UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
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☒
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended SeptemberJune 30, 20172021
OR
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☐
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission file number: 000-51948
Jones Lang LaSalle Income Property Trust, Inc.
(Exact name of registrant as specified in its charter)
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| | | | | | | |
Maryland | | 20-1432284 |
(State or other jurisdiction of incorporation or organization) | | (I.R.S. Employer Identification Number) |
333 West Wacker Drive, Chicago IL, 60606
(Address of principal executive offices, including Zip Code)
(312) 897-4000
(Registrant’s telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES ☒Yes ☑ NO ☐
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). YES ☒Yes ☑ NO ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act. |
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Large accelerated filer | | ☐ | | Accelerated filer | | ☐ |
Non-accelerated filer | | ☒☑ | | Smaller reporting company | | ☐ |
| | | | Emerging growth company | | ☒☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES ¨☐ NO ☒☑
The number of shares of the registrant’s Common Stock, $.01 par value, outstanding on November 13, 2017August 11, 2021 were 69,692,53094,655,245 shares of Class A Common Stock, 37,914,66535,053,191 shares of Class M Common Stock, 11,173,3419,584,831 shares of Class A-I Common Stock, 7,358,28743,003,450 shares of Class M-I Common Stock and 7,531,7147,513,281 shares of Class D Common Stock.
Jones Lang LaSalle Income Property Trust, Inc.
INDEX
Item 1. Financial Statements.
Jones Lang LaSalle Income Property Trust, Inc.
CONSOLIDATED BALANCE SHEETS
$ in thousands, except per share amounts |
| | | | | | | | |
| | September 30, 2017 | | December 31, 2016 |
| | (Unaudited) | | |
ASSETS | | | | |
Investments in real estate: | | | | |
Land (including from VIEs of $36,851 and $25,441, respectively) | | $ | 397,930 |
| | $ | 376,457 |
|
Buildings and equipment (including from VIEs of $199,675 and $153,445, respectively) | | 1,493,356 |
| | 1,367,860 |
|
Less accumulated depreciation (including from VIEs of $(22,541) and $(19,479), respectively) | | (114,469 | ) | | (88,870 | ) |
Net property and equipment | | 1,776,817 |
| | 1,655,447 |
|
Investment in unconsolidated real estate affiliates | | 133,700 |
| | 139,098 |
|
Real estate fund investment | | 94,283 |
| | 89,151 |
|
Net investments in real estate | | 2,004,800 |
| | 1,883,696 |
|
Cash and cash equivalents (including from VIEs of $6,125 and $9,786, respectively) | | 42,250 |
| | 45,782 |
|
Restricted cash (including from VIEs of $513 and $796, respectively) | | 25,098 |
| | 1,967 |
|
Tenant accounts receivable, net (including from VIEs of $1,563 and $1,509, respectively) | | 4,628 |
| | 3,902 |
|
Deferred expenses, net (including from VIEs of $220 and $207, respectively) | | 9,049 |
| | 9,498 |
|
Acquired intangible assets, net (including from VIEs of $15,010 and $8,022, respectively) | | 106,522 |
| | 110,787 |
|
Deferred rent receivable, net (including from VIEs of $1,046 and $901, respectively) | | 16,497 |
| | 14,891 |
|
Prepaid expenses and other assets (including from VIEs of $279 and $250, respectively) | | 4,573 |
| | 4,110 |
|
TOTAL ASSETS | | $ | 2,213,417 |
| | $ | 2,074,633 |
|
LIABILITIES AND EQUITY | | | | |
Mortgage notes and other debt payable, net (including from VIEs of $100,071 and $109,691, respectively) | | $ | 889,597 |
| | $ | 695,613 |
|
Accounts payable and other accrued expenses (including from VIEs of $1,698 and $1,376, respectively) | | 13,165 |
| | 13,058 |
|
Accrued offering costs | | 78,970 |
| | 86,517 |
|
Distributions payable | | 14,218 |
| | 14,555 |
|
Accrued interest (including from VIEs of $357 and $400, respectively) | | 1,875 |
| | 1,979 |
|
Accrued real estate taxes (including from VIEs of $2,335 and $1,628, respectively) | | 11,073 |
| | 5,022 |
|
Advisor fees payable | | 1,585 |
| | 1,600 |
|
Acquired intangible liabilities, net (including from VIEs of $1,205 and $0, respectively) | | 20,483 |
| | 21,748 |
|
TOTAL LIABILITIES | | 1,030,966 |
| | 840,092 |
|
Commitments and contingencies | | — |
| | — |
|
Equity: | | | | |
Class A common stock: $0.01 par value; 200,000,000 shares authorized; 69,448,287 and 69,837,581 shares issued and outstanding at September 30, 2017 and December 31, 2016, respectively | | 694 |
| | 698 |
|
Class M common stock: $0.01 par value; 200,000,000 shares authorized; 37,588,719 and 36,522,305 shares issued and outstanding at September 30, 2017 and December 31, 2016, respectively | | 376 |
| | 365 |
|
Class A-I common stock: $0.01 par value; 200,000,000 shares authorized; 11,105,281 and 12,812,637 shares issued and outstanding at September 30, 2017 and December 31, 2016, respectively | | 111 |
| | 128 |
|
Class M-I common stock: $0.01 par value; 200,000,000 shares authorized; 7,383,732 and 7,591,239 shares issued and outstanding at September 30, 2017 and December 31, 2016, respectively | | 74 |
| | 76 |
|
Class D common stock: $0.01 par value; 200,000,000 shares authorized; 7,531,714 and 7,963,493 shares issued and outstanding at September 30, 2017 and December 31, 2016, respectively | | 75 |
| | 80 |
|
Additional paid-in capital (net of offering costs of $132,017 and $126,995 as of September 30, 2017 and December 31, 2016, respectively) | | 1,520,881 |
| | 1,544,955 |
|
Accumulated other comprehensive loss | | — |
| | (1,875 | ) |
Distributions to stockholders | | (242,570 | ) | | (199,317 | ) |
Accumulated deficit | | (105,039 | ) | | (118,765 | ) |
Total Jones Lang LaSalle Income Property Trust, Inc. stockholders’ equity | | 1,174,602 |
| | 1,226,345 |
|
Noncontrolling interests | | 7,849 |
| | 8,196 |
|
Total equity | | 1,182,451 |
| | 1,234,541 |
|
TOTAL LIABILITIES AND EQUITY | | $ | 2,213,417 |
| | $ | 2,074,633 |
|
| | | | | | | | | | | |
| June 30, 2021 | | December 31, 2020 |
| (Unaudited) | | |
ASSETS | | | |
Investments in real estate: | | | |
Land (including from VIEs of $22,605 and $22,605, respectively) | $ | 461,639 | | | $ | 428,313 | |
Buildings and equipment (including from VIEs of $143,051 and $142,946, respectively) | 2,166,985 | | | 1,892,023 | |
Less accumulated depreciation (including from VIEs of $(24,774) and $(23,083), respectively) | (245,077) | | | (219,833) | |
Net property and equipment | 2,383,547 | | | 2,100,503 | |
Investment in unconsolidated real estate affiliates | 181,224 | | | 187,890 | |
Real estate fund investment | 79,156 | | | 79,192 | |
Investments in real estate and other assets held for sale | 0 | | | 34,148 | |
Net investments in real estate | 2,643,927 | | | 2,401,733 | |
Cash and cash equivalents (including from VIEs of $5,364 and $3,159, respectively) | 175,691 | | | 84,805 | |
Restricted cash (including from VIEs of $478 and $800, respectively) | 38,935 | | | 16,629 | |
Tenant accounts receivable, net (including from VIEs of $2,466 and $2,679, respectively) | 8,681 | | | 8,680 | |
Deferred expenses, net (including from VIEs of $470 and $516, respectively) | 14,408 | | | 10,982 | |
Acquired intangible assets, net (including from VIEs of $2,122 and $2,638, respectively) | 138,532 | | | 105,206 | |
Deferred rent receivable, net (including from VIEs of $1,117 and $1,087, respectively) | 22,856 | | | 21,274 | |
Prepaid expenses and other assets (including from VIEs of $224 and $164, respectively) | 17,881 | | | 9,290 | |
TOTAL ASSETS | $ | 3,060,911 | | | $ | 2,658,599 | |
LIABILITIES AND EQUITY | | | |
Mortgage notes and other debt payable, net (including from VIEs of $81,769 and $82,033, respectively) | $ | 1,008,496 | | | $ | 868,102 | |
Liabilities held for sale | 0 | | | 18,242 | |
Accounts payable and other liabilities (including from VIEs of $1,403 and $1,335, respectively) | 61,095 | | | 36,137 | |
Financing obligation | 285,201 | | | 155,882 | |
Accrued offering costs | 116,033 | | | 106,908 | |
| | | |
Accrued interest (including from VIEs of $294 and $296, respectively) | 2,232 | | | 2,153 | |
Accrued real estate taxes (including from VIEs of $1,141 and $738, respectively) | 9,340 | | | 6,640 | |
Advisor fees payable | 2,270 | | | 2,122 | |
Acquired intangible liabilities, net | 28,644 | | | 14,990 | |
TOTAL LIABILITIES | 1,513,311 | | | 1,211,176 | |
Commitments and contingencies | 0 | | | 0 | |
Equity: | | | |
Class A common stock: $0.01 par value; 200,000,000 shares authorized; 92,740,925 and 89,671,096 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively | 927 | | | 897 | |
Class M common stock: $0.01 par value; 200,000,000 shares authorized; 35,056,224 and 35,612,156 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively | 351 | | | 356 | |
Class A-I common stock: $0.01 par value; 200,000,000 shares authorized; 9,584,832 and 9,616,299 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively | 96 | | | 96 | |
Class M-I common stock: $0.01 par value; 200,000,000 shares authorized; 39,559,491 and 33,247,001 shares issued and outstanding at June 30, 2021, and December 31, 2020, respectively | 396 | | | 332 | |
Class D common stock: $0.01 par value; 200,000,000 shares authorized; 7,513,281 and 4,957,915 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively | 75 | | | 50 | |
Additional paid-in capital (net of offering costs of $233,628 and $216,405 as of June 30, 2021 and December 31, 2020, respectively) | 2,040,114 | | | 1,922,136 | |
| | | |
Distributions to stockholders | (525,732) | | | (481,760) | |
Retained earnings | 11,605 | | | (14,723) | |
Total Jones Lang LaSalle Income Property Trust, Inc. stockholders’ equity | 1,527,832 | | | 1,427,384 | |
Noncontrolling interests | 19,768 | | | 20,039 | |
Total equity | 1,547,600 | | | 1,447,423 | |
TOTAL LIABILITIES AND EQUITY | $ | 3,060,911 | | | $ | 2,658,599 | |
The abbreviation “VIEs” above means consolidated Variable Interest Entities.
See notes to consolidated financial statements.
Jones Lang LaSalle Income Property Trust, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
$ in thousands, except share and per share amounts
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended June 30, 2021 | | Three Months Ended June 30, 2020 | | Six Months Ended June 30, 2021 | | Six Months Ended June 30, 2020 |
Revenues: | | | | | | | |
Rental revenue | $ | 52,538 | | | $ | 45,483 | | | $ | 103,269 | | | $ | 92,400 | |
Other revenue | 3,508 | | | 1,433 | | | 5,358 | | | 3,176 | |
Total revenues | 56,046 | | | 46,916 | | | 108,627 | | | 95,576 | |
Operating expenses: | | | | | | | |
Real estate taxes | 8,205 | | | 7,306 | | | 16,291 | | | 14,847 | |
Property operating expenses | 10,194 | | | 8,821 | | | 20,105 | | | 17,579 | |
| | | | | | | |
Property general and administrative | (184) | | | 333 | | | 476 | | | 2,881 | |
Advisor fees | 6,749 | | | 6,279 | | | 13,074 | | | 12,857 | |
Company level expenses | 990 | | | 594 | | | 2,183 | | | 1,548 | |
| | | | | | | |
| | | | | | | |
Depreciation and amortization | 21,218 | | | 18,564 | | | 41,163 | | | 37,620 | |
Total operating expenses | 47,172 | | | 41,897 | | | 93,292 | | | 87,332 | |
| | | | | | | |
Other income (expenses): | | | | | | | |
Interest expense | (10,288) | | | (9,265) | | | (19,550) | | | (23,800) | |
| | | | | | | |
| | | | | | | |
Loss from unconsolidated real estate affiliates and fund investments | (2,412) | | | (3,970) | | | (2,751) | | | (12,897) | |
| | | | | | | |
Gain on disposition of property and extinguishment of debt, net | 0 | | | 0 | | | 33,422 | | | 1,708 | |
| | | | | | | |
| | | | | | | |
Total other income and (expenses) | (12,700) | | | (13,235) | | | 11,121 | | | (34,989) | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
Net (loss) income | (3,826) | | | (8,216) | | | 26,456 | | | (26,745) | |
Less: Net loss (income) attributable to the noncontrolling interests | 49 | | | 12 | | | (128) | | | (8) | |
Net (loss) income attributable to Jones Lang LaSalle Income Property Trust, Inc. | $ | (3,777) | | | $ | (8,204) | | | $ | 26,328 | | | $ | (26,753) | |
| | | | | | | |
| | | | | | | |
Net (loss) income attributable to Jones Lang LaSalle Income Property Trust, Inc. per share-basic and diluted: | 0 | | 0 | | 0 | | 0 |
Class A | (0.02) | | | (0.05) | | | 0.15 | | | (0.16) | |
Class M | (0.02) | | | (0.05) | | | 0.15 | | | (0.16) | |
Class A-I | (0.02) | | | (0.05) | | | 0.15 | | | (0.16) | |
Class M-I | (0.02) | | | (0.05) | | | 0.15 | | | (0.16) | |
Class D | (0.02) | | | (0.05) | | | 0.15 | | | (0.16) | |
Weighted average common stock outstanding-basic and diluted | 181,126,712 | | | 170,103,439 | | | 177,963,466 | | | 171,423,839 | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
|
| | | | | | | | | | | | | | | |
| Three Months Ended September 30, 2017 | | Three Months Ended September 30, 2016 | | Nine Months Ended September 30, 2017 | | Nine Months Ended September 30, 2016 |
Revenues: | | | | | | | |
Minimum rents | $ | 34,372 |
| | $ | 27,514 |
| | $ | 98,181 |
| | $ | 75,852 |
|
Tenant recoveries and other rental income | 7,921 |
| | 6,677 |
| | 24,235 |
| | 18,618 |
|
Total revenues | 42,293 |
| | 34,191 |
| | 122,416 |
| | 94,470 |
|
Operating expenses: | | | | | | | |
Real estate taxes | 6,181 |
| | 4,727 |
| | 18,363 |
| | 12,522 |
|
Property operating | 7,659 |
| | 6,381 |
| | 21,083 |
| | 17,217 |
|
Provision for doubtful accounts | 26 |
| | 57 |
| | 75 |
| | 191 |
|
Property general and administrative | 274 |
| | 208 |
| | 830 |
| | 814 |
|
Advisor fees | 4,842 |
| | 4,030 |
| | 14,383 |
| | 10,487 |
|
Company level expenses | 491 |
| | 454 |
| | 1,730 |
| | 1,657 |
|
Acquisition expenses | — |
| | 1,759 |
| | — |
| | 2,846 |
|
Provision for impairment of real estate | — |
| | 6,355 |
| | — |
| | 6,355 |
|
Depreciation and amortization | 16,589 |
| | 12,072 |
| | 44,704 |
| | 31,052 |
|
Total operating expenses | 36,062 |
| | 36,043 |
| | 101,168 |
| | 83,141 |
|
Operating income (loss) | 6,231 |
| | (1,852 | ) | | 21,248 |
| | 11,329 |
|
Other income and (expenses): | | | | | | | |
Interest expense | (7,730 | ) | | (5,874 | ) | | (21,375 | ) | | (18,529 | ) |
Income from unconsolidated real estate affiliates and fund investments | 6,236 |
| | 4,686 |
| | 8,144 |
| | 5,583 |
|
Other income | 500 |
| | — |
| | 500 |
| | — |
|
Gain on disposition of properties and extinguishment of debt, net | 5,501 |
| | 1,664 |
| | 5,501 |
| | 1,704 |
|
Total other income and (expenses) | 4,507 |
| | 476 |
| | (7,230 | ) | | (11,242 | ) |
Net income (loss) | 10,738 |
| | (1,376 | ) | | 14,018 |
| | 87 |
|
Less: Net income attributable to the noncontrolling interests | (68 | ) | | (396 | ) | | (292 | ) | | (544 | ) |
Net income (loss) attributable to Jones Lang LaSalle Income Property Trust, Inc. | $ | 10,670 |
| | $ | (1,772 | ) | | $ | 13,726 |
| | $ | (457 | ) |
Net income (loss) attributable to Jones Lang LaSalle Income Property Trust, Inc. per share-basic and diluted | $ | 0.08 |
| | $ | (0.02 | ) | | $ | 0.10 |
| | $ | — |
|
Weighted average common stock outstanding-basic and diluted | 133,554,999 |
| | 113,935,929 |
| | 134,894,754 |
| | 99,933,097 |
|
Other comprehensive gain (loss): | | | | | | | |
Foreign currency translation adjustment | (8 | ) | | (26 | ) | | (20 | ) | | 458 |
|
Reclassification for amounts recognized in net income | 1,895 |
| | — |
| | 1,895 |
| | — |
|
Total other comprehensive gain (loss) | 1,887 |
| | (26 | ) | | 1,875 |
| | 458 |
|
Net comprehensive income (loss) | $ | 12,557 |
| | $ | (1,798 | ) | | $ | 15,601 |
| | $ | 1 |
|
See notes to consolidated financial statements.
Jones Lang LaSalle Income Property Trust, Inc.
CONSOLIDATED STATEMENTSTATEMENTS OF EQUITY
$ in thousands, except share and per share amounts
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Common Stock | | Additional Paid In Capital | | | | Distributions to Stockholders | | Retained Earnings / (Accumulated Deficit) | | Noncontrolling Interests | | Total Equity |
Shares | | Amount |
Balance, April 1, 2020 | 173,260,200 | | | $ | 1,733 | | | $ | 1,938,168 | | | | | $ | (419,875) | | | $ | 10,734 | | | $ | 5,989 | | | $ | 1,536,749 | |
Issuance of common stock | 3,786,774 | | | 38 | | | 44,968 | | | | | — | | | — | | | — | | | 45,006 | |
Repurchase of shares | (7,116,405) | | | (71) | | | (84,674) | | | | | — | | | — | | | — | | | (84,745) | |
Conversion of shares | (193) | | | — | | | — | | | | | — | | | — | | | — | | | 0 | |
Offering costs | — | | | — | | | (3,592) | | | | | — | | | — | | | — | | | (3,592) | |
Stock based compensation | 0 | | | — | | | 0 | | | | | — | | | — | | | — | | | 0 | |
Net loss | — | | | — | | | — | | | | | — | | | (8,204) | | | (12) | | | (8,216) | |
Cash contributions from noncontrolling interests | — | | | — | | | — | | | | | — | | | — | | | (3) | | | (3) | |
| | | | | | | | | | | | | | | |
Distributions declared per share ($0.135) | — | | | — | | | — | | | | | (20,431) | | | — | | | — | | | (20,431) | |
Balance, June 30, 2020 | 169,930,376 | | | $ | 1,700 | | | $ | 1,894,870 | | | | | $ | (440,306) | | | $ | 2,530 | | | $ | 5,974 | | | $ | 1,464,768 | |
| | | | | | | | | | | | | | | |
Balance, January 1, 2020 | 165,745,572 | | | $ | 1,658 | | | $ | 1,860,734 | | | | | $ | (398,939) | | | $ | 29,283 | | | $ | 6,021 | | | $ | 1,498,757 | |
Issuance of common stock | 18,884,524 | | | 189 | | | 230,872 | | | | | — | | | — | | | — | | | 231,061 | |
Repurchase of shares | (14,715,002) | | | (147) | | | (177,762) | | | | | — | | | — | | | — | | | (177,909) | |
Conversion of shares | (718) | | | — | | | — | | | | | — | | | — | | | — | | | 0 | |
Offering costs | — | | | — | | | (19,166) | | | | | — | | | — | | | — | | | (19,166) | |
Stock based compensation | 16,000 | | | — | | | 192 | | | | | — | | | — | | | — | | | 192 | |
Net (loss) income | — | | | — | | | — | | | | | — | | | (26,753) | | | 8 | | | (26,745) | |
| | | | | | | | | | | | | | | |
Cash contributions from noncontrolling interests | — | | | — | | | — | | | | | — | | | — | | | 1 | | | 1 | |
Cash distributed to noncontrolling interests | — | | | — | | | — | | | | | — | | | — | | | (56) | | | (56) | |
Distributions declared per share ($0.270) | — | | | — | | | — | | | | | (41,367) | | | — | | | — | | | (41,367) | |
Balance, June 30, 2020 | 169,930,376 | | | $ | 1,700 | | | $ | 1,894,870 | | | | | $ | (440,306) | | | $ | 2,530 | | | $ | 5,974 | | | $ | 1,464,768 | |
| | | | | | | | | | | | | | | |
Balance, April 1, 2021 | 178,048,517 | | | $ | 1,780 | | | $ | 1,974,251 | | | | | $ | (503,381) | | | $ | 15,382 | | | $ | 20,022 | | | $ | 1,508,054 | |
Issuance of common stock | 9,540,603 | | | 96 | | | 114,150 | | | | | — | | | — | | | — | | | 114,246 | |
Repurchase of shares | (3,134,052) | | | (31) | | | (37,310) | | | | | — | | | — | | | — | | | (37,341) | |
Conversion of shares | (315) | | | — | | | — | | | | | — | | | — | | | — | | | 0 | |
Offering costs | — | | | — | | | (10,977) | | | | | — | | | — | | | — | | | (10,977) | |
| | | | | | | | | | | | | | | |
Net loss | — | | | — | | | — | | | | | — | | | (3,777) | | | (49) | | | (3,826) | |
| | | | | | | | | | | | | | | |
Cash distributed to noncontrolling interests | — | | | — | | | — | | | | | — | | | — | | | (205) | | | (205) | |
Distributions declared per share ($0.135) | — | | | — | | | — | | | | | (22,351) | | | — | | | — | | | (22,351) | |
Balance, June 30, 2021 | 184,454,753 | | | $ | 1,845 | | | $ | 2,040,114 | | | | | $ | (525,732) | | | $ | 11,605 | | | $ | 19,768 | | | $ | 1,547,600 | |
| | | | | | | | | | | | | | | |
Balance, January 1, 2021 | 173,104,467 | | | $ | 1,731 | | | $ | 1,922,136 | | | | | $ | (481,760) | | | $ | (14,723) | | | $ | 20,039 | | | $ | 1,447,423 | |
Issuance of common stock | 18,299,587 | | | 183 | | | 217,078 | | | | | — | | | — | | | — | | | 217,261 | |
Repurchase of shares | (6,964,644) | | | (69) | | | (82,066) | | | | | — | | | — | | | — | | | (82,135) | |
Conversion of shares | (657) | | | — | | | — | | | | | — | | | — | | | — | | | 0 | |
Offering costs | — | | | — | | | (17,223) | | | | | — | | | — | | | — | | | (17,223) | |
Stock based compensation | 16,000 | | | — | | | 189 | | | | | — | | | — | | | — | | | 189 | |
Net income | — | | | — | | | — | | | | | — | | | 26,328 | | | 128 | | | 26,456 | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Cash distributed to noncontrolling interests | — | | | — | | | — | | | | | — | | | — | | | (399) | | | (399) | |
Distributions declared per share ($0.270) | — | | | — | | | — | | | | | (43,972) | | | — | | | — | | | (43,972) | |
Balance, June 30, 2021 | 184,454,753 | | | $ | 1,845 | | | $ | 2,040,114 | | | | | $ | (525,732) | | | $ | 11,605 | | | $ | 19,768 | | | $ | 1,547,600 | |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Common Stock | | Additional Paid In Capital | | Accumulated Other Comprehensive Loss | | Distributions to Stockholders | | Accumulated Deficit | | Noncontrolling Interests | | Total Equity |
Shares | | Amount |
Balance, January 1, 2017 | 134,727,255 |
| | $ | 1,347 |
| | $ | 1,544,955 |
| | $ | (1,875 | ) | | $ | (199,317 | ) | | $ | (118,765 | ) | | $ | 8,196 |
| | $ | 1,234,541 |
|
Issuance of common stock | 6,097,302 |
| | 61 |
| | 69,627 |
| | — |
| | — |
| | — |
| | — |
| | 69,688 |
|
Repurchase of shares | (7,766,824 | ) | | (78 | ) | | (88,770 | ) | | — |
| | — |
| | — |
| | — |
| | (88,848 | ) |
Offering costs | — |
| | — |
| | (5,022 | ) | | — |
| | — |
| | — |
| | — |
| | (5,022 | ) |
Stock based compensation | — |
| | — |
| | 91 |
| | — |
| | — |
| | — |
| | — |
| | 91 |
|
Net income | — |
| | — |
| | — |
| | — |
| | — |
| | 13,726 |
| | 292 |
| | 14,018 |
|
Other comprehensive gain and reclassification of accumulated other comprehensive loss into earnings | — |
| | — |
| | — |
| | 1,875 |
| | — |
| | — |
| | — |
| | 1,875 |
|
Cash contributions from noncontrolling interests | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 1,168 |
| | 1,168 |
|
Cash distributed to noncontrolling interests | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | (1,807 | ) | | (1,807 | ) |
Distributions declared per share ($0.375) | — |
| | — |
| | — |
| | — |
| | (43,253 | ) | | — |
| | — |
| | (43,253 | ) |
Balance, September 30, 2017 | 133,057,733 |
| | $ | 1,330 |
| | $ | 1,520,881 |
| | $ | — |
| | $ | (242,570 | ) | | $ | (105,039 | ) | | $ | 7,849 |
| | $ | 1,182,451 |
|
See notes to consolidated financial statements.
Jones Lang LaSalle Income Property Trust, Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
$ in thousands
(Unaudited)
|
| | | | | | | | |
| | Nine Months Ended September 30, 2017 | | Nine Months Ended September 30, 2016 |
CASH FLOWS FROM OPERATING ACTIVITIES: | | | | |
Net income | | $ | 14,018 |
| | $ | 87 |
|
Adjustments to reconcile net income to net cash provided by operating activities: | | | | |
Depreciation and amortization | | 43,904 |
| | 29,649 |
|
Gain on disposition of property and extinguishment of debt | | (5,501 | ) | | (1,704 | ) |
Provision for doubtful accounts | | 75 |
| | 191 |
|
Straight line rent | | (2,275 | ) | | (4,072 | ) |
Provision for impairment of real estate | | — |
| | 6,355 |
|
Income from unconsolidated real estate affiliates and fund investments
| | (8,144 | ) | | (5,583 | ) |
Distributions from unconsolidated real estate affiliates and fund investments | | 8,414 |
| | 1,125 |
|
Net changes in assets, liabilities and other | | 5,493 |
| | 7,203 |
|
Net cash provided by operating activities | | 55,984 |
| | 33,251 |
|
CASH FLOWS FROM INVESTING ACTIVITIES: | | | | |
Purchase of real estate investments | | (119,317 | ) | | (573,774 | ) |
Proceeds from sale of real estate investments and fixed assets | | — |
| | 45,462 |
|
Capital improvements and lease commissions | | (9,244 | ) | | (9,879 | ) |
Transfer of cash in extinguishment of debt settlement | | (283 | ) | | — |
|
Investment in unconsolidated real estate affiliates | | (4 | ) | | (120,510 | ) |
Deposits for investments under contract | | — |
| | (1,850 | ) |
Deposits refunded for investments under contract | | 50 |
| | 600 |
|
Distributions from unconsolidated real estate affiliates | | — |
| | 4,495 |
|
Loan escrows | | (632 | ) | | (1,849 | ) |
Net cash used in investing activities | | (129,430 | ) | | (657,305 | ) |
CASH FLOWS FROM FINANCING ACTIVITIES: | | | | |
Issuance of common stock | | 40,392 |
| | 455,651 |
|
Repurchase of shares | | (88,563 | ) | | (43,862 | ) |
Offering costs | | (12,570 | ) | | (12,303 | ) |
Distributions to stockholders | | (14,131 | ) | | (8,997 | ) |
Distributions paid to noncontrolling interests | | (1,807 | ) | | (2,531 | ) |
Contributions received from noncontrolling interests | | 1,168 |
| | 169 |
|
Draws on credit facility | | 255,000 |
| | 160,000 |
|
Payment on credit facility | | (35,000 | ) | | (90,000 | ) |
Proceeds from mortgage notes and other debt payable | | — |
| | 218,089 |
|
Debt issuance costs | | (2,688 | ) | | (3,271 | ) |
Principal payments on mortgage notes and other debt payable | | (71,879 | ) | | (32,886 | ) |
Net cash provided by financing activities | | 69,922 |
| | 640,059 |
|
Net (decrease) increase in cash and cash equivalents | | (3,524 | ) | | 16,005 |
|
Effect of exchange rates | | (8 | ) | | 135 |
|
Cash and cash equivalents at the beginning of the period | | 45,782 |
| | 34,739 |
|
Cash and cash equivalents at the end of the period | | $ | 42,250 |
| | $ | 50,879 |
|
Supplemental disclosure of cash flow information: | | | | |
Interest paid | | $ | 20,553 |
| | $ | 18,444 |
|
Non-cash activities: | | | | |
Write-offs of receivables | | $ | 80 |
| | $ | 37 |
|
Write-offs of retired assets and liabilities | | 9,475 |
| | 2 |
|
Change in liability for capital expenditures | | 401 |
| | (3,630 | ) |
Deposit of proceeds from sale of real estate investments | | 21,202 |
| | — |
|
Net liabilities transferred at sale of real estate investment | | 729 |
| | 902 |
|
Net liabilities assumed at acquisition | | (548 | ) | | 987 |
|
Change in issuance of common stock receivable and redemption of common stock payable | | 219 |
| | 915 |
|
Change in accrued offering costs | | (7,548 | ) | | 31,710 |
|
Assumption of mortgage notes payable | | (67,870 | ) | | (61,939 | ) |
Transfers of property in extinguishment of debt settlement
| | 20,689 |
| | — |
|
| | | | | | | | | | | |
| Six Months Ended June 30, 2021 | | Six Months Ended June 30, 2020 |
CASH FLOWS FROM OPERATING ACTIVITIES: | | | |
Net income (loss) | $ | 26,456 | | | $ | (26,745) | |
Adjustments to reconcile net income to net cash provided by operating activities: | | | |
Depreciation and amortization | 40,539 | | | 37,237 | |
Gain on disposition of property and extinguishment of debt | (33,422) | | | (1,724) | |
| | | |
Straight line rent | (1,136) | | | (124) | |
| | | |
Loss from unconsolidated real estate affiliates and fund investment | 2,751 | | | 12,897 | |
Distributions from unconsolidated real estate affiliates and fund investment | 4,748 | | | 1,964 | |
Net changes in assets, liabilities and other | (1,744) | | | 6,551 | |
Net cash provided by operating activities | 38,192 | | | 30,056 | |
CASH FLOWS FROM INVESTING ACTIVITIES: | | | |
Purchase of real estate investments | (331,497) | | | (101,220) | |
Proceeds from sale of real estate investments and fixed assets | 66,992 | | | 5,372 | |
Capital improvements and lease commissions | (8,753) | | | (5,413) | |
| | | |
Investment in unconsolidated real estate affiliates | (797) | | | (1,348) | |
Deposits for investments under contract | (7,500) | | | 0 | |
| | | |
| | | |
| | | |
Net cash used in investing activities | (281,555) | | | (102,609) | |
CASH FLOWS FROM FINANCING ACTIVITIES: | | | |
Issuance of common stock | 341,487 | | | 186,867 | |
Repurchase of shares | (82,135) | | | (177,909) | |
| | | |
Offering costs | (8,098) | | | (9,632) | |
Distributions to stockholders | (15,974) | | | (20,714) | |
Distributions paid to noncontrolling interests | (399) | | | (56) | |
Contributions received from noncontrolling interests | 0 | | | 1 | |
| | | |
Draws on credit facility | 100,000 | | | 200,000 | |
Payment on credit facility | (100,000) | | | 0 | |
Proceeds from mortgage notes and other debt payable | 211,180 | | | 35,900 | |
Debt issuance costs | (6,335) | | | (71) | |
| | | |
Principal payments on mortgage notes and other debt payable | (83,171) | | | (31,020) | |
Net cash provided by financing activities | 356,555 | | | 183,366 | |
Net increase in cash, cash equivalents and restricted cash | 113,192 | | | 110,813 | |
| | | |
Cash, cash equivalents and restricted cash at the beginning of the period | 101,434 | | | 114,022 | |
Cash, cash equivalents and restricted cash at the end of the period | $ | 214,626 | | | $ | 224,835 | |
| | | |
Reconciliation of cash, cash equivalents and restricted cash shown per Consolidated Balance Sheets to cash, cash equivalents and restricted cash per Consolidated Statements of Cash Flows | | | |
Cash and cash equivalents | $ | 175,691 | | | $ | 215,183 | |
Restricted cash | 38,935 | | | 9,652 | |
| | | |
Cash, cash equivalents and restricted cash at the end of the period | $ | 214,626 | | | $ | 224,835 | |
| | | |
Supplemental disclosure of cash flow information: | | | |
Interest paid | $ | 17,297 | | | $ | 17,599 | |
Non-cash activities: | | | |
Write-offs of receivables | $ | 12 | | | $ | 13 | |
Write-offs of retired assets and liabilities | 2,952 | | | 5,758 | |
Change in liability for capital expenditures | (5,572) | | | 561 | |
| | | |
Net liabilities transferred at disposition of real estate investment | 230 | | | 63 | |
Net liabilities assumed at acquisition | 432 | | | 538 | |
| | | |
Change in issuance of common stock receivable and redemption of common stock payable | 609 | | | 1,246 | |
Change in accrued offering costs | 9,125 | | | 9,534 | |
| | | |
| | | |
See notes to consolidated financial statements.
