Equity and Redeemable Non-controlling Interest

3 Months Ended

Mar. 31, 2022

Equity [Abstract]

Equity and Redeemable Non-controlling Interest

10. Equity and Redeemable Non-controlling Interest

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. See Note 2 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.

Charter Amendment

On May 10, 2021, the Company amended its charter to increase the number of shares of stock that the Company has authority to issue to 3,100,000,000 shares, consisting of 3,000,000,000 shares of common stock, $0.01 par value per share, 500,000,000 of which are classified as Class T common stock, 1,000,000,000 of which are classified as Class S common stock, 500,000,000 of which are classified as Class D common stock and 1,000,000,000 of which are classified as Class I common stock, and 100,000,000 shares of preferred stock, $0.01 par value per share. Prior to the amendment, the Company had authority to issue 1,100,000,000 shares, consisting of 1,000,000,000 shares of common stock, $0.01 par value per share, 250,000,000 of which were classified as Class T common stock, 250,000,000 of which were classified as Class S common stock, 250,000,000 of which were classified as Class D common stock and 250,000,000 of which were classified as Class I common stock, and 100,000,000 shares of preferred stock, $0.01 par value per share.     

As of March 31, 2022, 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 March 31, 2022
	Class T			Class S			Class D			Class I			Total
December 31, 2021		4,648,436			154,381,036			22,142,299			163,624,500			344,796,271
Common stock shares issued		683,879			34,567,565			5,235,258			38,690,768			79,177,470
Distribution reinvestment plan shares issued		28,927			799,492			148,140			742,812			1,719,371
Common stock shares repurchased		(2,549	)		(1,063,944	)		(74,333	)		(678,139	)		(1,818,965	)
March 31, 2022		5,358,693			188,684,149			27,451,364			202,379,941			423,874,147

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 and suspend the Company’s share repurchase plan if it deems such action to be in the Company’s best interest and 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 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 March 31, 2022, the Company repurchased 1,818,965 shares of common stock representing a total of $47.0 million. The Company had no unfulfilled repurchase requests as of March 31, 2022.

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 paid directly to the applicable distributor.

The following table details the aggregate distributions declared for each applicable class of common stock for the three months ended March 31, 2022:

	Class T			Class S			Class D			Class I
Gross distributions declared per share of common stock	$	0.3105		$	0.3105		$	0.3105		$	0.3105
Stockholder servicing fee per share of common stock		(0.0552	)		(0.0552	)		(0.0161	)		—
Net distributions declared per share of common stock	$	0.2553		$	0.2553		$	0.2944		$	0.3105

Redeemable Non-controlling Interest

In connection with its performance participation interest, the Special Limited Partner holds Class I units in the Operating Partnership.  See Note 11 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 dividends, or the redemption value, which is equivalent to fair value, of such units at the end of each measurement period. As the redemption value was greater than the adjusted carrying value at March 31, 2022, the Company recorded an allocation adjustment of $12.4 million between Additional paid-in capital and Redeemable non-controlling interest.

The following table summarizes the Redeemable non-controlling interest activity for the three months ended March 31, 2022 and 2021 ($ in thousands):

	March 31, 2022			March 31, 2021
Balance at the beginning of the year	$	30,502		$	10,409
Settlement of performance participation allocation		204,225			15,061
GAAP income (loss) allocation		582			(221	)
Distributions		(2,810	)		(366	)
Fair value allocation		12,381			839
Ending balance	$	244,880		$	25,722