10-Q 1 rpt10q-2019q2.htm 10-Q Document

 
 
 
 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________________________________
Form 10-Q
_________________________________________
x
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2019
OR
o
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____ to ____

Commission file number 000-55598
__________________________________________ 
RREEF Property Trust, Inc.
(Exact name of registrant as specified in its charter)
__________________________________________
Maryland
45-4478978
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer Identification Number)
345 Park Avenue, 26th Floor, New York, NY 10154
(212) 454-6260
(Address of principal executive offices; zip code)
(Registrant’s telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
 ________________________________________________________________________

Securities registered pursuant to Section 12(b) of the Act: None.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes  x    No  o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  x    No  o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
o
Accelerated filer
o
Non-accelerated filer
x
Smaller reporting company
x
 
 
Emerging growth company
o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  o    No  x

As of August 7, 2019, the registrant had 3,755,900 shares of Class A common stock, $.01 par value, outstanding, 7,813,808 shares of Class I common stock, $.01 par value, outstanding, 832,912 shares of Class T common stock, $.01 par value, outstanding, 176,101 shares of Class D common stock, $.01 par value, outstanding, and no shares of Class N common stock, $.01 par value, outstanding.
 
 
 
 
 



RREEF PROPERTY TRUST, INC.
QUARTERLY REPORT ON FORM 10-Q
For the Quarter Ended June 30, 2019

TABLE OF CONTENTS


2


PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
RREEF PROPERTY TRUST, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)
 
June 30, 2019 (unaudited)
 
December 31, 2018
ASSETS

 

Investment in real estate assets:

 

Land
$
64,426

 
$
64,426

Buildings and improvements, less accumulated depreciation of $18,508 and $15,901, respectively
106,947

 
108,585

Furniture, fixtures and equipment, less accumulated depreciation of $331 and $292, respectively
213

 
229

Acquired intangible lease assets, less accumulated amortization of $21,917 and $19,682, respectively
26,783

 
29,017

Total investment in real estate assets, net
198,369

 
202,257

Investment in marketable securities
17,627

 
14,735

Total investment in real estate assets and marketable securities, net
215,996

 
216,992

Cash and cash equivalents
2,065

 
2,002

Restricted cash
376

 

Receivables, net of allowance for doubtful accounts of $6 and $6, respectively
3,861

 
3,324

Deferred leasing costs, net of amortization of $545 and $373, respectively
2,209

 
2,340

Prepaid and other assets
1,941

 
1,541

Total assets
$
226,448

 
$
226,199

LIABILITIES AND STOCKHOLDERS' EQUITY

 

Line of credit, net
$
46,558

 
$
84,046

Mortgage loans payable, net
51,373

 
34,055

Accounts payable and accrued expenses
2,239

 
2,041

Due to affiliates
4,593

 
4,292

Note to affiliate, net of unamortized discount of $1,291 and $1,365, respectively
7,659


7,585

Acquired below market lease intangibles, less accumulated amortization of $3,907 and $3,461, respectively
14,524

 
14,970

Distributions payable
375

 
334

Other liabilities
1,252

 
1,369

Total liabilities
128,573

 
148,692

Stockholders' Equity:

 

Preferred stock, $0.01 par value; 50,000,000 shares authorized; none issued

 

Class A common stock, $0.01 par value; 200,000,000 shares authorized; 3,731,104 and 3,574,584 issued and outstanding, respectively
37

 
36

Class I common stock, $0.01 par value; 200,000,000 shares authorized; 7,385,408 and 6,132,292 issued and outstanding, respectively
74

 
61

Class T common stock, $0.01 par value; 250,000,000 shares authorized; 777,658 and 628,863 issued and outstanding, respectively
8

 
6

Class D common stock, $0.01 par value; 50,000,000 shares authorized; 176,101 and none issued and outstanding, respectively
2

 

Class N common stock, $0.01 par value; 300,000,000 shares authorized; none issued

 

Additional paid-in capital
138,040

 
115,025

Deficit
(40,286
)
 
(37,621
)
Total stockholders' equity
97,875

 
77,507

Total liabilities and stockholders' equity
$
226,448

 
$
226,199

The accompanying notes are an integral part of these consolidated financial statements.

3


RREEF PROPERTY TRUST, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except share and per share data)
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2019
 
2018
 
2019
 
2018
Revenues

 
 
 
 
 
 
Property related income
$
5,561

 
$
4,383

 
$
11,326

 
$
8,886

Investment income on marketable securities
150

 
120

 
301

 
209

Total revenues
5,711

 
4,503

 
11,627

 
9,095

Expenses

 
 
 
 
 

General and administrative expenses
468

 
496

 
1,040

 
1,007

Property operating expenses
1,723

 
1,337

 
3,605

 
2,749

Advisory fees
561

 
390

 
932

 
669

Depreciation
1,336

 
1,074

 
2,646

 
2,163

Amortization
1,131

 
906

 
2,300

 
1,813

Total operating expenses
5,219

 
4,203

 
10,523

 
8,401

Net realized gain (loss) upon sale of marketable securities
146

 
(155
)
 
265

 
(408
)
Net unrealized change in fair value of investment in marketable securities
189

 
981

 
2,355

 
480

Operating income
827

 
1,126

 
3,724

 
766

Interest expense
(1,196
)
 
(884
)
 
(2,489
)
 
(1,788
)
Net (loss) income
$
(369
)
 
$
242

 
$
1,235

 
$
(1,022
)


 
 
 

 
 
Basic and diluted net income (loss) per share of Class A common stock
$
(0.03
)
 
$
0.03

 
$
0.11

 
$
(0.12
)
Basic and diluted net income (loss) per share of Class I common stock
$
(0.03
)
 
$
0.03

 
$
0.11

 
$
(0.12
)
Basic and diluted net income (loss) per share of Class T common stock
$
(0.03
)
 
$
0.03

 
$
0.11

 
$
(0.12
)
Basic and diluted net income (loss) per share of Class D common stock
$
(0.02
)
 
$

 
$
0.13

 
$


The accompanying notes are an integral part of these consolidated financial statements.



4


RREEF PROPERTY TRUST, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(Unaudited)
(in thousands, except share and per share data)

 
Preferred Stock
 
Class A Common Stock
 
Class I Common Stock
 
Class T Common Stock
 
Class D Common Stock
 
Class N Common Stock
 
Additional Paid-in Capital
 
Deficit
 
Total
Stockholders'
Equity
 
Number of
Shares
Par
Value
 
Number of
Shares
Par
Value
 
Number of
Shares
Par
Value
 
Number of
Shares
Par
Value
 
Number of
Shares
Par
Value
 
Number of
Shares
Par
Value
 
 
 
Balance, December 31, 2018

$

 
3,574,584

$
36

 
6,132,292

$
61

 
628,863

$
6

 

$

 

$

 
$
115,025

 
$
(37,621
)
 
$
77,507

Issuance of common stock


 
131,830

1

 
641,503

7

 
55,679

1

 


 


 
11,913

 

 
11,922

Issuance of common stock through the distribution reinvestment plan


 
22,405


 
34,329


 
2,250


 


 


 
841

 

 
841

Redemption of common stock


 
(68,408
)
(1
)
 
(43,806
)

 
(9,363
)

 


 


 
(1,723
)
 

 
(1,724
)
Distributions to investors


 


 


 


 


 


 
 
 
(1,841
)
 
(1,841
)
Offering costs


 


 


 


 


 


 
(916
)
 

 
(916
)
Equity based compensation


 


 
5,042


 


 


 


 
72

 

 
72

Net income


 


 


 


 


 


 

 
1,604

 
1,604

Balance, March 31, 2019

$

 
3,660,411

$
36

 
6,769,360

$
68

 
677,429

$
7

 

$

 

$

 
$
125,212

 
$
(37,858
)
 
$
87,465

Issuance of common stock


 
114,470

1

 
592,305

6

 
100,827

1

 
176,101

2

 


 
14,185

 

 
14,195

Issuance of common stock through the distribution reinvestment plan


 
23,894


 
39,949

1

 
2,736


 


 


 
953

 

 
954

Redemption of common stock


 
(67,671
)

 
(17,720
)
(1
)
 
(3,334
)

 


 


 
(1,262
)
 

 
(1,263
)
Distributions to investors


 


 


 


 


 


 

 
(2,059
)
 
(2,059
)
Offering costs


 


 


 


 


 


 
(1,070
)
 

 
(1,070
)
Equity based compensation


 


 
1,514


 


 


 


 
22

 

 
22

Net income


 


 


 


 


 


 

 
(369
)
 
(369
)
Balance, June 30, 2019

$

 
3,731,104

$
37

 
7,385,408

$
74

 
777,658

$
8

 
176,101

$
2

 

$

 
$
138,040

 
$
(40,286
)
 
$
97,875











5




RREEF PROPERTY TRUST, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(Unaudited)
(in thousands, except share and per share data)