Jones Lang LaSalle Income Property Trust, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
$ in thousands, except per share amounts
NOTE 1—ORGANIZATION
General
Except where the context suggests otherwise, the terms “we,” “us,” “our” and the “Company” refer to Jones Lang LaSalle Income Property Trust, Inc. The terms “Advisor” and “LaSalle” refer to LaSalle Investment Management, Inc.
Jones Lang LaSalle Income Property Trust, Inc. is an externally advised, daily valued perpetual-life real estate investment trust ("REIT") that owns and manages a diversified portfolio of apartment, industrial, office, retail and other properties located in the United States. Over time our real estate portfolio may be further diversified on a global basis through the acquisition of additional properties outside of the United States and may be complemented by investments in real estate-related debt and equity securities. We were incorporated on May 28, 2004 under the laws of the State of Maryland. We believe that we have operated in such a manner to qualify to be taxed as a REIT for federal income tax purposes commencing with the taxable year ended December 31, 2004, when we first elected REIT status. As of SeptemberJune 30, 2017,2021, we owned interests in a total of 6987 properties, located in 1922 states.
We own, and plan to continue to own, all or substantially all of our assets through JLLIPT Holdings, LP, a Delaware limited partnership (our “operating partnership”), of which we are the initial limited partner and JLLIPT Holdings GP, LLC, our wholly owned subsidiary, is the sole general partner. The use of our operating partnership to hold all or substantially all of our assets is referred to as an Umbrella Partnership Real Estate Investment Trust ("UPREIT"). This structure is intended to facilitate tax-deferred contributions of properties to our operating partnership in exchange for limited partnership interests in our operating partnership. A transfer of property directly to a REIT in exchange for shares of common stock of a REIT is generally a taxable transaction to the transferring property owner. In an UPREIT structure, a property owner who desires to defer taxable gain on the disposition of his property may transfer the property to our operating partnership in exchange for limited partnership interests in the operating partnership ("OP Units") and defer taxation of gain until the limited partnership interests are disposed of in a taxable transaction. As of June 30, 2021, we raised aggregate proceeds from the issuance of OP Units in our operating partnership of $14,242, and owned directly or indirectly 99.3% of the OP Units of our operating partnership. The remaining 0.7% of the OP Units are held by third parties.
From our inception to October 1, 2012,January 15, 2015, we raised equity proceeds through various public and private offerings of shares of our common stock. On October 1, 2012,January 16, 2015, our follow-on Registration Statement on Form S-11 was declared effective by the Securities and Exchange Commission (the "SEC") declared effective our Registration Statement on Form S-11 with respect to our continuous public offering of up to $3,000,000 in any combination of Class A and Class M shares of common stock (the "Initial“First Extended Public Offering"Offering”). As of January 15, 2015,July 6, 2018, the date our InitialFirst Extended Public Offering terminated, we had raised aggregate gross proceeds from the sale of shares of our Class A and Class M common stock in our InitialFirst Extended Public Offering of $268,981.$1,138,053.
On January 16, 2015,July 6, 2018, the SEC declared our second follow-on Registration Statement on Form S-11 was declared(the "Second Extended Public Offering") effective by the SEC (Commission File No. 333-196886) with respect333-222533) to our continuous public offering ofoffer up to $2,700,000$3,000,000 in any combination of shares of our Class A, Class M, Class A-I and Class M-I common stock, consisting of up to $2,400,000$2,700,000 of shares offered in our primary offering and up to $300,000 in shares offered pursuant to our distribution reinvestment plan. In accordance with SEC rules, we extended our Second Extended Public Offering one additional year through July 6, 2021. We reserve the right to terminate the Second Extended Public Offering at any time and to further extend the Second Extended Public Offering term to the extent permissible under applicable law. As of June 30, 2021, we have raised aggregate gross proceeds from the sale of shares of our common stock in our Second Extended Public Offering of $1,075,496.
On June 4, 2021, we filed a Registration Statement on Form S-11 with the SEC (Commission File No. 333-256823) to register a public offering of up to $3,000,000 in any combination of shares of our Class A, Class M, Class A-I and Class M-I common stock, consisting of up to $2,700,000 of shares offered in our primary offering and up to $300,000 in shares offered pursuant to our distribution reinvestment plan (the “First“Third Extended Public Offering”). We reserveAs of August 11, 2021, the right to terminate the FirstThird Extended Public Offering at any time and to extend the First Extended Public Offering term to the extent permissible under applicable law. As of September 30, 2017, we have raised aggregate gross proceeds from the sale of shares of our Class A, Class M, Class A-I and Class M-I shares in our First Extended Public Offering of $1,057,905.has not been declared effective.
On June 19, 2014, we began a private offering of up to $400,000 in any combination of our Class A-I, Class M-I and Class D shares of common stock (the "Initial Private Offering"). Upon the SEC declaring the registration statement for our First Extended Public Offering effective, we terminated the Initial Private Offering. As of January 15, 2015, we had raised aggregate gross proceeds from the sale of shares of our Class A-I, Class M-I and Class D common stock in our Initial Private Offering of approximately $43,510. On March 3, 2015, we commenced a new private offering (the "Follow-on Private"Private Offering") of up to $350,000 in shares of our Class D common stock with an indefinite duration. As of SeptemberJune 30, 2017,2021, we have raised aggregate gross proceeds from the sale of shares of our Class D sharescommon stock in our Follow-on Private Offering of $68,591.$98,188.
On October 16, 2019, through our operating partnership, we initiated a program (the “DST Program”) to raise up to $500,000, which our board of directors may increase in its sole discretion, in private placements exempt from registration under the Securities Act of 1933, as amended, through the sale of beneficial interests to accredited investors in specific Delaware
statutory trusts holding real properties ("DST Properties"), which may be sourced from our real properties or from third parties. As of June 30, 2021, we have raised $284,922 from our DST Program.
As of SeptemberJune 30, 2017, 69,448,2872021, 92,740,925 shares of Class A common stock, 37,588,71935,056,224 shares of Class M common stock, 11,105,2819,584,832 shares of Class A-I common stock, 7,383,73239,559,491 shares of Class M-I common stock, and 7,531,7147,513,281 shares of Class D common stock were outstanding and held by a total of 12,56518,453 stockholders.
LaSalle acts as our advisor pursuant to the second amended and restated advisory agreement between the Companyamong us, our operating partnership and LaSalle (the “Advisory Agreement”"Advisory Agreement"). On May 9, 2017, we renewedThe term of our Advisory Agreement with our Advisor for a one-year term expiring onexpires June 5, 2018.2022, subject to an unlimited number of successive one-year renewals. Our Advisor, a registered investment advisor with the SEC, has broad discretion with respect to our investment decisions and is responsible for selecting our investments and for managing our investment portfolio pursuant to the terms of the Advisory Agreement. Our executive officers are employees of and compensated by our Advisor. We have no employees, as all operations are managed by our Advisor.
LaSalle is a wholly-owned, but operationally independent subsidiary of our sponsor, Jones Lang LaSalle Incorporated ("JLL" or our "Sponsor"), a New York Stock Exchange-listed leading professional services firm that specializes in real estate and investment management. AffiliatesAs of our sponsor investedJune 30, 2021, JLL and its affiliates owned an aggregate of $50,200 (with2,521,801 Class M shares, which were issued for cash at a price equal to the most recently reported net asset value ("NAV") per share as of the purchase date and have a current value of $59,345) through purchases of shares of our common stock.$30,489.
NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation and Principles of Consolidation
The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”), the instructions to Form 10-Q and Rule 10-01 of Regulation S-X and include the accounts of our wholly-ownedwholly owned subsidiaries, consolidated variable interest entities ("VIE") and the unconsolidated investment in real estate affiliateaffiliates accounted for under the equity method of accounting. We consider the authoritative guidance of accounting for investments in common stock, investments in real estate ventures, investors accounting for an investee when the investor has the majority of the voting interest but the minority partners have certain approval or veto rights, determining whether a general partner or general partners as a group controls a limited partnership or similar entity when the limited partners have certain rights and the consolidation of VIEs in which we own less than a 100% interest. All significant intercompany balances and transactions have been eliminated in consolidation.
On August 8, 2017, we entered into a purchase agreement structured as a reverse 1031 exchange in order to acquire Montecito Marketplace located in Las Vegas, Neveda. We loaned the qualified intermediary $21,202 to acquire the property as replacement property pursuant to the applicable Internal Revenue Service guidance. The intermediary acquiring Montecito Marketplace was deemed to be a variable interest entity for which we are deemed to be the primary beneficiary as we have the ability to direct the activities of the entity that most significantly impact its economic performance and we have all of the risks and rewards of ownership. Accordingly, we have consolidated Montecito Marketplace. Parenthetical disclosures are shown on our Consolidated Balance Sheets regarding the amounts of VIE assets and liabilities that are consolidated. In addition to Montecito Marketplace, asAs of SeptemberJune 30, 2017,2021, our VIEs includeincluded The District at Howell Mill, The Edge at Lafayette, Grand Lakes Marketplace, and Townlake of CoppellPresley Uptown due to the limited partnershipjoint venture structures and our partners having limited participation rights and no kick-out rights. The creditors of our VIEs do not have general recourse to us.
Noncontrolling interests represent the minority members’ proportionate share of the equity in our VIEs. At acquisition, the assets, liabilities and noncontrolling interests were measured and recorded at the estimated fair value. Noncontrolling interests will increase for the minority members’ share of net income of these entities and contributions and decrease for the minority members’ share of net loss and distributions. As of SeptemberJune 30, 2017,2021, noncontrolling interests represented the minority members’ proportionate share of the equity of the entities listed above as VIEs.
Certain of our joint venture agreements include provisions whereby, at certain specified times, each party has the right to initiate a purchase or sale of its interest in the joint ventures at an agreed upon fair value. Under these provisions, we are not obligated to purchase the interest of our outside joint venture partners.
The accompanying unaudited interim consolidated financial statements have been prepared in accordance with the accounting policies described in the consolidated financial statements and related notes included in our Annual Report on Form 10-K filed with the SEC on March 9, 201712, 2021 (our “2016“2020 Form 10-K”) and should be read in conjunction with such consolidated financial statements and related notes. The following notes to these interim consolidated financial statements highlight changes to the notes included in the December 31, 20162020 audited consolidated financial statements included in our 20162020 Form 10-K and present interim disclosures as required by the SEC.
The interim financial data as of SeptemberJune 30, 20172021 and for the three and ninesix months ended SeptemberJune 30, 20172021 and 20162020 is unaudited. In our opinion, the interim data includes all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the results for the interim periods.
Restricted Cash
Restricted cash includes amounts established pursuant to various agreements for Doubtful Accounts
An allowance for doubtfulloan escrow accounts, is provided againstloan commitments and property sale proceeds. When we sell a property, we can elect to enter into a like-kind exchange pursuant to the portionapplicable Internal Revenue Service guidance whereby the proceeds from the sale are placed in escrow with a qualified intermediary until a replacement property can be purchased. At June 30, 2021, our restricted cash balance on our Consolidated Balance Sheets was primarily related to common stock subscriptions received in advance of accounts receivablethe issuance of the common stock and deferred rent receivable that is estimated to be uncollectible. Such allowance is reviewed periodically based upon our recovery experience. At September 30, 2017 and December 31, 2016, our allowance for doubtful accounts was $164 and $170, respectively.loan escrow amounts.
Deferred Expenses
Deferred expenses consist of lease commissions. Lease commissions are capitalized and amortized over the term of the related lease as a component of depreciation and amortization expense. Accumulated amortization of deferred expenses at SeptemberJune 30, 20172021 and December 31, 20162020 was $3,462$7,295 and $2,180,$6,495, respectively.
Rental Revenue Recognition
We recognize rental revenue from tenants under operating leases on a straight-line basis over the non-cancelable term of the lease when collectibility of substantially all rents is reasonably assured. Recognition of rental revenue on a straight-line basis includes the effects of rental abatements, lease incentives and fixed and determinable increases in lease payments over the lease term. For leases where collection of substantially all rents is not deemed to be probable, revenue is recorded equal to cash that has been received from the tenant. We evaluate the collectibility of rents and other receivables at each reporting period based on factors including, among others, tenant's payment history, the financial condition of the tenant, business conditions and trends in the industry in which the tenant operates and economic conditions in the geographic area where the property is located. If evaluation of these factors or others indicates it is not probable we will collect substantially all rent we recognize an adjustment to rental revenue. If our judgment or estimation regarding probability of collection changes we may adjust or record additional rental revenue in the period such conclusion is reached.
The COVID-19 pandemic has had a negative impact on some of our tenant’s businesses. The duration and extent of the negative effects caused by the COVID-19 pandemic to the economy is uncertain, and as such, collectibility of certain tenants rent receivable balances in the future is also uncertain. We have taken into account current tenant conditions, which include consideration of COVID-19 in our estimation of the tenants uncollectible accounts and deferred rents receivable at June 30, 2021. We are closely monitoring the collectibility of such rents and will adjust future estimations as further information becomes known. During the three and six months ended June 30, 2021, we recorded a reduction in rental revenue of $639 and $1,062, respectively due to concern of collectibility and an increase in straight line revenue of $336 and $149, respectively as a result of collections from certain tenants. During the three and six months ended June 30, 2020, we recorded a reduction in rental revenue of $1,732 and $1,991, respectively, and a reduction in straight line revenue of $1,031 and $2,111 due to concern of collectibility, respectively. During the three and six months ended June 30, 2021, we deferred $231 and $237, respectively, and abated $99 and $254, respectively, of rental revenue. During the three and six months ended June 30, 2020, we deferred $1,070 and abated $855 of rental revenue, respectively.
Acquisitions
We have allocated a portion of the purchase price of our acquisitions to acquired intangible assets, which include acquired in-place lease intangibles, acquired above-market in-place lease intangibles and acquired ground lease intangibles, which are reported net of accumulated amortization of $45,438$92,129 and $36,345$82,699 at SeptemberJune 30, 20172021 and December 31, 2016,2020, respectively, on the accompanying Consolidated Balance Sheets. The acquired intangible liabilities represent acquired below-market in-place leases, which are reported net of accumulated amortization of $7,613$13,969 and $5,142$12,724 at SeptemberJune 30, 20172021 and December 31, 2016,2020, respectively, on the accompanying Consolidated Balance Sheets.
Assets and Liabilities Measured at Fair Value
The Financial Accounting Standards Board’s (“FASB”) guidance for fair value measurement and disclosure states that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering assumptions, authoritative guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:
•Level 1—Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that we have access to at the measurement date.
•Level 2—Observable inputs, other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs are those in markets for which there are few transactions, the prices are not current, little public information exists or instances where prices vary substantially over time or among brokered market makers.
•Level 3—Unobservable inputs for the asset or liability. Unobservable inputs are those inputs that reflect our own assumptions that market participants would use to price the asset or liability based on the best available information.
The authoritative guidance requires the disclosure of the fair value of our financial instruments for which it is practicable to estimate that value. The guidance does not apply to all balance sheet items. Market information as available or present value techniques have been utilized to estimate the amounts required to be disclosed. Since such amounts are estimates, there can be no assurance that the disclosed value of any financial instrument could be realized by immediate settlement of the instrument.
Our realReal estate fund investmentinvestments accounted for under the fair value option is stated atfall within Level 3 of the fair value of our ownership in the real estate fund.hierarchy. The fair value is recorded based upon changes in the net asset valueNAV of the limited partnership as determined from the financial statements of the real estate fund. During the three and ninesix months ended SeptemberJune 30, 2017,2021 and 2020, we recorded increasesan increase and a decrease in fair value classified within the Level 3 category of $5,834$36 and $5,132,$12,088, respectively, in our investment in the NYC Retail Portfolio (see Note 4-Unconsolidated Real Estate Affiliates and Fund Investments). During the three and nine months ended September 30, 2016, we recorded increases in fair value of our investment in the NYC Retail Portfolio of $3,638 and $4,238, respectively.We have estimated the fair value of our mortgage notes and other debt payable reflected inon the accompanying Consolidated Balance Sheets at amounts that are based upon an interpretation of available market information and valuation methodologies (including discounted cash flow analysis with regard to fixed rate debt) for similar loans made to borrowers with similar credit ratings and for the same maturities. The fair value of our mortgage notes and other debt payable using Level 2 inputs was $4,304$25,760 and $5,729 lower$30,923 higher than the aggregate carrying amounts at SeptemberJune 30, 20172021 and December 31, 2016,2020, respectively. Such fair value estimates are not necessarily indicative of the amounts that would be realized upon disposition of our mortgage notes payable.
Derivative Financial Instruments
We record all derivatives on the Consolidated Balance Sheets at fair value in prepaid expenses and other assets or accounts payable and other accrued expenses. Changes in the fair value of our derivatives are recorded as a component of interest expense on our Consolidated Statements of Operations and Comprehensive Income (Loss) as we have not designated our derivative instruments as hedges. Our objective in using interest rate derivatives is to manage our exposure to interest rate movements. To accomplish this objective, we use interest rate caps and swaps.
As of SeptemberJune 30, 2017,2021, we had the following outstanding interest rate derivatives related to managing our interest rate risk:
| | Interest Rate Derivative | | Number of Instruments | | Notional Amount | Interest Rate Derivative | | Number of Instruments | | Notional Amount |
Interest Rate Caps | | 1 | | $ | 17,680 |
| |
| Interest Rate Swaps | | 5 | | 171,400 |
| Interest Rate Swaps | | 5 | | $ | 190,000 | |
The fair value of our interest rate caps and swaps represent assetsliabilities of $1,737$4,715 and $1,606$6,500 at SeptemberJune 30, 20172021 and December 31, 2016,2020, respectively.
Ground Lease
As of June 30, 2021, we have a single ground lease arrangement for which we are the lessee and recorded a right-of-use asset within prepaid expenses and other assets on our Consolidated Balance Sheets in the amount of $2,125 and a lease liability within accounts payable and other liabilities on our Consolidated Balance Sheets in the amount of $2,247.
Use of Estimates
The preparation of consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions. These estimates and assumptions impact the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. For example, significant estimates and assumptions have been made with respect to useful lives of assets, recoverable amounts of receivables, fair value of derivatives and real estate assets, initial valuations and related amortization periods of deferred costs and intangibles, particularly with respect to property acquisitions. Actual results could differ from those estimates.
ReclassificationRecent Issued Accounting Pronouncements
Certain reclassificationsIn April 2020, the FASB issued a question and answer document that focused on the application of lease guidance applicable on concessions related to the effects of the COVID-19 pandemic. Per the guidance, we made an election to account for lease concessions related to the effects of the COVID-19 pandemic consistent with how those concessions would be accounted for under Topic 842, Leases, as though enforceable rights and obligations for those concessions existed.
In March 2020, the FASB issued Accounting Standard Update ("ASU") No. 2020-04, Reference Rate Reform (Topic 848) ("ASU 2020-04"), which provides guidance containing practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance in ASU 2020-04 is optional and may be elected over time as reference rate reform activities occur. We are evaluating the impact of this guidance.
In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments Credit Losses (Topic 326), which changes how entities measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The guidance replaces the current incurred loss model with an expected loss approach, resulting in more timely recognition of such losses. In November 2018, the FASB released ASU 2018-19, Codification Improvements to Topic 326, Financial Instrument - Credit Losses, which clarifies that receivables arising from operating leases are not within the scope of Subtopic 326-20. The guidance was effective for us as of January 1, 2020 and did not have a material impact on our consolidated financial statements.
Effective January 1, 2019, we adopted ASU 2016-02 Leases and 2018-11 Leases: Targeted Improvements (Topic 842) ("ASU 842"). The new guidance sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e., lessees and lessors). We elected a practical expedient, by class of underlying assets, to not separate non-lease components from the related lease components and, instead, to account for those components as a single lease component, when certain criteria are met. Upon adoption, we reclassified these components for prior year's data have been madeperiods to conform towith the current yearperiod presentation. These reclassifications relateWe also elected permitted practical expedients to how amountsnot reassess lease classification and use of the standard’s effective date as the date of initial application and therefore financial information under ASU 842 is not provided for periods prior to January 1, 2019. The accounting for lessors remained largely unchanged from previous GAAP; however, the standard required that lessors expense, on an as-incurred basis, certain initial direct costs that are classifiednot incremental in negotiating a lease. Under previous standards, certain of these costs were capitalizable and therefore this new standard will result in certain of these costs being expensed as incurred after adoption. Additionally, the standard requires lessors to evaluate whether the collectability of all rents is probable before recognizing rental revenues on a straight-line basis over the applicable lease term. The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight line basis over the term of the lease. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases today. As of June 30, 2021, we have a ground lease arrangement for which we are the lessee and recorded a right-of-use asset within the Net Investment in Real Estateprepaid expenses and other assets on theour Consolidated Balance Sheets but do not changein the overall operations or results foramount of $2,125 and a lease liability within accounts payable and other liabilities on our Consolidated Balance Sheets in the prior year as previously reported.amount of $2,247.
NOTE 3—PROPERTY
The primary reason we make acquisitions of real estate investments in the apartment, industrial, office, retail and other property sectors is to invest capital contributed by stockholders in a diversified portfolio of real estate assets. All references to square footage and units are unaudited.
Acquisitions
On July 14, 2017,January 21, 2021, we acquired Jory Trail at the Grove,Louisville Distribution Center, a 324 unit apartment community1,040,000 square foot industrial property located in Wilsonville, Oregon,Shepherdsville, Kentucky for approximately $74,750. The acquisition was funded by the assumption of an eight-year mortgage loan that bears interest at a fixed-rate of 3.81% in the amount of $44,250, a draw on our credit facility and cash on hand.
On July 28, 2017, we acquired The Reserve at Johns Creek Walk, a 210 unit apartment community located in Johns Creek, Georgia, for approximately $47,300. The acquisition was funded by the assumption of a three-year mortgage loan that bears interest at a fixed rate of 3.30% in the amount of $23,620, a draw on our credit facility and cash on hand.
On August 8, 2017, we acquired, through a reverse 1031 exchange, Montecito Marketplace, a 190,000 square foot grocery-anchored retail center located in Las Vegas, Nevada for approximately $63,550.$95,000. The acquisition was funded with cash on hand.
On February 2, 2021, we acquired 170 Park Ave, a draw147,000 square foot life sciences property located in Florham Park, New Jersey for approximately $46,600. The acquisition was funded with cash on our credit facility andhand.
On February 23, 2021, we acquired Southeast Phoenix Distribution Center, a four property industrial distribution center totaling 474,000 square feet located in Chandler, Arizona for approximately $91,000. The acquisition was funded with cash on hand.
On May 3, 2021, we acquired Princeton North Andover, a newly constructed, 192-unit apartment property located in North Andover, Massachusetts, for approximately $72,500. The acquisition was funded with cash on hand.
On June 24, 2021, we acquired Louisville Airport Distribution Center, a nearly 284,000 square-foot, newly constructed Class A industrial property located in the Southside/Airport industrial submarket for approximately $32,100. The acquisition was funded with cash on hand.
We allocated the purchase price for our 20172021 acquisitions in accordance with authoritative guidance as follows:
| | | | | |
| 2021 Acquisitions |
Land | $ | 33,326 | |
Building and equipment | 266,491 | |
| |
In-place lease intangible (acquired intangible assets) | 44,655 | |
Above-market lease intangible (acquired intangible assets) | 2,214 | |
Below-market lease intangible (acquired intangible liabilities) | (15,514) | |
| |
| |
| |
| |
| $ | 331,172 | |
Amortization period for intangible assets and liabilities | 6 - 180 months |
|
| | | |
| 2017 Acquisitions |
Land | $ | 26,839 |
|
Building and equipment | 147,709 |
|
In-place lease intangible (acquired intangible assets) | 11,451 |
|
Above-market lease intangible (acquired intangible assets) | 805 |
|
Below-market lease intangible (acquired intangible liabilities) | (1,235 | ) |
| $ | 185,569 |
|
Amortization period for intangible assets and liabilities | 1 month - 15 years |
|
Disposition
During the nine months ended September 30, 2016, we incurred $2,846 of acquisition expenses recorded on the Consolidated Statements of Operations and Comprehensive Income (Loss). On January 1, 2017,8, 2021, we adopted Accounting Standard Update 2017-01 Business Combinations (Topic 805): Clarifying the Definition ofsold South Seattle Distribution Center, a Business. We expect that most future acquisitions will be accounted for as asset acquisitions and expenses associated with these asset acquisitions will be capitalized.
Dispositions
On July 26, 2017, we relinquished our ownership of Railway Street Corporate Centre, a 135,000three property industrial center totaling 323,000 square foot office buildingfeet located in Calgary, Canada, through a deed in lieu of foreclosureSeattle, Washington for approximately $72,600 less closing costs. In connection with the lender. Upon our relinquishment ofdisposition, the property, we were relieved of approximately $27,600 of mortgage obligations plus accrued interestloan associated with the mortgage loan. Upon extinguishmentproperty of the mortgage debt obligation, a $252 non-cash accounting gain$17,841 was recognized representing the difference between the book value of the debt, interest payable and other obligations extinguished over the fair value of the property and other assets transferred as of the transfer date. Upon relinquishment of the property and extinguishment of the mortgage debt obligation we also recognized $1,895 of Accumulated Other Comprehensive Loss from historical foreign currency translation adjustments as part of the gain on disposition of property and extinguishment of debt on our Consolidated Statement of Operations and Comprehensive Income (Loss).
On September 19, 2017, we sold 14600 Sherman Way and 14624 Sherman Way for approximately $22,350 less closing costs.retired. We recorded a gain on the sale of the propertiesproperty in the amount of $7,144. The proceeds from the sale are being held in the reserve 1031 exchange to acquire Montecito Marketplace.$33,580.
On September 15, 2017, we removed The Edge at Lafayette from held for sale and placed it in investments in real estate at cost less depreciation catch up.
NOTE 4—UNCONSOLIDATED REAL ESTATE AFFILIATES AND FUND INVESTMENTINVESTMENTS
Unconsolidated Real Estate Affiliates
Chicago Parking Garage
On December 23, 2014,In addition to investments in consolidated properties, we acquired a condominium interestmay make investments in Chicago Parking Garage, a 366 stall, multi-level parking facility located in a large mixed-use property in Chicago, Illinois for approximately $16,900. In accordance with authoritative guidance, Chicago Parking Garage is accounted forreal estate which are classified as an investment in an unconsolidated real estate affiliate. At Septemberaffiliates under GAAP. The following represent our unconsolidated real estate affiliates as of June 30, 20172021 and December 31, 2016, the carrying amount of our investment in Chicago Parking Garage was $17,048 and $18,373, respectively.2020.
Pioneer Tower
On June 28, 2016, we acquired Pioneer Tower, a 17 story, 296,000 square foot multi-tenant office property in Portland, Oregon for approximately $121,750 using cash on hand. Pioneer Tower sits atop a retail property owned by an independent third party. The land under the property is owned as a condominium interest with the owner of the retail property. In accordance with authoritative guidance, Pioneer Tower is accounted for as an investment in an unconsolidated real estate affiliate. At September 30, 2017 and December 31, 2016, the carrying amount of our investment in Pioneer Tower was $116,652 and $120,725, respectively. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | Carrying Amount of Investment |
Property | | Property Type | | Location | | Acquisition Date | | June 30, 2021 | | December 31, 2020 |
Chicago Parking Garage | | Other | | Chicago, IL | | December 23, 2014 | | $ | 14,075 | | | $ | 14,000 | |
Pioneer Tower | | Office | | Portland, OR | | June 28, 2016 | | 103,666 | | | 108,715 | |
The Tremont | | Apartment | | Burlington, MA | | July 19, 2018 | | 21,490 | | | 21,430 | |
The Huntington | | Apartment | | Burlington, MA | | July 19, 2018 | | 11,189 | | | 11,549 | |
Siena Suwanee Town Center | | Apartment | | Suwanee, GA | | December 15, 2020 | | 30,804 | | | 32,196 | |
Total | | | | | | | | $ | 181,224 | | | $ | 187,890 | |
Summarized Combined Statements of Operations—Unconsolidated Real Estate Affiliates—Equity Method Investments
| | | | Three Months Ended September 30, 2017 | | Three Months Ended September 30, 2016 | | Nine Months Ended September 30, 2017 | | Nine Months Ended September 30, 2016 | | Three Months Ended June 30, 2021 | | Three Months Ended June 30, 2020 | | Six Months Ended June 30, 2021 | | Six Months Ended June 30, 2020 |
Total revenues | | $ | 3,066 |
| | $ | 2,583 |
| | $ | 9,029 |
| | $ | 3,373 |
| Total revenues | $ | 5,276 | | | $ | 3,870 | | | $ | 10,402 | | | $ | 8,266 | |
Total operating expenses | | 2,664 |
| | 2,660 |
| | 8,036 |
| | 3,153 |
| Total operating expenses | 5,736 | | | 3,955 | | | 11,437 | | | 8,008 | |
Net income (loss) | | $ | 402 |
| | $ | (77 | ) | | $ | 993 |
| | $ | 220 |
| |
Operating income | | Operating income | $ | (460) | | | $ | (85) | | | $ | (1,035) | | | $ | 258 | |
Interest expense | | Interest expense | 834 | | | 533 | | | 1,680 | | | 1,067 | |
Net loss | | Net loss | $ | (1,294) | | | $ | (618) | | | $ | (2,715) | | | $ | (809) | |
Real Estate Fund Investment
NYC Retail Portfolio
On December 8, 2015, a wholly-owned subsidiary of the Company acquired an approximate 28% interest in a newly formed limited partnership, Madison NYC Core Retail Partners, L.P., which acquired an approximate 49% interest in entities that initially owned 15 retail properties located in the greater New York City area (the “NYC Retail Portfolio”), the result of which is that we own an approximate 14% interest in the NYC Retail Portfolio. The purchase price for such portion was approximately $85,600 including closing costs. As of SeptemberJune 30, 2017,2021, the NYC Retail Portfolio owned 138 retail properties totaling approximately 2,451,0001,940,000 square feet across urban infill locations in Manhattan, Brooklyn, Queens the Bronx, Staten Island and New Jersey.
At acquisition we made the election to account for our interest in the NYC Retail Portfolio under the fair value option. This fair value election was made as the investment is in the form of a commingled fund with institutional partners where fair value accounting provides the most relevant information about the financial condition of the investment. We record increases and decreases in our investment each reporting period based on the change in the fair value of the investment as estimated by the general partner. Critical inputs to NAV estimates include valuations of the underlying real estate assets, which incorporate investment-specific assumptions such as discount rates, capitalization rates and rental growth rates. We did not consider adjustments to NAV estimates provided by the general partner, including adjustments for any restrictions to the transferability of ownership interests embedded within the investment agreement to which we are a party, to be necessary based upon (1) our understanding of the methodology utilized and inputs incorporated to estimate NAV at the investment level, (2) consideration of market demand for the retail assets held by the venture, and (3) contemplation of real estate and capital markets conditions in the localities in which the venture operates. We have no unfunded commitments. Our investment in the NYC Retail Portfolio is presented on our Consolidated Balance Sheets within real estate fund investment. Changes in the fair value of our investment as well as cash distributions received are recorded on our Consolidated Statements of Operations and Comprehensive Income (Loss) within income from unconsolidated real estate affiliates and fund investments. As of SeptemberJune 30, 20172021 and December 31, 2016,2020, the carrying amount of our investment in the NYC Retail Portfolio was $94,283$79,156 and $89,151,$79,192, respectively. During the three and ninesix months ended SeptemberJune 30, 20172021, we recorded increasesa decrease in fair value of our investment in the NYC Retail Portfolio of $5,834$1,118 and $5,132, respectively. We$36, respectively and received no distributions during the three months ended September 30, 2017. During the nine months ended September 30, 2017, we received distributions of income totaling $2,019.cash distributions. During the three and ninesix months ended SeptemberJune 30, 20162020, we recorded increasesa decrease in fair value of our investment in the NYC Retail Portfolio of $3,638$3,352 and $4,238, respectively. During the three$12,088, respectively and nine months ended September 30, 2016 we received a distribution of income totaling $1,125. Thisno cash distribution increased equity in income of unconsolidated real estate affiliates and fund investments. During the three and nine months ended September 30, 2016 we received return of capital distributions totaling $120 and $4,495, respectively, related to the sale of an 84,000 square foot retail property and extinguishment of its mortgage loan.distributions. On January 17, 2017,March 4, 2020, a 116,000 square foot retail property in the NYC Retail Portfolio with a square footage of 74,000 was sold and itsthe mortgage loan was extinguished.
