Black Creek Diversified Property Fund 424B3 Prospectus supplement

Filed Pursuant to Rule 424(b)(3)

Registration No. 333-222630

BLACK CREEK DIVERSIFIED PROPERTY FUND INC.

SUPPLEMENT NO. 4 DATED MAY 14, 2021

TO THE PROSPECTUS DATED SEPTEMBER 4, 2020

This prospectus supplement (this “Supplement”) is part of and should be read in conjunction with the prospectus of Black Creek Diversified Property Fund Inc., dated September 4, 2020 as supplemented by Supplement No. 1 dated April 6, 2021, Supplement No. 2 dated April 15, 2021, and Supplement No. 3 dated May 5, 2021 (the “Prospectus”). Unless otherwise defined herein, capitalized terms used in this Supplement shall have the same meanings as in the Prospectus.

The purpose of this Supplement is to disclose:

●

the transaction price for each class of our common stock as of June 1, 2021;

●

the calculation of our April 30, 2021 net asset value (“NAV”) per share, as determined in accordance with our valuation procedures, for each of our share classes;

●

the status of this offering;

●

an update on our assets and performance;

●

updated information with respect to our real properties;

●

updated selected information regarding our operations;

●

updated information regarding distributions;

●

updated information regarding redemptions;

●

updated information regarding fees and expenses payable to our Advisor, our Dealer Manager and their affiliates;

●

updated certain historical NAV information;

●

updated experts information; and

●

our Quarterly Report on Form 10-Q for the quarter ended March 31, 2021.

● JUNE 1, 2021 TRANSACTION PRICE

The transaction price for each share class of our common stock for subscriptions accepted (and distribution reinvestment plan issuances) as of June 1, 2021 (and redemptions as of May 31, 2021) is as follows:


Share Class	Transaction Price (per share)
Class T	$	7.6145
Class S		7.6145
Class D		7.6145
Class I		7.6145
Class E		7.6145

The transaction price for each of our share classes is equal to such class’s NAV per share as of April 30, 2021. A calculation of the NAV per share is set forth below. The purchase price of our common stock for each share class equals the transaction price of such class, plus applicable upfront selling commissions and dealer manager fees.

● APRIL 30, 2021 NAV PER SHARE

Our board of directors, including a majority of our independent directors, has adopted valuation procedures, as amended from time to time, that contain a comprehensive set of methodologies to be used in connection with the calculation of our NAV. Our most recent NAV per share for each share class, which is updated as of the last calendar day of each month, is posted on our website at www.blackcreekdiversified.com and is also available on our toll-free, automated telephone line at (888) 310-9352. Please see “Net Asset Value Calculation and Valuation Procedures” in our Prospectus for a more detailed description of our valuation procedures, including important disclosure regarding real property valuations provided by Altus Group U.S Inc. (the “Independent Valuation Advisor”). All parties engaged by us in the calculation of our NAV, including our Advisor, are subject to the oversight of our board of directors. Generally, all of our real properties are appraised each calendar month by the Independent Valuation Advisor, with such appraisals reviewed by our external advisor. Additionally, each real property is appraised by a third-party appraiser at least once per calendar year, as described in our valuation procedures.

As used below, “Fund Interests” means our outstanding shares of common stock, along with the partnership units in our operating partnership (“OP Units”), which may be held directly or indirectly by the Advisor, the Sponsor, and third parties, and “Aggregate Fund NAV” means the NAV of all the Fund Interests.

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The following table sets forth the components of Aggregate Fund NAV as of April 30, 2021 and March 31, 2021:


	As of
(in thousands)	April 30, 2021		March 31, 2021
Investments in office properties	$	747,300	$	746,600
Investments in retail properties		906,700		905,300
Investments in multi-family properties		392,000		391,250
Investments in industrial properties		553,550		546,950
Total investment in real estate properties		2,599,550		2,590,100
Debt-related investments		47,718		47,645
DST Program Loans		50,518		50,012
Total investments		2,697,786		2,687,757
Cash and cash equivalents		16,273		17,100
Restricted cash		10,212		10,502
Other assets		29,210		28,890
Line of credit, term loans and mortgage notes		(907,466)		(915,758)
Financing obligations associated with our DST Program		(541,851)		(531,900)
Other liabilities		(38,501)		(43,624)
Accrued performance-based fee		(2,504)		(1,749)
Accrued advisory fees		(1,655)		(1,634)
Aggregate Fund NAV	$	1,261,504	$	1,249,584
Total Fund Interests outstanding		165,671		164,671

The following table sets forth the NAV per Fund Interest as of April 30, 2021 and March 31, 2021:


			Class T		Class S		Class D		Class I		Class E
(in thousands, except per Fund Interest data)	Total		Shares		Shares		Shares		Shares		Shares		OP Units
As of April 30, 2021
Monthly NAV	$	1,261,504	$	81,383	$	204,515	$	39,188	$	356,513	$	448,325	$	131,580
Fund Interests outstanding		165,671		10,688		26,859		5,146		46,820		58,878		17,280
NAV Per Fund Interest	$	7.6145	$	7.6145	$	7.6145	$	7.6145	$	7.6145	$	7.6145	$	7.6145
As of March 31, 2021
Monthly NAV	$	1,249,584	$	78,687	$	200,655	$	37,176	$	350,349	$	450,838	$	131,879
Fund Interests outstanding		164,671		10,369		26,443		4,899		46,169		59,412		17,379
NAV Per Fund Interest	$	7.5883	$	7.5883	$	7.5883	$	7.5883	$	7.5883	$	7.5883	$	7.5883

Under GAAP, we record liabilities for ongoing distribution fees that (i) we currently owe the Dealer Manager under the terms of our dealer manager agreement and (ii) we estimate we may pay to the Dealer Manager in future periods for shares of our common stock. As of April 30, 2021, we estimated approximately $20.2 million of ongoing distribution fees were potentially payable to the Dealer Manager. We do not deduct the liability for estimated future distribution fees in our calculation of NAV since we intend for our NAV to reflect our estimated value on the date that we determine our NAV. Accordingly, our estimated NAV at any given time does not include consideration of any estimated future distribution fees that may become payable after such date.

The valuations of our real property as of April 30, 2021 were provided by the Independent Valuation Advisor in accordance with our valuation procedures. Certain key assumptions that were used by the Independent Valuation Advisor in the discounted cash flow analysis are set forth in the following table based on weighted-averages by property type.


	Office		Retail		Multi‑family		Industrial		Weighted-Average Basis
Exit capitalization rate	6.31	%	6.21	%	5.26	%	5.36	%	5.91	%
Discount rate / internal rate of return	7.12	%	6.77	%	6.07	%	6.04	%	6.61	%
Average holding period (years)	10.0		10.0		10.0		10.0		10.0

A change in the exit capitalization and discount rates used would impact the calculation of the value of our real properties. For example, assuming all other factors remain constant, the changes listed below would result in the following effects on the value of our real properties:


Input	Hypothetical Change	Office		Retail		Multi‑family		Industrial		Weighted-Average Values
Exit capitalization rate (weighted-average)	0.25% decrease	3.01	%	2.54	%	3.20	%	3.32	%	2.94	%
	0.25% increase	(2.78)	%	(2.34)	%	(2.91)	%	(3.02)	%	(2.70)	%
Discount rate (weighted-average)	0.25% decrease	2.12	%	1.92	%	2.00	%	2.01	%	2.01	%
	0.25% increase	(2.07)	%	(1.87)	%	(1.95)	%	(1.97)	%	(1.96)	%

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● STATUS OF THIS OFFERING

As of May 1, 2021, we had raised gross proceeds of approximately $428.8 million from the sale of approximately 56.9 million shares in this offering, including proceeds from our distribution reinvestment plan of approximately $34.0 million. As of May 1, 2021, approximately $2.57 billion in shares remained available for sale pursuant to this offering, including approximately $466.0 million in shares available for sale through our distribution reinvestment plan.

· UPDATE ON OUR ASSETS AND PERFORMANCE

As of April 30, 2021, we had $2.7 billion in assets under management (calculated as fair value of total investment in real estate properties and debt-related investments, plus cash and cash equivalents). Our investments include 56 real estate properties totaling approximately 11.4 million square feet located in 25 markets throughout the U.S., which were 91.5% leased as of April 30, 2021.

As of April 30, 2021 our leverage ratio was 33.7% (calculated as outstanding principal balance of our borrowings less cash and cash equivalents, divided by the fair value of our real property and debt-related investments not associated with the DST Program, as determined in accordance with our valuation procedures).

The following table sets forth the total shareholder returns for the periods ended April 30, 2021:


	Trailing One-Month (1)		One-Year (Trailing 12-Months)(1)		Since NAV Inception Annualized (1)(2)
Class T Share Total Return (with upfront selling commissions and dealer manager fees) (3)	(2.72)	%	2.02	%	5.74	%
Class T Share Total Return (without upfront selling commissions and dealer manager fees) (3)	0.69		5.59		5.89
Class S Share Total Return (with upfront selling commissions and dealer manager fees) (3)	(2.72)		2.02		5.74
Class S Share Total Return (without upfront selling commissions and dealer manager fees) (3)	0.69		5.59		5.89
Class D Share Total Return (3)	0.74		6.22		6.29
Class I Share Total Return (3)	0.76		6.49		6.70
Class E Share Total Return (3)	0.76		6.49		6.76

(1)

Performance is measured by total return, which includes income and appreciation (i.e., distributions and changes in NAV) and is a compound rate of return that assumes reinvestment of all distributions for the respective time period, and excludes upfront selling commissions and dealer manager fees paid by investors, except for returns noted “with upfront selling commissions and dealer manager fees” (“Total Return”). Past performance is not a guarantee of future results. Current performance may be higher or lower than the performance data quoted.

(2)	NAV inception was September 30, 2012, which is when we first sold shares of our common stock after converting to an NAV-based REIT on July 12, 2012. Investors in our fixed price offerings prior to NAV inception on September 30, 2012 are likely to have a lower return.

(3)

The Total Returns presented are based on actual NAVs at which shareholders transacted, calculated pursuant to our valuation procedures. From NAV inception to November 30, 2019, these NAVs reflected mark-to-market adjustments on our borrowing-related interest rate hedge positions; and from September 1, 2017 to November 30, 2019, these NAVs also reflected mark-to-market adjustments on our borrowing-related debt instruments. Prior to September 1, 2017, our valuation policies dictated marking borrowing-related debt instruments to par except in certain circumstances; therefore, we did not formally track mark-to-market adjustments on our borrowing-related debt instruments during such time.

The following table sets forth a summary of our April rent collections as of May 10, 2021:


April 2021
Rent Collections
Office	98.5%
Retail	97.1%
Industrial	96.5%
Multifamily	97.0%

Total	97.5%

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· REAL PROPERTIES

As of March 31, 2021, our real property portfolio consisted of 56 properties totaling approximately 11.4 million square feet located in 25 markets throughout the U.S. Our real property portfolio includes nine properties placed in Delaware Statutory Trusts (“DST Properties”). The interests of the DST Properties are initially owned by a taxable REIT subsidiary of our operating partnership and then sold to third party investors (the “DST Program”). We, through a subsidiary of our operating partnership, hold long-term leasehold interests in the DST Properties pursuant to master leases that are guaranteed by the operating partnership, while third-party investors will ultimately hold some or all of the interests in the real estate through the Delaware Statutory Trusts.

As used herein, the term “commercial” refers to our office, retail and industrial properties or customers, as applicable.

Portfolio Overview. We currently operate in four reportable segments: office, retail, multi-family, and industrial. The following table summarizes our real property portfolio by segment as of March 31, 2021:


						Average
				% of Total		Effective Annual						% of
($ and square feet in thousands,	Number of	Number of	Rentable	Rentable		Base Rent per		%		Aggregate		Aggregate
except for per square foot data)	Markets (1)	Real Properties	Square Feet	Square Feet		Square Foot (2)		Leased		Fair Value		Fair Value
Office properties	8	9	2,082	18.3	%	$	32.86	78.0	%	$	746,600	28.8	%
Retail properties	8	25	3,012	26.4			19.04	93.4			905,300	35.0
Multi-family properties	4	4	1,222	10.7			23.13	93.0			391,250	15.2
Industrial properties	15	18	5,080	44.6			5.09	95.2			546,950	21.0
Total real property portfolio	25	56	11,396	100.0	%	$	14.52	91.4	%	$	2,590,100	100.0	%

(1)	Reflects the number of unique markets by segment and in total. As such, the total number of markets does not equal the sum of the number of markets by segment as certain segments are located in the same market.

(2)	Amount calculated as total annualized base rent, which includes the impact of any contractual tenant concessions (cash basis) per the terms of the lease, divided by total lease square footage as of March 31, 2021.

Acquisitions. During the three months ended March 31, 2021, we acquired one industrial property comprising 0.3 million square feet for an aggregate contractual purchase price of approximately $48.3 million.

Dispositions. During the three months ended March 31, 2021, we sold one industrial property and one retail property for net proceeds of approximately $49.0 million and recorded a net gain on sale of approximately $27.3 million and an impairment of $758,000, respectively.

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Market Diversification. The following table summarizes certain operating metrics of our real property portfolio by market and by segment as of March 31, 2021:


($ and square feet in thousands)	Number of Properties	Investment in Real Estate Properties		% of Gross Investment Amount		Rentable Square Feet		% of Total Rentable Square Feet			% Leased (1)
Office properties:
Northern New Jersey	1	$	250,994	10.2	%		601		5.4	%		84.0	%
Denver, CO	1		91,196	3.7			264		2.3			68.5
South Florida	2		90,437	3.7			366		3.2			63.8
Austin, TX	1		77,716	3.1			273		2.4			97.0
Washington, DC	1		75,622	3.1			132		1.2			49.0
Philadelphia, PA	1		50,109	2.0			174		1.5			68.9
Dallas, TX	1		41,663	1.7			165		1.4			90.3
Minneapolis/St. Paul, MN	1		29,529	1.2			107		0.9			100.0
Total office properties	9		707,266	28.7			2,082		18.3			78.0
Retail properties:
Greater Boston	17		464,626	18.9			1,754		15.4			92.9
South Florida	2		108,449	4.4			206		1.8			94.0
Washington, DC	1		65,417	2.6			233		2.0			100.0
Northern New Jersey	1		65,140	2.6			226		2.0			94.9
Birmingham, AL	1		43,891	1.8			193		1.7			92.1
Raleigh, NC	1		42,867	1.7			125		1.1			79.9
San Antonio, TX	1		42,523	1.7			174		1.5			99.3
Tulsa,OK	1		34,488	1.4			101		0.9			91.8
Total retail properties	25		867,401	35.1			3,012		26.4			93.4
Multi-family properties:
Atlanta, GA	1		117,464	4.8			356		3.2			92.7
Washington, DC	1		95,928	3.9			288		2.5			92.0
Orlando, FL	1		84,694	3.4			242		2.1			92.0
South Florida	1		79,267	3.2			336		2.9			94.9
Total multi-family properties (1,325 units)	4		377,353	15.3			1,222		10.7			93.0
Industrial properties:
Reno, NV	1		68,583	2.8			722		6.2			100.0
East Bay, CA	2		66,308	2.7			337		3.0			77.6
Atlanta, GA	1		64,695	2.6			798		7.0			100.0
Indianapolis, IN	2		63,947	2.4			811		7.1			100.0
Lehigh Valley, PA	1		49,573	2.0			291		2.6			46.6
Houston, TX	1		39,117	1.6			352		3.1			100.0
San Antonio, TX	2		33,578	1.4			404		3.5			100.0
Las Vegas, NV	1		24,671	1.0			248		2.2			100.0
Dallas, TX	1		19,585	0.8			230		2.0			100.0
Louisville, KY	1		19,201	0.8			235		2.1			100.0
Philadelphia, PA	1		18,988	0.8			171		1.5			93.6
Cincinnati, OH	1		18,759	0.8			218		1.9			100.0
Portland, OR	1		15,125	0.6			123		1.1			100.0
Chicago, IL	1		9,140	0.4			110		1.0			100.0
Washington, DC	1		5,327	0.2			30		0.3			100.0
Total industrial properties	18		516,597	20.9			5,080		44.6			95.2
Total real property portfolio	56	$	2,468,617	100.0	%		11,396		100.0	%		91.4	%

(1)	Percentage leased is based on executed leases as of March 31, 2021.

Lease Terms. Commercial lease terms typically range from one to 10 years, and often include renewal options. Most of our commercial leases include fixed rental increases or Consumer Price Index-based rental increases and are not based on the income or profits of any person. The majority of our multi-family leases expire within 12 months.

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Lease Expirations. As of March 31, 2021, the weighted-average remaining term of our total leased commercial portfolio was approximately 5.3 years based on annualized base rent and 5.3 years based on leased square footage, excluding renewal options. The following table summarizes the lease expirations at our commercial properties for leases in place as of March 31, 2021, without giving effect to the exercise of renewal options or termination rights, if any. The table excludes our multi-family properties as substantially all leases at such properties expire within 12 months.


($ and square feet in thousands)	Number of Commercial Leases	Annualized Base Rent (1)		% of Total Annualized Base Rent (1)		Leased Square Feet	% of Total Leased Square Feet
2021	59	$	8,805	6.7	%	466	5.0	%
2022	90		15,580	11.8		936	10.1
2023	87		19,021	14.5		983	10.6
2024	70		9,622	7.3		741	8.0
2025	68		21,071	16.0		1,362	14.7
2026	48		9,458	7.2		1,008	10.9
2027	23		11,285	8.6		1,467	15.8
2028	30		6,120	4.7		390	4.2
2029	21		5,794	4.4		714	7.7
2030	21		6,773	5.1		260	2.8
Thereafter	31		18,052	13.7		949	10.2
Total leased	548	$	131,581	100.0	%	9,276	100.0	%

(1)	Annualized base rent is calculated as monthly base rent including the impact of any contractual tenant concessions (cash basis) per the terms of the lease as of March 31, 2021, multiplied by 12.

