Table of Contents
SECURITIES AND EXCHANGE COMMISSION
Large accelerated filer | o | Accelerated filer | o | |||||
Non-accelerated filer | þ (Do not check if a smaller reporting company) | Smaller reporting company | o |
Table of Contents
The information in this prospectus is not complete and may be changed. We may not sell these securities pursuant to this prospectus until the registration statement filed with the SEC is effective. This prospectus is not an offer to sell these securities in any state where the offer or sale is not permitted. |
![(GRUBB & ELLIS LOGO)](https://capedge.com/proxy/S-11A/0000950123-09-014099/a51111a1a5111100.gif)
• | There is no public market for the shares of our common stock. Shares of our common stock cannot be readily sold and there are significant restrictions on the ownership, transferability and repurchase of shares of our common stock. If you are able to sell your shares of our common stock, you likely would have to sell them at a substantial discount. | |
• | This may be considered a “blind pool” offering because we have not identified any real estate or real estate-related investments to acquire with the net proceeds from this offering. As a result, you will not be able to evaluate the economic merits of our future investments prior to their purchase. We may be unable to invest the net proceeds from this offering on acceptable terms to investors, or at all. | |
• | As of the date of this prospectus, we have acquired only a limited number of properties. If we are unable to acquire suitable properties, or suffer a delay in making acquisitions, we may not have any cash flows available for distribution to you as a stockholder. | |
• | We have paid distributions from sources other than our cash flows from operations, including from the net proceeds from our initial public offering or from borrowed funds. Until we generate operating cash flows sufficient to pay distributions to you, we may pay distributions from the net proceeds of this offering or from borrowings in anticipation of future cash flows. We also may be required to sell assets or issue new securities for cash in order to pay distributions. Any such actions could reduce the amount of capital we ultimately invest in assets and negatively impact the amount of income available for future distributions. | |
• | We may incur substantial debt, which could hinder our ability to pay distributions to you or could decrease the value of your investment if the income from, or the value of, the property securing our debt falls. | |
• | This is a “best efforts” offering. If we raise substantially less than the maximum offering, we may not be able to invest in a diverse portfolio of real estate and real estate-related investments and the value of your investment may fluctuate more widely with the performance of specific investments. | |
• | We rely on our advisor and its affiliates to manage our business and assets. We pay substantial fees to our advisor and its affiliates for these services, and the agreements governing these fees were not negotiated at arm’s-length. In addition, fees payable to our dealer manager and our advisor in our organizational stage are based upon the gross offering proceeds and not on our or our properties’ performance. Such agreements may require us to pay more than we would if we were using unaffiliated third parties and may not solely reflect your interests as a stockholder of our company. | |
• | Many of our officers and non-independent directors have substantial conflicts of interest because they also serve as officers and directors of our sponsor, our advisor, our dealer manager or their affiliates, including significant conflicts in allocating time and investment opportunities among us and similar programs sponsored by our sponsor. | |
• | If we do not remain qualified as a REIT, we will be subject to federal income tax at regular corporate rates, which would adversely affect our operations and our ability to pay distributions to you. | |
• | The amount of distributions we may pay to you in the future, if any, is uncertain. Due to the risks involved in the ownership of real estate and real estate-related investments, there is no guarantee of any return on your investment in us and you may lose the amount you invest. |
Net Proceeds | ||||||||||||||||
Price to Public | Selling Commissions* | Dealer Manager Fee* | (Before Expenses) | |||||||||||||
Primary Offering | ||||||||||||||||
Per Share | $ | 10.00 | $ | 0.70 | $ | 0.30 | $ | 9.00 | ||||||||
Total Maximum | $ | 1,000,000,000 | $ | 70,000,000 | $ | 30,000,000 | $ | 900,000,000 | ||||||||
Distribution Reinvestment Plan | ||||||||||||||||
Per Share | $ | 9.50 | $ | — | $ | — | $ | 9.50 | ||||||||
Total Maximum | $ | 47,500,000 | $ | — | $ | — | $ | 47,500,000 | ||||||||
* | The selling commissions and all or a portion of the dealer manager fee will not be charged with regard to shares of our common stock sold pursuant to our primary offering to or for the account of our directors and officers, our affiliates and certain persons affiliated with broker-dealers participating in the primary offering. Selling commissions will not be charged for shares of our common stock sold pursuant to our primary offering to investors that have engaged the services of a financial advisor paid on a fee-for-service or assets under management basis by the investor. Selling commissions will be reduced in connection with sales of certain minimum numbers of shares of common stock. The reduction in these fees will be accompanied by a corresponding reduction in the per share purchase price; however, the net proceeds to us will remain unchanged. See the “Plan of Distribution” section of this prospectus. |
Table of Contents
• | a net worth of at least $250,000; or | |
• | a gross annual income of at least $70,000 and a net worth of at least $70,000. |
i
Table of Contents
• | make every reasonable effort to determine that the purchase of shares of our common stock is a suitable and appropriate investment for each investor based on information provided by such investor to the broker-dealer, including such investor’s age, investment objectives, income, net worth, financial situation and other investments held by such investor; and | |
• | maintain, for at least six years, records of the information used to determine that an investment in shares of our common stock is suitable and appropriate for each investor. |
• | meet the minimum income and net worth standards established in your state; | |
• | can reasonably benefit from an investment in shares of our common stock based on your overall investment objectives and portfolio structure; | |
• | are able to bear the economic risk of the investment based on your overall financial situation; and | |
• | have an apparent understanding of: |
• | the fundamental risks of an investment in shares of our common stock; | |
• | the risk that you may lose your entire investment; | |
• | the lack of liquidity of shares of our common stock; | |
• | the restrictions on transferability of shares of our common stock; | |
• | the background and qualifications of our advisor; and | |
• | the tax consequences of an investment in shares of our common stock. |
ii
Table of Contents
• | a “designated national,” “specially designated national,” “specially designated terrorist,” “specially designated global terrorist,” “foreign terrorist organization,” or “blocked person” within the definitions set forth in the Foreign Assets Control Regulations of the U.S. Treasury Department; | |
• | acting on behalf of, or an entity owned or controlled by, any government against whom the United States maintains economic sanctions or embargoes under the Regulations of the U.S. Treasury Department; | |
• | within the scope of Executive Order 13224 — Blocking Property and Prohibiting Transactions with Persons who Commit, Threaten to Commit, or Support Terrorism, effective September 24, 2001; | |
• | a person or entity subject to additional restrictions imposed by any of the following statutes or regulations and executive orders issued thereunder: the Trading with the Enemy Act, the National Emergencies Act, the Antiterrorism and Effective Death Penalty Act of 1996, the International Emergency Economic Powers Act, the United Nations Participation Act, the International Security and Development Cooperation Act, the Nuclear Proliferation Prevention Act of 1994, the Foreign Narcotics Kingpin Designation Act, the Iran and Libya Sanctions Act of 1996, the Cuban Democracy Act, the Cuban Liberty and Democratic Solidarity Act and the Foreign Operations, Export Financing and Related Programs Appropriations Act or any other law of similar import as to any non-U.S. country, as each such act or law has been or may be amended, adjusted, modified or reviewed from time to time; or | |
• | designated or blocked, associated or involved in terrorism, or subject to restrictions under laws, regulations, or executive orders as may apply in the future similar to those set forth above. |
iii
Table of Contents
• | Review this entire prospectus and any appendices and supplements accompanying this prospectus. | |
• | Complete the execution copy of the Subscription Agreement. A specimen copy of the Subscription Agreement is included in this prospectus as Exhibit B. | |
• | Deliver your check for the full purchase price of the shares of our common stock being subscribed for, along with a completed, executed subscription agreement to your participating broker-dealer. | |
• | Make your check payable to “Grubb & Ellis Apartment REIT, Inc.” |
iv
i | ||||||||
iv | ||||||||
1 | ||||||||
6 | ||||||||
23 | ||||||||
54 | ||||||||
55 | ||||||||
57 | ||||||||
58 | ||||||||
61 | ||||||||
76 | ||||||||
79 | ||||||||
95 | ||||||||
104 | ||||||||
109 | ||||||||
113 | ||||||||
116 | ||||||||
118 | ||||||||
122 | ||||||||
130 | ||||||||
135 | ||||||||
154 | ||||||||
160 | ||||||||
165 | ||||||||
165 | ||||||||
165 | ||||||||
166 | ||||||||
166 | ||||||||
166 | ||||||||
167 | ||||||||
A-1 | ||||||||
B-1 | ||||||||
