•
|
the transaction price and offering price for each class of our common stock for subscriptions to be accepted as of June 1, 2019;
|
•
|
the calculation of our April 30, 2019 net asset value (“NAV”) per share, as determined in accordance with our valuation procedures, for each of our share classes;
|
•
|
the status of our public and private offerings;
|
•
|
updated information with respect to our real properties;
|
•
|
updated information regarding distributions authorized by our board of directors;
|
•
|
updated information regarding redemptions;
|
•
|
updated selected financial data;
|
•
|
updated information regarding fees and expenses payable to the Advisor, the Dealer Manager and their affiliates;
|
•
|
updated historical NAV information for 2019;
|
•
|
an update to the risk factors;
|
•
|
updated experts information; and
|
•
|
our Quarterly Report on Form 10-Q for the quarter ended March 31, 2019.
|
•
|
JUNE 1, 2019 TRANSACTION PRICE
|
Share Class
|
|
Transaction Price
(per share) |
|
Offering Price
(per share) |
||||
Class T
|
|
$
|
10.0550
|
|
|
$
|
10.5288
|
|
Class W
|
|
$
|
10.0550
|
|
|
$
|
10.0550
|
|
Class I
|
|
$
|
10.0550
|
|
|
$
|
10.0550
|
|
•
|
APRIL 30, 2019 NAV PER SHARE
|
|
|
As of
|
||||||
(in thousands)
|
|
April 30, 2019
|
|
March 31, 2019
|
||||
Real estate properties
|
|
$
|
356,850
|
|
|
$
|
356,700
|
|
Cash and other assets, net of other liabilities
|
|
53,047
|
|
|
22,319
|
|
||
Debt obligations
|
|
(90,000
|
)
|
|
(90,000
|
)
|
||
Aggregate Fund NAV
|
|
$
|
319,897
|
|
|
$
|
289,019
|
|
Total Fund Interests outstanding
|
|
31,815
|
|
|
28,724
|
|
(in thousands, except per Fund Interest data)
|
|
Total
|
|
Class T
Shares |
|
Class W
Shares |
|
Class I
Shares |
|
OP Units
|
||||||||||
As of April 30, 2019
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Monthly NAV
|
|
$
|
319,897
|
|
|
$
|
303,471
|
|
|
$
|
10,328
|
|
|
$
|
5,375
|
|
|
$
|
723
|
|
Fund Interests outstanding
|
|
31,815
|
|
|
30,181
|
|
|
1,027
|
|
|
535
|
|
|
72
|
|
|||||
NAV Per Fund Interest
|
|
$
|
10.0550
|
|
|
$
|
10.0550
|
|
|
$
|
10.0550
|
|
|
$
|
10.0550
|
|
|
$
|
10.0550
|
|
As of March 31, 2019
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Monthly NAV
|
|
$
|
289,019
|
|
|
$
|
277,119
|
|
|
$
|
6,305
|
|
|
$
|
4,872
|
|
|
$
|
723
|
|
Fund Interests outstanding
|
|
28,724
|
|
|
27,542
|
|
|
626
|
|
|
484
|
|
|
72
|
|
|||||
NAV Per Fund Interest
|
|
$
|
10.0618
|
|
|
$
|
10.0618
|
|
|
$
|
10.0618
|
|
|
$
|
10.0618
|
|
|
$
|
10.0618
|
|
|
|
Weighted-Average
Basis
|
|
Exit capitalization rate
|
|
5.4
|
%
|
Discount rate / internal rate of return
|
|
6.5
|
%
|
Holding period of real properties (years)
|
|
10.6
|
|
Input
|
|
Hypothetical
Change |
|
Increase (Decrease)
to the NAV of Real Properties |
|
Exit capitalization rate (weighted-average)
|
|
0.25% decrease
|
|
3.2
|
%
|
|
|
0.25% increase
|
|
(3.0
|
)%
|
Discount rate (weighted-average)
|
|
0.25% decrease
|
|
2.1
|
%
|
|
|
0.25% increase
|
|
(2.0
|
)%
|
•
|
STATUS OF OUR PUBLIC AND PRIVATE OFFERINGS
|
(in thousands)
|
|
Class T
|
|
Class W
|
|
Class I
|
|
Notes to
Stockholders (1) |
|
Total
|
||||||||||
Amount of gross proceeds raised:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Primary offering
|
|
$
|
338,241
|
|
|
$
|
12,828
|
|
|
$
|
6,348
|
|
|
$
|
—
|
|
|
$
|
357,417
|
|
DRIP
|
|
4,695
|
|
|
57
|
|
|
156
|
|
|
—
|
|
|
4,908
|
|
|||||
Private offering (2)
|
|
62
|
|
|
—
|
|
|
62
|
|
|
376
|
|
|
500
|
|
|||||
Total offering
|
|
$
|
342,998
|
|
|
$
|
12,885
|
|
|
$
|
6,566
|
|
|
$
|
376
|
|
|
$
|
362,825
|
|
Number of shares issued:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Primary offering
|
|
32,196
|
|
|
1,276
|
|
|
654
|
|
|
—
|
|
|
34,126
|
|
|||||
DRIP
|
|
468
|
|
|
6
|
|
|
16
|
|
|
—
|
|
|
490
|
|
|||||
Private offering (2)
|
|
7
|
|
|
—
|
|
|
7
|
|
|
—
|
|
|
14
|
|
|||||
Stock dividends
|
|
—
|
|
|
6
|
|
|
3
|
|
|
—
|
|
|
9
|
|
|||||
Total offering
|
|
32,671
|
|
|
1,288
|
|
|
680
|
|
|
—
|
|
|
34,639
|
|
|
(1)
|
Amount relates to notes payable issued to investors in our private offering.
|
(2)
|
Our private offering closed on December 1, 2016.
|
•
|
REAL PROPERTIES
|
Building Type
|
|
Description
|
|
Percent of Rentable Square Feet
|
|
Bulk distribution
|
|
Building size of 150,000 to over 1 million square feet, single or multi-customer
|
|
77.7
|
%
|
Light industrial
|
|
Building size of 75,000 to 150,000 square feet, single or multi-customer
|
|
22.3
|
|
|
|
|
|
100.0
|
%
|
($ and square feet in thousands)
|
|
Number of Buildings
|
|
Rentable
Square Feet |
|
Occupied
Rate (1) |
|
Leased
Rate (1) |
|
Annualized Base Rent (2)
|
|
% of Total Annualized Base Rent
|
||||||
Austin
|
|
1
|
|
120
|
|
|
100.0
|
%
|
|
100.0
|
%
|
|
$
|
901
|
|
|
5.6
|
%
|
Central Valley
|
|
1
|
|
382
|
|
|
100.0
|
|
|
100.0
|
|
|
2,170
|
|
|
13.3
|
|
|
Chicago
|
|
2
|
|
386
|
|
|
100.0
|
|
|
100.0
|
|
|
564
|
|
|
3.5
|
|
|
D.C. / Baltimore
|
|
1
|
|
126
|
|
|
100.0
|
|
|
100.0
|
|
|
519
|
|
|
3.2
|
|
|
Las Vegas
|
|
1
|
|
482
|
|
|
100.0
|
|
|
100.0
|
|
|
2,547
|
|
|
15.6
|
|
|
New Jersey
|
|
2
|
|
253
|
|
|
98.8
|
|
|
98.8
|
|
|
1,293
|
|
|
7.9
|
|
|
Orlando
|
|
2
|
|
441
|
|
|
95.9
|
|
|
100.0
|
|
|
2,288
|
|
|
14.0
|
|
|
Pennsylvania
|
|
1
|
|
154
|
|
|
100.0
|
|
|
100.0
|
|
|
770
|
|
|
4.7
|
|
|
South Florida
|
|
1
|
|
57
|
|
|
100.0
|
|
|
100.0
|
|
|
424
|
|
|
2.6
|
|
|
Southern California
|
|
5
|
|
762
|
|
|
100.0
|
|
|
100.0
|
|
|
4,821
|
|
|
29.6
|
|
|
Total Portfolio
|
|
17
|
|
3,163
|
|
|
99.3
|
%
|
|
99.9
|
%
|
|
$
|
16,297
|
|
|
100.0
|
%
|
|
(1)
|
The occupied rate reflects the square footage with a paying customer in place. The leased rate includes the occupied square footage and additional square footage with leases in place that have not yet commenced.
|
(2)
|
Annualized base rent is calculated as monthly base rent including the impact of any contractual tenant concessions (cash basis) per the terms of the lease as of March 31, 2019, multiplied by 12.
|
($ and square feet in thousands)
|
|
Number of Leases
|
|
Occupied Square Feet
|
|
% of Total Occupied Square Feet
|
|
Annualized Base Rent (1)
|
|
% of Total Annualized Base Rent
|
|||||
2019
|
|
2
|
|
86
|
|
|
2.7
|
%
|
|
$
|
659
|
|
|
4.0
|
%
|
2020
|
|
4
|
|
153
|
|
|
4.9
|
|
|
764
|
|
|
4.7
|
|
|
2021
|
|
3
|
|
385
|
|
|
12.3
|
|
|
2,502
|
|
|
15.4
|
|
|
2022
|
|
2
|
|
171
|
|
|
5.4
|
|
|
755
|
|
|
4.6
|
|
|
2023
|
|
9
|
|
1,295
|
|
|
41.2
|
|
|
7,143
|
|
|
43.8
|
|
|
2024
|
|
1
|
|
37
|
|
|
1.2
|
|
|
255
|
|
|
1.6
|
|
|
2025
|
|
4
|
|
376
|
|
|
12.0
|
|
|
1,891
|
|
|
11.6
|
|
|
2026
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2027
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Thereafter
|
|
5
|
|
638
|
|
|
20.3
|
|
|
2,328
|
|
|
14.3
|
|
|
Total occupied
|
|
30
|
|
3,141
|
|
|
100.0
|
%
|
|
$
|
16,297
|
|
|
100.0
|
%
|
|
(1)
|
Annualized base rent is calculated as monthly base rent including the impact of any contractual tenant concessions (cash basis) per the terms of the lease as of March 31, 2019, multiplied by 12.
|
Customer
|
|
% of Total
Occupied Square Feet
|
|
% of Total Annualized Base Rent
|
||
The Kroger Co.
|
|
15.3
|
%
|
|
15.6
|
%
|
Boyd Flotation, Inc.
|
|
10.1
|
|
|
12.4
|
|
City Furniture, Inc.
|
|
7.8
|
|
|
7.9
|
|
G.P.R. Logistics LLC
|
|
7.9
|
|
|
7.4
|
|
Pactra USA, Inc.
|
|
5.9
|
|
|
6.8
|
|
Exel, Inc.
|
|
6.3
|
|
|
6.5
|
|
Enersys Delaware Inc.
|
|
4.9
|
|
|
4.7
|
|
The Hibbert Company, Inc.
|
|
5.2
|
|
|
4.3
|
|
Lanic Engineering
|
|
1.9
|
|
|
3.3
|
|
Lowe's Companies, Inc.