Customer Diversification. We believe that the customer base that occupies our real property portfolio is generally stable and well-diversified. As of March 31, 2021, there were no customers that represented more than 10.0% of total annualized base rent or more than 10.0% of total leased square feet. The following table reflects our 10 largest customers, based on annualized base rent, as of March 31, 2021:


($ and square feet in thousands)	Number of Locations (1)	Annualized Base Rent (2)		% of Total Annualized Base Rent (2)		Leased Square Feet	% of Total Leased Square Feet
Stop & Shop	11	$	11,825	7.5	%	703	6.8	%
Mizuho Bank Ltd.	1		4,666	3.0		119	1.1
FedEx	2		3,856	2.4		999	9.6
Amazon.com / Whole Foods	4		3,536	2.2		359	3.4
Citco Fund Services	1		3,021	1.9		72	0.7
Home Depot	1		2,964	1.9		102	1.0
Alliant Techsystems, Inc.	1		2,636	1.7		107	1.0
Deloitte LLP	1		2,528	1.6		61	0.6
Apple, Inc.	1		2,449	1.6		94	0.9
Shaw's Supermarket	2		2,448	1.6		135	1.3
Total	25	$	39,929	25.4	%	2,751	26.4	%

(1)	Reflects the number of properties for which the customer has at least one lease in-place.

(2)	Annualized base rent is calculated as monthly base rent including the impact of any contractual tenant concessions (cash basis) per the terms of the lease as of March 31, 2021, multiplied by 12.

The majority of our customers do not have a public corporate credit rating. We evaluate creditworthiness and financial strength of prospective commercial customers based on financial, operating and business plan information that such prospective customers provide to us, as well as other market, industry, and economic information that is generally publicly available. As a result of this assessment, we may require that the customers enhance their credit by providing us with security deposits, letters of credit from established financial institutions, or personal or corporate guarantees. Customer creditworthiness often influences the amount of upfront tenant improvements, lease incentives, concessions or other leasing costs. We evaluate creditworthiness of our multi-family customers based on standard market practice, which includes credit checks.

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Industry Diversification. We intend to maintain a well-diversified mix of customers to limit our exposure to any single customer or industry. Our diversified investment strategy inherently provides for customer diversity, and we continue to monitor our exposure relative to our larger customer industry sectors. The following table reflects the 10 largest industry concentrations within our portfolio, based on annualized base rent, as of March 31, 2021 and assumes that our multi-family investments are not concentrated within any specific industry:


($ and square feet in thousands)	Number of Leases	Annualized Base Rent (1)		% of Total Annualized Base Rent		Leased Square Feet	% of Total Leased Square Feet
Supermarket	25	$	21,101	13.4	%	1,318	12.7	%
Financial	38		17,172	10.9		446	4.3
Professional Services	82		12,513	7.9		410	3.9
Food & Beverage	74		7,763	4.9		301	2.9
Software / Technology	15		5,880	3.7		138	1.3
Healthcare Services	51		5,562	3.5		189	1.8
Computer / Electronics	13		4,535	2.9		176	1.7
Apparel / Clothing	15		4,396	2.8		479	4.6
Transportation / Logistics	9		4,383	2.8		765	7.3
Post & Courier Services	9		4,346	2.8		1,015	9.7
Total	331	$	87,651	55.6	%	5,237	50.2	%

(1)	Annualized base rent is calculated as monthly base rent including the impact of any contractual tenant concessions (cash basis) per the terms of the lease as of March 31, 2021, multiplied by 12.

Debt-Related Investments. As of March 31, 2021, we had one senior loan debt investment with a carrying value of $47.9 million. The interest rate and maturity were 7.45% and 0.9 years, respectively, as of March 31, 2021.

DST Program and DST Program Loans. As of March 31, 2021, we had nine DST Properties that were part of the DST Program. During the three months ended March 31, 2021 and 2020, we incurred rent obligations of approximately $6.5 million and $3.6 million, respectively, under our master lease agreements with investors who are participating in the DST Program. Additionally, during the three months ended March 31, 2021 and 2020, 3.4 million partnership units (“OP Units”) in our Operating Partnership and 1.5 million OP Units, respectively were issued for DST Interests for a net investment of $25.9 million and $11.3 million, respectively, in accordance with our Umbrella Partnership Real Estate Investment Trust (“UPREIT”) structure. In order to facilitate additional capital raise through the DST Program, we may offer loans (“DST Program Loans”) to finance a portion of the sale of beneficial interests in the trusts holding DST Properties to potential investors. As of March 31, 2021, we had 70 DST Program Loans with a combined carrying value of $50.0 million, and a weighted average interest rate and weighted average maturity of 3.96% and 9.0 years, respectively, related to the DST Program.

Debt Obligations. Our indebtedness is currently comprised of borrowings under our line of credit, term loans and mortgage notes. As of March 31, 2021, we had approximately $915.8 million of indebtedness with a weighted-average interest rate of 3.12%, which includes the effects of the interest rate swap agreements. The weighted-average remaining term of our debt as of March 31, 2021 was 2.5 years, excluding the impact of certain extension options. The total gross book value of properties encumbered by our debt as of March 31, 2021 was approximately $587.2 million.

In July 2017, the Financial Conduct Authority (“FCA”) that regulates LIBOR announced it intends to stop compelling banks to submit rates for the calculation of LIBOR after 2021. As a result, the Federal Reserve Board and the Federal Reserve Bank of New York organized the Alternative Reference Rates Committee ("ARRC"), which identified the Secured Overnight Financing Rate ("SOFR") as its preferred alternative rate for LIBOR in derivatives and other financial contracts. We are not able to predict when LIBOR will cease to be available or when there will be sufficient liquidity in the SOFR markets. Any changes adopted by the FCA or other governing bodies in the method used for determining LIBOR may result in a sudden or prolonged increase or decrease in reported LIBOR. If that were to occur, our interest payments could change. In addition, uncertainty about the extent and manner of future changes may result in interest rates and/or payments that are higher or lower than if LIBOR were to remain available in its current form.

LIBOR is expected to be phased out or modified by June 2023, and the writing of contracts using LIBOR is expected to stop by the end of 2021. As of March 31, 2021, our line of credit and our term loans are our only indebtedness with initial or extended maturity dates beyond 2023 that have exposure to LIBOR. The agreements governing the line of credit and term loans provide procedures for determining a replacement or alternative base rate in the event that LIBOR is discontinued. However, there can be no assurances as to whether such replacement or alternative base rate will be more or less favorable than LIBOR. We intend to monitor the developments with respect to the potential phasing out of LIBOR after 2023 and work with our lenders to seek to ensure any transition away from LIBOR will have minimal impact on our financial condition, but can provide no assurances regarding the impact of the discontinuation of LIBOR.

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· SELECTED INFORMATION REGARDING OUR OPERATIONS

Funds From Operations (“FFO”)

We believe that FFO, in addition to net income (loss) and cash flows from operating activities as defined by GAAP, are useful supplemental performance measures that our management uses to evaluate our consolidated operating performance. However, this supplemental, non-GAAP measure should not be considered as an alternative to net income (loss) or to cash flows from operating activities as an indication of our performance and is not intended to be used as a liquidity measure indicative of cash flow available to fund our cash needs, including our ability to make distributions to our stockholders. No single measure can provide users of financial information with sufficient information and only our disclosures read as a whole can be relied upon to adequately portray our financial position, liquidity, and results of operations. In addition, other REITs may define FFO and similar measures differently and choose to treat certain accounting line items in a manner different from us due to specific differences in investment and operating strategy or for other reasons.

FFO. As defined by the National Association of Real Estate Investment Trusts (“NAREIT”), FFO is a non-GAAP measure that excludes certain items such as real estate-related depreciation and amortization. We believe FFO is a meaningful supplemental measure of our operating performance that is useful to investors because depreciation and amortization in accordance with GAAP implicitly assumes that the value of real estate assets diminishes predictably over time. By excluding gains or losses on the sale of assets, we believe FFO provides a helpful additional measure of our consolidated operating performance on a comparative basis. We use FFO as an indication of our consolidated operating performance and as a guide to making decisions about future investments.

The following unaudited table presents a reconciliation of GAAP net income (loss) to NAREIT FFO:



(in thousands, except per share data)	For the Three Months Ended March 31, 2021		For the Year Ended December 31, 2020
GAAP net income (loss) attributable to common stockholders	$	17,565	$	(14,914)
GAAP net income (loss) per common share—basic and diluted	$	0.12	$	(0.10)
Reconciliation of GAAP net income (loss) to NAREIT FFO:
GAAP net income (loss) attributable to common stockholders	$	17,565	$	(14,914)
Real estate-related depreciation and amortization		16,733		62,923
Impairment of real estate property		758		—
Gain on sale of real estate property		(27,342)		(13,335)
Noncontrolling interests’ share of net income (loss)		1,699		(1,091)
Redeemable noncontrolling interests’ share of net income (loss)		134		(54)
Noncontrolling interests’ share of NAREIT FFO		(836)		(2,462)
Redeemable noncontrolling interests’ share of NAREIT FFO		(66)		(110)
NAREIT FFO attributable to common stockholders—basic		8,645		30,957
NAREIT FFO attributable to OP Units		902		2,572
NAREIT FFO	$	9,547	$	33,529
Weighted-average shares outstanding—basic		145,861		142,268
Weighted-average shares outstanding—diluted		161,089		154,052
NAREIT FFO per common share—basic and diluted	$	0.06	$	0.22

● DISTRIBUTIONS

From January 31, 2020 through March 31, 2021, our board of directors authorized a monthly distribution rate of $0.03125 per share of common stock, subject to adjustment for class-specific fees. Our board of directors reserves the right to revisit this distribution level during the quarter with respect to record dates that have not yet passed. The distributions were paid, or will be paid, on or about the last business day of each respective month to stockholders of record as of the close of business on the last business day of each respective month.

S-8

The following table outlines sources used, as determined on a GAAP basis, to pay total gross distributions (which are paid in cash or reinvested in shares of our common stock through our distribution reinvestment plan) for the periods indicated below:


	Amount
			Common Stock
	Declared per		Distributions		Other Cash		Reinvested in		Total
(in thousands, except per share data)	Common Share (1)		Paid in Cash		Distributions (2)		Shares		Distributions
2021
March 31	$	0.09375	$	7,562	$	2,010	$	5,526	$	15,098
Total	$	0.09375	$	7,562	$	2,010	$	5,526	$	15,098
2020
March 31	$	0.09375	$	7,533	$	1,499	$	5,360	$	14,392
June 30		0.09375		7,539		1,611		5,316		14,466
September 30		0.09375		7,482		1,592		5,282		14,356
December 31		0.09375		7,464		1,750		5,347		14,561
Total	$	0.37500	$	30,018	$	6,452	$	21,305	$	57,775

(1)	Amount reflects the total quarterly distribution rate, subject to adjustment for class-specific fees. Distributions were declared and paid as of monthly record dates. These monthly distributions have been aggregated and presented on a quarterly basis.

(2)	Includes other cash distributions consisting of: (i) distributions paid to OP Unit holders; and (ii) ongoing distribution fees paid to the Dealer Manager with respect to Class T, Class S and Class D shares.

For the three months ended March 31, 2021 and 2020, our FFO was $9.5 million, or 63.2% of our total distributions, and $7.8 million, or 54.3% of our total distributions, respectively. FFO is a non-GAAP operating metric and should not be used as a liquidity measure. However, management believes the relationship between FFO and distributions may be meaningful for investors to better understand the sustainability of our operating performance compared to distributions made. Refer to Item 2 “Management’s Discussion and Analysis of Financial Condition” in the Company’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2021 (included at the end of this Supplement) for the definition of FFO, as well as a detailed reconciliation of our GAAP net income (loss) to FFO.

· REDEMPTIONS

Below is a summary of redemptions and repurchases pursuant to our share redemption program for the three months ended March 31, 2021 and year ended December 31, 2020. Our board of directors may modify, suspend or terminate our current share redemption programs if it deems such action to be in the best interest of our stockholders.


(in thousands, except for per share data)	For the Three Months Ended March 31, 2021			For the Year Ended December 31, 2020
Number of shares requested for redemption or repurchase		2,244			14,071
Number of shares redeemed or repurchased		2,244			14,071
% of shares requested that were redeemed or repurchased		100.0	%		100.0	%
Average redemption or repurchase price per share	$	7.55		$	7.50

For the three months ended March 31, 2021 and 2020, we received and redeemed in full eligible redemption requests for an aggregate amount of approximately $16.9 million and $30.8 million, respectively, which we redeemed using cash flows from operating activities in excess of our distributions paid in cash, cash on hand, proceeds from our public offerings, proceeds from the disposition of properties, and borrowings under our revolving line of credit. We generally repay funds borrowed from our revolving line of credit from a variety of sources including: cash flows from operating activities in excess of our distributions; proceeds from our public offerings; proceeds from the disposition of properties; and other longer-term borrowings.

S-9

· FEES AND EXPENSES PAYABLE TO OUR ADVISOR, OUR DEALER MANAGER AND THEIR AFFILIATES

The table below summarizes the fees and expenses incurred by us for services provided by the Advisor and its affiliates, and by the Dealer Manager related to the services the Dealer Manager provided in connection with our public offerings and any related amounts payable. Refer to the section of the Prospectus entitled “The Advisor and the Advisory Agreement—Summary of Fees, Commissions and Reimbursements” for more information regarding these fees and expenses.



	For the Three Months Ended March 31,				Payable as of
(in thousands)	2021		2020		March 31, 2021		December 31, 2020
Selling commissions and dealer manager fees (1)	$	406	$	692	$	—	$	—
Ongoing distribution fees (1)(2)		603		470		226		188
Advisory fees - fixed component		4,824		4,153		1,630		1,547
Advisory fees—performance component		1,749		1,348		1,749		4,608
Other expense reimbursements—Advisor (3)(4)		3,041		2,217		781		2,112
Other expense reimbursements—Dealer Manager		58		335		—		—
DST Program selling commissions, dealer manager and distribution fees (1)		1,395		1,399		224		—
Other DST Program related costs - Advisor (3)		1,019		1,431		73		—
Total	$	13,095	$	12,045	$	4,683	$	8,455

(1)	All or a portion of these amounts will be retained by, or reallowed (paid) to, participating broker-dealers and servicing broker-dealers.

(2)

The distribution fees accrue daily and are payable monthly in arrears. Additionally, we accrue for future estimated amounts payable related to ongoing distribution fees. The future estimated amounts payable of approximately $19.5 million and $15.5 million as of March 31, 2021 and December 31, 2020, respectively, are included in other liabilities on the consolidated balance sheets.

(3)	Includes costs reimbursed to the Advisor related to the DST Program.

(4)

Other expense reimbursements include certain expenses incurred for organization and offering, acquisition and general administrative services provided to us under the advisory agreement, including, but not limited to, certain expenses described after this footnote, allocated rent paid to both third parties and affiliates of the Advisor, equipment, utilities, insurance, travel and entertainment.

Certain of the expense reimbursements described in the table above include a portion of the compensation expenses of officers and employees of the Advisor or its affiliates related to activities for which the Advisor does not otherwise receive a separate fee. Amounts incurred related to these compensation expenses for the three months ended March 31, 2021, and 2020 were approximately $2.5 million and $1.8 million, respectively. No reimbursement is made for compensation of our named executive officers unless the named executive officer is providing stockholder services, as outlined in the advisory agreement.

S-10

· CERTAIN HISTORICAL NAV INFORMATION

The following table shows our NAV per share at the end of each quarter during 2020 and 2021:


Date	Class T		Class S		Class D		Class I		Class E
March 31, 2020	$	7.53	$	7.53	$	7.53	$	7.53	$	7.53
June 30, 2020	$	7.50	$	7.50	$	7.50	$	7.50	$	7.50
September 30, 2020	$	7.52	$	7.52	$	7.52	$	7.52	$	7.52
December 31, 2020	$	7.54	$	7.54	$	7.54	$	7.54	$	7.54
March 31, 2021	$	7.59	$	7.59	$	7.59	$	7.59	$	7.59

Our share sales and redemptions are made based on the applicable NAV per share carried out to four decimal places. Our most recent NAV per share for each class is (i) posted on our website, www.blackcreekdiversified.com, and (ii) made available on our toll-free, automated telephone line, (888) 310-9352. In addition, we will disclose in a prospectus or prospectus supplement filed with the Commission the principal valuation components of our monthly NAV calculations.

● EXPERTS

The statements included in this Supplement under “April 30, 2021 NAV Per Share,” relating to the role of Altus Group U.S. Inc. have been reviewed by Altus Group U.S. Inc., an independent valuation firm, and are included in this Supplement given the authority of such firm as experts in real estate valuations.

· QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 2021

On May 11, 2021, we filed our Quarterly Report on Form 10-Q for the quarter ended March 31, 2021 with the Commission. The report (without exhibits) is attached to this Supplement.

S-11

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

⌧ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended March 31, 2021

◻ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from to .

Commission File No. 000-52596

BLACK CREEK DIVERSIFIED PROPERTY FUND INC.

(Exact name of registrant as specified in its charter)


Maryland	30-0309068
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

518 Seventeenth Street, 17th Floor Denver, CO	80202
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (303) 228-2200

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 ⌧ No ◻

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). 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 the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	◻	Accelerated filer	◻	Smaller reporting company	◻
Non-accelerated filer	⌧			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 ⌧

As of May 5, 2021, there were 11,076,586 shares of the registrant’s Class T common stock, 27,822,435 shares of the registrant’s Class S common stock, 5,293,775 shares of the registrant’s Class D common stock, 47,409,326 shares of the registrant’s Class I common stock and 58,369,100 shares of the registrant’s Class E common stock outstanding.

BLACK CREEK DIVERSIFIED PROPERTY FUND INC.

TABLE OF CONTENTS


		Page
PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements:
	Condensed Consolidated Balance Sheets as of March 31, 2021 (unaudited) and December 31, 2020	3
	Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2021 and 2020 (unaudited)	4
	Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three Months Ended March 31, 2021 and 2020 (unaudited)	5
	Condensed Consolidated Statements of Equity for the Three Months Ended March 31, 2021 and 2020 (unaudited)	6
	Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2021 and 2020 (unaudited)	7
	Notes to Condensed Consolidated Financial Statements (unaudited)	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	37
Item 4.	Controls and Procedures	38
PART II. OTHER INFORMATION
Item 1A.	Risk Factors	38
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	38
Item 5.	Other Information	40
Item 6.	Exhibits	41

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

BLACK CREEK DIVERSIFIED PROPERTY FUND INC.