C-1 | ||||||||
D-1 | ||||||||
EX-5.1 | ||||||||
EX-8.1 | ||||||||
EX-10.4.2 | ||||||||
EX-23.3 | ||||||||
EX-23.4 |
v
Table of Contents
Q: | What is a real estate investment trust, or REIT? | |
A: | In general, a REIT is a company that: |
• | combines the capital of many investors to acquire or provide financing for real estate; | |
• | pays annual distributions to investors of at least 90.0% of its taxable income (computed without regard to the dividends paid deduction and excluding net capital gain); | |
• | avoids the “double taxation” treatment of income that would normally result from investments in a corporation because a REIT is not generally subject to federal corporate income taxes on net income that it distributes to stockholders; and | |
• | enables individual investors to invest in a large-scale diversified real estate portfolio through the purchase of shares in the REIT. |
Q: | What is Grubb & Ellis Apartment REIT, Inc.? | |
A: | Grubb & Ellis Apartment REIT, Inc., or Grubb & Ellis Apartment REIT, is a Maryland corporation formed on December 21, 2005, which has qualified and elected to be taxed as a REIT for federal income tax purposes commencing with its taxable year ended December 31, 2006 and intends to continue to be taxed as a REIT. We primarily invest in a diverse portfolio of apartment communities with stable cash flows and growth potential in select U.S. metropolitan areas. | |
Q: | Who will choose and manage your real estate investments? | |
A: | Grubb & Ellis Apartment REIT Advisor, LLC, or Grubb & Ellis Apartment REIT Advisor, which we also refer to as our advisor, makes recommendations on all property acquisitions to our board of directors. Our board of directors, including a majority of our independent directors, must approve all of our property acquisitions. Our advisor or its affiliates receive, among other fees, an asset management fee for supervising the management and operation of properties that we acquire and an acquisition fee for the due diligence, selection and acquisition of properties that we acquire. | |
Q: | What types of real estate properties do you plan to acquire? | |
A: | We expect to use substantially all of the net proceeds from this offering to invest in a diversified portfolio of apartment communities with stable cash flows and growth potential in select U.S. metropolitan markets. We also may originate and invest in secured loans and other real estate-related investments. Because we have not yet identified any properties we intend to purchase with the net proceeds from this offering, we may be considered to be a “blind pool” investment. | |
Q: | How does Grubb & Ellis Apartment REIT own its real estate properties? | |
A: | We own our current real estate properties, and expect to own all of our future real estate properties, through Grubb & Ellis Apartment REIT Holdings, L.P., or Grubb & Ellis Apartment REIT Holdings, or through its subsidiaries. We organized Grubb & Ellis Apartment REIT Holdings, which we also refer to as our operating partnership, to own, operate and manage real estate properties on our behalf. We are the sole general partner of our operating partnership. Our advisor currently is the only limited partner and the only special partner of our operating partnership. | |
Q: | What is an UPREIT? | |
A: | UPREIT stands for Umbrella Partnership Real Estate Investment Trust. An UPREIT is a REIT that holds all or substantially all of its properties through a partnership in which the REIT holds a general partner and/or limited partner interest, approximately equal to the value of capital raised by the REIT through sales of its capital stock. Using an UPREIT structure may give us an advantage in acquiring properties |
1
Table of Contents
from persons who may not otherwise sell their properties because of unfavorable tax results. Generally, a sale of property directly to a REIT is a taxable transaction to the selling property owner. In an UPREIT structure, a seller of a property who desires to defer taxable gain on the sale of his property may transfer the property to the UPREIT in exchange for limited partnership units in the partnership and defer taxation of gain until the seller later exchanges his limited partnership units on a one-for-one basis for REIT shares or for cash pursuant to the terms of the limited partnership agreement. | ||
The benefits of our UPREIT structure include the following: |
• | We believe our structure provides us with access to capital for refinancing and growth. Because an UPREIT structure includes a partnership as well as a corporation, we can access the markets through our operating partnership issuing equity or debt as well as our company issuing capital stock or debt securities. Sources of capital include the common stock sold in this offering and possible future issuances of debt or equity through public offerings or private placements. | |
• | Our structure allows stockholders through their ownership of common stock, and the limited partners through their ownership of limited partnership units, an opportunity to participate in the growth of the real estate market through a diversified and ongoing business enterprise. | |
• | The UPREIT structure will provide property owners who transfer their real properties to our operating partnership in exchange for limited partnership units the opportunity to defer the tax consequences that otherwise would arise from a sale of their real properties and other assets to us or to a third party. This will allow us to acquire assets without using as much of our cash and may allow us to acquire assets that the owner would otherwise be unwilling to sell because of tax considerations. |
Q: | What will you do with the money raised in this offering? | |
A: | We will use the net offering proceeds primarily to invest in apartment communities with stable cash flows and growth potential in select U.S. metropolitan markets, and for real estate-related investments. The diversification of our portfolio is dependent upon the amount of proceeds we receive in this offering. We expect that at least 86.4% of the money you invest will be used to acquire our targeted investments and the remaining 13.6% will be used to pay fees and expenses of this offering. Until we invest the proceeds of this offering in targeted investments, we may invest in short-term, highly liquid or other authorized investments. Such short-term investments will not earn significant returns, and we cannot guarantee how long it will take to fully invest the net proceeds in properties. | |
Q: | What kind of offering is this? | |
A: | Through our dealer manager, we are offering up to 100,000,000 shares of our common stock pursuant to the primary offering on a “best efforts” basis at $10.00 per share. We are also offering up to 5,000,000 shares of our common stock pursuant to the DRIP at $9.50 per share to those stockholders who elect to participate in such plan as described in this prospectus. We reserve the right to reallocate the shares of our common stock we are offering between the primary offering and the DRIP. | |
Q: | How does a “best efforts” offering work? | |
A: | When securities are offered to the public on a “best efforts” basis, the broker-dealers participating in the offering are only required to use their best efforts to sell the securities and have no firm commitment or obligation to purchase any of the securities. Because this is a “best efforts” offering, we cannot guarantee that any specific number of shares of our common stock will be sold. We intend to admit stockholders periodically as subscriptions for shares of our common stock are received, but not less frequently than monthly. | |
Q: | How long will this offering last? |
A: | We will sell shares of our common stock in this offering until the earlier of , 2011, or the date on which the maximum offering amount has been sold; provided, however, that the amount of shares of our common stock registered pursuant to this offering is the amount which we reasonably expect to be offered and sold within two years from the initial effective date of this offering, and we may extend this |
2
Table of Contents
offering for an additional year or as otherwise permitted under applicable law. We also reserve the right to terminate this offering at any time. | ||
Q: | Who can buy shares of Grubb & Ellis Apartment REIT common stock? | |
A: | Generally, you can buy shares of our common stock pursuant to this prospectus provided that you have either (1) a net worth of at least $250,000, or (2) a gross annual income of at least $70,000 and a net worth of at least $70,000. For this purpose, net worth does not include your home, home furnishings or personal automobiles. However, these minimum levels are higher in certain states, so you should carefully read the more detailed description under “Suitability Standards” beginning on page i of this prospectus. | |
Q: | For whom is an investment in shares of Grubb & Ellis Apartment REIT common stock appropriate? | |
A: | An investment in shares of our common stock may be appropriate for you if you meet the minimum suitability standards mentioned above, seek to diversify your personal portfolio with a real estate-based investment, seek to receive current income, seek to preserve capital, wish to obtain the benefits of potential long-term capital appreciation and are able to hold your investment for a time period consistent with our liquidity plans. On the other hand, we caution persons who require immediate liquidity or guaranteed income, or who seek a short-term investment, that an investment in shares of our common stock will not meet those needs. | |
Q: | May I make an investment through my IRA, SEP or other tax-deferred account? | |