|
|
2.8
|
|
|
3.1
|
|
Total
|
|
68.1
|
%
|
|
72.0
|
%
|
($ and square feet in thousands)
|
|
Number of Leases
|
|
Occupied Square Feet
|
|
% of Total Occupied Square Feet
|
|
Annualized Base Rent (1)
|
|
% of Total Annualized Base Rent
|
|||||
Transportation / Logistics
|
|
4
|
|
644
|
|
|
20.5
|
%
|
|
$
|
3,491
|
|
|
21.4
|
%
|
Home Furnishings
|
|
2
|
|
564
|
|
|
18.0
|
|
|
3,315
|
|
|
20.3
|
|
|
Food & Beverage
|
|
2
|
|
519
|
|
|
16.5
|
|
|
2,803
|
|
|
17.2
|
|
|
Storage / Warehousing
|
|
5
|
|
556
|
|
|
17.7
|
|
|
1,339
|
|
|
8.2
|
|
|
Auto
|
|
3
|
|
158
|
|
|
5.0
|
|
|
1,084
|
|
|
6.7
|
|
|
Printing
|
|
1
|
|
164
|
|
|
5.2
|
|
|
698
|
|
|
4.3
|
|
|
Electrical / Wire
|
|
2
|
|
131
|
|
|
4.2
|
|
|
616
|
|
|
3.8
|
|
|
Aerospace
|
|
1
|
|
59
|
|
|
1.9
|
|
|
532
|
|
|
3.3
|
|
|
Home Improvement
|
|
1
|
|
89
|
|
|
2.8
|
|
|
505
|
|
|
3.1
|
|
|
Refrigeration
|
|
1
|
|
57
|
|
|
1.8
|
|
|
424
|
|
|
2.6
|
|
|
Post & Courier Services
|
|
1
|
|
52
|
|
|
1.7
|
|
|
372
|
|
|
2.3
|
|
|
Packaging
|
|
1
|
|
33
|
|
|
1.1
|
|
|
278
|
|
|
1.7
|
|
|
Fitness / Recreation
|
|
2
|
|
35
|
|
|
1.1
|
|
|
268
|
|
|
1.6
|
|
|
Computer / Electronics
|
|
1
|
|
23
|
|
|
0.7
|
|
|
208
|
|
|
1.3
|
|
|
Apparel / Clothing
|
|
1
|
|
35
|
|
|
1.1
|
|
|
181
|
|
|
1.1
|
|
|
Other
|
|
2
|
|
22
|
|
|
0.7
|
|
|
183
|
|
|
1.1
|
|
|
Total
|
|
30
|
|
3,141
|
|
|
100.0
|
%
|
|
$
|
16,297
|
|
|
100.0
|
%
|
|
(1)
|
Annualized base rent is calculated as monthly base rent including the impact of any contractual tenant concessions (cash basis) per the terms of the lease as of March 31, 2019, multiplied by 12.
|
($ in thousands)
|
|
Acquisition Date
|
|
Ownership Percentage
|
|
Purchase Price (1)
|
|
Purchase Price Capitalization Rate
|
|
Rentable Square Feet
|
|
Leased Rate
|
||||||
Ontario Industrial Center—Ontario, CA
|
|
2/26/2018
|
|
100%
|
|
$
|
10,565
|
|
|
1.3
|
%
|
(2)
|
|
86,000
|
|
|
100.0
|
%
|
Medley Industrial Center—Medley, FL
|
|
4/11/2018
|
|
100%
|
|
$
|
7,375
|
|
|
5.2
|
%
|
|
|
57,000
|
|
|
100.0
|
%
|
Ontario Distribution Center—Ontario, CA
|
|
5/17/2018
|
|
100%
|
|
$
|
30,770
|
|
|
3.5
|
%
|
(2)
|
|
247,000
|
|
|
100.0
|
%
|
Park 429 Logistics Center (3)
|
|
6/7/2018
|
|
100%
|
|
$
|
45,700
|
|
|
3.0
|
%
|
(4)
|
|
441,000
|
|
|
95.9
|
%
|
Pescadero Distribution Center (3)
|
|
6/20/2018
|
|
100%
|
|
$
|
45,750
|
|
|
4.7
|
%
|
|
|
382,000
|
|
|
100.0
|
%
|
Gothard Industrial Center—Huntington Beach, CA
|
|
6/25/2018
|
|
100%
|
|
$
|
10,075
|
|
|
5.1
|
%
|
|
|
59,000
|
|
|
100.0
|
%
|
Midway Industrial Center—Odenton, MD
|
|
10/22/2018
|
|
100%
|
|
$
|
7,987
|
|
|
6.5
|
%
|
|
|
126,000
|
|
|
100.0
|
%
|
Executive Airport Distribution Center—Henderson, NV
|
|
11/20/2018
|
|
100%
|
|
$
|
51,050
|
|
|
5.0
|
%
|
|
|
482,000
|
|
|
100.0
|
%
|
Iron Run Distribution Center—Allentown, PA
|
|
12/4/2018
|
|
100%
|
|
$
|
15,300
|
|
|
5.0
|
%
|
|
|
154,000
|
|
|
100.0
|
%
|
Elgin Distribution Center—Elgin, IL
|
|
12/11/2018
|
|
100%
|
|
$
|
21,550
|
|
|
2.1
|
%
|
(5)
|
|
257,000
|
|
|
100.0
|
%
|
Addison Distribution Center II—Addison, IL
|
|
12/21/2018
|
|
100%
|
|
$
|
12,500
|
|
|
5.0
|
%
|
|
|
129,000
|
|
|
100.0
|
%
|
Fontana Distribution Center—Fontana, CA
|
|
12/28/2018
|
|
100%
|
|
$
|
42,129
|
|
|
4.7
|
%
|
|
|
318,000
|
|
|
100.0
|
%
|
Airport Industrial Center—Ontario, CA
|
|
1/8/2019
|
|
100%
|
|
$
|
8,100
|
|
|
4.4
|
%
|
|
|
53,000
|
|
|
100.0
|
%
|
Kelly Trade Center—Austin, TX
|
|
1/31/2019
|
|
100%
|
|
$
|
15,300
|
|
|
5.8
|
%
|
|
|
119,000
|
|
|
100.0
|
%
|
7A Distribution Center—Robbinsville, NJ
|
|
2/11/2019
|
|
100%
|
|
$
|
12,100
|
|
|
6.3
|
%
|
|
|
177,000
|
|
|
98.2
|
%
|
Quakerbridge Distribution Center—Hamilton, NJ
|
|
3/11/2019
|
|
100%
|
|
$
|
8,500
|
|
|
5.9
|
%
|
|
|
76,000
|
|
|
100.0
|
%
|
|
(1)
|
Reflects contractual purchase price amount exclusive of transfer taxes, due diligence expenses, and other closing costs.
|
(2)
|
We acquired each of these buildings with an in-place lease that has below-market rent for this type of property and location. If the rent under each lease was at the current market rate, we estimate that the purchase price capitalization rate would be 4.8% for the Ontario Industrial Center and 5.0% for the Ontario Distribution Center. There is no assurance that, upon expiration of each lease, we will renew or re-lease the respective building at the then-current market rent rate.
|
(3)
|
This was a significant real property acquisition. See Supplement No. 1 for further detail.
|
(4)
|
The purchase price capitalization rate is approximately 4.6% excluding contractual free rent during a portion of the year following the acquisition of this property.
|
(5)
|
The purchase price capitalization rate is approximately 5.2% excluding contractual free rent during a portion of the year following the acquisition of this property.
|
($ in thousands)
|
|
Estimated Closing Quarter (1)
|
|
Ownership Percentage
|
|
Expected Purchase Price (2)
|
|
Rentable Square Feet
|
|
Leased Rate
|
|||
Monte Vista Avenue
|
|
Q2-19
|
|
100.0%
|
|
$
|
15,700
|
|
|
89,000
|
|
|
100.0%
|
Airpark West 16
|
|
Q2-19
|
|
100.0%
|
|
$
|
11,750
|
|
|
152,000
|
|
|
100.0%
|
Las Vegas Light Industrial Portfolio
|
|
Q2-19
|
|
100.0%
|
|
$
|
59,250
|
|
|
369,000
|
|
|
100.0%
|
|
(1)
|
The consummation of each of these acquisitions is subject to our completion of due diligence and various closing conditions to be met by the parties to each acquisition. There can be no assurance these acquisitions will be completed.
|
(2)
|
Reflects the contract purchase price exclusive of transfer taxes, due diligence expenses, and other closing costs.
|
•
|
DISTRIBUTIONS
|
|
|
Source of Cash Distributions
|
|
|
||||||||||||||||||||||||||||
($ in thousands)
|
|
Provided by
Expense Support (1) |
|
Provided by
Operating Activities |
|
Proceeds
from Financing Activities |
|
Proceeds from
DRIP (2) |
|
Gross
Distributions (3) |
||||||||||||||||||||||
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
March 31
|
|
$
|
1,295
|
|
|
36.6
|
%
|
|
$
|
503
|
|
|
14.2
|
%
|
|
$
|
—
|
|
|
—
|
%
|
|
$
|
1,744
|
|
|
49.2
|
%
|
|
$
|
3,542
|
|
Total
|
|
$
|
1,295
|
|
|
36.6
|
%
|
|
$
|
503
|
|
|
14.2
|
%
|
|
$
|
—
|
|
|
—
|
%
|
|
$
|
1,744
|
|
|
49.2
|
%
|
|
$
|
3,542
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
December 31
|
|
$
|
1,153
|
|
|
51.1
|
%
|
|
$
|
—
|
|
|
—
|
%
|
|
$
|
—
|
|
|
—
|
%
|
|
$
|
1,102
|
|
|
48.9
|
%
|
|
$
|
2,255
|
|
September 30
|
|
751
|
|
|
52.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
681
|
|
|
47.6
|
|
|
1,432
|
|
|||||
June 30
|
|
452
|
|
|
53.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
399
|
|
|
46.9
|
|
|
851
|
|
|||||
March 31
|
|
207
|
|
|
51.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
197
|
|
|
48.8
|
|
|
404
|
|
|||||
Total
|
|
$
|
2,563
|
|
|
51.9
|
%
|
|
$
|
—
|
|
|
—
|
%
|
|
$
|
—
|
|
|
—
|
%
|
|
$
|
2,379
|
|
|
48.1
|
%
|
|
$
|
4,942
|
|
|
(1)
|
For the three months ended March 31, 2019, the Advisor provided expense support of $1.3 million. See “Note 8 to the Condensed Consolidated Financial Statements” in our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2019 (included at the end of this Supplement) for further detail on the expense support provided during the quarter. For the year ended December 31, 2018, the Advisor provided expense support of $5.6 million. See Supplement No. 1 for a description of the expense support agreement.
|
(2)
|
Stockholders may elect to have cash distributions reinvested in shares of our common stock through our distribution reinvestment plan.
|
(3)
|
Gross distributions are total distributions before the deduction of any distribution fees relating to Class T shares and Class W shares issued in the primary portion of our initial public offering.
