Subsequent Events	3 Months Ended
Mar. 31, 2021
Subsequent Events [Abstract]
Subsequent Events	Subsequent Events We evaluate subsequent events up until the date the condensed consolidated financial statements are issued and have determined there are none to be reported or disclosed in the condensed consolidated financial statements other than those mentioned below. Merger with Cottonwood Residential II, Inc. and Cottonwood Residential O.P., LP On May 7, 2021, we completed the CRII Merger through a stock-for-stock and unit-for-unit transaction as described in Note 1. With the completion of the CRII Merger, we acquired interests in 22 stabilized multifamily apartment communities, four multifamily development projects, one structured investment, and land held for development. We also acquired CRII’s property management business and its employees, which currently manage over 13,000 units, including approximately 8,600 for Cottonwood affiliates (including us), as well as personnel who have historically performed certain administrative and other services for us on behalf of CCA III. Pro forma revenues and earnings have not been presented as the initial accounting for the transaction is incomplete as of the date the consolidated financial statements are issued. We are in the process of assessing the fair value of the acquired tangible assets, liabilities assumed and any applicable intangible assets and liabilities for this business combination. Amended and Restated Advisory Agreement Upon the closing of the CRII Merger, we entered into an Amended and Restated Advisory Agreement with CCA III. The Amended and Restated Advisory Agreement includes changes to reflect that upon the closing of the CRII Merger, we acquired our property manager, including its employees, as well as personnel who historically performed certain other services for us on behalf of CCA III. CCA III has no obligation to perform these services as it did prior to the CRII Merger, but will continue to oversee and supplement these services to the extent CCA III, acting in its fiduciary capacity, deems appropriate. The Amended and Restated Advisory Agreement also removes a provision regarding the use of the Cottonwood name because, following the CRII Merger, the trademark is held by us. In addition, the Amended and Restated Advisory Agreement revises the compensation payable and the expenses that may be reimbursed to CCA III for its services as described below: Asset Management Fee. CCA III receives a monthly asset management fee equal to 0.0625% of the gross asset value or GAV of CROP (subject to a cap of 0.125% of net asset value or NAV of the operating partnership), before giving effect to any accruals (related to the month for which the asset management fee is being calculated) for the asset management fee, distribution fees in connection with a securities offering, the Performance Allocation (as defined in the Fifth CROP Partnership Agreement and described below) or any distributions. The GAV and NAV of CROP is determined in accordance with the valuation guidelines adopted by the CCI Board and reflective of the ownership interest held by CROP in such gross assets. If we own assets other than through CROP, we will pay a corresponding fee. The management fee may be paid, at CCA III's election, in cash or shares of our common stock or CROP Common Units. To the extent that CCA III elects to receive any portion of its management fee in shares of our common stock or CROP Common Units, CCA III may request that we or CROP may repurchase such shares or units at a later date. Shares of our common stock and CROP Common Units obtained by CCA III as compensation for the management fee payable are not subject to the repurchase limits of our share repurchase plan or any reduction or penalty for an early repurchase. Upon the request of CCA III, we or CROP will repurchase any such securities for cash unless our board of directors determines that any such repurchase would be prohibited by applicable law, our charter, the Fifth CROP Partnership Agreement, or otherwise cause our cash levels or leverage levels to be imprudent as determined by our board of directors. CROP will waive the one-year holding period requirement with respect to the “Exchange Right” provided for in the CROP Partnership Agreement. CCA III will have registration rights with respect to shares of our common stock. Contingent Acquisition Fees and Contingent Financing Fees. If the Amended and Restated Advisory Agreement is terminated other than for cause (or non-renewal or termination by CCA III), the Contingent Acquisition Fees and Contingent Financing Fees provided for in the previous advisory agreement will be due and payable in an amount equal to approximately $22 million (if the termination occurs in year one) reduced by 10% each year thereafter. Organization and Offering Expenses. We will reimburse CCA III for any organization and offering expenses that it incurs on our behalf as and when incurred. CCA III is no longer obligated to pay the organization and offering expenses associated with the Offering as it was prior to the CRII Merger, with the exception of the deferred selling commission associated with Class TX shares sold. After the termination of the