A: | Yes. You may make an investment through your IRA, simplified employee pension, or SEP, plan or other tax-deferred account. In making these investment decisions, you should consider, at a minimum, (1) whether the investment is in accordance with the documents and instruments governing your IRA, plan or other account, (2) whether the investment satisfies the fiduciary requirements associated with your IRA, plan or other account, (3) whether the investment will generate unrelated business taxable income, or UBTI, to your IRA, plan or other account, (4) whether there is sufficient liquidity for such investment under your IRA, plan or other account, (5) the need to value the assets of your IRA, plan or other account annually or more frequently, and (6) whether the investment would constitute a prohibited transaction under applicable law. | |
Q: | Is there any minimum investment required? | |
A: | Yes. The minimum investment is 100 shares of our common stock, which generally equals a minimum investment of at least $1,000, except for purchases by (1) our existing stockholders, including purchases made pursuant to the DRIP, and (2) existing investors in other programs sponsored by our sponsor, Grubb & Ellis, or any of our sponsor’s affiliates, which may be in lesser amounts; provided, however, that the minimum initial investment for residents of New York is 250 shares of our common stock, which generally equals a minimum investment of at least $2,500, unless such purchase is made by an IRA, in which case the minimum initial purchase is 100 shares of our common stock, which generally equals a minimum investment of at least $1,000. | |
Q: | How do I subscribe for shares of Grubb & Ellis Apartment REIT common stock? | |
A: | You must meet the suitability standards described in the “Suitability Standards” section of this prospectus in order to purchase shares of our common stock in this offering. If you would like to purchase shares of our common stock, please proceed as directed in the “How to Subscribe” section of this prospectus. | |
Q: | If I buy shares of common stock, will I receive distributions and how often? | |
A: | Provided we have sufficient available cash flow, we expect to pay distributions on a monthly basis to you. Our distribution policy is set by our board of directors and is subject to change based on available cash flow. We declare distributions with a daily record date so your distribution benefits begin to accrue immediately upon becoming a stockholder. However, we cannot guarantee the amount of distributions we will pay, if any. Currently, we pay distributions monthly. |
3
Table of Contents
Q: | Will the distributions I receive be taxable as ordinary income? | |
A: | If you are a taxable stockholder, distributions that you receive, including distributions that are reinvested pursuant to the DRIP, generally will be taxed as ordinary income to the extent they are from our current or accumulated earnings and profits, unless we have designated all or a portion of the distribution as a capital gain distribution. In such case, such designated portion of the distribution will be treated as a capital gain. To the extent that we pay a distribution in excess of our current and accumulated earnings and profits, the distribution will be treated first as a tax-free return of capital, reducing the tax basis in your shares of our common stock, and the amount of each distribution in excess of your tax basis in shares of our common stock will be taxable as a gain realized from the sale of your shares of our common stock. For example, because depreciation expense reduces taxable income but does not reduce cash available for distribution, if our distributions exceed our current and accumulated earnings and profits, the portion of such distributions to you exceeding our current and accumulated earnings and profits (to the extent of your positive basis in your shares of our common stock) will be considered a return of capital to you for tax purposes. These amounts will not be subject to income tax immediately but will instead reduce the tax basis of your investment, in effect, deferring a portion of your income tax until you sell your shares of our common stock or we liquidate, assuming we do not pay any future distributions in excess of our current and accumulated earnings and profits at a time that your tax basis in your shares of our common stock is zero. If you are a tax-exempt entity, distributions from us generally will not constitute UBTI unless you have borrowed to acquire or carry your stock or have used the shares of our common stock in a trade or business. There are exceptions to this rule for certain types of tax-exempt entities. Because each investor’s tax considerations are different, especially the treatment of tax-exempt entities, we suggest that you consult with your tax advisor. See the “Federal Income Tax Considerations — Taxation of Taxable U.S. Stockholders,” the “Federal Income Tax Considerations — Taxation of Tax-Exempt Stockholders,” and the “Distribution Reinvestment Plan” sections of this prospectus. | |
Q: | May I reinvest my distributions? | |
A: | Yes. See the “Distribution Reinvestment Plan” section of this prospectus for more information regarding the DRIP. | |
Q: | If I buy shares of common stock in this offering, how may I later sell them? | |
A: | At the time you purchase shares of our common stock, they will not be listed for trading on any national securities exchange. As a result, if you wish to sell your shares of our common stock, you may not be able to do so promptly or at all, or you may only be able to sell them at a substantial discount from the price you paid. In general, however, you may sell your shares of our common stock to any buyer that meets the applicable suitability standards unless such sale would cause the buyer to own more than 9.9% of the value of our then outstanding capital stock (which includes common stock and any preferred stock we may issue) or more than 9.9% of the value or number of shares, whichever is more restrictive, of our then outstanding common stock. See the “Suitability Standards” and “Description of Capital Stock — Restrictions on Ownership and Transfer” sections of this prospectus. We have adopted a share repurchase plan, as discussed under the “Share Repurchase Plan” section of this prospectus, which may provide limited liquidity for some of our stockholders. | |
Q: | Do you intend to list the shares of your common stock on a securities exchange? If not, is there any other planned liquidity event? | |
A: | We will seek to list the shares of our common stock on a national securities exchange if and when our board of directors determines that such listing would be in the best interest of our stockholders. If by 2013, the shares of our common stock are not listed on a national securities exchange, then our board of directors will seek stockholder approval of either (a) an extension of this listing deadline or (b) the liquidation of our company and distribution of the net proceeds to our stockholders. |
4
Table of Contents
Q: | Will I be notified of how my investment is doing? | |
A: | Yes. You will receive periodic updates on the performance of your investment with us, including: |
• | four quarterly investment statements, which will generally include a summary of the amount you have invested, the monthly distributions paid and the amount of distributions reinvested pursuant to the DRIP, as applicable; | |
• | an annual report after the end of each year; and | |
• | an annual IRS Form 1099-DIV after the end of each year. |
Q: | When will I get my detailed tax information? | |
A: | Your Form 1099-DIV tax information will be mailed by January 31 of each year. | |
Q: | Who can help answer my questions? | |
A: | If you have any questions regarding this offering or if you would like additional copies of this prospectus, you should contact your registered representative or: | |
Investor Services Department Grubb & Ellis Apartment REIT Advisor, LLC 1551 N. Tustin Ave., Ste. 300 Santa Ana, CA 92705 Telephone: (877) 888-7348 or (714) 667-8252 Facsimile: (714) 667-6843 |
5
Table of Contents
• | stable cash flows available for distribution to our stockholders; | |
• | preservation, protection and return of capital; and | |
• | growth of income and principal without taking undue risk. |
• | invest in income-producing real estate and real estate-related investments in a manner which permits us to maintain our qualification as a REIT for federal income tax purposes; and | |
• | realize capital appreciation upon the ultimate sale of our properties. |
6
Table of Contents
• | There is no public market for the shares of our common stock. Shares of our common stock cannot be readily sold and there are significant restrictions on the ownership, transferability and repurchase of shares of our common stock. If you are able to sell your shares of our common stock, you likely would have to sell them at a substantial discount. | |
• | This may be considered a “blind pool” offering because we have not identified any real estate or real estate-related investments to acquire with the net proceeds from this offering. As a result, you will not be able to evaluate the economic merits of our future investments prior to their purchase. We may be unable to invest the net proceeds from this offering on acceptable terms to investors, or at all. | |
• | As of the date of this prospectus, we have acquired only a limited number of properties. If we are unable to acquire suitable properties, or suffer a delay in making acquisitions, we may not have any cash flows available for distribution to you as a stockholder. |
• | We have paid distributions from sources other than our cash flows from operations, including from the net proceeds from our initial public offering or from borrowed funds. Until we generate operating cash flows sufficient to pay distributions to you, we may pay distributions from the net proceeds of this offering or from borrowings in anticipation of future cash flows. We have not established any limit on the amount of offering proceeds that may be used to fund distributions other than those limits imposed by our organizational documents and Maryland law. We also may be required to sell assets or issue new securities for cash in order to pay distributions. Any such actions could reduce the amount of capital we ultimately invest in assets and negatively impact the amount of income available for future distribution. |