|
•
|
REDEMPTIONS
|
•
|
SELECTED FINANCIAL DATA
|
|
|
For the Three Months Ended March 31,
|
||||||
(in thousands, except per share data)
|
|
2019 (1)
|
|
2018 (1)
|
||||
Operating data:
|
|
|
|
|
||||
Total revenues
|
|
$
|
5,963
|
|
|
$
|
93
|
|
Total operating expenses
|
|
$
|
(7,693
|
)
|
|
$
|
(1,375
|
)
|
Total other expenses
|
|
$
|
(1,201
|
)
|
|
$
|
(183
|
)
|
Total expenses before expense support from Advisor
|
|
$
|
(8,894
|
)
|
|
$
|
(1,558
|
)
|
Total (reimbursement to) expense support from the Advisor, net
|
|
$
|
(2,205
|
)
|
|
$
|
1,062
|
|
Net expenses after expense support from Advisor
|
|
$
|
(11,099
|
)
|
|
$
|
(496
|
)
|
Net loss
|
|
$
|
(5,136
|
)
|
|
$
|
(403
|
)
|
Net loss attributable to common stockholders
|
|
$
|
(5,122
|
)
|
|
$
|
(403
|
)
|
Net loss per common share - basic and diluted
|
|
$
|
(0.20
|
)
|
|
$
|
(0.14
|
)
|
Weighted-average shares outstanding
|
|
25,997
|
|
|
2,961
|
|
||
Distributions:
|
|
|
|
|
||||
Gross cash distributions declared (2)
|
|
$
|
3,542
|
|
|
$
|
404
|
|
Cash distributions declared per common share (2)(3)(4)
|
|
$
|
0.14
|
|
|
$
|
0.14
|
|
Company-defined FFO (5):
|
|
|
|
|
||||
Reconciliation of net loss to Company-defined FFO:
|
|
|
|
|
||||
Net loss attributable to common stockholders
|
|
$
|
(5,122
|
)
|
|
$
|
(403
|
)
|
Total NAREIT-defined adjustments (6)
|
|
$
|
3,119
|
|
|
$
|
66
|
|
Total Company-defined adjustments (7)
|
|
$
|
876
|
|
|
$
|
741
|
|
Company-defined FFO
|
|
$
|
(1,127
|
)
|
|
$
|
404
|
|
Cash flow data:
|
|
|
|
|
||||
Net cash provided by operating activities
|
|
$
|
3,624
|
|
|
$
|
404
|
|
Net cash used in investing activities
|
|
$
|
(43,588
|
)
|
|
$
|
(11,163
|
)
|
Net cash provided by financing activities
|
|
$
|
50,576
|
|
|
$
|
26,629
|
|
|
|
As of
|
||||||
(in thousands)
|
|
March 31, 2019
|
|
December 31, 2018
|
||||
Balance sheet data:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
29,603
|
|
|
$
|
19,016
|
|
Total assets
|
|
$
|
376,629
|
|
|
$
|
324,620
|
|
Total liabilities
|
|
$
|
132,608
|
|
|
$
|
152,847
|
|
Total stockholders' equity
|
|
$
|
243,297
|
|
|
$
|
171,772
|
|
Gross offering proceeds raised during period (8)
|
|
$
|
88,434
|
|
|
$
|
200,070
|
|
Shares outstanding
|
|
28,700
|
|
|
20,265
|
|
||
Portfolio data:
|
|
|
|
|
||||
Number of buildings
|
|
17
|
|
|
13
|
|
||
Rentable square feet
|
|
3,163
|
|
|
2,737
|
|
||
Number of customers
|
|
30
|
|
|
18
|
|
|
(1)
|
The SEC declared this offering effective on February 18, 2016. We broke escrow on November 30, 2016 and then adjusted our share class structure in July 2017. We commenced real estate operations on February 26, 2018 when we acquired our first property. We are early in the acquisition phase of our life cycle, and the results of our operations are primarily impacted by the timing of our acquisitions and the equity raised through this offering. Accordingly, our year-over-year financial data is not directly comparable.
|
(2)
|
Gross cash distributions are total distributions before the deduction of distribution fees relating to Class T shares and Class W shares.
|
(3)
|
Amounts reflect the quarterly distribution rate authorized by our board of directors per Class I share of common stock. Our board of directors authorized distributions at this same rate per Class T and Class W share of common stock less respective distribution fees that are payable monthly with respect to such Class T and Class W shares (as calculated on a daily basis).
|
(4)
|
Cash distributions were authorized to all common stockholders of record as of the close of business on each day of the Initial Quarter. We met the minimum offering requirements in connection with our initial public offering on November 30, 2016. Accordingly, the Initial Quarter commenced on that date and ended on December 31, 2016.
|
(5)
|
Refer to the section of this Supplement titled “Additional Performance Measures” for a definition of Company-defined FFO, as well as a detailed reconciliation of our net (loss) income to Company-defined FFO.
|
(6)
|
Included in our NAREIT-defined adjustments is real estate-related depreciation and amortization.
|
(7)
|
Included in our Company-defined adjustments are acquisition expense reimbursements, which reflect amounts reimbursable to the Advisor for all expenses incurred by the Advisor and its affiliates on our behalf in connection with the selection, acquisition, development or origination of an asset.
|
(8)
|
Reflects gross offering proceeds raised from our public and private offerings.
|
|
|
For the Three Months Ended March 31,
|
|
For the Period
From Inception (August 12, 2014) to March 31, 2018 |
||||||||
(in thousands, except per share data)
|
|
2019
|
|
2018
|
|
|||||||
GAAP net loss attributable to common stockholders
|
|
$
|
(5,122
|
)
|
|
$
|
(403
|
)
|
|
$
|
(9,317
|
)
|
GAAP net loss per common share
|
|
$
|
(0.20
|
)
|
|
$
|
(0.14
|
)
|
|
$
|
(2.55
|
)
|
Reconciliation of GAAP net loss to NAREIT FFO:
|
|
|
|
|
|
|
||||||
GAAP net loss attributable to common stockholders
|
|
$
|
(5,122
|
)
|
|
$
|
(403
|
)
|
|
$
|
(9,317
|
)
|
Add (deduct) NAREIT-defined adjustments:
|
|
|
|
|
|
|
||||||
Real estate-related depreciation and amortization
|
|
3,128
|
|
|
66
|
|
|
6,669
|
|
|||
Redeemable noncontrolling interest's share of real estate-related depreciation and amortization
|
|
$
|
(9
|
)
|
|
$
|
—
|
|
|
$
|
(9
|
)
|
NAREIT FFO attributable to common stockholders
|
|
$
|
(2,003
|
)
|
|
$
|
(337
|
)
|
|
$
|
(2,657
|
)
|
NAREIT FFO per common share
|
|
$
|
(0.08
|
)
|
|
$
|
(0.11
|
)
|
|
$
|
(0.73
|
)
|
Reconciliation of NAREIT FFO to Company-defined FFO:
|
|
|
|
|
|
|
||||||
NAREIT FFO attributable to common stockholders
|
|
$
|
(2,003
|
)
|
|
$
|
(337
|
)
|
|
$
|
(2,657
|
)
|
Add (deduct) Company-defined adjustments:
|
|
|
|
|
|
|
||||||
Acquisition expense reimbursements, related party
|
|
878
|
|
|
741
|
|
|
5,778
|
|
|||
Redeemable noncontrolling interest's share of acquisition expense reimbursements, related party
|
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
|||
Company-defined FFO attributable to common stockholders
|
|
$
|
(1,127
|
)
|
|
$
|
404
|
|
|
$
|
3,119
|
|
Company-defined FFO per common share
|
|
$
|
(0.04
|
)
|
|
$
|
0.14
|
|
|
$
|
0.85
|
|
Reconciliation of Company-defined FFO to MFFO:
|
|
|
|
|
|
|
||||||
Company-defined FFO attributable to common stockholders
|
|
$
|
(1,127
|
)
|
|
$
|
404
|
|
|
$
|
3,119
|
|
Add (deduct) MFFO adjustments:
|
|
|
|
|
|
|
||||||
Straight-line rent and amortization of above/below-market leases
|
|
(845
|
)
|
|
(56
|
)
|
|
(2,518
|
)
|
|||
Redeemable noncontrolling interest's share of straight-line rent and amortization of above/below-market leases
|
|
2
|
|
|
—
|
|
|
2
|
|
|||
MFFO attributable to common stockholders
|
|
$
|
(1,970
|
)
|
|
$
|
348
|
|
|
$
|
603
|
|
MFFO per common share
|
|
$
|
(0.08
|
)
|
|
$
|
0.12
|
|
|
$
|
0.16
|
|
Weighted-average shares outstanding
|
|
25,997
|
|
|
2,961
|
|
|
3,657
|
|
•
|
FEES AND EXPENSES PAYABLE TO THE ADVISOR, THE DEALER MANAGER AND THEIR AFFILIATES
|
|
|
For the Three Months Ended March 31,
|
|
Payable as of
|
||||||||||||
|
|
|
March 31,
2019 |
|
December 31,
2018 |
|||||||||||
(in thousands)
|
|
2019
|
|
2018
|
|
|
||||||||||
Selling commissions—the Dealer Manager
|
|
$
|
1,818
|
|
|
$
|
555
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Dealer manager fees—the Dealer Manager
|
|
1,801
|
|
|
692
|
|
|
—
|
|
|
—
|
|
||||
Offering costs—the Advisor or its affiliates, including the Dealer Manager (1)
|
|
1,149
|
|
|
1,868
|
|
|
15,269
|
|
|
14,119
|
|
||||
Distribution fees—the Dealer Manager (2)
|
|
3,612
|
|
|
1,108
|
|
|
10,685
|
|
|
7,625
|
|
||||
Advisory fee—the Advisor
|
|
1,188
|
|
|
14
|
|
|
972
|
|
|
923
|
|
||||
Acquisition expense reimbursements—the Advisor (3)
|
|
878
|
|
|
741
|
|
|
3,728
|
|
|
3,500
|
|
||||
Other expense reimbursements—the Advisor (4)
|
|
472
|
|
|
246
|
|
|
90
|
|
|
299
|
|
||||
Total
|
|
$
|
10,918
|
|
|
$
|
5,224
|
|
|
$
|
30,744
|
|
|
$
|
26,466
|
|
|
(1)
|
As of March 31, 2019, the Advisor had incurred $15.6 million of offering costs on our behalf.
|
(2)
|
The distribution fees accrue daily and are payable monthly in arrears. The monthly amount of distribution fees payable is included in distributions payable on the condensed consolidated balance sheets. Additionally, we accrue for future estimated trailing amounts payable based on the shares outstanding as of the balance sheet date, which are included in distribution fees payable to affiliates on the condensed consolidated balance sheets. The Dealer Manager will reallow the distribution fees to participating broker dealers and broker dealers servicing accounts of investors who own Class T shares and/or Class W shares.
|
(3)
|
Reflects amounts reimbursable to the Advisor for all expenses incurred by the Advisor and its affiliates on our behalf in connection with the selection, acquisition, development or origination of an asset.
|
(4)
|
Other expense reimbursements include certain expenses incurred in connection with the services provided to us under the amended and restated advisory agreement, dated June 13, 2018, by and among us, the Operating Partnership, and the Advisor. These reimbursements include a portion of compensation expenses of individual employees of the Advisor, including certain of our named executive officers, related to services for which the Advisor does not otherwise receive a separate fee. A portion of the compensation received by certain employees of the Advisor and its affiliates may be in the form of a restricted stock grant awarded by us. We show these as reimbursements to the Advisor to the same extent that we recognize the related share-based compensation on our condensed consolidated statements of operations. We reimbursed the Advisor approximately $0.4 million and $0.2 million for the three months ended March 31, 2019 and 2018, respectively, for such compensation expenses. The remaining amount of other expense reimbursements relate to other general overhead and administrative expenses including, but not limited to, allocated rent paid to both third parties and affiliates of the Advisor, equipment, utilities, insurance, travel and entertainment.
|
|
|
For the Three Months Ended
March 31, |
||||||
(in thousands)
|
|
2019
|
|
2018
|
||||
Fees deferred
|
|
$
|
670
|
|
|
$
|
14
|
|
Other expenses supported
|
|
625
|
|
|
1,048
|
|
||
Total expense support from Advisor
|
|
1,295
|
|
|
1,062
|
|
||
Reimbursement of previously deferred fees and other expenses supported
|
|
(3,500
|
)
|
|
—
|
|
||
Total (reimbursement to) expense support from Advisor, net (1)
|
|
$
|
(2,205
|
)
|
|
$
|
1,062
|
|
|
(1)
|
As of March 31, 2019, approximately $3.3 million was payable to the Advisor by us, and is included in due to affiliates on the condensed consolidated balance sheets. As of December 31, 2018, approximately $0.7 million of expense support was payable to us by the Advisor, and is included in due from affiliates on the condensed consolidated balance sheets.
|
•
|
CERTAIN HISTORICAL NAV INFORMATION
|
Date
|
|
Class T
|
|
Class W
|
|
Class I
|
|
OP Units (1)
|
||||||||
2019
|
|
|
|
|
|
|
|
|
||||||||
March 31, 2019
|
|
$
|
10.0618
|
|
|
$
|
10.0618
|
|
|
$
|
10.0618
|
|
|
$
|
10.0618
|
|
|
(1)
|
OP Units were issued in January 2019.