Summarized Statement of Operations—NYC Retail Portfolio Investment—Fair Value Option Investment
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended June 30, 2021 | | Three Months Ended June 30, 2020 | | Six Months Ended June 30, 2021 | | Six Months Ended June 30, 2020 |
Total revenue | $ | 1,040 | | | $ | 428 | | | $ | 1,076 | | | $ | 1,934 | |
| | | | | | | |
Net investment income (loss) | 525 | | | (174) | | | 32 | | | 910 | |
Net change in unrealized loss on investment in real estate venture | (4,039) | | | (12,113) | | | (132) | | | (43,673) | |
Net loss | $ | (3,514) | | | $ | (12,287) | | | $ | (100) | | | $ | (42,763) | |
NOTE 5—MORTGAGE NOTES AND OTHER DEBT PAYABLE
Mortgage notes and other debt payable have various maturities through 20542031 and consist of the following:
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Mortgage notes and other debt payable | | Maturity Date | | Interest Rate | | Amount payable as of |
June 30, 2021 | | December 31, 2020 |
Mortgage notes payable (1) (2) (3) (4) (5) (6) (7) | | June 1, 2023 - March 1, 2038 | | 2.41% - 5.30% | | $ | 916,925 | | | $ | 771,043 | |
| | | | | | |
Credit facility | | | | | | | | |
| | | | | | | | |
Term loans | | May 25, 2024 | | 3.10% | | 100,000 | | | 100,000 | |
TOTAL | | | | | | $ | 1,016,925 | | | $ | 871,043 | |
Net debt discount on assumed debt and debt issuance costs | | | | (8,429) | | | (2,941) | |
Mortgage notes and other debt payable, net | | $ | 1,008,496 | | | $ | 868,102 | |
| | | | | | | | |
South Seattle Distribution Center (8) | | | | | | $ | 0 | | | $ | 17,873 | |
Mortgage notes and other debt payable of held for sale property | | | | $ | 0 | | | $ | 17,873 | |
________
(1) On February 10, 2021, we entered into a $34,000 mortgage payable on Whitestown Distribution Center. The mortgage note bears an interest of 2.95% and matures on February 10, 2028.
(2) On March 8, 2021, we repaid the mortgage note payable related to 140 Park Avenue in the amount of $22,800.
(3) On March 11, 2021, we entered into a $36,030 mortgage payable on Townlake of Coppell. The mortgage note bears an interest rate of 2.41% and matures on April 10, 2028.
(4) On March 17, 2021, we repaid the mortgage note payable related to Monument IV in the amount of $40,000.
(5) On April 26, 2021, we entered into a $52,250 mortgage payable on Louisville Distribution Center. The mortgage bears an interest rate of 1.76% and matures on May 1, 2026.
(6) On May 18, 2021, we entered into a $49,000 mortgage payable on Southeast Phoenix Distribution Center. The mortgage bears an interest rate of 2.70% and matures on June 1, 2028.
(7) On June 30, 2021, we entered into a $39,900 mortgage payable on Princeton North Andover. The mortgage bears an interest rate of LIBOR + 1.55% (1.65% at June 30, 2021) and matures on June 1, 2028.
(8) The property associated with this loan was designated as held for sale as of December 31, 2020. The property associated with this loan was sold on January 8, 2021 and the loan was repaid.
|
| | | | | | | | | | | | |
Mortgage notes and other debt payable | | Maturity Date | | Interest Rate | | Amount payable as of |
September 30, 2017 | | December 31, 2016 |
Mortgage notes payable (1) (2) (3) (4) (5) (6) | | December 1, 2018 - March 1, 2054 | | 3.00% - 5.30% | | $ | 666,756 |
| | $ | 691,163 |
|
Credit facility | | | | | | | | |
Revolving line of credit | | May 26, 2020 | | 2.58% | | 130,000 |
| | 10,000 |
|
Term loans | | May 26, 2022 | | 3.10% | | 100,000 |
| | — |
|
Net debt discount on assumed debt and debt issuance costs | |
| | (7,159 | ) | | (5,550 | ) |
Mortgage notes and other debt payable, net | | $ | 889,597 |
| | $ | 695,613 |
|
| |
(1) | On February 1, 2017, we repaid the mortgage note payable collateralized by Norfleet Distribution Center in the amount of $12,000. |
| |
(2) | On March 16, 2017, we repaid the mortgage note payable collateralized by the District at Howell Mill in the amount of $9,348. |
| |
(3) | On May 26, 2017, we repaid the mortgage note payable collateralized by 180 North Jefferson in the amount of $48,250. |
| |
(4) | On July 14, 2017, we assumed a mortgage note payable that was originated on January 1, 2015 on Jory Trail at the Grove. The mortgage note bears an interest rate of 3.81% for the remaining term and matures on February 1, 2025. As of September 30, 2017, the balance of the loan was $44,250. |
| |
(5) | On July 26, 2017, we relinquished our ownership of Railway Street Corporate Centre through a deed in lieu of foreclosure with the lender. Upon our relinquishment of the property, we were relieved of approximately $21,000 of mortgage obligations. |
| |
(6) | On July 28, 2017, we assumed a mortgage note payable that was originated on March 1, 2013 on The Reserve at Johns Creek Walk. The mortgage note bears an interest rate of 3.30% for the remaining term and matures on April 1, 2020. As of September 30, 2017, the balance of the loan was $23,620. |
Aggregate future principal payments of mortgage notes and other debt payable as of SeptemberJune 30, 20172021 are as follows:
| | Year | | Amount | Year | | Amount |
2017 | | $ | 844 |
| |
2018 | | 21,813 |
| |
2019 | | 13,717 |
| |
2020 | | 76,075 |
| |
2021 | | 29,295 |
| 2021 | | $ | 6,856 | |
2022 | | 2022 | | 88,896 | |
2023 | | 2023 | | 123,889 | |
2024 | | 2024 | | 191,221 | |
2025 | | 2025 | | 191,152 | |
Thereafter | | 525,012 |
| Thereafter | | 414,911 | |
Total | | $ | 666,756 |
| Total | | $ | 1,016,925 | |
Credit Facility
On May 26, 2017,24, 2021, we entered into a credit agreement providing for a $250,000$650,000 revolving line of credit and unsecured term loan (collectively, the “Credit Facility”) with a syndicate of sixeight lenders led by JPMorgan Chase Bank, N.A., Bank of America, N.A., PNC Capital Markets LLC and PNCWells Fargo Bank, National Association.N.A. The $250,000Credit Facility provides us with the ability, from time to time, to increase the size of the Credit Facility up to a total of $800 million, subject to receipt of lender commitments and other conditions. The $650,000 Credit Facility consists of a $415,000 revolving credit facility (the "Credit Facility") consists of a $200,000 revolving line of credit (the “Revolving Line of Credit”Credit Facility”) and a $50,000$235,000 term loan (the “Term Loan”). On August 4, 2017, we expanded our with the ability to delay the draw of up to $135,000 for a period of six months. The Revolving Credit Facility to $300,000. The additional $50,000 borrowing was in the formcontains a sublimit of a five-year Term Loan maturing on May 26, 2022.$25,000 for letters of credit. The primary interest rate for the Revolving Credit Facility is based on LIBOR, plus a margin ranging from 1.25%1.40% to 2.00%2.10%, depending on our total leverage ratio. The primary interest rate for the Term Loan is based on LIBOR, plus a margin ranging from 1.35% to 2.05%, depending on our total leverage ratio. The maturity date of the Revolving Credit Facility and the Term Loan is May 24, 2024. Based on our current total leverage ratio, we can elect to borrow at LIBOR plus 1.45% and LIBOR plus 1.40% for the Revolving Credit Facility and Term Loan, respectively, or alternatively, we can choose to borrow at a “base rate” equal to (i) the highest of (a) the Federal Funds Rate plus 0.5%, (b) the prime rate announced by JPMorgan Chase Bank, N.A., and (c) LIBOR plus 1.0%, plus (ii) a margin ranging from 0.25%0.40% to 1.00%1.10% for base rate loans. The maturity date of the Revolving Line of Credit is May 26, 2020 and contains two 12-month extension options that we may exercise upon (i) payment of an extension fee equal to 0.15% of the gross capacityloans under the Revolving Line of Credit atFacility or a margin ranging from 0.35% to 1.05% for base rate loans under the timeTerm Loan. If the “base rate” is less than 1.0%, it will be deemed to be 1.0% for purposes of the extension, and (ii) compliance with the other conditions set forth in the credit agreement.Credit Facility. We intend to use the Revolving Line of Credit Facility to cover short-term capital needs, for new property acquisitions and working capital. We may not draw funds on our Credit Facility if we (i) experience a material adverse effect, which is defined to include, among other things,
(a) a material adverse effect on the business, assets, operations or financial condition of the Company taken as a whole; (b) the abilityinability of any loan party to perform any of its obligations under any loan document; or (c) a material adverse effect upon the validity or enforceability of any loan document or (ii) are in default, as that term is defined in the agreement, including a default under certain other loan agreements and/or guarantees entered into by us or our subsidiaries. As of SeptemberJune 30, 2017,2021, we believe no material adverse effects had occurred.
Borrowings under the Credit Facility are guaranteed by us and certain of our subsidiaries. The Credit Facility requires the maintenance of certain financial covenants, including: (i) unencumbered property pool leverage ratio; (ii) debt service coverage ratio; (iii) maximum total leverage ratio; (iv) fixed charges coverage ratio; (v) minimum net asset value; (vi) maximum secured debt ratio; (vii) maximum secured recourse debt ratio; (viii) maximum permitted investments; and (ix) unencumbered property pool criteria. The Credit Facility provides for alternative rate benchmarks in the flexibility to move assets in and out of the unencumbered property pool during the term of the Credit Facility. event that LIBOR is no longer appropriate or available.
At SeptemberJune 30, 2017,2021, we had $130,000$0 outstanding under the Revolving Line of Credit Facility at a blended rate of 2.58% (LIBORLIBOR + 1.35%)1.40% and $100,000 outstanding under the Term Loan at a rate of 2.53% (LIBORLIBOR + 1.30%)1.35%. We swapped the LIBOR portion of our $100,000 in Term LoansLoan to a blended fixed rate of 1.80% (all in rate of 3.10%3.15% at SeptemberJune 30, 2017).
On2021) and swapped $90,000 of the Revolving Credit Facility to a fixed rate of 2.64% (all in rate of 4.04%) at June 30, 2021. The interest rate swap agreements have maturity dates ranging from May 26, 2017, we terminated our $150,000 line of credit with Bank of America, N.A. We repaid the outstanding balance of $25,000 which had an interest rate of approximately 2.57%, using proceeds from our Credit Facility. The line of credit was set to expire on September 19, 2017. At December 31, 2016, we had $10,000 in borrowings outstanding on the line of credit.2022 through February 17, 2023.
Covenants
At SeptemberJune 30, 2017,2021, we were in compliance with all debt covenants.
Debt Issuance Costs
Debt issuance costs are capitalized, and presented net of mortgage notes and other debt payable, and amortized over the terms of the respective agreements as a component of interest expense. Accumulated amortization of debt issuance costs at SeptemberJune 30, 20172021 and December 31, 20162020 was $3,067$6,690 and $2,537,$6,749, respectively.
NOTE 6—COMMON STOCK
We have five classes of common stock: Class A, Class M, Class A-I, Class M-I, and Class D. The fees payable to LaSalle Investment Management Distributors, LLC, an affiliate of our Advisor and the dealer manager for our offerings (the "Dealer Manager"), with respect to each outstanding share of each class, as a percentage of net asset value ("NAV"),NAV, are as follows:
|
| | | | | | | | | | | | | |
| | Selling Commission (1) | | Dealer Manager Fee (2) |
Class A Shares | | up to 3.0% | | 1.05%0.85% |
Class M Shares | | None— | | 0.30% |
Class A-I Shares | | up to 1.5% | | 0.30% |
Class M-I Shares | | None— | | 0.05%None |
Class D Shares (3) | | up to 1.0% | | None |
| |
(1) | Selling commissions are paid on the date of sale of our common stock. |
| |
(2) | We accrue all future dealer manager fees up to the ten percent regulatory limitation as accrued offering costs on our Consolidated Balance Sheets on the date of sale of our common stock. For NAV calculation purposes, dealer manager fees are accrued daily, on a continuous basis equal to 1/365th of the stated fee. |
| |
(3) | Shares of Class D common stock are only being offered pursuant to a private offering. |
________
(1) Selling commissions are paid on the date of sale of our common stock.
(2) We accrue all future dealer manager fees up to the ten percent regulatory limitation as accrued offering costs on our Consolidated Balance Sheets on the date of sale of our common stock. For NAV calculation purposes, dealer manager fees are accrued daily, on a continuous basis equal to 1/365th of the stated fee. Each Class A, Class M and Class A-I share sold in a public offering will automatically convert into the number of Class M-I shares based on the then-current applicable NAV of each class on the date following the termination of the primary portion of such public offering in which we, with the assistance of the Dealer Manager, determine that total underwriting compensation paid with respect to such public offering equals 10% of the gross proceeds from the primary portion of such public offering.
(3) Shares of Class D common stock are only being offered pursuant to a private offering.
The selling commissions and dealer manager fees are offering costs and are recorded as a reduction of additional paid in capital.
Stock Transactions
The stock transactions for each of our classes of common stock for the ninesix months ended SeptemberJune 30, 20172021 were as follows:
| | | | | | | | | | | | | | Shares of Class A Common Stock | | Shares of Class M Common Stock | | Shares of Class A-I Common Stock | | Shares of Class M-I Common Stock | | Shares of Class D Common Stock |
| Shares of Class A Common Stock | | Shares of Class M Common Stock | | Shares of Class A-I Common Stock | | Shares of Class M-I Common Stock | | Shares of Class D Common Stock | |
Balance, December 31, 2016 | 69,837,581 |
| | 36,522,305 |
| | 12,812,637 |
| | 7,591,239 |
| | 7,963,493 |
| |
Balance, December 31, 2020 | | Balance, December 31, 2020 | | 89,671,096 | | | 35,612,156 | | | 9,616,299 | | | 33,247,001 | | | 4,957,915 | |
Issuance of common stock | 2,509,679 |
| | 2,742,008 |
| | 468,049 |
| | 377,566 |
| | — |
| Issuance of common stock | | 7,185,987 | | | 1,276,355 | | | 144,404 | | | 7,153,475 | | | 2,555,366 | |
Repurchase of common stock | (2,898,973 | ) | | (1,675,594 | ) | | (2,175,405 | ) | | (585,073 | ) | | (431,779 | ) | Repurchase of common stock | | (4,029,628) | | | (1,316,457) | | | (175,871) | | | (1,442,688) | | | 0 | |
Balance, September 30, 2017 | 69,448,287 |
| | 37,588,719 |
| | 11,105,281 |
| | 7,383,732 |
| | 7,531,714 |
| |
Share conversions | | Share conversions | | (86,530) | | | (515,830) | | | 0 | | | 601,703 | | | 0 | |
Balance, June 30, 2021 | | Balance, June 30, 2021 | | 92,740,925 | | | 35,056,224 | | | 9,584,832 | | | 39,559,491 | | | 7,513,281 | |
Stock Issuances
The stock issuances for our classes of common stock, including those issued through our distribution reinvestment plan, for the ninesix months ended SeptemberJune 30, 20172021 were as follows:
| | | | | | | | | | | | | | | | | | |
| | Six Months Ended June 30, 2021 | | |
| | # of shares | | Amount | | | | |
Class A Shares | | 7,185,987 | | $ | 85,794 | | | | | |
Class M Shares | | 1,276,355 | | 15,162 | | | | | |
Class A-I Shares | | 144,404 | | 1,722 | | | | | |
Class M-I Shares | | 7,153,475 | | 84,772 | | | | | |
Class D Shares | | 2,555,366 | | 30,000 | | | | | |
Total | | | | $ | 217,450 | | | | | |
|
| | | | | | |
| | Nine Months Ended |
| | September 30, 2017 |
| | # of shares | | Amount |
Class A Shares | | 2,509,679 | | $ | 28,843 |
|
Class M Shares | | 2,742,008 | | 31,318 |
|
Class A-I Shares | | 468,049 | | 5,311 |
|
Class M-I Shares | | 377,566 | | 4,307 |
|
Total | | | | $ | 69,779 |
|
Share Repurchase Plan
Our share repurchase plan allows stockholders, subject to a one-year holding period, with certain exceptions, to request that we repurchase all or a portion of their shares of common stock on a daily basis at that day's NAV per share, limited to 5% of aggregate Company NAV per quarter. For the ninesix months ended SeptemberJune 30, 2017,2021, we repurchased 7,766,8246,964,644 shares of common stock in the amount of $88,848.$82,135. During the ninesix months ended SeptemberJune 30, 2016,2020, we repurchased 3,891,95514,715,002 shares of common stock in the amount of $43,860.$177,909.
Distribution Reinvestment Plan
Pursuant to our distribution reinvestment plan, holders of shares of any class of our common stock may elect to have their cash distributions reinvested in additional shares of our common stock at the NAV per share applicable to the class of shares being purchased on the distribution date. For the ninesix months ended SeptemberJune 30, 2017,2021, we issued 2,592,7972,348,551 shares of common stock for $29,459$27,998 under the distribution reinvestment plan. For the ninesix months ended SeptemberJune 30, 2016,2020, we issued 1,788,4113,370,113 shares of common stock for $20,073$40,541 under the distribution reinvestment plan.
Operating Partnership Units
In connection with the acquisition of Siena Suwanee Town Center, we issued 1,217,092 OP Units to third parties for a total of $14,252. After a one-year holding period, holders of OP Units generally have the right to cause the operating partnership to redeem all or a portion of their OP Units for, at our sole discretion, shares of our common stock, cash, or a combination of both.
Earnings Per Share
BasicWe compute net income per share amounts are based onfor Class A, Class M, Class A-I, Class M-I and Class D common stock using the weighted averagetwo-class method. Our Advisor may earn a performance fee (see Note 9-Related Party Transactions), which may impact the net income of each class of common stock differently. In periods where no performance fee is recognized in our Consolidated Statements of Operations and Comprehensive Income, the net income per share will be the same for each class of common stock.Basic and diluted net income per share for each class of common stock is computed using the weighted-average number of common shares outstanding during the period for each class of 133,554,999 and 134,894,754 for the three and nine months ended September 30, 2017, respectively, and 113,935,929 and 99,933,097 for the three and nine months ended September 30, 2016, respectively.common stock. We have nonot issued any dilutive or potentially dilutive securities.securities, and thus the basic and diluted net income per share for a given class of common stock is the same for each period presented.
The following table sets forth the computation of basic and diluted net income per share for each of our Class A, Class M, Class A-I, Class M-I and Class D common stock:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended June 30, 2021 |
| Class A | | Class M | | Class A-I | | Class M-I | | Class D |
Basic and diluted net loss per share: | | | | | | | | | |
Allocation of net loss per share before performance fee | $ | (1,904) | | | $ | (729) | | | $ | (201) | | | $ | (786) | | | $ | (157) | |
| | | | | | | | | |
| | | | | | | | | |
Weighted average number of common shares outstanding | 91,360,963 | | | 34,932,190 | | | 9,625,797 | | | 37,694,481 | | | 7,513,281 | |
Basic and diluted net loss per share: | $ | (0.02) | | | $ | (0.02) | | | $ | (0.02) | | | $ | (0.02) | | | $ | (0.02) | |
| | | | | | | | | |
| Six Months Ended June 30, 2021 |
| Class A | | Class M | | Class A-I | | Class M-I | | Class D |
Basic and diluted net income per share: | | | | | | | | | |
Allocation of net income per share before performance fee | $ | 13,398 | | | $ | 5,187 | | | $ | 1,424 | | | $ | 5,332 | | | $ | 987 | |
| | | | | | | | | |
| | | | | | | | | |
Weighted average number of common shares outstanding | 90,565,959 | | | 35,054,212 | | | 9,631,765 | | | 36,031,214 | | | 6,680,316 | |
Basic and diluted net income per share: | $ | 0.15 | | | $ | 0.15 | | | $ | 0.15 | | | $ | 0.15 | | | $ | 0.15 | |
| | | | | | | | | |
| Three Months Ended June 30, 2020 |
| Class A | | Class M | | Class A-I | | Class M-I | | Class D |
Basic and diluted net loss per share: | | | | | | | | | |
Allocation of net loss per share before performance fee | $ | (4,344) | | | $ | (1,760) | | | $ | (480) | | | $ | (1,381) | | | $ | (239) | |
| | | | | | | | | |
| | | | | | | | | |
Weighted average number of common shares outstanding | 90,076,114 | | | 36,489,588 | | | 9,958,587 | | | 28,621,235 | | | 4,927,915 | |
Basic and diluted net loss per share: | $ | (0.05) | | | $ | (0.05) | | | $ | (0.05) | | | $ | (0.05) | | | $ | (0.05) | |
| | | | | | | | | |
| Six Months ended June 30, 2020 |
| Class A | | Class M | | Class A-I | | Class M-I | | Class D |
Basic and diluted net loss per share: | | | | | | | | | |
Allocation of net loss per share before performance fee | $ | (14,187) | | | $ | (5,878) | | | $ | (1,643) | | | $ | (4,272) | | | $ | (773) | |
| | | | | | | | | |
| | | | | | | | | |
Weighted average number of common shares outstanding | 90,903,509 | | | 37,668,688 | | | 10,520,723 | | | 27,373,005 | | | 4,927,915 | |
Basic and diluted net loss per share: | $ | (0.16) | | | $ | (0.16) | | | $ | (0.16) | | | $ | (0.16) | | | $ | (0.16) | |
Organization and Offering Costs
Organization and offering costs include, but are not limited to, legal, accounting, and printing fees and personnel costs of our Advisor (including reimbursement of personnel costs for our executive officers prior to the commencement of the offerings) attributable to our organization, preparation of the registration statement, registration and qualification of our common stock for sale with the SEC, or in a private placement, and in the various states and filing fees incurred by our Advisor. LaSalle agreed to fund our organization and offering expenses through January 16, 2015, which isfor the dateSecond Extended Public Offering until July 6, 2018, the SEC declared ourday the registration statement was declared effective forby the First Extended Public Offering,SEC, following which time we commenced reimbursing LaSalle over 36 months for organization and offering costs incurred prior to the commencement date of the First Extended Public Offering. months. Following the FirstSecond Extended Public Offering commencement date, we began paying directly or reimbursing LaSalle if it pays on our behalf
any organization and offering costs incurred during the FirstSecond Extended Public Offering period (other than selling commissions and dealer manager fees) as and when incurred. After the termination of the FirstSecond Extended Public Offering, LaSalle has agreed to reimburse us to the extent that the organization and offering costs that we incur exceed 15% of our gross proceeds from the FirstSecond Extended Public Offering. Organization costs are expensed, whereas offering costs are recorded as a reduction of capital in excess of par value. As of SeptemberJune 30, 20172021 and December 31, 2016,2020, LaSalle had paid $1,380$1,535 and $1,714,$1,138, respectively, of organization and offering costs on our behalf which we had not yet been reimbursed. These costs are included in Accruedaccrued offering costs on the Consolidated Balance Sheets.
NOTE 7—DST PROGRAM
On October 16, 2019, we, through our operating partnership, initiated the DST Program to raise up to $500,000 in private placements through the sale of beneficial interests in specific Delaware statutory trusts (“DST”) holding DST Properties, which may be sourced from our existing portfolio or from newly acquired properties sourced from third parties. Each DST Property will be leased back by a wholly owned subsidiary of our operating partnership on a long-term basis of up to ten years pursuant to a master lease agreement. The master lease agreements are expected to be guaranteed by our operating partnership. As compensation for the master lease guarantee, our operating partnership will retain a fair market value purchase option giving it the right, but not the obligation, to acquire the beneficial interests in the DST from the investors at any time after two years from the closing of the applicable DST offering in exchange for OP Units or cash, at our discretion.
The sale of beneficial interests in the DST Property will be accounted for as a failed sale-leaseback transaction due to the fair market value purchase option retained by the operating partnership and as such, the property will remain on our books and records. The proceeds received from each DST offering will be accounted for as a financing obligation on the Consolidated Balance Sheets. Upfront costs for legal work and debt placement costs for the DST totaling $267 are accounted for as deferred loan costs and are netted against the financing obligation.
Under the master lease, we are responsible for subleasing the DST Property to tenants, for covering all costs associated with operating the underlying DST Property, and for paying base rent to the DST that owns such property. For financial reporting purposes (and not for income tax purposes), the DST Properties are included in our consolidated financial statements, with the master lease rent payments accounted for using the interest method whereby a portion is accounted for as interest expense and a portion is accounted for as a reduction of the outstanding principal balance of the financing obligation. Upon the determination that it is probable that we will exercise the fair market value purchase option, we will recognize additional interest expense or interest income to the financing obligation to account for the difference between the fair value of the property and the outstanding liabilities. For financial reporting purposes, the rental revenues and rental expenses associated with the underlying property of each master lease are included in the respective line items on our Consolidated Statements of Operations and Comprehensive Income. The net amount we receive from the underlying DST Properties may be more or less than the amount we pay to the investors in the specific DST and could fluctuate over time.
As of June 30, 2021, we have sold approximately $284,922 in interests related to the DST Program. As of June 30, 2021, the following properties are included in our DST Program:
•The Reserve at Johns Creek,
•Summit at San Marcos,
•Mason Mill Distribution Center,
•San Juan Medical Center,
•The Penfield,
•Milford Crossing,
•Villas at Legacy,
•Montecito Marketplace,
•Whitestown Distribution Center, and
•Louisville Airport Distribution Center.
NOTE 8—RENTALS UNDER OPERATING LEASES
We receive rental income from operating leases. The minimum future rentals from consolidated properties based on operating leases in place at June 30, 2021 are as follows:
| | | | | | | | |
Year | | Amount |
2021 | | $ | 85,585 | |
2022 | | 132,092 | |
2023 | | 110,755 | |
2024 | | 94,432 | |
2025 | | 84,245 | |
Thereafter | | 292,010 | |
Total | | $ | 799,119 | |
Minimum future rentals do not include amounts payable by certain tenants based upon a percentage of their gross sales or as reimbursement of property operating expenses. During the three and six months ended June 30, 2021, no individual tenant accounted for greater than 10% of minimum base rents.
NOTE 9—RELATED PARTY TRANSACTIONS
Effective as of October 1, 2012, we entered into a first amended and restated advisory agreementPursuant to our Advisory Agreement with LaSalle, pursuant to which we pay a fixed advisory fee of 1.25% of our NAV calculated daily. The Advisory Agreement allows for a performance fee to be earned for each share class based on the total return of that share class during the calendar year. The performance fee is calculated as 10% of the return in excess of 7% per annum. On May 9, 2017, we renewedThe term of our Advisory Agreement with our Advisor for aexpires June 5, 2022, subject to an unlimited number of successive one year term expiring on June 5, 2018.renewals.
The fixedFixed advisory fees for the three and ninesix months ended SeptemberJune 30, 20172021 were $4,842$6,749 and $14,383,$13,074, respectively. The fixed advisory fees for the three and ninesix months ended SeptemberJune 30, 20162020 were $4,030$6,279 and $10,487,$12,857, respectively. There were no0 performance fees for the ninesix months ended SeptemberJune 30, 20172021 and 2016.2020. Included in Advisor fees payable at SeptemberJune 30, 2017 and December 31, 2016 were $1,585 and $1,6002021 was $2,270 of fixed advisory fee expense, respectively.expense. Included in Advisor fees payable for the year ended December 31, 2020 was $2,122 of fixed advisory fee expense.
We pay Jones Lang LaSalle Americas, Inc. (“JLL Americas”), an affiliate of our Advisor, for property management, construction management, leasing, mortgage brokerage and sales brokerage services performed at various properties we own, on terms no less favorable than we could receive from other third party service providers.own. For the three and ninesix months ended SeptemberJune 30, 2017,2021, we paid JLL Americas was paid $221$240 and $920,$479, respectively, for property management and leasing services. For the three and ninesix months ended SeptemberJune 30, 2016,2020, we paid JLL Americas was paid $105$214 and $285,$402, respectively, for property management and leasing services.services During the ninethree and six months ended SeptemberJune 30, 2016,2021, we paid JLL Americas a total of $114$209 and $371, respectively in loan placementmortgage brokerage fees related to the mortgage notenotes payable on 140 Park Avenuefor Louisville Airport Distribution Center and $647Townlake of Coppell. During the three and six months ended June 30, 2020, we paid JLL Americas $0 and $75, respectively, in sales brokerage fees for the 36 Research Park Drive property sale and Dylan Point Loma acquisition.fees.
We pay the Dealer Manager selling commissions and dealer manager fees in connection with our offerings. For the three and ninesix months ended SeptemberJune 30, 2017,2021, we paid the Dealer Manager selling commissions and dealer manager fees totaling $2,530$2,938 and $7,516,$5,552, respectively. For the three and ninesix months ended SeptemberJune 30, 2016,2020, we paid the Dealer Manager selling commissions and dealer manager fees totaling $3,106$2,588 and $8,323,$6,178, respectively. A majority of the selling commissions and dealer manager fees are reallowed to participating broker-dealers. Included in Accruedaccrued offering costs, at SeptemberJune 30, 20172021 and December 31, 20162020, were $77,590$114,498 and $84,803$105,770 of future dealer manager fees payable, respectively.
As of SeptemberJune 30, 20172021 and December 31, 2016,2020, we owed $1,380$1,535 and $1,714,$1,138, respectively, for organization and offering costs paid by LaSalle (see Note 6-Common Stock). These costs are included in Accruedaccrued offering costs. LaSalle Investment Management Distributors, LLC also serves as the dealer manager for the DST Program on a “best efforts” basis. Our taxable REIT subsidiary, which is a wholly owned subsidiary of our operating partnership, will pay the Dealer Manager upfront selling commissions, upfront dealer manager fees and placement fees of up to 5.0%, 1.0% and 1.0%, respectively, of the gross purchase price per unit of beneficial interest sold in the DST Program. All upfront selling commissions and upfront dealer manager fees are reallowed to participating broker-dealers. For the three and six months ended June 30, 2021, the taxable REIT subsidiary paid $1,715 and $2,742, respectively, to the Dealer Manager. For the three and six months ended June 30, 2020, the taxable REIT subsidiary paid $249 and $912, respectively, to the Dealer Manager. In addition, the Dealer Manager may receive an ongoing investor servicing fee that is calculated daily on a continuous basis from year to year equal to 1/365th of (a) 0.25% of the total equity of each outstanding unit of beneficial interest for such day, payable by the
Delaware statutory trusts; (b) 0.85% of the NAV of each outstanding Class A OP Unit, 0.30% of the NAV of each outstanding Class M OP Unit or 0.30% of the NAV of each outstanding Class A-I OP Unit for such day issued in connection with our operating partnership's fair market value purchase option, payable by our operating partnership; and (c) 0.85% of the NAV of each outstanding Class A share, 0.30% of the NAV of each outstanding Class M share or 0.30% of the NAV of each outstanding Class A-I share for such day issued in connection with the investors' redemption right, payable by us. The investor servicing fee may continue for so long as the investor in the DST Program holds beneficial interests, Class A, Class M and Class A-I OP Units or Class A, Class M and Class A-I shares that were issued in connection with the DST Program. No investor servicing fee will be paid on Class M-I OP Units or Class M-I shares. For the three and six months ended June 30, 2021, the Delaware statutory trusts paid $178 and $305 in investor servicing fees to the Dealer Manager in connection with the DST Program. For the three and six months ended June 30, 2020, the Delaware statutory trusts paid $14 and $18, respectively, in investor servicing fees to the Dealer Manager in connection with the DST program.
LaSalle also serves as the manager for the DST Program. Each Delaware statutory trust pays the manager a management fee equal to a to-be-agreed upon percentage of the total equity of such Delaware statutory trust. For the three and six months ended June 30, 2021, the Delaware statutory trusts paid $107 and $183 , respectively, in management fees to our Advisor in connection with the DST Program. For the three and six months ended June 30, 2020, the Delaware statutory trusts paid $8 and $10, respectively, in management fees to our Advisor in connection with the DST Program.
NOTE 8—10—COMMITMENTS AND CONTINGENCIES
We are involved in various claims and litigation matters arising in the ordinary course of business, some of which involve claims for damages. Many of these matters are covered by insurance, although they may nevertheless be subject to deductibles or retentions. Although the ultimate liability for these matters cannot be determined, based upon information currently available, we believe the ultimate resolution of such claims and litigation will not have a material adverse effect on our financial position, results of operations or liquidity.
From time to time, we have entered into contingent agreements for the acquisition and financing of properties. Such acquisitions and financings are subject to satisfactory completion of due diligence or meeting certain leasing or occupancy thresholds.