primary offering, CCA III will reimburse us to the extent that the organization and offering expenses that we incur exceed 15% of the gross proceeds from any public offering. Expense Reimbursement. Subject to the limitations on total operating expenses, CCA III is entitled to reimbursement of all costs and expenses incurred by it or its affiliates on our behalf, provided that CCA III is responsible for the expenses related to any and all personnel of CCA III who provide investment advisory services pursuant to the Amended and Restated Advisory Agreement (including, without limitation, each of our executive officers and any directors who are also directors, officers or employees of CCA III or any of its affiliates), including, without limitation, salaries, bonus and other wages, payroll taxes and the cost of employee benefit plans of such personnel, and costs of insurance with respect to such personnel (“Advisor Expenses”); provided that we are responsible for the personnel costs of our employees even if they are also directors or officers of CCA III or any of its affiliates except for certain costs as provided for in a reimbursement and cost sharing agreement. Fifth Amended and Restated CROP Partnership Agreement As a result of the CRII Merger, our operations are now conducted through CROP. The Fifth Amended and Restated CROP Partnership Agreement (the "Fifth CROP Partnership Agreement") entered into at the close of the CRII Merger amends the performance fee payable to CCA III or its affiliates as follows: Performance Participation The Fifth CROP Partnership Agreement eliminates the promotional interest in the operating partnership held by Cottonwood Communities Investor, LLC and assigned to Cottonwood Advisors Promote, LLC, and provides for the payment of a performance participation interest in CROP to CCA III (the “Special Limited Partner” for purposes of the below) as follows. So long as the advisory agreement with CCA III has not been terminated (including by means of non-renewal), the Special Limited Partner will hold a performance participation interest in CROP that entitles it to receive an allocation from CROP equal to 12.5% of the Total Return, subject to a 5% Hurdle Amount, with a Catch-Up (each term as defined below). Such allocation will be made annually and accrue monthly. Specifically, the Special Limited Partner will be allocated a performance participation in an amount equal to: •First, if the Total Return for the applicable period exceeds the sum of (i) the Hurdle Amount for that period and (ii) the Loss Carryforward Amount (any such excess, “Excess Profits”), 100% of such annual Excess Profits until the total amount allocated to the Special Limited Partner equals 12.5% of the sum of (x) the Hurdle Amount for that period and (y) any amount allocated to the Special Limited Partner pursuant to this clause (this is commonly referred to as a “Catch-Up”); and •Second, to the extent there are remaining Excess Profits, 12.5% of such remaining Excess Profits. “Total Return” means, for any period since the end of the prior calendar year (but for the year 2021, beginning as of the date of the CRII Merger) the sum of: (i) all distributions accrued or paid (without duplication) on the participating partnership units outstanding at the end of such period since the beginning of the then-current calendar year (but for the year 2021, since the date of the CRII Merger) plus (ii) the change in aggregate NAV of such units since the beginning of the year (but for the year 2021, since the date of the CRII Merger), before giving effect to (x) changes resulting solely from the proceeds of issuances of participating partnership units, (y) any allocation/accrual to the performance participation interest and (z) applicable distribution fee expenses (including any payments made to CCI for payment of such expenses). For the avoidance of doubt, the calculation of Total Return will (i) include any appreciation or depreciation in the NAV of units issued during the then-current calendar year (but for the year 2021, beginning as of the date of the CRII Merger) but (ii) exclude the proceeds from the initial issuance of such units. “Hurdle Amount” means, for any period during a calendar year, an amount that results in a 5% annualized internal rate of return on the NAV of the participating partnership units outstanding at the beginning of the then-current calendar year (but for the year 2021, beginning as of the date of the CRII Merger) and all participating partnership units issued since the beginning of the applicable calendar year (but for the year 2021, beginning as of the date of the CRII Merger), taking into account the timing and amount of all distributions accrued or paid (without duplication) on all such units and all issuances of participating partnership units over the period and calculated in accordance with recognized industry practices. The ending NAV of the participating partnership units used in calculating the internal rate of return will be calculated before giving effect to any allocation/accrual to the performance participation interest and applicable distribution fee expenses. For the avoidance of doubt, the calculation of the Hurdle Amount for any period will exclude