|
•
|
RISK FACTORS
|
•
|
Overall investment objectives, strategy and criteria, including product type and style of investing (for example, core, core plus, value-add and opportunistic);
|
•
|
The general real property sector or debt investment allocation targets of each program and any targeted geographic concentration;
|
•
|
The cash requirements of each program;
|
•
|
The strategic proximity of the investment opportunity to other assets;
|
•
|
The effect of the acquisition on diversification of investments, including by type of property, geographic area, customers, size and risk;
|
•
|
The policy of each program relating to leverage of investments;
|
•
|
The effect of the acquisition on loan maturity profile;
|
•
|
The effect on lease expiration profile;
|
•
|
Customer concentration;
|
•
|
The effect of the acquisition on ability to comply with any restrictions on investments and indebtedness contained in applicable governing documents, SEC filings, contracts or applicable law or regulation;
|
•
|
The effect of the acquisition on the applicable entity's intention not to be subject to regulation under the Investment Company Act;
|
•
|
Legal considerations, such as Employee Retirement Income Security Act of 1974, as amended ("ERISA") and Foreign Investment in Real Property Tax Act ("FIRPTA"), that may be applicable to specific investment platforms;
|
•
|
The financial attributes of the investment opportunity;
|
•
|
Availability of financing;
|
•
|
Cost of capital;
|
•
|
Ability to service any debt associated with the investment opportunity;
|
•
|
Risk return profiles;
|
•
|
Targeted distribution rates;
|
•
|
Anticipated future pipeline of suitable investments;
|
•
|
Expected holding period of the investment opportunity and the applicable entity's remaining term;
|
•
|
Whether the applicable entity still is in its fundraising and acquisition stage, or has substantially invested the proceeds from its fundraising stage;
|
•
|
Whether the applicable entity was formed for the purpose of making a particular type of investment;
|
•
|
Affiliate and/or related party considerations;
|
•
|
The anticipated cash flow of the applicable entity and the asset;
|
•
|
Tax effects of the acquisition, including on REIT or partnership qualifications;
|
•
|
The size of the investment opportunity; and
|
•
|
The amount of funds available to each program and the length of time such funds have been available for investment.
|
•
|
EXPERTS
|
•
|
QUARTERLY REPORT ON FOR THE QUARTER ENDED MARCH 31, 2019
|
|
|
☒
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
Maryland
|
|
47-1592886
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
|
|
||
518 Seventeenth Street, 17th Floor
Denver, CO
|
|
80202
|
(Address of principal executive offices)
|
|
(Zip code)
|
|
Large accelerated filer
|
¨
|
Accelerated filer
|
¨
|
Smaller reporting company
|
x
|
|
|
|
|
|
|
Non-accelerated filer
|
x
|
|
Emerging growth company
|
x
|
|
|
|
|
|
|
|
|
Page
|
|
||
Item 1.
|
|
|
|
||
|
||
|
||
|
||
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
|
|
|
|
||
Item 1A.
|
||
Item 2.
|
||
Item 6.
|
|
|
As of
|
||||||
(in thousands, except per share data)
|
|
March 31,
2019 |
|
December 31,
2018 |
||||
|
|
(unaudited)
|
|
|
||||
ASSETS
|
|
|
|
|
||||
Net investment in real estate properties
|
|
$
|
343,576
|
|
|
$
|
301,371
|
|
Cash and cash equivalents
|
|
29,603
|
|
|
19,016
|
|
||
Restricted cash
|
|
30
|
|
|
5
|
|
||
Straight-line and tenant receivables
|
|
1,910
|
|
|
1,394
|
|
||
Due from affiliates
|
|
49
|
|
|
517
|
|
||
Debt issuance costs related to line of credit, net of amortization
|
|
1,047
|
|
|
1,167
|
|
||
Acquisition deposits
|
|
—
|
|
|
675
|
|
||
Other assets
|
|
414
|
|
|
475
|
|
||
Total assets
|
|
$
|
376,629
|
|
|
$
|
324,620
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
||||
Liabilities
|
|
|
|
|
||||
Accounts payable and accrued liabilities
|
|
$
|
1,885
|
|
|
$
|
1,190
|
|
Line of credit
|
|
—
|
|
|
119,000
|
|
||
Term loan, net of debt issuance costs
|
|
88,778
|
|
|
—
|
|
||
Notes payable to stockholders, net of debt issuance costs
|
|
376
|
|
|
376
|
|
||
Due to affiliates
|
|
23,337
|
|
|
18,439
|
|
||
Distributions payable
|
|
1,310
|
|
|
920
|
|
||
Distribution fees payable to affiliates
|
|
10,450
|
|
|
7,457
|
|
||
Other liabilities
|
|
6,472
|
|
|
5,465
|
|
||
Total liabilities
|
|
132,608
|
|
|
152,847
|
|
||
Commitments and contingencies (Note 10)
|
|
|
|
|
||||
Redeemable noncontrolling interest
|
|
723
|
|
|
—
|
|
||
Equity
|
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
|
||||
Preferred stock, $0.01 par value - 200,000 shares authorized, none issued and outstanding
|
|
—
|
|
|
—
|
|
||
Class T common stock, $0.01 par value per share - 1,200,000 shares authorized, 27,542 and 19,759 shares issued and outstanding, respectively
|
|
275
|
|
|
198
|
|
||
Class W common stock, $0.01 par value per share - 75,000 shares authorized, 626 and 161 shares issued and outstanding, respectively
|
|
6
|
|
|
2
|
|
||
Class I common stock, $0.01 par value per share - 225,000 shares authorized, 532 and 345 shares issued and outstanding, respectively
|
|
5
|
|
|
3
|
|
||
Additional paid-in capital
|
|
259,611
|
|
|
180,125
|
|
||
Accumulated deficit
|
|
(16,600
|
)
|
|
(8,556
|
)
|
||
Total stockholders’ equity
|
|
243,297
|
|
|
171,772
|
|
||
Noncontrolling interests
|
|
1
|
|
|
1
|
|
||
Total equity
|
|
243,298
|
|
|
171,773
|
|
||
Total liabilities and equity
|
|
$
|
376,629
|
|
|
$
|
324,620
|
|
|
|
For the Three Months Ended
March 31, |
||||||
(in thousands, except per share data)
|
|
2019
|
|
2018
|
||||
Revenues:
|
|
|
|
|
||||
Rental revenues
|
|
$
|
5,963
|
|
|
$
|
93
|
|
Total revenues
|
|
5,963
|
|
|
93
|
|
||
Operating expenses:
|
|
|
|
|
||||
Rental expenses
|
|
1,422
|
|
|
13
|
|
||
Real estate-related depreciation and amortization
|
|
3,128
|
|
|
66
|
|
||
General and administrative expenses
|
|
605
|
|
|
295
|
|
||
Advisory fees, related party
|
|
1,188
|
|
|
14
|
|
||
Acquisition expense reimbursements, related party
|
|
878
|
|
|
741
|
|
||
Other expense reimbursements, related party
|
|
472
|
|
|
246
|
|
||
Total operating expenses
|
|
7,693
|
|
|
1,375
|
|
||
Other expenses:
|
|
|
|
|
||||
Interest expense and other
|
|
1,201
|
|
|
183
|
|
||
Total other expenses
|
|
1,201
|
|
|
183
|
|
||
Total expenses before expense support
|
|
8,894
|
|
|
1,558
|
|
||
Total (reimbursement to) expense support from the Advisor, net
|
|
(2,205
|
)
|
|
1,062
|
|
||
Net expenses after expense support
|
|
(11,099
|
)
|
|
(496
|
)
|
||
Net loss
|
|
(5,136
|
)
|
|
(403
|
)
|
||
Net loss attributable to redeemable noncontrolling interest
|
|
14
|
|
|
—
|
|
||
Net loss attributable to noncontrolling interests
|
|
—
|
|
|
—
|
|
||
Net loss attributable to common stockholders
|
|
$
|
(5,122
|
)
|
|
$
|
(403
|
)
|
Weighted-average shares outstanding
|
|
25,997
|
|
|
2,961
|
|
||
Net loss per common share - basic and diluted
|
|
$
|
(0.20
|
)
|
|
$
|
(0.14
|
)
|
|
|
Stockholders’ Equity
|
|
|
|
|
|||||||||||||||||
|
|
Common Stock
|
|
Additional
Paid-In Capital |
|
Accumulated
Deficit |
|
Noncontrolling
Interests |
|
Total
Equity |
|||||||||||||
(in thousands)
|
|
Shares
|
|
Amount
|
|
||||||||||||||||||
Balance as of December 31, 2017
|
|
1,238
|
|
|
$
|
12
|
|
|
$
|
10,859
|
|
|
$
|
(266
|
)
|
|
$
|
1
|
|
|
$
|
10,606
|
|
Net loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(403
|
)
|
|
—
|
|
|
(403
|
)
|
|||||
Issuance of common stock
|
|
2,691
|
|
|
27
|
|
|
28,127
|
|
|
—
|
|
|
—
|
|
|
28,154
|
|
|||||
Upfront offering costs, including selling commissions, dealer manager fees, and offering costs
|
|
—
|
|
|
—
|
|
|
(3,115
|
)
|
|
—
|
|
|
—
|
|
|
(3,115
|
)
|
|||||
Trailing distribution fees
|
|
—
|
|
|
—
|
|
|
(1,108
|
)
|
|
66
|
|
|
—
|
|
|
(1,042
|
)
|
|||||
Distributions to stockholders
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(404
|
)
|
|
—
|
|
|
(404
|
)
|
|||||
Balance as of March 31, 2018
|
|
3,929
|
|
|
$
|
39
|
|
|
$
|
34,763
|
|
|
$
|
(1,007
|
)
|
|
$
|
1
|
|
|
$
|
33,796
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance as of December 31, 2018
|
|
20,265
|
|
|
$
|
203
|
|
|
$
|
180,125
|
|
|
$
|
(8,556
|
)
|
|
$
|
1
|
|
|
$
|
171,773
|
|
Net loss ($14 allocated to redeemable noncontrolling interest)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,122
|
)
|
|
—
|
|
|
(5,122
|
)
|
|||||
Issuance of common stock
|
|
8,511
|
|
|
84
|
|
|
88,350
|
|
|
—
|
|
|
—
|
|
|
88,434
|
|
|||||
Share-based compensation
|
|
—
|
|
|
—
|
|
|
303
|
|
|
—
|
|
|
—
|
|
|
303
|
|
|||||
Upfront offering costs, including selling commissions, dealer manager fees, and offering costs
|
|
—
|
|
|
—
|
|
|
(4,768
|
)
|
|
—
|
|
|
—
|
|
|
(4,768
|
)
|
|||||
Trailing distribution fees
|
|
—
|
|
|
—
|
|
|
(3,612
|
)
|
|
620
|
|
|
—
|
|
|
(2,992
|
)
|
|||||
Redemptions of common stock
|
|
(76
|
)
|
|
(1
|
)
|
|
(763
|
)
|
|
—
|
|
|
—
|
|
|
(764
|
)
|
|||||
Distributions to stockholders
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,542
|
)
|
|
—
|
|
|
(3,542
|
)
|
|||||
Redemption value allocation adjustment to redeemable noncontrolling interest
|
|
—
|
|
|
—
|