We are subject to fixed ground lease payments on South Beach Parking Garage of $100 per year until September 30, 2021, and these paymentswhich will increase every five years thereafter by the lesser of 12% or the cumulative CPI over the previous five year period. We are also subject to a variable ground lease payment calculated as 2.5% of revenue. The lease expires September 30, 2041 and has a ten-year renewal option.
The operating agreement for Townlake of CoppellPresley Uptown allows the unrelated third party joint venture partner, owning a 10%2.5% interest, to put theirits interest to us at a market determined value for a period of 90 days beginning in 2018.
starting September 30, 2022 until September 30, 2024.
NOTE 9—11—SEGMENT REPORTING
We have five reportable operating segments: apartment, industrial, office, retail and other properties. Consistent with how our chief operating decision makers evaluate performance and manage our properties, the financial information summarized below is presented by operating segment and reconciled to net income (loss) for the three and ninesix months ended SeptemberJune 30, 20172021 and 2016.2020.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Apartment | | Industrial | | Office | | Retail | | Other | | Total |
Assets as of June 30, 2021 | $ | 854,281 | | | $ | 838,704 | | | $ | 333,190 | | | $ | 571,639 | | | $ | 22,752 | | | $ | 2,620,566 | |
Assets as of December 31, 2020 | 788,060 | | | 659,870 | | | 277,556 | | | 577,588 | | | 22,134 | | | 2,325,208 | |
| | | | | | | | | | | |
Three Months Ended June 30, 2021 | | | | | | | | | | | |
| | | | | | | | | | | |
Capital expenditures by segment | $ | 1,907 | | | $ | 5,906 | | | $ | 903 | | | $ | 964 | | | $ | 0 | | | $ | 9,680 | |
| | | | | | | | | | | |
Revenues: | | | | | | | | | | | |
Rental revenue | $ | 16,934 | | | $ | 15,979 | | | $ | 7,425 | | | $ | 12,138 | | | $ | 62 | | | $ | 52,538 | |
Other revenue | 2,119 | | | 57 | | | 443 | | | 93 | | | 796 | | | 3,508 | |
Total revenues | $ | 19,053 | | | $ | 16,036 | | | $ | 7,868 | | | $ | 12,231 | | | $ | 858 | | | $ | 56,046 | |
Operating expenses: | | | | | | | | | | | |
Real estate taxes | $ | 3,065 | | | $ | 2,518 | | | $ | 861 | | | $ | 1,639 | | | $ | 122 | | | $ | 8,205 | |
Property operating expenses | 5,103 | | | 1,142 | | | 1,569 | | | 2,197 | | | 183 | | | 10,194 | |
| | | | | | | | | | | |
Total segment operating expenses | $ | 8,168 | | | $ | 3,660 | | | $ | 2,430 | | | $ | 3,836 | | | $ | 305 | | | $ | 18,399 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Reconciliation to net income |
Property general and administrative | | | | | | | | | | | $ | (184) | |
Advisor fees | | | | | | | | | | | 6,749 | |
Company level expenses | | | | | | | | | | | 990 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Depreciation and amortization | | | | | | | | | | | 21,218 | |
Total operating expenses | | | | | | | | | | | $ | 47,172 | |
Other income and (expenses): | | | | | | | | | | | |
Interest expense | | | | | | | | | | | $ | (10,288) | |
Loss from unconsolidated real estate affiliates and fund investment | | | | (2,412) | |
| | | | |
| | | | |
Total other income and (expenses) | | | | | | | | | | | $ | (12,700) | |
Net loss | | | | | | | | | | | $ | (3,826) | |
| | | | | | | | | | | |
Reconciliation to total consolidated assets as of June 30, 2021 |
Assets per reportable segments | | | | | | | | | | | $ | 2,620,566 | |
Investment in unconsolidated real estate affiliates, real estate fund investment and corporate level assets | | 440,345 | |
Total consolidated assets | | | | | | | | | | | $ | 3,060,911 | |
| | | | | | | | | | | |
Reconciliation to total consolidated assets as of December 31, 2020 |
Assets per reportable segments | | | | | | | | | | | 2,325,208 | |
Investment in unconsolidated real estate affiliates, real estate fund investment and corporate level assets | | 333,391 | |
Total consolidated assets | | | | | | | | | | | $ | 2,658,599 | |
|
| | | | | | | | | | | | | | | | | | | | | | | | |
| | Apartment | | Industrial | | Office | | Retail | | Other | | Total |
Assets as of September 30, 2017 | | $ | 605,427 |
| | $ | 480,636 |
| | $ | 261,806 |
| | $ | 575,540 |
| | $ | 20,962 |
| | $ | 1,944,371 |
|
Assets as of December 31, 2016 | | 492,530 |
| | 488,454 |
| | 300,702 |
| | 517,758 |
| | 21,313 |
| | 1,820,757 |
|
| | | | | | | | | | | | |
Three Months Ended September 30, 2017 | | | | | | | | | | | | |
Revenues: | | | | | | | | | | | | |
Minimum rents | | $ | 11,460 |
| | $ | 7,876 |
| | $ | 6,735 |
| | $ | 8,233 |
| | $ | 68 |
| | $ | 34,372 |
|
Tenant recoveries and other rental income | | 1,111 |
| | 2,365 |
| | 1,109 |
| | 2,841 |
| | 495 |
| | 7,921 |
|
Total revenues | | $ | 12,571 |
| | $ | 10,241 |
| | $ | 7,844 |
| | $ | 11,074 |
| | $ | 563 |
| | $ | 42,293 |
|
Operating expenses: | | | | | | | | | | | | |
Real estate taxes | | $ | 2,040 |
| | $ | 1,805 |
| | $ | 728 |
| | $ | 1,504 |
| | $ | 104 |
| | $ | 6,181 |
|
Property operating | | 3,461 |
| | 715 |
| | 1,722 |
| | 1,546 |
| | 215 |
| | 7,659 |
|
Provision for doubtful accounts | | 14 |
| | 1 |
| | 1 |
| | 10 |
| | — |
| | 26 |
|
Total segment operating expenses | | $ | 5,515 |
| | $ | 2,521 |
| | $ | 2,451 |
| | $ | 3,060 |
| | $ | 319 |
| | $ | 13,866 |
|
Operating income - Segments | | $ | 7,056 |
| | $ | 7,720 |
| | $ | 5,393 |
| | $ | 8,014 |
| | $ | 244 |
| | $ | 28,427 |
|
| | | | | | | | | | | | |
Capital expenditures by segment | | $ | 1,213 |
| | $ | 276 |
| | $ | 839 |
| | $ | 357 |
| | $ | 19 |
| | $ | 2,704 |
|
| | | | | | | | | | | | |
Reconciliation to net income |
Operating income - Segments | | | | | | | | | | | | $ | 28,427 |
|
Property general and administrative | | | | | | | | | | | | 274 |
|
Advisor fees | | | | | | | | | | | | 4,842 |
|
Company level expenses | | | | | | | | | | | | 491 |
|
Depreciation and amortization | | | | | | | | | | | | 16,589 |
|
Operating income | | | | | | | | | | | | $ | 6,231 |
|
Other income and (expenses): | | | | | | | | | | | | |
Interest expense | | | | | | | | | | | | $ | (7,730 | ) |
Income from unconsolidated real estate affiliates and fund investments | | | | | | | | 6,236 |
|
Other income | | | | 500 |
|
Gain on disposition of property and extinguishment of debt | | | | 5,501 |
|
Total other income and (expenses) | | | | | | | | | | | | $ | 4,507 |
|
Net income | | | | | | | | | | | | $ | 10,738 |
|
| | | | | | | | | | | | |
Reconciliation to total consolidated assets as of September 30, 2017 |
Assets per reportable segments | | | | | | | | | | | | $ | 1,944,371 |
|
Investment in unconsolidated real estate affiliates, real estate fund investment and corporate level assets | | 269,046 |
|
Total consolidated assets | | | | | | | | | | | | $ | 2,213,417 |
|
| | | | | | | | | | | | |
Reconciliation to total consolidated assets as of December 31, 2016 |
Assets per reportable segments | | | | | | | | | | | | $ | 1,820,757 |
|
Investment in unconsolidated real estate affiliates, real estate fund investment and corporate level assets
| | 253,876 |
|
Total consolidated assets | | | | | | | | | | | | $ | 2,074,633 |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Apartment | | Industrial | | Office | | Retail | | Other | | Total |
Three Months Ended June 30, 2020 | | | | | | | | | | | |
| | | | | | | | | | | |
Capital expenditures by segment | $ | 715 | | | $ | 542 | | | $ | 663 | | | $ | 226 | | | $ | 0 | | | $ | 2,146 | |
| | | | | | | | | | | |
Revenues: | | | | | | | | | | | |
Rental revenue | $ | 16,039 | | | $ | 11,890 | | | $ | 6,912 | | | $ | 10,567 | | | $ | 75 | | | $ | 45,483 | |
Other revenue | 728 | | | 81 | | | 381 | | | 89 | | | 154 | | | 1,433 | |
Total revenues | $ | 16,767 | | | $ | 11,971 | | | $ | 7,293 | | | $ | 10,656 | | | $ | 229 | | | $ | 46,916 | |
Operating expenses: | | | | | | | | | | | |
Real estate taxes | $ | 2,936 | | | $ | 2,026 | | | $ | 858 | | | $ | 1,417 | | | $ | 69 | | | $ | 7,306 | |
Property operating expenses | 4,557 | | | 1,005 | | | 1,451 | | | 1,656 | | | 152 | | | 8,821 | |
| | | | | | | | | | | |
Total segment operating expenses | $ | 7,493 | | | $ | 3,031 | | | $ | 2,309 | | | $ | 3,073 | | | $ | 221 | | | $ | 16,127 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Reconciliation to net income |
Property general and administrative | | | | | | | | | | | $ | 333 | |
Advisor fees | | | | | | | | | | | 6,279 | |
Company level expenses | | | | | | | | | | | 594 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Depreciation and amortization | | | | | | | | | | | 18,564 | |
Total operating expenses | | | | | | | | | | | $ | 41,897 | |
Other income and (expenses): | | | | | | | | | | | |
Interest expense | | | | | | | | | | | $ | (9,265) | |
| | | | | | | | | | | |
Loss from unconsolidated real estate affiliates and fund investment | | | | | | (3,970) | |
| | | | | | |
| | | | | |
Total other income and (expenses) | | | | | | | | | | | $ | (13,235) | |
Net loss | | | | | | | | | | | $ | (8,216) | |
|
| | | | | | | | | | | | | | | | | | | | | | | | |
| | Apartment | | Industrial | | Office | | Retail | | Other | | Total |
Three Months Ended September 30, 2016 | | | | | | | | | | | | |
Revenues: | | | | | | | | | | | | |
Minimum rents | | $ | 6,956 |
| | $ | 6,877 |
| | $ | 7,184 |
| | $ | 6,428 |
| | $ | 69 |
| | $ | 27,514 |
|
Tenant recoveries and other rental income | | 452 |
| | 2,093 |
| | 1,205 |
| | 2,407 |
| | 520 |
| | 6,677 |
|
Total revenues | | $ | 7,408 |
| | $ | 8,970 |
| | $ | 8,389 |
| | $ | 8,835 |
| | $ | 589 |
| | $ | 34,191 |
|
Operating expenses: | | | | | | | | | | | | |
Real estate taxes | | $ | 985 |
| | $ | 1,507 |
| | $ | 898 |
| | $ | 1,258 |
| | $ | 79 |
| | $ | 4,727 |
|
Property operating | | 2,557 |
| | 591 |
| | 1,786 |
| | 1,212 |
| | 235 |
| | 6,381 |
|
(Recovery of) provision for doubtful accounts | | (9 | ) | | — |
| | 24 |
| | 41 |
| | 1 |
| | 57 |
|
Total segment operating expenses | | $ | 3,533 |
| | $ | 2,098 |
| | $ | 2,708 |
| | $ | 2,511 |
| | $ | 315 |
| | $ | 11,165 |
|
Operating income - Segments | | $ | 3,875 |
| | $ | 6,872 |
| | $ | 5,681 |
| | $ | 6,324 |
| | $ | 274 |
| | $ | 23,026 |
|
| | | | | | | | | | | | |
Capital expenditures by segment | | $ | 835 |
| | $ | 235 |
| | $ | 2,838 |
| | $ | 923 |
| | $ | 28 |
| | $ | 4,859 |
|
| | | | | | | | | | | | |
Reconciliation to net loss |
Operating income - Segments | | | | | | | | | | | | $ | 23,026 |
|
Property general and administrative | | | | | | | | | | | | 208 |
|
Advisor fees | | | | | | | | | | | | 4,030 |
|
Company level expenses | | | | | | | | | | | | 454 |
|
Acquisition expenses | | | | | | | | | | | | 1,759 |
|
Provision for impairment of real estate | | | | | | | | | | | | 6,355 |
|
Depreciation and amortization | | | | | | | | | | | | 12,072 |
|
Operating loss | | | | | | | | | | | | $ | (1,852 | ) |
Other income and (expenses): | | | | | | | | | | | | |
Interest expense | | | | | | | | | | | | $ | (5,874 | ) |
Income from unconsolidated real estate affiliates and fund investments | | | | | | 4,686 |
|
Gain on disposition of property and extinguishment of debt | | | | | 1,664 |
|
Total other income and (expenses) | | | | | | | | | | | | $ | 476 |
|
Net loss | | | | | | | | | | | | $ | (1,376 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Apartments | | Industrial | | Office | | Retail | | Other | | Total |
Six Months Ended June 30, 2021 | | | | | | | | | | | |
| | | | | | | | | | | |
Capital expenditures by segment | $ | 2,616 | | | $ | 8,881 | | | $ | 1,337 | | | $ | 1,476 | | | $ | 16 | | | $ | 14,326 | |
| | | | | | | | | | | |
Revenues: | | | | | | | | | | | |
Rental revenue | $ | 32,783 | | | $ | 31,205 | | | $ | 14,997 | | | $ | 24,191 | | | $ | 93 | | | $ | 103,269 | |
Other revenue | 2,878 | | | 62 | | | 815 | | | 176 | | | 1,427 | | | 5,358 | |
Total revenues | $ | 35,661 | | | $ | 31,267 | | | $ | 15,812 | | | $ | 24,367 | | | $ | 1,520 | | | $ | 108,627 | |
Operating expenses: | | | | | | | | | | | |
Real estate taxes | $ | 6,176 | | | $ | 4,978 | | | $ | 1,628 | | | $ | 3,272 | | | $ | 237 | | | $ | 16,291 | |
Property operating expenses | 9,933 | | | 2,496 | | | 3,056 | | | 4,243 | | | 377 | | | 20,105 | |
| | | | | | | | | | | |
Total segment operating expenses | $ | 16,109 | | | $ | 7,474 | | | $ | 4,684 | | | $ | 7,515 | | | $ | 614 | | | $ | 36,396 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Reconciliation to net income |
Property general and administrative | | | | | | | | | | | $ | 476 | |
Advisor fees | | | | | | | | | | | 13,074 | |
Company level expenses | | | | | | | | | | | 2,183 | |
| | | | | | | | | | | |
Depreciation and amortization | | | | | | | | | | | 41,163 | |
Total operating expenses | | | | | | | | | | | $ | 93,292 | |
Other income and (expenses): | | | | | | | | | | | |
Interest expense | | | | | | | | | | | $ | (19,550) | |
Loss from unconsolidated real estate affiliates and fund investments | | (2,751) | |
| | | | | | | | | | | |
Gain on disposition of property and extinguishment of debt, net | | | | | | 33,422 | |
Total other income and (expenses) | | | | | | | | | | | $ | 11,121 | |
Net income | | | | | | | | | | | $ | 26,456 | |
|
| | | | | | | | | | | | | | | | Apartments | | Industrial | | Office | | Retail | | Other | | Total |
Six Months Ended June 30, 2020 | | Six Months Ended June 30, 2020 | | | | | | | | | | | |
| | Apartments | | Industrial | | Office | | Retail | | Other | | Total | |
Nine Months Ended September 30, 2017 | | | | | | | | | | | | | |
Capital expenditures by segment | | Capital expenditures by segment | $ | 1,728 | | | $ | 815 | | | $ | 1,461 | | | $ | 849 | | | $ | 0 | | | $ | 4,853 | |
| Revenues: | | | | | | | | | | | | | Revenues: | |
Minimum rents | | $ | 30,288 |
| | $ | 23,501 |
| | $ | 20,729 |
| | $ | 23,457 |
| | $ | 206 |
| | $ | 98,181 |
| |
Tenant recoveries and other rental income | | 3,085 |
| | 7,622 |
| | 3,721 |
| | 8,046 |
| | 1,761 |
| | 24,235 |
| |
Rental revenue | | Rental revenue | $ | 32,280 | | | $ | 23,882 | | | $ | 13,312 | | | $ | 22,782 | | | $ | 144 | | | $ | 92,400 | |
Other revenue | | Other revenue | 1,515 | | | 188 | | | 656 | | | 212 | | | 605 | | | 3,176 | |
Total revenues | | $ | 33,373 |
| | $ | 31,123 |
| | $ | 24,450 |
| | $ | 31,503 |
| | $ | 1,967 |
| | $ | 122,416 |
| Total revenues | $ | 33,795 | | | $ | 24,070 | | | $ | 13,968 | | | $ | 22,994 | | | $ | 749 | | | $ | 95,576 | |
Operating expenses: | | | | | | | | | | | | | Operating expenses: | |
Real estate taxes | | $ | 5,121 |
| | $ | 5,902 |
| | $ | 2,620 |
| | $ | 4,393 |
| | $ | 327 |
| | $ | 18,363 |
| Real estate taxes | $ | 5,833 | | | $ | 4,126 | | | $ | 1,706 | | | $ | 3,010 | | | $ | 172 | | | $ | 14,847 | |
Property operating | | 8,846 |
| | 1,990 |
| | 5,221 |
| | 4,367 |
| | 659 |
| | 21,083 |
| |
Provision for (recovery of) doubtful accounts | | 30 |
| | 1 |
| | (1 | ) | | 45 |
| | — |
| | 75 |
| |
Property operating expenses | | Property operating expenses | 9,052 | | | 1,984 | | | 2,654 | | | 3,529 | | | 360 | | | 17,579 | |
| Total segment operating expenses | | $ | 13,997 |
|
| $ | 7,893 |
| | $ | 7,840 |
| | $ | 8,805 |
| | $ | 986 |
| | $ | 39,521 |
| Total segment operating expenses | $ | 14,885 | | | $ | 6,110 | | | $ | 4,360 | | | $ | 6,539 | | | $ | 532 | | | $ | 32,426 | |
Operating income - Segments | | $ | 19,376 |
| | $ | 23,230 |
| | $ | 16,610 |
| | $ | 22,698 |
| | $ | 981 |
| | $ | 82,895 |
| |
| | | | | | | | | | | | | |
Capital expenditures by segment | | $ | 2,406 |
| | $ | 1,105 |
| | $ | 3,339 |
| | $ | 1,730 |
| | $ | 204 |
| | $ | 8,784 |
| |
| | | | | | | | | | | | | | | | | | | | | | | | |
Reconciliation to net income | Reconciliation to net income | Reconciliation to net income |
Operating income - Segments | | | | | | | | | | | | $ | 82,895 |
| |
Property general and administrative | | | | | | | | | | | | 830 |
| Property general and administrative | | $ | 2,881 | |
Advisor fees | | | | | | | | | | | | 14,383 |
| Advisor fees | | 12,857 | |
Company level expenses | | | | | | | | | | | | 1,730 |
| Company level expenses | | 1,548 | |
| Depreciation and amortization | | | | | | | | | | | | 44,704 |
| Depreciation and amortization | | 37,620 | |
Operating income | | | | | | | | | | | | $ | 21,248 |
| |
Total operating expenses | | Total operating expenses | | $ | 87,332 | |
Other income and (expenses): | | | | | | | | | | | | | Other income and (expenses): | |
Interest expense | | | | | | | | | | | | $ | (21,375 | ) | Interest expense | | $ | (23,800) | |
Income from unconsolidated real estate affiliates and fund investments | | 8,144 |
| |
Other income | | | | | | | | | | | | 500 |
| |
Gain on disposition of property and extinguishment of debt | | | | | | 5,501 |
| |
| Loss from unconsolidated real estate affiliates and fund investments | | Loss from unconsolidated real estate affiliates and fund investments | | (12,897) | |
| Gain on disposition of property and extinguishment of debt, net | | Gain on disposition of property and extinguishment of debt, net | | 1,708 | |
Total other income and (expenses) | | | | | | | | | | | | $ | (7,230 | ) | Total other income and (expenses) | | $ | (34,989) | |
Net income | | | | | | | | | | | | $ | 14,018 |
| |
Net loss | | Net loss | | $ | (26,745) | |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | |
| | Apartments | | Industrial | | Office | | Retail | | Other | | Total |
Nine Months Ended September 30, 2016 | | | | | | | | | | | | |
Revenues: | | | | | | | | | | | | |
Minimum rents | | $ | 18,634 |
| | $ | 17,322 |
| | $ | 21,382 |
| | $ | 18,306 |
| | $ | 208 |
| | $ | 75,852 |
|
Tenant recoveries and other rental income | | 1,148 |
| | 5,147 |
| | 3,738 |
| | 6,814 |
| | 1,771 |
| | 18,618 |
|
Total revenues | | $ | 19,782 |
| | $ | 22,469 |
|
| $ | 25,120 |
| | $ | 25,120 |
| | $ | 1,979 |
| | $ | 94,470 |
|
Operating expenses: | | | | | | | | | | | | |
Real estate taxes | | $ | 2,325 |
| | $ | 3,768 |
| | $ | 2,591 |
| | $ | 3,511 |
| | $ | 327 |
| | $ | 12,522 |
|
Property operating | | 6,406 |
| | 1,449 |
| | 5,185 |
| | 3,492 |
| | 685 |
| | 17,217 |
|
Provision for doubtful accounts | | 12 |
| | — |
| | 24 |
| | 154 |
| | 1 |
| | 191 |
|
Total segment operating expenses | | $ | 8,743 |
| | $ | 5,217 |
| | $ | 7,800 |
| | $ | 7,157 |
| | $ | 1,013 |
| | $ | 29,930 |
|
Operating income - Segments | | $ | 11,039 |
| | $ | 17,252 |
| | $ | 17,320 |
| | $ | 17,963 |
| | $ | 966 |
| | $ | 64,540 |
|
| | | | | | | | | | | | |
Capital expenditures by segment | | $ | 1,930 |
| | $ | 1,006 |
| | $ | 8,380 |
| | $ | 2,090 |
| | $ | 41 |
| | $ | 13,447 |
|
| | | | | | | | | | | | |
Reconciliation to net income |
Operating income - Segments | | | | | | | | | | | | $ | 64,540 |
|
Property general and administrative | | | | | | | | | | | | 814 |
|
Advisor fees | | | | | | | | | | | | 10,487 |
|
Company level expenses | | | | | | | | | | | | 1,657 |
|
Acquisition expenses | | | | | | | | | | | | 2,846 |
|
Provision for impairment of real estate | | | | | | | | | | | | 6,355 |
|
Depreciation and amortization | | | | | | | | | | | | 31,052 |
|
Operating income | | | | | | | | | | | | $ | 11,329 |
|
Other income and (expenses): | | | | | | | | | | | | |
Interest expense | | | | | | | | | | | | $ | (18,529 | ) |
Income from unconsolidated real estate affiliates and fund investments | | 5,583 |
|
Gain on disposition of property and extinguishment of debt | | | | | | | | 1,704 |
|
Total other income and (expenses) | | | | | | | | | | | | $ | (11,242 | ) |
Net income | | | | | | | | | | | | $ | 87 |
|
NOTE 10—DISTRIBUTIONS PAYABLE12—SUBSEQUENT EVENTS
On July 2, 2021, we acquired two industrial buildings totaling 153,000 square feet located in San Marcos and Poway, California for approximately $36,640. The acquisitions were funded with cash on hand.
On July 9, 2021, we acquired a 130,000 square foot industrial property located in Fremont, California for approximately $32,000 using cash on hand.
On August 5, 2021, we acquired a 49% interest in GVI RH JV Investor, LLC, which owns a 95% interest in a joint venture, alongside a prominent national single family rental operating company, of a portfolio of approximately 4,000 stabilized single family rental homes located in various markets across the United States, including Atlanta, Dallas, Phoenix, Nashville and Charlotte, among others. The seller will retain a 51% interest. The portfolio is encumbered by RMBS in a net amount of $760,000 maturing in the fourth quarter of 2025 at an interest rate of 2.1%. The equity purchase price is approximately $205,000. We funded the transaction using cash on hand and a draw on our revolving line of credit.
On August 10, 2017,2021, our board of directors approved a gross dividend for the third quarter of 20172021 of $0.125$0.135 per share to stockholders of record as of September 28, 2017. The dividend was paid on November 1, 2017. Class A, Class M, Class A-I, Class M-I and Class D stockholders received $0.125 per share, less applicable class-specific fees, if any.
NOTE 11— RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
InMay 2014, the FASB issued Accounting Standard Update 2014-09 Revenue from Contracts with Customers, which will use a five step model to recognize revenue from customer contracts in an effort to increase consistency and comparability throughout global capital markets and across industries. The model will identify the contract, identify any separate performance obligations in the contract, determine and allocate the transaction price, and recognize revenue when the performance obligation is satisfied. The new standard will replace most existing revenue recognition in GAAP when it becomes effective for us on January 1, 2018. We are in the process of evaluating whether the guidance will impact the accounting for tenant reimbursements, but we currently do not believe this update will have a material impact on our consolidated financial statements and notes to our consolidated financial statements. Additionally, we are evaluating the impact on the timing of gain recognition for dispositions but currently do not believe there will be a material impact to our consolidated financial statements for dispositions given the simplicity of our historical disposition transactions. We expect to adopt the standard using the cumulative effect transition method.
In January 2016, the FASB issued Accounting Standard Update 2016-01 Financial Instruments - Overall: Recognition and Measurement of Financial Assets and Financial Liabilities. The new standard requires equity investments (except those accounted for under the equity method of accounting, or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income, requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes, requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset, and eliminates the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost. The standard will become effective for reporting periods beginning after December 15, 2017, with early adoption permitted. We are in the process of evaluating the impact of this new guidance.
In February 2016, the FASB issued Accounting Standard Update 2016-02 Leases (ASC 842), which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e. lessees and lessors). The new standard requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales-type leases, direct financing leases and operating leases. The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight line basis over the term of the lease. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases today. The update is expected to impact our consolidated financial statements as we have a ground lease arrangement for which we are the lessee. ASC 842 supersedes the previous leases standard, ASC 840 Leases. The standard is effective on January 1, 2019, with early adoption permitted. We currently believe the adoption of the standard will not have a material impact on leases for which we are the lessor. We are the lessee on one ground lease that will require us to record a right-of-use asset and a lease liability. We have preliminarily concluded that the adoption of the standard will not have a material impact on the consolidated financial statements for leases for which we are the lessee.
In August 2016, the FASB issued Accounting Standard Update 2016-15 Statement of Cash Flows (Topic 230). The new guidance is intended to reduce the existing diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The core principle of the standard requires the classification of eight specific issues identified under ASC 230 to be presented as either financing, investing or operating, or some combination thereof, depending upon the nature of the issue. The standard will be effective for annual reporting periods, including interim periods within those annual periods, beginning after December 15, 2017, with early adoption permitted. Entities are required to use a retrospective transition approach for all of the issues identified to each period presented. We do not expect this standard to materially effect our consolidated financial statements and related disclosures.
In November 2016, the FASB issued Accounting Standard Update 2016-18 Statement of Cash Flows (Topic 230) – Restricted Cash. The new guidance requires that restricted cash be included as a component of total cash and cash equivalents as presented on the statement of cash flows. The standard is effective for annual periods, and interim periods therein, beginning after December 15, 2017. Early application is permitted in any interim or annual period. We do not expect the application of this standard to materially effect our consolidated financial statements and related disclosures.
NOTE 12—SUBSEQUENT EVENTS
On November 9, 2017, our board of directors approved a gross dividend for the fourth quarter of 2017 of $0.125 per share to stockholders of record as of December 28, 2017.24, 2021. The dividend will be paid on or around February 1, 2018.September 29, 2021. Class A, Class M, Class A-I, Class M-I and Class D stockholders will receive $0.125$0.135 per share, less applicable class-specific fees, if any.
On August 10, 2021, our board of directors approved increasing our DST Program by an additional $500,000 in private placements through the sale of beneficial interests in specific DST Properties, which may be sourced from our existing portfolio or from newly acquired properties sourced from third parties.
* * * * * *
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Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations. |
$ in thousands, except per share amounts
Cautionary Note Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q ("Form 10-Q") may contain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), regarding, among other things, our plans, strategies and prospects, both business and financial. Forward-looking statements include, but are not limited to, statements that represent our beliefs concerning future operations, strategies, financial results or other developments. Forward-looking statements can be identified by the use of forward-looking terminology such as, but not limited to, “may,” “should,” “expect,” “anticipate,” “estimate,” “would be,” “believe,” or “continue” or the negative or other variations of comparable terminology. Because these forward-looking statements are based on estimates and assumptions that are subject to significant business, economic and competitive uncertainties, many of which are beyond our control or are subject to change, actual results could be materially different. Although we believe that our plans, intentions and expectations reflected in or suggested by these forward-looking statements are reasonable, we cannot assure you that we will achieve or realize these plans, intentions or expectations. Forward-looking statements are inherently subject to risks, uncertainties and assumptions. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date this Form 10-Q is filed with the SEC. Except as required by law, we do not undertake to update or revise any forward-looking statements contained in this Form 10-Q. Important factors that could cause actual results to differ materially from the forward-looking statements are disclosed in “Item 1A. Risk Factors,” “Item 1. Business” and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in our 20162020 Form 10-K and our periodic reports filed with the SEC.
Management Overview
The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to help the reader understand our results of operations and financial condition. This MD&A is provided as a supplement to, and should be read in conjunction with, our consolidated financial statements and the accompanying notes to the consolidated financial statements appearing elsewhere in this Form 10-Q. All references to numbered Notes are to specific notes to our Consolidated Financial Statementsconsolidated financial statements beginning on page 7 of this Form 10-Q, and the descriptions referred to are incorporated into the applicable portion of this section by reference. References to “base rent” in this Form 10-Q refer to cash payments made under the relevant lease(s), excluding real estate taxes and certain property operating expenses that are paid by us and are recoverable under the relevant lease(s) and exclude adjustments for straight-line rent revenue and above- and below-market lease amortization.
The discussions surrounding our Consolidated Properties refer to our wholly or majority owned and controlled properties, including our DST Properties, which as of SeptemberJune 30, 2017,2021, were comprised of:
Apartment
Station Nine Apartments,
•The Edge at Lafayette,
•Townlake of Coppell,
•AQ Rittenhouse,
•Lane Parke Apartments, (acquired in 2016),
•Dylan Point Loma, (acquired in 2016),
•The Penfield, (acquired in 2016),
•180 North Jefferson, (acquired in 2016),
•Jory Trail at the Grove, (acquired in 2017) and
•The Reserve at Johns Creek,
•Villas at Legacy,
•Stonemeadow Farms,
•Summit at San Marcos,
•Presley Uptown, and
•Princeton North Andover (acquired in 2017)2021).
Industrial
•Kendall Distribution Center,
•Norfleet Distribution Center,
Joliet Distribution Center,
•Suwanee Distribution Center,
South Seattle Distribution Center,•3325 Trinity Boulevard,
Grand Prairie Distribution Center,
•Charlotte Distribution Center,
•DFW Distribution Center,
•O'Hare Industrial Portfolio,
•Tampa Distribution Center,
•Aurora Distribution Center,
•Valencia Industrial Portfolio,
•Pinole Point Distribution Center,
•Mason Mill Distribution Center,
•Fremont Distribution Center,
•3324 Trinity Boulevard,
•Taunton Distribution Center,
•Chandler Distribution Center,
•Fort Worth Distribution Center, (acquired in 2016)2020),
Aurora•Whitestown Distribution Center (acquired in 2016)2020),
Valencia Industrial Portfolio (acquired in 2016) and
Pinole Point•Louisville Distribution Center (acquired in 2016)2021),
•Southeast Phoenix Distribution Center (acquired in 2021), and
•Louisville Airport Distribution Center (acquired in 2021).
Office
•Monument IV at Worldgate,
111 Sutter Street,
•140 Park Avenue, and
•San Juan Medical Center,
•Genesee Plaza,
•Fountainhead Corporate Park (acquired in 2016)2020), and
•170 Park Avenue (acquired in 2021).
Retail
•The District at Howell Mill,
•Grand Lakes Marketplace,
•Oak Grove Plaza,
•Rancho Temecula Town Center,
•Skokie Commons,
•Whitestone Market,
•Maui Mall,
•Silverstone Marketplace,
•Kierland Village Center,
•Timberland Town Center,
•Montecito Marketplace, and
•Milford Crossing (acquired in 2016),2020).
Kierland Village Center (acquired in 2016),
Timberland Town Center (acquired in 2016) and
Montecito Marketplace (acquired in 2017).
Other
•South Beach Parking Garage.