CONDENSED CONSOLIDATED BALANCE SHEETS


	As of
	March 31,		December 31,
(in thousands, except per share data)	2021		2020
	(Unaudited)
ASSETS
Net investment in real estate properties	$	1,970,456	$	1,954,573
Debt-related investments, net		47,685		49,628
Cash and cash equivalents		17,100		11,266
Restricted cash		10,502		10,468
DST Program Loans		50,012		45,229
Other assets		47,717		40,396
Total assets	$	2,143,472	$	2,111,560
LIABILITIES AND EQUITY
Liabilities
Accounts payable and accrued expenses	$	33,464	$	40,371
Debt, net		912,881		965,305
Intangible lease liabilities, net		40,078		40,457
Financing obligations, net		528,051		502,533
Other liabilities		60,217		61,205
Total liabilities		1,574,691		1,609,871
Commitments and contingencies (Note 12)
Redeemable noncontrolling interest		8,430		3,798
Equity
Stockholders’ equity:
Preferred stock, $0.01 par value—200,000 shares authorized, none issued and outstanding		—		—
Class E common stock, $0.01 par value—500,000 shares authorized, 59,412 shares and 60,873 shares issued and outstanding, respectively		594		609
Class T common stock, $0.01 par value—500,000 shares authorized, 10,369 shares and 9,831 shares issued and outstanding, respectively		104		98
Class S common stock, $0.01 par value—500,000 shares authorized, 26,443 shares and 23,516 shares issued and outstanding, respectively		264		235
Class D common stock, $0.01 par value—500,000 shares authorized, 4,899 shares and 4,098 shares issued and outstanding, respectively		49		41
Class I common stock, $0.01 par value—500,000 shares authorized, 46,169 shares and 44,723 shares issued and outstanding, respectively		462		447
Additional paid-in capital		1,298,328		1,269,146
Distributions in excess of earnings		(837,019)		(841,496)
Accumulated other comprehensive loss		(22,096)		(27,431)
Total stockholders’ equity		440,686		401,649
Noncontrolling interests		119,665		96,242
Total equity		560,351		497,891
Total liabilities and equity	$	2,143,472	$	2,111,560

See accompanying Notes to Condensed Consolidated Financial Statements.

BLACK CREEK DIVERSIFIED PROPERTY FUND INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)


	For the Three Months Ended
	March 31,
(in thousands, except per share data)	2021		2020
Revenues:
Rental revenues	$	50,432	$	44,268
Debt-related income		2,124		34
Total revenues		52,556		44,302
Operating expenses:
Rental expenses		17,562		15,503
Real estate-related depreciation and amortization		16,733		14,450
General and administrative expenses		2,585		2,229
Advisory fees, related party		6,573		5,501
Impairment of real estate property		758		—
Total operating expenses		44,211		37,683
Other expenses (income):
Interest expense		16,563		13,351
Gain on sale of real estate property		(27,342)		(2,192)
Other (income) expenses		(274)		(92)
Total other expenses (income)		(11,053)		11,067
Net income (loss)		19,398		(4,448)
Net (income) loss attributable to redeemable noncontrolling interests		(134)		15
Net (income) loss attributable to noncontrolling interests		(1,699)		299
Net income (loss) attributable to common stockholders	$	17,565	$	(4,134)
Weighted-average shares outstanding—basic		145,861		142,543
Weighted-average shares outstanding—diluted		161,089		153,357
Net income (loss) attributable to common stockholders per common share—basic and diluted	$	0.12	$	(0.03)

See accompanying Notes to Condensed Consolidated Financial Statements.

BLACK CREEK DIVERSIFIED PROPERTY FUND INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited)


	For the Three Months Ended
	March 31,
(in thousands)	2021		2020
Net income (loss)	$	19,398	$	(4,448)
Change from cash flow hedging derivatives		5,915		(18,222)
Comprehensive income (loss)		25,313		(22,670)
Comprehensive (income) loss attributable to redeemable noncontrolling interests		(175)		77
Comprehensive (income) loss attributable to noncontrolling interests		(2,238)		1,662
Comprehensive income (loss) attributable to common stockholders	$	22,900	$	(20,931)

See accompanying Notes to Condensed Consolidated Financial Statements.

BLACK CREEK DIVERSIFIED PROPERTY FUND INC.

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(Unaudited)


	Stockholders’ Equity
								Accumulated
				Additional		Distributions		Other
	Common Stock			Paid-in		in Excess of		Comprehensive		Noncontrolling		Total
(in thousands)	Shares	Amount		Capital		Earnings		Income (Loss)		Interests		Equity
FOR THE THREE MONTHS ENDED MARCH 31, 2020
Balance as of December 31, 2019	140,480	$	1,405	$	1,257,147	$	(775,259)	$	(14,662)	$	81,657	$	550,288
Net loss (excluding $15 attributable to redeemable noncontrolling interest)	—		—		—		(4,134)		—		(299)		(4,433)
Unrealized loss from derivative instruments (excluding $62 attributable to redeemable noncontrolling interest)	—		—		—		—		(16,797)		(1,363)		(18,160)
Issuance of common stock, net of offering costs	6,977		70		50,139		—		—		—		50,209
Share-based compensation, net of forfeitures	16		—		118		—		—		—		118
Redemptions of common stock	(4,118)		(41)		(30,736)		—		—		—		(30,777)
Amortization of share-based compensation	—		—		15		—		—		—		15
Issuances of OP Units for DST Interests	—		—		—		—		—		11,233		11,233
Distributions declared on common stock and noncontrolling interests, net of distribution fees	—		—		—		(12,893)		—		(982)		(13,875)
Redemption value allocation adjustment to redeemable noncontrolling interest	—		—		(138)		—		—		—		(138)
Redemptions of noncontrolling interests	—		—		(445)		—		—		(4,713)		(5,158)
Balance as of March 31, 2020	143,355	$	1,434	$	1,276,100	$	(792,286)	$	(31,459)	$	85,533	$	539,322
FOR THE THREE MONTHS ENDED MARCH 31, 2021
Balance as of December 31, 2020	143,041	$	1,430	$	1,269,146	$	(841,496)	$	(27,431)	$	96,242	$	497,891
Net income (excluding $134 attributable to redeemable noncontrolling interest)	—		—		—		17,565		—		1,699		19,264
Unrealized gain from derivative instruments (excluding $41 attributable to redeemable noncontrolling interest)	—		—		—		—		5,335		539		5,874
Issuance of common stock, net of offering costs	6,487		65		46,663		—		—		—		46,728
Share-based compensation, net of forfeitures	8		—		57		—		—		—		57
Redemptions of common stock	(2,244)		(22)		(16,907)		—		—		—		(16,929)
Amortization of share-based compensation	—		—		(10)		—		—		—		(10)
Issuances of OP Units for DST Interests	—		—		—		—		—		25,941		25,941
Distributions declared on common stock and noncontrolling interests, net of distribution fees (excludes $103 attributable to redeemable noncontrolling interest)	—		—		(587)		(13,088)		—		(3,711)		(17,386)
Redemption value allocation adjustment to redeemable noncontrolling interest	—		—		48		—		—		—		48
Redemptions of noncontrolling interests	—		—		(82)		—		—		(1,045)		(1,127)
Balance as of March 31, 2021	147,292	$	1,473	$	1,298,328	$	(837,019)	$	(22,096)	$	119,665	$	560,351

See accompanying Notes to Condensed Consolidated Financial Statements.

BLACK CREEK DIVERSIFIED PROPERTY FUND INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


	For the Three Months Ended March 31,
(in thousands)	2021		2020
Operating activities:
Net income (loss)	$	19,398	$	(4,448)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Real estate-related depreciation and amortization		16,733		14,450
Straight-line rent and amortization of above- and below-market leases		(1,825)		(1,060)
Gain on sale of real estate property		(27,342)		(2,192)
Impairment of real estate property		758		—
Other		3,082		2,691
Changes in operating assets and liabilities		(3,145)		(1,986)
Net cash provided by operating activities		7,659		7,455
Investing activities:
Real estate acquisitions		(49,053)		(56,385)
Capital expenditures		(7,916)		(11,227)
Proceeds from disposition of real estate property		48,960		2,752
Principal collections on debt-related investments		2,405		43
Investment in debt-related investments		(402)		—
Other		(1,698)		(473)
Net cash used in investing activities		(7,704)		(65,290)
Financing activities:
Repayments of mortgage notes		(786)		(704)
Net repayments of line of credit		(52,000)		—
Redemptions of common stock		(16,929)		(30,777)
Distributions on common stock		(7,517)		(7,483)
Proceeds from issuance of common stock		43,895		47,444
Proceeds from financing obligations		46,824		82,396
Offering costs for issuance of common stock and private placements		(2,687)		(2,606)
Distributions to noncontrolling interest holders		(1,303)		(982)
Redemption of OP Unit holder interests		(1,127)		(5,158)
Other		(2,457)		(3,183)
Net cash provided by financing activities		5,913		78,947
Net increase in cash, cash equivalents and restricted cash		5,868		21,112
Cash, cash equivalents and restricted cash, at beginning of period		21,734		107,782
Cash, cash equivalents and restricted cash, at end of period	$	27,602	$	128,894

See accompanying Notes to Condensed Consolidated Financial Statements.

BLACK CREEK DIVERSIFIED PROPERTY FUND INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. BASIS OF PRESENTATION

Unless the context otherwise requires, the “Company,” “we,” “our,” or “us” refers to Black Creek Diversified Property Fund Inc. and its consolidated subsidiaries.

The accompanying unaudited condensed consolidated financial statements included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Accordingly, certain disclosures normally included in the annual audited financial statements prepared in accordance with accounting principles generally accepted in the U.S. (“GAAP”) have been omitted. As such, the accompanying unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes contained in our Annual Report on Form 10-K for the year ended December 31, 2020, filed with the SEC on March 5, 2021 (“2020 Form 10-K”).

As used herein, the term “commercial” refers to our office, retail and industrial properties or customers, as applicable.

Recently Adopted Accounting Standards

In August 2020, the FASB issued ASU 2020-06, “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40)” (“ASU 2020-06”), which updates various codification topics to simplify the accounting guidance for certain financial instruments with characteristics of liabilities and equity, with a specific focus on convertible instruments and the derivative scope exception for contracts in an entity’s own equity. ASU 2020-06 is effective for annual and interim reporting periods beginning after December 15, 2021, with early adoption permitted for annual and interim reporting periods beginning after December 15, 2020. We adopted this standard as of the reporting period beginning January 1, 2021. The adoption did not have a material effect on our condensed consolidated financial statements.

In January 2021, the FASB issued ASU 2021-01 “Reference Rate Reform (Topic 848)” (“ASU 2021-01”) to refine the scope of ASU 2020-04 and clarify the guidance as part of FASB’s ongoing monitoring of global reference rate reform activities. The ASU extends the guidance to provide optional expedients and exceptions for applying GAAP to derivative contracts if certain criteria are met. The amendments only apply to derivative contracts that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. ASU 2021-01 is effective for annual and interim reporting periods beginning after March 12, 2020, with early adoption permitted, through December 31, 2022. The expedients and exceptions do not apply to derivative contracts entered into after December 31, 2022. We adopted this standard immediately upon its issuance. The adoption did not have a material effect on our condensed consolidated financial statements.

2. INVESTMENTS IN REAL ESTATE PROPERTIES

The following table summarizes our consolidated investments in real estate properties:


	As of
(in thousands)	March 31, 2021		December 31, 2020
Land	$	480,989	$	476,442
Buildings and improvements		1,705,947		1,689,474
Intangible lease assets		281,681		289,762
Investment in real estate properties		2,468,617		2,455,678
Accumulated depreciation and amortization		(498,161)		(501,105)
Net investment in real estate properties	$	1,970,456	$	1,954,573

Acquisitions

During the three months ended March 31, 2021, we acquired 100% of the following property, which was determined to be an asset acquisition:


($ in thousands)	Property Type	Acquisition Date	Total Purchase Price (1)
Radar Distribution Center LLC	Industrial	3/31/2021	$	49,168

(1)	Total purchase price is equal to the total consideration paid plus any debt assumed at fair value. There was no debt assumed in connection with the 2021 acquisition.

During the three months ended March 31, 2021, we allocated the purchase price of our acquisitions to land, building and intangible lease assets and liabilities as follows:


	For the Three Months Ended
($ in thousands)	March 31, 2021
Land	$	7,167
Building		40,952
Intangible lease assets		1,421
Below-market lease liabilities		(372)
Total purchase price (1)	$	49,168

(1)	There was no debt assumed in connection with the 2021 acquisition.

The weighted-average amortization period for the intangible lease assets and liabilities acquired in connection with our acquisition during the three months ended March 31, 2021, as of the date of the acquisition, was 7.1 years.

Dispositions

During the three months ended March 31, 2021, we sold one retail property and one industrial property for net proceeds of approximately $49.0 million. We recorded a net gain on sale of approximately $27.3 million.

During the three months ended March 31, 2020, we sold one retail outparcel for net proceeds of approximately $2.8 million. We recorded a net gain on sale of approximately $2.2 million.

Intangible Lease Assets and Liabilities

Intangible lease assets and liabilities as of March 31, 2021 and December 31, 2020 include the following:


	As of March 31, 2021						As of December 31, 2020
			Accumulated						Accumulated
(in thousands)	Gross		Amortization		Net		Gross		Amortization		Net
Intangible lease assets	$	259,464	$	(209,352)	$	50,112	$	266,242	$	(214,055)	$	52,187
Above-market lease assets		22,217		(20,015)		2,202		23,520		(21,216)		2,304
Below-market lease liabilities		(80,244)		40,166		(40,078)		(79,891)		39,434		(40,457)

Rental Revenue Adjustments and Depreciation and Amortization Expense

The following table summarizes straight-line rent adjustments, amortization recognized as an increase (decrease) to rental revenues from above- and below-market lease assets and liabilities, and real estate-related depreciation and amortization expense:


	For the Three Months Ended March 31,
(in thousands)	2021		2020
Increase (decrease) to rental revenue:
Straight-line rent adjustments	$	1,176	$	288
Above-market lease amortization		(102)		(71)
Below-market lease amortization		751		843
Real estate-related depreciation and amortization:
Depreciation expense	$	13,354	$	10,963
Intangible lease asset amortization		3,379		3,487

Real Estate Property Impairment

During the three months ended March 31, 2021, we recorded non-cash impairment charges of $0.8 million related to a retail property located in the Manomet, Massachusetts market, which was disposed of in March 2021. Prior to the disposition, we reevaluated the fair value of the property and determined that the net book value of the property exceeded the respective contract sales price less costs to sell the property, resulting in the impairment.

3. DEBT

A summary of our debt is as follows:


	Weighted-Average
	Effective Interest Rate as of					Balance as of
	March 31,		December 31,			March 31,		December 31,
($ in thousands)	2021		2020		Current Maturity Date	2021		2020
Line of credit (1)	1.51	%	1.54	%	January 2023	$	54,000	$	106,000
Term loan (2)	3.27		3.27		January 2024		325,000		325,000
Term loan (3)	3.29		3.29		February 2022		200,000		200,000
Fixed-rate mortgage notes (4)	3.55		3.55		September 2021 - December 2029		209,758		210,544
Floating-rate mortgage note (5)	2.50		2.50		January 2022		127,000		127,000
Total principal amount / weighted-average (6)	3.12	%	3.04	%		$	915,758	$	968,544
Less: unamortized debt issuance costs						$	(3,657)	$	(4,083)
Add: mark-to-market adjustment on assumed debt							780		844
Total debt, net						$	912,881	$	965,305
Gross book value of properties encumbered by debt						$	587,162	$	584,637

(1)

The effective interest rate is calculated based on the London Interbank Offered Rate (“LIBOR”), plus a margin ranging from 1.30% to 2.10%, depending on our consolidated leverage ratio. As of March 31, 2021, the unused and available portions under the line of credit were approximately $396.0 million and $260.2 million, respectively. The line of credit is available for general business purposes including, but not limited to, refinancing of existing indebtedness and financing the acquisition of permitted investments, including commercial properties.

(2)

The effective interest rate is calculated based on LIBOR, plus a margin ranging from 1.25% to 2.05%, depending on our consolidated leverage ratio. Total commitments for this term loan are $325.0 million. There are no amounts unused or available under this term loan as of March 31, 2021. The weighted-average interest rate is the all-in interest rate, including the effects of interest rate swap agreements relating to approximately $300.0 million in borrowings under this term loan.

(3)

The effective interest rate is calculated based on LIBOR, plus a margin ranging from 1.25% to 2.05%, depending on our consolidated leverage ratio. Total commitments for this term loan are $200.0 million. There are no amounts unused or available under this term loan as of March 31, 2021. The weighted-average interest rate is the all-in interest rate and is fixed through interest swap agreements.

(4)

The amount outstanding as of March 31, 2021 includes a $49.5 million floating-rate mortgage note that is subject to an interest rate spread of 1.65% over one-month LIBOR, which we have effectively fixed using an interest rate swap at 2.85% until the designated cash flow hedge expires in July 2021. This mortgage note matures in August 2023.

(5)	The effective interest rate is calculated based on LIBOR plus a margin. As of both March 31, 2021, and December 31, 2020, our floating-rate mortgage note was subject to a weighted-average interest rate spread of 2.25%.

(6)	The weighted-average remaining term of our borrowings was approximately 2.5 years as of March 31, 2021, excluding the impact of certain extension options.

As of March 31, 2021, the principal payments due on our outstanding debt during each of the next five years and thereafter were as follows:


(in thousands)	Line of Credit		Term Loans		Mortgage Notes		Total
Remainder of 2021	$	—	$	—	$	9,021	$	9,021
2022 (1)		—		200,000		128,367		328,367
2023 (2)		54,000		—		49,549		103,549
2024		—		325,000		—		325,000
2025		—		—		70,000		70,000
Thereafter		—		—		79,821		79,821
Total principal payments	$	54,000	$	525,000	$	336,758	$	915,758

(1)	The term of this term loan may be extended pursuant to two one-year extension options, subject to certain conditions.

(2)	The term of the line of credit may be extended pursuant to two six-month extension options, subject to certain conditions.

Debt Covenants

Our line of credit, term loans and mortgage note agreements contain various property-level covenants, including customary affirmative and negative covenants. In addition, the line of credit and term loan agreements contain certain corporate-level financial covenants, including leverage ratio, fixed charge coverage ratio, and tangible net worth thresholds. We were in compliance with our debt covenants as of March 31, 2021.