|
|
(24
|
)
|
|
—
|
|
|
—
|
|
|
(24
|
)
|
|||||
Balance as of March 31, 2019
|
|
28,700
|
|
|
$
|
286
|
|
|
$
|
259,611
|
|
|
$
|
(16,600
|
)
|
|
$
|
1
|
|
|
$
|
243,298
|
|
|
|
For the Three Months Ended March 31,
|
||||||
(in thousands)
|
|
2019
|
|
2018
|
||||
Operating activities:
|
|
|
|
|
||||
Net loss
|
|
$
|
(5,136
|
)
|
|
$
|
(403
|
)
|
Adjustments to reconcile net loss to net cash provided by operating activities:
|
|
|
|
|
||||
Real estate-related depreciation and amortization
|
|
3,128
|
|
|
66
|
|
||
Straight-line rent and amortization of above- and below-market leases
|
|
(845
|
)
|
|
(56
|
)
|
||
Amortization of debt issuance costs
|
|
212
|
|
|
101
|
|
||
Share-based compensation
|
|
303
|
|
|
—
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
|
||||
Tenant receivables and other assets
|
|
243
|
|
|
86
|
|
||
Accounts payable and accrued liabilities
|
|
776
|
|
|
143
|
|
||
Due from / to affiliates, net
|
|
4,943
|
|
|
467
|
|
||
Net cash provided by operating activities
|
|
3,624
|
|
|
404
|
|
||
Investing activities:
|
|
|
|
|
||||
Real estate acquisitions
|
|
(43,458
|
)
|
|
(10,587
|
)
|
||
Acquisition deposits
|
|
—
|
|
|
(550
|
)
|
||
Capital expenditures
|
|
(130
|
)
|
|
(26
|
)
|
||
Net cash used in investing activities
|
|
(43,588
|
)
|
|
(11,163
|
)
|
||
Financing activities:
|
|
|
|
|
||||
Proceeds from line of credit
|
|
28,000
|
|
|
—
|
|
||
Repayments of line of credit
|
|
(147,000
|
)
|
|
—
|
|
||
Proceeds from term loan
|
|
90,000
|
|
|
—
|
|
||
Debt issuance costs paid
|
|
(1,315
|
)
|
|
—
|
|
||
Proceeds from issuance of common stock
|
|
83,266
|
|
|
27,466
|
|
||
Offering costs paid upon issuance of common stock
|
|
—
|
|
|
(692
|
)
|
||
Distributions paid to common stockholders
|
|
(1,058
|
)
|
|
(102
|
)
|
||
Distribution fees paid to affiliates
|
|
(553
|
)
|
|
(43
|
)
|
||
Redemptions of common stock
|
|
(764
|
)
|
|
—
|
|
||
Net cash provided by financing activities
|
|
50,576
|
|
|
26,629
|
|
||
Net increase in cash, cash equivalents and restricted cash
|
|
10,612
|
|
|
15,870
|
|
||
Cash, cash equivalents and restricted cash, at beginning of period
|
|
19,021
|
|
|
11,046
|
|
||
Cash, cash equivalents and restricted cash, at end of period
|
|
$
|
29,633
|
|
|
$
|
26,916
|
|
($ in thousands)
|
|
Acquisition Date
|
|
Number of Buildings
|
|
Total Purchase Price (1)
|
||
Airport Industrial Center
|
|
1/8/2019
|
|
1
|
|
$
|
8,136
|
|
Kelly Trade Center
|
|
1/31/2019
|
|
1
|
|
15,340
|
|
|
7A Distribution Center
|
|
2/11/2019
|
|
1
|
|
12,151
|
|
|
Quakerbridge Distribution Center
|
|
3/11/2019
|
|
1
|
|
8,594
|
|
|
Total Acquisitions
|
|
|
|
4
|
|
$
|
44,221
|
|
|
(1)
|
Total purchase price is equal to the total consideration paid.
|
(in thousands)
|
|
For the Three Months Ended March 31, 2019
|
||
Land
|
|
$
|
15,080
|
|
Building
|
|
25,524
|
|
|
Intangible lease assets
|
|
4,374
|
|
|
Above-market lease assets
|
|
104
|
|
|
Below-market lease liabilities
|
|
(861
|
)
|
|
Total purchase price (1)
|
|
$
|
44,221
|
|
|
(1)
|
Total purchase price is equal to the total consideration paid.
|
|
|
As of
|
||||||
(in thousands)
|
|
March 31, 2019
|
|
December 31, 2018
|
||||
Land
|
|
$
|
106,167
|
|
|
$
|
91,087
|
|
Building and improvements
|
|
214,397
|
|
|
188,872
|
|
||
Intangible lease assets
|
|
28,971
|
|
|
24,492
|
|
||
Construction in progress
|
|
742
|
|
|
476
|
|
||
Investment in real estate properties
|
|
350,277
|
|
|
304,927
|
|
||
Less accumulated depreciation and amortization
|
|
(6,701
|
)
|
|
(3,556
|
)
|
||
Net investment in real estate properties
|
|
$
|
343,576
|
|
|
$
|
301,371
|
|
|
|
As of March 31, 2019
|
|
As of December 31, 2018
|
||||||||||||||||||||
(in thousands)
|
|
Gross
|
|
Accumulated
Amortization |
|
Net
|
|
Gross
|
|
Accumulated
Amortization |
|
Net
|
||||||||||||
Intangible lease assets (1)
|
|
$
|
28,619
|
|
|
$
|
(2,860
|
)
|
|
$
|
25,759
|
|
|
$
|
24,245
|
|
|
$
|
(1,450
|
)
|
|
$
|
22,795
|
|
Above-market lease assets (1)
|
|
352
|
|
|
(33
|
)
|
|
319
|
|
|
247
|
|
|
(15
|
)
|
|
232
|
|
||||||
Below-market lease liabilities (2)
|
|
(4,903
|
)
|
|
887
|
|
|
(4,016
|
)
|
|
(4,042
|
)
|
|
582
|
|
|
(3,460
|
)
|
|
(1)
|
Included in net investment in real estate properties on the condensed consolidated balance sheets.
|
(2)
|
Included in other liabilities on the condensed consolidated balance sheets.
|
|
|
Estimated Net Amortization
|
||||||||||
(in thousands)
|
|
Intangible
Lease Assets |
|
Above-Market
Lease Assets |
|
Below-Market
Lease Liabilities |
||||||
Remainder of 2019
|
|
$
|
4,525
|
|
|
$
|
60
|
|
|
$
|
(928
|
)
|
2020
|
|
5,649
|
|
|
80
|
|
|
(1,064
|
)
|
|||
2021
|
|
5,136
|
|
|
65
|
|
|
(917
|
)
|
|||
2022
|
|
3,772
|
|
|
37
|
|
|
(594
|
)
|
|||
2023
|
|
2,889
|
|
|
28
|
|
|
(321
|
)
|
|||
Thereafter
|
|
3,788
|
|
|
49
|
|
|
(192
|
)
|
|||
Total
|
|
$
|
25,759
|
|
|
$
|
319
|
|
|
$
|
(4,016
|
)
|
|
|
As of
|
||||||
(in thousands)
|
|
March 31, 2019
|
|
December 31, 2018
|
||||
2019
|
|
$
|
12,859
|
|
|
$
|
14,354
|
|
2020
|
|
17,332
|
|
|
14,877
|
|
||
2021
|
|
16,991
|
|
|
14,567
|
|
||
2022
|
|
14,343
|
|
|
12,756
|
|
||
2023
|
|
11,935
|
|
|
10,834
|
|
||
Thereafter
|
|
24,211
|
|
|
21,378
|
|
||
Total
|
|
$
|
97,671
|
|
|
$
|
88,766
|
|
|
|
For the Three Months Ended
March 31, |
||||||
(in thousands)
|
|
2019
|
|
2018
|
||||
Increase (Decrease) to Rental Revenue:
|
|
|
|
|
||||
Straight-line rent adjustments
|
|
$
|
557
|
|
|
$
|
1
|
|
Above-market lease amortization
|
|
(17
|
)
|
|
—
|
|
||
Below-market lease amortization
|
|
305
|
|
|
55
|
|
||
Real Estate-Related Depreciation and Amortization:
|
|
|
|
|
||||
Depreciation expense
|
|
$
|
1,718
|
|
|
$
|
34
|
|
Intangible lease asset amortization
|
|
1,410
|
|
|
32
|
|
|
|
Weighted-Average Effective Interest Rate as of
|
|
|
|
Balance as of
|
||||||||||
($ in thousands)
|
|
March 31, 2019
|
|
December 31, 2018
|
|
Maturity Date
|
|
March 31, 2019
|
|
December 31, 2018
|
||||||
Line of credit (1)
|
|
4.10
|
%
|
|
4.10
|
%
|
|
September 2020
|
|
$
|
—
|
|
|
$
|
119,000
|
|
Term loan (2)
|
|
3.75
|
|
|
—
|
|
|
February 2024
|
|
90,000
|
|
|
—
|
|
||
Total principal amount / weighted-average
|
|
3.75
|
%
|
|
4.10
|
%
|
|
|
|
$
|
90,000
|
|
|
$
|
119,000
|
|
|
(1)
|
The effective interest rate is calculated based on either: (i) the London Interbank Offered Rate (“LIBOR”) plus a margin ranging from
1.60%
to
2.50%
; or (ii) an alternative base rate plus a margin ranging from
0.60%
to
1.50%
, each depending on the Company’s consolidated leverage ratio. Customary fall-back provisions apply if LIBOR is unavailable. The line of credit is available for general corporate purposes including, but not limited to, the acquisition and operation of permitted investments by the Company. A pledge of equity interests in the Company’s subsidiaries that directly own unencumbered properties will be provided until such time as the Company elects to terminate such pledges, subject to satisfaction of certain financial covenants. As of
March 31, 2019
, the unused portion under the line of credit was
$199.9 million
, of which
$20.1 million
was available.
|
(2)
|
The effective interest rate is calculated based on either (i) LIBOR plus a margin ranging from
1.25%
to
2.05%
; or (ii) an alternative base rate plus a margin ranging from
0.25%
to
1.05%
, depending on the Company’s consolidated leverage ratio. The Company has the ability to borrow an additional
$110.0 million
under this term loan for total commitments of
$200.0 million
. This term loan is available for general corporate purposes including, but not limited to, the acquisition and operation of permitted investments by the Company.
|
|
|
As of March 31, 2019
|
|
As of December 31, 2018
|
||||||||||||
(in thousands)
|
|
Carrying
Value |
|
Fair
Value |
|
Carrying
Value |
|
Fair
Value |
||||||||
Line of credit
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
119,000
|
|
|
$
|
119,000
|
|
Term loan
|
|
90,000
|
|
|
90,000
|
|
|
—
|
|
|
—
|
|
||||
Notes payable to stockholders
|
|
376
|
|
|
376
|
|
|
376
|
|
|
376
|
|
(in thousands)
|
|
Class T
|
|
Class W
|
|
Class I
|
|
Notes to
Stockholders (1) |
|
Total
|
||||||||||
Amount of gross proceeds raised:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Primary offering
|
|
$
|
286,162
|
|
|
$
|
6,210
|
|
|
$
|
4,759
|
|
|
$
|
—
|
|
|
$
|
297,131
|
|
DRIP
|
|
3,404
|
|
|
23
|
|
|
132
|
|
|
—
|
|
|
3,559
|
|
|||||
Private offering
|
|
62
|
|
|
—
|
|
|
62
|
|
|
376
|
|
|
500
|
|
|||||
Total offering
|
|
$
|
289,628
|
|
|
$
|
6,233
|
|
|
$
|
4,953
|
|
|
$
|
376
|
|
|
$
|
301,190
|
|
Number of shares issued:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Primary offering
|
|
27,251
|
|
|
617
|
|
|
496
|
|
|
—
|
|
|
28,364
|
|
|||||
DRIP
|
|
340
|
|
|
3
|
|
|
14
|
|
|
—
|
|
|
357
|
|
|||||
Private offering
|
|
7
|
|
|
—
|
|
|
7
|
|
|
—
|
|
|
14
|
|
|||||
Stock dividends
|
|
—
|
|
|
6
|
|
|
3
|
|
|
—
|
|
|
9
|
|
|||||
Total offering
|
|
27,598
|
|
|
626
|
|
|
520
|
|
|
—
|
|
|
28,744
|
|
|
(1)
|
The Company pays interest on the unpaid principal amount of the notes at a fixed rate of
18.25%
per annum per note payable semi-annually in arrears.