Sold Properties
36 Research Park•24823 Anza Drive (sold in 2016)2020), and
Campus Lodge Tampa•South Seattle Distribution Center (sold in 2016),2021).
Railway Street Corporate Centre (transferred to lender in 2017),
14600 Sherman Way (sold in 2017) and
14624 Sherman Way (sold in 2017).
Discussions surrounding our Unconsolidated Properties refer to properties owned through joint venture arrangements or condominium interests, which were comprised of the Chicago Parking Garage, the NYC Retail Portfolio and Pioneer Tower (office)following properties as of SeptemberJune 30, 2017. Our investment in 2021:
| | | | | | | | |
Property | | Property Type |
Chicago Parking Garage | | Parking |
NYC Retail Portfolio(1) | | Retail |
Pioneer Tower | | Office |
The Tremont | | Apartment |
The Huntington | | Apartment |
Siena Suwanee Town Center (2) | | Apartment |
________
(1) We have elected the fair value option to account for this investment.
(2) Investment was acquired on June 28, 2016.December 15, 2020.
Our primary business is the ownership and management of a diversified portfolio of apartment, industrial, office, retail and other properties primarily located in the United States. It is expected that over time our real estate portfolio will be further diversified on a global basis and will be complemented by investments in real estate-related assets.
We are managed by our Advisor, LaSalle Investment Management, Inc., a subsidiary of our Sponsor, Jones Lang LaSalle Incorporated (NYSE: JLL), a leading global financial and professional services firm that specializes in commercial real estate and investment management. We hire property management and leasing companies to provide the on-site, day-to-day management and leasing services for our properties. When selecting a property management or leasing company for one of our properties, we look for service providers that have a strong local market or industry presence, create portfolio efficiencies, have the ability to develop new business for us and will provide a strong internal control environment that will comply with our Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley”) internal control requirements. We currently use a mix of property management
and leasing service providers that include large national real estate service firms, including an affiliate of our Advisor and smaller local firms.
We seek to minimize risk and maintain stability of income and principal value through broad diversification across property sectors and geographic markets and by balancing tenant lease expirations and debt maturities across the real estate portfolio. Our diversification goals also take into account investing in sectors or regions we believe will create returns consistent with our investment objectives. Under normal conditions, we intend to pursue investments principally in well-located, well-leased properties within the apartment, industrial, office, retail and other sectors. We expect to actively manage the mix of properties and markets over time in response to changing operating fundamentals within each property sector and to changing economies and real estate markets in the geographic areas considered for investment. When consistent with our investment objectives, we also seek to maximize the tax efficiency of our investments through like-kind exchanges and other tax planning strategies.
The following charts summarize our portfolio diversification by property sector and geographic region based upon the fair value of our properties. These tables provide examples of how our Advisor evaluates our real estate portfolio when making investment decisions.
Estimated Percent of Fair Value as of SeptemberJune 30, 2017:2021:
Our investments are not materially impacted by seasonality, despite certain of our retail tenants being impacted by seasonality. Percentage rents (rents computed as a percentage of tenant sales) that we earn from investments in retail properties may, in the future, be impacted by seasonality.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions. These estimates and assumptions impact the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. For example, significant estimates and assumptions have been made with respect to the useful lives of assets, recoverable amounts of receivables, fair value of derivatives and real estate assets, initial valuations and related amortization periods of deferred costs and intangibles, particularly with respect to property acquisitions. Actual results could differ from those estimates.
Critical Accounting Policies
This MD&A is based upon our consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of these consolidated financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. Management bases its estimates on historical experience and assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. We believe there have been no significant changes during the ninesix months ended SeptemberJune 30, 20172021 to the items that we disclosed as our critical accounting policies and estimates under “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 20162020 Form 10-K.
Initial Valuations and Estimated Useful Lives or Amortization Periods for Real Estate Investments and Intangibles
These estimates are particularly important as they are used for the allocation of purchase price between depreciable and non-depreciable real estatebuilding, land and other identifiable intangibles, including above, below and at-market leases. As a result, the impact of these estimates on our operations could be substantial. Significant differences in annual depreciation or amortization expense may result from the differing useful life or amortization periods related to such purchased assets and liabilities.
Impairment of Long-Lived Assets
Our estimate of the expected future cash flows used in testing for impairment is subjective and based on, among other things, our estimates regarding future market conditions, rental rates, occupancy levels, costs of tenant improvements, leasing commissions and other tenant concessions, assumptions regarding the residual value of our properties at the end of our anticipated holding period, discount rates and the length of our anticipated holding period. These assumptions could differ materially from actual results. If changes in our strategy changes or ifthe market conditions otherwise dictateresult in a reduction in the holding period and an earlier sale date, an impairment loss could be recognized and such loss could be material. No such strategy changes or market conditions have been identified as of June 30, 2021.
Collectibility of Rental Revenue
Individual leases are evaluated for collectibility at each reporting period. We evaluate the collectibility of rents and other receivables at each reporting period based on factors including, among others, tenant's payment history, the financial condition of the tenant, business conditions and trends in the industry in which the tenant operates and economic conditions in the geographic area where the property is located. If evaluation of these factors or others indicates it is not probable we will collect substantially all rent we recognize an adjustment to rental revenue. If our judgment or estimation regarding probability of collection changes we may adjust or record additional rental revenue in the period such conclusion is reached.
Properties
Properties owned at SeptemberJune 30, 20172021, including DST Properties, are as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | Percentage Leased as of June 30, 2021 |
Property Name | | Location | | Acquisition Date | | Ownership % | | Net Rentable Square Feet | |
Consolidated Properties: | | | | | | | | | | |
Apartment Segment: | | | | | | | | | | |
The Edge at Lafayette | | Lafayette, LA | | January 15, 2008 | | 100% | | 207,000 | | | 66% |
Townlake of Coppell | | Coppell, TX | | May 22, 2015 | | 100 | | 351,000 | | | 94 |
AQ Rittenhouse | | Philadelphia, PA | | July 30, 2015 | | 100 | | 92,000 | | | 97 |
Lane Parke Apartments | | Mountain Brook, AL | | May 26, 2016 | | 100 | | 263,000 | | | 97 |
Dylan Point Loma | | San Diego, CA | | August 9, 2016 | | 100 | | 204,000 | | | 99 |
The Penfield | | St. Paul, MN | | September 22, 2016 | | 100 | | 245,000 | | | 89 |
180 North Jefferson | | Chicago, IL | | December 1, 2016 | | 100 | | 217,000 | | | 97 |
Jory Trail at the Grove | | Wilsonville, OR | | July 14, 2017 | | 100 | | 315,000 | | | 99 |
The Reserve at Johns Creek | | Johns Creek, GA | | July 28, 2017 | | 100 | | 244,000 | | | 94 |
Villas at Legacy | | Plano, TX | | June 6, 2018 | | 100 | | 340,000 | | | 94 |
Stonemeadow Farms | | Bothell, WA | | May 13, 2019 | | 100 | | 228,000 | | | 98 |
Summit at San Marcos | | Chandler, AZ | | July 31, 2019 | | 100 | | 257,000 | | | 99 |
Presley Uptown (1) | | Charlotte, NC | | September 30, 2019 | | 98 | | 190,000 | | | 94 |
| | | | | | | | | | |
Princeton North Andover | | North Andover, MA | | May 3, 2021 | | 100 | | 204,000 | | | 97 |
Industrial Segment: | | | | | | | | | | |
Kendall Distribution Center | | Atlanta, GA | | June 30, 2005 | | 100% | | 409,000 | | | 100% |
Norfleet Distribution Center | | Kansas City, MO | | February 27, 2007 | | 100 | | 702,000 | | | 100 |
Suwanee Distribution Center | | Suwanee, GA | | June 28, 2013 | | 100 | | 559,000 | | | 100 |
Grand Prairie Distribution Center | | | | | | | | | | |
3325 West Trinity Boulevard | | Grand Prairie, TX | | January 22, 2014 | | 100 | | 277,000 | | | 100 |
3324 West Trinity Boulevard | | Grand Prairie, TX | | May 31, 2019 | | 100 | | 145,000 | | | 100 |
Charlotte Distribution Center | | Charlotte, NC | | June 27, 2014 | | 100 | | 347,000 | | | 100 |
DFW Distribution Center | | | | | | | | | | |
4050 Corporate Drive | | Grapevine, TX | | April 15, 2015 | | 100 | | 441,000 | | | 100 |
4055 Corporate Drive | | Grapevine, TX | | April 15, 2015 | | 100 | | 202,000 | | | 100 |
O'Hare Industrial Portfolio | | | | | | | | | | |
200 Lewis | | Wood Dale, IL | | September 30, 2015 | | 100 | | 31,000 | | | 82 |
1225 Michael Drive | | Wood Dale, IL | | September 30, 2015 | | 100 | | 109,000 | | | 100 |
1300 Michael Drive | | Wood Dale, IL | | September 30, 2015 | | 100 | | 71,000 | | | 100 |
1301 Mittel Drive | | Wood Dale, IL | | September 30, 2015 | | 100 | | 53,000 | | | 100 |
1350 Michael Drive | | Wood Dale, IL | | September 30, 2015 | | 100 | | 56,000 | | | 66 |
2501 Allan Drive | | Elk Grove, IL | | September 30, 2015 | | 100 | | 198,000 | | | 100 |
2601 Allan Drive | | Elk Grove, IL | | September 30, 2015 | | 100 | | 124,000 | | | 100 |
Tampa Distribution Center | | Tampa, FL | | April 11, 2016 | | 100 | | 386,000 | | | 100 |
Aurora Distribution Center | | Aurora, IL | | May 19, 2016 | | 100 | | 305,000 | | | 100 |
Valencia Industrial Portfolio: | | | | | | | | | | |
28150 West Harrison Parkway | | Valencia, CA | | June 29, 2016 | | 100 | | 87,000 | | | 100 |
28145 West Harrison Parkway | | Valencia, CA | | June 29, 2016 | | 100 | | 114,000 | | | 100 |
28904 Paine Avenue | | Valencia, CA | | June 29, 2016 | | 100 | | 117,000 | | | 100 |
25045 Tibbitts Avenue | | Santa Clarita, CA | | June 29, 2016 | | 100 | | 142,000 | | | 100 |
Pinole Point Distribution Center: | | | | | | | | | | |
6000 Giant Road | | Richmond, CA | | September 8, 2016 | | 100 | | 225,000 | | | 100 |
|
| | | | | | | | | | |
| | | | | | | | | | Percentage Leased as of September 30, 2017 |
Property Name | | Location | | Acquisition Date | | Ownership % | | Net Rentable Square Feet | |
Consolidated Properties: | | | | | | | | | | |
Apartment Segment: | | | | | | | | | | |
Station Nine Apartments | | Durham, NC | | April 16, 2007 | | 100% | | 312,000 | | 92% |
The Edge at Lafayette (1) | | Lafayette, LA | | January 15, 2008 | | 78 | | 207,000 | | 92 |
Townlake of Coppell (1) | | Coppell, TX | | May 22, 2015 | | 90 | | 351,000 | | 94 |
AQ Rittenhouse | | Philadelphia, PA | | July 30, 2015 | | 100 | | 92,000 | | 93 |
Lane Parke Apartments | | Mountain Brook, AL | | May 26, 2016 | | 100 | | 263,000 | | 95 |
Dylan Point Loma | | San Diego, CA | | August 9, 2016 | | 100 | | 204,000 | | 93 |
The Penfield | | St. Paul, MN | | September 22, 2016 | | 100 | | 245,000 | | 96 |
180 North Jefferson | | Chicago, IL | | December 1, 2016 | | 100 | | 217,000 | | 95 |
Jory Trail at the Grove | | Wilsonville, OR | | July 14, 2017 | | 100 | | 315,000 | | 90 |
The Reserve at Johns Creek | | Johns Creek, GA | | July 28, 2017 | | 100 | | 244,000 | | 95 |
Industrial Segment: | | | | | | | | | | |
Kendall Distribution Center | | Atlanta, GA | | June 30, 2005 | | 100 | | 409,000 | | — |
Norfleet Distribution Center | | Kansas City, MO | | February 27, 2007 | | 100 | | 702,000 | | 100 |
Joliet Distribution Center | | Joliet, IL | | June 26, 2013 | | 100 | | 442,000 | | 100 |
Suwanee Distribution Center | | Suwanee, GA | | June 28, 2013 | | 100 | | 559,000 | | 100 |
South Seattle Distribution Center: | | | | | | | | | | |
3800 1st Avenue South | | Seattle, WA | | December 18, 2013 | | 100 | | 162,000 | | 100 |
3844 1st Avenue South | | Seattle, WA | | December 18, 2013 | | 100 | | 101,000 | | 100 |
3601 2nd Avenue South | | Seattle, WA | | December 18, 2013 | | 100 | | 60,000 | | 100 |
Grand Prairie Distribution Center | | Grand Prairie, TX | | January 22, 2014 | | 100 | | 277,000 | | 100 |
Charlotte Distribution Center | | Charlotte, NC | | June 27, 2014 | | 100 | | 347,000 | | 100 |
DFW Distribution Center: | | | | | | | | | | |
4050 Corporate Drive | | Grapevine, TX | | April 15, 2015 | | 100 | | 441,000 | | 100 |
4055 Corporate Drive | | Grapevine, TX | | April 15, 2015 | | 100 | | 202,000 | | 100 |
O’Hare Industrial Portfolio: | | | | | | | | | | |
200 Lewis | | Wood Dale, IL | | September 30, 2015 | | 100 | | 31,000 | | 100 |
1225 Michael Drive | | Wood Dale, IL | | September 30, 2015 | | 100 | | 109,000 | | 100 |
1300 Michael Drive | | Wood Dale, IL | | September 30, 2015 | | 100 | | 71,000 | | 100 |
1301 Mittel Drive | | Wood Dale, IL | | September 30, 2015 | | 100 | | 53,000 | | 100 |
1350 Michael Drive | | Wood Dale, IL | | September 30, 2015 | | 100 | | 56,000 | | 100 |
2501 Allan Drive | | Elk Grove, IL | | September 30, 2015 | | 100 | | 198,000 | | 100 |
2601 Allan Drive | | Elk Grove, IL | | September 30, 2015 | | 100 | | 124,000 | | 100 |
Tampa Distribution Center | | Tampa, FL | | April 11, 2016 | | 100 | | 386,000 | | 100 |
Aurora Distribution Center | | Aurora, IL | | May 19, 2016 | | 100 | | 305,000 | | 100 |
Valencia Industrial Portfolio: | | | | | | | | | | |
28150 West Harrison Parkway | | Valencia, CA | | June 29, 2016 | | 100 | | 87,000 | | 100 |
28145 West Harrison Parkway | | Valencia, CA | | June 29, 2016 | | 100 | | 114,000 | | 100 |
28904 Paine Avenue | | Valencia, CA | | June 29, 2016 | | 100 | | 117,000 | | 100 |
24823 Anza Drive | | Santa Clarita, CA | | June 29, 2016 | | 100 | | 31,000 | | 100 |
25045 Tibbitts Avenue | | Santa Clarita, CA | | June 29, 2016 | | 100 | | 142,000 | | 100 |
Pinole Point Distribution Center: | | | | | | | | | | |
6000 Giant Road | | Richmond, CA | | September 8, 2016 | | 100 | | 252,000 | | 100 |
6015 Giant Road | | Richmond, CA | | September 8, 2016 | | 100 | | 225,000 | | 100 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | Percentage Leased as of June 30, 2021 |
Property Name | | Location | | Acquisition Date | | Ownership % | | Net Rentable Square Feet | |
6015 Giant Road | | Richmond, CA | | September 8, 2016 | | 100 | | 252,000 | | | 100 |
6025 Giant Road | | Richmond, CA | | December 29, 2016 | | 100 | | 41,000 | | | 100 |
Mason Mill Distribution Center | | Buford, GA | | December 20, 2017 | | 100 | | 340,000 | | | 100 |
Fremont Distribution Center | | | | | | | | | | |
45275 Northport Court | | Fremont, CA | | March 29, 2019 | | 100 | | 117,000 | | | 100 |
45630 Northport Loop East | | Fremont, CA | | March 29, 2019 | | 100 | | 120,000 | | | 100 |
Taunton Distribution Center | | Taunton, MA | | August 23, 2019 | | 100 | | 200,000 | | | 100 |
Chandler Distribution Center | | | | | | | | | | |
1725 East Germann Road | | Chandler, AZ | | December 5, 2019 | | 100 | | 122,000 | | | 100 |
1825 East Germann Road | | Chandler, AZ | | December 5, 2019 | | 100 | | 89,000 | | | 89 |
Fort Worth Distribution Center | | Fort Worth, TX | | October 23, 2020 | | 100 | | 351,000 | | | 100 |
Whitestown Distribution Center | | | | | | | | | | |
4993 Anson Boulevard | | Whitestown, IN | | December 11, 2020 | | 100 | | 280,000 | | | 100 |
5102 E 500 South | | Whitestown, IN | | December 11, 2020 | | 100 | | 440,000 | | | 100 |
Louisville Distribution Center | | Shepherdsville, KY | | January 21, 2021 | | 100 | | 1,040,000 | | | 100 |
Southeast Phoenix Distribution Center | | | | | | | | | | |
6511 West Frye Road | | Chandler, AZ | | February 23, 2021 | | 100 | | 102,000 | | | 100 |
6565 West Frye Road | | Chandler, AZ | | February 23, 2021 | | 100 | | 118,000 | | | 100 |
6615 West Frey Road | | Chandler, AZ | | February 23, 2021 | | 100 | | 136,000 | | | 100 |
6677 West Frye Road | | Chandler, AZ | | February 23, 2021 | | 100 | | 118,000 | | | 100 |
Louisville Airport Distribution Center | | Louisville, KY | | June 24, 2021 | | 100 | | 283,844 | | | 100 |
Office Segment: | | | | | | | | | | |
Monument IV at Worldgate | | Herndon, VA | | August 27, 2004 | | 100% | | 228,000 | | | 100% |
140 Park Avenue | | Florham Park, NJ | | December 21, 2015 | | 100 | | 100,000 | | | 100 |
San Juan Medical Center | | San Juan Capistrano, CA | | April 1, 2016 | | 100 | | 40,000 | | | 97 |
Genesee Plaza | | | | | | | | | | |
9333 Genesee Ave | | San Diego, CA | | July 2, 2019 | | 100 | | 80,000 | | | 89 |
9339 Genesee Ave | | San Diego, CA | | July 2, 2019 | | 100 | | 81,000 | | | 88 |
Fountainhead Corporate Park | | | | | | | | | | |
Fountainhead Corporate Park I | | Tempe, AZ | | February 6, 2020 | | 100 | | 167,000 | | | 99 |
Fountainhead Corporate Park II | | Tempe, AZ | | February 6, 2020 | | 100 | | 128,000 | | | 97 |
170 Park Avenue | | Florham Park, NJ | | February 2, 2021 | | 100 | | 147,000 | | | 100 |
| | | | | | | | | | |
Retail Segment: | | | | | | | | | | |
The District at Howell Mill (1) | | Atlanta, GA | | June 15, 2007 | | 88% | | 306,000 | | | 96% |
Grand Lakes Marketplace (1) | | Katy, TX | | September 17, 2013 | | 90 | | 131,000 | | | 75 |
Oak Grove Plaza | | Sachse, TX | | January 17, 2014 | | 100 | | 120,000 | | | 94 |
Rancho Temecula Town Center | | Temecula, CA | | June 16, 2014 | | 100 | | 165,000 | | | 96 |
Skokie Commons | | Skokie, IL | | May 15, 2015 | | 100 | | 97,000 | | | 98 |
Whitestone Market | | Austin, TX | | September 30, 2015 | | 100 | | 145,000 | | | 99 |
Maui Mall | | Kahului, HI | | December 22, 2015 | | 100 | | 235,000 | | | 80 |
Silverstone Marketplace | | Scottsdale, AZ | | July 27, 2016 | | 100 | | 78,000 | | | 93 |
Kierland Village Center | | Scottsdale, AZ | | September 30, 2016 | | 100 | | 118,000 | | | 95 |
Timberland Town Center | | Beaverton, OR | | September 30, 2016 | | 100 | | 92,000 | | | 98 |
Montecito Marketplace | | Las Vegas, NV | | August 8, 2017 | | 100 | | 190,000 | | | 93 |
Milford Crossing | | Milford, MA | | January 29, 2020 | | 100 | | 159,000 | | | 99 |
| | | | | | | | | | |
Other Segment: | | | | | | | | | | |
South Beach Parking Garage (2) | | Miami Beach, FL | | January 28, 2014 | | 100% | | 130,000 | | | N/A |
| | | | | | | | | | |
|
| | | | | | | | | | |
6025 Giant Road | | Richmond, CA | | December 29, 2016 | | 100 | | 41,000 | | 100 |
| | | | | | | | | | |
Office Segment: | | | | | | | | | | |
Monument IV at Worldgate | | Herndon, VA | | August 27, 2004 | | 100 | | 228,000 | | 100 |
111 Sutter Street | | San Francisco, CA | | March 29, 2005 | | 100 | | 286,000 | | 85 |
140 Park Avenue | | Florham Park, NJ | | December 21, 2015 | | 100 | | 100,000 | | 100 |
San Juan Medical Center | | San Juan Capistrano, CA | | April 1, 2016 | | 100 | | 40,000 | | 100 |
Retail Segment: | | | | | | | | | | |
The District at Howell Mill (1) | | Atlanta, GA | | June 15, 2007 | | 88 | | 306,000 | | 97 |
Grand Lakes Marketplace (1) | | Katy, TX | | September 17, 2013 | | 90 | | 131,000 | | 100 |
Oak Grove Plaza | | Sachse, TX | | January 17, 2014 | | 100 | | 120,000 | | 95 |
Rancho Temecula Town Center | | Temecula, CA | | June 16, 2014 | | 100 | | 165,000 | | 94 |
Skokie Commons | | Skokie, IL | | May 15, 2015 | | 100 | | 97,000 | | 100 |
Whitestone Market | | Austin, TX | | September 30, 2015 | | 100 | | 145,000 | | 98 |
Maui Mall | | Kahului, HI | | December 22, 2015 | | 100 | | 235,000 | | 93 |
Silverstone Marketplace | | Scottsdale, AZ | | July 27, 2016 | | 100 | | 78,000 | | 97 |
Kierland Village Center | | Scottsdale, AZ | | September 30, 2016 | | 100 | | 118,000 | | 100 |
Timberland Town Center | | Beaverton, OR | | September 30, 2016 | | 100 | | 92,000 | | 97 |
Montecito Marketplace | | Las Vegas, NV | | August 8, 2017 | | 100 | | 190,000 | | 98 |
Other Segment: | | | | | | | | | | |
South Beach Parking Garage (2) | | Miami Beach, FL | | January 28, 2014 | | 100 | | 130,000 | | N/A |
| | | | | | | | | | |
Unconsolidated Properties: | | | | | | | | | | |
Chicago Parking Garage (3) | | Chicago, IL | | December 23, 2014 | | 100 | | 167,000 | | N/A |
NYC Retail Portfolio (4) | | NY/NJ | | December 8, 2015 | | 14 | | 2,451,000 | | 95 |
Pioneer Tower (5) | | Portland, OR | | June 28, 2016 | | 100 | | 296,000 | | 94 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | Percentage Leased as of June 30, 2021 |
Property Name | | Location | | Acquisition Date | | Ownership % | | Net Rentable Square Feet | |
Unconsolidated Properties: | | | | | | | | | | |
Chicago Parking Garage (3) | | Chicago, IL | | December 23, 2014 | | 100% | | 167,000 | | | N/A |
NYC Retail Portfolio (4) | | NY/NJ | | December 8, 2015 | | 14 | | 1,938,000 | | | 89% |
Pioneer Tower (5) | | Portland, OR | | June 28, 2016 | | 100 | | 296,000 | | | 71 |
The Tremont (1) | | Burlington, MA | | July 19, 2018 | | 75 | | 175,000 | | | 93 |
The Huntington (1) | | Burlington, MA | | July 19, 2018 | | 75 | | 115,000 | | | 92 |
Siena Suwanee Town Center | | Suwanee, GA | | December 15, 2020 | | 100 | | 226,000 | | | 93 |
________
| |
(1) | We own an interest in the joint venture that owns a fee interest in this property. |
| |
(2) | The parking garage contains 343 stalls. This property is owned subject to a ground lease. |
| |
(3) | We own a condominium interest in the building that contains a 366 stall parking garage. |
| |
(4) | We own an approximate 14% fund interest in a portfolio of 13 urban infill retail properties located in the greater New York City area. |
| |
(5) | We own a condominium interest in the building that contains a 17 story multi-tenant office property. |
(1)We own a majority interest in the joint venture that owns a fee simple interest in this property. (2)The parking garage contains 343 stalls. This property is owned leasehold.
(3)We own a condominium interest in the building that contains a 366 stall parking garage.
(4)We own an approximate 14% interest in a portfolio of eight urban infill retail properties located in the greater New York City area.
(5)We own a condominium interest in the building that contains a 17 story multi-tenant office property.
Operating Statistics
We generally hold investments in properties with high occupancy rates leased to quality tenants under long-term, non-cancelable leases. We believe these leases are beneficial to achieving our investment objectives. The following table shows our operating statistics by property type for our consolidated properties as of SeptemberJune 30, 2017:2021:
|
| | | | | | | | | | | | | | | | |
| | Number of Properties | | Total Area (Sq Ft) | | % of Total Area | | Occupancy % | | Average Minimum Base Rent per Occupied Sq Ft (1) |
Apartment | | 10 |
| | 2,453,000 |
| | 22 | % | | 93 | % | | $ | 21.89 |
|
Industrial | | 28 |
| | 6,044,000 |
| | 55 |
| | 93 |
| | 5.03 |
|
Office | | 4 |
| | 655,000 |
| | 7 |
| | 94 |
| | 40.05 |
|
Retail | | 11 |
| | 1,675,000 |
| | 15 |
| | 97 |
| | 19.86 |
|
Other | | 1 |
| | 130,000 |
| | 1 |
| | N/A |
| | N/A |
|
Total | | 54 |
| | 10,957,000 |
| | 100 | % | | 94 | % | | $ | 13.23 |
|
| |
(1) | Amount calculated as in-place minimum base rent for all occupied space at September 30, 2017 and excludes any straight line rents, tenant recoveries and percentage rent revenues. |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Number of Properties | | Total Area (Sq Ft) | | % of Total Area | | Occupancy % | | | | Average Minimum Base Rent per Occupied Sq Ft (1) |
Apartment | 14 | | | 3,358,000 | | | 22 | % | | 94 | % | | | | $ | 22.05 | |
Industrial | 39 | | | 9,250,000 | | | 59 | | | 100 | | | | | 5.42 | |
Office | 8 | | | 976,000 | | | 6 | | | 98 | | | | | 31.82 | |
Retail | 12 | | | 1,834,000 | | | 12 | | | 92 | | | | | 20.98 | |
Other | 1 | | | 130,000 | | | 1 | | | N/A | | | | N/A |
Total | 74 | | | 15,548,000 | | | 100 | % | | 97 | % | | | | $ | 12.37 | |
________
(1)Amount calculated as in-place minimum base rent for all occupied space at June 30, 2021 and excludes any straight line rents, tenant recoveries and percentage rent revenues.
As of SeptemberJune 30, 2017,2021, our average effective annual rent per square foot, calculated as average minimum base rent per occupied square foot less tenant concessions and allowances, was $13.12$10.99 for our consolidated properties.
Recent Events and Outlook
COVID-19 Business Outlook
The outbreak of COVID-19 was declared by the World Health Organization as a global health emergency in January 2020 and then as a pandemic in March 2020. COVID-19 has impacted global financial markets, severely restricted international trade and travel, disrupted business operations (in part or in their entirety) and negatively impacted many investment asset classes including real estate. The ongoing outbreak and corollary response could have a material adverse impact on our financial condition and results of operations. The severity of the impact brought on by these disruptions will be different across property types and markets but could have serious negative impacts on all real estate depending on the longer-term economic effects of COVID-19.
Rent Collections
Rent collections across our portfolio have continued to improve as most tenants have been able to reopen their businesses and return to normal payment patterns. Collections have been in the upper 90 percent range, and we have received very few new requests for rent relief over the last two quarters. Our retail tenants continue to be a slight laggard in collection of outstanding receivables as compared to the other property sectors.
Property Valuations
Property valuations across our portfolio have stabilized, and we are seeing positive valuation increases across our apartment, industrial and healthcare properties driven by good underlying property fundamentals and strong capital markets.
Credit Facility
On May 24, 2021, we entered into our Credit Facility providing for a $650,000 revolving line of credit and unsecured term loan made up of a $415,000 Revolving Credit Facility and a $235,000 of Term Loans. The Credit Facility provides us with the ability, from time to time, to increase the size of the Credit Facility up to a total of $800 million, subject to receipt of lender commitments and other conditions. We are in compliance with our debt covenants as of June 30, 2021. We expect to maintain compliance with our debt covenants
Liquidity
At June 30, 2021, we had in excess of $176,000 in total cash on hand and $550,000 of capacity under our Credit Facility. Looking into 2021, we expect to utilize our cash on hand and Credit Facility capacity to acquire new properties, fund repurchases of our shares and fund quarterly distributions.
Share Repurchase Plan
During the second quarter of 2021, we repurchased $37,341 of our common stock pursuant to our Share Repurchase Plan, which had a quarterly limit of $105,224. The quarterly limit on repurchases is calculated as 5% of our NAV as of the last day of the previous quarter. The limit for the third quarter of 2021 is $111,435.
General Company and Market Commentary
On January 16, 2015, we commencedJuly 6, 2018, the SEC declared our FirstSecond Extended Public Offering ofeffective registering up to $2,700,000$3,000,000 in any combination of shares of our Class A, Class M, Class A-I and Class M-I shares of common stock, consisting of up to $2,400,000$2,700,000 of shares offered in our primary offering and up to $300,000 ofin shares offered pursuant to our distribution reinvestment plan, and our Initial Public Offering automatically terminated.plan. We intend to offer shares of our common stock on a continuous basis for an indefinite period of time by filing a new registration statement before the end of each offering period, subject to regulatory approval. The per share purchase price varies from day-to-dayday to day and, on each day, equals our NAV per share for each class of common stock, plus, for Class A and Class A-I shares, applicable selling commissions. The Dealer Manager LaSalle Investment Management Distributors, LLC, has agreed to distributeis distributing shares of our common stock in our FirstSecond Extended Public Offering. We intend to primarily use the net proceeds from the offering, after we pay the fees and expenses attributable to the offerings and our operations, to (1) grow and further diversify our portfolio by making investments in accordance with our investment strategy and policies, (2) reduce borrowings and repay indebtedness incurred under various financing instruments and (3) fund repurchases of our shares under our share repurchase plan.
On March 3, 2015, we commenced a private offering of up to $350,000 in shares of our Class D common stock with an indefinite duration. Proceeds from our private offering will be used for the same corporate purposes as the proceeds from the First Extended Public Offering.
On October 16, 2019, through our operating partnership, we initiated the DST Program to raise up to $500,000, which our board of directors may increase in its sole discretion, in private placements exempt from registration under the Securities Act through the sale of beneficial interests to accredited investors in specific Delaware statutory trusts holding DST Properties, which may be sourced from our real properties or from third parties.
On June 4, 2021, we filed a Registration Statement on Form S-11 with the SEC for our Third Extended Public Offering to register a public offering of up to $3,000,000 in any combination of shares of our Class A, Class M, Class A-I and Class M-I common stock, consisting of up to $2,700,000 of shares offered in our primary offering and up to $300,000 in shares offered pursuant to our distribution reinvestment plan. As of August 11, 2021, the Third Extended Public Offering has not been declared effective.
Over the past fivenine years we have acquired 6492 properties (all of these consistent with our investment strategy), sold 2838 non-strategic properties, reduced our Company leverage ratio, decreased our average interest rate on debt, and increased cash reserves and Company-wide liquidity, while also providing cash flow to our stockholders through our regular quarterly dividend payments.
Capital Raised and Use of Proceeds
As of SeptemberJune 30, 2017,2021, we have raised gross proceeds of over $1,490,000$2,684,000 from our offerings and private share sales since 2012. We used these proceeds along with proceeds from mortgage debt to acquire approximately $1,928,000$3,129,000 of real estate investments, deleverage the companyCompany by repaying mortgage loans of approximately $397,000$647,000 and repurchase shares of our common stock for approximately $291,000.$850,000.
Property Acquisitions
On July 14, 2017,January 21, 2021, we acquired Jory Trail at the Grove,Louisville Distribution Center, a 324 unit apartment community1,040,000 square foot industrial property located in Wilsonville, Oregon,Shepherdsville, Kentucky for approximately $74,750. The acquisition was funded by the assumption of an eight-year mortgage loan that bears interest at a fixed-rate of 3.81% in the amount of $44,250, a draw on our credit facility and cash on hand.
On July 28, 2017, we acquired The Reserve at Johns Creek Walk, a 210 unit apartment community located in Johns Creek, Georgia, for approximately $47,300. The acquisition was funded by the assumption of a three year mortgage loan that bears interest at a fixed rate of 3.30% in the amount of $23,620, a draw on our credit facility and cash on hand.