Derivative Instruments

To manage interest rate risk for certain of our variable-rate debt, we use interest rate derivative instruments as part of our risk management strategy. These derivatives are designed to mitigate the risk of future interest rate increases by either providing a fixed interest rate or capping the variable interest rate for a limited, pre-determined period of time. Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for us making fixed-rate payments over the life of the interest rate swap agreements without exchange of the underlying notional amount. Interest rate caps involve the receipt of variable amounts from a counterparty at the end of each period in which the interest rate exceeds the agreed fixed price. Interest rate caps are not designated as hedges. Certain of our variable-rate borrowings are not hedged, and therefore, to an extent, we have ongoing exposure to interest rate movements.

For derivative instruments that are designated and qualify as cash flow hedges, the gain or loss is recorded as a component of accumulated other comprehensive income (loss) (“AOCI”) on the condensed consolidated balance sheets and is reclassified into earnings as interest expense for the same period that the hedged transaction affects earnings, which is when the interest expense is recognized on the related debt. During the next 12 months, we estimate that approximately $9.3 million will be reclassified as an increase to interest expense related to active effective hedges of existing floating-rate debt, and we estimate that approximately $0.1 million will be reclassified as an increase to interest expense related to terminated hedges where the likelihood of the originally hedged interest payments remains probable.

The following table summarizes the location and fair value of our derivative instruments on our condensed consolidated balance sheets:


	Number of			Fair Value
($ in thousands)	Contracts	Notional Amount			Other Assets	Other Liabilities
As of March 31, 2021
Interest rate swaps	14	$	549,549	$	—	$	21,014
Interest rate caps	1		127,000		—		—
Total derivative instruments	15	$	676,549	$	—	$	21,014
As of December 31, 2020
Interest rate swaps	14	$	549,849	$	—	$	26,916
Interest rate caps	1		127,000		—		—
Total derivative instruments	15	$	676,849	$	—	$	26,916

The following table presents the effect of our derivative instruments on our condensed consolidated financial statements:


	For the Three Months Ended
	March 31,
(in thousands)	2021		2020
Derivative instruments designated as cash flow hedges:
Gain (loss) recognized in AOCI	$	3,343	$	(18,730)
Amount reclassified from AOCI into interest expense		2,572		508
Total interest expense presented in the condensed consolidated statements of operations in which the effects of cash flow hedges are recorded		16,563		13,351
Derivative instruments not designated as cash flow hedges:
Loss recognized in income	$	(13)	$	(11)

4. DST PROGRAM

We have a program to raise capital through private placement offerings by selling beneficial interests (the “DST Interests”) in specific Delaware statutory trusts holding real properties (the “DST Program”). During the three months ended March 31, 2021 and 2020, we sold approximately $51.8 million and $94.3 million, respectively, in gross interests related to the DST Program, including interests financed by the DST Program Loans (as defined below), and incurred rent obligations of approximately $6.5 million and $3.6 million, respectively, under our master lease agreements with investors who are participating in the DST Program. Additionally, during the three months ended March 31, 2021 and 2020, 3.4 million partnership units (“OP Units”) in our operating partnership, Black Creek Diversified Property Operating Partnership LP (the “Operating Partnership”) and 1.5 million OP Units, respectively were issued in exchange for DST Interests, for a net investment of $25.9 million and $11.3 million, respectively, in accordance with our Umbrella Partnership Real Estate Investment Trust (“UPREIT”) structure.

In order to facilitate additional capital raise through the DST Program, we may offer loans (“DST Program Loans”) to finance a portion of the sale of DST Interests to potential investors. As of March 31, 2021 and December 31, 2020, we had approximately $50.0 million and $45.2 million, respectively, outstanding in DST Program Loans that were made to partially finance the sale of DST Interests outstanding in the DST Program. Of the $51.8 million and $94.3 million, respectively, of gross interests sold during the three months ended March 31, 2021 and 2020, $5.0 million and $11.9 million, respectively, were financed by DST Program Loans. We include our investments in DST Program Loans separately on our consolidated balance sheets in the “DST Program Loans” line item and we include income earned from DST Program Loans in “other income” on our statements of operations. We do not have a significant credit concentration with any individual purchaser as a result of DST Program Loans.

5. FAIR VALUE

We estimate the fair value of our financial instruments using available market information and valuation methodologies we believe to be appropriate for these purposes. Considerable judgment and a high degree of subjectivity are involved in developing these estimates and, accordingly, they are not necessarily indicative of the amounts that we would realize upon disposition.

Fair Value Measurements on a Recurring Basis

The following table presents our financial instruments measured at fair value on a recurring basis:


							Total
(in thousands)	Level 1		Level 2		Level 3		Fair Value
As of March 31, 2021
Assets:
Derivative instruments	$	—	$	—	$	—	$	—
Total assets measured at fair value	$	—	$	—	$	—	$	—
Liabilities:
Derivative instruments	$	—	$	21,014	$	—	$	21,014
Total liabilities measured at fair value	$	—	$	21,014	$	—	$	21,014
As of December 31, 2020
Assets:
Derivative instruments	$	—	$	—	$	—	$	—
Total assets measured at fair value	$	—	$	—	$	—	$	—
Liabilities:
Derivative instruments	$	—	$	26,916	$	—	$	26,916
Total liabilities measured at fair value	$	—	$	26,916	$	—	$	26,916

The following methods and assumptions were used to estimate the fair value of each class of financial instrument:

Derivative Instruments. The derivative instruments are interest rate swaps and an interest rate cap whose fair value is estimated using market-standard valuation models. Such models involve using market-based observable inputs, including interest rate curves. We incorporate credit valuation adjustments to appropriately reflect both our nonperformance risk and respective counterparty’s nonperformance risk in the fair value measurements, which we have concluded are not material to the valuation. Due to these derivative instruments being unique and not actively traded, the fair value is classified as Level 2. See “Note 3” above for further discussion of our derivative instruments.

Nonrecurring Fair Value Measurements

As of March 31, 2021 and December 31, 2020, the fair values of cash and cash equivalents, restricted cash, tenant receivables, accounts payable and accrued expenses, and distributions payable approximate their carrying values because of the short-term nature of these instruments. The table below includes fair values for certain of our financial instruments for which it is practicable to estimate fair value. The carrying values and fair values of these financial instruments were as follows:


	As of March 31, 2021				As of December 31, 2020
	Carrying		Fair		Carrying		Fair
(in thousands)	Value (1)		Value		Value (1)		Value
Assets:
Debt-related investments	$	47,883	$	47,645	$	49,885	$	49,584
DST Program Loans		50,012		50,012		45,229		45,229
Liabilities:
Line of credit	$	54,000	$	53,971	$	106,000	$	105,592
Term loans		525,000		524,085		525,000		521,945
Mortgage notes		336,758		335,349		337,544		336,336

(1)	The carrying value reflects the principal amount outstanding.

6. STOCKHOLDERS’ EQUITY

Public Offering

A summary of our public offerings (including shares sold through the primary offering and distribution reinvestment plan (“DRIP”)) for the three months ended March 31, 2021, is as follows:


(in thousands)	Class T		Class S		Class D			Class I		Class E		Total
Amount of gross proceeds raised:
Primary offering	$	4,047	$	22,244	$	6,156		$	11,448	$	—	$	43,895
DRIP		440		1,016		189			2,003		1,810		5,458
Total offering	$	4,487	$	23,260	$	6,345	��	$	13,451	$	1,810	$	49,353
Number of shares sold:
Primary offering		523		2,909		816			1,516		—		5,764
DRIP		58		135		25			265		240		723
Total offering		581		3,044		841			1,781		240		6,487

Common Stock

The following table describes the changes in each class of common shares during the periods presented below:


	Class T	Class S	Class D	Class I	Class E	Total
(in thousands)	Shares	Shares	Shares	Shares	Shares	Shares
FOR THE THREE MONTHS ENDED MARCH 31, 2020
Balance as of December 31, 2019	5,852	20,593	3,499	43,732	66,804	140,480
Issuance of common stock:
Primary shares	1,764	1,990	320	2,188	—	6,262
Distribution reinvestment plan	35	116	22	276	266	715
Share-based compensation	—	—	—	16	—	16
Redemptions of common stock	(108)	(913)	(26)	(761)	(2,310)	(4,118)
Balance as of March 31, 2020	7,543	21,786	3,815	45,451	64,760	143,355
FOR THE THREE MONTHS ENDED MARCH 31, 2021
Balance as of December 31, 2020	9,831	23,516	4,098	44,723	60,873	143,041
Issuance of common stock:
Primary shares	523	2,909	816	1,516	—	5,764
Distribution reinvestment plan	58	135	25	265	240	723
Share-based compensation	—	—	—	8	—	8
Redemptions of common stock	(43)	(117)	(40)	(343)	(1,701)	(2,244)
Balance as of March 31, 2021	10,369	26,443	4,899	46,169	59,412	147,292

Distributions

The following table summarizes our distribution activity (including distributions to noncontrolling interests and distributions reinvested in shares of our common stock) for the periods below:


	Amount
			Common Stock
	Declared per		Distributions		Other Cash		Reinvested in		Total
(in thousands, except per share data)	Common Share (1)		Paid in Cash		Distributions (2)		Shares		Distributions
2021
March 31	$	0.09375	$	7,562	$	2,010	$	5,526	$	15,098
Total	$	0.09375	$	7,562	$	2,010	$	5,526	$	15,098
2020
March 31	$	0.09375	$	7,533	$	1,499	$	5,360	$	14,392
June 30		0.09375		7,539		1,611		5,316		14,466
September 30		0.09375		7,482		1,592		5,282		14,356
December 31		0.09375		7,464		1,750		5,347		14,561
Total	$	0.37500	$	30,018	$	6,452	$	21,305	$	57,775

(1)	Amount reflects the total quarterly distribution rate, subject to adjustment for class-specific fees.

(2)

Includes other cash distributions consisting of (i) distributions paid to holders of OP Units; and (ii) ongoing distribution fees paid to the dealer manager for our public offerings, Black Creek Capital Markets, LLC (the “Dealer Manager”), with respect to certain classes of our shares. See “Note 8” for further detail regarding the current and historical ongoing distribution fees.

Redemptions and Repurchases

Below is a summary of redemptions and repurchases pursuant to our share redemption program for the three months ended March 31, 2021 and 2020. Our board of directors may modify, suspend or terminate our current share redemption programs if it deems such action to be in the best interest of our stockholders.


	For the Three Months Ended March 31,
(in thousands, except for per share data)	2021			2020
Number of shares requested for redemption or repurchase		2,244			4,118
Number of shares redeemed or repurchased		2,244			4,118
% of shares requested that were redeemed or repurchased		100.0	%		100.0	%
Average redemption or repurchase price per share	$	7.55		$	7.47

7. REDEEMABLE NONCONTROLLING INTERESTS

Our sponsor, Black Creek Diversified Property Advisors Group LLC (the “Sponsor”), holds, either directly or indirectly, OP Units, which were issued as payment of the performance component of the advisory fee pursuant to the amended and restated advisory agreement, by and among the Company, the Operating Partnership and our external advisor, Black Creek Diversified Property Advisors LLC (the “Advisor”). We have classified these OP Units as redeemable noncontrolling interests in mezzanine equity on the condensed consolidated balance sheets due to the fact that, as provided in the agreement of limited partnership of the Operating Partnership (the “Partnership Agreement”), the Sponsor has the ability to tender its OP Units at any time irrespective of the period that such OP Units have been held by the Sponsor, and the Operating Partnership is required to satisfy such redemption for cash unless such cash redemption would be prohibited by applicable law or the Partnership Agreement, in which case such OP Units will be redeemed for shares of the Company’s common stock of the class corresponding to the class of such OP Units. The redeemable noncontrolling interest is recorded at the greater of the carrying amount, adjusted for its share of the allocation of income or loss and dividends, or the redemption value, which is equivalent to fair value, of such OP Units at the end of each measurement period.

The following table summarizes the redeemable noncontrolling interest activity for the three months ended March 31, 2021:


($ in thousands)
As of December 31, 2020	$	3,798
Settlement of 2020 advisory fee—performance component (1)		4,608
Distributions to OP Unitholders		(103)
Net income attributable to redeemable noncontrolling interest		134
Change from cash flow hedging activities attributable to redeemable noncontrolling interest		41
Redemption value allocation adjustment to redeemable noncontrolling interest		(48)
As of March 31, 2021	$	8,430

(1)

The 2020 performance component of the advisory fee in the amount of $4.6 million became payable to the Sponsor on December 31, 2020. At the Advisor’s election, it was paid in the form of Class I OP Units valued at $4.6 million (based on the NAV per unit as of December 31, 2020), which were issued to the Sponsor in January 2021.

8. RELATED PARTY TRANSACTIONS

Summary of Fees and Expenses



	For the Three Months Ended March 31,				Payable as of
(in thousands)	2021		2020		March 31, 2021		December 31, 2020
Selling commissions and dealer manager fees (1)	$	406	$	692	$	—	$	—
Ongoing distribution fees (1)(2)		603		470		226		188
Advisory fees - fixed component		4,824		4,153		1,630		1,547
Advisory fees—performance component		1,749		1,348		1,749		4,608
Other expense reimbursements—Advisor (3)(4)		3,041		2,217		781		2,112
Other expense reimbursements—Dealer Manager		58		335		—		—
DST Program selling commissions, dealer manager and distribution fees (1)		1,395		1,399		224		—
Other DST Program related costs - Advisor (3)		1,019		1,431		73		—
Total	$	13,095	$	12,045	$	4,683	$	8,455

(1)	All or a portion of these amounts will be retained by, or reallowed (paid) to, participating broker-dealers and servicing broker-dealers.

(2)

(3)	Includes costs reimbursed to the Advisor related to the DST Program.

(4)

9. NET INCOME (LOSS) PER COMMON SHARE

The computation of our basic and diluted net income (loss) per share attributable to common stockholders is as follows:



	For the Three Months Ended March 31,
(in thousands, except per share data)	2021		2020
Net income (loss) attributable to common stockholders—basic	$	17,565	$	(4,134)
Net income (loss) attributable to redeemable OP Units		134		(15)
Net income (loss) attributable to OP Units		1,699		(299)
Net income (loss) attributable to common stockholders—diluted	$	19,398	$	(4,448)
Weighted-average shares outstanding—basic		145,861		142,543
Incremental weighted-average shares effect of conversion of OP Units		15,228		10,814
Weighted-average shares outstanding—diluted		161,089		153,357
Net income (loss) per share attributable to common stockholders:
Basic	$	0.12	$	(0.03)
Diluted	$	0.12	$	(0.03)

10. SUPPLEMENTAL CASH FLOW INFORMATION

Supplemental cash flow information and disclosure of non-cash investing and financing activities is as follows:


	For the Three Months Ended
	March 31,
(in thousands)	2021		2020
Distributions reinvested in common stock	$	5,459	$	5,340
Change in accrued future ongoing distribution fees		3,987		709
Increase in DST Program Loans receivable through DST Program capital raising		4,992		11,909
Redeemable noncontrolling interest issued as settlement of performance component of the Advisory fee		4,608		3,776
Redemption value allocation adjustment to redeemable noncontrolling interest		(48)		138
Mortgage notes assumed on real estate acquisitions at fair value		—		9,518
Issuances of OP Units for DST Interests		25,941		11,232

Restricted Cash

Restricted cash consists of lender and property-related escrow accounts. The following table presents the components of the beginning of period and end of period cash, cash equivalents and restricted cash reported within the condensed consolidated statements of cash flows:


	For the Three Months Ended
	March 31,
(in thousands)	2021		2020
Beginning of period:
Cash and cash equivalents	$	11,266	$	97,772
Restricted cash		10,468		10,010
Cash, cash equivalents and restricted cash	$	21,734	$	107,782
End of period:
Cash and cash equivalents	$	17,100	$	118,275
Restricted cash		10,502		10,619
Cash, cash equivalents and restricted cash	$	27,602	$	128,894

11. SIGNIFICANT RISKS AND UNCERTAINTIES

Significant Risks and Uncertainties

Currently, one of the most significant risks and uncertainties is the adverse effect of the current novel coronavirus (COVID-19) pandemic. A number of our customers previously announced temporary closures of their stores and requested rent deferral or rent abatement during this pandemic.

The COVID-19 pandemic could have material and adverse effects on our financial condition, results of operations and cash flows in the near term due to, but not limited to, the following:

●

reduced economic activity severely impacts our customers’ businesses, financial condition and liquidity and may cause customers to be unable to fully meet their obligations to us or to otherwise seek modifications of such obligations, resulting in increases in uncollectible receivables and reductions in rental income;

●

the negative financial impact of the pandemic could impact our future compliance with financial covenants of our credit facility and other debt agreements; and

●

weaker economic conditions could cause us to recognize impairment in value of our tangible or intangible assets.

We are closely monitoring the impact of the COVID-19 pandemic on all aspects of our business, including how it will impact our customers and business partners. While COVID-19 has not had a material effect on our condensed consolidated financial statements, we are unable to predict the impact that the COVID-19 pandemic and the vaccination rates in the United States will have on our future financial condition, results of operations and cash flows due to numerous uncertainties and the impact could be material. The extent to which the COVID-19 pandemic impacts our operations and those of our customers will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the scope, severity and duration of the pandemic, the actions taken to contain the pandemic or mitigate its impact, and the direct and indirect economic effects of the pandemic and containment measures, among others.

12. COMMITMENTS AND CONTINGENCIES

Environmental Matters

A majority of the properties we acquire are subject to environmental reviews either by us or the previous owners. In addition, we may incur environmental remediation costs associated with certain land parcels we may acquire in connection with the development of the land. We have acquired certain properties in urban and industrial areas that may have been leased to or previously owned by commercial and industrial companies that discharged hazardous materials. We may purchase various environmental insurance policies to mitigate our exposure to environmental liabilities. We are not aware of any environmental liabilities that we believe would have a material adverse effect on our business, financial condition, or results of operations as of March 31, 2021.

13. SEGMENT FINANCIAL INFORMATION

Our four reportable segments are office, retail, multi-family and industrial. Factors used to determine our reportable segments include the physical and economic characteristics of our properties and the related operating activities. Our chief operating decision makers rely on net operating income, among other factors, to make decisions about allocating resources and assessing segment performance. Net operating income is the key performance metric that captures the unique operating characteristics of each segment. Items that are not directly assignable to a segment, such as certain corporate items, are not allocated but reflected as reconciling items.