 
Preferred Stock
 
Class A Common Stock
 
Class I Common Stock
 
Class T Common Stock
 
Class D Common Stock
 
Class N Common Stock
 
Additional Paid-in Capital
 
Deficit
 
Accumulated Other Comprehensive Income
 
Total
Stockholders'
Equity
 
Number of
Shares
Par
Value
 
Number of
Shares
Par
Value
 
Number of
Shares
Par
Value
 
Number of
Shares
Par
Value
 
Number of
Shares
Par
Value
 
Number of
Shares
Par
Value
 
 
 
 
Balance, December 31, 2017

$

 
3,666,927

$
37

 
4,352,050

$
44

 
71,316

$
1

 

$

 

$

 
$
86,813

 
$
(28,290
)
 
$
736

 
$
59,341

Cumulative effect adjustment for change in accounting principle


 


 


 


 


 


 

 
736

 
(736
)
 

Balance January 1, 2018, as adjusted
 
 
 
3,666,927

37

 
4,352,050

44

 
71,316

1

 


 


 
86,813

 
(27,554
)
 

 
59,341

Issuance of common stock


 
55,887

1

 
273,546

2

 
19,256


 


 


 
4,840

 

 

 
4,843

Issuance of common stock through the distribution reinvestment plan


 
22,714


 
21,479


 
678


 


 


 
619

 

 

 
619

Redemption of common stock


 
(64,468
)
(1
)
 
(53,455
)

 


 


 


 
(1,622
)
 

 

 
(1,623
)
Distributions to investors


 


 


 


 


 


 

 
(1,400
)
 

 
(1,400
)
Offering costs


 


 


 


 


 


 
(622
)
 

 

 
(622
)
Net loss


 


 


 


 


 


 

 
(1,264
)
 

 
(1,264
)
Balance, March 31, 2018

$

 
3,681,060

$
37

 
4,593,620

$
46

 
91,250

$
1

 

$

 

$

 
$
90,028

 
$
(30,218
)
 
$

 
$
59,894

Issuance of common stock


 
102,652

1

 
405,944

5

 
140,238

1

 


 


 
9,175

 

 

 
9,182

Issuance of common stock through the distribution reinvestment plan


 
22,901


 
23,520


 
976


 


 


 
662

 

 

 
662

Redemption of common stock


 
(74,710
)
(1
)
 
(64,144
)
(1
)
 


 


 


 
(1,926
)
 

 

 
(1,928
)
Distributions to investors


 


 


 


 


 


 

 
(1,493
)
 

 
(1,493
)
Offering costs


 


 


 


 


 


 
(1,227
)
 

 

 
(1,227
)
Net loss


 


 


 


 


 


 

 
242

 

 
242

Balance, June 30, 2018

$

 
3,731,903

$
37

 
4,958,940

$
50

 
232,464

$
2

 

$

 

$

 
$
96,712

 
$
(31,469
)
 
$

 
$
65,332



The accompanying notes are an integral part of these consolidated financial statements.


6


RREEF PROPERTY TRUST, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)

 
Six Months Ended June 30,
 
2019
 
2018
Cash flows from operating activities:
 
 
 
Net income (loss)
$
1,235

 
$
(1,022
)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:

 

Depreciation
2,646

 
2,163

Net realized (gain) loss upon sale of marketable securities
(265
)
 
408

Net unrealized change in fair value of marketable securities
(2,355
)
 
(480
)
Share based compensation
94

 

Amortization of intangible lease assets and liabilities
1,961

 
1,723

Amortization of deferred financing costs
160

 
151

Allowance for doubtful accounts

 
9

Straight line rent
(421
)
 
311

Amortization of discount on note to affiliate
74

 
72

Changes in assets and liabilities:

 

Receivables
(162
)
 
108

Deferred leasing costs
(111
)
 
(343
)
Prepaid and other assets
(154
)
 
(144
)
Accounts payable and accrued expenses
407

 
108

Other liabilities
(197
)
 
(175
)
Due to affiliates
(419
)
 
(540
)
Net cash provided by operating activities
2,493

 
2,349

Cash flows from investing activities:

 

Improvements to real estate assets
(1,181
)
 
(39
)
Deposit for acquisition of investment in real estate

 
(500
)
Investment in marketable securities
(10,325
)
 
(14,762
)
Proceeds from sale of marketable securities
10,037

 
10,783

Net cash used in investing activities
(1,469
)
 
(4,518
)
Cash flows from financing activities:

 

Proceeds from line of credit
2,200

 

Repayment of line of credit
(39,819
)
 
(4,600
)
Proceeds from mortgage loans payable
17,600

 

Repayment of mortgage loans payable
(126
)
 

Proceeds from issuance of common stock
26,192

 
13,918

Payment of financing costs
(185
)
 
(493
)
Payment of offering costs
(1,434
)
 
(1,778
)
Distributions to investors
(2,064
)
 
(1,593
)
Redemption of common stock
(2,949
)
 
(3,550
)
Net cash (used in) provided by financing activities
(585
)
 
1,904

Net increase in cash and cash equivalents
439

 
(265
)
Cash and cash equivalents and restricted cash, beginning of period
2,002

 
2,442

Cash and cash equivalents and restricted cash, end of period
$
2,441

 
$
2,177


The accompanying notes are an integral part of these consolidated financial statements.

7


RREEF PROPERTY TRUST, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(continued)
(Unaudited)

 
Six Months Ended June 30,
Supplemental Disclosures of Non-Cash Investing and Financing Activities:
2019
 
2018
Distributions declared and unpaid
$
375


$
277

Common stock issued through the distribution reinvestment plan
1,794


1,281

Purchases of marketable securities not yet paid
118


407

Proceeds from sale of marketable securities not yet received
117


346

Proceeds from issuance of common stock not yet received
24


328

Accrued offering costs not yet paid
1,199

 
1,206

Capital expenditures not yet paid
62

 

Deferred leasing cost not yet paid
36

 

Redemptions of common stock not yet paid
38

 

Supplemental Cash Flow Disclosures:

 

Interest paid
$
2,226


$
1,525


The accompanying notes are an integral part of these consolidated financial statements.


8


RREEF PROPERTY TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2019
(Unaudited)
(in thousands except share and per share data)

NOTE 1 — ORGANIZATION

RREEF Property Trust, Inc. (the “Company”) was formed on February 7, 2012 as a Maryland corporation and has elected to qualify as a real estate investment trust (“REIT”) for federal income tax purposes. Substantially all of the Company's business is conducted through RREEF Property Operating Partnership, LP, the Company's operating partnership (the “Operating Partnership”). The Company is the sole general partner of the Operating Partnership. RREEF Property OP Holder, LLC (the “OP Holder”), a wholly-owned subsidiary of the Company, is the limited partner of the Operating Partnership. As the Company completes the settlement for purchase orders for shares of its common stock in its continuous public offering, it will continue to transfer substantially all of the proceeds to the Operating Partnership.

The Company was organized to invest primarily in a diversified portfolio consisting primarily of high quality, income-producing commercial real estate located in the United States, including, without limitation, office, industrial, retail and apartment properties (“Real Estate Properties”). Although the Company intends to invest primarily in Real Estate Properties, it also intends to acquire common and preferred stock of REITs and other real estate companies (“Real Estate Equity Securities”) and debt investments backed principally by real estate (“Real Estate Loans” and, together with Real Estate Equity Securities, “Real Estate-Related Assets”).

On January 3, 2013, the Securities and Exchange Commission ("SEC") declared effective the Company's registration statement on Form S-11 (File No. 333-180356), filed under the Securities Act of 1933, as amended (the "Initial Registration Statement"). On May 30, 2013, RREEF America L.L.C., a Delaware limited liability company (“RREEF America”), the Company's sponsor and advisor, purchased $10,000 of the Company's Class I common stock, $0.01 par value per share ("Class I Shares"), and the Company’s board of directors authorized the release of the escrowed funds to the Company, thereby allowing the Company to commence operations.

On January 15, 2016, the Company filed articles supplementary to its articles of incorporation to add a newly-designated Class D common stock, $0.01 par value per share ("Class D Shares"). On January 20, 2016, the Company commenced a private offering of up to a maximum of $350,000 in Class D Shares (the "Private Offering," and together with the Follow-On Public Offering (defined below), the "Offerings").

On July 12, 2016, the SEC declared effective the Company's registration statement on Form S-11 (File No. 333-208751), filed under the Securities Act of 1933, as amended (the "Registration Statement"). Pursuant to the Registration Statement, the Company is offering for sale up to $2,100,000 of shares of its Class A common stock, $0.01 par value per share ("Class A Shares"), Class I Shares, and Class T common stock, $0.01 par value per share ("Class T Shares"), in its primary offering and up to $200,000 of Class A Shares, Class I Shares, Class N common stock, $0.01 par value per share ("Class N Shares") and Class T Shares pursuant to its distribution reinvestment plan, to be sold on a "best efforts" basis for the Company's follow-on public offering (the "Follow-On Public Offering"). The Company's initial public offering terminated upon the commencement of the Follow-On Public Offering.

On June 28, 2019, the Company filed a registration statement on Form S-11 (File No. 333-232425) for the Company's second follow-on offering. This registration statement is not yet effective.

