108 Months Ended | ||
---|---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
Dec. 31, 2017 |
|
Class of Stock [Line Items] | |||||
Payments of ordinary dividends, common stock | $ 87,612,706 | $ 13,722,790 | $ 100,944,127 | $ 27,167,402 | |
Stock issued during period, dividend reinvestment plan (in shares) | 4,073,759 | ||||
Proceeds from issuance of common stock, dividend reinvestment plan | $ 39,580,847 |
Earnings (Loss) Per Share (Details) - USD ($) |
3 Months Ended | 6 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
Dec. 31, 2017 |
|
Earnings Per Share [Abstract] | |||||
Net income (loss) attributable to the Company | $ (7,965,511) | $ (5,656,573) | $ 65,314,517 | $ (11,301,448) | $ 72,473,867 |
Less: dividends declared on participating securities | 1,819 | 2,122 | 3,618 | 4,221 | |
Net income (loss) attributable to common stockholders | $ (7,967,330) | $ (5,658,695) | $ 65,310,899 | $ (11,305,669) | |
Weighted average number of common shares outstanding — basic (in shares) | 75,212,006 | 75,878,088 | 75,277,570 | 75,969,547 | |
Weighted average number of common shares outstanding — diluted (in shares) | 75,223,881 | 75,878,088 | 75,289,445 | 75,969,547 | |
Income (loss) per common share — basic and diluted (in dollars per share) | $ (0.11) | $ (0.07) | $ 0.87 | $ (0.15) |
Related Party Arrangements - Investment Management Fee (Details) |
6 Months Ended |
---|---|
Jun. 30, 2018 | |
Steadfast Income Advisor, LLC [Member] | Steadfast Income Advisor, LLC [Member] | Investment Management Fees [Member] | |
Related Party Transaction [Line Items] | |
Investment management monthly fee, percentage of real properties or related assets acquired | 0.06667% |
Related Party Arrangements - Acquisition Fees and Expenses (Details) - Steadfast Income Advisor, LLC [Member] - Steadfast Income Advisor, LLC [Member] - Acquisition Fees and Expenses [Member] |
6 Months Ended |
---|---|
Jun. 30, 2018 | |
Related Party Transaction [Line Items] | |
Acquisition fee, percentage of purchase price of real property or related asset | 2.00% |
Acquisition fees and expenses, maximum, percentage of contract purchase price | 6.00% |
Related Party Arrangements - Construction Management Fees (Details) - Affiliated Entity [Member] - Pacific Coast Land & Construction, Inc. [Member] - Construction Management Agreement [Member] |
6 Months Ended |
---|---|
Jun. 30, 2018 | |
Related Party Transaction [Line Items] | |
Construction management agreement, termination notification period | 30 days |
Minimum [Member] | |
Related Party Transaction [Line Items] | |
Construction management fee, percent | 6.00% |
Maximum [Member] | |
Related Party Transaction [Line Items] | |
Construction management fee, percent | 12.00% |
Related Party Arrangements - Other Operating Expense Reimbursements (Details) - Steadfast Income Advisor, LLC [Member] - Steadfast Income Advisor, LLC [Member] - Other Operating Expense Reimbursement [Member] |
6 Months Ended |
---|---|