The following table reflects our total assets by business segment as of March 31, 2021 and December 31, 2020:


	As of
(in thousands)	March 31, 2021		December 31, 2020
Assets:
Office properties	$	456,762	$	459,646
Retail properties		661,015		670,455
Multi-family properties		360,701		363,322
Industrial properties		491,978		461,150
Corporate		173,016		156,987
Total assets	$	2,143,472	$	2,111,560

The following table sets forth the financial results by segment for the three months ended March 31, 2021 and 2020:


(in thousands)	Office		Retail		Multi-family		Industrial		Consolidated
For the Three Months Ended March 31, 2021
Rental revenues	$	16,823	$	17,911	$	6,640	$	9,058	$	50,432
Rental expenses		(7,509)		(4,902)		(3,242)		(1,909)		(17,562)
Net operating income	$	9,314	$	13,009	$	3,398	$	7,149	$	32,870
Real estate-related depreciation and amortization	$	4,869	$	4,627	$	2,740	$	4,497	$	16,733
For the Three Months Ended March 31, 2020
Rental revenues	$	16,513	$	17,643	$	5,248	$	4,864	$	44,268
Rental expenses		(8,124)		(4,263)		(2,138)		(978)		(15,503)
Net operating income	$	8,389	$	13,380	$	3,110	$	3,886	$	28,765
Real estate-related depreciation and amortization	$	4,868	$	4,849	$	2,163	$	2,570	$	14,450

We consider net operating income to be an appropriate supplemental performance measure and believe net operating income provides useful information to our investors regarding our financial condition and results of operations because net operating income reflects the operating performance of our properties and excludes certain items that are not considered to be controllable in connection with the management of the properties, such as real estate-related depreciation and amortization, general and administrative expenses, advisory fees, impairment charges, interest expense, gains on sale of properties, other income and expense, gains and losses on the extinguishment of debt and noncontrolling interests. However, net operating income should not be viewed as an alternative measure of our financial performance since it excludes such items, which could materially impact our results of operations. Further, our net operating income may not be comparable to that of other real estate companies, as they may use different methodologies for calculating net operating income. Therefore, we believe net income, as defined by GAAP, to be the most appropriate measure to evaluate our overall financial performance.

The following table is a reconciliation of our reported net income (loss) attributable to common stockholders to our net operating income for the three months ended March 31, 2021 and 2020:


	For the Three Months Ended
	March 31,
(in thousands)	2021		2020
Net income (loss) attributable to common stockholders	$	17,565	$	(4,134)
Debt-related income		(2,124)		(34)
Real estate-related depreciation and amortization		16,733		14,450
General and administrative expenses		2,585		2,229
Advisory fees, related party		6,573		5,501
Impairment of real estate property		758		—
Other income		(274)		(92)
Interest expense		16,563		13,351
Gain on sale of real estate property		(27,342)		(2,192)
Net income (loss) attributable to redeemable noncontrolling interests		134		(15)
Net income (loss) attributable to noncontrolling interests		1,699		(299)
Net operating income	$	32,870	$	28,765

14. SUBSEQUENT EVENTS

We performed a review of events subsequent to the condensed consolidated balance sheet date through the date the condensed consolidated financial statements were issued and determined that there were no such events requiring recognition or disclosure in the condensed consolidated financial statements.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

References to the terms “we,” “our,” or “us” refer to Black Creek Diversified Property Fund Inc. and its consolidated subsidiaries. The following discussion and analysis should be read together with our unaudited condensed consolidated financial statements and notes thereto included in this Quarterly Report on Form 10-Q.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q includes certain statements that may be deemed to be “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, or the “Securities Act,” and Section 21E of the Securities Exchange Act of 1934, as amended, or the “Exchange Act.” Such forward-looking statements relate to, without limitation, our future capital expenditures, distributions, acquisitions and dispositions (including the amount and nature thereof), other developments and trends of the real estate industry, business strategies, and the expansion and growth of our operations. These statements are based on certain assumptions and analyses made by us in light of our experience and our perception of historical trends, current conditions, expected future developments and other factors we believe are appropriate. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act and Section 21E of the Exchange Act. Such statements are subject to a number of assumptions, risks and uncertainties which may cause our actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by these forward-looking statements. Forward-looking statements are generally identifiable by the use of the words “may,” “will,” “should,” “expect,” “anticipate,” “estimate,” “believe,” “intend,” “project,” “continue,” or the negative of these words, or other similar words or terms. Readers are cautioned not to place undue reliance on these forward-looking statements.

Some of the risks and uncertainties that may cause our actual results, performance or achievements to differ materially from those expressed or implied by forward-looking statements include, among others, the following:

●

the impact of macroeconomic trends, such as the unemployment rate, availability of credit, and the COVID-19 pandemic, which may have a negative effect on the following, among other things:

●

the fundamentals of our business, including overall market occupancy, space utilization for our tenants, who we refer to as customers from time-to-time herein, and rental rates;

●

the financial condition of our customers, some of which are retail, financial, legal and other professional firms, our lenders, and institutions that hold our cash balances and short-term investments, which may expose us to increased risks of breach or default by these parties;

●

customers’ ability to pay rent on their leases or our ability to re-lease space that is or becomes vacant; and

●

the value of our real estate assets, which may limit our ability to dispose of assets at attractive prices or obtain or maintain debt financing secured by our properties or on an unsecured basis;

●

general risks affecting the real estate industry (including, without limitation, the inability to enter into or renew leases, dependence on customers’ financial condition, and competition from other developers, owners and operators of real estate);

●

our ability to effectively raise and deploy proceeds from our ongoing public offerings;

●

risks associated with the demand for liquidity under our share redemption program and our ability to meet such demand;

●

risks associated with the availability and terms of debt and equity financing and the use of debt to fund acquisitions and developments, including the risk associated with interest rates impacting the cost and/or availability of financing;

●

the business opportunities that may be presented to and pursued by us, changes in laws or regulations (including changes to laws governing the taxation of real estate investment trusts (“REITs”));

●

conflicts of interest arising out of our relationships with the Sponsor, the Advisor, and their affiliates;

●

changes in accounting principles, policies and guidelines applicable to REITs;

●

environmental, regulatory and/or safety requirements; and

●

the availability and cost of comprehensive insurance, including coverage for terrorist acts.

For further discussion of these and other factors, see Part I, Item 1A, “Risk Factors” in our 2020 Form 10-K. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of future events, new information or otherwise.

OVERVIEW

General

Black Creek Diversified Property Fund Inc. is a NAV-based perpetual life REIT that was formed on April 11, 2005, as a Maryland corporation. We are primarily focused on investing in and operating a diverse portfolio of real property. As of March 31, 2021, our real property portfolio consisted of 56 properties, which includes nine properties that are part of the DST Program (as defined below), totaling approximately 11.4 million square feet located in 25 markets throughout the U.S.

We have operated and elected to be treated as a REIT for U.S. federal income tax purposes, commencing with the taxable year ended December 31, 2006, and we intend to continue to operate in accordance with the requirements for qualification as a REIT. We utilize an Umbrella Partnership Real Estate Investment Trust (“UPREIT”) organizational structure to hold all or substantially all of our assets through the Operating Partnership.

As a NAV-based perpetual life REIT, we intend to conduct ongoing public primary offerings of our common stock on a perpetual basis. We also intend to conduct an ongoing distribution reinvestment plan offering for our stockholders to reinvest distributions in our shares. From time to time, we intend to file new registration statements on Form S-11 with the SEC to register additional shares of common stock so that we may continuously offer shares of common stock pursuant to Rule 415 under the Securities Act. During the three months ended March 31, 2021, we raised $43.9 million of gross proceeds from the sale of common stock in our ongoing public primary offerings and $5.5 million from the sale of common stock under our distribution reinvestment plan. See “Note 6 to the Condensed Consolidated Financial Statements” for more information about our public offerings.

Additionally, we have a program to raise capital through private placement offerings by selling beneficial interests (“DST Interests”) in specific Delaware statutory trusts holding real properties (the “DST Program”). These private placement offerings are exempt from registration requirements pursuant to Section 4(a)(2) of the Securities Act. We anticipate that these interests may serve as replacement properties for investors seeking to complete like-kind exchange transactions under Section 1031 of the Code. Similar to our prior private placement offerings, we expect that the DST Program will give us the opportunity to expand and diversify our capital raise strategies by offering what we believe to be an attractive and unique investment product for investors that may be seeking replacement properties to complete like-kind exchange transactions under Section 1031 of the Code. We also make loans (“DST Program Loans”) to finance a portion of the sale of DST Interests to certain purchasers of the interests in the Delaware statutory trusts to finance no more than 50% of the purchase price payable upon their acquisition of such interests. During the three months ended March 31, 2021, we sold $51.8 million of gross interests related to the DST Program, $5.0 million of which were financed by DST Program Loans. See “Note 4” to the Condensed Consolidated Financial Statements” for additional detail regarding the DST Program.

We currently operate in four reportable segments: office, retail, multi-family and industrial. The following table summarizes our real property portfolio by segment as of March 31, 2021:


						Average
				% of Total		Effective Annual						% of
($ and square feet in thousands,	Number of	Number of	Rentable	Rentable		Base Rent per		%		Aggregate		Aggregate
except for per square foot data)	Markets (1)	Real Properties	Square Feet	Square Feet		Square Foot (2)		Leased		Fair Value		Fair Value
Office properties	8	9	2,082	18.3	%	$	32.86	78.0	%	$	746,600	28.8	%
Retail properties	8	25	3,012	26.4			19.04	93.4			905,300	35.0
Multi-family properties	4	4	1,222	10.7			23.13	93.0			391,250	15.2
Industrial properties	15	18	5,080	44.6			5.09	95.2			546,950	21.0
Total real property portfolio	25	56	11,396	100.0	%	$	14.52	91.4	%	$	2,590,100	100.0	%

(1)	Reflects the number of unique markets by segment and in total. As such, the total number of markets does not equal the sum of the number of markets by segment as certain segments are located in the same market.

(2)	Amount calculated as total annualized base rent, which includes the impact of any contractual tenant concessions (cash basis) per the terms of the lease, divided by total lease square footage as of March 31, 2021.

We will continue to focus our investment activities on expanding a high-quality, diversified real property portfolio throughout the U.S. Although we generally target investments in four primary property categories (office, retail, multi-family and industrial), our charter and bylaws do not preclude us from investing in other types of commercial property, real estate debt, or real estate-related equity securities. Our near-term investment strategy is likely to prioritize new investments in the industrial and multi-family sectors due to relatively attractive fundamental conditions. In 2019, we were focused on selling certain office and retail assets. The disposition of these properties has helped us to increase our current allocation to multi-family and industrial real estate assets and liquidity to pursue new investment opportunities. However, there can be no assurance that we will be successful in our investment strategy, including with respect to any particular asset class. We also intend to continue to hold an allocation of properties in the office and retail sectors, the latter of which is largely grocery-anchored. To a lesser extent we may invest in other types of real estate including, but not limited to, hospitality, medical offices, manufactured housing, student housing and unimproved land, however we have no investments in these sectors currently. Additionally, to provide diversification to our portfolio, we may continue to invest in real estate-related debt, which will generally include mortgage loans secured by real estate, mezzanine debt, loans associated with our DST Program and other related investments. While we

are not currently investing in real estate-related securities, should we decide to invest in real estate-related securities, any such investments generally will focus on debt or equity issued by public and private real estate companies and certain other securities, with the primary goal of such investments being preservation of liquidity in support of our share redemption program, while also seeking income, potential for capital appreciation and further portfolio diversification.

Net Asset Value

Our board of directors, including a majority of our independent directors, has adopted valuation procedures, as amended from time to time, that contain a comprehensive set of methodologies to be used in connection with the calculation of our NAV. With the approval of our board of directors, including a majority of our independent directors, we have engaged Altus Group U.S., Inc., a third-party valuation firm, to serve as our independent valuation advisor (‘‘Altus Group’’ or the “Independent Valuation Advisor”) with respect to providing monthly real property appraisals, reviewing annual third-party real property appraisals, reviewing the internal valuations of debt-related assets and liabilities performed by our Advisor, helping us administer the valuation process for the real properties in our portfolio, and assisting in the development and review of our valuation procedures. As part of this process, our Advisor reviews the estimates of the values of our real property portfolio, real estate-related assets, and other assets and liabilities within our portfolio for consistency with our valuation guidelines and the overall reasonableness of the valuation conclusions, and informs our board of directors of its conclusions. Although the Independent Valuation Advisor or other pricing sources may consider any comments received from us or our Advisor or other valuation sources for their individual valuations, the final estimated fair values of our real property assets are determined by the Independent Valuation Advisor and real estate-related assets and other assets and liabilities are determined by the applicable pricing source, subject to the oversight of our board of directors. With respect to the valuation of our real property assets, the Independent Valuation Advisor provides our board of directors with periodic valuation reports and is available to meet with our board of directors to review valuation information, as well as our valuation guidelines and the operation and results of the valuation process generally. All parties engaged by us in connection with the calculation of our NAV, including our Advisor, are subject to the oversight of our board of directors. Our board of directors has the right to engage additional valuation firms and pricing sources to review the valuation process or valuations, if deemed appropriate. At least once each calendar year our board of directors, including a majority of our independent directors, reviews the appropriateness of our valuation procedures with input from the Independent Valuation Advisor. From time to time our board of directors, including a majority of our independent directors, may adopt changes to the valuation procedures if it: (1) determines that such changes are likely to result in a more accurate reflection of NAV or a more efficient or less costly procedure for the determination of NAV without having a material adverse effect on the accuracy of such determination; or (2) otherwise reasonably believes a change is appropriate for the determination of NAV. We will publicly announce material changes to our valuation procedures or the identity or role of the Independent Valuation Advisor or ALPS Fund Services Inc. See Exhibit 4.4 of this Quarterly Report on Form 10-Q for a more detailed description of our valuation procedures, including important disclosures regarding real property valuations provided by the Independent Valuation Advisor.

Our valuation procedures, which address specifically each category of our assets and liabilities and are applied separately from the preparation of our financial statements in accordance with GAAP, involve adjustments from historical cost. There are certain factors which cause NAV to be different from net book value on a GAAP basis. Most significantly, the valuation of our real assets, which is the largest component of our NAV calculation, is provided to us by the Independent Valuation Advisor on a monthly basis. For GAAP purposes, these assets are generally recorded at depreciated or amortized cost. Other examples that will cause our NAV to differ from our GAAP net book value include the straight-lining of rent, which results in a receivable for GAAP purposes that is not included in the determination of our NAV. Third-party appraisers may value our individual real assets using appraisal standards that deviate from fair value standards under GAAP. The use of such appraisal standards may cause our NAV to deviate from GAAP fair value principles. We did not develop our valuation procedures with the intention of complying with fair value concepts under GAAP and, therefore, there could be differences between our fair values and the fair values derived from the principal market or most advantageous market concepts of establishing fair value under GAAP.

The following table sets forth the components of Aggregate Fund NAV as of March 31, 2021 and December 31, 2020:


	As of
(in thousands)	March 31, 2021		December 31, 2020
Investments in office properties	$	746,600	$	753,950
Investments in retail properties		905,300		906,100
Investments in multi-family properties		391,250		388,350
Investments in industrial properties		546,950		516,100
Total investment in real estate properties		2,590,100		2,564,500
Debt-related investments		47,645		49,584
DST Program Loans		50,012		45,229
Total investments		2,687,757		2,659,313
Cash and cash equivalents		17,100		11,266
Restricted cash		10,502		10,468
Other assets		28,890		27,987
Line of credit, term loans and mortgage notes		(915,758)		(968,544)
Financing obligations associated with our DST Program		(531,900)		(507,204)
Other liabilities		(43,624)		(46,729)
Accrued performance-based fee		(1,749)		(4,608)
Accrued advisory fees		(1,634)		(1,548)
Aggregate Fund NAV	$	1,249,584	$	1,180,401
Total Fund Interests outstanding		164,671		156,527

The following table sets forth the NAV per Fund Interest as of March 31, 2021:


			Class T		Class S		Class D		Class I		Class E		OP
(in thousands, except per Fund Interest data)	Total		Shares		Shares		Shares		Shares		Shares		Units
Monthly NAV	$	1,249,584	$	78,687	$	200,655	$	37,176	$	350,349	$	450,838	$	131,879
Fund Interests outstanding		164,671		10,369		26,443		4,899		46,169		59,412		17,379
NAV Per Fund Interest	$	7.59	$	7.59	$	7.59	$	7.59	$	7.59	$	7.59	$	7.59

The fair values of our assets and certain liabilities are determined using widely accepted methodologies and, as appropriate, the GAAP principles within the FASB Accounting Standards Codification under Topic 820, Fair Value Measurements and Disclosures (“ASC Topic 820”) and are used by ALPS Fund Services Inc. in calculating our NAV per share. However, our valuation procedures and our NAV are not subject to GAAP and will not be subject to independent audit.

Under GAAP, we record liabilities for ongoing distribution fees that (i) we currently owe the Dealer Manager under the terms of our dealer manager agreement and (ii) we estimate we may pay to the Dealer Manager in future periods for shares of our common stock. As of March 31, 2021, we estimated approximately $19.5 million of ongoing distribution fees were potentially payable to the Dealer Manager. We do not deduct the liability for estimated future distribution fees in our calculation of NAV since we intend for our NAV to reflect our estimated value on the date that we determine our NAV. Accordingly, our estimated NAV at any given time does not include consideration of any estimated future distribution fees that may become payable after such date.

We include no discounts to our NAV for the illiquid nature of our shares, including the limitations on our stockholders’ ability to redeem shares under our share redemption program and our ability to suspend or terminate our share redemption program at any time. Our NAV generally does not consider exit costs (e.g. selling costs and commissions related to the sale of a property) that would likely be incurred if our assets and liabilities were liquidated or sold today. While we may use market pricing concepts to value individual components of our NAV, our per share NAV is not derived from the market pricing information of open-end real estate funds listed on stock exchanges.

Our NAV is not a representation, warranty or guarantee that: (i) we would fully realize our NAV upon a sale of our assets; (ii) shares of our common stock would trade at our per share NAV on a national securities exchange; and (iii) a stockholder would be able to realize the per share NAV if such stockholder attempted to sell his or her shares to a third party.