any participating partnership units repurchased during such period, which units will be subject to the performance participation allocation upon repurchase as described below. Except as described in Loss Carryforward below, any amount by which Total Return falls below the Hurdle Amount will not be carried forward to subsequent periods. “Loss Carryforward Amount” shall initially equal zero and shall cumulatively increase by the absolute value of any negative annual Total Return and decrease by any positive annual Total Return, provided that the Loss Carryforward Amount shall at no time be less than zero and provided further that the calculation of the Loss Carryforward Amount will exclude the Total Return related to any participating partnership units repurchased during such year, which units will be subject to the performance participation allocation upon repurchase as described below. The effect of the Loss Carryforward Amount is that the recoupment of past annual Total Return losses will offset the positive annual Total Return for purposes of the calculation of the Special Limited Partner’s performance participation. The Special Limited Partner will also be allocated a performance participation with respect to all Common Units that are repurchased at the end of any month (in connection with repurchases of our shares under our share repurchase plan) in an amount calculated as described above with the relevant period being the portion of the year for which such unit was outstanding, and proceeds for any such unit repurchase will be reduced by the amount of any such performance participation. The performance participation interest may be payable in cash or Common Units at the election of the Special Limited Partner. If the Special Limited Partner elects to receive such distributions in Common Units, the Special Limited Partner may request CROP to repurchase such Common Units from the Special Limited Partner at a later date pursuant to the “Exchange Right” and CROP will waive the one-year-holding-period requirement. Dividends Declared - Series 2016 Preferred Stock On May 7, 2021, our board of directors declared cash distributions at a daily distribution rate of $0.00191781 to holders of record of our Series 2016 Preferred Stock issued in the CRII Merger for each day in the period from May 7, 2021 through May 31, 2021. On May 11, 2021, our board of directors declared cash distributions at a daily distribution rate of $0.00191781 to holders of record of our Series 2016 Preferred Stock for each day in the months of June, July and August 2021. The daily distribution rate is equal to 7.0% annually on the $10.00 purchase price. Dividends Declared - Series 2017 Preferred Stock On May 7, 2021, our board of directors declared cash distributions at a daily distribution rate of $0.00205479 to holders of record of our Series 2017 Preferred Stock issued in the CRII Merger for each day in the period from May 7, 2021 through May 31, 2021. On May 11, 2021, our board of directors declared cash distributions at a daily distribution rate of $0.00205479 to holders of record of our Series 2017 Preferred Stock for each day in the months of June, July and August 2021. The daily distribution rate is equal to 7.5% annually on the $10.00 purchase price. Dividends Declared - Series 2019 Preferred Stock On May 11, 2021, our board of directors declared cash distributions at a daily distribution rate of $0.00150685, or 5.5% annually on the $10.00 purchase price, to holders of record of our Series 2019 Preferred Stock for each day in the months of June, July and August 2021. Distributions Declared - Common Stock On May 11, 2021, our board of directors declared cash distributions for each class of common stock at a daily distribution rate of $0.00136986, or 5.0% annually on the $10.00 purchase price, to holders of record of each class of common stock for each day in the months of June, July, and August 2021. In December 2020, our board of directors approved the suspension of our distribution reinvestment plan. All distributions are currently being paid in cash until we resume our distribution reinvestment plan offering. Dolce Note Payoff On May 7, 2021, the borrower of the Dolce B Note prepaid in full the outstanding principal balance of $9,336,338 with us plus accrued interest as a result of refinancing the project upon completion. Executive Compensation Effective immediately prior to the closing of the CRII Merger, Enzio Cassinis, Adam Larson, Susan Hallenberg and Eric Marlin were granted an aggregate of 50,000 time-based, retention LTIP Units of the Operating Partnership, which did not accelerate in connection with the CRII Merger but converted into the right to receive one CROP LTIP Unit, and such units continue to have, and are subject to, the same terms and conditions (including vesting terms) set forth in the applicable vesting agreement, as in effect immediately prior to the effective time of the CROP Merger. Consistent with prior time-based LTIP Units of the Operating Partnership, the units vest over four years in equal installments on an annual basis, with the first 25% vesting May 7, 2022, subject to the grantee’s continued employment with CCA III or its affiliates or us, as applicable.