Shares of the Company’s common stock are sold at the Company’s net asset value (“NAV”) per share, plus, for Class A, T and D Shares only, applicable selling commissions. Each class of shares may have a different NAV per share because of certain class-specific fees. NAV per share is calculated by dividing the NAV at the end of each business day for each class by the number of shares outstanding for that class on such day.


9

RREEF PROPERTY TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
June 30, 2019
(Unaudited)
(in thousands, except share and per share data)

The Company's NAV per share for its Class A, Class I and Class T Shares is posted to the Company's website at www.rreefpropertytrust.com after the stock market close each business day. Additionally, the Company's NAV per share for its Class A, Class I and Class T Shares is published daily via NASDAQ's Mutual Fund Quotation System under the symbols ZRPTAX, ZRPTIX and ZRPTTX for its Class A Shares, Class I Shares and Class T Shares, respectively.

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation and Principles of Consolidation
The accompanying consolidated financial statements have been prepared in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”), the authoritative reference for U.S. generally accepted accounting principles (“GAAP”). There have been no significant changes to the Company's significant accounting policies during the six months ended June 30, 2019 except for the adoption of Accounting Standards Updates ("ASU") noted below in Note 2. The interim financial data as of June 30, 2019 and for the three and six months ended June 30, 2019 and 2018 is unaudited. In the Company’s opinion, the interim data includes all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results for the interim periods.
Use of Estimates
The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates.

Real Estate Investments and Lease Intangibles
    
Entities are required to evaluate whether transactions should be accounted for as acquisitions (and dispositions) of assets or businesses. When substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. Generally, a real estate asset and its related leases will be considered a single identifiable asset and therefore will not meet the definition of a business. If the real estate and related leases in an acquisition are determined to be an asset and not a business, then the acquisition related costs would be capitalized onto the consolidated balance sheets. Otherwise, such costs will be expensed upon completion of the transaction.

Organization and Offering Costs

Organizational expenses and other expenses which do not qualify as offering costs are expensed as incurred. Offering costs are those costs incurred by the Company, RREEF America and its affiliates on behalf of the Company which relate directly to the Company’s activities of raising capital in the Offerings, preparing for the Offerings, the qualification and registration of the Offerings and the marketing and distribution of the Company’s shares. This includes, but is not limited to, accounting and legal fees, including the legal fees of the dealer manager for the public offerings, costs for registration statement amendments and prospectus supplements, printing, mailing and distribution costs, filing fees, amounts to reimburse RREEF America as the Company’s advisor or its affiliates for the salaries of employees and other costs in connection with preparing supplemental sales literature, amounts to reimburse the dealer manager for amounts that it may pay to reimburse the bona fide due diligence expenses of any participating broker-dealers supported by detailed and itemized invoices, telecommunication costs, fees of the transfer agent, registrars, trustees, depositories and experts, the cost of educational conferences held by the Company (including the travel, meal and lodging costs of registered representatives of any participating broker-dealers) and attendance fees and cost reimbursement for employees of affiliates to attend retail seminars conducted by broker-dealers. Offering costs will be paid from the proceeds of the Offerings. These costs will be treated as a reduction of the total proceeds. Total organization and offering costs incurred by the Company with respect to a particular Offering will not exceed 15% of the gross proceeds from such particular Offering. In addition, the Company will

10

RREEF PROPERTY TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
June 30, 2019
(Unaudited)
(in thousands, except share and per share data)

not reimburse RREEF America or the dealer manager for any underwriting compensation (a subset of organization and offering costs) which would cause the Company’s total underwriting compensation to exceed 10% of the gross proceeds from the primary portion of a particular offering.

Included in offering costs are (1) distribution fees paid on a trailing basis at the rate of (a) 0.50% per annum on the NAV of the outstanding Class A Shares, and (b) 1.00% per annum for approximately three years on the NAV of the outstanding Class T Shares, and (2) dealer manager fees paid on a trailing basis at the rate of 0.55% per annum on the NAV of the outstanding Class A and Class I Shares (collectively, the "Trailing Fees"). The Trailing Fees are computed daily based on the respective NAV of each share class as of the beginning of each day and paid monthly. However, at each reporting date, the Company accrues an estimate for the amount of Trailing Fees that ultimately may be paid on the outstanding shares. Such estimate reflects the Company's assumptions for certain variables, including future redemptions, share price appreciation and the total gross proceeds raised or to be raised during each Offering. In addition, the estimated accrual for future Trailing Fees as of a given reporting date may be reduced by the aforementioned limits on total organization and offering costs and total underwriting compensation. Changes in this estimate will be recorded prospectively as an adjustment to additional paid-in capital. As of June 30, 2019 and December 31, 2018, the Company has accrued $3,696 and $3,107, respectively, in Trailing Fees to be payable in the future, which was included in due to affiliates on the consolidated balance sheets.

Revenue Recognition

Effective January 1, 2019, the Company adopted ASU 2016-02, Leases (Topic 842) (ASC 842), and related ASU's that amended or clarified certain provisions of ASC 842. Under ASC 842, as amended, the Company elected (a) a package of three practical expedients whereby the Company will not be required to reassess (i) whether any expired or existing contracts are or contain leases, (ii) the lease classification (operating versus capital/financing leases) for any expired or existing leases and (iii) initial direct costs for any existing leases (Package of Three Practical Expedients), and (b) a practical expedient to not separate lease and non-lease components of a lease and instead account for them as a single component if two criteria are met: (i) the timing and pattern of transfer of the non-lease component(s) and associated lease component are the same, and (ii) the lease component, if accounted for separately, would be classified as an operating lease. In addition, the Company elected to adopt ASU 2016-02 on its effective date, and the Company did not have a cumulative effect adjustment to its opening deficit balance as of January 1, 2019. In accordance with the Company's adoption of the provisions of ASC 842, leases in place as of December 31, 2018 will continue to be accounted for under the previous lease guidance of ASC 840, while any new or amended leases entered into by the Company after December 31, 2018 will be accounted for under ASC 842.

The Company has evaluated the lease and non-lease components within its leases under the practical expedient and will now report rental and other property income and common area expense reimbursement income as a single component on the Company’s consolidated statements of operations. Rental and other property income and tenant reimbursement income for prior periods have similarly been combined to conform to the current year presentation.

Lessor accounting for lease and non-lease components, while presented differently under ASC 842, is largely unchanged from prior GAAP. Contractual base rental revenue from real estate leases is recognized on a straight-line basis over the terms of the related leases. The differences between contractual base rental revenue earned from real estate leases on a straight-line basis and amounts due under the respective lease agreements are amortized or accreted, as applicable, to deferred rent receivable. Property related income will also include amortization of above- and below-market leases as well as amortization of lease incentives. Revenues relating to lease termination fees for the termination of an entire lease will be recognized at the time that a tenant’s right to occupy the leased space is terminated and collectibility is reasonably assured.

Under ASC 842, the future revenue stream from leases must be evaluated for collectibility. Pursuant to these provisions, if an entity has determined that the collectibility of substantially all future lease payments from a particular lease is not at least probable, then the entity must write off its existing receivable balances (except receivable amounts which are under dispute by the tenant), including any deferred rent amounts recognized on a

11

RREEF PROPERTY TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
June 30, 2019
(Unaudited)
(in thousands, except share and per share data)

straight-line basis, and instead begin recognizing revenue from such lease on cash basis. The factors used to evaluate the collectibility of future lease payments for each lease may include, but not be limited to, the tenant's payment history, current payment status, publicly available information about the financial condition of the tenant and other information about the tenant of which the entity may be aware. As of June 30, 2019, the Company has assessed all of its future lease payments to be at least probable.

To the extent the Company's revenues do not qualify for treatment under ASC 842 or under other specific guidance, the Company is required to recognize revenue in its financial statements in a manner that depicts the transfer of the promised goods or services to its customers in an amount that reflects the consideration to which the Company is entitled at the time of transfer of those goods or services. Such treatment may apply to other types of real estate related contracts, such as for dispositions or development of real estate.

Investment income from marketable securities is accrued at each distribution record date.

Net Earnings or Loss Per Share

Net earnings or loss per share is calculated using the two-class method. The two-class method is utilized when an entity (1) has different classes of common stock that participate differently in net earnings or loss, or (2) has issued participating securities, which are securities that participate in distributions separately from the entity’s common stock. Pursuant to the advisory agreement between the Company and its advisor (see Note 8), the advisor may earn a performance component of the advisory fee which is calculated separately for each class of common stock which therefore may result in a different allocation of net earnings or loss to each class of common stock. In addition, in March and May 2019, the Company granted shares of its Class I common stock to its independent directors (see Note 9), which qualify as participating securities.

Concentration of Credit Risk

As of June 30, 2019 and December 31, 2018, the Company had cash on deposit at multiple financial institutions which were in excess of federally insured levels. The Company limits significant cash holdings to accounts held by financial institutions with a high credit standing. Therefore, the Company believes it is not exposed to any significant credit risk on its cash deposits.