The valuations of our real property as of March 31, 2021 were provided by the Independent Valuation Advisor in accordance with our valuation procedures. The aggregate real property valuation of $2.59 billion compares to a GAAP basis of real properties (net of intangible lease liabilities and before accumulated amortization and depreciation) of $2.39 billion, representing an increase of approximately $201.7 million, or 8.4%. Certain key assumptions that were used by the Independent Valuation Advisor in the discounted cash flow analysis are set forth in the following table based on weighted-averages by property type.


									Weighted-
	Office		Retail		Multi-family		Industrial		Average Basis
Exit capitalization rate	6.31	%	6.22	%	5.26	%	5.39	%	5.92	%
Discount rate / internal rate of return	7.12	%	6.77	%	6.07	%	6.07	%	6.61	%
Average holding period (years)	10.0		10.0		10.0		10.0		10.0


	Hypothetical									Weighted-
Input	Change	Office		Retail		Multi-family		Industrial		Average Values
Exit capitalization rate (weighted-average)	0.25% decrease	3.02	%	2.54	%	3.20	%	3.29	%	2.93	%
	0.25% increase	(2.78)	%	(2.34)	%	(2.91)	%	(3.00)	%	(2.69)	%
Discount rate (weighted-average)	0.25% decrease	2.12	%	1.92	%	2.00	%	2.01	%	2.01	%
	0.25% increase	(2.07)	%	(1.87)	%	(1.95)	%	(1.96)	%	(1.96)	%

From September 30, 2017 through November 30, 2019, we valued our debt-related investments and real estate-related liabilities generally in accordance with fair value standards under GAAP. Beginning with our valuation for December 31, 2019, our property-level mortgages and corporate-level credit facilities that are intended to be held to maturity (which for fixed rate debt not subject to interest rate hedges may be the date near maturity at which time the debt will be eligible for prepayment at par for purposes herein), including those subject to interest rate hedges, were valued at par (i.e. at their respective outstanding balances). In addition, because we utilize interest rate hedges to stabilize interest payments (i.e. to fix all-in interest rates through interest rate swaps or to limit interest rate exposure through interest rate caps) on individual loans, each loan and associated interest rate hedge is treated as one financial instrument which is valued at par if intended to be held to maturity. This policy of valuing at par applies regardless of whether any given interest rate hedge is considered as an asset or liability for GAAP purposes. We currently estimate the fair value of our debt (inclusive of associated interest rate hedges) that was intended to be held to maturity as of March 31, 2021 was $18.7 million higher than par for such debt in aggregate, meaning that if we used the fair value of our debt rather than par (and treated the associated hedge as part of the same financial instrument), our NAV would have been lower by approximately $18.7 million, or $0.11 per share, not taking into account all of the other items that impact our monthly NAV, as of March 31, 2021. As of March 31, 2021, we classified all of our debt as intended to be held to maturity. See “Performance” below for further information concerning the impact of interest rate movements on our total shareholder returns assuming we were to include the mark-to-market adjustments for all borrowing-related interest rate hedge and debt instruments.

Reconciliation of Stockholders’ Equity and Noncontrolling Interests to NAV

The following table reconciles stockholders’ equity and noncontrolling interests per our condensed consolidated balance sheet to our NAV as of March 31, 2021:


(in thousands)	As of March 31, 2021
Total stockholder's equity	$	440,686
Noncontrolling interests		119,665
Total equity under GAAP		560,351

Adjustments:
Accrued distribution fee (1)		19,475
Unrealized net real estate, debt and interest rate hedge appreciation (depreciation) (2)		219,632
Accumulated depreciation and amortization (3)		457,995
Other adjustments (4)		(7,869)
Aggregate Fund NAV	$	1,249,584

(1)

Accrued distribution fee represents the accrual for the full cost of the distribution fee for Class T, Class S, and Class D shares. Under GAAP, we accrued the full cost of the distribution fee payable over the life of each share (assuming such share remains outstanding the length of time required to pay the maximum distribution fee) as an offering cost at the time we sold the Class T, Class S, and Class D shares. For purposes of calculating the NAV, we recognize the distribution fee as a reduction of NAV on a monthly basis when such fee is paid and do not deduct the liability for estimated future distribution fees that may become payable after the date as of which our NAV is calculated.

(2)

Our real estate and real estate-related investments are presented as historical cost in our condensed consolidated financial statements. Additionally, our mortgage notes, term loans and line of credit are presented at their carrying value in our condensed consolidated financial statements. As such, any increases of decreases in the fair market value of our real estate and real estate-related investments or our debt instruments are not included in our GAAP results. For purposes of determining our NAV, our real estate and real estate-related investments and certain of debt are recorded at fair value. Notwithstanding, our property-level mortgages and corporate-level credit facilities that are intended to be held to maturity, including those subject to interest rates hedges, are valued at par (i.e. at their respective outstanding balances).

(3)	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.

(4)

Includes (i) straight-line rent receivables, which are recorded in accordance with GAAP but not recorded for purposes of determining our NAV (ii) redeemable noncontrolling interests related to our OP Units, which are included in our determination of NAV but not included in total equity, and (iii) other minor adjustments.

Performance

Our NAV increased from $7.54 per share as of December 31, 2020 to $7.59 per share as of March 31, 2021. The increase in NAV was primarily driven by performance of our real property portfolio, including the disposition of an industrial property for net proceeds of approximately $42.7 million, which resulted in an increase to NAV.

Effective December 31, 2019, our board of directors approved amendments to our valuation procedures which revised the way we value property-level mortgages, corporate-level credit facilities and associated interest rate hedges when loans, including associated interest rate hedges, are intended to be held to maturity, effectively eliminating all mark-to-market adjustments for such loans and hedges from the calculation of our NAV. The following table summarizes the impact of interest rate movements on our share class returns assuming we continued to include the mark-to-market adjustments for all borrowing-related interest rate hedge and debt instruments beginning with the December 31, 2019 NAV:


					One-Year						Since NAV
	Trailing				(Trailing		Three-Year		Five-Year		Inception
(as of March 31, 2021) (1)	Three-Months		Year-to-Date		12-Months)		Annualized		Annualized		Annualized (2)
Class T Share Total Return (with upfront selling commissions and dealer manager fees) (3)	(1.77)	%	(1.77)	%	1.50	%	3.66	%	4.11	%	5.70	%
Adjusted Class T Share Total Return (with upfront selling commissions and dealer manager fees) (continued inclusion of mark-to-market adjustments for borrowing-related interest rate hedge and debt instruments) (4)	(1.42)	%	(1.42)	%	1.80	%	3.35	%	3.92	%	5.59	%
Difference	(0.35)	%	(0.35)	%	(0.30)	%	0.31	%	0.19	%	0.11	%

Class T Share Total Return (without upfront selling commissions and dealer manager fees) (3)	1.67	%	1.67	%	5.06	%	4.86	%	4.75	%	5.86	%
Adjusted Class T Share Total Return (without upfront selling commissions and dealer manager fees) (continued inclusion of mark-to-market adjustments for borrowing-related interest rate hedge and debt instruments) (4)	2.03	%	2.03	%	5.37	%	4.54	%	4.56	%	5.75	%
Difference	(0.36)	%	(0.36)	%	(0.31)	%	0.32	%	0.19	%	0.11	%

Class S Share Total Return (with upfront selling commissions and dealer manager fees) (3)	(1.77)	%	(1.77)	%	1.50	%	3.66	%	4.11	%	5.70	%
Adjusted Class S Share Total Return (with upfront selling commissions and dealer manager fees) (continued inclusion of mark-to-market adjustments for borrowing-related interest rate hedge and debt instruments) (4)	(1.42)	%	(1.42)	%	1.80	%	3.35	%	3.92	%	5.59	%
Difference	(0.35)	%	(0.35)	%	(0.30)	%	0.31	%	0.19	%	0.11	%

Class S Share Total Return (without upfront selling commissions and dealer manager fees) (3)	1.67	%	1.67	%	5.06	%	4.86	%	4.75	%	5.86	%
Adjusted Class S Share Total Return (without upfront selling commissions and dealer manager fees) (continued inclusion of mark-to-market adjustments for borrowing-related interest rate hedge and debt instruments) (4)	2.03	%	2.03	%	5.37	%	4.54	%	4.56	%	5.75	%
Difference	(0.36)	%	(0.36)	%	(0.31)	%	0.32	%	0.19	%	0.11	%

Class D Share Total Return (3)	1.82	%	1.82	%	5.68	%	5.49	%	5.35	%	6.26	%
Adjusted Class D Share Total Return (continued inclusion of mark-to-market adjustments for borrowing-related interest rate hedge and debt instruments) (4)	2.18	%	2.18	%	6.00	%	5.17	%	5.16	%	6.14	%
Difference	(0.36)	%	(0.36)	%	(0.32)	%	0.32	%	0.19	%	0.12	%

Class I Share Total Return (3)	1.88	%	1.88	%	5.95	%	5.75	%	5.68	%	6.67	%
Adjusted Class I Share Total Return (continued inclusion of mark-to-market adjustments for borrowing-related interest rate hedge and debt instruments) (4)	2.25	%	2.25	%	6.26	%	5.43	%	5.49	%	6.56	%
Difference	(0.37)	%	(0.37)	%	(0.31)	%	0.32	%	0.19	%	0.11	%

Class E Share Return Total Return (3)	1.88	%	1.88	%	5.95	%	5.75	%	5.71	%	6.73	%
Adjusted Class E Share Total Return (continued inclusion of mark-to-market adjustments for borrowing-related interest rate hedge and debt instruments) (4)	2.25	%	2.25	%	6.26	%	5.43	%	5.52	%	6.62	%
Difference	(0.37)	%	(0.37)	%	(0.31)	%	0.32	%	0.19	%	0.11	%

(1)

(2)	NAV inception was September 30, 2012, which is when we first sold shares of our common stock after converting to an NAV-based REIT on July 12, 2012. Investors in our fixed price offerings prior to NAV inception on September 30, 2012 are likely to have a lower return.

(3)

The Total Returns presented are based on actual NAVs at which stockholders transacted, calculated pursuant to our valuation procedures. From NAV inception to November 30, 2019, these NAVs reflected mark-to-market adjustments on our borrowing-related interest rate hedge positions; and from September 1, 2017 to November 30, 2019, these NAVs also reflected mark-to-market adjustments on our borrowing-related debt instruments. Prior to September 1, 2017, our valuation policies dictated marking borrowing-related debt instruments to par except in certain circumstances; therefore, we did not formally track mark-to-market adjustments on our borrowing-related debt instruments during such time.

(4)

The Adjusted Total Returns presented are based on adjusted NAVs calculated as if we had continued to mark our hedge and debt instruments to market following a policy change to largely exclude borrowing-related interest rate hedge and debt marks to market from our NAV calculations (except in certain circumstances pursuant to our valuation procedures), beginning with our NAV calculated as of December 31, 2019 NAV. Therefore, the NAVs used in the calculation are identical to those presented per Note (3) above from NAV inception through November 30, 2019. The adjusted NAVs include the incremental impacts to advisory fees and performance fees; however, the adjusted NAVs are not assumed to have impacted any share purchase or redemption. For calculation purposes, transactions were assumed to occur at the adjusted NAVs.

Impacts of COVID-19

With respect to COVID-19, we are continuing to assess impacts to our portfolio and commercial real estate more broadly. Our properties have not experienced the same level of stress and valuation declines seen within harder hit sectors in which we are not invested such as hospitality, gaming, student housing, senior housing or shopping malls, nor do we have any investments in real estate securities which have experienced significant volatility. Where appropriate, we have restructured leases and may restructure additional leases to provide temporary rent relief needed by certain customers while positioning ourselves to recapture abated rent over time. This, coupled with various government stimulus efforts designed to help smaller businesses in this environment, should help us recover a significant portion of 2020 deferred rent in 2021. We can provide no assurances that we will be able to collect rent at the same level that we did prior to the pandemic going forward. Furthermore, we can provide no assurances that we will be able to recover unpaid rent.

We remain an active buyer of institutional quality, income-producing and defensive real estate, particularly within the industrial and multi-family sectors which we believe should provide increased appreciation potential for the fund over time and complement our retail and office investment allocations that provide for higher income potential. Accordingly, we acquired one industrial property in 2021 for an aggregate contractual purchase price of $48.3 million.

Rent collections for the three months ended March 31, 2021 for our portfolio as a whole to date are 98.1%, which includes 99.1% for office properties, 97.6% for retail properties, 98.3% for multi-family properties, and 97.2% for industrial properties. We have also collected 96.5% of our base rent originally payable for the month of April in 2021. In addition, we are pleased to report that our retail portfolio as a whole has remained stable, and many of our customers are successfully supplementing their in-store sales with e-commerce and curbside pick-up.

RESULTS OF OPERATIONS

Summary of 2021 Activities

During the three months ended March 31, 2021, we completed the following activities:

●

We acquired one industrial property comprising 0.3 million square feet for an aggregate contractual purchase price of approximately $48.3 million.

●

We sold one industrial property and one retail property for net proceeds of approximately $49.0 million and recorded a net gain on sale of approximately $27.3 million and an impairment of $758,000, respectively.

●

We leased approximately 344,000 square feet, which included 35,000 square feet of new leases and 309,000 square feet of renewals. We are currently 91.4% leased as of March 31, 2021, as compared to 93.1% as of December 31, 2020.

●

We decreased our leverage ratio from 37.1% as of December 31, 2020, to 34.7% as of March 31, 2021. Our leverage ratio for reporting purposes is calculated as the outstanding principal balance of our borrowings divided by the fair value of our real property and debt-related investments not associated with the DST Program (determined in accordance with our valuation procedures). By calculating the leverage ratio net of cash and cash equivalents (based on the outstanding principal balance of our borrowings less cash and cash equivalents) our leverage ratio decreased from 36.6% as of December 31, 2020, to 34.1% as of March 31, 2021.

●

We raised $43.9 million of gross proceeds from the sale of common stock in our ongoing public primary offerings and $5.5 million from the sale of common stock under our distribution reinvestment plan. Additionally, we raised $51.8 million of gross capital through private placement offerings by selling DST Interests, $5.0 million of which were financed by DST Program Loans.

●

We redeemed 2.2 million shares of common stock at a weighted-average purchase price of $7.55 per share for an aggregate amount of $16.9 million.

Results for the Three Months Ended March 31, 2021 Compared to the Same Period in 2020

The following table summarizes our results of operations for the three months ended March 31, 2021, as compared to the same period in 2020. We evaluate the performance of consolidated operating properties we own and manage using a same store analysis because the population of properties in this analysis is consistent from period to period, thereby eliminating the effects of any material changes in the composition of the aggregate portfolio on performance measures. We have defined the same store portfolio to include consolidated operating properties owned for the entirety of both the current and prior reporting periods for which the operations had been stabilized. Other operating properties not meeting the same store criteria are reflected in the non-same store portfolio. The same store operating portfolio for the periods presented below includes 45 properties totaling 8.0 million square feet owned as of January 1, 2020, which portfolio represented 70.0% of total rentable square feet as of March 31, 2021.


	For the Three Months Ended
	March 31,						Change
($ in thousands, except per square foot data)	2021			2020			$		%
Rental revenues:
Same store properties	$	42,630		$	42,202		$	428	1.0	%
Non-same store properties		7,802			2,066			5,736	NM
Total rental revenues		50,432			44,268			6,164	13.9
Rental expenses:
Same store properties		(15,240)			(14,901)			(339)	(2.3)
Non-same store properties		(2,322)			(602)			(1,720)	NM
Total rental expenses		(17,562)			(15,503)			(2,059)	(13.3)
Net operating income:
Same store properties		27,390			27,301			89	0.3
Non-same store properties		5,480			1,464			4,016	NM
Total net operating income		32,870			28,765			4,105	14.3
Other income and (expenses):
Debt-related income		2,124			34			2,090	NM
Real estate-related depreciation and amortization		(16,733)			(14,450)			(2,283)	(15.8)
General and administrative expenses		(2,585)			(2,229)			(356)	(16.0)
Advisory fees, related party		(6,573)			(5,501)			(1,072)	(19.5)
Impairment of real estate property		(758)			—			(758)	—
Interest expense		(16,563)			(13,351)			(3,212)	(24.1)
Gain on sale of real estate property		27,342			2,192			25,150	NM
Other income		274			92			182	NM
Total other (expenses) income		(13,472)			(33,213)			19,741	59.4
Net income (loss)		19,398			(4,448)			23,846	NM
Net (income) loss attributable to redeemable noncontrolling interests		(134)			15			(149)	NM
Net (income) loss attributable to noncontrolling interests		(1,699)			299			(1,998)	NM
Net income (loss) attributable to common stockholders	$	17,565		$	(4,134)		$	21,699	NM
Same store supplemental data:
Same store average percentage leased		90.9	%		92.4	%
Same store average annualized base rent per square foot	$	17.83		$	18.02

NM = Not meaningful

Rental Revenues. Rental revenues are comprised of rental income, straight-line rent, and amortization of above- and below-market lease assets and liabilities. Total rental revenues increased by $6.2 million for the three months ended March 31, 2021, as compared to the same period in 2020. For the three months ended March 31, 2021, same store revenues were generally consistent with the same period in 2020, with minor increases resulting from increased occupancy at our 3 Second Street office property and at our Braintree and Bandera retail properties in 2021. Non-same store revenue increased by $5.7 million for the three months ended March 31, 2021, as compared to the same period in 2020, due to net positive acquisition activity, primarily in the industrial and multi-family segments after accounting for dispositions, primarily in the retail segment.

The following table presents the components of our consolidated rental revenues:


	For the Three Months Ended March 31,				Change
(in thousands)	2021		2020		$		%
Rental income	$	48,607	$	43,208	$	5,399	12.5	%
Straight-line rent		1,176		288		888	308.3
Amortization of above- and below-market intangibles		649		772		(123)	(15.9)
Total rental revenues	$	50,432	$	44,268	$	6,164	13.9	%

Rental Expenses. Rental expenses include certain property operating expenses typically reimbursed by our customers, such as real estate taxes, property insurance, property management fees, repair and maintenance, and include certain non-recoverable expenses, such as consulting services and roof repairs. Total rental expenses for the three months ended March 31, 2021 increased by $2.1 million primarily due to an increase in non-same store rental expenses as a result of our acquisition activity since January 1, 2020, which was partially offset by our disposition activity since January 1, 2020.