We evaluate subsequent events up until the date the condensed consolidated financial statements are issued and have determined there are none to be reported or disclosed in the condensed consolidated financial statements other than those mentioned below.

On May 7, 2021, we completed the CRII Merger through a stock-for-stock and unit-for-unit transaction as described in Note 1. With the completion of the CRII Merger, we acquired interests in 22 stabilized multifamily apartment communities, four multifamily development projects, one structured investment, and land held for development. We also acquired CRII’s property management business and its employees, which currently manage over 13,000 units, including approximately 8,600 for Cottonwood affiliates (including us), as well as personnel who have historically performed certain administrative and other services for us on behalf of CCA III. Pro forma revenues and earnings have not been presented as the initial accounting for the transaction is incomplete as of the date the consolidated financial statements are issued. We are in the process of assessing the fair value of the acquired tangible assets, liabilities assumed and any applicable intangible assets and liabilities for this business combination.

Upon the closing of the CRII Merger, we entered into an Amended and Restated Advisory Agreement with CCA III. The Amended and Restated Advisory Agreement includes changes to reflect that upon the closing of the CRII Merger, we acquired our property manager, including its employees, as well as personnel who historically performed certain other services for us on behalf of CCA III. CCA III has no obligation to perform these services as it did prior to the CRII Merger, but will continue to oversee and supplement these services to the extent CCA III, acting in its fiduciary capacity, deems appropriate. The Amended and Restated Advisory Agreement also removes a provision regarding the use of the Cottonwood name because, following the CRII Merger, the trademark is held by us.

Asset Management Fee. CCA III receives a monthly asset management fee equal to 0.0625% of the gross asset value or GAV of CROP (subject to a cap of 0.125% of net asset value or NAV of the operating partnership), before giving effect to any accruals (related to the month for which the asset management fee is being calculated) for the asset management fee, distribution fees in connection with a securities offering, the Performance Allocation (as defined in the Fifth CROP Partnership Agreement and described below) or any distributions. The GAV and NAV of CROP is determined in accordance with the valuation guidelines adopted by the CCI Board and reflective of the ownership interest held by CROP in such gross assets. If we own assets other than through CROP, we will pay a corresponding fee.

The management fee may be paid, at CCA III's election, in cash or shares of our common stock or CROP Common Units. To the extent that CCA III elects to receive any portion of its management fee in shares of our common stock or CROP Common Units, CCA III may request that we or CROP may repurchase such shares or units at a later date. Shares of our common stock and CROP Common Units obtained by CCA III as compensation for the management fee payable are not subject to the repurchase limits of our share repurchase plan or any reduction or penalty for an early repurchase. Upon the request of CCA III, we or CROP will repurchase any such securities for cash unless our board of directors determines that any such repurchase would be prohibited by applicable law, our charter, the Fifth CROP Partnership Agreement, or otherwise cause our cash levels or leverage levels to be imprudent as determined by our board of directors. CROP will waive the one-year holding period requirement with respect to the “Exchange Right” provided for in the CROP Partnership Agreement. CCA III will have registration rights with respect to shares of our common stock.

Contingent Acquisition Fees and Contingent Financing Fees. If the Amended and Restated Advisory Agreement is terminated other than for cause (or non-renewal or termination by CCA III), the Contingent Acquisition Fees and Contingent Financing Fees provided for in the previous advisory agreement will be due and payable in an amount equal to approximately $22 million (if the termination occurs in year one) reduced by 10% each year thereafter.