Cash and Cash Equivalents

For purposes of the presentation of the accompanying consolidated financial statements, all unrestricted short-term investments purchased with an initial maturity of three months or less are considered to be cash equivalents. The Company maintains cash and cash equivalents with various financial institutions. The combined cash balances at each institution periodically exceed Federal Deposit Insurance Corporation (“FDIC”) insurance coverage and, as a result, there is a concentration of credit risk related to amounts on deposit in excess of FDIC insurance coverage. The Company believes the risk is not significant.

Restricted Cash

All cash amounts that are considered restricted in nature are classified as such on the consolidated balance sheets. Restricted cash is comprised of lender escrows and deposits on future financings.

Recent Accounting Pronouncements

In August 2018, FASB issued ASU 2018-13, Fair Value Measurement (Topic 820) - Disclosure Framework - Changes to Disclosure Requirements for Fair Value Measurement. ASU 2018-13 changes the fair value measurement disclosure requirements of ASC 820 by eliminating, modifying or adding certain disclosure requirements for fair value measurements. The Company elected to early adopt the provisions regarding eliminating

12

RREEF PROPERTY TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
June 30, 2019
(Unaudited)
(in thousands, except share and per share data)

or modifying certain disclosures and defer adopting the provisions regarding additional disclosures until the effective date of ASU 2018-13, which is for fiscal years beginning after December 15, 2019, including interim periods therein. The early adoption of the provisions regarding eliminating or modifying certain disclosures of ASU 2018-13 did not have a material impact on the Company's consolidated financial statements.

In March 2019, FASB issued ASU 2019-01, Leases (Topic 842), which provides guidance for determining the fair value and its application to lease classification and measurement for lessors that are not manufacturers or dealers, referred to as qualifying lessors. For qualifying lessors, the fair value of the underlying asset at lease commencement would be its cost, including any acquisition costs, however if a significant amount of time has elapsed between the asset acquisition date and the lease commencement, the fair value would be based on the guidance in ASC 820. ASU 2019-01 is effective for fiscal years beginning after December 15, 2019, including interim periods therein. The Company is evaluating the impact of ASU 2019-01 but does not expect adoption to have a material impact.

NOTE 3 — FAIR VALUE MEASUREMENTS
Fair value measurements are determined based on the assumptions that market participants would use in pricing an asset or liability. As a basis for considering market participant assumptions in fair value measurements, FASB ASC 820, Fair Value Measurement and Disclosures, establishes a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity's own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy).
Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access. Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs may include quoted prices for similar assets and liabilities in active markets, as well as inputs that are observable for the asset or liability (other than quoted prices), such as interest rates and yield curves that are observable at commonly quoted intervals. Level 3 inputs are the unobservable inputs for the asset or liability, which are typically based on an entity's own assumption, as there is little, if any, related market activity. In instances where the determination of the fair value measurement is based on input from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company's assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability.
The Company's investments in marketable securities are valued using Level 1 inputs as the securities are publicly traded on major stock exchanges.
The fair value of the Company's lines of credit and mortgage loans payable are determined using Level 2 and Level 3 inputs and a discounted cash flow approach with an interest rate, property valuation and other assumptions that estimate current market conditions. The carrying amount of the Company's line of credit, exclusive of deferred financing costs, approximated its fair value of $47,000 and $84,619 at June 30, 2019 and December 31, 2018, respectively. The Company estimated the fair value of the Company's mortgage loans payable at $51,872 and $33,560 as of June 30, 2019 and December 31, 2018, respectively. If the valuation of the Company's properties as of June 30, 2019 were significantly lower, the market interest rate assumption would be higher (due to higher loan-to-value ratios) potentially resulting in a significantly lower estimated fair value for these liabilities.
The Company has estimated the fair value of its note to affiliate at approximately $3,800 and $2,900 as of June 30, 2019 and December 31, 2018, respectively. The estimated market interest rate is impacted by a number of factors. Material changes in those factors may cause a material change to the estimated market interest rate, thereby materially affecting the estimated fair value of the note to affiliate. The Company has estimated the fair value of the note to affiliate in the middle of the range of reasonably estimable values.

13

RREEF PROPERTY TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
June 30, 2019
(Unaudited)
(in thousands, except share and per share data)

The Company's financial instruments, other than those referred to above, are generally short-term in nature and contain minimal credit risk. These instruments consist of cash and cash equivalents, accounts and other receivables and accounts payable. The carrying amounts of these assets and liabilities in the consolidated balance sheets approximate their fair value.

NOTE 4 — REAL ESTATE INVESTMENTS

The Company acquired no real estate properties during the six months ended June 30, 2019 and 2018.

NOTE 5 — RENTALS UNDER OPERATING LEASES

As of June 30, 2019, the Company owned four office properties (including one medical office property), three retail properties and four industrial properties with a total of thirty-one tenants, and one student housing property with 316 beds. As of June 30, 2018, the Company owned four office properties (including one medical office property), two retail properties and one industrial property with a total of nineteen tenants, and one student housing property with 316 beds. All leases at the Company's properties have been classified as operating leases. The Company's property related income from its real estate investments is comprised of the following:
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2019
 
2018
 
2019
 
2018
Lease revenue 1
$
5,178

 
$
4,093

 
$
10,566

 
$
9,106

Straight-line revenue
214

 
245

 
421

 
(311
)
Above- and below-market lease amortization, net
195

 
71

 
390

 
142

Lease incentive amortization
(26
)
 
(26
)
 
(51
)
 
(51
)
Property related income
$
5,561

 
$
4,383

 
$
11,326

 
$
8,886

1Lease revenue includes $836 and $541 of variable income from tenant reimbursements for the three months ended June 30, 2019 and 2018, respectively and $1,793 and $1,219 of variable income from tenant reimbursements for the six months ended June 30, 2019 and 2018, respectively.
The future minimum rentals to be received, excluding tenant reimbursements, under the non-cancelable portions of all of the in-place leases in effect as of June 30, 2019 are as follows:
Six Months Ended June 30, 2019
 
Future Minimum Rent
2019
 
$
8,849

2020
 
16,848

2021
 
13,629

2022
 
12,004

2023
 
8,675

Thereafter
 
36,488

 
 
$
96,493

Percentages of property related income by property and tenant representing more than 10% of the Company's total property related income are shown below.

14

RREEF PROPERTY TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
June 30, 2019
(Unaudited)
(in thousands, except share and per share data)

 
 
Percent of property related income
Property
 
Three Months Ended June 30, 2019
 
Six Months Ended June 30, 2019
Elston Plaza, Chicago, IL
 
14.5
%
 
14.4
%
Flats at Carrs Hill, Athens, GA
 
14.5

 
14.1

Loudoun Gateway, Sterling, VA
 
12.8

 
13.5

Allied Drive, Dedham, MA
 
12.8

 
12.8

Terra Nova Plaza, Chula Vista, CA
 
10.0

 
10.0

Total
 
64.6
%
 
64.8
%
 
 
 
 
 
 
 
Percent of property related income
Tenant
 
Three Months Ended June 30, 2019
 
Six Months Ended June 30, 2019
Orbital ATK Inc. - Loudoun Gateway
 
12.8
%
 
13.5
%
New England Baptist Hospital - Allied Drive
 
11.4

 
11.4

Total
 
24.2
%
 
24.9
%
 
 
Percent of property related income
Property
 
Three Months Ended June 30, 2018
 
Six Months Ended June 30, 2018
Flats at Carrs Hill, Athens, GA
 
17.2
%
 
17.0
%
Loudoun Gateway, Sterling, VA
 
16.8

 
17.0

Allied Drive, Dedham, MA
 
15.7

 
16.6

Anaheim Hills Office Plaza, Anaheim, CA
 
13.2

 
12.9

Terra Nova Plaza, Chula Vista, CA
 
12.6

 
12.4

Commerce Corner, Logan Township, NJ
 
10.3

 
10.4

Total
 
85.8
%
 
86.3
%
 
 
 
 
 
 
 
Percent of property related income
Tenant
 
Three Months Ended June 30, 2018
 
Six Months Ended June 30, 2018
Orbital ATK Inc. - Loudoun Gateway
 
16.8
%
 
17.0
%
New England Baptist Hospital - Allied Drive
 
13.3

 
14.0

Total
 
30.1
%
 
31.0
%

15

RREEF PROPERTY TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
June 30, 2019
(Unaudited)
(in thousands, except share and per share data)

The Company's tenants representing more than 10% of in-place annualized base rental revenues were as follows:
 
 
Percent of in-place annualized base rental revenues as of
Property
 
June 30, 2019
 
June 30, 2018
Orbital ATK Inc. - Loudoun Gateway
 
16.8
%
 
19.9
%
New England Baptist Hospital - Allied Drive
 
9.5

 
11.1

Total
 
26.3
%
 
31.0
%

NOTE 6 — MARKETABLE SECURITIES

The following is a summary of the Company's marketable securities held as of the dates indicated, which consisted entirely of publicly-traded shares of common stock in REITs as of each date. All marketable securities held as of December 31, 2018 were available-for-sale securities and none were considered impaired on an other-than-temporary basis.
 
