Equity and Redeemable Non-controlling Interests

9 Months Ended

Sep. 30, 2023

Equity [Abstract]

Equity and Redeemable Non-controlling Interests

11.Equity and Redeemable Non-controlling Interests

Authorized Capital

The Company is authorized to issue preferred stock and four classes of common stock consisting of Class T shares, Class S shares, Class D shares, and Class I shares. The Company’s board of directors has the ability to establish the preferences and rights of each class or series of preferred stock, without stockholder approval, and as such, it may afford the holders of any series or class of preferred stock preferences, powers and rights senior to the rights of holders of common stock. The differences among the common share classes relate to upfront selling commissions, dealer manager fees and ongoing stockholder servicing fees. Refer to Note 2 — “Summary of Significant Accounting Policies” to the Company’s consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, for a further description of such items. Other than the differences in upfront selling commissions, dealer manager fees and ongoing stockholder servicing fees, each class of common stock is subject to the same economic and voting rights.

As of September 30, 2023, the Company had the authority to issue 3,100,000,000 shares of capital stock, consisting of the following:

Classification	Number of Shares		Par Value
Preferred Stock		100,000,000	$	0.01
Class T Shares		500,000,000	$	0.01
Class S Shares		1,000,000,000	$	0.01
Class D Shares		500,000,000	$	0.01
Class I Shares		1,000,000,000	$	0.01
Total		3,100,000,000

Common Stock

The following table details the movement in the Company’s outstanding shares of common stock:

	Three Months Ended September 30, 2023
	Class T			Class S			Class D			Class I			Total
June 30, 2023		5,640,007			212,244,742			29,291,354			222,011,809			469,187,912
Common stock shares issued (1)		12,504			794,388			(4,725	)		3,265,512			4,067,679
Distribution reinvestment plan shares issued		36,190			948,038			79,607			970,189			2,034,024
Common stock shares repurchased		(139,792	)		(10,889,677	)		(659,557	)		(13,842,080	)		(25,531,106	)
Independent directors’ restricted stock grant (2)		—			—			—			30,361			30,361
September 30, 2023		5,548,909			203,097,491			28,706,679			212,435,791			449,788,870

	Nine Months Ended September 30, 2023
	Class T			Class S			Class D			Class I			Total
December 31, 2022		5,721,496			224,556,910			30,974,173			244,455,013			505,707,592
Common stock shares issued (1)		95,616			4,353,179			(142,011	)		11,693,589			16,000,373
Distribution reinvestment plan shares issued		106,290			2,868,401			259,145			2,929,928			6,163,764
Common stock shares repurchased		(374,493	)		(28,680,999	)		(2,384,628	)		(46,673,100	)		(78,113,220	)
Independent directors’ restricted stock grant (2)		—			—			—			30,361			30,361
September 30, 2023		5,548,909			203,097,491			28,706,679			212,435,791			449,788,870

__________

(1)Includes exchanges between share classes

(2)The independent directors’ restricted stock grant represents $0.8 million of the annual compensation paid to the independent directors for the period ended September 30, 2023. Each grant is amortized over the one-year service period of such grant. The shares vested in August 2023.

Share Repurchases

The Company has adopted a share repurchase plan whereby, subject to certain limitations, stockholders may request on a monthly basis that the Company repurchases all or any portion of their shares. Should repurchase requests, in the Company’s judgment, place an undue burden on its liquidity, adversely affect its operations or risk having an adverse impact on the Company as a whole, or should the Company otherwise determine that investing its liquid assets in real properties or other illiquid investments rather than repurchasing its shares is in the best interests of the Company as a whole, then the Company may choose to repurchase fewer shares than have been requested to be repurchased, or none at all. Further, the Company’s board of directors may modify or suspend the Company’s share

repurchase plan if it deems such action to be in the Company’s best interest and in the best interest of its stockholders. In addition, the total amount of shares that the Company will repurchase is limited, in any calendar month, to shares whose aggregate value (based on the repurchase price per share on the date of the repurchase) is no more than 2% of its aggregate Net Asset Value (“NAV”) as of the last day of the previous calendar month and, in any calendar quarter, to shares whose aggregate value is no more than 5% of its aggregate NAV as of the last day of the previous calendar quarter. In the event that the Company determines to repurchase some but not all of the shares submitted for repurchase during any month, shares repurchased at the end of the month will be repurchased on a pro rata basis.