On August 8, 2017, we acquired through a reverse 1031 exchange, Montecito Marketplace, a 190,000 square foot grocery-anchored retail center located in Las Vegas, Nevada for approximately $63,550.$95,000. The acquisition was funded with cash on hand.
On February 2, 2021, we acquired 170 Park Ave, a draw147,000 square foot life sciences property located in Florham Park, New Jersey for approximately $46,600. The acquisition was funded with cash on our credit facility andhand.
On February 23, 2021, we acquired Southeast Phoenix Distribution Center, a four property industrial distribution center totaling 474,000 square feet located in Chandler, Arizona for approximately $91,000. The acquisition was funded with cash on hand.
On May 3, 2021, we acquired Princeton North Andover, a newly constructed, 192-unit apartment property located in North Andover, Massachusetts, for approximately $72,500. The acquisition was funded with cash on hand.
On June 24, 2021, we acquired Louisville Airport Distribution Center, a nearly 284,000 square-foot, newly constructed Class A industrial property located in the Southside/Airport industrial submarket for approximately $32,100. The acquisition was funded with cash on hand.
Property Dispositions
On January 17, 2017,8, 2021, we sold South Seattle Distribution Center, a 116,000323,000 square foot retailindustrial property in the NYC Retail Portfolio was sold and its mortgage loan extinguished. Sale proceeds were maintained at the venture for operating needs.
On July 26, 2017, we relinquished our ownership of Railway Street Corporate Centre, a 135,000 square foot office building located in Calgary, Canada, through a deed in lieu of foreclosure with the lender.
On September 19, 2017, we sold 14600 Sherman Way and 14624 Sherman WaySeattle, Washington for approximately $22,350$72,600 less closing costs.costs and the loan of $17,841 was retired. We recorded a gain on the sale of the propertiesproperty in the amount of $7,144.
Stock Repurchases
For the nine months ended September 30, 2017, we repurchased $88,563 of shares of our common stock through the share repurchase plan.
$33,580.
Financing
On February 1, 2017,10, 2021, we entered into a $34,000 mortgage payable on Whitestown Distribution Center. The mortgage note bears an interest of 2.95% and matures on February 10, 2028.
On March 8, 2021, we repaid the mortgage note payable collateralized by Norfleet Distribution Centerrelated to 140 Park Avenue in the amount of $12,000.$22,800.
On March 16, 2017,11, 2021, we entered into a $36,030 mortgage payable on Townlake of Coppell. The mortgage note bears an interest rate of 2.41% and matures on April 10, 2028.
On March 17, 2021, we repaid the mortgage note payable collateralized by the District at Howell Millrelated to Monument IV in the amount of $9,348.$40,000.
On MayApril 26, 2017,2021, we entered into a new Credit Facility providing for a $200,000 Revolving Line of Credit and $50,000 Term Loan. We used proceeds from the Term Loan to repay the$52,250 mortgage note payable collateralized by 180 North Jefferson in the amount of $48,250 and the Credit Facility to repay the $25,000 outstanding balance we had as of May 25, 2017 on our previous line of credit. We swapped the LIBOR portion of the initial $50,000 of the Term Loan to a fixedLouisville Distribution Center. The mortgage bears an interest rate of 1.80%1.76% and matures on May 1, 2026.
On August 4, 2017,May 18, 2021, we expanded our Credit Facility by $50,000.entered into a $49,000 mortgage payable on Southeast Phoenix Distribution Center. The additional borrowing was in the form of a five year term loan maturing on May 26, 2022 at LIBOR plus 1.35%. We swapped the LIBOR portion to a fixedmortgage bears an interest rate of 1.81%.2.70% and matures on June 1, 2028.
On June 30, 2021, we entered into a $39,900 mortgage payable on Princeton North Andover. The mortgage bears an interest rate of libor + 1.55% (1.65% at June 30, 2021) and matures on June 1, 2028.
Subsequent Events
On NovemberJuly 2, 2021, we acquired two industrial properties totaling 153,000 square feet located in San Marcos and Poway, California for approximately $36,640. The acquisitions were funded with cash on hand.
On July 9, 2017,2021, we acquired a 130,000 square foot industrial property located in Fremont, California for approximately $32,000 using cash on hand.
On August 5, 2021, we acquired a 49% interest in GVI RH JV Investor, LLC, which owns a 95% interest in a joint venture, alongside a prominent national single family rental operating company, of a portfolio of approximately 4,000 stabilized single family rental homes located in various markets across the United States, including Atlanta, Dallas, Phoenix, Nashville and Charlotte, among others. The seller will retain a 51% interest. The portfolio is encumbered by RMBS in a net amount of $760,000 maturing in the fourth quarter of 2025 at an interest rate of 2.1%. The equity purchase price is approximately $205,000. We funded the transaction using cash on hand and a draw on our revolving line of credit.
On August 10, 2021, our board of directors approved a gross dividend for the fourththird quarter of 20172021 of $0.125$0.135 per share to stockholders of record as of December 28, 2017.September 24, 2021. The dividend will be paid on or around February 1, 2018.September 29, 2021. Class A, Class M, Class A-I, Class M-I and Class D stockholders will receive $0.125$0.135 per share, less applicable class-specific fees, if any.
On August 10, 2021, our board of directors approved increasing our DST Program by an additional $500,000 in private placements through the sale of beneficial interests in specific DST Properties, which may be sourced from our existing portfolio or from newly acquired properties sourced from third parties.
Investment Objectives and Strategy
Our primary investment objectives are:
•to generate an attractive level of current income for distribution to our stockholders;
•to preserve and protect our stockholders' capital investments;
•to achieve appreciation of our NAV over time; and
•to enable stockholders to utilize real estate as an asset class in diversified, long-term investment portfolios.
We cannot ensure that we will achieve our investment objectives. Our charter places numerous limitations on us with respect to the manner in which we may invest our funds. In most cases, these limitations cannot be changed unless our charter is amended, which may require the approval of our stockholders.
The cornerstone of our investment strategy is to acquire and manage income-producing commercial real estate properties and real estate-related assets around the world. We believe this strategy enables us to provide our stockholders with a portfolio that is well-diversified across property type, geographic region and industry, both in the United States and internationally. It is our belief that adding international investments to our portfolio over time will serve as an effective tool to construct a well-diversified portfolio designed to provide our stockholders with stable distributions and attractive long-term risk-adjusted returns.
We believe that our broadly diversified portfolio benefits our stockholders by providing:
•diversification of sources of income;
•access to attractive real estate opportunities currently in the United States and, over time, around the world; and
•exposure to a return profile that should have lower correlations with other investments.
Since real estate markets are often cyclical in nature, our strategy allows us to more effectively deploy capital into property types and geographic regions where the underlying investment fundamentals are relatively strong or strengthening and away from those property types and geographic regions where such fundamentals are relatively weak or weakening. We intend to meet our investment objectives by selecting investments across multiple property types and geographic regions to achieve portfolio stability, diversification, current income and favorable risk-adjusted returns. To a lesser degree, we also
intend to invest in debt and equity interests backed principally by real estate, which we refer to collectively as “real estate-related assets.”
We will leverage LaSalle's broad commercial real estate research and strategy platform and resources to employ a research-based investment philosophy focused on building a portfolio of commercial properties and real estate-related assets that we believe has the potential to provide stable income streams and outperform market averages over an extended holding period. Furthermore, we believe that having access to LaSalle and JLL's international organization and platform, with real estate professionals living and working full time throughout our global target markets, will be a valuable resource to us when considering and executing upon international investment opportunities.
Our board of directors has adopted investment guidelines for our Advisor to implement and actively monitor in order to allow us to achieve and maintain diversification in our overall investment portfolio. Our board of directors formally reviews our investment guidelines on an annual basis and our investment portfolio on a quarterly basis or, in each case, more often as they deem appropriate. Our board of directors reviews the investment guidelines to ensure that the guidelines are being followed and are in the best interests of our stockholders. Each such determination and the basis therefor shall be set forth in the minutes of the meetings of our board of directors. Changes to our investment guidelines must be approved by our board of directors but do not require notice to or the vote of stockholders.
We seek to invest:
•up to 95% of our assets in properties;
•up to 25% of our assets in real estate-related assets; and
•up to 15% of our assets in cash, cash equivalents and other short-term investments.
Notwithstanding the above, the actual percentage of our portfolio that is invested in each investment type may from time to time be outside these target levels due to numerous factors including, but not limited to, large inflows of capital over a short period of time, lack of attractive investment opportunities or increases in anticipated cash requirements for repurchase requests.
We expect to maintain a targeted Company leverage ratio (calculated as our share of total liabilities excluding future dealer manager fees, divided by our share of the fair value of total assets) of between 30% and 50%. We intend to use low leverage, or in some cases possibly no leverage, to finance new acquisitions in order to maintain our targeted Company leverage ratio. Our Company leverage ratio was 40%33% as of SeptemberJune 30, 2017.2021.
20172021 Key Initiatives
A short-term initiative is to continue monitoring the status of COVID-19 guidance and its impact on our properties. During 2017,the remainder of 2021, we intend to use capital raised from our public and private offerings and the DST Program to acquire new investment opportunities, repurchasing stock under our share repurchase plan, and fund quarterly distributions. We look to make new acquisitionsinvestments that will furtherfit with our investment objectives and are in keeping with ourguidelines. Likely investment strategy. Likely acquisition candidates may include well-located, well-leased apartment properties, industrial warehouses, grocery-anchored neighborhoodproperties, medical office properties, single family rentals and community shopping centers, urban infill retail and conventional apartments in either urban and transit-oriented locations or suburban, supply-constrained markets with highly-rated school districts. We will look to acquire other property types when the opportunities and risk profile match our investment objectives and strategy.public REIT securities. We will also attempt to further our geographic diversification. We will use debt financing to take advantage of the current favorable interest rate environment, while looking to keep the Company leverage ratio in the 30% to 50% range in the near term.term consistent with traditional core real estate. We also intend to use our Revolving Line of Credit Facility to allow us to more efficiently manage our cash flows.
Results of Operations
General
Our revenues are primarily received from tenants in the form of fixed minimum base rents and recoveries of operating expenses. Our expenses primarily relate to the costs of operating and financing the properties. Our share of the net income or net loss from our unconsolidated real estate affiliates is included in income from unconsolidated affiliates and fund investments. We believe the following analysis of reportable segments provides important information about the operating results of our real estate investments, such as trends in total revenues or operating expenses that may not be as apparent in a period-over-period comparison of the entire Company. We group our investments in real estate assets from continuing operations into five reportable operating segments based on the type of property, which are apartment, industrial, office, retail and other. Operations from corporate level items and real estate assets sold are excluded from reportable segments.
Properties acquired or sold during any of the periods presented are presented within the recent acquisitions and sold properties line until the property has been owned for all periods presented.line. The properties currently presented within the recent acquisitions and sold properties line include the properties listed as either acquired or sold in the Management Overview section above. Properties owned for the ninesix months ended SeptemberJune 30, 20172021 and 20162020 are referred to as our comparable properties.
Results of Operations for the Three Months Ended September June 30, 20172021 and 20162020
Revenues
The following chart sets forth revenues by reportable segment for the three months ended SeptemberJune 30, 20172021 and 2016:2020: | | | Three Months Ended September 30, 2017 | | Three Months Ended September 30, 2016 | | $ Change | | % Change | | Three Months Ended June 30, 2021 | | Three Months Ended June 30, 2020 | | $ Change | | % Change |
Revenues: | | | | | | | | Revenues: | | | | | | | |
Minimum rents | | | | |
|
| |
|
| |
Rental revenue | | Rental revenue | |
Apartment | $ | 4,225 |
| | $ | 4,210 |
| | $ | 15 |
| | 0.4 | % | Apartment | $ | 16,085 | | | $ | 16,137 | | | $ | (52) | | | (0.3) | % |
Industrial | 4,984 |
| | 4,827 |
| | 157 |
| | 3.3 |
| Industrial | 12,272 | | | 11,088 | | | 1,184 | | | 10.7 | |
Office | 5,750 |
| | 5,862 |
| | (112 | ) | | (1.9 | ) | Office | 5,026 | | | 5,027 | | | (1) | | | — | |
Retail | 5,805 |
| | 5,952 |
| | (147 | ) | | (2.5 | ) | Retail | 11,332 | | | 9,738 | | | 1,594 | | | 16.4 | |
Other | 68 |
| | 69 |
| | (1 | ) | | (1.4 | ) | Other | 62 | | | 75 | | | (13) | | | (17.3) | |
Comparable properties total | $ | 20,832 |
| | $ | 20,920 |
| | $ | (88 | ) | | (0.4 | )% | Comparable properties total | $ | 44,777 | | | $ | 42,065 | | | $ | 2,712 | | | 6.4 | % |
Recent acquisitions and sold properties | 13,540 |
| | 6,594 |
| | 6,946 |
| | 105.3 |
| Recent acquisitions and sold properties | 7,761 | | | 3,418 | | | 4,343 | | | 127.1 | |
Total | $ | 34,372 |
| | $ | 27,514 |
| | $ | 6,858 |
| | 24.9 | % | |
Total rental revenue | | Total rental revenue | $ | 52,538 | | | $ | 45,483 | | | $ | 7,055 | | | 15.5 | % |
| | | | | | | | | | | | | | | |
Tenant recoveries and other rental income | | | | |
|
| |
|
| |
Other revenue | | Other revenue | |
Apartment | $ | 272 |
| | $ | 244 |
| | $ | 28 |
| | 11.5 | % | Apartment | $ | 964 | | | $ | 728 | | | $ | 236 | | | 32.4 | % |
Industrial | 1,412 |
| | 1,529 |
| | (117 | ) | | (7.7 | ) | Industrial | 30 | | | 26 | | | 4 | | | 15.4 | |
Office | 625 |
| | 562 |
| | 63 |
| | 11.2 |
| Office | 253 | | | 177 | | | 76 | | | 42.9 | |
Retail | 2,127 |
| | 2,253 |
| | (126 | ) | | (5.6 | ) | Retail | 93 | | | 88 | | | 5 | | | 5.7 | |
Other | 495 |
| | 520 |
| | (25 | ) | | (4.8 | ) | Other | 796 | | | 154 | | | 642 | | | 416.9 | |
Comparable properties total | $ | 4,931 |
| | $ | 5,108 |
| | $ | (177 | ) | | (3.5 | )% | Comparable properties total | $ | 2,136 | | | $ | 1,173 | | | $ | 963 | | | 82.1 | % |
Recent acquisitions and sold properties | 2,990 |
| | 1,569 |
| | 1,421 |
| | 90.6 |
| Recent acquisitions and sold properties | 1,372 | | | 260 | | | 1,112 | | | 428 | |
Total | $ | 7,921 |
| | $ | 6,677 |
| | $ | 1,244 |
| | 18.6 | % | |
Total other revenue | | Total other revenue | $ | 3,508 | | | $ | 1,433 | | | $ | 2,075 | | | 144.8 | % |
Total revenues | $ | 42,293 |
| | $ | 34,191 |
|
| $ | 8,102 |
| | 23.7 | % | Total revenues | $ | 56,046 | | | $ | 46,916 | | | $ | 9,130 | | | 19.5 | % |
Minimum rentsRental revenues at comparable properties decreased by $88increased $2,712 for the three months ended SeptemberJune 30, 20172021 as compared to the same period in 2016.2020. The increase of $1,594 within our retail segment was primarily related to an increase in collections from tenants which experienced a decrease in operations from COVID-19 in 2020. The increase in rental revenue from our industrial properties is primarily related to $763 of rent collections at Norfleet Distribution Center and $207 at Taunton Distribution Center due to decreases of $110 at 111 Sutter Street and $92 at The District at Howell Mill related to a decrease inhigher occupancy during the three months ended SeptemberJune 30, 2017. Partially offsetting these decreases were increases2021 as compared to the same period of $622020.
Other revenues relate mainly to parking and nonrecurring revenue such as lease termination fees. Other revenue at Joliet Distribution Center related to an increase in occupancy and $44 at O'Hare Industrial Portfolio related to increases in rental rates duringcomparable properties increased by $963 for the three months ended SeptemberJune 30, 20172021 as compared to the same period in 2016.
Tenant recoveries relate mainly to real estate taxes and certain property operating expenses that are paid by us and are recoverable under the various tenants’ leases. Other rental income includes daily transient parking, percentage rents and other non-recurring tenant charges. Tenant recoveries and other rental income at comparable properties decreased by $177 for the three months ended September 30, 2017 as compared to the same period in 2016.2020. The decreaseincrease is primarily related to decreases$642 of $135higher parking revenue at O'Hare Industrial Portfolioour parking garage in South Beach due to the travel and $79 at Rancho Temecula Town Center related to true-up billings
shelter in place orders placed on the city of prior year expenses madeSouth Beach during the three months ended SeptemberJune 30, 2017.2020, which greatly reduced our revenue during that period. The increase of $236 in our apartment segment is primarily related to increases in parking revenue, lease termination fees and insurance reimbursements across several properties during the three months ended June 30, 2021.
Operating Expenses
The following chart sets forth real estate taxes and property operating expenses and provisions for doubtful accounts by reportable segment, for the three months ended SeptemberJune 30, 20172021 and 2016:2020:
| | | | Three Months Ended September 30, 2017 | | Three Months Ended September 30, 2016 | | $ Change | | % Change | | Three Months Ended June 30, 2021 | | Three Months Ended June 30, 2020 | | $ Change | | % Change |
Operating expenses: | | | | | | | | | Operating expenses: | | | | | | | |
Real estate taxes | | | | | | | | | Real estate taxes | |
Apartment | | $ | 500 |
| | $ | 411 |
| | $ | 89 |
| | 21.7 | % | Apartment | $ | 2,969 | | | $ | 2,935 | | | $ | 34 | | | 1.2 | % |
Industrial | | 1,094 |
| | 1,097 |
| | (3 | ) | | (0.3 | ) | Industrial | 2,014 | | | 1,908 | | | 106 | | | 5.6 | |
Office | | 590 |
| | 634 |
| | (44 | ) | | (6.9 | ) | Office | 631 | | | 626 | | | 5 | | | 0.8 | |
Retail | | 1,199 |
| | 1,193 |
| | 6 |
| | 0.5 |
| Retail | 1,533 | | | 1,318 | | | 215 | | | 16.3 | |
Other | | 104 |
| | 79 |
| | 25 |
| | 31.6 |
| Other | 122 | | | 69 | | | 53 | | | 76.8 | |
Comparable properties total | | $ | 3,487 |
| | $ | 3,414 |
| | $ | 73 |
| | 2.1 | % | Comparable properties total | $ | 7,269 | | | $ | 6,856 | | | $ | 413 | | | 6.0 | % |
Recent acquisitions and sold properties | | 2,694 |
| | 1,313 |
| | 1,381 |
| | 105 |
| Recent acquisitions and sold properties | 936 | | | 450 | | | 486 | | | 108 | |
Total | | $ | 6,181 |
| | $ | 4,727 |
| | $ | 1,454 |
| | 30.8 | % | |
Total real estate taxes | | Total real estate taxes | $ | 8,205 | | | $ | 7,306 | | | $ | 899 | | | 12.3 | % |
| | | | | | | | | | | | | | | | |
Property operating | | | | | | | | | |
Property operating expenses | | Property operating expenses | |
Apartment | | $ | 1,404 |
| | $ | 1,255 |
| | $ | 149 |
| | 11.9 | % | Apartment | $ | 4,956 | | | $ | 4,548 | | | $ | 408 | | | 9.0 | % |
Industrial | | 426 |
| | 450 |
| | (24 | ) | | (5.3 | ) | Industrial | 1,014 | | | 976 | | | 38 | | | 3.9 | |
Office | | 1,231 |
| | 1,207 |
| | 24 |
| | 2.0 |
| Office | 962 | | | 920 | | | 42 | | | 4.6 | |
Retail | | 1,192 |
| | 1,156 |
| | 36 |
| | 3.1 |
| Retail | 2,122 | | | 1,588 | | | 534 | | | 33.6 | |
Other | | 215 |
| | 235 |
| | (20 | ) | | (8.5 | ) | Other | 183 | | | 152 | | | 31 | | | 20.4 | |
Comparable properties total | | $ | 4,468 |
| | $ | 4,303 |
| | $ | 165 |
| | 3.8 | % | Comparable properties total | $ | 9,237 | | | $ | 8,184 | | | $ | 1,053 | | | 12.9 | % |
Recent acquisitions and sold properties | | 3,191 |
| | 2,078 |
| | 1,113 |
| | 53.6 |
| Recent acquisitions and sold properties | 957 | | | 637 | | | 320 | | | 50.2 | |
Total | | $ | 7,659 |
| | $ | 6,381 |
| | $ | 1,278 |
| | 20.0 | % | |
Total property operating expenses | | Total property operating expenses | $ | 10,194 | | | $ | 8,821 | | | $ | 1,373 | | | 15.6 | % |
| | | | | | | | | |
Provision for doubtful accounts | | | | | |
|
| |
|
| |
Apartment | | $ | 14 |
| | $ | 11 |
| | $ | 3 |
| | 27.3 | % | |
Retail | | 12 |
| | 42 |
| | (30 | ) | | (71.4 | ) | |
Other | | — |
| | 1 |
| | (1 | ) | | (100.0 | ) | |
Comparable properties total | | $ | 26 |
| | $ | 54 |
| | $ | (27 | ) | | (50.0 | )% | |
Recent acquisitions and sold properties | | — |
| | 3 |
| | (3 | ) | | (100.0 | ) | |
Total | | $ | 26 |
| | $ | 57 |
| | $ | (31 | ) | | (54.4 | )% | |
| Total operating expenses | | $ | 13,866 |
| | $ | 11,165 |
| | $ | 2,701 |
| | 24.2 | % | Total operating expenses | $ | 18,399 | | | $ | 16,127 | | | $ | 2,272 | | | 14.1 | % |
Real estate taxes at comparable properties increased by $73$413 for the three months ended SeptemberJune 30, 20172021 as compared to the same period in 2016. The increase is primarily related to several properties across the segments having higher tax assessments during the three months ended September 30, 2017 as compared to the same period of 2016. Partially offsetting these increases was a decrease of $93 at Monument IV at Worldgate related to lower tax assessment during the three months ended September 30, 2017 as compared to the same period of 2016.2020. Our properties are reassessed periodically by the taxing authorities, which may result in increases or decreases in the real estates taxes that we owe. Overall, we expect real estate taxes to increase over time; however, we utilize real estate tax consultants to attempt to control assessment increases.
The overall increase is primarily related to a reassessment at Grand Lakes Marketplace and Taunton Distribution Center resulting in higher real estate tax expense during the three months ended June 30, 2021. In addition to the reassessments, we experienced an increase of $117 during the three months ended June 30, 2021 at Whitestone Marketplace for taxes we now pay, and recover from tenants, that were previously billed directly to tenants.
Property operating expenses consist of the costs of ownership and operation of the real estate investments, many of which are recoverable under net leases. Examples of property operating expenses include insurance, utilities and repair and maintenance expenses. Property operating expenses at comparable properties increased $165$1,053 for the three months ended SeptemberJune 30, 20172021 as compared to the same period in 2016.2020. The primary increase is primarily related to an increase of $91 at AQ Rittenhouse due to higher security and repairs and maintenance expenses. Additionally, there was an increase of $57 at The District at Howell Mill related to higheroccurred within our retail segment where various increases in utilities and repair and maintenance expenses.
Provision for doubtful accounts relates to receivables deemed potentially uncollectable due to the age of the receivable or the status of the tenant. Provision for doubtful accounts at comparable properties decreased by $27 foroccurred during the three months ended SeptemberJune 30, 20172021 as compared to the same period in 2016. Our total provision for doubtful accounts continues to be a minimal percentage of total revenues when comparing2020. The increases occurring within our apartment segment during the three months ended SeptemberJune 30, 20172021 as compared to the same period in 2016.2020 were related to turnover costs, repairs and maintenance and utilities.
The following chart sets forth expenses not directly related to the operations of the reportable segments for the three months ended
SeptemberJune 30,
20172021 and
2016:2020: | | | | Three Months Ended September 30, 2017 | | Three Months Ended September 30, 2016 | | $ Change | | % Change | | Three Months Ended June 30, 2021 | | Three Months Ended June 30, 2020 | | $ Change | | % Change |
Property general and administrative | | $ | 274 |
| | $ | 208 |
| | $ | 66 |
| | 31.7 | % | Property general and administrative | $ | (184) | | | $ | 333 | | | $ | (517) | | | (155.3) | % |
Advisor fees | | 4,842 |
| | 4,030 |
| | 812 |
| | 20.1 |
| Advisor fees | 6,749 | | | 6,279 | | | 470 | | | 7.5 | |
Company level expenses | | 491 |
| | 454 |
| | 37 |
| | 8.1 |
| Company level expenses | 990 | | | 594 | | | 396 | | | 66.7 | |
Acquisition expenses | | — |
| | 1,759 |
| | (1,759 | ) | | (100.0 | ) | |
Provision for impairment of real estate | | — |
| | 6,355 |
| | (6,355 | ) | | (100.0 | ) | |
| Depreciation and amortization | | 16,589 |
| | 12,072 |
| | 4,517 |
| | 37.4 |
| Depreciation and amortization | 21,218 | | | 18,564 | | | 2,654 | | | 14.3 | |
Interest expense | | 7,730 |
| | 5,874 |
| | 1,856 |
| | 31.6 |
| Interest expense | 10,288 | | | 9,265 | | | 1,023 | | | 11.0 | |
Income from unconsolidated affiliates and fund investments
| | (6,236 | ) | | (4,686 | ) | | (1,550 | ) | | 33.1 |
| |
Other income | | (500 | ) | | — |
| | (500 | ) | | 100.0 |
| |
Gain on disposition of property and extinguishment of debt | | (5,501 | ) | | (1,664 | ) | | (3,837 | ) | | 230.6 |
| |
| Loss from unconsolidated affiliates and fund investments | | Loss from unconsolidated affiliates and fund investments | 2,412 | | | 3,970 | | | (1,558) | | | (39.2) | |
| Total expenses | | $ | 17,689 |
| | $ | 24,402 |
| | $ | (6,713 | ) | | (27.5 | )% | Total expenses | $ | 41,473 | | | $ | 39,005 | | | $ | 2,468 | | | 6.3 | % |
Property general and administrative expenses relate mainly to property expenses unrelated to the operations of the property. Property general and administrative expenses increased $66 primarily due to legal fees incurreddecreased during the three months ended SeptemberJune 30, 2017.2021 as compared to the same period in 2020 primarily due to a partial recovery of a deposit for an unsuccessful acquisition received during 2021.
Advisor fees relate to the fixed advisory and performance fees earned by the Advisor. Fixed fees increase or decrease based on changes in our NAV, which will beis primarily impacted by changes in capital raised and the value of our properties. The performance fee is accrued when the total return per share for a share class exceeds 7% for that calendar year, whereinand in such years our Advisor will receive 10% of the excess total return above the 7% threshold. The increase in advisor fees of $812$470 for the three months ended SeptemberJune 30, 20172021 as compared to the same period of 2016in 2020 is related to the increase in our NAV primarily attributable to increases in property values and capital raised overin the pastcurrent year.
Company level expenses relate mainly to our compliance and administration related costs. CompanyThe increase of $396 in company level expenses increased $37 for the three months ended SeptemberJune 30, 2017 as compared to the same period in 20162021 is primarily due to an increase in stockholder servicing costs and other professional service fees.
Acquisition expenses relate to expenses incurred during the acquisition of a property. On January 1, 2017, we adopted Accounting Standard Update 2017-01 Business Combinations (Topic 805): Clarifying the Definition of a Business. We expect that most future acquisitions will qualify as asset acquisitions. As such, future acquisition-related expenses will be capitalized. During the three months ended September 30, 2016, we incurred $1,759 of acquisition expenses related to acquisitions we were pursuing.
The provision for impairmenttiming of real estate relates to real estate investments whose estimated future undiscounted cash flows have decreased below the carrying value of the property. A provision for impairment of real estate is recorded to write the property down from its carrying value to its fair value. During the three months ended September 30, 2016, provision for impairment of real estate of $6,355 is due to impairment charges at Railway Street Corporate Centre as we shortened the expected holding period for the investment because we considered it a non-strategic investment. The impairment charges had no impact on our NAV as we had previously written the property down to its fair value for purposes of our NAV calculation.
professional fees.
Depreciation and amortization expense is impacted by the values assigned to buildings, personal property and in-place lease assets as part of the initial purchase price allocation. The increase of $4,517$2,654 in depreciation and amortization expense for the three months ended SeptemberJune 30, 20172021 as compared to the same period in 2016 is2020 was primarily related to an increasethe acquisition of $4,793 on our acquisitions that occurred in 2016 and 2017.new properties.
Interest expense increased by $1,856$1,023 for the three months ended SeptemberJune 30, 20172021 as compared to the same period in 20162020 primarily as a result of a $1,414 of increased interest expense from new debtmortgage notes payable placed on our 2016several assets in 2020 and 2017 acquisitions2021 and our Credit Facility usage.
Other income of $500 isinterest expense on the financial obligations related to receiptthe DST Program. Offsetting this increase is a decrease of a termination payment upon$843 in the expirationfair value of a contract to sell The Edge at Lafayetteour interest rate swaps during the three months ended SeptemberJune 30, 2017.2021 as compared to the same period of 2020.
IncomeLoss from unconsolidated affiliates and fund investments relates to the income from Chicago Parking Garage, and Pioneer Tower, The Tremont, The Huntington and Siena Suwanee Town Center as well as changes in fair value and operating distributions received from our investment in the NYC Retail Portfolio. During the three months ended SeptemberJune 30, 2017,2021, we recorded a $5,834 increase$1,118 decrease in the fair value of our investment in the NYC Retail Portfolio as compared to a $3,638 increasean $3,352 decrease in the fair value during the same period of 2016.2020.
Gain on disposition of property and extinguishment of debt of $5,501 is related to the dispositions of Railway Street Corporate Centre, 14600 Sherman Way and 14624 Sherman Way during the three months ended September 30, 2017. During the three months ended September 30, 2016, the gain on disposition of property and extinguishment of debt of $1,664 is related to the disposition of Campus Lodge Tampa.
Results of Operations for the NineSix Months Ended SeptemberJune 30, 20172021 and 20162020
Revenues
The following chart sets forth revenues by reportable segment, for the ninesix months ended SeptemberJune 30, 20172021 and 2016:2020: | | | | Nine Months Ended September 30, 2017 | | Nine Months Ended September 30, 2016 | | $ Change | | % Change | | Six Months Ended June 30, 2021 | | Six Months Ended June 30, 2020 | | $ Change | | % Change |
Revenues: | | | | | | | | | Revenues: | | | | | | | |
Minimum rents | | | | | | | | | |
Rental revenue | | Rental revenue | |
Apartment | | $ | 12,707 |
| | $ | 12,273 |
| | $ | 434 |
| | 3.5 | % | Apartment | $ | 31,933 | | | $ | 32,482 | | | $ | (549) | | | (1.7) | % |
Industrial | | 14,823 |
| | 14,591 |
| | 232 |
| | 1.6 |
| Industrial | 24,807 | | | 22,159 | | | 2,648 | | | 11.9 | |
Office | | 17,075 |
| | 17,674 |
| | (599 | ) | | (3.4 | ) | Office | 9,966 | | | 10,280 | | | (314) | | | (3.1) | |
Retail | | 17,411 |
| �� | 17,831 |
| | (420 | ) | | (2.4 | ) | Retail | 22,290 | | | 21,352 | | | 938 | | | 4.4 | |
Other | | 206 |
| | 208 |
| | (2 | ) | | (1.0 | ) | Other | 93 | | | 144 | | | (51) | | | (35.4) | |
Comparable properties total | | $ | 62,222 |
| | $ | 62,577 |
| | $ | (355 | ) | | (0.6 | )% | Comparable properties total | $ | 89,089 | | | $ | 86,417 | | | $ | 2,672 | | | 3.1 | % |
Recent acquisitions and sold properties | | 35,959 |
| | 13,275 |
| | 22,684 |
| | 170.9 |
| Recent acquisitions and sold properties | 14,180 | | | 5,983 | | | 8,197 | | | 137.0 | |
Total | | $ | 98,181 |
| | $ | 75,852 |
| | $ | 22,329 |
| | 29.4 | % | |
Total rental revenue | | Total rental revenue | $ | 103,269 | | | $ | 92,400 | | | $ | 10,869 | | | 11.8 | % |
| | | | | | | | | | | | | | | | |
Tenant recoveries and other rental income | | | | | | | | | |
Other revenue | | Other revenue | |
Apartment | | $ | 935 |
| | $ | 753 |
| | $ | 182 |
| | 24.2 | % | Apartment | $ | 1,722 | | | $ | 1,514 | | | $ | 208 | | | 13.7 | % |
Industrial | | 4,448 |
| | 4,406 |
| | 42 |
| | 1.0 |
| Industrial | 35 | | | 133 | | | (98) | | | (73.7) | |
Office | | 1,907 |
| | 1,904 |
| | 3 |
| | 0.2 |
| Office | 474 | | | 411 | | | 63 | | | 15.3 | |
Retail | | 6,277 |
| | 6,619 |
| | (342 | ) | | (5.2 | ) | Retail | 176 | | | 171 | | | 5 | | | 2.9 | |
Other | | 1,761 |
| | 1,771 |
| | (10 | ) | | (0.6 | ) | Other | 1,427 | | | 605 | | | 822 | | | 135.9 | |
Comparable properties total | | $ | 15,328 |
| | $ | 15,453 |
| | $ | (125 | ) | | (0.8 | )% | Comparable properties total | $ | 3,834 | | | $ | 2,834 | | | $ | 1,000 | | | 35.3 | % |
Recent acquisitions and sold properties | | 8,907 |
| | 3,165 |
| | 5,742 |
| | 181.4 |
| Recent acquisitions and sold properties | 1,524 | | | 342 | | | 1,182 | | | 345.6 | |
Total | | $ | 24,235 |
| | $ | 18,618 |
| | $ | 5,617 |
| | 30.2 | % | |
Total other revenue | | Total other revenue | $ | 5,358 | | | $ | 3,176 | | | $ | 2,182 | | | 68.7 | % |
Total revenues | | $ | 122,416 |
| | $ | 94,470 |
| | $ | 27,946 |
| | 29.6 | % | Total revenues | $ | 108,627 | | | $ | 95,576 | | | $ | 13,051 | | | 13.7 | % |
Minimum rentsRental revenue at comparable properties decreasedincreased by $355$2,672 for the ninesix months ended SeptemberJune 30, 20172021 as compared to the same period in 2016.2020. The increase in rental revenue from our industrial properties is primarily related to $1,710 of rent collections at Norfleet Distribution Center and $502 at Taunton Distribution Center due to higher occupancy during the six months ended June 30, 2021 as compared to the same period of 2020. The increase of $938 within our retail segment was primarily related to an increase in collections from tenants which experienced a decrease in operations from COVID-19 in 2020. The decrease isof $549 within the apartment segment was primarily due to decreases of $584 at 111 Sutter Street and $343 at The District at Howell Mill related to a decreasereduction in occupancyrental rates at 180 North Jefferson as well as lower rental revenue due to uncertainty of collectibility from certain tenants during the ninesix months ended SeptemberJune 30, 20172021 as compared to the same period of 2020.
