Filed pursuant to 424(b)(3)
Registration No. 333-200594
BLACK CREEK INDUSTRIAL REIT IV INC.
SUPPLEMENT NO. 15 DATED DECEMBER 13, 2018
TO THE PROSPECTUS DATED APRIL 30, 2018
This prospectus supplement (“Supplement”) is part of and should be read in conjunction with the prospectus of Black Creek Industrial REIT IV Inc., dated April 30, 2018 (the “Prospectus”), as supplemented by Supplement No. 10, dated September 7, 2018, Supplement No. 11, dated September 14, 2018, Supplement No. 12, dated October 5, 2018, Supplement No. 13, dated October 15, 2018, and Supplement No. 14, dated November 15, 2018. Unless otherwise defined herein, capitalized terms used in this Supplement shall have the same meanings as in the Prospectus.
The purpose of this Supplement is to disclose:
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the transaction price and offering price for each class of our common stock as of
January 1, 2019
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the calculation of our
November 30, 2018
NAV per share, as determined in accordance with our valuation procedures, for all share classes;
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updated suitability standards;
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an update to the risk factors;
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an update to the conflict resolution procedures related to the allocation of investment opportunities; and
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updated experts information.
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JANUARY 1, 2019 TRANSACTION PRICE
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The transaction price for each share class of our common stock for subscriptions to be accepted as of
January 1, 2019
(and distribution reinvestment plan issuances following the close of business on
December 31, 2018
and share redemptions as of
December 31, 2018
) is as follows:
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Share Class
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Transaction Price
(per share)
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Offering Price
(per share)
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Class T
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$
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10.0565
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$
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10.5304
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Class W
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$
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10.0565
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$
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10.0565
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Class I
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$
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10.0565
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$
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10.0565
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The transaction price for each of our share classes is equal to such class’s NAV per share as of
November 30, 2018
. A calculation of the NAV per share is set forth in the section of this Supplement titled “
November 30, 2018
NAV Per Share.” The offering price of our common stock for each share class equals the transaction price of such class, plus applicable upfront selling commissions and dealer manager fees. Distribution reinvestment plan issuances following the close of business on
December 31, 2018
and share redemptions as of
December 31, 2018
will be made at the transaction price.
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NOVEMBER 30, 2018
NAV PER SHARE
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Our board of directors, including a majority of our independent directors, has adopted valuation procedures, as amended from time to time, that contain a comprehensive set of methodologies to be used in connection with the calculation of our NAV. Our most recent NAV per share for each share class, which is updated as of the last calendar day of each month, is posted on our website at
www.blackcreekindustrialiv.com
and is also available on our toll-free, automated telephone line at (888) 310-9352. See the “Net Asset Value Calculation and Valuation Procedures” section of the Prospectus for a more detailed description of our valuation procedures, including important disclosure regarding real property valuations provided by Altus Group U.S. Inc. (the “Independent Valuation Firm”). All parties engaged by us in the calculation of our NAV, including the Advisor, are subject to the oversight of our board of directors. Generally, all of our real properties are appraised once each calendar year by third party appraisal firms in accordance with our valuation procedures and such appraisals are reviewed by our Independent Valuation Firm.
As used below, “Fund Interests” means our outstanding shares of common stock, along with the partnership units in our operating partnership (“OP Units”) held by third parties (if any), and “Aggregate Fund NAV” means the NAV of all of the Fund Interests.