Jun. 30, 2018
quarter
| |
Related Party Transaction [Line Items] | |
Operating expenses limited, number of quarters | 4 |
Other operating expense reimbursement, percentage of average invested assets, threshold | 2.00% |
Other operating expense reimbursement, percentage of net income, threshold | 25.00% |
Average invested assets calculation period | 12 months |
Related Party Arrangements - Loan Coordination Fee (Details) |
6 Months Ended |
---|---|
Jun. 30, 2018 | |
Steadfast Income Advisor, LLC and Affiliates [Member] | Steadfast Income Advisor, LLC [Member] | General and Administrative Expense [Member] | Loan coordination fee [Member] | |
Related Party Transaction [Line Items] | |
Loan coordination fee, percentage | 0.50% |
Related Party Arrangements - Contributions, Settlement and Release Agreements (Details) - Company Subsidiaries and Property Manager [Member] - Texas Water Code [Member] |
6 Months Ended |
---|---|
Jun. 30, 2018
USD ($)
lawsuit
| |
Loss Contingencies [Line Items] | |
Number of class action lawsuits | lawsuit | 2 |
Litigation settlement amount | $ | $ 378,405 |
Derivative Financial Instruments - Schedule of Interest Rate Derivative Instruments (Details) - Interest Rate Cap [Member] - Cash Flow Hedging [Member] - Not Designated as Hedging Instrument [Member] |
Jun. 30, 2018
USD ($)
instrument
|
Dec. 31, 2017
USD ($)
instrument
|
---|---|---|
Derivative [Line Items] | ||
Number of Instruments | instrument | 14 | 18 |
Notional Amount | $ 386,897,000 | $ 458,655,000 |
Weighted Average Rate Cap | 2.91% | 2.89% |
Fair Value | $ 340,253 | $ 51,646 |
LIBOR [Member] | ||
Derivative [Line Items] | ||
Variable Rate | 2.09% | 1.56% |
Derivative Financial Instruments - Narrative (Details) - USD ($) |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
Dec. 31, 2017 |
|
Derivative [Line Items] | |||||
Unrealized (loss) gain on derivatives | $ 85,307 | $ (516,089) | |||
Interest Rate Cap [Member] | |||||
Derivative [Line Items] | |||||
Unrealized (loss) gain on derivatives | $ (41,953) | $ (196,136) | 85,307 | (516,089) | |
Acquired interest rate cap agreements | 203,300 | $ 0 | 203,300 | $ 0 | |
Deferred Financing Costs and Other Assets, Net [Member] | Interest Rate Cap [Member] | |||||
Derivative [Line Items] | |||||
Fair value of interest rate cap agreements | 340,253 | 340,253 | $ 51,646 | ||
Interest Expense [Member] | Interest Rate Cap [Member] | |||||
Derivative [Line Items] | |||||
Unrealized (loss) gain on derivatives | $ (41,953) | $ 85,307 |
Subsequent Events - Distributions Paid (Details) - Dividend Paid [Member] - USD ($) |
Aug. 01, 2018 |
Jul. 02, 2018 |
May 02, 2018 |
---|---|---|---|
Subsequent Event [Line Items] | |||
Distributions paid, common stock, including distribution reinvestment plan | $ 75,298,163 | ||
Subsequent Event [Member] | |||
Subsequent Event [Line Items] | |||
Distributions paid, common stock, including distribution reinvestment plan | $ 3,535,232 | $ 3,790,856 |