Organization and Offering Expenses. We will reimburse CCA III for any organization and offering expenses that it incurs on our behalf as and when incurred. CCA III is no longer obligated to pay the organization and offering expenses associated with the Offering as it was prior to the CRII Merger, with the exception of the deferred selling commission

associated with Class TX shares sold. After the termination of the primary offering, CCA III will reimburse us to the extent that the organization and offering expenses that we incur exceed 15% of the gross proceeds from any public offering.

Expense Reimbursement. Subject to the limitations on total operating expenses, CCA III is entitled to reimbursement of all costs and expenses incurred by it or its affiliates on our behalf, provided that CCA III is responsible for the expenses related to any and all personnel of CCA III who provide investment advisory services pursuant to the Amended and Restated Advisory Agreement (including, without limitation, each of our executive officers and any directors who are also directors, officers or employees of CCA III or any of its affiliates), including, without limitation, salaries, bonus and other wages, payroll taxes and the cost of employee benefit plans of such personnel, and costs of insurance with respect to such personnel (“Advisor Expenses”); provided that we are responsible for the personnel costs of our employees even if they are also directors or officers of CCA III or any of its affiliates except for certain costs as provided for in a reimbursement and cost sharing agreement.

As a result of the CRII Merger, our operations are now conducted through CROP. The Fifth Amended and Restated CROP Partnership Agreement (the "Fifth CROP Partnership Agreement") entered into at the close of the CRII Merger amends the performance fee payable to CCA III or its affiliates as follows:

The Fifth CROP Partnership Agreement eliminates the promotional interest in the operating partnership held by Cottonwood Communities Investor, LLC and assigned to Cottonwood Advisors Promote, LLC, and provides for the payment of a performance participation interest in CROP to CCA III (the “Special Limited Partner” for purposes of the below) as follows. So long as the advisory agreement with CCA III has not been terminated (including by means of non-renewal), the Special Limited Partner will hold a performance participation interest in CROP that entitles it to receive an allocation from CROP equal to 12.5% of the Total Return, subject to a 5% Hurdle Amount, with a Catch-Up (each term as defined below). Such allocation will be made annually and accrue monthly.

•First, if the Total Return for the applicable period exceeds the sum of (i) the Hurdle Amount for that period and (ii) the Loss Carryforward Amount (any such excess, “Excess Profits”), 100% of such annual Excess Profits until the total amount allocated to the Special Limited Partner equals 12.5% of the sum of (x) the Hurdle Amount for that period and (y) any amount allocated to the Special Limited Partner pursuant to this clause (this is commonly referred to as a “Catch-Up”); and

(i) all distributions accrued or paid (without duplication) on the participating partnership units outstanding at the end of such period since the beginning of the then-current calendar year (but for the year 2021, since the date of the CRII Merger) plus

(ii) the change in aggregate NAV of such units since the beginning of the year (but for the year 2021, since the date of the CRII Merger), before giving effect to (x) changes resulting solely from the proceeds of issuances of participating partnership units, (y) any allocation/accrual to the performance participation interest and (z) applicable distribution fee expenses (including any payments made to CCI for payment of such expenses).

For the avoidance of doubt, the calculation of Total Return will (i) include any appreciation or depreciation in the NAV of units issued during the then-current calendar year (but for the year 2021, beginning as of the date of the CRII Merger) but (ii) exclude the proceeds from the initial issuance of such units.

“Hurdle Amount” means, for any period during a calendar year, an amount that results in a 5% annualized internal rate of return on the NAV of the participating partnership units outstanding at the beginning of the then-current calendar year (but for the year 2021, beginning as of the date of the CRII Merger) and all participating partnership units issued since the beginning of the applicable calendar year (but for the year 2021, beginning as of the date of the CRII Merger), taking into account the timing and amount of all distributions accrued or paid (without duplication) on all such units and all issuances of participating

partnership units over the period and calculated in accordance with recognized industry practices. The ending NAV of the participating partnership units used in calculating the internal rate of return will be calculated before giving effect to any allocation/accrual to the performance participation interest and applicable distribution fee expenses. For the avoidance of doubt, the calculation of the Hurdle Amount for any period will exclude any participating partnership units repurchased during such period, which units will be subject to the performance participation allocation upon repurchase as described below.