The following table sets forth the components of Aggregate Fund NAV as of
November 30, 2018
and
October 31, 2018
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As of
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(in thousands)
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November 30, 2018
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October 31, 2018
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Real estate properties
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$
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213,950
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$
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162,150
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Cash and other assets, net of other liabilities
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17,612
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16,711
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Debt obligations
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(75,000
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(40,000
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Aggregate Fund NAV
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$
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156,562
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$
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138,861
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Total Fund Interests outstanding
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15,568
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13,820
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The following table sets forth the NAV per Fund Interest as of
November 30, 2018
and
September 30, 2018
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(in thousands, except per Fund Interest data)
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Total
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Class T
Shares
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Class W
Shares
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Class I
Shares
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As of November 30, 2018
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Monthly NAV
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$
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156,562
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$
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151,934
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$
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1,384
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$
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3,244
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Fund Interests outstanding
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15,568
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15,108
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138
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322
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NAV Per Fund Interest
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$
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10.0565
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$
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10.0565
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$
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10.0565
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$
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10.0565
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As of October 31, 2018
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Monthly NAV
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$
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138,861
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$
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134,770
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$
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922
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$
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3,169
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Fund Interests outstanding
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13,820
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13,413
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92
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315
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NAV Per Fund Interest
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$
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10.0481
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$
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10.0481
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$
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10.0481
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$
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10.0481
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Under GAAP, we record liabilities for ongoing distribution fees that (i) we currently owe under the terms of the dealer manager agreement and (ii) we estimate we may pay to the Dealer Manager in future periods for shares of our common stock. As of
November 30, 2018
, we estimated approximately
$5.8 million
of ongoing distribution fees were potentially payable to the Dealer Manager. We intend for our NAV to reflect our estimated value on the date that we determine our NAV. As such, we do not deduct the liability for estimated future distribution fees in our calculation of NAV that may become payable after the date as of which our NAV is calculated.
The valuation for our real properties as of
November 30, 2018
was provided by the Independent Valuation Firm in accordance with our valuation procedures and determined by starting with the acquisition price of our real properties, which was adjusted based on subsequent events and assumptions used by the Independent Valuation Firm. Certain key assumptions that were used by our Independent Valuation Firm in the discounted cash flow analysis are set forth in the following table:
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Weighted-Average
Basis
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Exit capitalization rate
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5.37
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%
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Discount rate / internal rate of return
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6.18
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%
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Holding period of real properties (years)
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11.0
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A change in the rates used would impact the calculation of the value of our real properties. For example, assuming all other factors remain constant, the hypothetical changes listed below would result in the following effects on the value of our real properties:
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Input
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Hypothetical
Change
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Increase (Decrease)
to the NAV of Real Properties
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Exit capitalization rate (weighted-average)
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0.25% decrease
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3.19
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0.25% increase
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(2.90
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)%
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Discount rate (weighted-average)
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0.25% decrease
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2.15
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%
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0.25% increase
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(2.09
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)%
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The valuation of our debt obligations as of
November 30, 2018
was in accordance with fair value standards under GAAP. The key assumption used in the discounted cash flow analysis was the market interest rate. Market interest rates relating to the underlying debt obligations are based on unobservable Level 3 inputs, which we have determined to be our best estimate
of current market interest rates of similar instruments. The weighted-average market interest rate used in the
November 30, 2018
valuation was
3.85%
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A change in the market interest rates used would impact the calculation of the fair value of our debt obligations. For example, assuming all other factors remain constant, a decrease in the weighted-average market interest rate of 0.25% would not have a material impact on the fair value of our debt obligations. Alternatively, assuming all other factors remain constant, an increase in the weighted-average market interest rate of 0.25% would decrease the fair value of our debt obligations by approximately
0.26%
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Effective as of the date of this Supplement, Puerto Rico investors must meet the following additional suitability standard to invest in this offering:
Puerto Rico
—In addition to our suitability requirements, Puerto Rico investors may not invest more than 10% of their liquid net worth in us, our affiliates, and in other non-traded REITs. For these purposes, “liquid net worth” is defined as that portion of net worth (total assets exclusive of primary residence, home furnishings, and automobiles minus total liabilities) consisting of cash, cash equivalents, and readily marketable securities.
