Redeemable Common Stock

6 Months Ended

Jun. 30, 2021

Equity [Abstract]

Redeemable Common Stock

Redeemable Common Stock

As of June 30, 2021, Massachusetts Mutual Life Insurance Company (“MassMutual”) has committed to purchase up to $200.0 million of Class N shares in the Private Offering (the “MassMutual Capital Commitment”). MassMutual is an affiliate of Invesco. The MassMutual Capital Commitment expires on September 28, 2021. The initial purchase price per Class N share was $25.00. The price per Class N share for subsequent purchases is based on our NAV per Class N share at the time of purchase.

As of June 30, 2021, MassMutual had purchased 5,536,905 Class N shares for $144.9 million, net of offering costs. The Class N shares have been classified as redeemable common stock on our condensed consolidated balance sheets because MassMutual has the contractual right to redeem the shares under certain circumstances, as described below. MassMutual's redemption rights are not transferable.

At MassMutual's written request, we are required to repurchase MassMutual's Class N shares and any other shares of our common stock held by MassMutual (collectively, “MassMutual Shares”) at the earlier of (i) the third anniversary of the date we commenced the Offering, or (ii) the date that our aggregate NAV is at least $1.5 billion. When we are required to begin repurchasing the MassMutual Shares, we will repurchase the shares on a monthly basis at MassMutual's request. The repurchase price will generally be equal to the NAV per share for the class of shares being repurchased as of the prior month end. The aggregate amount (based upon aggregate repurchase price) of MassMutual Shares that we are required to repurchase in any month is limited to the lesser of (i) 15% of the net proceeds from the sale of shares of common stock in the Offering to persons other than MassMutual and its affiliates in the month prior to when MassMutual submits their purchase request, and (ii) 1.5% of our aggregate NAV as of the last day of the month prior to when MassMutual submits their purchase request.

We began to recognize changes in the value of the MassMutual Shares when redemption of the shares became probable. The redemption of the MassMutual shares became probable when the SEC declared our Registration Statement on Form S-11 (File No. 333-254931) effective on May 14, 2021. As of June 30, 2021, we recorded an increase to redeemable common stock and a decrease to additional paid-in capital of $10.2 million to adjust the value of the MassMutual Shares to our June 30, 2021 NAV per Class N share. We will limit any adjustment in the carrying amount of the redeemable common stock to the initial amount reported as redeemable common stock on the condensed consolidated balance sheet. The change in the redemption value does not affect income available to common stockholders.

We have entered into an exchange rights and registration agreement with MassMutual (the “Registration Rights Agreement”). After September 28, 2025, MassMutual may require us to exchange all or a portion of its Class N shares for any class of shares of our common stock being sold in the Primary Offering and file and maintain an effective registration statement with the SEC (for no longer than three years) registering the offer and sale of the new shares issued in the exchange. MassMutual's rights under the Registration Rights Agreement will terminate when its shares of our common stock have an aggregate NAV of less than $20.0 million.

On July 29, 2021, MassMutual committed to purchase an additional $200.0 million of Class N shares in the Private Offering and modified their redemption rights in connection with the new subscription agreement. See additional information in Note 17 — “Subsequent Events”.