• | We may incur substantial debt, which could hinder our ability to pay distributions to you or could decrease the value of your investment if the income from, or the value of, the property securing our debt falls. |
7
Table of Contents
• | This is a “best efforts” offering. If we raise substantially less than the maximum offering, we may not be able to invest in a diverse portfolio of real estate and real estate-related investments and the value of your investment may fluctuate more widely with the performance of specific investments. | |
• | We rely on our advisor and its affiliates to manage our business and assets. We pay substantial fees to our advisor and its affiliates for these services, and the agreements governing these fees were not negotiated at arm’s-length. In addition, fees payable to our dealer manager and our advisor in our organizational stage are based upon the gross offering proceeds and not on our or our properties’ performance. Such agreements may require us to pay more than we would if we were using unaffiliated third parties and may not solely reflect your interests as a stockholder of our company. | |
• | Many of our officers and non-independent directors have substantial conflicts of interest because they also serve as officers and directors of our sponsor, our advisor, our dealer manager or their affiliates, including significant conflicts in allocating time and investment opportunities among us and similar programs sponsored by our sponsor. | |
• | If we do not remain qualified as a REIT, we will be subject to federal income tax at regular corporate tax rates, which would adversely affect our operations and our ability to pay distributions to you. | |
• | The amount of distributions we may pay to you in the future, if any, is uncertain. Due to the risks involved in the ownership of real estate and real estate-related investments, there is no guarantee of any return on your investment in us and you may lose the amount you invest. | |
• | Our board of directors may change our investment objectives without seeking your approval. |
• | We intend to preserve capital through selective acquisitions and professional management, whereby we intend to increase rental rates, maintain high economic occupancy rates, reduce tenant turnover, make value-enhancing and income-producing capital improvements where appropriate, and control operating costs and capital expenditures. | |
• | We intend to purchase apartment communities in growth markets, at attractive prices relative to replacement cost, and obtain immediate income from tenant rents with the potential for appreciation in value over time. |
8
Table of Contents
Ownership | Type of | Number | Purchase | Contract | Mortgage | Maturity | ||||||||||||||||||||||||
Property Name | Interest | Property | of Units | Occupancy | Date | Purchase Price | Debt | Date | Location | |||||||||||||||||||||
Walker Ranch Apartment Homes | 100 | % | apartment | 325 | 88.9 | % | 10/31/2006 | $ | 30,750,000 | $ | 20,000,000 | 5/11/2017 | San Antonio, TX | |||||||||||||||||
Hidden Lake Apartment Homes | 100 | % | apartment | 380 | 88.2 | % | 12/28/2006 | $ | 32,030,000 | $ | 19,218,000 | 1/11/2017 | San Antonio, TX | |||||||||||||||||
Park at Northgate | 100 | % | apartment | 248 | 96.0 | % | 6/12/2007 | $ | 16,600,000 | $ | 10,295,000 | 8/1/2017 | Spring, TX | |||||||||||||||||
Residences at Braemar | 100 | % | apartment | 160 | 91.3 | % | 6/29/2007 | $ | 15,000,000 | $ | 9,474,000 | 6/1/2015 | Charlotte, NC | |||||||||||||||||
Baypoint Resort | 100 | % | apartment | 350 | 84.6 | % | 8/2/2007 | $ | 33,250,000 | $ | 21,612,000 | 8/1/2017 | Corpus Christi, TX | |||||||||||||||||
Towne Crossing Apartments | 100 | % | apartment | 268 | 93.3 | % | 8/29/2007 | $ | 21,600,000 | $ | 14,981,000 | 11/1/2014 | Mansfield, TX | |||||||||||||||||
Villas of El Dorado | 100 | % | apartment | 248 | 91.5 | % | 11/2/2007 | $ | 18,000,000 | $ | 13,600,000 | 12/1/2016 | McKinney, TX | |||||||||||||||||
The Heights at Olde Towne | 100 | % | apartment | 148 | 90.5 | % | 12/21/2007 | $ | 17,000,000 | $ | 10,475,000 | 1/1/2018 | Portsmouth, VA | |||||||||||||||||
The Myrtles at Olde Towne | 100 | % | apartment | 246 | 93.9 | % | 12/21/2007 | $ | 36,000,000 | $ | 20,100,000 | 1/1/2018 | Portsmouth, VA | |||||||||||||||||
Arboleda Apartments | 100 | % | apartment | 312 | 86.9 | % | 3/31/2008 | $ | 29,250,000 | $ | 17,651,000 | 4/1/2015 | Cedar Park, TX | |||||||||||||||||
Creekside Crossing | 100 | % | apartment | 280 | 98.2 | % | 6/26/2008 | $ | 25,400,000 | $ | 17,000,000 | 7/1/2015 | Lithonia, GA | |||||||||||||||||
Kedron Village | 100 | % | apartment | 216 | 91.7 | % | 6/27/2008 | $ | 29,600,000 | $ | 20,000,000 | 7/1/2015 | Peachtree City, GA | |||||||||||||||||
Canyon Ridge Apartments | 100 | % | apartment | 350 | 93.1 | % | 9/15/2008 | $ | 36,050,000 | $ | 24,000,000 | 10/1/2015 | Hermitage, TN |
9
Table of Contents
Maximum Offering | ||||||||
Amount | Percent | |||||||
Gross Offering Proceeds | $ | 1,000,000,000 | 100 | % | ||||
Less Public Offering Expenses: | ||||||||
Selling Commissions | 70,000,000 | 7.0 | ||||||
Dealer Manager Fee | 30,000,000 | 3.0 | ||||||
Other Organizational and Offering Expenses | 10,000,000 | 1.0 | ||||||
Amount Available for Investment | $ | 890,000,000 | 89.0 | % | ||||
Less Acquisition Costs: | ||||||||
Acquisition Fees | $ | 25,922,000 | 2.6 | % | ||||
Initial Working Capital Reserve | — | — | ||||||
Amount Invested in Assets | $ | 864,078,000 | 86.4 | % | ||||
10
Table of Contents
11
Table of Contents
12
Table of Contents
• | for stockholders who have continuously held their shares of our common stock for at least one year, the lower of $9.25 or 92.5% of the price paid per share to acquire shares of our common stock from us; | |
• | for stockholders who have continuously held their shares of our common stock for at least two years, the lower of $9.50 or 95.0% of the price paid per share to acquire shares of our common stock from us; | |
• | for stockholders who have continuously held their shares of our common stock for at least three years, the lower of $9.75 or 97.5% of the price paid per share to acquire shares of our common stock from us; and | |
• | for stockholders who have continuously held their shares of our common stock for at least four years, a price determined by our board of directors, but in no event less than 100% of the price paid per share to acquire shares of our common stock from us. |
13
Table of Contents
Type of Compensation | Description and | |||
(Recipient) | Method of Computation | Estimated Amount | ||
Offering Stage | ||||
Selling Commissions (our dealer manager) | Generally, up to 7.0% of gross offering proceeds from the sale of shares of our common stock pursuant to the primary offering (all or a portion of which may be reallowed by our dealer manager to participating broker-dealers). No selling commissions are payable on shares of our common stock sold pursuant to the DRIP. | Actual amount depends upon the number of shares of our common stock sold. We estimate that we will pay a total of $70,000,000 if we sell the maximum offering. | ||
Dealer Manager Fee (our dealer manager) | Generally, up to 3.0% of gross offering proceeds from the sale of shares of our common stock pursuant to the primary offering (all or a portion of which may be reallowed by our dealer manager to participating broker-dealers). No dealer manager fee is payable on shares of our common stock sold pursuant to the DRIP. | Actual amount depends upon the number of shares of our common stock sold. We estimate that we will pay a total of $30,000,000 if we sell the maximum offering. | ||
Other Organizational and Offering Expenses (our advisor or its affiliates) | Up to 1.0% of gross offering proceeds for shares of our common stock sold pursuant to the primary offering. No other organizational and offering expenses will be reimbursed with respect to shares of our common stock sold pursuant to the DRIP. | Actual amount depends upon the number of shares of our common stock sold. We estimate that we will pay a total of $10,000,000 if we sell the maximum offering. | ||
Acquisition Stage | ||||
Acquisition Fees (our advisor or its affiliates) | Up to 3.0% of the contract purchase price of each property we acquire, up to 4.0% of the total development cost of any development property or up to 2.0% of the origination or purchase price of any real estate-related investment, as applicable. | $25,922,000 assuming no debt or $74,064,000 assuming leverage of 65.0% of the contract purchase price if we sell the maximum offering. | ||
Reimbursement of Acquisition Expenses (our advisor or its affiliates) | All expenses actually incurred related to selecting, evaluating and acquiring assets, which will be paid regardless of whether an asset is acquired. | Actual amount depends upon the actual expenses incurred, and, therefore, cannot be determined at this time. |
14
Table of Contents
Type of Compensation | Description and | |||
(Recipient) | Method of Computation | Estimated Amount | ||
Operational Stage | ||||
Asset Management Fee (our advisor or its affiliates) | Subject to our stockholders receiving distributions in an amount equal to 5.0% per annum, cumulative, non-compounded, of our invested capital, an amount equal to 0.5% per annum of average invested assets. The asset management fee is calculated and payable monthly in cash or shares of our common stock, at the option of our advisor or one of its affiliates, not to exceed one-twelfth of 0.5% of our average invested assets as of the last day of the immediately preceding quarter; provided that, effective January 1, 2009, our advisor has agreed to waive the right to receive an asset management fee until the quarter following the quarter in which we generate funds from operations, or FFO, sufficient to cover 100% of the distributions declared to our stockholders for such quarter. For purposes of calculating FFO, non-recurring charges including, but not limited to, acquisition-related expenses, amortization of deferred financing fees on our line of credit or other equivalent mezzanine financing, interest expense associated with our line of credit, our loans from NNN Realty Advisors, Inc., or NNN Realty Advisors, an affiliate of our advisor, or other mezzanine loans, and gains or losses on future interest rate swaps, will be excluded. Average invested assets include any property-related debt; therefore, fully leveraging our portfolio could increase the asset management fee payable to our advisor or one of its affiliates. | Actual amount depends upon the average invested assets, and, therefore, cannot be determined at this time. | ||