|
(in thousands)
|
|
Class T
Shares |
|
Class W
Shares |
|
Class I
Shares |
|
Total
Shares |
||||
Balance as of December 31, 2017
|
|
976
|
|
|
6
|
|
|
256
|
|
|
1,238
|
|
Issuance of common stock:
|
|
|
|
|
|
|
|
—
|
|
|||
Primary shares
|
|
2,646
|
|
|
—
|
|
|
32
|
|
|
2,678
|
|
DRIP
|
|
12
|
|
|
—
|
|
|
1
|
|
|
13
|
|
Balance as of March 31, 2018
|
|
3,634
|
|
|
6
|
|
|
289
|
|
|
3,929
|
|
Balance as of December 31, 2018
|
|
19,759
|
|
|
161
|
|
|
345
|
|
|
20,265
|
|
Issuance of common stock:
|
|
|
|
|
|
|
|
|
||||
Primary shares
|
|
7,640
|
|
|
463
|
|
|
177
|
|
|
8,280
|
|
DRIP
|
|
150
|
|
|
2
|
|
|
3
|
|
|
155
|
|
Stock grants
|
|
—
|
|
|
—
|
|
|
76
|
|
|
76
|
|
Redemptions
|
|
(7
|
)
|
|
—
|
|
|
(69
|
)
|
|
(76
|
)
|
Balance as of March 31, 2019
|
|
27,542
|
|
|
626
|
|
|
532
|
|
|
28,700
|
|
|
|
Amount
|
||||||||||||||||||
(in thousands,
except per share data) |
|
Declared per
Common Share (1) |
|
Paid
in Cash |
|
Reinvested
in Shares |
|
Distribution
Fees (2) |
|
Gross
Distributions (3) |
||||||||||
2019
|
|
|
|
|
|
|
|
|
|
|
||||||||||
March 31
|
|
$
|
0.13625
|
|
|
$
|
1,178
|
|
|
$
|
1,744
|
|
|
$
|
620
|
|
|
$
|
3,542
|
|
Total
|
|
$
|
0.13625
|
|
|
$
|
1,178
|
|
|
$
|
1,744
|
|
|
$
|
620
|
|
|
$
|
3,542
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
||||||||||
December 31
|
|
$
|
0.13625
|
|
|
$
|
747
|
|
|
$
|
1,102
|
|
|
$
|
406
|
|
|
$
|
2,255
|
|
September 30
|
|
0.13625
|
|
|
496
|
|
|
681
|
|
|
255
|
|
|
1,432
|
|
|||||
June 30
|
|
0.13625
|
|
|
305
|
|
|
399
|
|
|
147
|
|
|
851
|
|
|||||
March 31
|
|
0.13625
|
|
|
140
|
|
|
197
|
|
|
67
|
|
|
404
|
|
|||||
Total
|
|
$
|
0.54500
|
|
|
$
|
1,688
|
|
|
$
|
2,379
|
|
|
$
|
875
|
|
|
$
|
4,942
|
|
|
(1)
|
Amounts reflect the quarterly distribution rate authorized by the Company’s board of directors per Class T share, per Class W share, and per Class I share of common stock. Distributions were declared and paid as of monthly record dates. These monthly distributions have been aggregated and presented on a quarterly basis. The distributions on Class T shares and Class W shares of common stock are reduced by the respective distribution fees that are payable with respect to such Class T shares and Class W shares.
|
(2)
|
Distribution fees are paid monthly to Black Creek Capital Markets, LLC (the “Dealer Manager”) with respect to Class T shares and Class W shares issued in the primary portion of the Company’s initial public offering only.
|
(3)
|
Gross distributions are total distributions before the deduction of any distribution fees relating to Class T shares and Class W shares.
|
|
|
For the Three Months Ended March 31,
|
||||||
|
|
2019
|
|
2018
|
||||
Number of eligible shares redeemed
|
|
76,288
|
|
|
—
|
|
||
Aggregate dollar amount of shares redeemed
|
|
$
|
764,277
|
|
|
$
|
—
|
|
Average redemption price per share
|
|
$
|
10.02
|
|
|
$
|
—
|
|
|
|
For the Three Months Ended March 31,
|
|
Payable as of
|
||||||||||||
|
|
|
March 31,
2019 |
|
December 31,
2018 |
|||||||||||
(in thousands)
|
|
2019
|
|
2018
|
|
|
||||||||||
Expensed:
|
|
|
|
|
|
|
|
|
||||||||
Advisory fee—fixed component
|
|
$
|
670
|
|
|
$
|
14
|
|
|
$
|
454
|
|
|
$
|
200
|
|
Advisory fee—performance component
|
|
518
|
|
|
—
|
|
|
518
|
|
|
723
|
|
||||
Acquisition expense reimbursements (1)
|
|
878
|
|
|
741
|
|
|
3,728
|
|
|
3,500
|
|
||||
Other expense reimbursements (2)
|
|
472
|
|
|
246
|
|
|
90
|
|
|
299
|
|
||||
Total
|
|
$
|
2,538
|
|
|
$
|
1,001
|
|
|
$
|
4,790
|
|
|
$
|
4,722
|
|
Additional Paid-In Capital:
|
|
|
|
|
|
|
|
|
||||||||
Selling commissions
|
|
$
|
1,818
|
|
|
$
|
555
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Dealer manager fees
|
|
1,801
|
|
|
692
|
|
|
—
|
|
|
—
|
|
||||
Offering costs (3)
|
|
1,149
|
|
|
1,868
|
|
|
15,269
|
|
|
14,119
|
|
||||
Distribution fees—current
|
|
620
|
|
|
66
|
|
|
235
|
|
|
168
|
|
||||
Distribution fees—trailing (4)
|
|
2,992
|
|
|
1,042
|
|
|
10,450
|
|
|
7,457
|
|
||||
Total
|
|
$
|
8,380
|
|
|
$
|
4,223
|
|
|
$
|
25,954
|
|
|
$
|
21,744
|
|
|
(1)
|
Reflects amounts reimbursable to the Advisor for all expenses incurred by the Advisor and its affiliates on the Company’s behalf in connection with the selection, acquisition, development or origination of an asset.
|
(2)
|
Other expense reimbursements include certain expenses incurred in connection with the services provided to the Company under the amended and restated advisory agreement, dated June 13, 2018, by and among the Company, the Operating Partnership, and the Advisor. These reimbursements include a portion of compensation expenses of individual employees of the Advisor, including certain of the Company’s named executive officers, related to services for which the Advisor does not otherwise receive a separate fee. A portion of the compensation received by certain employees of the Advisor and its affiliates may be in the form of a restricted stock grant awarded by the Company. The Company shows these as reimbursements to the Advisor to the same extent that the Company recognizes the related share-based compensation on its condensed consolidated statements of operations. The Company reimbursed the Advisor approximately
$0.4 million
and
$0.2 million
for the
three
months ended
March 31, 2019
and
2018
, respectively, for such compensation expenses. The remaining amount of other expense reimbursements relate to other general overhead and administrative expenses including, but not limited to, allocated rent paid to both third parties and affiliates of the Advisor, equipment, utilities, insurance, travel and entertainment.
|
(3)
|
As of
March 31, 2019
, the Advisor had incurred
$15.6 million
of offering costs on behalf of the Company.
|
(4)
|
The distribution fees accrue daily and are payable monthly in arrears. The monthly amount of distribution fees payable is included in distributions payable on the condensed consolidated balance sheets. Additionally, the Company accrues for estimated trailing amounts payable based on the shares outstanding as of the balance sheet date, which are included in distribution fees payable to affiliates on the condensed consolidated balance sheets. All or a portion of the distribution fees are reallowed or advanced by the Dealer Manager to unaffiliated participating broker dealers and broker dealers servicing accounts of investors who own Class T shares and/or Class W shares.
|
|
|
For the Three Months Ended
March 31, |
||||||
(in thousands)
|
|
2019
|
|
2018
|
||||
Fees deferred
|
|
$
|
670
|
|
|
$
|
14
|
|
Other expenses supported
|
|
625
|
|
|
1,048
|
|
||
Total expense support from Advisor
|
|
1,295
|
|
|
1,062
|
|
||
Reimbursement of previously deferred fees and other expenses supported
|
|
(3,500
|
)
|
|
—
|
|
||
Total (reimbursement to) expense support from Advisor, net (1)
|
|
$
|
(2,205
|
)
|
|
$
|
1,062
|
|
|
(1)
|
As of
March 31, 2019
, approximately
$3.3 million
was payable to the Advisor by the Company, and is included in due to affiliates on the condensed consolidated balance sheets. As of
December 31, 2018
, approximately
$0.7 million
of expense support was payable to the Company by the Advisor, and is included in due from affiliates on the condensed consolidated balance sheets.
|
|
|
For the Three Months Ended
March 31, |
||||||
(in thousands)
|
|
2019
|
|
2018
|
||||
Distributions payable
|
|
$
|
1,310
|
|
|
$
|
178
|
|
Distribution fees payable to affiliates
|
|
10,450
|
|
|
1,436
|
|
||
Distributions reinvested in common stock
|
|
1,547
|
|
|
135
|
|
||
Accrued offering costs due to the Advisor
|
|
15,269
|
|
|
2,795
|
|
||
Redeemable noncontrolling interest issued as settlement of performance component of the Advisory fee
|
|
723
|
|
|
—
|
|
||
Redemption value allocation adjustment to redeemable noncontrolling interest
|
|
24
|
|
|
—
|
|
||
Accrued acquisition expense reimbursements due to the Advisor
|
|
3,728
|
|
|
741
|
|
||
Non-cash capital expenditures
|
|
137
|
|
|
53
|
|
||
Non-cash selling commissions and dealer manager fees
|
|
3,619
|
|
|
555
|
|
|
|
For the Three Months Ended March 31,
|
||||||
(in thousands)
|
|
2019
|
|
2018
|
||||
Beginning of period:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
19,016
|
|
|
$
|
10,565
|
|
Restricted cash (1)
|
|
5
|
|
|
481
|
|
||
Cash, cash equivalents and restricted cash
|
|
$
|
19,021
|
|
|
$
|
11,046
|
|
End of period:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
29,603
|
|
|
$
|
26,916
|
|
Restricted cash (2)
|
|
30
|
|
|
—
|
|
||
Cash, cash equivalents and restricted cash
|
|
$
|
29,633
|
|
|
$
|
26,916
|
|
|
(1)
|
As of
December 31, 2018
, restricted cash consisted of cash held in escrow in connection with certain estimated property improvements. As of
December 31, 2017
, restricted cash consisted of amounts deposited with a third-party escrow agent related to the notes issued pursuant to the private offering, which was released to the Company from escrow in January 2018.
|
(2)
|
As of
March 31, 2019
, restricted cash consisted of cash held in escrow in connection with a property acquisition.