Other revenues relate mainly to parking and nonrecurring revenue such as lease termination fees. Other revenue at comparable properties increased by $1,000 for the six months ended June 30, 2021 as compared to the same period in 2016. Partially offsetting these decreases were increases of $308 at O'Hare Distribution Center and $217 at AQ
Rittenhouse related to increased occupancy during the nine months ended September 30, 2017 as compared to the same period in 2016.
Tenant recoveries relate mainly to real estate taxes and certain property operating expenses that are paid by us and are recoverable under the various tenants’ leases. Other rental income includes daily transient parking, percentage rents and other non-recurring tenant charges. Tenant recoveries and other rental income at comparable properties decreased by $125 for the nine months ended September 30, 2017 as compared to the same period in 2016.2020. The decreaseincrease is primarily related to a decrease$822 of $178higher parking revenue at Rancho Temecula Town Center related to true-up billing of prior year expenses. Additionally, there was a decrease of $76 at Grand Lakes Marketplaceour parking garage in South Beach primarily due to lower real estate tax recoveriesthe travel and shelter in place orders placed on the city of South Beach during the ninesix months ended SeptemberJune 30, 2017 as compared to the same period in 2016. Partially offsetting the decreases was an increase of $101 at Townlake of Coppell related to cable TV service fees and insurance proceeds from a small fire2020, which greatly reduced our revenue during the nine months ended September 30, 2017 as compared to the same period in 2016.that period.
Operating Expenses
The following chart sets forth real estate taxes, property operating expenses and provisions for doubtful accounts by reportable segment, for the ninesix months ended SeptemberJune 30, 20172021 and 2016:2020:
| | | | Nine Months Ended September 30, 2017 | | Nine Months Ended September 30, 2016 | | $ Change | | % Change | | Six Months Ended June 30, 2021 | | Six Months Ended June 30, 2020 | | $ Change | | % Change |
Operating expenses: | | | | | | | | | Operating expenses: | | | | | | | |
Real estate taxes | | | | | | | | | Real estate taxes | |
Apartment | | $ | 1,564 |
| | $ | 1,394 |
| | $ | 170 |
| | 12.2 | % | Apartment | $ | 6,080 | | | $ | 5,833 | | | $ | 247 | | | 4.2 | % |
Industrial | | 3,447 |
| | 3,233 |
| | 214 |
| | 6.6 |
| Industrial | 4,096 | | | 3,863 | | | 233 | | | 6.0 | |
Office | | 1,896 |
| | 1,840 |
| | 56 |
| | 3.0 |
| Office | 1,201 | | | 1,319 | | | (118) | | | (8.9) | |
Retail | | 3,566 |
| | 3,449 |
| | 117 |
| | 3.4 |
| Retail | 3,057 | | | 2,845 | | | 212 | | | 7.5 | |
Other | | 327 |
| | 327 |
| | — |
| | — |
| Other | 237 | | | 172 | | | 65 | | | 37.8 | |
Comparable properties total | | $ | 10,800 |
| | $ | 10,243 |
| | $ | 557 |
| | 5.4 | % | Comparable properties total | $ | 14,671 | | | $ | 14,032 | | | $ | 639 | | | 4.6 | % |
Recent acquisitions and sold properties | | 7,563 |
| | 2,279 |
| | 5,284 |
| | 231.9 |
| Recent acquisitions and sold properties | 1,620 | | | 815 | | | 805 | | | 98.8 | |
Total | | $ | 18,363 |
| | $ | 12,522 |
| | $ | 5,841 |
| | 46.6 | % | |
Total real estate taxes | | Total real estate taxes | $ | 16,291 | | | $ | 14,847 | | | $ | 1,444 | | | 9.7 | % |
| | | | | | | | | | | | | | | | |
Property operating | | | | | | | | | |
Property operating expenses | | Property operating expenses | |
Apartment | | $ | 3,780 |
| | $ | 3,642 |
| | $ | 138 |
| | 3.8 | % | Apartment | $ | 9,787 | | | $ | 9,254 | | | $ | 533 | | | 5.8 | % |
Industrial | | 1,252 |
| | 1,238 |
| | 14 |
| | 1.1 |
| Industrial | 2,115 | | | 1,911 | | | 204 | | | 10.7 | |
Office | | 3,658 |
| | 3,539 |
| | 119 |
| | 3.4 |
| Office | 1,956 | | | 1,852 | | | 104 | | | 5.6 | |
Retail | | 3,539 |
| | 3,436 |
| | 103 |
| | 3.0 |
| Retail | 4,044 | | | 3,410 | | | 634 | | | 18.6 | |
Other | | 659 |
| | 685 |
| | (26 | ) | | (3.8 | ) | Other | 377 | | | 360 | | | 17 | | | 4.7 | |
Comparable properties total | | $ | 12,888 |
|
| $ | 12,540 |
| | $ | 348 |
| | 2.8 | % | Comparable properties total | $ | 18,279 | | | $ | 16,787 | | | $ | 1,492 | | | 8.9 | % |
Recent acquisitions and sold properties | | 8,195 |
| | 4,677 |
| | 3,518 |
| | 75.2 |
| Recent acquisitions and sold properties | 1,826 | | | 792 | | | 1,034 | | | 130.6 | |
Total | | $ | 21,083 |
| | $ | 17,217 |
| | $ | 3,866 |
| | 22.5 | % | |
| | | | | | | | | |
Provision for doubtful accounts | | | | | | | |
Apartment | | $ | 31 |
| | $ | 20 |
| | $ | 11 |
| | 55.0 | % | |
Office | | — |
| | — |
| | — |
| | 100.0 |
| |
Retail | | 43 |
| | 154 |
| | (111 | ) | | (72.1 | ) | |
Other | | — |
| | 1 |
| | (1 | ) | | (100.0 | ) | |
Comparable properties total | | $ | 74 |
| | $ | 175 |
| | $ | (101 | ) | | (57.7 | )% | |
Recent acquisitions and sold properties | | 1 |
| | 16 |
| | (15 | ) | | (93.8 | ) | |
Total | | $ | 75 |
| | $ | 191 |
| | $ | (116 | ) | | (60.7 | )% | |
Total property operating expenses | | Total property operating expenses | $ | 20,105 | | | $ | 17,579 | | | $ | 2,526 | | | 14.4 | % |
Total operating expenses | | $ | 39,521 |
| | $ | 29,930 |
| | $ | 9,591 |
| | 32.0 | % | Total operating expenses | $ | 36,396 | | | $ | 32,426 | | | $ | 3,970 | | | 12.2 | % |
Real estate taxes at comparable properties increased by $557$639 for the ninesix months ended SeptemberJune 30, 20172021 as compared to the same period in 2016. The increase is primarily the result of several properties across the segments having higher tax assessments during the nine months ended September 30, 2017 as compared to the same period of 2016.2020. Our
properties are reassessed periodically by the taxing authorities, which may result in increases or decreases in the real estates taxes that we owe. Overall, we expect real estate taxes to increase over time; however, we utilize real estate tax consultants to attempt to control assessment increases.
Property operating expenses consist of the costs of ownership and operation of the real estate investments, many of which are recoverable under net leases. Examples of property operating expenses include insurance, utilities and repair and maintenance expenses. Property operating expenses at comparable properties increased $348 forwere in line with the nineprior year. The primary increase that occurred within our retail segment was related to increases in utilities during the six months ended SeptemberJune 30, 20172021 as compared to the same period of 2016.in 2020. The increase is primarily related to an increase of $140 at Monument IV at Worldgate and $74 at The District at Howell Mill related to higher utilities and repair and maintenance expenses. Additionally, there was an increase of $60 at Station Nine Apartments related to higher advertising and property management fee expense and $48 at AQ Rittenhouse due to higher security and repairs and maintenance expensesother increases occurring within our apartment segment during the ninesix months ended SeptemberJune 30, 2017.
Net provision for doubtful accounts relates to receivables deemed potentially uncollectible due to the age of the receivable or the status of the tenant. Provision for doubtful accounts decreased by $101 for the nine months ended September 30, 20172021 as compared to the same period of 2016, primarilyin 2020 were related to tenant bankruptcies in 2016 resulting in provisions of $51 at The District at Howell Mill, $23 at Maui Mallturnover costs, repairs and $16 at Rancho Temecula Town Center. Partially offsetting these decreases were higher bad debts of $12 at The Edge at Lafayette related to early move outs that occurred during the nine months ended September 30, 2017 as compared to the same period of 2016.maintenance and utilities.
The following chart sets forth expenses not directly related to the operations of the reportable segments for the ninesix months ended SeptemberJune 30, 20172021 and 2016:2020: |
| | | | | | | | | | | | | | | |
| | Nine Months Ended September 30, 2017 | | Nine Months Ended September 30, 2016 | | $ Change | | % Change |
Property general and administrative | | $ | 830 |
| | $ | 814 |
| | $ | 16 |
| | 2.0 | % |
Advisor fees | | 14,383 |
| | 10,487 |
| | 3,896 |
| | 37.2 |
|
Company level expenses | | 1,730 |
| | 1,657 |
| | 73 |
| | 4.4 |
|
Acquisition expenses | | — |
| | 2,846 |
| | (2,846 | ) | | (100.0 | ) |
Provision for impairment of real estate | | — |
| | 6,355 |
| | (6,355 | ) | | (100.0 | ) |
Depreciation and amortization | | 44,704 |
| | 31,052 |
| | 13,652 |
| | 44.0 |
|
Interest expense | | 21,375 |
| | 18,529 |
| | 2,846 |
| | 15.4 |
|
Income from unconsolidated affiliates and fund investments
| | (8,144 | ) | | (5,583 | ) | | (2,561 | ) | | 45.9 |
|
Other income | | (500 | ) | | — |
| | (500 | ) | | 100.0 |
|
Gain on disposition of property and extinguishment of debt | | (5,501 | ) | | (1,704 | ) | | (3,797 | ) | | 222.8 |
|
Total expenses | | $ | 68,877 |
| | $ | 64,453 |
| | $ | 4,424 |
| | 6.9 | % |
| | | | | | | | | | | | | | | | | | | | | | | |
| Six Months Ended June 30, 2021 | | Six Months Ended June 30, 2020 | | $ Change | | % Change |
Property general and administrative | $ | 476 | | | $ | 2,881 | | | $ | (2,405) | | | (83.5) | % |
Advisor fees | 13,074 | | | 12,857 | | | 217 | | | 1.7 | |
Company level expenses | 2,183 | | | 1,548 | | | 635 | | | 41.0 | |
| | | | | | | |
| | | | | | | |
Depreciation and amortization | 41,163 | | | 37,620 | | | 3,543 | | | 9.4 | |
Interest expense | 19,550 | | | 23,800 | | | (4,250) | | | (17.9) | |
| | | | | | | |
Loss from unconsolidated affiliates and fund investments | 2,751 | | | 12,897 | | | (10,146) | | | (78.7) | |
| | | | | | | |
Gain on disposition of property and extinguishment of debt, net | (33,422) | | | (1,708) | | | (31,714) | | | 1,856.8 | |
| | | | | | | |
Total expenses (income) | $ | 45,775 | | | $ | 89,895 | | | $ | (44,120) | | | (49) | % |
Property general and administrative expenses relate mainly to property expenses unrelated to the operations of the property. Property general and administrative expenses remained consistentdecreased for the ninesix months ended SeptemberJune 30, 20172021 as compared to the same period in 2020 due to expenses incurred for unsuccessful acquisitions in 2020 and a partial recovery of 2016.a deposit for an unsuccessful acquisition received in 2021.
Advisor fees relate to the fixed advisory and performance fees earned by the Advisor. Fixed fees increase or decrease based on changes in our NAV, which will be primarily impacted by changes in capital raised and the value of our properties. The performance fee is accrued when the total return per share for a share class exceeds 7% for that calendar year, where in our Advisor will receive 10% of the excess total return above the 7% threshold. The increase in advisor fees of $3,896$217 for the ninesix months ended SeptemberJune 30, 20172021 as compared to the same period of 20162020 is related to the increase in our NAV attributable to capital raised and increase in property values over during the pastcurrent year.
Company level expenses relate mainly to our compliance and administration related costs. Company level expenses increased $73$635 for the ninesix months ended SeptemberJune 30, 20172021 as compared to the same period in 20162020 primarily duerelated to an increase in stockholder servicing costs and othertiming of professional service fees.
Acquisition expenses relate to expenses incurred during the acquisition of a property. On January 1, 2017, we adopted Accounting Standard Update 2017-01 Business Combinations (Topic 805): Clarifying the Definition of a Business. We expect that most future acquisitions will qualify as asset acquisitions. As such, future acquisition-related expenses will be capitalized. During the nine months ended September 30, 2016, we incurred $2,846 of acquisition expenses related to acquisitions we were pursuing.
The provision for impairment of real estate relates to real estate investments whose estimated future undiscounted cash flows have decreased below the carrying value of the property. A provision for impairment of real estate is recorded to write the property down from its carrying value to its fair value. During the nine months ended September 30, 2016, provision for impairment of real estate of $6,355 is due to impairment charges at Railway Street Corporate Centre as we shortened the expected holding period for the investment because we considered it a non-strategic investment. The impairment charges had no impact on our NAV as we had previously written the property down to its fair value for purposes of our NAV calculation.
Depreciation and amortization expense is impacted by the values assigned to buildings, personal property and in-place lease assets as part of the initial purchase price allocation. The increase of $13,652 in depreciationDepreciation and amortization expense for the ninesix months ended SeptemberJune 30, 20172021 as compared to the same period in 2016 is primarily related to an increase of $13,553 on our2020 increased as additional expense from acquisitions that occurred in 2016 and 2017.offset lower expenses from property dispositions.
Interest expense increaseddecreased by $2,846$4,250 for the ninesix months ended SeptemberJune 30, 20172021 as compared to the same period in 20162020 as a result of new debtunrealized gains on our 2016interest rate swaps in 2021 as opposed to unrealized losses in 2020. This decrease is offset by an increase in interest expense from new mortgage notes payable placed on several assets in 2020 and 2017 acquisitions2021 and our Credit Facility usage.interest expense on the financial obligations related to the DST Program.
IncomeLoss from unconsolidated affiliates and fund investments relates to the income from Chicago Parking Garage, and Pioneer Tower, The Tremont and The Huntington as well as changes in fair value and operating distributions received from our investment in the NYC Retail Portfolio. During the ninesix months ended SeptemberJune 30, 2017,2021, we recorded a $5,132 increase$36 decrease in the fair value of and received $$2,019 in operating distribution from our investment in the NYC Retail Portfolio as compared to a $4,238 increase$12,088 decrease in the fair value during the same period of 2016.
Other income of $500 is related to receipt of a termination payment upon the expiration of a contract to sell The Edge at Lafayette during the nine months ended September 30, 2017.2020.
Gain on disposition of property and extinguishment of debt, net increased due to a $33,580 gain on the sale of $5,501 is related to the dispositions of Railway Street Corporate Centre, 14600 Sherman Way and 14624 Sherman WaySouth Seattle Distribution Center, which occurred during the ninesix months ended SeptemberJune 30, 2017. During the nine months ended September 30, 2016, the gain on disposition of property and extinguishment of debt of $1,704 is related to the dispositions of 36 Research Park Drive and Campus Lodge Tampa.2021.
Funds From Operations
Consistent with real estate industry and investment community preferences, we consider funds from operations ("FFO") as a supplemental measure of the operating performance for a real estate investment trust and a complement to GAAP measures because it facilitates an understanding of the operating performance of our properties. The National Association of Real Estate Investment Trusts ("NAREIT") defines FFO as net income (loss) attributable to the Company (computed in accordance with GAAP), excluding gains or losses from cumulative effects of accounting changes, extraordinary items, impairment write-downs of depreciable real estate and sales of properties, plus real estate related depreciation and amortization and after adjustments for these items related to noncontrolling interests and unconsolidated affiliates.
FFO does not give effect to real estate depreciation and amortization because these amounts are computed to allocate the cost of a property over its useful life. Because values for well-maintained real estate assets have historically increased or decreased based upon prevailing market conditions, we believe that FFO and AFFO provide investors with an additional view of our operating performance. We also use Adjusted FFO ("AFFO") as a supplemental measure of operating performance. We define AFFO as FFO adjusted for straight-line rental income, amortization of above- and below-market leases, amortization of net discount on assumed debt, gains or losses on the extinguishment and modification of debt, performance fees based on the investment returns on shares of our common stock and acquisition expenses. Because values for well-maintained real estate assets have historically increased or decreased based upon prevailing market conditions, we believe that FFO and AFFO provide investors with an additional view of our operating performance.
In order to provide a better understanding of the relationship between FFO, AFFO and GAAP net income, the most directly comparable GAAP financial reporting measure, we have provided reconciliations of GAAP net income attributable to Jones Lang LaSalle Income Property Trust, Inc. to FFO, and FFO to AFFO. FFO and AFFO do not represent cash flow from operating activities in accordance with GAAP, should not be considered alternatives to GAAP net income and are not measures of liquidity or indicators of the Company's ability to make cash distributions. We believe that to more comprehensively understand our operating performance, FFO and AFFO should be considered along with the reported net income attributable to Jones Lang LaSalle Income Property Trust, Inc. and our cash flows in accordance with GAAP, as presented in our consolidated financial statements. Our presentations of FFO and AFFO are not necessarily comparable to the similarly titled measures of other REITs due to the fact that not all REITs use the same definitions.
The following table presents a reconciliation of the most comparable GAAP amount of net income (loss) attributable to Jones Lang LaSalle Income Property Trust, IncInc. to NAREIT FFO for the periods presented:
| | | | | | | | | | | | | | | | | | | | | | | |
Reconciliation of GAAP net (loss) income to NAREIT FFO | Three Months Ended June 30, 2021 | | Three Months Ended June 30, 2020 | | Six Months Ended June 30, 2021 | | Six Months Ended June 30, 2020 |
Net (loss) income attributable to Jones Lang LaSalle Income Property Trust, Inc. Common Stockholders (1) | $ | (3,777) | | | $ | (8,204) | | | $ | 26,328 | | | $ | (26,753) | |
Real estate depreciation and amortization (1) | 24,849 | | | 20,820 | | | 48,271 | | | 42,088 | |
Loss (gain) on disposition of property and unrealized gain on investment in unconsolidated real estate affiliate (1) | 1,110 | | | 3,352 | | | (33,306) | | | 10,441 | |
| | | | | | | |
| | | | | | | |
NAREIT FFO attributable to Jones Lang LaSalle Income Property Trust, Inc. Common Stockholders | $ | 22,182 | | | $ | 15,968 | | | $ | 41,293 | | | $ | 25,776 | |
Weighted average shares outstanding, basic and diluted | 181,126,712 | | | 170,103,439 | | | 177,963,466 | | | 171,423,839 | |
NAREIT FFO per share, basic and diluted | $ | 0.12 | | | $ | 0.09 | | | $ | 0.23 | | | $ | 0.15 | |
________
(1) Excludes amounts attributable to noncontrolling interests and includes our ownership share of both consolidated properties and unconsolidated real estate affiliates.
|
| | | | | | | | | | | | | | | |
Reconciliation of GAAP net income (loss) to NAREIT FFO | Three Months Ended September 30, 2017 | | Three Months Ended September 30, 2016 | | Nine Months Ended September 30, 2017 | | Nine Months Ended September 30, 2016 |
Net income (loss) attributable to Jones Lang LaSalle Income Property Trust, Inc. Common Stockholders (1) | $ | 10,670 |
| | $ | (1,772 | ) | | $ | 13,726 |
| | $ | (457 | ) |
Real estate depreciation and amortization (1) | 18,105 |
| | 13,558 |
| | 49,436 |
| | 32,306 |
|
Gain on disposition of property and unrealized gain on investment in unconsolidated real estate affiliate (1) | (11,335 | ) | | (4,936 | ) | | (10,632 | ) | | (5,576 | ) |
Impairment of real estate held for sale | — |
| | 6,355 |
| | — |
| | 6,355 |
|
NAREIT FFO attributable to Jones Lang LaSalle Income Property Trust, Inc. Common Stockholders | $ | 17,440 |
| | $ | 13,205 |
| | $ | 52,530 |
| | $ | 32,628 |
|
Weighted average shares outstanding, basic and diluted | 133,554,999 |
| | 113,935,929 |
| | 134,894,754 |
| | 99,933,097 |
|
NAREIT FFO per share, basic and diluted | $ | 0.13 |
| | $ | 0.12 |
| | $ | 0.39 |
| | $ | 0.33 |
|
| |
(1) | Excludes amounts attributable to noncontrolling interests and includes our ownership share of both consolidated properties and unconsolidated real estate affiliates. |
We believe AFFO is useful to investors because it provides supplemental information regarding the performance of our portfolio over time.
The following table presents a reconciliation of NAREIT FFO to AFFO for the periods presented:
| | | | | | | | | | | | | | | | | | | | | | | |
Reconciliation of NAREIT FFO to AFFO | Three Months Ended June 30, 2021 | | Three Months Ended June 30, 2020 | | Six Months Ended June 30, 2021 | | Six Months Ended June 30, 2020 |
NAREIT FFO attributable to Jones Lang LaSalle Income Property Trust, Inc. Common Stockholders | $ | 22,182 | | | $ | 15,968 | | | $ | 41,293 | | | $ | 25,776 | |
Straight-line rental income (1) | (1,033) | | | (438) | | | (1,628) | | | (171) | |
Amortization of above- and below-market leases (1) | (818) | | | (733) | | | (1,580) | | | (1,357) | |
Amortization of net discount on assumed debt (1) | (58) | | | (27) | | | (116) | | | (54) | |
(Gain) loss on derivative instruments and extinguishment or modification of debt (1) | (840) | | | (2) | | | (1,616) | | | 6,304 | |
Adjustment for investment accounted for under the fair value option (2) | 255 | | | 724 | | | 699 | | | 1,375 | |
| | | | | | | |
Acquisition expenses | (707) | | | 48 | | | (599) | | | 2,080 | |
AFFO attributable to Jones Lang LaSalle Income Property Trust, Inc. Common Stockholders | $ | 18,981 | | | $ | 15,540 | | | $ | 36,453 | | | $ | 33,953 | |
Weighted average shares outstanding, basic and diluted | 181,126,712 | | | 170,103,439 | | | 177,963,466 | | | 171,423,839 | |
AFFO per share, basic and diluted | $ | 0.10 | | | $ | 0.09 | | | $ | 0.20 | | | $ | 0.20 | |
________
(1) Excludes amounts attributable to noncontrolling interests and includes our ownership share of both consolidated properties and unconsolidated real estate affiliates.
(2) Represents the normal and recurring AFFO reconciling adjustments for the NYC Retail Portfolio.
|
| | | | | | | | | | | | | | | |
Reconciliation of NAREIT FFO to AFFO | Three Months Ended September 30, 2017 | | Three Months Ended September 30, 2016 | | Nine Months Ended September 30, 2017 | | Nine Months Ended September 30, 2016 |
NAREIT FFO attributable to Jones Lang LaSalle Income Property Trust, Inc. Common Stockholders | $ | 17,440 |
| | $ | 13,205 |
| | $ | 52,530 |
| | $ | 32,628 |
|
Straight-line rental income (1) | (840 | ) | | (1,472 | ) | | (2,745 | ) | | (4,160 | ) |
Amortization of above- and below-market leases (1) | (862 | ) | | (718 | ) | | (2,649 | ) | | (1,800 | ) |
Amortization of net discount on assumed debt (1) | (40 | ) | | (44 | ) | | (148 | ) | | (204 | ) |
Loss on derivative instruments and extinguishment or modification of debt (1) | (131 | ) | | (519 | ) | | (131 | ) | | 1,123 |
|
Adjustment for investment accounted for under the fair value option (2) | 1,078 |
| | (300 | ) | | 1,277 |
| | 2,013 |
|
Acquisition expenses (1) | — |
| | 1,759 |
| | — |
| | 2,846 |
|
AFFO attributable to Jones Lang LaSalle Income Property Trust, Inc. Common Stockholders | $ | 16,645 |
| | $ | 11,911 |
| | $ | 48,134 |
| | $ | 32,446 |
|
Weighted average shares outstanding, basic and diluted | 133,554,999 |
| | 113,935,929 |
| | 134,894,754 |
| | 99,933,097 |
|
AFFO per share, basic and diluted | $ | 0.12 |
| | $ | 0.10 |
| | $ | 0.36 |
| | $ | 0.32 |
|
| |
(1) | Excludes amounts attributable to noncontrolling interests and includes our ownership share of both consolidated properties and unconsolidated real estate affiliates. |
| |
(2) | Represents the normal and recurring AFFO reconciling adjustments for the NYC Retail Portfolio. |
NAV as of SeptemberJune 30, 20172021
The following table provides a breakdown of the major components of our NAV as of SeptemberJune 30, 2017:2021:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| June 30, 2021 |
Component of NAV | Class A Shares | | Class M Shares | | Class A-I Shares | | Class M-I Shares | | Class D Shares | | Total |
Real estate investments (1) | $ | 1,515,634 | | | $ | 574,048 | | | $ | 157,089 | | | $ | 648,087 | | | $ | 122,903 | | | $ | 3,017,761 | |
Debt | (489,575) | | | (185,427) | | | (50,742) | | | (209,343) | | | (39,700) | | | (974,787) | |
Other assets and liabilities, net | 93,283 | | | 35,331 | | | 9,668 | | | 39,888 | | | 7,565 | | | 185,735 | |
Estimated enterprise value premium | None assumed | | None assumed | | None assumed | | None assumed | | None assumed | | None assumed |
NAV | $ | 1,119,342 | | | $ | 423,952 | | | $ | 116,015 | | | $ | 478,632 | | | $ | 90,768 | | | $ | 2,228,709 | |
Number of outstanding shares | 92,740,925 | | | 35,056,224 | | | 9,584,832 | | | 39,559,491 | | | 7,513,281 | | | |
NAV per share | $ | 12.07 | | | $ | 12.09 | | | $ | 12.10 | | | $ | 12.10 | | | $ | 12.08 | | | |
|
| | | | | | | | | | | | | | | | | | | | | | | | |
| | September 30, 2017 |
Component of NAV | | Class A Shares | | Class M Shares | | Class A-I Shares | | Class M-I Shares | | Class D Shares | | Total |
Real estate investments (1) | | $ | 1,272,064 |
| | $ | 690,454 |
| | $ | 204,068 |
| | $ | 135,726 |
| | $ | 138,251 |
| | $ | 2,440,563 |
|
Debt | | (499,620 | ) | | (271,185 | ) | | (80,150 | ) | | (53,308 | ) | | (54,300 | ) | | (958,563 | ) |
Other assets and liabilities, net | | 26,137 |
| | 14,186 |
| | 4,193 |
| | 2,789 |
| | 2,841 |
| | 50,146 |
|
Estimated enterprise value premium | | None assumed |
| | None assumed |
| | None assumed |
| | None assumed |
| | None assumed |
| | None assumed |
|
NAV | | $ | 798,581 |
| | $ | 433,455 |
| | $ | 128,111 |
| | $ | 85,207 |
| | $ | 86,792 |
| | $ | 1,532,146 |
|
Number of outstanding shares | | 69,448,287 |
| | 37,588,719 |
| | 11,105,281 |
| | 7,383,732 |
| | 7,531,714 |
| | |
NAV per share | | $ | 11.50 |
| | $ | 11.53 |
|
| $ | 11.54 |
| | $ | 11.54 |
| | $ | 11.52 |
| | |
________ | |
(1) | The value of our real estate investments was greater than the historical cost by 5.9% as of September 30, 2017. |
(1)The value of our real estate investments was greater than the historical cost by 5.4% as of June 30, 2021.
The following table provides a breakdown of the major components of our NAV as of December 31, 2016:2020:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| December 31, 2020 |
Component of NAV | Class A Shares | | Class M Shares | | Class A-I Shares | | Class M-I Shares | | Class D Shares | | Total |
Real estate investments (1) | $ | 1,464,376 | | | $ | 582,651 | | | $ | 157,468 | | | $ | 544,201 | | | $ | 81,029 | | | $ | 2,829,725 | |
Debt | (472,476) | | | (187,990) | | | (50,807) | | | (175,584) | | | (26,144) | | | (913,001) | |
Other assets and liabilities, net | 48,023 | | | 19,107 | | | 5,165 | | | 17,846 | | | 2,658 | | | 92,799 | |
Estimated enterprise value premium | None assumed | | None assumed | | None assumed | | None assumed | | None assumed | | None assumed |
NAV | $ | 1,039,923 | | | $ | 413,768 | | | $ | 111,826 | | | $ | 386,463 | | | $ | 57,543 | | | $ | 2,009,523 | |
Number of outstanding shares | 89,671,096 | | | 35,612,156 | | | 9,616,299 | | | 33,247,001 | | | 4,957,915 | | | |
NAV per share | $ | 11.60 | | | $ | 11.62 | | | $ | 11.63 | | | $ | 11.62 | | | $ | 11.61 | | | |
|
| | | | | | | | | | | | | | | | | | | | | | | | |
| | December 31, 2016 |
Component of NAV | | Class A Shares | | Class M Shares | | Class A-I Shares | | Class M-I Shares | | Class D Shares | | Total |
Real estate investments (1) | | $ | 1,160,702 |
| | $ | 608,854 |
| | $ | 213,621 |
| | $ | 126,613 |
| | $ | 132,639 |
| | $ | 2,242,429 |
|
Debt | | (395,838 | ) | | (207,639 | ) | | (72,852 | ) | | (43,179 | ) | | (45,234 | ) | | (764,742 | ) |
Other assets and liabilities, net | | 18,952 |
| | 9,815 |
| | 3,470 |
| | 2,057 |
| | 2,154 |
| | 36,448 |
|
Estimated enterprise value premium | | None assumed |
| | None assumed |
| | None assumed |
| | None assumed |
| | None assumed |
| | None assumed |
|
NAV | | $ | 783,816 |
| | $ | 411,030 |
| | $ | 144,239 |
| | $ | 85,491 |
| | $ | 89,559 |
| | $ | 1,514,135 |
|
Number of outstanding shares | | 69,837,581 |
| | 36,522,305 |
| | 12,812,637 |
| | 7,591,239 |
| | 7,963,493 |
| | |
NAV per share | | $ | 11.22 |
| | $ | 11.25 |
| | $ | 11.26 |
| | $ | 11.26 |
| | $ | 11.25 |
| | |
________ | |
(1) | The value of our real estate investments was greater than the historical cost by 4.7% as of December 31, 2016. |
(1)The value of our real estate investments was greater than the historical cost by 2.6% as of December 31, 2020.
The increase in NAV per share from December 31, 20162020 to SeptemberJune 30, 2017,2021, was related to a net increase of 0.65%3.7% in the value of our portfolio. Property operations for the ninesix months ended SeptemberJune 30, 20172021 had an insignificant impact on NAV as dividends declared offset property operations for the period. Our NAV for the different share classes is reduced by normal and recurring class-specific fees and offering and organization costs.