Subsequent Events - Shares Repurchased (Details) - Share Repurchase Program [Member] - Common Stock [Member] - USD ($) |
3 Months Ended | 6 Months Ended | 1080 Months Ended | |||
---|---|---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
Jul. 31, 2108 |
Jul. 31, 2018 |
|
Subsequent Event [Line Items] | ||||||
Repurchase of common stock (in shares) | 218,011 | 180,226 | 399,415 | 364,181 | ||
Stock repurchase plan, stock redeemed, value | $ 2,000,000 | $ 2,000,000 | $ 4,000,000 | $ 4,000,000 | ||
Subsequent Event [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Repurchase of common stock (in shares) | 218,555 | |||||
Stock repurchase plan, stock redeemed, value | $ 2,000,000 | |||||
Redemption price per share (in dollars per share) | $ 9.15 |
Subsequent Events - Distributions Declared (Details) - $ / shares |
3 Months Ended | |||
---|---|---|---|---|
Aug. 08, 2018 |
Jun. 30, 2018 |
Mar. 31, 2018 |
Jun. 30, 2017 |
|
Subsequent Event [Line Items] | ||||
Common share, distribution rate per share per day, declared (in dollars per share) | $ 0.001683 | $ 0.001964 | $ 0.001964 | |
Subsequent Event [Member] | ||||
Subsequent Event [Line Items] | ||||
Common share, distribution rate per share per day, declared (in dollars per share) | $ 0.001519 |
2X^_M1LNMZF[$72:1X#@\I*AN,?78M@">O2FJ7T];[[LB8
M*UM0W-V8#C3>U,8J[M&T#7.=!5Y%D)(L39*/3'&A:9%%W]D6F>F]%!K.EKA>
M*6Y_G4":(:<;^N9X$$WK@X,56<<;^ '^9W>V:+&9I1(*M!-&$PMU3F\WQ],N
MQ,> 1PYQ)J.1BS',POE8Y38(@D%#ZP,!QN\(=2!F(4,;+Q$GGE &X/+^Q
M?XFU8RT7[N#.R"=1^3:G!THJJ'DO_8,9[F&JYP,E4_'?X H2PX,2S%$:Z>)*
MRMYYHR86E*+XZ[@+'?=AO-GO)]@Z()T Z0PXQ#QL3!25?^:>%YDU [%C[SL>
MGGAS3+$W97#&5L0[%._0>RTV^T/&KH%HBCF-,>DR9HY@R#ZG2-=2G-)_X.DZ
M?+NJEUG.2%=Q[8
MVS2^R7OX..W?N6V$=N1B/+YL[']MC >4DMS@"+7XP69#0NW#<8]G.X[9:'C3
M33^(S=^X^ U02P,$% @ ,X(*35C>,4RT 0 T@, !D !X;"]W;W)K
M .>3M]Y[R3>WMRF[!*$) %S@)@D! Y0(#\]L%[D&(0.1E_)DY\9(R -?G3_;'
M6+NOY RR:P:)9ZX /''#L@$,'O'7@#QSXHVH[3=!JRE83^3X.
MXL,@/@@28 ,$*-62YW4 C0%40P2J1F%4DXLD3!%E!F10IL'
MC!'E5PPJAH0"2F(R+K<3Q8,%=,,L-%),$PU )#J.%)C4!R1*DH2/'V) &3+"
MXM VWYA1:D)J]8 )I-$5LX#IH@ O )"]I]2T_KK1=
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M4]/W336>"NR:IK 7C84RP]%\F.6
M#0()8T$?WP$MR6#AH4!XA&NOA46"?F"70W$_4]3/5DH 2)C;B7= 2S)8&2C8
MWPB'G%.L##3^0$IP1U/0AY:XC*"Y1LT
MD EFY^!2UL?^CJ'Q=NI2M=UA&PO=V]R:W-H965T
=0M@T)O@O
_8JSA5H2_RDJZ[UY3H'#"IE
MIHF>B_&*&0/%^^GV1/,57OP%4$L#!!0 ( #.""DU/1/WK_@( (T, 9
M >&PO=V]R:W-H965T
7ZL@QQ>%UXRO8'
MTRQ$J\51[M4/97X>'RL[BWJ6;5:HLLYT&51JMPP_XOLU(4V 0_S*U*4>C(,F
ME6>M7YK)U^TR1(TBE:N-:2BD?9S56N5YPV1U_.E(PW[/)G XOK)_=LG;9)YE
MK=8Z_YUMS6$9)F&P53MYRLV3OGQ174(L#+KLOZFSRBV\46+WV.B\=K_!YE0;
M770L5DHA7]MG5KKGI>._AL$!I L@?0".WPR@70 =!42M,I?J)VGD:E'I2U"U
M;^LHFT.![ZDU<],L.N_5PRC171NB#K,0XLA PRY1:P!!.TAD170
MJR"@"N+BZ2 ^YAPFH" !=03Q31IXE$:+$0Y3.HP0G*"4"@9O%8-;Q=Y6L1CM
MU$+8S4Z8QP3%8^-B3U,BF$A82A-8$P,U,3]]1& "#A+P^2] @ 1BQ@L0GBV,
M<,8%&QVXM0],,>*"#( WDA)04@)(&OG_D'@[?:",)#P=*0)P2X0K<*#"?XPKW4Q:,LF'*G3DSD+>RX/:#H?XSE1G<+G#R#G/@ L=^
MA0/F^*5+;&/"Q&N#