|
(in thousands)
|
|
Class T
|
|
Class W
|
|
Class I
|
|
Notes to
Stockholders |
|
Total
|
||||||||||
Amount of gross proceeds raised:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Primary offering
|
|
$
|
338,241
|
|
|
$
|
12,828
|
|
|
$
|
6,348
|
|
|
$
|
—
|
|
|
$
|
357,417
|
|
DRIP
|
|
4,695
|
|
|
57
|
|
|
156
|
|
|
—
|
|
|
4,908
|
|
|||||
Private offering
|
|
62
|
|
|
—
|
|
|
62
|
|
|
376
|
|
|
500
|
|
|||||
Total offering
|
|
$
|
342,998
|
|
|
$
|
12,885
|
|
|
$
|
6,566
|
|
|
$
|
376
|
|
|
$
|
362,825
|
|
Number of shares issued:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Primary offering
|
|
32,196
|
|
|
1,276
|
|
|
654
|
|
|
—
|
|
|
34,126
|
|
|||||
DRIP
|
|
468
|
|
|
6
|
|
|
16
|
|
|
—
|
|
|
490
|
|
|||||
Private offering
|
|
7
|
|
|
—
|
|
|
7
|
|
|
—
|
|
|
14
|
|
|||||
Stock dividends
|
|
—
|
|
|
6
|
|
|
3
|
|
|
—
|
|
|
9
|
|
|||||
Total offering
|
|
32,671
|
|
|
1,288
|
|
|
680
|
|
|
—
|
|
|
34,639
|
|
•
|
Our ability to raise capital and effectively deploy the net proceeds raised in our public offering in accordance with our investment strategy and objectives;
|
•
|
The failure of properties to perform as we expect;
|
•
|
Risks associated with acquisitions, dispositions and development of properties;
|
•
|
Our failure to successfully integrate acquired properties and operations;
|
•
|
Unexpected delays or increased costs associated with any development projects;
|
•
|
The availability of cash flows from operating activities for distributions and capital expenditures;
|
•
|
Defaults on or non-renewal of leases by customers, lease renewals at lower than expected rent, or failure to lease properties at all or on favorable rents and terms;
|
•
|
Difficulties in economic conditions generally and the real estate, debt, and securities markets specifically;
|
•
|
Legislative or regulatory changes, including changes to the laws governing the taxation of real estate investment trusts (“REITs”);
|
•
|
Our failure to obtain, renew, or extend necessary financing or access the debt or equity markets;
|
•
|
Conflicts of interest arising out of our relationships with the Sponsor, the Advisor, and their affiliates;
|
•
|
Risks associated with using debt to fund our business activities, including re-financing and interest rate risks;
|
•
|
Increases in interest rates, operating costs, or greater than expected capital expenditures;
|
•
|
Changes to GAAP; and
|
•
|
Our ability to continue to qualify as a REIT.
|
•
|
preserving and protecting our stockholders’ capital contributions;
|
•
|
providing current income to our stockholders in the form of regular cash distributions; and
|
•
|
realizing capital appreciation upon the potential sale of our assets or other liquidity events.
|
(in thousands)
|
|
As of
March 31, 2019 |
|
As of
December 31, 2018
|
||||
Real estate properties
|
|
$
|
356,700
|
|
|
$
|
306,550
|
|
Cash and other assets, net of other liabilities
|
|
22,319
|
|
|
16,257
|
|
||
Debt obligations
|
|
(90,000
|
)
|
|
(119,000
|
)
|
||
Aggregate Fund NAV
|
|
$
|
289,019
|
|
|
$
|
203,807
|
|
Total Fund Interests outstanding
|
|
28,724
|
|
|
20,265
|
|
(in thousands, except per Fund Interest data)
|
|
Total
|
|
Class T
Shares |
|
Class W
Shares |
|
Class I
Shares |
|
OP Units
|
||||||||||
Monthly NAV
|
|
$
|
289,019
|
|
|
$
|
277,119
|
|
|
$
|
6,305
|
|
|
$
|
4,872
|
|
|
$
|
723
|
|
Fund Interests outstanding
|
|
28,724
|
|
|
27,542
|
|
|
626
|
|
|
484
|
|
|
72
|
|
|||||
NAV Per Fund Interest
|
|
$
|
10.0618
|
|
|
$
|
10.0618
|
|
|
$
|
10.0618
|
|
|
$
|
10.0618
|
|
|
$
|
10.0618
|
|
|
|
Weighted-Average
Basis |
|
Exit capitalization rate
|
|
5.4
|
%
|
Discount rate / internal rate of return
|
|
6.5
|
%
|
Holding period of real properties (years)
|
|
10.6
|
|
Input
|
|
Hypothetical
Change |
|
Increase (Decrease)
to the NAV of Real Properties |
|
Exit capitalization rate (weighted-average)
|
|
0.25% decrease
|
|
3.2
|
%
|
|
|
0.25% increase
|
|
(3.0
|
)%
|
Discount rate (weighted-average)
|
|
0.25% decrease
|
|
2.1
|
%
|
|
|
0.25% increase
|
|
(2.0
|
)%
|
•
|
Our NAV was $10.0618 per share as of
March 31, 2019
as compared to
$10.0571
per share as of
December 31, 2018
.
|
•
|
We raised
$88.4 million
of gross equity capital from our public offering.
|
•
|
We acquired
four
industrial buildings comprising
0.4 million
square feet for an aggregate total purchase price of approximately
$44.2 million
, exclusive of transfer taxes, due diligence expenses, and other closing costs. We funded these acquisitions with proceeds from our public offering and debt financings.
|
•
|
In February 2019, we amended and restated our $200.0 million credit facility by amending it to provide for a $200.0 million line of credit facility and a $200.0 million term loan facility. We have the ability to increase the size of the aggregate commitment under the credit facility agreement up to $600.0 million, subject certain conditions.
|
|
|
As of
|
|||||||
(square feet in thousands)
|
|
March 31, 2019
|
|
December 31, 2018
|
|
March 31, 2018
|
|||
Portfolio data:
|
|
|
|
|
|
|
|||
Total buildings
|
|
17
|
|
|
13
|
|
|
1
|
|
Total rentable square feet
|
|
3,163
|
|
|
2,737
|
|
|
86
|
|
Total number of customers
|
|
30
|
|
|
18
|
|
|
2
|
|
Percent occupied of total portfolio (1)
|
|
99.3
|
%
|
|
99.3
|
%
|
|
100.0
|
%
|
Percent leased of total portfolio (1)
|
|
99.9
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
|
|
For the Three Months Ended
March 31, |
|
|
||||||||
(in thousands, except per share data)
|
|
2019
|
|
2018
|
|
Change
|
||||||
Net operating income:
|
|
|
|
|
|
|
||||||
Total rental revenues
|
|
$
|
5,963
|
|
|
$
|
93
|
|
|
$
|
5,870
|
|
Total rental expenses
|
|
(1,422
|
)
|
|
(13
|
)
|
|
(1,409
|
)
|
|||
Total net operating income
|
|
4,541
|
|
|
80
|
|
|
4,461
|
|
|||
Other (expenses) income:
|
|
|
|
|
|
|
||||||
Real estate-related depreciation and amortization
|
|
(3,128
|
)
|
|
(66
|
)
|
|
(3,062
|
)
|
|||
General and administrative expenses
|
|
(605
|
)
|
|
(295
|
)
|
|
(310
|
)
|
|||
Advisory fees, related party
|
|
(1,188
|
)
|
|
(14
|
)
|
|
(1,174
|
)
|
|||
Acquisition expense reimbursements, related party
|
|
(878
|
)
|
|
(741
|
)
|
|
(137
|
)
|
|||
Other expense reimbursements, related party
|
|
(472
|
)
|
|
(246
|
)
|
|
(226
|
)
|
|||
Interest expense and other
|
|
(1,201
|
)
|
|
(183
|
)
|
|
(1,018
|
)
|
|||
Total (reimbursement to) expense support from the Advisor, net
|
|
(2,205
|
)
|
|
1,062
|
|
|
(3,267
|
)
|
|||
Total other expenses
|
|
(9,677
|
)
|
|
(483
|
)
|
|
(9,194
|
)
|
|||
Net loss
|
|
(5,136
|
)
|
|
(403
|
)
|
|
(4,733
|
)
|
|||
Net loss attributable to redeemable noncontrolling interest
|
|
14
|
|
|
—
|
|
|
14
|
|
|||
Net loss attributable to noncontrolling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net loss attributable to common stockholders
|
|
$
|
(5,122
|
)
|
|
$
|
(403
|
)
|
|
$
|
(4,719
|
)
|
Weighted-average shares outstanding
|
|
25,997
|
|
|
2,961
|
|
|
23,036
|
|
|||
Net loss per common share - basic and diluted
|
|
$
|
(0.20
|
)
|
|
$
|
(0.14
|
)
|
|
$
|
(0.06
|
)
|
•
|
an increase in real estate-related depreciation and amortization expense, advisory fees and general and administrative expenses totaling an aggregate amount of
$4.5 million
as a result of the growth in our portfolio since January 1, 2018;
|
•
|
a net decrease in expense support from the Advisor of
$3.3 million
due to an increase in expense support received from the Advisor of
$0.2 million
for the three months ended March 31, 2019, as compared to the same period in 2018, offset by a repayment of
$3.5 million
to the Advisor during the first quarter of 2019; and
|
•
|
an increase in interest expense of
$1.0 million
primarily related to an increase in average net borrowings under the line of credit of
$63.0 million
, as well as interest expense derived from the term loan we entered into in February 2019.