June 30, 2019
 
December 31, 2018
Marketable securities—cost
$
15,183

 
$
14,646

   Unrealized gains
2,465

 
676

   Unrealized losses
(21
)
 
(587
)
Net unrealized gain
2,444

 
89

Marketable securities—fair value
$
17,627

 
$
14,735


Upon the sale of a particular security, the realized net gain or loss is computed assuming the shares with the highest cost are sold first. During the three months ended June 30, 2019 and 2018, marketable securities sold generated proceeds of $4,395 and $7,055, respectively, resulting in gross realized gains of $203 and $132, respectively, and gross realized losses of $57 and $287, respectively. During the six months ended June 30, 2019 and 2018, marketable securities sold generated proceeds of $10,063 and $11,055, respectively, resulting in gross realized gains of $469 and $211, respectively, and gross realized losses of $204 and $619, respectively.

NOTE 7 — NOTES PAYABLE

Wells Fargo Line of Credit

On February 27, 2018, the Company, as guarantor, and certain of the wholly owned subsidiaries of the Operating Partnership, as co-borrowers, entered into an amended and restated secured revolving credit facility (the “Revised Wells Fargo Line of Credit”) with Wells Fargo Bank, National Association, as administrative agent, and other lending institutions that may become parties to the credit agreement. The Revised Wells Fargo Line of Credit has an initial three-year term maturing February 27, 2021. The Company has two one-year extension options following the initial term subject to satisfaction of certain conditions and payment of applicable extension fees.

The interest rate under the Revised Wells Fargo Line of Credit is based on the 1-month London Inter-bank Offered Rate ("LIBOR") with a spread of 160 to 180 basis points depending on the debt yield as defined in the agreement. In addition, the Revised Wells Fargo Line of Credit has a maximum capacity of $100,000 and is expandable by the Company up to a maximum capacity of $200,000 upon satisfaction of specified conditions. Each requested expansion must be for at least $25,000 and may result in the Revised Wells Fargo Line of Credit being syndicated. As of June 30, 2019, the outstanding balance under the Revised Wells Fargo Line of Credit was $47,000

16

RREEF PROPERTY TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
June 30, 2019
(Unaudited)
(in thousands, except share and per share data)

and the weighted average interest rate was 4.02%. As of December 31, 2018, the outstanding balance was $84,619 and the weighted average interest rate was 4.07%.

At any time, the borrowing capacity under the Revised Wells Fargo Line of Credit is based on the lesser of (1) an amount equal to 65% of the aggregate value of the properties in the collateral pool as determined by lender appraisals, (2) an amount that results in a minimum debt yield of 10% based on the in-place net operating income of the collateral pool as defined, or (3) the maximum capacity of the Revised Wells Fargo Line of Credit. Proceeds from the Revised Wells Fargo Line of Credit can be used to fund acquisitions, redeem shares pursuant to the Company's redemption plan and for any other corporate purpose. As of June 30, 2019, the Company's maximum borrowing capacity was $81,883.

The Revised Wells Fargo Line of Credit agreement contains customary representations, warranties, borrowing conditions and affirmative, negative and financial covenants, including that there must be at least five properties in the collateral pool at all times and that the collateral pool must also meet specified concentration provisions, unless waived by the lender. In addition, the Company, as guarantor, must meet tangible net worth hurdles. The Company was in compliance with all financial covenants as of June 30, 2019.

Nationwide Life Insurance Loan

On March 1, 2016, RPT Flats at Carrs Hill, LLC, a wholly-owned subsidiary of the Operating Partnership, entered into a credit agreement with Nationwide Life Insurance Company (the "Nationwide Loan"). Proceeds of $14,500 obtained from the Nationwide Loan were used to repay outstanding balances under the Wells Fargo Line of Credit, thereby releasing The Flats at Carrs Hill from the Wells Fargo Line of Credit. The Nationwide Loan is a secured, fully non-recourse loan maturing after ten years on March 1, 2026 with no extension options. The Nationwide Loan carries a fixed interest rate of 3.63% and requires monthly interest-only payments of $44 during the entire term.

Hartford Life Insurance Loan

On December 1, 2016, RPT 1109 Commerce Boulevard, LLC, a wholly-owned subsidiary of the Operating Partnership, entered into a credit agreement with Hartford Life Insurance Company (the "Hartford Loan"). Proceeds of $13,000 obtained from the Hartford Loan were used to repay outstanding balances under the Wells Fargo Line of Credit, thereby releasing Commerce Corner from the Wells Fargo Line of Credit. The Hartford Loan is a secured, fully non-recourse loan maturing after seven years on December 1, 2023 with no extension options. The Hartford Loan carries a fixed interest rate of 3.41% with interest-only payments for the first 24 months of the term, then principal and interest payments for the remainder of the term based upon a 30-year amortization schedule.

Transamerica Life Insurance Loan

On December 6, 2018, RPT Wallingford Plaza, LLC, a wholly-owned subsidiary of the Operating Partnership, entered into a credit agreement with Transamerica Premier Life Insurance Company (the "Transamerica Loan"). Proceeds of $6,950, net of transaction costs, obtained from the Transamerica Loan were used to repay outstanding balances under the Revised Wells Fargo Line of Credit, thereby releasing Wallingford Plaza from the Revised Wells Fargo Line of Credit. The Transamerica Loan is a secured, fully non-recourse loan maturing after ten years on January 1, 2029 with no extension options. The Transamerica Loan carries a fixed interest rate of 4.56% with interest-only payments for the first 24 months of the term, then principal and interest payments for the remainder of the term, based upon a 30-year amortization schedule.

State Farm Life Insurance Loan


17

RREEF PROPERTY TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
June 30, 2019
(Unaudited)
(in thousands, except share and per share data)

On June 11, 2019, RPT Elston Plaza, LLC, a wholly-owned subsidiary of the Operating Partnership, entered into a credit agreement with State Farm Life Insurance Company (the "State Farm Loan"). Proceeds of $17,600 obtained from the State Farm Loan were used to repay outstanding balances under the Revised Wells Fargo Line of Credit, thereby releasing Elston Plaza from the Revised Wells Fargo Line of Credit. The State Farm Loan is a secured, fully non-recourse loan maturing after seven years on July 1, 2026 with no extension options. The State Farm Loan carries a fixed interest rate of 3.89% with interest-only payments for the first 24 months of the term, then principal and interest payments for the remainder of the term, based upon a 30-year amortization schedule.

The following is a reconciliation of the carrying amount of the Revised Wells Fargo Line of Credit and mortgage loans payable:

 
June 30, 2019
 
December 31, 2018
Line of credit
$
47,000

 
$
84,619

Deduct: Deferred financing costs, less accumulated amortization
(442
)
 
(573
)
Line of credit, net
$
46,558

 
$
84,046

 
 
 
 
Mortgage loans payable
$
51,924

 
$
34,450

Deduct: Deferred financing costs, less accumulated amortization
(551
)
 
(395
)
Mortgage loans payable, net
$
51,373

 
$
34,055


Aggregate future principal payments due on the Revised Wells Fargo Line of Credit and mortgage loans payable as of June 30, 2019 are as follows:
Year
 
Amount
Remainder of 2019
 
$
128

2020
 
262

2021
 
47,503

2022
 
717

2023
 
12,388

Thereafter
 
37,926

Total
 
$
98,924


NOTE 8 — RELATED PARTY ARRANGEMENTS

Advisory Agreement

RREEF America is entitled to compensation and reimbursements in connection with the management of the Company's investments in accordance with an advisory agreement between RREEF America and the Company (the "Advisory Agreement"). The Advisory Agreement has a one-year term and is renewable annually upon the review and approval of the Company's board of directors, including the approval of a majority of the Company's independent directors. The Advisory Agreement has a current expiration date of January 20, 2020. There is no limit to the number of terms for which the Advisory Agreement can be renewed.