The following risk factor supersedes and replaces the second risk factor beginning on page 93 in the section of the Prospectus titled “Risk Factors—Risks Related to the Advisor and Its Affiliates”:
We will compete with entities sponsored or advised by affiliates of the Sponsor, for whom affiliates of the Sponsor provide certain advisory or management services, for opportunities to acquire or sell investments, and for customers, which may have an adverse impact on our operations.
We will compete with entities sponsored or advised by affiliates of the Sponsor, whether existing or created in the future, as well as entities for whom affiliates of the Sponsor provide certain advisory or management services, for opportunities to acquire, lease, finance or sell certain types of properties. We may also buy, finance or sell properties at the same time as these entities are buying, financing or selling properties. In this regard, there is a risk that we will purchase a property that provides lower returns to us than a property purchased by entities sponsored or advised by affiliates of the Sponsor and entities for whom affiliates of the Sponsor provide certain advisory or management services. Certain entities sponsored or advised by affiliates of the Sponsor own and/or manage properties in geographical areas in which we expect to own properties. Therefore, our properties may compete for customers with other properties owned and/or managed by these entities. The Advisor may face conflicts of interest when evaluating customer leasing opportunities for our properties and other properties owned and/or managed by these entities and these conflicts of interest may have a negative impact on our ability to attract and retain customers.
The Sponsor and the Advisor have implemented lease allocation guidelines to assist with the process of the allocation of leases when we and certain other entities to which affiliates of the Advisor are providing certain advisory services have potentially competing properties with respect to a particular customer. Pursuant to the lease allocation guidelines, if we have an opportunity to bid on a lease with a prospective customer and one or more of these other entities has a potentially competing property, then, under certain circumstances, we may not be permitted to bid on the opportunity and in other circumstances, we and the other entities will be permitted to participate in the bidding process. The lease allocation guidelines are overseen by a joint management committee consisting of our management committee and certain other management representatives associated with other entities to which affiliates of the Advisor are providing similar services.
Because affiliates of the Sponsor and the Advisor currently sponsor and in the future may advise other investment vehicles (each, an “Investment Vehicle”) with overlapping investment objectives, strategies and criteria, potential conflicts of interest may arise with respect to industrial real estate investment opportunities (“Industrial Investments”). In order to manage this potential conflict of interest, in allocating Industrial Investments among the Investment Vehicles, the Sponsor follows an allocation policy (the “Allocation Policy”) which currently provides that if the Sponsor or one of its affiliates is awarded and controls an Industrial Investment that is suitable for more than one Investment Vehicle, based upon various Allocation Factors (defined below), including without limitation availability of capital, portfolio objectives, diversification goals, target investment markets, return requirements, investment timing and the Investment Vehicle’s applicable approval discretion and timing, then the Industrial Investment will be allocated to Investment Vehicles on a rotational basis and will be offered to the Investment Vehicle at the top of the rotation list (that is, the Investment Vehicle that has gone the longest without being allocated an Industrial Investment). If an Investment Vehicle on the list declines the Industrial Investment, it will be rotated to the bottom of the rotation list. Exceptions may be made to the Allocation Policy for (x) transactions necessary to accommodate an exchange
pursuant to Section 1031 of the U.S. Internal Revenue Code of 1986, as amended (the “Code”), or (y) characteristics of a particular Industrial Investment or Investment Vehicle, such as adjacency to an existing asset, legal, regulatory or tax concerns or benefits, portfolio balancing or other Allocation Factors listed below, which make the Industrial Investment more advantageous to one of the Investment Vehicles. In addition, the Sponsor may from time to time specify that it will not seek new allocations for more than one Investment Vehicle until certain minimum allocation levels are reached.