The following table presents the various components of our rental expenses:


	For the Three Months Ended
	March 31,				Change
(in thousands)	2021		2020		$		%
Real estate taxes	$	7,042	$	6,154	$	888	14.4	%
Repairs and maintenance		4,801		3,892		909	23.4
Utilities		1,938		1,547		391	25.3
Property management fees		1,220		1,050		170	16.2
Insurance		565		435		130	29.9
Other		1,996		2,425		(429)	(17.7)
Total rental expenses	$	17,562	$	15,503	$	2,059	13.3	%

Other Income and Expenses. The net amount of other expenses decreased by $19.7 million for the three months ended March 31, 2021, as compared to the same period in 2020, primarily as a result of (i) larger gains on 2021 dispositions; and (ii) increased interest income on debt-related investments received in 2021. These drivers were partially offset by an increase in interest expense driven by higher interest expense on financing obligations associated with an increase in the sale of interests related to our DST Program, an increase in real estate-related depreciation and amortization driven by our net acquisition activity, and an increase in advisory fees driven by financing obligations associated with the sale of interests related to our DST Program during 2021.

Segment Summary for the Three Months Ended March 31, 2021 Compared to the Same Period in 2020

Our segments are based on our internal reporting of operating results used to assess performance based on the type of our properties. Our markets are aggregated into four reportable segments: office, retail, multi-family and industrial. These segments are comprised of the markets by which management and its operating teams conduct and monitor business. See “Note 13 to the Condensed Consolidated Financial Statements” for further information on our segments. Management considers rental revenues and net operating income (“NOI”)

aggregated by segment to be the appropriate way to analyze performance. See “Additional Measures of Performance” below for detail regarding the use of NOI. The following table summarizes certain operating trends in our consolidated properties by segment:


	For the Three Months Ended
	March 31,						Change
($in thousands, except per square foot data)	2021			2020			$		%
Rental revenues:
Office	$	16,819		$	16,369		$	450	2.7	%
Retail		16,928			16,606			322	1.9
Multi-family		4,849			5,248			(399)	(7.6)
Industrial		4,034			3,979			55	1.4
Total same store rental revenues		42,630			42,202			428	1.0
Non-same store properties		7,802			2,066			5,736	NM
Total rental revenues	$	50,432		$	44,268		$	6,164	13.9	%
NOI:
Office	$	9,311		$	8,587		$	724	8.4	%
Retail		12,484			12,512			(28)	(0.2)
Multi-family		2,531			3,110			(579)	(18.6)
Industrial		3,064			3,092			(28)	(0.9)
Total same store NOI		27,390			27,301			89	0.3
Non-same store properties		5,480			1,464			4,016	NM
Total NOI	$	32,870		$	28,765		$	4,105	14.3	%
Same store average percentage leased:
Office		77.6	%		82.3	%
Retail		93.5			94.7
Multi-family		92.8			90.1
Industrial		99.5			100.0
Same store average annualized base rent per square foot:
Office	$	30.86		$	30.04
Retail		18.70			18.74
Multi-family		22.33			24.73
Industrial		5.42			5.28

NM = Not meaningful

Office Segment. For the three months ended March 31, 2021, our office segment same store NOI increased by $0.7 million as compared to the same period in 2020, primarily due to increased occupancy at our 3 Second Street office property and decreased operating expenses at certain properties in 2021.

Retail Segment. For the three months ended March 31, 2021, our retail segment same store NOI remained relatively consistent as compared to the same period in 2020.

Multi-family Segment. For the three months ended March 31, 2021, our multi-family segment same store NOI decreased by $0.6 million as compared to the same period in 2020, primarily due to (i) increased rent concessions at our Perimeter and Juno Winter Park properties; and (ii) increased operating expenses specifically related to bad debt largely due to COVID-19.

Industrial Segment. For the three months ended March 31, 2021 our industrial segment same store NOI remained relatively consistent as compared to the same period in 2020.

ADDITIONAL MEASURES OF PERFORMANCE

Net Income and NOI

We define NOI as GAAP rental revenues less GAAP rental expenses. We consider NOI to be an appropriate supplemental performance measure and believe NOI provides useful information to our investors regarding our results of operations because NOI reflects the operating performance of our properties and excludes certain items that are not considered to be controllable in connection with the management of the properties, such as real estate-related depreciation and amortization, general and administrative expenses, advisory fees, impairment charges, interest expense, gains on sale of properties, other income and expense, gains and losses on the extinguishment of debt and noncontrolling interests. However, NOI should not be viewed as an alternative measure of our financial performance since it excludes such items, which could materially impact our results of operations. Further, our NOI may not be comparable to that of other real estate companies, as they may use different methodologies for calculating NOI. Therefore, we believe net income (loss), as defined by GAAP, to be the most appropriate measure to evaluate our overall financial performance. Refer to “Results of Operations—Results for the

Three Months Ended March 31, 2021 Compared to the Same Period in 2020” above for a reconciliation of our GAAP net income (loss) to NOI for the three months ended March 31, 2021 and 2020.

Funds From Operations (“FFO”)

The following unaudited table presents a reconciliation of GAAP net income (loss) to NAREIT FFO:


	For the Three Months Ended
	March 31,
(in thousands, except per share data)	2021		2020
GAAP net income (loss) attributable to common stockholders	$	17,565	$	(4,134)
GAAP net income (loss) per common share—basic and diluted	$	0.12	$	(0.03)
Reconciliation of GAAP income gain (loss) to NAREIT FFO:
GAAP net income (loss) attributable to common stockholders	$	17,565	$	(4,134)
Real estate-related depreciation and amortization		16,733		14,450
Impairment of real estate property		758		—
Gain on sale of real estate property		(27,342)		(2,192)
Noncontrolling interests’ share of net income (loss)		1,699		(299)
Redeemable noncontrolling interests' share of net income (loss)		134		(15)
Noncontrolling interests’ share of NAREIT FFO		(836)		(525)
Redeemable noncontrolling interests' share of NAREIT FFO		(66)		(26)
NAREIT FFO attributable to common stockholders—basic		8,645		7,259
NAREIT FFO attributable to OP Units		902		551
NAREIT FFO	$	9,547	$	7,810
Weighted-average shares outstanding—basic		145,861		142,543
Weighted-average shares outstanding—diluted		161,089		153,357
NAREIT FFO per common share—basic and diluted	$	0.06	$	0.05

LIQUIDITY AND CAPITAL RESOURCES

Liquidity

Our primary sources of capital for meeting our cash requirements include debt financings, cash generated from operating activities, net proceeds from our public and private offerings, and asset sales. Our principal uses of funds are distributions to our stockholders, payments under our debt obligations, redemption payments, acquisition of properties and other investments, and capital expenditures. Over time, we intend to fund a majority of our cash needs, including the repayment of debt and capital expenditures, from operating cash flows and refinancings. As of March 31, 2021, we had approximately $336.0 million of borrowings maturing in the next 12 months, including scheduled amortization payments. Of this amount, $200.0 million relates to a term loan that matures in February 2022, and may be extended pursuant to two one-year extension options, subject to certain conditions, including the payment of an extension fee. We expect to be able to repay our principal obligations over the next 12 months through refinancings and/or disposition proceeds.

The Advisor, subject to the oversight of our board of directors and, under certain circumstances, the investment committee or other committees established by our board of directors, will evaluate potential acquisitions or dispositions and will engage in negotiations with buyers, sellers and lenders on our behalf. Pending investment in property, debt, or other investments, we may decide to temporarily invest any unused proceeds from our public offerings in certain investments that are expected to yield lower returns than those earned on real estate assets. These lower returns may affect our ability to make distributions to our stockholders. Potential future sources of capital include proceeds from secured or unsecured financings from banks or other lenders, proceeds from our public and private offerings, proceeds from the sale of assets, and undistributed funds from operations.

The global pandemic and resulting shut down of large parts of the U.S. economy has created significant uncertainty and enhanced investment risk across many asset classes, including real estate. The COVID-19 pandemic could have a material adverse effect on our financial condition, results of operations and cash flows as the reduced economic activity severely impacts certain of our customers’ businesses, financial condition and liquidity and may cause certain customers to be unable to meet their obligations to us in full. However, to date we have collected approximately 98.1% of our rental revenues for the first quarter of 2021 (based on base rent originally payable) across the portfolio, compared to average annual collections of over 99% prior to the pandemic. In addition, we have collected 96.5% of base rent originally payable for the month of April in 2021. We are pleased with these collections given the pandemic’s significant impacts on the broader economy, thus reflecting the relatively defensive nature of our assets.

As of March 31, 2021, our financial position was strong with 34.7% leverage, or 34.1% leverage net of cash and cash equivalents, and $17.1 million of cash and cash equivalents. In addition, our portfolio was 91.4% leased as of March 31, 2021 and is diversified across 56 properties totaling 11.4 million square feet across 25 geographic markets. Our properties contain a diverse roster of 454 commercial customers, large and small, and has an allocation based on fair value of real estate properties as determined by our NAV calculation of 28.8% office, 35.0% retail which is primarily grocery-anchored, 21.0% industrial, and 15.2% multi-family.

We believe that our cash on-hand, anticipated net offering proceeds, proceeds from our line of credit, and other financing and disposition activities should be sufficient to meet our anticipated future acquisition, operating, debt service, distribution and redemption requirements.

Cash Flows. The following table summarizes our cash flows for the following periods:


	For the Three Months Ended March 31,
(in thousands)	2021		2020		$ Change
Total cash provided by (used in):
Operating activities	$	7,659	$	7,455	$	204
Investing activities		(7,704)		(65,290)		57,586
Financing activities		5,913		78,947		(73,034)
Net increase in cash, cash equivalents and restricted cash	$	5,868	$	21,112	$	(15,244)

Net cash provided by operating activities remained fairly consistent in total for the three months ended March 31, 2021, compared to the same period in 2020.

Net cash used in investing activities decreased by approximately $57.6 million for the three months ended March 31, 2021, compared to the same period in 2020, primarily due to (i) an increase in net disposition proceeds of $46.2 million due to proceeds received in 2021 related to the sale of one retail property and one industrial property, as compared to the sale of one retail outparcel during the corresponding period in 2020; (ii) a decrease in acquisition activity during the three months ended March 31, 2021 of $7.3 million; (iii) lower capital expenditure activity during the three months ended March 31, 2021 of $3.3 million; and (iv) an increase in principal collections on debt-related investments due to the $2.4 million repayment of a debt-related investment during the three months ended March 31, 2021.

Net cash provided by financing activities decreased by approximately $73.0 million for the three months ended March 31, 2021, compared to the same period in 2020, primarily due to the net repayment of the line of credit during the three months ended March 31, 2021 of $52.0 million and due to a $39.2 million decrease in net offering activity from our DST Program and public offering. These drivers were partially offset by a $17.9 million decrease in public offering and OP Unit redemptions.

Capital Resources and Uses of Liquidity

In addition to our cash and cash equivalents balances available, our capital resources and uses of liquidity are as follows:

Line of Credit and Term Loans. As of March 31, 2021, we had an aggregate of $975.0 million of commitments under our unsecured credit agreements, including $450.0 million under our line of credit and $525.0 million under our two term loans. As of that date, we had: (i) $54.0 outstanding under our line of credit; and (ii) $525.0 million outstanding under our term loans. The weighted-average effective interest rate across all of our unsecured borrowings is 3.11%, which includes the effect of the interest rate swap agreements related to $500.0 million in borrowings under our term loans.

The unused and available portions under our line of credit were $396.0 million and $260.2 million, respectively. Our $450.0 million line of credit matures in January 2023, and may be extended pursuant to two six-month extension options, subject to certain conditions, including the payment of extension fees. Our $325.0 million term loan matures in January 2024, with no extension option available. Our $200.0 million term loan matures in February 2022, and may be extended pursuant to two one-year extension options, subject to certain conditions, including the payment of an extension fee. Our line of credit borrowings are available for general corporate purposes, including but not limited to the refinancing of other debt, payment of redemptions, acquisition and operation of permitted investments. Refer to “Note 3 to the Condensed Consolidated Financial Statements” for additional information regarding our line of credit and term loans.

In July 2017, the Financial Conduct Authority (“FCA”) that regulates LIBOR announced it intends to stop compelling banks to submit rates for the calculation of LIBOR. As a result, the Federal Reserve Board and the Federal Reserve Bank of New York organized the Alternative Reference Rates Committee (“ARRC”), which identified the Secured Overnight Financing Rate ("SOFR") as its preferred alternative rate for LIBOR in derivatives and other financial contracts. We are not able to predict when LIBOR will cease to be available or when there will be sufficient liquidity in the SOFR markets. Any changes adopted by the FCA or other governing bodies in the method used for determining LIBOR may result in a sudden or prolonged increase or decrease in reported LIBOR. If that were to occur, certain of our interest payments could change. In addition, uncertainty about the extent and manner of future changes may result in interest rates and/or payments that are higher or lower than if LIBOR were to remain available in its current form.

LIBOR is expected to be phased out or modified by June 2023, and the writing of contracts using LIBOR is expected to stop by the end of 2021. As of March 31, 2021, our line of credit and term loans are our only indebtedness with initial or extended maturity dates beyond 2023 that have exposure to LIBOR. The agreements governing these loans provide procedures for determining a replacement or alternative base rate in the event that LIBOR is discontinued. However, there can be no assurances as to whether such replacement or alternative base rate will be more or less favorable than LIBOR. We intend to monitor the developments with respect to the potential phasing out of LIBOR after 2023 and work with our lenders to seek to ensure any transition away from LIBOR will have minimal impact on our financial condition, but can provide no assurances regarding the impact of the discontinuation of LIBOR.

Mortgage Notes. As of March 31, 2021, we had property-level borrowings of approximately $336.8 million outstanding with a weighted-average remaining term of approximately 3.1 years. These borrowings are secured by mortgages or deeds of trust and related assignments and security interests in the collateralized properties, and had a weighted-average interest rate of 3.15%, which includes the effects of an interest rate swap agreement related to a $49.5 million variable-rate mortgage note. Refer to “Note 3 to the Condensed Consolidated Financial Statements” for additional information regarding the mortgage notes.

Debt Covenants. Our line of credit, term loan and mortgage note agreements contain various property-level covenants, including customary affirmative and negative covenants. In addition, our line of credit and term loan agreements contain certain corporate level financial covenants, including leverage ratio, fixed charge coverage ratio, and tangible net worth thresholds. These covenants may limit our ability to incur additional debt, or to pay distributions. We were in compliance with our debt covenants as of March 31, 2021.

Offering Proceeds. For the three months ended March 31, 2021, the amount of aggregate gross proceeds raised from our public offerings (including shares issued pursuant to the distribution reinvestment plan) was $49.4 million ($46.1 million net of direct selling costs).

Distributions. To obtain the favorable tax treatment accorded to REITs, we normally will be required each year to distribute to our stockholders at least 90% of our real estate investment trust taxable income, determined without regard to the deduction for distributions paid and by excluding net capital gains. The payment of distributions is determined by our board of directors and may be adjusted at its discretion at any time. Distribution levels are set by our board of directors at a level it believes to be appropriate and sustainable based upon a review of a variety of factors including the current and anticipated market conditions, current and anticipated future performance and make-up of our investments, our overall financial projections and expected future cash needs. We intend to continue to make distributions on a monthly basis.


	Amount														Source of Distributions Paid in Cash
	Declared												Total Cash
	per												Flows from		Cash Flows from
(in thousands, except per share	Common						Reinvested in				Total		Operating		Operating
data)	Share (1)		Paid in Cash (2)				Shares				Distributions		Activities (3)		Activities				Borrowings
2021
March 31	$	0.09375	$	9,572	63.4	%	$	5,526	36.6	%	$	15,098	$	7,659	$	7,659	80.0	%	$	1,913	20.0	%
Total	$	0.09375	$	9,572	63.4	%	$	5,526	36.6	%	$	15,098	$	7,659	$	7,659	80.0	%	$	1,913	20.0	%
2020
March 31	$	0.09375	$	9,032	62.8	%	$	5,360	37.2	%	$	14,392	$	7,455	$	7,455	82.5	%	$	1,577	17.5	%
June 30		0.09375		9,150	63.3			5,316	36.7			14,466		11,384		9,150	100.0			—	—
September 30		0.09375		9,074	63.2			5,282	36.8			14,356		10,008		9,074	100.0			—	—
December 31		0.09375		9,214	63.3			5,347	36.7			14,561		12,281		9,214	100.0			—	—
Total	$	0.37500	$	36,470	63.1	%	$	21,305	36.9	%	$	57,775	$	41,128	$	34,893	95.7	%	$	1,577	4.3	%

(1)	Amount reflects the total quarterly distribution rate, subject to adjustment for class-specific fees. Distributions were declared and paid as of monthly record dates. These monthly distributions have been aggregated and presented on a quarterly basis.

(2)	Includes other cash distributions consisting of (i) distributions paid to OP Unit holders; and (ii) ongoing distribution fees paid to the Dealer Manager with respect to Class T, Class S and Class D shares.

(3)

During the first quarter of each calendar year, we typically generate lower cash flows from operating activities than the other quarters of the years, all else equal, as a result of annual payments of operating expenses that are due during the first quarter. Such annual payments due in the first quarter include annual bonus reimbursements and certain property taxes in jurisdictions that require one annual payment.

For the three months ended March 31, 2021 and 2020, our FFO was $9.5 million, or 63.2% of our total distributions, and $7.8 million, or 54.3% of our total distributions, respectively. FFO is a non-GAAP operating metric and should not be used as a liquidity measure. However, management believes the relationship between FFO and distributions may be meaningful for investors to better understand the sustainability of our operating performance compared to distributions made. Refer to “Additional Measures of Performance” above for the definition of FFO, as well as a detailed reconciliation of our GAAP net income (loss) to FFO.

Redemptions. Below is a summary of redemptions and repurchases pursuant to our share redemption program for the three months ended March 31, 2021 and 2020. Our board of directors may modify, suspend or terminate our current share redemption programs if it deems such action to be in the best interest of our stockholders. Refer to Part II, Item 2. “Unregistered Sales of Equity Securities and Use of Proceeds—Share Redemption Program” for detail regarding our share redemption program.


	For the Three Months Ended March 31,
(in thousands, except for per share data)	2021			2020
Number of shares requested for redemption or repurchase		2,244			4,118
Number of shares redeemed or repurchased		2,244			4,118
% of shares requested that were redeemed or repurchased		100.0	%		100.0	%
Average redemption or repurchase price per share	$	7.55		$	7.47

SUBSEQUENT EVENTS

CONTRACTUAL OBLIGATIONS

A summary of future obligations as of December 31, 2020 was disclosed in our 2020 Form 10-K. Except as otherwise disclosed in “Note 3 to the Condensed Consolidated Financial Statements” relating to our debt obligations, there were no material changes outside the ordinary course of business.