18

RREEF PROPERTY TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
June 30, 2019
(Unaudited)
(in thousands, except share and per share data)

Fees

Under the Advisory Agreement, RREEF America can earn an advisory fee comprised of two components as described below.
1.
The fixed component accrues daily in an amount equal to 1/365th of 1.0% of the NAV of the outstanding shares of each class of common stock for such day. The fixed component of the advisory fee is payable monthly in arrears.
2.
The performance component is calculated for each class of common stock on the basis of the total return to stockholders and is measured by the total distributions per share declared to such class plus the change in the NAV per share for such class. For any calendar year in which the total return per share allocable to a class exceeds 6% per annum (the “Hurdle Amount”), RREEF America will receive up to 10% of the aggregate total return allocable to such class with a Catch-Up (defined below) calculated as follows: first, if the total return for the applicable period exceeds the Hurdle Amount, 25% of such total return in excess of the Hurdle Amount (the “Excess Profits”) until the total return reaches 10% (commonly referred to as a “Catch-Up”); and second, to the extent there are remaining Excess Profits, 10% of such remaining Excess Profits. The performance component earned by RREEF America for each class is subject to certain other adjustments which do not apply unless the NAV per share is below $12.00 per share. The performance component is payable annually in arrears.
The performance component is calculated daily on a year-to-date basis by reference to a proration of the per annum hurdle as of the date of calculation. Any resulting performance component as of a given date is deducted from the Company's published NAV per share for such date. At each interim balance sheet date, the Company considers the estimated performance component that is probable to be due as of the end of the current calendar year in assessing whether the calculated performance component as of the interim balance sheet date meets the threshold for recognition in accordance with GAAP in the Company's consolidated financial statements. The ultimate amount of the performance component as of the end of the current calendar year, if any, may be more or less than the amount recognized by the Company as of any interim date and will depend on a variety of factors, including but not limited to, the performance of the Company's investments, interest rates, capital raise and redemptions. The Company considers the estimated performance component as of June 30, 2019 to be sufficiently probable to warrant recognition of a performance component as of June 30, 2019 in the Company's consolidated financial statements. The fixed component earned by RREEF America and the performance component recognized by the Company are shown below.
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2019
 
2018
 
2019
 
2018
Fixed component
$
411

 
$
300

 
$
782

 
$
579

Performance component
150

 
90

 
150

 
90

 
$
561

 
$
390

 
$
932

 
$
669


Expense Reimbursements

Under the Advisory Agreement, RREEF America is entitled to reimbursement of certain costs incurred by RREEF America or its affiliates that were not incurred under the Expense Support Agreement, as described below. Costs eligible for reimbursement, if they were not incurred under the Expense Support Agreement, include most third-party operating expenses, salaries and related costs of RREEF America's employees who perform services for the Company (but not those employees for which RREEF America earns a separate fee or those employees who are executive officers of the Company) and travel related costs for RREEF America's employees who incur such costs

19

RREEF PROPERTY TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
June 30, 2019
(Unaudited)
(in thousands, except share and per share data)

on behalf of the Company. Reimbursement payments to RREEF America are subject to the limitations described below under "Reimbursement Limitations."

For the three months ended June 30, 2019 and 2018, RREEF America incurred $65 and $80 of reimbursable operating expenses and offering costs, respectively, that were subject to reimbursement under the Advisory Agreement. For the six months ended June 30, 2019 and 2018, RREEF America incurred $140 and $156 of reimbursable operating expenses and offering costs, respectively, that were subject to reimbursement under the Advisory Agreement. As of June 30, 2019 and December 31, 2018, the Company had a payable to RREEF America of $61 and $73, respectively, of operating expenses and offering costs reimbursable under the Advisory Agreement.

Organization and Offering Costs

Under the Advisory Agreement, RREEF America agreed to pay all of the Company’s organization and offering costs incurred through January 3, 2013. In addition, RREEF America agreed to pay certain of the Company’s organization and offering costs from January 3, 2013 through January 3, 2014 that were incurred in connection with certain offering related activities. In total, RREEF America incurred $4,618 of these costs (the “Deferred O&O”) on behalf of the Company from the Company’s inception through January 3, 2014. Pursuant to the Advisory Agreement, the Company reimbursed RREEF America monthly for the Deferred O&O on a pro rata basis over 60 months beginning in January 2014. The Deferred O&O balance was fully reimbursed as of December 31, 2018. The Company reimbursed RREEF America $228 for Deferred O&O for the three months ended June 30, 2018. The Company reimbursed RREEF America $456 for Deferred O&O for the six months ended June 30, 2018.

Expense Support Agreement
Pursuant to the terms of the expense support agreement, as most recently amended on January 20, 2016 (the "Expense Support Agreement"), RREEF America agreed to defer reimbursement of certain expenses related to the Company's operations that RREEF America has incurred that are not part of the Deferred O&O described above and, therefore, are in addition to the Deferred O&O amount (the “Expense Payments”). The Expense Payments include organization and offering costs and operating expenses as described above under the Advisory Agreement. RREEF America incurred these expenses until the date upon which the aggregate Expense Payments by RREEF America reached $9,200. As of December 31, 2015, the Company had incurred a total of $9,200 in Expense Payments in addition to the $4,618 of Deferred O&O noted above. The balance of $9,200 in Expense Payments consisted of $3,775 in organization and offering costs related to the Company's initial public offering, $196 of offering costs for the Private Offering and $5,229 in operating expenses. The Company has not received any Expense Payments since December 31, 2015.
In accordance with the Expense Support Agreement, the Company was to reimburse RREEF America $250 per quarter (the "Quarterly Reimbursement"), representing a non-interest bearing note due to RREEF America ("Note to Affiliate") which was subject to the imputation of interest. In accordance therewith, on January 1, 2016, the Company recorded a discount on the Note to Affiliate in the amount of $1,862 which was to be amortized to interest expense over the contractual reimbursement period using the effective interest method.
On April 25, 2016, the Company and RREEF America entered into a letter agreement that amended certain provisions of the Advisory Agreement and the Expense Support Agreement (the "Letter Agreement"). The Letter Agreement provides, in part, that the Company's obligations to reimburse RREEF America for Expense Payments under the Expense Support Agreement are suspended until the first calendar month following the month in which the Company has reached $500,000 in offering proceeds from the offerings (the "ESA Commencement Date"). The Company currently owes $8,950 to RREEF America under the Expense Support Agreement in the form of the Note to Affiliate. Beginning the month following the ESA Commencement Date, the Company will make monthly reimbursement payments to RREEF America in the amount of $417 for the first 12 months and $329 for the second 12 months, subject to monthly reimbursement payment limitations described in the Letter Agreement. The execution of the Letter Agreement represented a modification of the Note to Affiliate, and as such, the unamortized discount on

20

RREEF PROPERTY TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
June 30, 2019
(Unaudited)
(in thousands, except share and per share data)

the Note to Affiliate as of April 25, 2016 is instead being amortized over the estimated repayment period pursuant to the Letter Agreement. In accordance therewith, the Company is amortizing the remaining discount using an interest rate of 1.93%. For the three months ended June 30, 2019 and 2018, the Company amortized $37 and $36, respectively, of the discount on the Note to Affiliate into interest expense. For the six months ended June 30, 2019 and 2018, the Company amortized $74 and $72, respectively, of the discount on the Note to Affiliate into interest expense.
In addition, pursuant to the Letter Agreement, if RREEF America is serving as the Company's advisor at the time that the Company or the Operating Partnership undertakes a liquidation, the Company's remaining obligations to reimburse RREEF America for the unreimbursed Expense Payments under the Expense Support Agreement shall be waived.

Dealer Manager Agreement

The Company and its Operating Partnership entered into a dealer manager agreement (the "Dealer Manager Agreement") with DWS Distributors, Inc., an affiliate of the Company's sponsor and advisor (the "Dealer Manager"), which was most recently amended and restated on March 7, 2019. The Dealer Manager Agreement governs the distribution by the Dealer Manager of the Company’s Class A Shares, Class I Shares, Class N Shares and Class T Shares in the Follow-On Public Offering and any subsequent registered public offering. In connection with the ongoing Trailing Fees to be paid in the future, the Company and the Dealer Manager entered into an agreement whereby the Company will pay to the Dealer Manager the Trailing Fees that are attributable to the Company's shares issued in the Company's initial public offering that remain outstanding. In addition, the Company is obligated to pay to the Dealer Manager Trailing Fees that are attributable to the Company's shares issued in the Follow-On Public Offering. As of June 30, 2019 and December 31, 2018, the Company has accrued $96 and $86, respectively, in Trailing Fees currently payable to the Dealer Manager, and $3,696 and $3,107, respectively, in Trailing Fees estimated to become payable in the future to the Dealer Manager, both of which are included in due to affiliates on the consolidated balance sheets. The Company also pays the Dealer Manager upfront selling commissions and upfront dealer manager fees in connection with its Offerings, as applicable. For the three months ended June 30, 2019 and 2018, the Dealer Manager earned upfront selling commissions and upfront dealer manager fees totaling $124 and $131, respectively. For the six months ended June 30, 2019 and 2018, the Dealer Manager earned upfront selling commissions and upfront dealer manager fees totaling $214 and $164, respectively.

Under the Dealer Manager Agreement, the Company is obligated to reimburse the Dealer Manager for certain offering costs incurred by the Dealer Manager on the Company's behalf, including but not limited to broker-dealer sponsorships, attendance fees for retail seminars conducted by broker-dealers or the Dealer Manager, and travel costs for certain personnel of the Dealer Manager who are dedicated to the distribution of the Company's shares of common stock. For the three months ended June 30, 2019 and 2018, the Dealer Manager incurred $67 and $111, respectively, in such costs on behalf of the Company. For the six months ended June 30, 2019 and 2018, the Dealer Manager incurred $120 and $221, respectively, in such costs on behalf of the Company. As of June 30, 2019 and December 31, 2018, the Company had payable to the Dealer Manager $450 and $329, respectively, of such costs which was included in due to affiliates on the consolidated balance sheets.