The Sponsor may from time to time grant to certain Investment Vehicles certain exclusivity, rotation or other priority (each, a “Special Priority”) with respect to Industrial Investments or other investment opportunities. The only currently existing Special Priority has been granted to Build-to-Core Industrial Partnership III LLC (“BTC III”), pursuant to which BTC III will be presented one out of every three qualifying development Industrial Investments (subject to the terms and conditions of the BTC III partnership agreement) until such time as capital commitments thereunder have been fully committed. The Sponsor or its affiliates may grant additional special priorities in the future and from time to time. In addition, to the extent that a potential conflict of interest arises with respect to an investment opportunity other than an Industrial Investment, the Sponsor currently expects to manage the potential conflict of interest by allocating the investment in accordance with the principles of the Allocation Policy the Sponsor follows with respect to Industrial Investments.
“Allocation Factors” are those factors that the Sponsor maintains and updates from time to time based on review by the Sponsor’s Head of Real Estate. Current examples of Allocation Factors include:
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Overall investment objectives, strategy and criteria, including product type and style of investing (for example, core, core plus, value-add and opportunistic);
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The general real property sector or debt investment allocation targets of each program and any targeted geographic concentration;
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The cash requirements of each program;
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The strategic proximity of the investment opportunity to other assets;
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The effect of the acquisition on diversification of investments, including by type of property, geographic area, customers, size and risk;
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The policy of each program relating to leverage of investments;
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The effect of the acquisition on loan maturity profile;
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The effect on lease expiration profile;
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Customer concentration;
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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;
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The effect of the acquisition on the applicable entity’s intention not to be subject to regulation under the Investment Company Act;
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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;
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The financial attributes of the investment opportunity;
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Availability of financing;
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Ability to service any debt associated with the investment opportunity;
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Targeted distribution rates;
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Anticipated future pipeline of suitable investments;
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Expected holding period of the investment opportunity and the applicable entity’s remaining term;
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Whether the applicable entity still is in its fundraising and acquisition stage, or has substantially invested the proceeds from its fundraising stage;
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Whether the applicable entity was formed for the purpose of making a particular type of investment;
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Affiliate and/or related party considerations;
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The anticipated cash flow of the applicable entity and the asset;
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Tax effects of the acquisition, including on REIT or partnership qualifications;
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The size of the investment opportunity; and
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The amount of funds available to each program and the length of time such funds have been available for investment.
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The Sponsor may modify its overall allocation policies from time to time. Any changes to the Sponsor’s allocation policies will be timely reported to our Conflicts Resolution Committee. The Advisor will be required to provide information to our board of directors on a quarterly basis to enable our board of directors, including the independent directors, to determine whether such policies are being fairly applied.
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CONFLICT RESOLUTION PROCEDURES—ALLOCATION OF INVESTMENT OPPORTUNITIES AMONG AFFILIATES AND OTHER RELATED ENTITIES
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The following paragraph supersedes and replaces the first paragraph on page 185 in the section of the Prospectus titled “Conflict Resolution Procedures—Allocation of Investment Opportunities Among Affiliates and Other Related Entities”:
The Sponsor may from time to time grant to certain Investment Vehicles certain exclusivity, rotation or other priority (each, a “Special Priority”) with respect to Industrial Investments or other investment opportunities. The only currently existing Special Priority has been granted to Build-to-Core Industrial Partnership III LLC (“BTC III”), pursuant to which BTC III will be presented one out of every three qualifying development Industrial Investments (subject to the terms and conditions of the BTC III partnership agreement) until such time as capital commitments thereunder have been fully committed. The Sponsor or its affiliates may grant additional special priorities in the future and from time to time. In addition, to the extent that a potential conflict of interest arises with respect to an investment opportunity other than an Industrial Investment, the Sponsor currently expects to manage the potential conflict of interest by allocating the investment in accordance with the principles of the Allocation Policy the Sponsor follows with respect to Industrial Investments.
The statements included in this Supplement under the section titled “
November 30, 2018
NAV Per Share” relating to the role of Altus Group U.S., Inc. as the Independent Valuation Firm, and the valuation of the real properties and related assumptions have been reviewed by Altus Group U.S., Inc., an independent valuation firm, and are included in this Supplement given the authority of such firm as experts in real estate valuations.