Property Management Fees (Realty or Residential Management) | Up to 4.0% of the gross monthly cash receipts from each property managed by the respective property manager, some of which may be reallowed to a third-party property manager. | Actual amount depends upon the gross monthly cash receipts of the properties, and, therefore, cannot be determined at this time. |
15
Table of Contents
Type of Compensation | Description and | |||
(Recipient) | Method of Computation | Estimated Amount | ||
Compensation for Additional Services (our advisor or its affiliates) | If we request our advisor or one of its affiliates to render services for our company other than those required to be rendered by our advisor under the advisory agreement, the additional services, if our advisor elects to perform them, will be compensated separately on terms to be agreed upon between our advisor or its affiliate and us. The rate of compensation for these services must be approved by a majority of our board of directors, including a majority of our independent directors, and cannot exceed the amount that would be paid to unaffiliated third parties for similar services. | Actual amount depends upon the services provided, and, therefore, cannot be determined at this time. | ||
Operating Expenses (our advisor or its affiliates) | We reimburse our advisor or its affiliates for operating expenses incurred in rendering services to us, subject to certain limitations. | Actual amount depends upon the services provided, and, therefore, cannot be determined at this time. | ||
Liquidity Stage | ||||
Disposition Fees (our advisor or its affiliates) | Up to the lesser of 1.75% of the contract sales price of each property or 50.0% of a competitive real estate commission that would have been paid to a third party. The amount of disposition fees paid, when added to the real estate commissions paid to unaffiliated parties, will not exceed the lesser of the customary competitive real estate commission or an amount equal to 6.0% of the contract sales price. | Actual amount depends upon the sale price of properties, and, therefore, cannot be determined at this time. | ||
Subordinated Participation Interest (our advisor) | Our advisor has a subordinated participation interest in our operating partnership pursuant to which our advisor will receive cash distributions from our operating partnership under the following circumstances: | |||
• Incentive Distribution upon Sales | Equal to 15.0% of the net proceeds of the sale of the property after we have received, and paid to our stockholders, the sum of: | Actual amount depends upon the sale price of properties, and, therefore, cannot be determined at this time. | ||
• the gross proceeds from the sale of shares of our common stock; and |
16
Table of Contents
Type of Compensation | Description and | |||
(Recipient) | Method of Computation | Estimated Amount | ||
• any shortfall in our 8.0% annual cumulative, non-compounded return on the gross proceeds from the sale of shares of our common stock, as adjusted for distributions of net sale proceeds. | ||||
Until such time as stockholders receive such 8.0% return, our advisor will not receive any incentive distributions. There is no assurance we will be able to pay an annual 8.0% return to our stockholders. Thus, the 8.0% return is disclosed solely as a measure for our advisor’s incentive compensation. | ||||
• Incentive Distribution upon Listing | In the event of termination of the advisory agreement due to listing of the shares of our common stock on a national securities exchange, our advisor will be entitled to an incentive distribution equal to 15.0% of the amount, if any, by which (1) the market value of our outstanding common stock plus distributions paid by us prior to listing, exceeds (2) the sum of the gross proceeds from the sale of shares of our common stock plus an 8.0% per annum cumulative, non-compounded return on the gross proceeds from the sale of shares of our common stock. This distribution may be in the form of cash, units of limited partnership interest in our operating partnership or shares of our common stock. | Actual amount depends upon the market value of our common stock at the time of listing, among other factors, and, therefore, cannot be determined at this time. |
17
Table of Contents
Type of Compensation | Description and | |||
(Recipient) | Method of Computation | Estimated Amount | ||
There is no assurance we will be able to pay an annual 8.0% return to our stockholders. Thus, the 8.0% return is disclosed solely as a measure for our advisor’s incentive compensation. Upon our advisor’s receipt of the incentive distribution upon listing, our advisor’s special limited partnership units will be redeemed and our advisor will not be entitled to receive any further incentive distributions upon sales of our properties. | ||||
•Fees Payable upon Termination of the Advisory Agreement | In the event of termination of the advisory agreement due to an internalization of our advisor in connection with our conversion to a self-administered REIT, our advisor will be entitled to compensation to be determined by negotiation between our advisor and our independent directors. Upon our advisor’s receipt of such compensation, our advisor’s special limited partnership units will be redeemed and our advisor will not be entitled to receive any further incentive distributions upon sales of our properties. In connection with the termination of the advisory agreement other than due to a listing of the shares of our common stock on a national securities exchange or due to the internalization of our advisor in connection with our conversion to a self-administered REIT, we may cause our operating partnership to redeem our advisor’s special limited partner units, for cash, units of limited partnership interests in our operating partnership or shares of our common stock, in an amount equal to what our advisor would have received pursuant to the incentive distribution upon sales if our operating partnership immediately sold all of its assets at fair market value. | Actual amount depends upon many factors to be negotiated between our advisor and our independent directors and, therefore, cannot be determined at this time. |
18
Table of Contents
19
Table of Contents
![(ORGANIZATIONAL CHART)](https://capedge.com/proxy/S-11A/0000950123-09-014099/a51111a1a5111116.gif)
20
Table of Contents
![(ORGANIZATIONAL CHART)](https://capedge.com/proxy/S-11A/0000950123-09-014099/a51111a1a5111120.gif)
21
Table of Contents
22
Table of Contents
23
Table of Contents
• | identify and acquire investments that further our investment strategy; | |
• | build, expand and maintain our network of licensed securities brokers and other agents; | |
• | attract, integrate, motivate and retain qualified personnel to manage our day-to-day operations; | |
• | respond to competition both for investment opportunities and potential investors in us; and | |
• | build and expand our operations structure to support our business. |
24
Table of Contents
25
Table of Contents
26
Table of Contents
27
Table of Contents
28
Table of Contents
• | Debt and Equity Markets — Our results of operations are sensitive to the volatility of the credit markets. The real estate debt markets are currently experiencing volatility as a result of certain factors, including the tightening of underwriting standards by lenders and credit rating agencies and the significant inventory of unsold commercial mortgage-backed securities in the market. Credit spreads for major sources of capital have widened significantly as investors have demanded a higher risk premium. This is resulting in lenders increasing the cost for debt financing. Should the overall cost of borrowings increase, either by increases in the index rates or by increases in lender spreads, we will need to factor such increases into the economics of our acquisitions, developments and property contributions. This may result in our property operations generating lower overall economic returns and a reduced level of cash flows, which could potentially impact our ability to pay distributions to you. In addition, the recent dislocations in the debt markets have reduced the amount of capital that is available to finance real estate, which, in turn: (1) limits the ability of real estate investors to benefit from reduced real estate values or to realize enhanced returns on real estate investments; (2) has slowed real estate transaction activity; and (3) may result in an inability to refinance debt as it becomes due, all of which may reasonably be expected to have a material impact, favorable or unfavorable, on revenues, income and/or cash flows from the acquisition and operations of real estate and mortgage loans. In addition, the state of the debt markets could have an impact on the overall amount of capital being invested in real estate, which may result in price or value decreases of real estate assets and impact our ability to raise equity capital. |
• | Valuations — The recent market volatility will likely make the valuation of our properties more difficult. There may be significant uncertainty in the valuation, or in the stability of the value, of our properties that could result in a substantial decrease in the value of our properties. As a result, we may not be able to recover the carrying amount of our properties, which may require us to recognize an impairment charge in earnings. |