Reimbursement Limitations

Organization and Offering Costs
The Company will not reimburse RREEF America under the Advisory Agreement or the Expense Support Agreement and will not reimburse the Dealer Manager under the Dealer Manager Agreement for any organization and offering costs which would cause the Company's total organization and offering costs with respect to a public offering to exceed 15% of the gross proceeds from such public offering. Further, the Company will not reimburse RREEF America or the Dealer Manager for any underwriting compensation (a subset of organization and offering costs) which would cause the Company's total underwriting compensation with respect to a public offering to exceed

21

RREEF PROPERTY TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
June 30, 2019
(Unaudited)
(in thousands, except share and per share data)

10% of the gross proceeds from the primary portion of such public offering. For the Company's initial public offering that ended on June 30, 2016, the Company raised $102,831 in gross proceeds and incurred $15,424 in organization and offering costs, including, as of June 30, 2019, estimated accrued Trailing Fees payable in the future of $499.

As of June 30, 2019, in the Follow-On Public Offering, the Company raised $93,496 in gross proceeds and incurred total organization and offering costs of $8,942, including estimated accrued Trailing Fees payable in the future of $3,198.
Operating Expenses
Pursuant to the Company’s charter, the Company may reimburse RREEF America, at the end of each fiscal quarter, for total operating expenses incurred by RREEF America, whether under the Expense Support Agreement or otherwise. However, the Company may not reimburse RREEF America at the end of any fiscal quarter for total operating expenses (as defined in the Company’s charter) that, in the four consecutive fiscal quarters then ended, exceed the greater of 2% of average invested assets or 25% of net income determined without reduction for any additions to reserves for depreciation, bad debts or other similar non-cash reserves and excluding any gain from the sale of the Company's assets for that period (the “2%/25% Guidelines”). Notwithstanding the foregoing, the Company may reimburse RREEF America for expenses in excess of the 2%/25% Guidelines if a majority of the Company’s independent directors determines that such excess expenses are justified based on unusual and non-recurring factors. For the four fiscal quarters ended June 30, 2019, total operating expenses of the Company were $4,007, which did not exceed the amount prescribed by the 2%/25% Guidelines.
Due to Affiliates and Note to Affiliate
In accordance with all the above, the Company owed its affiliates the following amounts:
 
June 30, 2019
 
December 31, 2018
Reimbursable under the Advisory Agreement
$
61

 
$
73

Reimbursable under the Dealer Manager Agreement
450

 
329

Advisory fees
289

 
697

Accrued Trailing Fees
3,793

 
3,193

Due to affiliates
$
4,593

 
$
4,292

 
 
 
 
Note to Affiliate
$
8,950

 
$
8,950

Unamortized discount
(1,291
)
 
(1,365
)
Note to Affiliate, net of unamortized discount
$
7,659

 
$
7,585


NOTE 9 — CAPITALIZATION

Under the Company's charter, as most recently amended on February 16, 2017, the Company has the authority to issue 1,000,000,000 shares of common stock and 50,000,000 shares of preferred stock. All shares of such stock have a par value of $0.01 per share. The Company's authorized shares of common stock are allocated between classes as follows:

22

RREEF PROPERTY TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
June 30, 2019
(Unaudited)
(in thousands, except share and per share data)

Common Stock
 
No. of Authorized Shares
Class A Shares
 
200,000,000

Class I Shares
 
200,000,000

Class T Shares
 
250,000,000

Class D Shares
 
50,000,000

Class N Shares
 
300,000,000

 
 
1,000,000,000


Class A Shares are subject to selling commissions of up to 3% of the purchase price, and annual dealer manager fees of 0.55% and distribution fees of 0.50% of NAV, both paid on a trailing basis. Class I Shares are subject to annual dealer manager fees of 0.55% of NAV paid in a trailing basis, but are not subject to any selling commissions or distribution fees. Class T Shares are subject to selling commissions of up to 3% of the purchase price, an up-front dealer manager fee of up to 2.50% of the purchase price, and annual distribution fees of 1.0% of NAV paid on a trailing basis for approximately three years. Class D shares sold in the Private Offering are subject to selling commissions of up to 1.0% of the purchase price, but do not incur any dealer manager or distribution fees.

Class N Shares are not sold in the primary Follow-On Public Offering, but will be issued upon conversion of an investor's Class T Shares once (i) the investor's Class T Share account for a given offering has incurred a maximum of 8.5% of commissions, dealer manager fees and distribution fees; (ii) the total underwriting compensation from whatever source with respect to the Follow-On Public Offering exceeds 10% of the gross proceeds from the primary portion of the Follow-On Public Offering; (iii) a listing of the Class N Shares; or (iv) the Company's merger or consolidation with or into another entity or the sale or other disposition of all or substantially all of the Company's assets.

Distribution Reinvestment Plan

The Company has adopted a distribution reinvestment plan that allows stockholders to have the cash distributions attributable to the class of shares that the stockholder owns automatically invested in additional shares of the same class. Shares are offered pursuant to the Company's distribution reinvestment plan at the NAV per share applicable to that class, calculated as of the distribution date and after giving effect to all distributions. Stockholders who elect to participate in the distribution reinvestment plan, and who are subject to U.S. federal income taxation laws, will incur a tax liability on an amount equal to the fair value on the relevant distribution date of the shares of the Company's common stock purchased with reinvested distributions, even though such stockholders have elected not to receive the distributions used to purchase those shares of the Company's common stock in cash.

Redemption Plan

In an effort to provide the Company's stockholders with liquidity in respect of their investment in shares of the Company's common stock, the Company has adopted a redemption plan whereby on a daily basis stockholders may request the redemption of all or any portion of their shares. The redemption price per share is equal to the Company's NAV per share of the class of shares being redeemed on the date of redemption, subject to a short-term trading discount, if applicable. The total amount of redemptions in any calendar quarter will be limited to shares whose aggregate value (based on the redemption price per share on the date of the redemption) is equal to 5% of the Company's combined NAV for all classes of shares as of the last day of the previous calendar quarter. In addition, if redemptions do not reach the 5% limit in a calendar quarter, the unused portion generally will be carried over to the next quarter and not any subsequent quarter, except that the maximum amount of redemptions during any quarter may never exceed 10% of the combined NAV for all classes of shares as of the last day of the previous calendar quarter. If the quarterly volume limitation is reached on or before the third business day of a calendar quarter, redemption requests during the next quarter will be satisfied on a stockholder by stockholder basis, which the

23

RREEF PROPERTY TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
June 30, 2019
(Unaudited)
(in thousands, except share and per share data)

Company refers to as a per stockholder allocation, instead of a first-come, first-served basis. Pursuant to the per stockholder allocation, each stockholder would be allowed to request redemption at any time during such quarter of a total number of shares not to exceed 5% of the shares of common stock the stockholder held as of the end of the prior quarter. The per stockholder allocation requirement will remain in effect for each succeeding quarter for which the total redemptions for the immediately preceding quarter exceeded 4% of the Company's NAV on the last business day of such preceding quarter. If total redemptions during a quarter for which the per stockholder allocation applies are equal to or less than 4% of the Company's NAV on the last business day of such preceding quarter, then redemptions will again be satisfied on a first-come, first-served basis for the next succeeding quarter and each quarter thereafter.

Each redemption request will be evaluated by the Company in consideration of rules and regulations promulgated by the Internal Revenue Service with respect to dividend equivalent redemptions. Redemptions that may be considered dividend equivalent redemptions may adversely affect the Company or its stockholders. Accordingly, the Company may reject any redemption request that it reasonably believes may be treated as a dividend equivalent redemption.

While there is no minimum holding period, shares redeemed within 365 days of the date of the investor's initial purchase of the Company's shares will be redeemed at the Company's NAV per share of the class of shares being redeemed on the date of redemption less a short-term trading discount equal to 2% of the gross proceeds otherwise payable with respect to the redemption.

In the event that any stockholder fails to maintain a minimum balance of $500 (not in thousands) worth of shares of common stock, the Company may redeem all of the shares held by that stockholder at the redemption price per share in effect on the date it is determined that the stockholder has failed to meet the minimum balance, less the short-term trading discount of 2%, if applicable. Minimum account redemptions will apply even in the event that the failure to meet the minimum balance is caused solely by a decline in the Company's NAV.