For the three months ended September 30, 2023, the Company repurchased 25,531,106 shares of common stock representing, a total of $639.2 million. For the three months ended September 30, 2022, the Company repurchased 14,659,490 shares of common stock representing, a total of $402.4 million. For the nine months ended September 30, 2023, the Company repurchased 78,113,220 shares of common stock representing, a total of $2.0 billion. For the nine months ended September 30, 2022, the Company repurchased 20,835,406 shares of common stock representing a total of $567.6 million.

Distributions

The Company generally intends to distribute substantially all of its taxable income, which does not necessarily equal net income as calculated in accordance with GAAP, to its stockholders each year to comply with the REIT provisions of the Code.

Each class of common stock receives the same gross distribution per share. The net distribution varies for each class based on the applicable stockholder servicing fee, which is deducted from the monthly distribution per share and is paid directly to the applicable distributor.

The following table details the aggregate distributions declared for each applicable class of common stock:

	Three Months Ended September 30, 2023
	Class T			Class S			Class D			Class I
Aggregate gross distributions declared per share of common stock	$	0.3105		$	0.3105		$	0.3105		$	0.3105
Stockholder servicing fee per share of common stock		(0.0537	)		(0.0537	)		(0.0154	)		—
Net distributions declared per share of common stock	$	0.2568		$	0.2568		$	0.2951		$	0.3105
	Nine Months Ended September 30, 2023
	Class T			Class S			Class D			Class I
Aggregate gross distributions declared per share of common stock	$	0.9315		$	0.9315		$	0.9315		$	0.9315
Stockholder servicing fee per share of common stock		(0.1631	)		(0.1631	)		(0.0470	)		—
Net distributions declared per share of common stock	$	0.7684		$	0.7684		$	0.8845		$	0.9315

Redeemable Non-controlling Interests

In connection with its performance participation interest, the Special Limited Partner holds Class I units in the Operating Partnership. See Note 12 for further details of the Special Limited Partner’s performance participation interest. Because the Special Limited Partner has the ability to redeem its Class I units for cash, at its election, the Company has classified these Class I units as Redeemable non-controlling interest in mezzanine equity on the Company’s Condensed Consolidated Balance Sheets. The redeemable non-controlling interest is recorded at the greater of the carrying amount, adjusted for its share of the allocation of income or loss and distributions, or the redemption value, which is equivalent to fair value, of such units at the end of each measurement period. In addition to the Special Limited Partner’s interest noted above, certain third parties also have a redeemable non-controlling interest.

The following tables detail the redeemable non-controlling interests activity related to the Special Limited Partner and third-party Operating Partnership unitholders for the nine months ended September 30, 2023 and 2022 ($ in thousands):

	Special Limited Partner			Third-party Operating Partnership unitholders			Total
Balance at December 31, 2022	$	238,322		$	188,777		$	427,099
Settlement of performance participation allocation		102,348			—			102,348
GAAP loss allocation		(11,263	)		(6,241	)		(17,504	)
Distributions		(12,049	)		(6,677	)		(18,726	)
Fair value allocation		2,598			1,439			4,037
Balance at September 30, 2023	$	319,956		$	177,298		$	497,254

	Special Limited Partner			Third-party Operating Partnership unitholders			Total
Balance at December 31, 2021	$	30,502		$	—		$	30,502
Settlement of performance participation allocation		204,225			—			204,225
Issuance of Operating Partnership units as consideration for   acquisitions of real estate		—			190,459			190,459
GAAP income allocation		949			487			1,436
Distributions		(8,429	)		(4,175	)		(12,604	)
Fair value allocation		22,796			11,290			34,086
Balance at September 30, 2022	$	250,043		$	198,061		$	448,104