• | Government Intervention — The pervasive and fundamental disruptions that the global financial markets are currently undergoing have led to extensive and unprecedented governmental intervention. Although the government intervention is intended to stimulate the flow of capital and to undergird the U.S. economy in the short term, it is impossible to predict the actual effect of the government intervention and what effect, if any, additional interim or permanent governmental intervention may have on the financial markets and/or the effect of such intervention on us and our results of operations. In addition, there is a high likelihood that regulation of the financial markets will be significantly increased in the future, which could have a material impact on our operating results and financial condition. |
29
Table of Contents
30
Table of Contents
31
Table of Contents
• | any person directly or indirectly owning, controlling or holding, with the power to vote, 10.0% or more of the outstanding voting securities of such other person; | |
• | any person 10.0% or more of whose outstanding voting securities are directly or indirectly owned, controlled or held, with the power to vote, by such other person; | |
• | any person directly or indirectly controlling, controlled by or under common control with such other person; | |
• | any executive officer, director, manager, trustee or general partner of such other person; and | |
• | any legal entity for which such person acts as an executive officer, director, manager, trustee or general partner. |
32
Table of Contents
33
Table of Contents
34
Table of Contents
• | a venture partner may at any time have economic or other business interests or goals which become inconsistent with our business interests or goals, including inconsistent goals relating to the sale of properties held in a joint venture or the timing of the termination and liquidation of the venture; | |
• | a venture partner might become bankrupt and such proceedings could have an adverse impact on the operation of the partnership or joint venture; | |
• | actions taken by a venture partner might have the result of subjecting the property to liabilities in excess of those contemplated; | |
• | a venture partner may be in a position to take action contrary to our instructions or requests or contrary to our strategies or objectives, including our strategy to qualify and maintain our qualification as a REIT; and | |
• | the joint venture may provide for the distribution of income to us otherwise than in direct proportion to our ownership interest in the joint venture. |
35
Table of Contents
• | future offerings of our securities, including issuances pursuant to the DRIP and up to 50,000,000 shares of any preferred stock that our board of directors may authorize; | |
• | private issuances of our securities to other investors, including institutional investors; | |
• | issuances of our securities pursuant to our 2006 Incentive Award Plan; or | |
• | redemptions of units of limited partnership interest in our operating partnership in exchange for shares of our common stock. |
• | a merger, tender offer or proxy contest; | |
• | assumption of control by a holder of a large block of our securities; or | |
• | removal of incumbent management. |
36
Table of Contents
• | the election or removal of directors; | |
• | any amendment of our charter, except that our board of directors may amend our charter without stockholder approval to change our name or the name of other designation or the par value of any class or series of our stock and the aggregate par value of our stock, increase or decrease the aggregate number of our shares of stock, increase or decrease the number of our shares of any class or series that we have the authority to issue, or effect certain reverse stock splits; | |
• | our dissolution; and | |
• | certain mergers, consolidations and sales or other dispositions of all or substantially all of our assets. |
• | may consider the transfer to be null and void; | |
• | will not reflect the transaction on our books; | |
• | may institute legal action to enjoin the transaction; | |
• | will not pay dividends or other distributions to him or her with respect to those excess shares of stock; |
37
Table of Contents
• | will not recognize his or her voting rights for those excess shares of stock; and | |
• | may consider the excess shares of stock held in trust for the benefit of a charitable beneficiary. |
• | he or she may lose his or her power to dispose of the stock; | |
• | he or she may not recognize profit from the sale of such stock if the “market price” of the stock increases; and | |
• | he or she may incur a loss from the sale of such stock if the “market price” decreases. |
38
Table of Contents
• | limitations on capital structure; | |
• | restrictions on specified investments; | |
• | prohibitions on transactions with affiliates; and | |
• | compliance with reporting, record keeping, voting, proxy disclosure and other rules and regulations that would significantly change our operations. |
39
Table of Contents
• | poor economic times may result in defaults by tenants of our properties and borrowers. We may also be required to provide rent concessions or reduced rental rates to maintain or increase occupancy levels; | |
• | job transfers and layoffs may cause vacancies to increase and a lack of future population and job growth may make it difficult to maintain or increase occupancy levels; | |
• | increases in supply of competing properties or decreases in demand for our properties may impact our ability to maintain or increase occupancy levels; | |
• | changes in interest rates and availability of debt financing could render the sale of properties difficult or unattractive; | |
• | periods of high interest rates may reduce cash flows from leveraged properties; and | |
• | increased insurance premiums, real estate taxes or energy or other expenses may reduce funds available for distribution. Also, any such increased expenses may make it difficult to increase rents to tenants on turnover, which may limit our ability to increase our returns. |
40
Table of Contents
41
Table of Contents
42
Table of Contents
• | make it more difficult for us to find tenants to lease units in our apartment communities; | |
• | force us to lower our rental prices in order to lease units in our apartment communities; and | |
• | substantially reduce our revenues and cash available for distribution to you. |
43
Table of Contents
44
Table of Contents
45
Table of Contents
46
Table of Contents
47
Table of Contents
48
Table of Contents
49
Table of Contents
50
Table of Contents
51
Table of Contents
• | part of the income and gain recognized by certain qualified employee pension trusts with respect to our common stock may be treated as unrelated business taxable income if the shares of our common stock are predominately held by qualified employee pension trusts, and we are required to rely on a special look-through rule for purposes of meeting one of the REIT share ownership tests, and we are not operated in a manner to avoid treatment of such income or gain as unrelated business taxable income; | |
• | part of the income and gain recognized by a tax exempt stockholder with respect to the shares of our common stock would constitute unrelated business taxable income if the stockholder incurs debt in order to acquire shares of our common stock; and | |
• | part or all of the income or gain recognized with respect to the shares of our common stock by social clubs, voluntary employee benefit associations, supplemental unemployment benefit trusts and qualified group legal services plans which are exempt from federal income taxation under Sections 501(c)(7), (9), (17) or (20) of the Internal Revenue Code may be treated as unrelated business taxable income. |
52
Table of Contents
• | whether your investment is consistent with the applicable provisions of ERISA and the Internal Revenue Code, or any other applicable governing authority in the case of a government plan; | |
• | whether your investment is made in accordance with the documents and instruments governing your Benefit Plan or IRA, including your Benefit Plan or IRA’s investment policy; | |
• | whether your investment satisfies the prudence and diversification requirements of Sections 404(a)(1)(B) and 404(a)(1)(C) of ERISA; | |
• | whether your investment will impair the liquidity of the Benefit Plan or IRA; | |
• | whether your investment will constitute a prohibited transaction under Section 406 of ERISA or Section 4975 of the Internal Revenue Code; | |
• | whether your investment will produce unrelated business taxable income, referred to as UBTI and as defined in Sections 511 through 514 of the Internal Revenue Code, to the Benefit Plan or IRA; and | |
• | your need to value the assets of the Benefit Plan or IRA annually in accordance with ERISA and the Internal Revenue Code. |
53
Table of Contents
• | our ability to effectively deploy the proceeds raised in this offering; | |
• | changes in economic conditions generally and the real estate and securities markets specifically; | |
• | legislative or regulatory changes (including changes to the laws governing the taxation of REITs); | |
• | the availability of capital; | |
• | interest rates; and | |
• | changes to accounting principles generally accepted in the United States of America, or GAAP. |
54
Table of Contents
Maximum Offering | ||||||||
Amount | Percent | |||||||
Gross Offering Proceeds | $ | 1,000,000,000 | 100 | % | ||||
Less Public Offering Expenses: | ||||||||
Selling Commissions(1) | 70,000,000 | 7.0 | ||||||
Dealer Manager Fee(1) | 30,000,000 | 3.0 | ||||||
Other Organizational and Offering Expenses(2) | 10,000,000 | 1.0 | ||||||
Amount Available for Investment(3) | $ | 890,000,000 | 89.0 | % | ||||
Less Acquisition Costs: | ||||||||