The following are key assumptions (shown on a weighted-average basis) that are used in the discounted cash flow models to estimate the value of our real estate investments as of SeptemberJune 30, 2017:2021:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Apartment | | Industrial | | Office | | Retail | | Other (1) | | Total Company |
Exit capitalization rate | 4.91 | % | | 5.28 | % | | 5.68 | % | | 5.50 | % | | 6.25 | % | | 5.30 | % |
Discount rate/internal rate of return (IRR) | 6.12 | | | 5.91 | | | 6.46 | | | 6.37 | | | 7.80 | | | 6.20 | |
Annual market rent growth rate | 3.13 | | | 3.04 | | | 2.78 | | | 2.53 | | | 3.07 | | | 2.90 | |
Holding period (years) | 10.00 | | | 10.00 | | | 10.00 | | | 10.00 | | | 22.26 | | | 10.14 | |
________
(1) Other includes two standalone parking garages. South Beach Parking Garage is subject to a ground lease and the appraisal incorporates discounted cash flows over its remaining lease term and therefore does not utilize an exit capitalization rate.
|
| | | | | | | | | | | | | | | | | | |
| | Apartment | | Industrial | | Office | | Retail | | Other (1) | | Total Company |
Exit capitalization rate | | 5.46 | % | | 5.86 | % | | 5.82 | % | | 5.65 | % | | 6.25 | % | | 5.70 | % |
Discount rate/internal rate of return (IRR) | | 6.76 |
| | 6.48 |
| | 6.45 |
| | 6.42 |
| | 8.17 |
| | 6.55 |
|
Annual market rent growth rate | | 3.13 |
| | 3.00 |
| | 2.81 |
| | 3.12 |
| | 3.41 |
| | 3.04 |
|
Holding period (years) | | 10.00 |
| | 10.00 |
| | 10.00 |
| | 10.00 |
| | 22.49 |
| | 10.20 |
|
| |
(1) | Other includes Chicago and South Beach parking garages. South Beach Parking Garage is subject to a ground lease and the appraisal incorporates discounted cash flows over its remaining lease term and therefore does not utilize an exit capitalization rate. |
The following are key assumptions (shown on a weighted-average basis) that are used in the discounted cash flow models to estimate the value of our real estate investments as of December 31, 2016:2020:
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| Apartment | | Industrial | | Office | | Retail | | Other (1) | | Total Company |
Exit capitalization rate | 5.09 | % | | 5.44 | % | | 5.72 | % | | 5.56 | % | | 6.25 | % | | 5.43 | % |
Discount rate/internal rate of return (IRR) | 6.35 | | | 6.00 | | | 6.50 | | | 6.38 | | | 7.78 | | | 6.30 | |
Annual market rent growth rate | 3.03 | | | 2.96 | | | 2.80 | | | 2.50 | | | 3.13 | | | 2.83 | |
Holding period (years) | 10.00 | | | 10.00 | | | 10.00 | | | 10.00 | | | 21.81 | | | 10.15 | |
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| | Apartment | | Industrial | | Office | | Retail | | Other (1) | | Total Company |
Exit capitalization rate | | 5.95 | % | | 5.94 | % | | 6.00 | % | | 5.78 | % | | 6.75 | % | | 5.93 | % |
Discount rate/internal rate of return (IRR) | | 7.35 |
| | 6.77 |
| | 6.70 |
| | 6.63 |
| | 8.17 |
| | 6.82 |
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Annual market rent growth rate | | 3.04 |
| | 3.06 |
| | 2.89 |
| | 3.32 |
| | 3.41 |
| | 3.10 |
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Holding period (years) | | 10.00 |
| | 10.00 |
| | 10.00 |
| | 10.00 |
| | 22.90 |
| | 10.23 |
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(1) | Other includes Chicago and South Beach parking garages. South Beach Parking Garage is subject to a ground lease and the appraisal incorporates discounted cash flows over its remaining lease term and therefore does not utilize an exit capitalization rate. |
(1) Other includes Chicago and South Beach parking garages. South Beach Parking Garage is subject to a ground lease, the appraisal incorporates discounted cash flows over its remaining lease term and therefore does not utilize an exit capitalization rate.
While we believe our assumptions are reasonable, a change in these assumptions would impact the calculation of the value of our real estate investments. For example, assuming all other factors remain unchanged, an increasethe changes listed below would result in the weighted-average discount rate/internal rate of return ("IRR") used as of September 30, 2017 of 0.25% would yield a decrease infollowing effects on our total real estate investment value:
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Input | | | | June 30, 2021 | | December 31, 2020 |
Discount Rate - weighted average | | 0.25% increase | | (2.0) | % | | (2.0) | % |
Exit Capitalization Rate - weighted average | | 0.25% increase | | (3.0) | % | | (2.9) | |
Annual market rent growth rate - weighted average | | 0.25% decrease | | (1.6) | % | | (1.5) | |
The fair value of 1.7%our mortgage notes and ourother debt payable was estimated to be approximately $38,320 and $43,959 higher than the carrying values at June 30, 2021 and December 31, 2020, respectively. The NAV per share class would have been $11.19, $11.22, $11.22, $11.22decreased by $0.18 and $11.21$0.26 per share at June 30, 2021 and December 31, 2020, respectively, if we were to have included the fair value of our mortgage notes and other debt payable in our methodology to determine NAV.
The selling commission and dealer manager fee are offering costs and are recorded as a reduction of capital in excess of par value. Selling commissions are paid on the date of sale of our common stock. We accrue all future dealer manager fees up to the ten percent regulatory limit on the date of sale of our common stock. For NAV calculation purposes, dealer manger fees are accrued daily, on a continuous basis equal to 1/365th of the stated fee. Dealer manager fees payable are included in accrued offering costs on our Consolidated Balance Sheets. Dealer manager fees payable as of June 30, 2021 and December 31, 2020 were $114,498 and $105,770, respectively.
The following table reconciles stockholders' equity per our Consolidated Balance Sheet to our NAV:
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| June 30, 2021 |
Stockholders' equity under GAAP | $ | 1,527,832 | |
Adjustments: | |
Accrued dealer manager fees (1) | 112,110 | |
Organization and offering costs (2) | 478 | |
Unrealized real estate appreciation (3) | 209,722 | |
Accumulated depreciation, amortization and other (4) | 378,567 | |
NAV | $ | 2,228,709 | |
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(1) Accrued dealer manager fees represents the accrual for future dealer manager fees for Class A, Class M and Class A-I Class M-Ishares. We accrue all future dealer manager fees up to the ten percent regulatory limit on the date of sale of our common stock as an offering cost. For NAV calculation purposes, dealer manger fees are accrued daily, on a continuous basis equal to 1/365th of the stated fee.
(2) The Advisor advanced organization and Class D, respectively. An increaseoffering costs on our behalf through July 6, 2018. Such costs are reimbursed to the Advisor ratably over 36 months through July 5, 2021. Under GAAP, organization costs are expensed as incurred and offering costs are charged to equity as such amounts are incurred. For NAV, such costs are recognized as a reduction to NAV ratably over 36 months.
(3) Our investments in real estate are presented under historical cost in our GAAP Consolidated Financial Statements. As such, any increases in the weighted-average discount rate/IRR used asfair market value of December 31, 2016 of 0.25% would yield a decreaseour investments in real estate are not included in our totalGAAP results. For purposes of determining our NAV, our investments in real estate investmentare recorded at fair value.
(4) We depreciate our investments in real estate and amortize certain other assets and liabilities in accordance with GAAP. Such depreciation and amortization is not recorded for purposes of determining our NAV. Additionally, we make other fair value of 1.2% andadjustments to our NAV per each share classto account for differences with historical cost GAAP; an example would have been $10.97, $11.00, $11.00, $11.00 and $10.99 for Class A, Class M, Class A-I, Class M-I and Class D, respectively.be straight-line rent revenue.
Limitations and Risks
As with any valuation methodology, our methodology is based upon a number of estimates and assumptions that may not be accurate or complete. Our valuation methodology may not result in the determination of the fair value of our net assets as our mortgage notes and other debt payable are valued at cost. Different parties with different assumptions and estimates could derive a different NAV per share. Accordingly, with respect to our NAV per share, we can provide no assurance that:
•a stockholder would be able to realize this NAV per share upon attempting to resell his or her shares;
•we would be able to achieve for our stockholders the NAV per share upon a listing of our shares of common stock on a national securities exchange, selling our real estate portfolio or merging with another company; or
•the NAV per share, or the methodologies relied upon to estimate the NAV per share, will be found by any regulatory authority to comply with any regulatory requirements.
Furthermore, the NAV per share was calculated as of a particular point in time. The NAV per share will fluctuate over time in response to, among other things, changes in real estate market fundamentals, capital markets activities and attributes specific to the properties and leases within our portfolio.
Liquidity and Capital Resources
Our primary uses and sources of cash are as follows:
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Uses | | Sources |
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Short-term liquidity and capital needs such as: | | • | Operating cash flow, including the receipt of distributions of our share of cash flow produced by our unconsolidated real estate affiliates and fund investment |
• | Interest payments on debt | | |
• | Distributions to stockholders | | • | Proceeds from secured loans collateralized by individual properties |
• | Fees payable to our Advisor | | |
• | Minor improvements made to individual properties that are not recoverable through expense recoveries or common area maintenance charges to tenants | | • | Proceeds from our Revolving Line of Credit Facility |
| | • | Sales of our shares |
• | General and administrative costs | | • | Sales of real estate investments |
• | Costs associated with capital raising in our continuous public offering, private offering and DST Program | | • | DrawsProceeds from lender escrow accountsour private offering |
• | Other Company level expenses | | • | Draws from lender escrow accounts |
• | Lender escrow accounts for real estate taxes, insurance, and capital expenditures | | • | Sales of beneficial interests in the DST Program |
• | Fees payable to our Dealer Manager | | | |
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Longer-term liquidity and capital needs such as: | | | |
• | Acquisitions of new real estate investments | | | |
• | Expansion of existing properties | | | |
• | Tenant improvements and leasing commissions | | | |
• | Debt repayment requirements, including both principal and interest | | | |
• | Repurchases of our shares pursuant to our share repurchase plan | | | |
• | Fees payable to our Advisor | | | |
• | Fees payable to our Dealer Manager | | | |
The sources and uses of cash for the ninesix months ended SeptemberJune 30, 20172021 and 20162020 were as follows: | | | | Nine Months Ended September 30, 2017 | | Nine Months Ended September 30, 2016 | | $ Change | | Six Months Ended June 30, 2021 | | Six Months Ended June 30, 2020 | | $ Change |
Net cash provided by operating activities | | $ | 55,984 |
| | $ | 33,251 |
| | $ | 22,733 |
| Net cash provided by operating activities | $ | 38,192 | | | $ | 30,056 | | | $ | 8,136 | |
Net cash used in investing activities | | (129,430 | ) | | (657,305 | ) | | 527,875 |
| Net cash used in investing activities | (281,555) | | | (102,609) | | | (178,946) | |
Net cash provided by financing activities | | 69,922 |
| | 640,059 |
| | (570,137 | ) | Net cash provided by financing activities | 356,555 | | | 183,366 | | | 173,189 | |
CashNet cash provided by operating activities increased $22,733by $8,136 for the ninesix months ended SeptemberJune 30, 20172021 as compared to the same period in 2016. Cash2020. The increase in cash from operating activities increased $24,443is primarily relateddue to new acquisitions of properties that occurred in 2016 and 2017 and distributions received from unconsolidated real estate affiliates and fund investments during 2017. Also impacting our cash provided by operating activities are changes in our working capital, which include tenant accounts receivable, prepaid expenses and other assets, advisor fee payable and accounts payable and other accrued expenses. These changes in our working capital caused a decrease to cash provided by operating activities of $1,710 between the nine months ended September 30, 2017 and the same period in 2016, which was primarily related to an increase in prepaid expenses as well as a decreaseincreased rent collections from several tenants primarily in the amount of accrued expenses.our retail segment.
CashNet cash used in investing activities decreasedincreased by $527,875$178,946 for the ninesix months ended SeptemberJune 30, 20172021 as compared to the same period in 2016.2020. The decreaseincrease was primarily related to a decrease in cash used to purchase new properties and cash used for investments in unconsolidated real estate affiliatesincreased acquisitions made during the ninesix months ended SeptemberJune 30, 2016 compared to 2017.
Cash provided by financing activities decreased by $570,137 for the nine months ended September 30, 20172021 as compared to the same period in 2016. The decrease is primarily related to a decrease of $460,227 in net proceeds2020, offset partially by the cash received from the sale of common stock during 2017South Seattle Distribution Center in the first quarter of 2021.
Net cash provided by financing activities increased by $173,189 for the six months ended June 30, 2021 as compared to the same period in 2016. Additionally, there was2020. The change is primarily related to a decrease$154,620 increase in net proceeds from mortgage note payables and our line of credit of $106,499stock issuance during the ninesix months ended SeptemberJune 30, 20172021 as compared to the same period in 2016.2020. Additionally, less cash was used for repurchases of common stock during the six months ended June 30, 2021 as compared to the same period in 2020.
Financing
We have relied primarily on fixed-rate financing, locking in what were favorable spreads between real estate income yields and mortgage interest rates and have tried to maintain a balanced schedule of debt maturities. We also use interest rate derivatives to manage our exposure to interest rate movements on our variable rate debt. The following consolidated debt table provides information on the outstanding principal balances and the weighted average interest rates at SeptemberJune 30, 20172021 and December 31, 2016:2020: | | | | Consolidated Debt | | Consolidated Debt |
| | September 30, 2017 | | December 31, 2016 | | June 30, 2021 | | December 31, 2020 |
| | Principal Balance | | Weighted Average Interest Rate | | Principal Balance | | Weighted Average Interest Rate | | Principal Balance | | Weighted Average Interest Rate | | Principal Balance | | Weighted Average Interest Rate |
Fixed | | $ | 749,076 |
| | 3.67 | % | | $ | 613,233 |
| | 3.85 | % | Fixed | $ | 977,025 | | | 3.19 | % | | $ | 871,043 | | | 3.53 | % |
Variable | | 147,680 |
| | 2.72 |
| | 87,930 |
| | 2.59 |
| Variable | 39,900 | | | 1.65 | | | — | | | — | |
Total | | $ | 896,756 |
| | 3.51 | % | | $ | 701,163 |
| | 3.69 | % | Total | $ | 1,016,925 | | | 3.13 | % | | $ | 871,043 | | | 3.53 | % |
At June 30, 2021, we were in compliance with all debt covenants.
Other Sources
On July 6, 2018, our Second Extended Public Offering registration statement was declared effective with the SEC (Commission File No. 333-222533) to register up to $3,000,000 in any combination of shares of our Class A, Class M, Class A-I and Class M-I common stock, consisting of up to $2,700,000 of shares offered in our primary offering and up to $300,000 in shares offered pursuant to our distribution reinvestment plan. We intend to offer shares of our common stock on a continuous basis for an indefinite period of time by filing a new registration statement before the end of each three-year offering period, subject to regulatory approval. We intend to use the net proceeds from the Second Extended Public Offering, which are not used to pay the fees and other expenses attributable to our operations, to (1) grow and further diversify our portfolio by making investments in accordance with our investment strategy and policies, (2) repay indebtedness incurred under various financing instruments and (3) fund repurchases under our share repurchase plan.
On March 3, 2015, we commenced the Private Offering of up to $350,000 in shares of our Class D common stock with an indefinite duration. Proceeds from our Private Offering will be used for the same corporate purposes as the proceeds of our First Extended Public Offering. We will reserve the right to terminate the Private Offering at any time and to extend the Private Offering term to the extent permissible under applicable law.
On October 16, 2019, through our operating partnership, we initiated the DST Program to raise up to $500,000, which our board of directors may increase in its sole discretion, in private placements exempt from registration under the Securities Act, as amended, through the sale of beneficial interests to accredited investors in specific Delaware statutory trusts holding real properties, which may be sourced from our real properties or from third parties.
On June 4, 2021, we filed a Registration Statement on Form S-11 with the SEC (Commission File No. 333-256823) to register our Third Extended Public Offering of up to $3,000,000 in any combination of shares of our Class A, Class M, Class A-I and Class M-I common stock, consisting of up to $2,700,000 of shares offered in our primary offering and up to $300,000 in shares offered pursuant to our distribution reinvestment plan. As of August 11, 2021, the Third Extended Public Offering has not been declared effective. Proceeds from our Third Extended Public Offering will be used for the same corporate purposes as the proceeds of the Second Extended Public Offering.
Contractual Cash Obligations and Commitments
From time to time, we enter into contingent agreements for the acquisition and financing of properties. Such acquisitions and financings are subject to satisfactory completion of due diligence or meeting certain leasing or occupancy thresholds.
We are subject to fixed ground lease payments on South Beach Parking Garage of $100 per year until September 30, 2021 and these payments will increase every five years thereafter by the lesser of 12% or the cumulative CPI over the previous five year period. We are also subject to a variable ground lease payment calculated as 2.5% of revenue. The lease expires September 30, 2041 and has a ten-year renewal option.
The operating agreement for Townlake of CoppellPresley Uptown allows the unrelated third party joint venture partner, owning a 10%2.5% interest, to put theirits interest to us at a market determined value for a period of 90 days beginning in 2018. starting September 30, 2022 until September 30, 2024.
On January 16, 2015, our First Extended Public Offering registration statement was declared effective with the SEC (Commission File No. 333-196886) to register up to $2,700,000 in any combination of shares of our Class A, Class M, Class A-I and Class M-I common stock, consisting of up to $2,400,000 of shares offered in our primary offering and up to $300,000 in shares offered pursuant to our distribution reinvestment plan. We intend to offer shares of our common stock on a continuous basis for an indefinite period of time by filing a new registration statement before the end of each three-year offering period, subject to regulatory approval. We intend to use the net proceeds from the First Extended Public Offering, which are not used to pay the fees and other expenses attributable to our operations, to (1) grow and further diversify our portfolio by making investments in accordance with our investment strategy and policies, (2) reduce borrowings and repay indebtedness incurred under various financing instruments and (3) fund repurchases under our share repurchase plan.
On March 3, 2015, we commenced a private offering of up to $350,000 in shares of our Class D common stock with an indefinite duration. Proceeds from our private offering will be used for the same corporate purposes as the proceeds of our First Extended Public Offering. We reserve the right to terminate the Follow-on Private Offering at any time and to extend the Follow-on Private Offering term to the extent permissible under applicable law.
Off Balance Sheet Arrangements
At June 30, 2021, we had approximately $110 in an outstanding letter of credit that is not reflected on our balance sheet. We have no other off balance sheet arrangements.
Distributions to Stockholders
To remain qualified as a REIT for federal income tax purposes, we must distribute or pay tax on 100% of our capital gains and distribute at least 90% of ordinary taxable income to stockholders.
The following factors, among others, will affect operating cash flow and, accordingly, influence the decisions of our board of directors regarding distributions:
•scheduled increases in base rents of existing leases;
•changes in minimum base rents and/or overage rents attributable to replacement of existing leases with new or renewal leases;
•changes in occupancy rates at existing properties and procurement of leases for newly acquired or developed properties;
•necessary capital improvement expenditures or debt repayments at existing properties;
•ability of our tenants to pay rent as a result of the impact of COVID-19 on their financial condition; and
•our share of distributions of operating cash flow generated by the unconsolidated real estate affiliates, less management costs and debt service on additional loans that have been or will be incurred.
We anticipate that operating cash flow, cash on hand, proceeds from dispositions of real estate investments or refinancings will provide adequate liquidity to conduct our operations, fund general and administrative expenses, fund operating costs and interest payments and allow distributions to our stockholders in accordance with the REIT qualification requirements of the Internal Revenue Code of 1986, as amended.
Recently Issued Accounting Pronouncements
InMay 2014, the FASB issued Accounting Standard Update 2014-09 Revenue from Contracts with Customers, which will use a five step model to recognize revenue from customer contracts in an effort to increase consistency and comparability throughout global capital markets and across industries. The model will identify the contract, identify any separate performance obligations in the contract, determine and allocate the transaction price, and recognize revenue when the performance obligation is satisfied. The new standard will replace most existing revenue recognition in GAAP when it becomes effective for us on January 1, 2018. We are in the process of evaluating whether the guidance will impact the accounting for tenant reimbursements, but we currently do not believe this update will have a material impact on our consolidated financial statements and notes to our consolidated financial statements. Additionally, we are evaluating the impact on the timing of gain recognition for dispositions but currently do not believe there will be a material impact to our consolidated financial statements for dispositions given the simplicity of our historical disposition transactions. We expect to adopt the standard using the cumulative effect method.
In January 2016, the FASB issued Accounting Standard Update 2016-01 Financial Instruments - Overall: Recognition and Measurement of Financial Assets and Financial Liabilities. The new standard requires equity investments (except those accounted for under the equity method of accounting, or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income, requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes, requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset, and eliminates the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost. The standard will become effective for reporting periods beginning after December 15, 2017, with early adoption permitted. We are in the process of evaluating the impact of this new guidance.
In February 2016, the FASB issued Accounting Standard Update 2016-02 Leases (ASC 842), which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e. lessees and lessors). The new standard requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales-type leases, direct financing leases and operating leases. The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight line basis over the term of the lease. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases today. The update is expected to impact our consolidated financial statements as we have a ground lease arrangement for which we are the lessee. ASC 842 supersedes the previous leases standard, ASC 840 Leases. The standard is effective on January 1, 2019, with early adoption permitted. We currently believe the adoption of the standard will not have a material impact on leases for which we are the lessor. We are the lessee on one ground lease that will require us to record a right-of-use asset and a lease liability. We have preliminarily
concluded that the adoption of the standard will not have a material impact on the consolidated financial statements for leases for which we are the lessee.
In August 2016, the FASB issued Accounting Standard Update 2016-15 Statement of Cash Flows (Topic 230). The new guidance is intended to reduce the existing diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The core principle of the standard requires the classification of eight specific issues identified under ASC 230 to be presented as either financing, investing or operating, or some combination thereof, depending upon the nature of the issue. The standard will be effective for annual reporting periods, including interim periods within those annual periods, beginning after December 15, 2017, with early adoption permitted. Entities are required to use a retrospective transition approach for all of the issues identified to each period presented. We do not expect this standard to materially effect our consolidated financial statements and related disclosures.
In November 2016, the FASB issued Accounting Standard Update 2016-18 Statement of Cash Flows (Topic 230) – Restricted Cash. The new guidance requires that restricted cash be included as a component of total cash and cash equivalents as presented on the statement of cash flows. The standard is effective for annual periods, and interim periods therein, beginning after December 15, 2017. Early application is permitted in any interim or annual period. We do not expect the application of this standard to materially effect our consolidated financial statements and related disclosures.
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Item 3. | Quantitative and Qualitative Disclosures About Market Risk. |
We are subject to market risk associated with changes in interest rates in terms of our variable-rate debt and the price of new fixed-rate debt for refinancing of existing debt. We manage our interest rate risk exposure by obtaining fixed-rate loans where possible as well as by entering into interest rate cap and swap agreements. As of SeptemberJune 30, 2017,2021, we had consolidated debt of $896,756, which included $147,680 of variable-rate debt.$1,016,925. Including the $7,159$8,429 net debt discount on assumed debt and debt issuance costs, we have consolidated debt of $889,597$1,008,496 at SeptemberJune 30, 2017.2021. We also entered into interest rate cap and swap agreements on $189,080$190,000 of debt, which cap the LIBOR rate at between 1.0%1.4% and 3.3%2.6%. A 0.25% movement in the interest rate on the $147,680 of variable-rate debt would have resulted in a $369 annualized increase or decrease in consolidated interest expense and cash flow from operating activities.
We are subject to interest rate risk with respect to our fixed-rate financing in that changes in interest rates will impact the fair value of our fixed-rate financing. To determine fair market value, the fixed-rate debt is discounted at a rate based on an estimate of current lending rates, assuming the debt is outstanding through maturity and considering the collateral. At SeptemberJune 30, 2017,2021, the fair value of our mortgage notes payableconsolidated debt was estimated to be $4,304$25,760 higher than the carrying value of $896,756.$1,016,925. If treasury rates were 0.25% higher at SeptemberJune 30, 2017,2021, the fair value of our mortgage notes payableconsolidated debt would have been $7,591 lower$13,295 higher than the carrying value.
In August 2007, we purchased Railway Street Corporate Centre located in Calgary, Canada (relinquished ownership of this property on July 28, 2017). For this investment, we used the Canadian dollar as the functional currency. When preparing consolidated financial statements, assets and liabilities of foreign entities are translated at the exchange rates at the balance sheet date, while income and expense items are translated at weighted average rates for the period. Foreign currency translation adjustments are recorded in accumulated other comprehensive income on the Consolidated Balance Sheet and foreign currency translation adjustment on the Consolidated Statement of Operations and Comprehensive Income (Loss).
As a result of our Canadian investment, we were subject to market risk associated with changes in foreign currency exchange rates. These risks include the translation of local currency balances of our Canadian investment and transactions denominated in Canadian dollars. Our objective was to control our exposure to these risks through our normal operating activities. For the nine months ended September 30, 2017 and 2016, we recognized a foreign currency translation loss of $20 and gain of $484, respectively. Upon the relinquishment of our ownership of Railway Street Corporate Centre we recognized $1,895,000 of Accumulated Other Comprehensive Loss as part of the loss on disposition of property and extinguishment of debt on our Consolidated Statement of Operations and Comprehensive Income (Loss).
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Item 4. | Controls and Procedures. |
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act), as of the end of the period covered by this report. Based on management’s evaluation as of SeptemberJune 30, 2017,2021, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures were effective to provide reasonable assurance that the information required to be disclosed by us in our reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and such information is accumulated and communicated to management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.
Changes in Internal Control Over Financial Reporting
There were nohave not been any changes toin our internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Securities and Exchange Act of 1934, as amended) during the quarter ended SeptemberJune 30, 20172021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. We have not experienced any material impact to our internal control over financial reporting to date as a result of most of the employees of our Advisor and its affiliates working remotely due to the COVID-19 pandemic. We are continually monitoring and assessing the COVID-19 pandemic on our internal controls to minimize the impact to their design and operating effectiveness.
PART II
OTHER INFORMATION
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Item 1. | Legal Proceedings. |
We are involved in various claims and litigation matters arising in the ordinary course of business, some of which involve claims for damages. Many of these matters are covered by insurance, although they may nevertheless be subject to deductibles or retentions. Although the ultimate liability for these matters cannot be determined, based upon information currently available, we believe the ultimate resolution of such claims and litigation will not have a material adverse effect on our financial position, results of operations or liquidity.
The most significant risk factors applicable to the Company are described in Item 1A to our 20162020 Form 10-K. ThereThe following risk factor supplements the risk factors contained in our 2020 Form 10-K:
The phase-out of LIBOR could affect interest rates for our Term Loans and interest rate cap and swap arrangements.
LIBOR is used as a reference rate for our Term Loans and our interest rate cap and swap arrangements. On July 27, 2017, the United Kingdom’s Financial Conduct Authority (the "FCA") announced it intends to stop compelling banks to submit rates for the calculation of LIBOR after 2021. The FCA subsequently announced on March 5, 2021 that the publication of LIBOR will cease for the one-week and two-month USD LIBOR settings immediately after December 31, 2021, and the remaining USD LIBOR settings immediately after June 30, 2023. Based on undertakings received from the panel banks, the FCA does not expect that any LIBOR settings will become unrepresentative before these dates. Nevertheless, the U.S. Federal Reserve System, Office of the Comptroller of the Currency, and Federal Deposit Insurance Corporation have beenissued guidance encouraging market participants to adopt alternatives to LIBOR in new contracts as soon as practicable. It is unclear a new method of calculating LIBOR will be established, or if an alternative reference rate will be established. The Federal Reserve Board and the Federal Reserve Bank of New York organized the Alternative Reference Rates Committee, which identified the Secured Overnight Financing Rate (“SOFR”) as its preferred alternative to U.S. dollar LIBOR in derivatives and other financial contracts. We are not able to predict if SOFR, or another alternative rate reference rate, attains market traction as a LIBOR replacement. Our Term Loans and interest rate cap and swap arrangements provide that if LIBOR is no material changeslonger available, then the parties to the agreements shall enter into an amendment utilizing the prevailing market convention for determining the rate of interest for syndicated loans in the United States at the time. In such circumstances the interest rates on our Term Loans and in our interest rate cap and swap arrangements may change. The new rates may not be as favorable as those previously-disclosed risk factors.
any LIBOR phase-out. In addition, the transition process may result in delays in funding, higher interest expense, additional expenses, and increased volatility in markets for instruments that currently rely on LIBOR, all of which could negatively impact our cash flow.
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Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds. |
ISSUER PURCHASES OF EQUITY SECURITIES
Share Repurchase PlanIssuer Purchases of Equity Securities
Our share repurchase plan limits repurchases during any calendar quarter to shares with an aggregate value (based on the repurchase price per share on the day the repurchase is effected) of 5% of the combined NAV of all classes of shares as of the last day of the previous calendar quarter, which means that in any 12-month period, we limit repurchases to approximately 20% of our total NAV. If the quarterly volume limitation is reached on or before the third business day of a calendar quarter, repurchase requests during the next quarter will be satisfied on a stockholder by stockholder basis, which we refer to as a “per stockholder allocation,” instead of a first-come, first-served basis. Pursuant to the per stockholder allocation, each of our stockholders would be allowed to request repurchase at any time during such quarter of a total number of shares not to exceed 5% of the shares of common stock the stockholder held as of the end of the prior quarter. The per stockholder allocation requirement will remain in effect for each succeeding quarter for which the total repurchases for the immediately preceding quarter exceeded four percent of our NAV on the last business day of such preceding quarter. If total repurchases during a quarter for which the per stockholder allocation applies are equal to or less than four percent of our NAV on the last business day of such preceding quarter, then repurchases will again be first-come, first-served for the next succeeding quarter and each quarter thereafter.
During the three months ended SeptemberJune 30, 2017,2021, we repurchased 3,786,7033,134,052 shares of common stock under the share repurchase plan. |
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Period | | Total Number of Shares Redeemed | | Average Price Paid per Share | | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | | Maximum Number of Shares that May Yet Be Purchased Pursuant to the Program (1) |
July 1 - July 31, 2017 | | 2,282,871 | | $11.45 | | 2,282,871 | | — |
August 1 - August 31, 2017 | | 683,495 | | 11.51 | | 683,495 | | — |
September 1 - September 30, 2017 | | 820,337 | | 11.58 | | 820,337 | | — |
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Period | | Total Number of Shares Purchased | | Average Price Paid per Share | | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | | Maximum Number of Shares that May Yet Be Purchased Pursuant to the Program (1) |
April 1 - April 30, 2021 | | 1,151,879 | | | $ | 11.84 | | | 1,151,879 | | | — | |
May 1 - May 31, 2021 | | 990,220 | | | 11.89 | | | 990,220 | | | — | |
June 1 - June 30, 2021 | | 991,953 | | | 12.03 | | | 991,953 | | | — | |
Total | | 3,134,052 | | | $ | 11.91 | | | 3,134,052 | | | — | |
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(1) RedemptionsRepurchases are limited as described above.
UNREGISTERED SALES OF EQUITY SECURITIESUnregistered Sales of Equity Securities
On March 3, 2015, we commenced the Follow-on Private Offering of up to $350,000 in shares of our Class D common stock with an indefinite duration. No Class D shares were issued during the three months ended SeptemberJune 30, 2017.2021.
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Item 3. | Defaults Upon Senior Securities. |
Not applicable.
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Item 4. | Mine Safety Disclosures. |
Not applicable.
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Item 5. | Other Information. |
None.
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Exhibit No. | | Description |
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Exhibit No. | | Description |
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| | Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
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| | Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
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| | Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
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| | Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
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101.INS101.INS* | | XBRL Instance Document |
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101.SCH101.SCH* | | XBRL Schema Document |
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101.CAL101.CAL* | | XBRL Calculation Linkbase Document |
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101.DEF101.DEF* | | Definition Linkbase Document |
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101.LAB101.LAB* | | XBRL Labels Linkbase Document |
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101.PRE101.PRE* | | XBRL Presentation Linkbase Document |
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104* | | Cover Page Intereactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101) |
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* Filed herewith.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant, Jones Lang LaSalle Income Property Trust, Inc., has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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| | | JONES LANG LASALLE INCOME PROPERTY TRUST, INC. |
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Date: | August 11, 2021 | By: | /s/ C. Allan Swaringen |
| | | C. Allan Swaringen |
| | | President, Chief Executive Officer |
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| | | JONES LANG LASALLE INCOME PROPERTY TRUST, INC. |
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Date: | November 13, 2017 | By: | /s/ C. Allan Swaringen |
| | | C. Allan Swaringen |
| | | President, Chief Executive Officer |
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Date: | August 11, 2021 | By: | JONES LANG LASALLE INCOME PROPERTY TRUST, INC. |
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Date: | November 13, 2017 | By: | /s/ Gregory A. Falk |
| | | Gregory A. Falk |
| | | Chief Financial Officer and Treasurer |