During the three and six months ended June 30, 2019 and 2018, redemptions were as shown below. The Company funded these redemptions with cash flow from operations, proceeds from its public offerings or borrowings on the line of credit. The weighted average redemption prices are shown before allowing for any applicable 2% short-term trading discounts.
Three Months Ended June 30, 2019
 
Shares
 
Weighted Average Share Price
 
Amount
Class A
 
67,671

 
$
14.24

 
$
963

Class I
 
17,720

 
14.32

 
253

Class T
 
3,334

 
14.27

 
47

Class D
 

 

 

Six Months Ended June 30, 2019
 
Shares
 
Weighted Average Share Price
 
Amount
Class A
 
136,079

 
$
14.21

 
$
1,934

Class I
 
61,526

 
14.21

 
873

Class T
 
12,697

 
14.26

 
180

Class D
 

 

 


24

RREEF PROPERTY TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
June 30, 2019
(Unaudited)
(in thousands, except share and per share data)

Three Months Ended June 30, 2018
 
Shares
 
Weighted Average Share Price
 
Amount
Class A
 
74,710

 
$
13.86

 
$
1,036

Class I
 
64,144

 
13.90

 
892

Class T
 

 

 

Class D
 

 

 

Six Months Ended June 30, 2018
 
Shares
 
Weighted Average Share Price
 
Amount
Class A
 
139,178

 
$
13.80

 
$
1,920

Class I
 
117,599

 
13.86

 
1,630

Class T
 

 

 

Class D
 

 

 

    
The Company's board of directors has the discretion to suspend or modify the redemption plan at any time, including in circumstances in which it (1) determines that such action is in the best interest of the Company's stockholders, (2) determines that it is necessary due to regulatory changes or changes in law or (3) becomes aware of undisclosed material information that it believes should be publicly disclosed before shares are redeemed. In addition, the Company's board of directors may suspend the Offerings and the redemption plan, if it determines that the calculation of NAV is materially incorrect or there is a condition that restricts the valuation of a material portion of the Company's assets. If the board of directors materially amends (including any reduction of the quarterly limit) or suspends the redemption plan during any quarter, other than any temporary suspension to address certain external events unrelated to the Company's business, any unused portion of that quarter’s 5% limit will not be carried forward to the next quarter or any subsequent quarter.

Equity-Based Compensation

The Company has in place an incentive compensation plan and an independent directors compensation plan (the “Compensation Plans”). The Compensation Plans were created to attract, retain and compensate highly-qualified individuals, who are not employees of RREEF Property Trust, Inc. or any of its subsidiaries or affiliates, for service as members of the board by providing them with competitive compensation. The Compensation Plans provide for 5,000 shares of restricted stock to be reserved for issuance to each of the Company's independent directors once the Company has issued 12,500,000 shares of its common stock in the aggregate from its Offerings.

On March 29, 2019, pursuant to the Company having met the issued share requirement, the Company granted 5,000 shares of restricted Class I common stock to each of the Company's independent directors for a total of 20,000 shares (the "Initial Stock Awards"). The Initial Stock Awards shall vest and become non-forfeitable in three equal annual installments on each of the first three anniversaries of the grant date with the exception of one independent director whose Initial Stock Award vested immediately upon grant. The fair value of the Initial Stock Awards is determined using the Company’s Class I Share price on the date of grant, which was $14.34. The Company has elected to account for any forfeitures of restricted stock awards as they occur.

On May 15 2019, pursuant to the new independent director compensation plan, the Company granted $10 of shares of restricted Class I common stock to each of the Company's independent directors (the "Annual Share Grant Awards"). The fair value of the Annual Share Grant Awards is determined using the Company’s Class I Share price on the date of grant, which was $14.32, which resulted in a total of 2,094 shares granted. The Annual Share Grant Awards shall vest and become non-forfeitable at the next annual shareholder meeting (approximately one year from issue date). The Company has elected to account for any forfeitures of restricted stock awards as they occur.

Below is a summary of the activity, per share value and recognized expense for the stock awards. No stock

25

RREEF PROPERTY TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
June 30, 2019
(Unaudited)
(in thousands, except share and per share data)

awards were granted prior to 2019.

 
 
 
Three Months Ended June 30, 2019
 
Six Months Ended June 30, 2019
Stock Awards
 
Class I Shares
 
Weighted Average Grant Date Fair Value
 
Class I Shares
 
Weighted Average Grant Date Fair Value
Outstanding, beginning of period
 
15,000

 
$
14.34

 

 

Changes during the period:
 
 
 
 
 
 
 
 
 
Granted
 
2,094

 
14.32

 
22,094

 
$
14.34

 
Vested
 

 

 
(5,000
)
 
14.34

 
Forfeited
 

 

 

 

Outstanding, end of period
 
17,094

 
14.34

 
17,094

 
14.34

 
 
 
 
 
 
 
 
 
 
Amount included in general and administrative expenses
 
$
22

 
 
 
$
94

 
 

NOTE 10 - NET INCOME (LOSS) PER SHARE

The Company computes net income (loss) per share for each class of common stock with shares outstanding using the two-class method. RREEF America may earn a performance component of the advisory fee (see Note 8) which may impact the net income (loss) of each class of common stock differently. The performance component and the impact on each class of common stock, if any, are shown below.
Basic and diluted net income (loss) per share for each class of common stock is computed using the weighted-average number of common shares outstanding during the period for each class of common stock. The Initial Stock Awards and the Annual Share Grant Awards granted to the Company's independent directors (see Note 9) qualify as participating securities and therefore also require use of the two-class method for computing net income (loss) per share. However, the unvested Initial Stock Awards and the unvested Annual Share Grant Awards are immaterially dilutive, and therefore are ignored in the diluted net income per share calculation for the three and six months ended June 30, 2019.
The following table sets forth the computation of basic and diluted net income (loss) per share for each class of the Company’s common stock which had shares outstanding during the relevant period.

26

RREEF PROPERTY TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
June 30, 2019
(Unaudited)
(in thousands, except share and per share data)




Three Months Ended June 30, 2019


Class A

Class I

Class T
 
Class D*
Basic and diluted net loss per share:






 
 
 
Allocation of net loss before performance fee
 
$
(70
)
 
$
(135
)
 
$
(14
)
 
$


Allocation of performance fees

(46
)

(96
)

(8
)
 


Total numerator

$
(116
)

$
(231
)

$
(22
)
 
$


Denominator - weighted average number of common shares outstanding

3,703,672


7,105,086


737,796

 
11,611

Basic and diluted net loss per share:

$
(0.03
)

$
(0.03
)

$
(0.03
)
 
$
(0.02
)








 
 



Six Months Ended June 30, 2019


Class A

Class I

Class T
 
Class D*
Basic and diluted net income per share:






 
 
 
Allocation of net income before performance fee
 
$
456

 
$
841

 
$
87

 
$
1


Allocation of performance fees

(46
)

(96
)

(8
)
 


Total numerator

$
410


$
745


$
79

 
$
1


Denominator - weighted average number of common shares outstanding

3,648,217


6,720,456


693,952

 
5,838

Basic and diluted net income per share:

$
0.11


$
0.11


$
0.11

 
$
0.13

* Class D Shares were initially issued in June 2019. For the three months ended June 30, 2019, the net loss allocated to Class D Shares was $220 (not in thousands).
 
 
 
Three Months Ended June 30, 2018
 
 
Class A
 
Class I
 
Class T
Basic and diluted net income per share:
 
 
 
 
 
 
 
Allocation of net income before performance fee
 
$
142

 
$
184

 
$
6

 
Allocation of performance fees
 
(36
)
 
(53
)
 
(1
)
 
Total numerator
 
$
106

 
$
131

 
$
5

 
Denominator - weighted average number of common shares outstanding
 
3,691,785

 
4,793,077

 
150,764

Basic and diluted net income per share:
 
$
0.03

 
$
0.03

 
$
0.03

 
 
 
 
 
 
 
 
 
 
 
Six Months Ended June 30, 2018
 
 
Class A
 
Class I
 
Class T
Basic and diluted net loss per share:
 
 
 
 
 
 
 
Allocation of net loss before performance fee
 
$
(408
)
 
$
(511
)
 
$
(13
)
 
Allocation of performance fees
 
(36
)
 
(53
)
 
(1
)
 
Total numerator
 
$
(444
)
 
$
(564
)
 
$
(14
)
 
Denominator - weighted average number of common shares outstanding
 
3,689,242

 
4,630,940

 
115,232

Basic and diluted net loss per share:
 
$
(0.12
)
 
$
(0.12
)
 
$
(0.12
)

27

RREEF PROPERTY TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
June 30, 2019
(Unaudited)
(in thousands, except share and per share data)


NOTE 11 — DISTRIBUTIONS

In order to qualify as a REIT, the Company is required, among other things, to make distributions each taxable year of at least 90% of its taxable income determined without regard to the dividends-paid deduction and excluding net capital gains, and to meet certain tests regarding the nature of the Company's income and assets. The Company expects that its board of directors will continue to declare distributions with a daily record date, payable monthly in arrears. Any distributions the Company makes will be at the discretion of its board of directors, considering factors such as its earnings, cash flow, capital needs and general financial condition and the requirements of Maryland law. The Company commenced operations on May 30, 2013 and elected taxation as a REIT for the year ended December 31, 2013. Distributions for each month are payable on or before the first business day of the following month. However, any distributions reinvested by the stockholders in accordance with the Company's dividend reinvestment plan are reinvested at the per share NAV of the same class determined at the close of business on the last business day of the month in which the distributions were accrued.
Shown below are details of the Company's distributions.
 
Three Months Ended
 
Six Months Ended June 30, 2019
 
March 31, 2019
 
June 30, 2019
 
Declared daily distribution rate, before adjustment for class-specific fees
$
0.00193545

 
$
0.00195924