Acquisition Fees(4) | $ | 25,922,000 | 2.6 | % | ||||
Initial Working Capital Reserve(5) | — | — | ||||||
Amount Invested in Assets(6) | $ | 864,078,000 | 86.4 | % | ||||
(1) | Assumes selling commissions equal to 7.0% of gross offering proceeds for shares of our common stock sold pursuant to the primary offering, which commissions may be reduced under certain circumstances, |
55
Table of Contents
and a dealer manager fee equal to 3.0% of gross offering proceeds for shares of our common stock sold pursuant to the primary offering. However, our dealer manager may, from time to time, enter into selected dealer agreements that provide for reduced selling commissions and an increased dealer manager fee, provided that in no event will the aggregate of the selling commissions and the dealer manager fee be greater than 10.0% of the gross offering proceeds for shares of our common stock sold pursuant to the primary offering. In addition, the amount of selling commissions we pay may be reduced under certain circumstances for volume discounts and other types of sales. See the “Plan of Distribution” section of this prospectus for a description of these provisions. | ||
(2) | Other organizational and offering expenses consist of reimbursement of, among other items, the cumulative cost of actual legal, accounting, printing and other accountable offering expenses, including, but not limited to, amounts to reimburse our advisor for marketing, salaries and direct expenses of its employees, employees of its affiliates and others while engaged in registering and marketing shares of our common stock to be sold in this offering. Activities of our advisor that may be reimbursed include, but are not limited to, development of marketing materials and marketing presentations, participating in due diligence and coordinating generally the marketing process for this offering. Our advisor will be responsible for the payment of our cumulative other organizational and offering expenses to the extent they exceed 1.0% of the aggregate gross proceeds from the sale of shares of our common stock pursuant to the primary offering without recourse against or reimbursement by us. | |
(3) | Until required in connection with the acquisition of real estate or real estate-related investments, the net proceeds of this offering may be invested in short-term, highly-liquid investments including government obligations, bank certificates of deposit, short-term debt obligations and interest-bearing accounts or other authorized investments as determined by our board of directors. | |
(4) | Acquisition fees include any and all fees paid by any party to any person in connection with the purchase, development or construction of real properties. Acquisition fees do not include acquisition expenses. We will pay our advisor or one of its affiliates acquisition fees of up to 3.0% of the contract purchase price of each property we acquire. Our advisor or its affiliates will be entitled to receive acquisition fees for properties acquired with funds raised in this offering, including acquisitions completed after the termination of the advisory agreement, or funded with net proceeds from the sale of a property or real estate-related investment, subject to certain conditions. We may pay our advisor or its affiliates up to 4.0% of the total development cost of any development property and up to 2.0% of the origination or purchase price of any real estate-related investment. For purposes of this table, we have assumed that (a) no real estate-related investments will be originated or acquired, (b) no payments for development fees will be made and (c) no debt will be incurred with respect to any property acquisition. However, as disclosed throughout this prospectus, we have used, and expect to continue to use, leverage, which results in higher fees paid to our advisor and its affiliates. Assuming, in addition to our other assumptions, a maximum leverage of 65.0% of our assets, the maximum acquisition fees would be approximately $74,064,000. These assumptions may change due to different factors including changes in the allocation of shares of our common stock between the primary offering and the DRIP, the extent to which proceeds from the DRIP are used to repurchase shares of our common stock pursuant to our share repurchase plan and the extent to which we make real estate-related investments. To the extent that we issue new shares of our common stock outside of this offering or interests in our operating partnership in order to acquire real properties then the acquisition fees and amounts invested in real properties will exceed the amount stated above. | |
(5) | Although we do not anticipate establishing a general working capital reserve out of the proceeds from this offering, we may establish capital reserves with respect to particular investments. See the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section in our Annual Report on Form 10-K that is incorporated into this prospectus for a discussion of the capital plan that our advisor will establish for each of our investments. | |
(6) | Includes amounts anticipated to be invested in assets and all expenses actually incurred in connection with selecting, evaluating and acquiring such assets, which will be reimbursed regardless of whether an asset is acquired. |
56
Table of Contents
March 31, | ||||||||||||||||||||
2009 | December 31, | January 10, 2006 | ||||||||||||||||||
Selected Financial Data | (Unaudited) | 2008 | 2007 | 2006 | (Date of Inception) | |||||||||||||||
BALANCE SHEET DATA: | ||||||||||||||||||||
Total assets | $ | 342,208,000 | $ | 344,685,000 | $ | 228,814,000 | $ | 67,214,000 | $ | 201,000 | ||||||||||
Mortgage loan payables, net | $ | 217,643,000 | $ | 217,713,000 | $ | 139,318,000 | $ | 19,218,000 | $ | — | ||||||||||
Stockholders’ equity | $ | 106,232,000 | $ | 106,705,000 | $ | 66,056,000 | $ | 14,247,000 | $ | 201,000 |
Period from | ||||||||||||||||
January 10, 2006 | ||||||||||||||||
Three Months | (Date of Inception) | |||||||||||||||
Ended March 31, | through | |||||||||||||||
2009 | Years Ended December 31, | December 31, | ||||||||||||||
(Unaudited) | 2008 | 2007 | 2006 | |||||||||||||
STATEMENT OF OPERATIONS DATA: | ||||||||||||||||
Total revenues | $ | 9,378,000 | $ | 31,878,000 | $ | 12,705,000 | $ | 659,000 | ||||||||
Net loss from continuing operations | $ | (1,478,000 | ) | $ | (12,827,000 | ) | $ | (5,579,000 | ) | $ | (523,000 | ) | ||||
Net loss attributable to controlling interest | $ | (1,478,000 | ) | $ | (12,826,000 | ) | $ | (5,579,000 | ) | $ | (523,000 | ) | ||||
Net loss per share — basic and diluted(1): | ||||||||||||||||
Net loss from continuing operations | $ | (0.09 | ) | $ | (1.04 | ) | $ | (1.10 | ) | $ | (1.99 | ) | ||||
Net loss attributable to controlling interest | $ | (0.09 | ) | $ | (1.04 | ) | $ | (1.10 | ) | $ | (1.99 | ) | ||||
STATEMENT OF CASH FLOWS DATA: | ||||||||||||||||
Cash flows provided by operating activities | $ | 299,000 | $ | 1,567,000 | $ | 2,195,000 | $ | 301,000 | ||||||||
Cash flows used in investing activities | $ | (202,000 | ) | $ | (126,638,000 | ) | $ | (126,965,000 | ) | $ | (63,991,000 | ) | ||||
Cash flows provided by financing activities | $ | 790,000 | $ | 126,041,000 | $ | 125,010,000 | $ | 65,144,000 | ||||||||
OTHER DATA: | ||||||||||||||||
Distributions declared | $ | 2,614,000 | $ | 8,633,000 | $ | 3,519,000 | $ | 145,000 | ||||||||
Distributions declared per share | $ | 0.17 | $ | 0.70 | $ | 0.68 | $ | 0.14 | ||||||||
Funds from operations(2) | $ | 1,611,000 | $ | (1,106,000 | ) | $ | (194,000 | ) | $ | (234,000 | ) | |||||
Net operating income(3) | $ | 5,020,000 | $ | 15,832,000 | $ | 6,482,000 | $ | 393,000 |
(1) | Net loss per share is based upon the weighted average number of shares of our common stock outstanding. Distributions by us of our current and accumulated earnings and profits for federal income tax purposes are taxable to stockholders as ordinary income. Distributions in excess of these earnings and profits generally are treated as a non-taxable reduction of the stockholder’s basis in the shares of our common stock to the extent thereof (a return of capital for tax purposes) and, thereafter, as taxable gain. These distributions in excess of earnings and profits will have the effect of deferring taxation of the distributions until the sale of the stockholder’s common stock. |
(2) | For additional information on FFO, refer to the “Our Performance — Funds from Operations” section of this prospectus, which includes a reconciliation of our GAAP net income (loss) to FFO for each of our last four fiscal quarters ended March 31, 2009. |
(3) | For additional information on net operating income, refer to the “Our Performance — Net Operating Income” section of this prospectus, which includes a reconciliation of our GAAP net income (loss) to net operating income for the three months ended March 31, 2009 and for the year ended December 31, 2008. |
57
Table of Contents
Three Months Ended | ||||||||||||||||
March 31, | December 31, | September 30, | June 30, | |||||||||||||
2009 | 2008 | 2008 | 2008 | |||||||||||||
Net loss | $ | (1,478,000 | ) | $ | (3,677,000 | ) | $ | (3,169,000 | ) | $ | (3,060,000 | ) | ||||
Add: | �� | |||||||||||||||
Net loss attributable to noncontrolling interests | — | — | — | — | ||||||||||||
Depreciation and amortization — consolidated properties | 3,089,000 | 3,437,000 | 3,164,000 | 2,525,000 | ||||||||||||
FFO | $ | 1,611,000 | $ | (240,000 | ) | $ | (5,000 | ) | $ | (535,000 | ) | |||||
FFO per share — basic and diluted | $ | 0.10 | $ | (0.02 | ) | $ | — | $ | (0.05 | ) | ||||||
Weighted average common shares outstanding — basic and diluted | 15,688,833 | 14,998,194 | 13,499,942 | 11,368,448 | ||||||||||||
58
Table of Contents
Three Months Ended | Year Ended | |||||||
March 31, 2009 | December 31, 2008 | |||||||
Net loss | $ | (1,478,000 | ) | $ | (12,827,000 | ) | ||
Add: | ||||||||
General and administrative | 549,000 | 5,354,000 | ||||||
Depreciation and amortization | 3,089,000 | 11,720,000 | ||||||