OFF-BALANCE SHEET ARRANGEMENTS

As of March 31, 2021, we had no material off-balance sheet arrangements that have or are reasonably likely to have a material effect on our financial condition, changes in our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources.

CRITICAL ACCOUNTING ESTIMATES

Our unaudited condensed consolidated financial statements have been prepared in accordance with GAAP and in conjunction with the rules and regulations of the SEC. The preparation of our unaudited condensed consolidated financial statements requires significant management judgments, assumptions, and estimates about matters that are inherently uncertain. These judgments affect the reported amounts of assets and liabilities and our disclosure of contingent assets and liabilities at the dates of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods. With different estimates or assumptions, materially different amounts could be reported in our condensed consolidated financial statements. Additionally, other companies may utilize different estimates that may impact the comparability of our results of operations to those of companies in similar businesses. For a detailed description of our critical accounting estimates, see Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2020 Form 10-K. As of March 31, 2021, our critical accounting estimates have not changed from those described in our 2020 Form 10-K.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Risk

We are exposed to the impact of interest rate changes. Our interest rate risk management objectives are to limit the impact of interest rate changes on earnings and cash flows, and optimize overall borrowing costs. To achieve these objectives, we often plan to borrow on a fixed interest rate basis for longer-term debt and utilize interest rate swap agreements on certain variable interest rate debt in order to limit the effects of changes in interest rates on our results of operations. As of March 31, 2021, our debt instruments consisted of borrowings under our line of credit, term loans and mortgage notes.

Fixed Interest Rate Debt. As of March 31, 2021, our fixed interest rate debt consisted of $209.8 million under our mortgage notes, which included a $49.5 million variable-rate mortgage note that we effectively fixed through the use of an interest rate swap until the designated cash flow hedge expires in July 2021; and $500.0 million of borrowings under our term loans that were effectively fixed through the use of interest rate swaps. In total, our fixed interest rate debt represented 77.5% of our total consolidated debt as of March 31, 2021. Interest rate fluctuations will generally not affect our future earnings or cash flows on our fixed interest rate debt unless such instruments mature or are otherwise terminated. However, interest rate changes could affect the fair value of our fixed interest rate debt. As of March 31, 2021, the fair value and the carrying value of our fixed interest rate debt, excluding the values of any associated hedges, was $707.5 million and $709.8 million, respectively. The fair value estimate of this debt was estimated using a discounted cash flow analysis utilizing rates we would expect to pay for debt of a similar type and remaining maturity if the loans were originated on March 31, 2021. Given we generally expect to hold our fixed interest rate debt instruments to maturity or when they otherwise open up for prepayment at par, and the amounts due under such debt instruments should be limited to the outstanding principal balance and any accrued and unpaid interest at such time, we do not expect that the resulting change in fair value of our fixed interest rate debt instruments due to market fluctuations in interest rates, would have a significant impact on our operating cash flows.

Variable Interest Rate Debt. As of March 31, 2021, our consolidated variable interest rate debt consisted of $54.0 million of borrowings under our line of credit, $25.0 million of borrowings under our term loans and $127.0 million under our mortgage notes, which represented 22.5% of our total consolidated debt. Interest rate changes on the variable portion of our variable-rate debt could impact our future earnings and cash flows, but would not necessarily affect the fair value of such debt. As of March 31, 2021, we were exposed to market risks related to fluctuations in interest rates on $206.0 million of consolidated borrowings. A hypothetical 25 basis points increase in the all-in rate on the outstanding balance of our variable interest rate debt as of March 31, 2021, would increase our annual interest expense by approximately $0.5 million.

Derivative Instruments. As of March 31, 2021, we had 15 outstanding derivative instruments with a total notional amount of $676.5 million. These derivative instruments were comprised of interest rate swaps and interest rate caps that were designed to mitigate the risk of future interest rate increases by either providing a fixed interest rate or capping the variable interest rate for a limited, pre-determined period of time. See “Note 3 to the Condensed Consolidated Financial Statements” for further detail on our derivative instruments. We are exposed to credit risk of the counterparty to our interest rate cap and swap agreements in the event of non-performance under the terms of the agreements. If we were not able to replace these caps or swaps in the event of non-performance by the counterparty, we would be subject to variability of the interest rate on the amount outstanding under our debt that is fixed or capped through the use of the swaps or caps, respectively.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Under the direction of our principal executive officer and principal financial officer, we evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of March 31, 2021. Based on this evaluation, our principal executive officer and principal financial officer have concluded that, as of March 31, 2021, our disclosure controls and procedures were effective.

Internal Control Over Financial Reporting

There have not been any changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the three months ended March 31, 2021 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 many 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

ITEM 1A. RISK FACTORS

In addition to the other information set forth in this report, you should carefully consider the risk factors discussed in Part I, Item 1A, “Risk Factors” of our 2020 Form 10-K, which could materially affect our business, financial condition, and/or future results. The risks described in our 2020 Form 10-K are not the only risks facing us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition, and/or operating results.

There have been no material changes to the risk factors disclosed in our 2020 Form 10-K.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Share Redemption Program

While stockholders may request on a monthly basis that we redeem all or any portion of their shares pursuant to our share redemption program, we are not obligated to redeem any shares and may choose to redeem only some, or even none, of the shares that have been requested to be redeemed in any particular month, in our discretion. In addition, our ability to fulfill redemption requests is subject to a number of limitations. As a result, share redemptions may not be available each month. Under our share redemption program, to the extent we choose to redeem shares in any particular month, we will only redeem shares as of the last calendar day of that month (each such date, a “Redemption Date”). Shares redeemed on the Redemption Date remain outstanding on the Redemption Date and are no longer outstanding on the day following the Redemption Date. Redemptions will be made at the transaction price in effect on the Redemption Date, except that shares that have not been outstanding for at least one year will be redeemed at 95% of the transaction price (an “Early Redemption Deduction”). The Early Redemption Deduction may be waived in certain circumstances including: (i) in the case of redemption requests arising from the death or qualified disability of the holder; (ii) in the event that a stockholder’s shares are redeemed because the stockholder has failed to maintain the $2,000 minimum account balance or (iii) with respect to shares purchased through our distribution reinvestment plan. To have his or her shares redeemed, a stockholder’s redemption request and required documentation must be received in good order by 4:00 p.m. (Eastern time) on the second to last business day of the applicable month. Settlements of share redemptions will be made within three business days of the Redemption Date. An investor may withdraw its redemption request by notifying the transfer agent before 4:00 p.m. (Eastern time) on the last business day of the applicable month.

The total amount of aggregate redemptions of Class T, Class S, Class D, Class I and Class E shares (based on the price at which the shares are redeemed) will be limited during each calendar month to 2% of the aggregate NAV of all classes as of the last calendar day of the previous quarter and in each calendar quarter will be limited to 5% of the aggregate NAV of all classes of shares as of the last calendar day of the previous calendar quarter; provided, however, that every month and quarter each class of our common stock will be allocated capacity within such aggregate limit to allow stockholders in such class to either (a) redeem shares (based on the price at which the shares are redeemed) equal to at least 2% of the aggregate NAV of such share class as of the last calendar day of the previous quarter, or, if more limiting, (b) redeem shares (based on the price at which the shares are redeemed) over the course of a given quarter equal to at least 5% of the aggregate NAV of such share class as of the last calendar day of the previous quarter (collectively referred to herein as the “2% and 5% limits”), which in the second and third months of a quarter could be less than 2% of the NAV of such share class. In the event that we determine to redeem some but not all of the shares submitted for redemption during any month, shares redeemed at the end of the month will be redeemed on a pro rata basis. Even if the class-specific allocations are exceeded for a class, the program may offer such class additional capacity under the aggregate program limits. Redemptions and pro rata treatment, if necessary, will first be applied within the class-specific allocated capacity and then applied on an aggregate basis to the extent there is remaining capacity. All unsatisfied redemption requests must be resubmitted after the start of the next month or quarter, or upon the recommencement of the share redemption program, as applicable.

For both the aggregate and class-specific allocations described above, (i) provided that the share redemption program has been operating and not suspended for the first month of a given quarter and that all properly submitted redemption requests were satisfied, any unused capacity for that month will carry over to the second month and (ii) provided that the share redemption program has been operating and not suspended for the first two months of a given quarter and that all properly submitted redemption requests were satisfied, any unused capacity for those two months will carry over to the third month. In no event will such carry-over capacity permit the redemption of shares with aggregate value (based on the redemption price per share for the month the redemption is effected) in excess of 5% of the combined NAV of all classes of shares as of the last calendar day of the previous calendar quarter (provided that for these purposes redemptions may be measured on a net basis as described in the paragraph below).

We currently measure the foregoing redemption allocations and limitations based on net redemptions during a month or quarter, as applicable. The term “net redemptions” means, during the applicable period, the excess of our share redemptions (capital outflows) over the proceeds from the sale of our shares (capital inflows). Net redemptions for the class-specific allocations will be based only on the capital inflows and outflows of that class, while net redemptions for the overall program limits would be based on capital inflows and outflows of all classes. Thus, for any given calendar quarter, the maximum amount of redemptions during that quarter will be equal to (i) 5% of the combined NAV of all classes of shares as of the last calendar day of the previous calendar quarter, plus (ii) proceeds from sales of new shares in this offering (including purchases pursuant to our distribution reinvestment plan) and the Class E distribution reinvestment plan offering since the beginning of the current calendar quarter. The same would apply for a given month, except that redemptions in a month would be subject to the 2% limit described above (subject to potential carry-over capacity), and netting would be measured on a monthly basis. With respect to future periods, our board of directors may choose whether the allocations and limitations will be applied to “gross redemptions,” i.e., without netting against capital inflows, rather than to net redemptions. If redemptions for a given month or quarter are measured on a gross basis rather than on a net basis, the redemption limitations could limit the amount of shares redeemed in a given month or quarter despite our receiving a net capital inflow for that month or quarter. In order for our board of directors to change the application of the allocations and limitations from net redemptions to gross redemptions or vice versa, we will provide notice to stockholders in a prospectus supplement or special or periodic report filed by us, as well as in a press release or on our website, at least 10 days before the first business day of the quarter for which the new test will apply. The determination to measure redemptions on a gross basis, or vice versa, will only be made for an entire quarter, and not particular months within a quarter.

Although the vast majority of our assets consist of properties that cannot generally be readily liquidated on short notice without impacting our ability to realize full value upon their disposition, we intend to maintain a number of sources of liquidity including (i) cash equivalents (e.g. money market funds), other short-term investments, U.S. government securities, agency securities and liquid real estate-related securities and (ii) one or more borrowing facilities. We may fund redemptions from any available source of funds, including operating cash flows, borrowings, proceeds from this offering and/or sales of our assets.

Should redemption requests, in our judgment, place an undue burden on our liquidity, adversely affect our operations or risk having an adverse impact on the company as a whole, or should we otherwise determine that investing our liquid assets in real properties or other illiquid investments rather than redeeming our shares is in the best interests of the company as a whole, then we may choose to redeem fewer shares than have been requested to be redeemed, or none at all. Further, our board of directors may modify, suspend or terminate our share redemption program if it deems such action to be in our best interest and the best interest of our stockholders. If the transaction price for the applicable month is not made available by the tenth business day prior to the last business day of the month (or is changed after such date), then no redemption requests will be accepted for such month and stockholders who wish to have their shares redeemed the following month must resubmit their redemption requests. The above description of the share redemption program is a summary of certain of the terms of the share redemption program. Please see the full text of the share redemption program, which is incorporated by reference as Exhibit 4.2 to this Quarterly Report on Form 10-Q, for all the terms and conditions.

The table below summarizes the redemption activity for the three months ended March 31, 2021, for which all eligible redemption requests were redeemed in full:


				Total Number of Shares	Maximum Number of
				Redeemed as Part of	Shares That May Yet Be
	Total Number of	Average Price		Publicly Announced	Redeemed Pursuant
(shares in thousands)	Shares Redeemed	Paid Per Share (1)		Plans or Programs	to the Program (2)
For the Month Ended:
January 31, 2021	568	$	7.54	568	—
February 28, 2021	826		7.54	826	—
March 31, 2021 (3)	850		7.55	850	—
Total	2,244	$	7.55	2,244	—

(1)	Amount represents the average price paid to investors upon redemption.

(2)	We limit the number of shares that may be redeemed under the share redemption program as described above.

(3)	Redemption requests accepted in March 2021 are considered redeemed on April 1, 2021 and are not included in the table above.

ITEM 5. OTHER INFORMATION

Distribution Reinvestment Plan Suitability Requirement

Pursuant to the terms of our distribution reinvestment plan (“DRP”), participants in the DRP must promptly notify us if at any time they fail to meet the current suitability requirements for making an investment in us.

The current suitability standards require that Class E stockholders participating in the DRP other than investors in Arizona, California, Ohio and Oregon have either:

●

a net worth (exclusive of home, home furnishings and automobiles) of $150,000 or more; or

●

a net worth (exclusive of home, home furnishings and automobiles) of at least $45,000 and had during the last tax year, or estimate that such investor will have during the current tax year, a minimum of $45,000 annual gross income.

The current suitability standards require that Class E stockholders participating in the DRP in Arizona, California, Ohio and Oregon have either:

●

a net worth (exclusive of home, home furnishings and automobiles) of $250,000 or more; or

●

a net worth (exclusive of home, home furnishings and automobiles) of at least $70,000 and had during the last tax year, or estimate that such investor will have during the current tax year, a minimum of $70,000 annual gross income.

In addition, Class E stockholders participating in the DRP in Ohio and Oregon must have a net worth of at least 10 times their investment in us and any of our affiliates. The current suitability standards for Class T, Class S, Class D and Class I stockholders participating in the DRP are listed in the section entitled “Suitability Standards” in our current Class T, Class S, Class D and Class I public offering prospectus on file at www.sec.gov and on our website at www.blackcreekdiversified.com.

Stockholders can notify us of any changes to their ability to meet the suitability requirements or change their DRP election by contacting us at Black Creek Diversified Property Fund Inc., Investor Relations, 518 17th Street, Suite 1700, Denver, Colorado 80202, Telephone: (303) 228-2200.

ITEM 6. EXHIBITS


Exhibit Number		Description

3.1		Articles of Restatement. Incorporated by reference to Exhibit 3.1 to the Annual Report on Form 10-K filed with the SEC on March 21, 2012.

3.2		Articles of Amendment (name change). Incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed with the SEC on July 12, 2012.

3.3		Articles Supplementary (Class A shares). Incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K filed with the SEC on July 12, 2012.

3.4		Articles Supplementary (Class W shares). Incorporated by reference to Exhibit 3.3 to the Current Report on Form 8-K filed with the SEC on July 12, 2012.

3.5		Articles Supplementary (Class I shares). Incorporated by reference to Exhibit 3.4 to the Current Report on Form 8-K filed with the SEC on July 12, 2012.

3.6		Certificate of Correction to Articles of Restatement. Incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed with the SEC on March 26, 2014.

3.7		Certificate of Correction to Articles of Restatement. Incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed with the SEC on August 30, 2016.

3.8		Articles of Amendment (revised terms of share classes). Incorporated by reference to Exhibit 3.8 to the Post-Effective Amendment No. 10 to Registration Statement on Form S-11 (File No. 333-197767) filed with the SEC on September 1, 2017.

3.9		Articles of Amendment (name change). Incorporated by reference to Exhibit 3.9 to the Post-Effective Amendment No. 10 to Registration Statement on Form S-11 (File No. 333-197767) filed with the SEC on September 1, 2017.

3.10		Eighth Amended and Restated Bylaws. Incorporated by reference to Exhibit 3.10 to the Annual Report on Form 10-K filed with the SEC on March 5, 2020.

3.11		Amendment No. 1 to Bylaws. Incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed with the SEC on April 1, 2020.

4.1		Fifth Amended and Restated Distribution Reinvestment Plan. Incorporated by reference to Appendix B to the Pre-Effective Amendment No. 1 to Registration Statement on Form S-11 (File No. 333-222630) filed with the SEC on August 17, 2018.

4.2		Second Amended and Restated Share Redemption Program effective as of December 10, 2018. Incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed with the SEC on December 14, 2018.

4.3		Statement regarding transfer restrictions, preferences, limitations and rights of holders of shares of common stock (to appear on stock certificate or to be sent upon request and without charge to stockholders issued shares without certificates). Incorporated by reference to Exhibit 4.5 to the Post-Effective Amendment No. 10 to Registration Statement on Form S-11 (File No. 333-197767) filed with the SEC on September 1, 2017.

4.4		Valuation Procedures. Incorporated by reference to Exhibit 99.3 to the Current Report on Form 8-K filed with the SEC on July 15, 2020.

4.5		Multiple Class Plan. Incorporated by reference to Exhibit 4.5 to the Quarterly Report on Form 10-Q filed with the SEC on August 12, 2019.

10.1		Amended and Restated Advisory Agreement (2021), effective as of May 1, 2021. Incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed with the SEC on May 5, 2021.

31.1*		Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2*		Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1*		Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

99.1*		Consent of Altus Group U.S., Inc.


Exhibit Number		Description

101.1		The following materials from Black Creek Diversified Property Fund Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2021, filed on May 11, 2021, formatted in XBRL (eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets; (ii) Condensed Consolidated Statements of Operations; (iii) Condensed Consolidated Statements of Comprehensive Income (Loss); (iv) Condensed Consolidated Statements of Equity; (v) Condensed Consolidated Statements of Cash Flows; and (vi) Notes to Condensed Consolidated Financial Statements.

*	Filed or furnished herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


		BLACK CREEK DIVERSIFIED PROPERTY FUND INC.

May 11, 2021	By:	/s/ JEFFREY W. TAYLOR
		Jeffrey W. Taylor Managing Director, Co-President (Principal Executive Officer)

May 11, 2021	By:	/s/ LAINIE P. MINNICK
		Lainie P. Minnick Managing Director, Chief Financial Officer and Treasurer (Principal Financial Officer and Principal Accounting Officer)

Black Creek Diversified Property Fund 424B3Prospectus supplement