|
|
|
For the Three Months Ended March 31,
|
|
For the Period
From Inception (August 12, 2014) to March 31, 2018 |
||||||||
(in thousands, except per share data)
|
|
2019
|
|
2018
|
|
|||||||
GAAP net loss attributable to common stockholders
|
|
$
|
(5,122
|
)
|
|
$
|
(403
|
)
|
|
$
|
(9,317
|
)
|
GAAP net loss per common share
|
|
$
|
(0.20
|
)
|
|
$
|
(0.14
|
)
|
|
$
|
(2.55
|
)
|
Reconciliation of GAAP net loss to NAREIT FFO:
|
|
|
|
|
|
|
||||||
GAAP net loss attributable to common stockholders
|
|
$
|
(5,122
|
)
|
|
$
|
(403
|
)
|
|
$
|
(9,317
|
)
|
Add (deduct) NAREIT-defined adjustments:
|
|
|
|
|
|
|
||||||
Real estate-related depreciation and amortization
|
|
3,128
|
|
|
66
|
|
|
6,669
|
|
|||
Redeemable noncontrolling interest's share of real estate-related depreciation and amortization
|
|
(9
|
)
|
|
—
|
|
|
(9
|
)
|
|||
NAREIT FFO attributable to common stockholders
|
|
$
|
(2,003
|
)
|
|
$
|
(337
|
)
|
|
$
|
(2,657
|
)
|
NAREIT FFO per common share
|
|
$
|
(0.08
|
)
|
|
$
|
(0.11
|
)
|
|
$
|
(0.73
|
)
|
Reconciliation of NAREIT FFO to Company-defined FFO:
|
|
|
|
|
|
|
||||||
NAREIT FFO attributable to common stockholders
|
|
$
|
(2,003
|
)
|
|
$
|
(337
|
)
|
|
$
|
(2,657
|
)
|
Add (deduct) Company-defined adjustments:
|
|
|
|
|
|
|
||||||
Acquisition expense reimbursements, related party
|
|
878
|
|
|
741
|
|
|
5,778
|
|
|||
Redeemable noncontrolling interest's share of acquisition expense reimbursements, related party
|
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
|||
Company-defined FFO attributable to common stockholders
|
|
$
|
(1,127
|
)
|
|
$
|
404
|
|
|
$
|
3,119
|
|
Company-defined FFO per common share
|
|
$
|
(0.04
|
)
|
|
$
|
0.14
|
|
|
$
|
0.85
|
|
Reconciliation of Company-defined FFO to MFFO:
|
|
|
|
|
|
|
||||||
Company-defined FFO attributable to common stockholders
|
|
$
|
(1,127
|
)
|
|
$
|
404
|
|
|
$
|
3,119
|
|
Add (deduct) MFFO adjustments:
|
|
|
|
|
|
|
||||||
Straight-line rent and amortization of above/below-market leases
|
|
(845
|
)
|
|
(56
|
)
|
|
(2,518
|
)
|
|||
Redeemable noncontrolling interest's share of straight-line rent and amortization of above/below-market leases
|
|
2
|
|
|
—
|
|
|
2
|
|
|||
MFFO attributable to common stockholders
|
|
$
|
(1,970
|
)
|
|
$
|
348
|
|
|
$
|
603
|
|
MFFO per common share
|
|
$
|
(0.08
|
)
|
|
$
|
0.12
|
|
|
$
|
0.16
|
|
Weighted-average shares outstanding
|
|
25,997
|
|
|
2,961
|
|
|
3,657
|
|
|
|
For the Three Months Ended March 31,
|
||||||
(in thousands)
|
|
2019
|
|
2018
|
||||
Total cash provided by (used in):
|
|
|
|
|
||||
Operating activities
|
|
$
|
3,624
|
|
|
$
|
404
|
|
Investing activities
|
|
(43,588
|
)
|
|
(11,163
|
)
|
||
Financing activities
|
|
50,576
|
|
|
26,629
|
|
||
Net increase in cash, cash equivalents and restricted cash
|
|
$
|
10,612
|
|
|
$
|
15,870
|
|
|
|
Source of Distributions
|
|
|
||||||||||||||||||||||||||||
($ in thousands)
|
|
Provided by
Expense Support (1) |
|
Provided by
Operating Activities |
|
Proceeds
from Financing Activities |
|
Proceeds from
DRIP (2) |
|
Gross
Distributions (3) |
||||||||||||||||||||||
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
March 31
|
|
$
|
1,295
|
|
|
36.6
|
%
|
|
$
|
503
|
|
|
14.2
|
%
|
|
$
|
—
|
|
|
—
|
%
|
|
$
|
1,744
|
|
|
49.2
|
%
|
|
$
|
3,542
|
|
Total
|
|
$
|
1,295
|
|
|
36.6
|
%
|
|
$
|
503
|
|
|
14.2
|
%
|
|
$
|
—
|
|
|
—
|
%
|
|
$
|
1,744
|
|
|
49.2
|
%
|
|
$
|
3,542
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
December 31
|
|
$
|
1,153
|
|
|
51.1
|
%
|
|
$
|
—
|
|
|
—
|
%
|
|
$
|
—
|
|
|
—
|
%
|
|
$
|
1,102
|
|
|
48.9
|
%
|
|
$
|
2,255
|
|
September 30
|
|
751
|
|
|
52.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
681
|
|
|
47.6
|
|
|
1,432
|
|
|||||
June 30
|
|
452
|
|
|
53.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
399
|
|
|
46.9
|
|
|
851
|
|
|||||
March 31
|
|
207
|
|
|
51.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
197
|
|
|
48.8
|
|
|
404
|
|
|||||
Total
|
|
$
|
2,563
|
|
|
51.9
|
%
|
|
$
|
—
|
|
|
—
|
%
|
|
$
|
—
|
|
|
—
|
%
|
|
$
|
2,379
|
|
|
48.1
|
%
|
|
$
|
4,942
|
|
|
(1)
|
For the
three
months ended
March 31, 2019
, the Advisor provided expense support of
$1.3 million
. See “
Note 8 to the Condensed Consolidated Financial Statements
” for further detail on the expense support provided during the quarter. For the year ended
December 31, 2018
, the Advisor provided expense support of $5.6 million. Refer to Item 8, “Financial Statements and Supplementary Data” in our
2018
Form 10-K for a description of the expense support agreement.
|
(2)
|
Stockholders may elect to have their distributions reinvested in shares of our common stock through our distribution reinvestment plan.
|
(3)
|
Gross distributions are total distributions before the deduction of any distribution fees relating to Class T shares and Class W shares issued in the primary portion of our initial public offering.
|
(in thousands)
|
|
Class T
|
|
Class W
|
|
Class I
|
|
Notes to
Stockholders |
|
Total
|
||||||||||
Amount of gross proceeds raised:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Primary offering
|
|
$
|
338,241
|
|
|
$
|
12,828
|
|
|
$
|
6,348
|
|
|
$
|
—
|
|
|
$
|
357,417
|
|
DRIP
|
|
4,695
|
|
|
57
|
|
|
156
|
|
|
—
|
|
|
4,908
|
|
|||||
Private offering
|
|
62
|
|
|
—
|
|
|
62
|
|
|
376
|
|
|
500
|
|
|||||
Total offering
|
|
$
|
342,998
|
|
|
$
|
12,885
|
|
|
$
|
6,566
|
|
|
$
|
376
|
|
|
$
|
362,825
|
|
Number of shares issued:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Primary offering
|
|
32,196
|
|
|
1,276
|
|
|
654
|
|
|
—
|
|
|
34,126
|
|
|||||
DRIP
|
|
468
|
|
|
6
|
|
|
16
|
|
|
—
|
|
|
490
|
|
|||||
Private offering
|
|
7
|
|
|
—
|
|
|
7
|
|
|
—
|
|
|
14
|
|
|||||
Stock dividends
|
|
—
|
|
|
6
|
|
|
3
|
|
|
—
|
|
|
9
|
|
|||||
Total offering
|
|
32,671
|
|
|
1,288
|
|
|
680
|
|
|
—
|
|
|
34,639
|
|
(in thousands)
|
|
For the Period
from Inception (August 12, 2014) to March 31, 2019 |
||
Gross offering proceeds
|
|
$
|
300,690
|
|
Selling commissions (1)
|
|
$
|
6,393
|
|
Dealer manager fees (1)
|
|
6,484
|
|
|
Offering costs
|
|
15,268
|
|
|
Total direct selling costs incurred related to public offering (2)
|
|
$
|
28,145
|
|
Offering proceeds, net of direct selling costs
|
|
$
|
272,545
|
|
|
(1)
|
The selling commissions and dealer manager fees were payable to the Dealer Manager. A substantial portion of the commissions and fees were reallowed by the Dealer Manager to participating broker dealers as commissions and marketing fees and expenses.
|
(2)
|
This amount excludes the distribution fees paid to the Dealer Manager, all or a portion of which are reallowed by the Dealer Manager to participating broker dealers or broker dealers servicing accounts of investors who own Class T shares or Class W shares, referred to as servicing broker dealers. The distribution fees are not paid from and do not reduce offering proceeds, but rather they reduce the distributions payable to stockholders with respect to Class T shares and Class W shares.
|
For the Month Ended
|
|
Total Number of Shares Redeemed
|
|
Average Price Paid per Share
|
|
Total Number of Shares Redeemed as Part of Publicly Announced Plans or Programs
|
|
Maximum Number of Shares That May Yet Be Redeemed Under the Plans or Programs (1)
|
|||||
January 31, 2019
|
|
69,607
|
|
|
$
|
10.06
|
|
|
69,607
|
|
|
—
|
|
February 28, 2019
|
|
1,910
|
|
|
9.81
|
|
|
1,910
|
|
|
—
|
|
|
March 31, 2019
|
|
4,771
|
|
|
9.55
|
|
|
4,771
|
|
|
—
|
|
|
Total
|
|
76,288
|
|
|
$
|
10.02
|
|
|
76,288
|
|
|
—
|
|
|
(1)
|
We limit the number of shares that may be redeemed per calendar quarter under the program as described above.
|
Exhibit Number
|
|
Description
|
|
|
|
3.1
|
|
Third Articles of Amendment and Restatement. Incorporated by reference to Exhibit 3.1 to Pre-Effective Amendment No. 1 to Post-Effective Amendment No. 3 to the Registration Statement on Form S-11 (File No. 333-200594) filed with the SEC on June 30, 2017 (“Pre-Effective Amendment”).
|
|
|
|
3.2
|
|
Third Amended and Restated Bylaws of Black Creek Industrial REIT IV Inc. (formerly known as Industrial Logistics Realty Trust Inc.). Incorporated by reference to Exhibit 3.2 to the Quarterly Report on Form 10-Q filed with the SEC on November 9, 2017.
|
|
|
|
4.1
|
|
Form of Subscription Agreement. Incorporated by reference to Appendix B to Post-Effective Amendment No. 5 to the Registration Statement on Form S-11 (File No. 333-200594) on April 18, 2018.
|
|
|
|
4.2
|
|
Third Amended and Restated Distribution Reinvestment Plan. Incorporated by reference to Exhibit 4.2 to the Pre-Effective Amendment No. 1 to Post-Effective Amendment No. 3 to Form S-11 (File No. 333-200594) filed with the SEC on July 3, 2017.
|
|
|
|
4.3
|
|
Share Redemption Program, effective as of November 1, 2017. Incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed with the SEC on November 2, 2017.
|
|
|
|
10.1
|
|
Amendment No. 1 to Advisory Agreement (2018), dated and effective as of January 1, 2019, by and among Black Creek Industrial REIT IV Inc., BCI IV Operating Partnership LP and BCI IV Advisors LLC. Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC on January 7, 2019.
|
|
|
|
10.2
|
|
Second Amended and Restated Expense Support Agreement, dated as of January 1, 2019, by and among Black Creek Industrial REIT IV Inc., BCI IV Operating Partnership LP and BCI IV Advisors LLC. Incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed with the SEC on January 7, 2019.
|
|
|
|
10.3
|
|
First Amended and Restated Credit Agreement, dated as of February 21, 2019, by and among BCI IV Operating Partnership LP, as the Borrower; the lenders from time to time who are parties thereto; Wells Fargo Bank, National Association, as Administrative Agent; Bank of America, N.A., as Syndication Agent; U.S. Bank, National Association, as Revolving Credit Facility Documentation Agent; JPMorgan Chase Bank, N.A., as Term Facility Documentation Agent; Wells Fargo Securities, LLC, as a Revolving Credit Facility Joint Lead Arranger and Joint Bookrunner and a Term Facility Joint Lead Arranger and Joint Bookrunner; Merrill Lynch, Pierce, Fenner & Smith Incorporated or its affiliate, as a Revolving Credit Facility Joint Lead Arranger and Joint Bookrunner and a Term Facility Joint Lead Arranger and Joint Bookrunner; and U.S. Bank, National Association, as a Revolving Credit Facility Joint Lead Arranger. Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC on February 27, 2019.
|
|
|
|
31.1*
|
|
Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
31.2*
|
|
Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
32.1**
|
|
Certifications of Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
99.1*
|
|
Consent of Altus Group U.S., Inc.
|
|
|
|
99.2
|
|
Net Asset Value Calculation and Valuation Procedures. Incorporated by reference to Exhibit 99.1 to the Current Report on Form 8-K filed with the SEC on June 15, 2018.
|
|
|
|
101
|
|
The following materials from Black Creek Industrial REIT IV Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2019, filed on May 14, 2019, formatted in XBRL (eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Operations, (iii) Condensed Consolidated Statements of Equity, (iv) Condensed Consolidated Statements of Cash Flows, and (v) Notes to the Condensed Consolidated Financial Statements.
|
|
|
|
|
|
|
BLACK CREEK INDUSTRIAL REIT IV INC.
|
||
|
|
|
|
May 14, 2019
|
By:
|
|
/s/ D
WIGHT
L. M
ERRIMAN
III
|
|
|
|
Dwight L. Merriman III
Managing Director, Chief Executive Officer
(Principal Executive Officer)
|
|
|
|
|
May 14, 2019
|
By:
|
|
/s/ T
HOMAS
G. M
CGONAGLE
|
|
|
|
Thomas G. McGonagle
Managing Director, Chief Financial Officer
(Principal Financial Officer and Principal Accounting Officer)
|