“Loss Carryforward Amount” shall initially equal zero and shall cumulatively increase by the absolute value of any negative annual Total Return and decrease by any positive annual Total Return, provided that the Loss Carryforward Amount shall at no time be less than zero and provided further that the calculation of the Loss Carryforward Amount will exclude the Total Return related to any participating partnership units repurchased during such year, which units will be subject to the performance participation allocation upon repurchase as described below. The effect of the Loss Carryforward Amount is that the recoupment of past annual Total Return losses will offset the positive annual Total Return for purposes of the calculation of the Special Limited Partner’s performance participation.

The Special Limited Partner will also be allocated a performance participation with respect to all Common Units that are repurchased at the end of any month (in connection with repurchases of our shares under our share repurchase plan) in an amount calculated as described above with the relevant period being the portion of the year for which such unit was outstanding, and proceeds for any such unit repurchase will be reduced by the amount of any such performance participation.

The performance participation interest may be payable in cash or Common Units at the election of the Special Limited Partner. If the Special Limited Partner elects to receive such distributions in Common Units, the Special Limited Partner may request CROP to repurchase such Common Units from the Special Limited Partner at a later date pursuant to the “Exchange Right” and CROP will waive the one-year-holding-period requirement.

On May 7, 2021, our board of directors declared cash distributions at a daily distribution rate of $0.00191781 to holders of record of our Series 2016 Preferred Stock issued in the CRII Merger for each day in the period from May 7, 2021 through May 31, 2021. On May 11, 2021, our board of directors declared cash distributions at a daily distribution rate of $0.00191781 to holders of record of our Series 2016 Preferred Stock for each day in the months of June, July and August 2021. The daily distribution rate is equal to 7.0% annually on the $10.00 purchase price.

On May 7, 2021, our board of directors declared cash distributions at a daily distribution rate of $0.00205479 to holders of record of our Series 2017 Preferred Stock issued in the CRII Merger for each day in the period from May 7, 2021 through May 31, 2021. On May 11, 2021, our board of directors declared cash distributions at a daily distribution rate of $0.00205479 to holders of record of our Series 2017 Preferred Stock for each day in the months of June, July and August 2021. The daily distribution rate is equal to 7.5% annually on the $10.00 purchase price.

On May 11, 2021, our board of directors declared cash distributions at a daily distribution rate of $0.00150685, or 5.5% annually on the $10.00 purchase price, to holders of record of our Series 2019 Preferred Stock for each day in the months of June, July and August 2021.

On May 11, 2021, our board of directors declared cash distributions for each class of common stock at a daily distribution rate of $0.00136986, or 5.0% annually on the $10.00 purchase price, to holders of record of each class of common stock for each day in the months of June, July, and August 2021. In December 2020, our board of directors approved the suspension of our distribution reinvestment plan. All distributions are currently being paid in cash until we resume our distribution reinvestment plan offering.

Effective immediately prior to the closing of the CRII Merger, Enzio Cassinis, Adam Larson, Susan Hallenberg and Eric Marlin were granted an aggregate of 50,000 time-based, retention LTIP Units of the Operating Partnership, which did not accelerate in connection with the CRII Merger but converted into the right to receive one CROP LTIP Unit, and such units continue to have, and are subject to, the same terms and conditions (including vesting terms) set forth in the applicable vesting agreement, as in effect immediately prior to the effective time of the CROP Merger. Consistent with prior time-based LTIP Units of the Operating Partnership, the units vest over four years in equal installments on an annual basis, with the first 25% vesting May 7, 2022, subject to the grantee’s continued employment with CCA III or its affiliates or us, as applicable.