Interest expense | 2,861,000 | 11,607,000 | ||||||
Less: | ||||||||
Interest and dividend income | (1,000 | ) | (22,000 | ) | ||||
Net operating income | $ | 5,020,000 | $ | 15,832,000 | ||||
59
Table of Contents
Three Months Ended | ||||||||||||||||
March 31, | December 31, | September 30, | June 30, | |||||||||||||
2009 | 2008 | 2008 | 2008 | |||||||||||||
Distributions paid in cash | $ | 1,499,000 | $ | 1,363,000 | $ | 1,211,000 | $ | 1,014,000 | ||||||||
Distributions reinvested | 1,219,000 | 1,193,000 | 1,044,000 | 854,000 | ||||||||||||
Total distributions | $ | 2,718,000 | $ | 2,556,000 | $ | 2,255,000 | $ | 1,868,000 | ||||||||
Source of distributions: | ||||||||||||||||
Cash flow from operations | $ | 299,000 | $ | — | $ | 1,750,000 | $ | 1,445,000 | ||||||||
Offering proceeds | 2,419,000 | 2,556,000 | 505,000 | 423,000 | ||||||||||||
Total sources | $ | 2,718,000 | $ | 2,556,000 | $ | 2,255,000 | $ | 1,868,000 |
Years Ended December 31, | ||||||||||||||||||||||||
2008 | 2007 | 2006 | ||||||||||||||||||||||
Ordinary income | $ | — | — | % | $ | — | — | % | $ | — | — | % | ||||||||||||
Capital gain | — | — | — | — | — | — | ||||||||||||||||||
Return of capital | 8,216,000 | 100 | 3,115,000 | 100 | 68,000 | 100 | ||||||||||||||||||
$ | 8,216,000 | 100 | % | $ | 3,115,000 | 100 | % | $ | 68,000 | 100 | % | |||||||||||||
60
Table of Contents
• | stable cash flows available for distribution to our stockholders; | |
• | preservation, protection and return of capital; and | |
• | growth of income and principal without taking undue risk. |
• | invest in income-producing real estate and real estate-related investments in a manner which permits us to continue to qualify as a REIT for federal income tax purposes; and | |
• | realize capital appreciation upon the ultimate sale of our properties. |
61
Table of Contents
62
Table of Contents
(in Thousands)
![Bar Chart](https://capedge.com/proxy/S-11A/0000950123-09-014099/a51111a1a5111140.gif)
• | According to Professor Arthur Nelson, Director of Metropolitan Research at the University of Utah, to meet emerging housing demands, half of all new homes built between now and 2020 will have to be rental units. |
• | According to Mr. Bibby, by 2015, there will be 67 million people aged 20-34, an age group highly likely to rent. Prime renters are those considered to be aged 20 to 29, according to CB Richard Ellis-Torto Wheaton Research. |
• | A trend towards “lifestyle renting” is emerging for the baby boom generation, 78 million strong, according to CB Richard Ellis-Torto Wheaton Research and Mr. Bibby. |
• | More than 80 percent of the 1.6 million immigrants living in the U.S. in 2005 rented, according to Harvard’s Joint Center for Housing Studies. |
63
Table of Contents
64
Table of Contents
• | We intend to purchase apartment communities at favorable prices and obtain immediate income from tenant rents, with the potential for appreciation in value over time. | |
• | We intend to preserve capital through selective acquisitions and professional management, whereby we intend to increase rental rates, maintain high economic occupancy rates, reduce tenant turnover, make value-enhancing and income-producing capital improvements, where appropriate, and control operating costs and capital expenditures. |
• | We seek to acquire apartment communities in growth markets, at attractive prices relative to replacement cost, that provide the opportunity to improve operating performance through professional management, marketing and selective leasing and renovation programs. |
• | geographic location and type; | |
• | construction quality and condition; | |
• | potential for capital appreciation; | |
• | the general credit quality of current and potential tenants; | |
• | the potential for rent increases; | |
• | the interest rate environment; | |
• | potential for economic growth in the tax and regulatory environment of the community in which the property is located; |
65
Table of Contents
• | potential for expanding the physical layout of the property; | |
• | occupancy and demand by tenants for properties of a similar type in the same geographic vicinity; | |
• | prospects for liquidity through sale, financing or refinancing of the property; | |
• | competition from existing properties and the potential for the construction of new properties in the area; and | |
• | treatment under applicable federal, state and local tax and other laws and regulations. |
• | changes in general economic or local conditions; | |
• | changes in supply of or demand for similar competing properties in an area; | |
• | changes in interest rates and availability of permanent mortgage funds, which may render the sale of a property difficult or unattractive; | |
• | changes in tax, real estate, environmental and zoning laws; | |
• | periods of high interest rates and tight money supply which may make the sale of properties more difficult; | |
• | tenant turnover; and | |
• | general overbuilding or excess supply in the market area. |
66
Table of Contents
• | Seniors — The 65+ age group who are the elders of the baby boomers. | |
• | Boomers — Born between 1946 and 1964, the American Hospital Association and First Consulting Group state that this group controls approximately 75.0% of the United States’ assets. | |
• | Echo boomers — Born between 1982 and 1994, this group represents the children of the boomers. |
• | Seniors — Older retirees may prefer the ease of living associated with renting such as senior housing and small apartments, instead of dealing with the expenses and burden of home ownership. | |
• | Boomers — This aging population, currently the largest, controls the largest percent of U.S. financial assets according to the American Hospital Association and First Consulting Group. As their children reach adulthood and move out or go off to college, they may be more likely to consider renting smaller, luxury apartments or condominiums. | |
• | Echo Boomers — This group, most likely to rent apartments, is entering their household formation years which is helping to fuel new demand for apartments, according to the Joint Center for Housing Studies of Harvard University, or JCHS. With approximately 4,000,000 echo boomers turning 21 every year, in fast growing areas, the existing housing stock will be unable to accommodate the rising number of young households according to a study by the JCHS. |
67
Table of Contents
• | there are no duplicate property management or other fees; | |
• | the investment of each entity is on substantially the same terms and conditions as those received by other joint venturers; and | |
• | we have a right of first refusal to acquire the property if the other joint venturers wish to sell their interests in the property. |
68
Table of Contents
69
Table of Contents
• | we believe the value of a property might decline substantially; | |
• | an opportunity has arisen to improve other properties; | |
• | we can increase cash flows through the disposition of the property; or | |
• | we believe the sale of the property is in our best interest. |
70
Table of Contents
71
Table of Contents
• | make investments in unimproved property in excess of 10.0% of our total assets (as used herein, “unimproved property” means any investment with the following characteristics: (a) an equity interest in real property which was not acquired for the purpose of producing rental or other operating income; (b) has no development or construction in process on such land; and (c) no development or construction on such land is planned to commence within one year); | |
• | invest in commodities or commodity futures contracts, except for futures contracts when used solely for the purpose of hedging in connection with our ordinary business of investing in real estate assets; | |
• | invest in real estate contracts of sale, otherwise known as land sale contracts, unless such contracts of sale are in recordable form and appropriately recorded in the chain of title; | |
• | make or invest in mortgage loans unless an appraisal is obtained concerning the underlying property except for those mortgage loans insured or guaranteed by a government or government agency. In cases where a majority of our independent directors determines, and in all cases in which the transaction is with any of our directors, our advisor or any of their respective affiliates, such appraisal shall be obtained from an independent appraiser. We will maintain such appraisal in our records for at least five years and it will be available for your inspection and duplication. We will also obtain a mortgagee’s or owner’s title insurance policy as to the priority of the mortgage; |
• | make or invest in mortgage loans on any one property if the aggregate amount of all mortgage loans on such property, including our loan, would exceed an amount equal to 85.0% of the appraised value of such property as determined by appraisal unless substantial justification exists for exceeding such limit because of the presence of other underwriting criteria; |
• | make or invest in mortgage loans that are subordinate to any lien or other indebtedness of any of our directors, our advisor, our sponsor or any of our affiliates; | |
• | issue equity securities redeemable solely at the option of the holder (this limitation, however, does not limit or prohibit the operation of our share repurchase plan); | |
• | issue debt securities unless the historical debt service coverage (in the most recently completed fiscal year) as adjusted for known changes is anticipated to be sufficient to properly service that higher level of debt; | |
• | issue equity securities on a deferred payment basis or other similar arrangement; | |
• | issue options or warrants to purchase shares of our stock to our advisor, any of our directors, our sponsor or any of their respective affiliates except on the same terms, if any, as the options or warrants are sold to the general public; options or warrants may be issued to persons other than our directors, our advisor, our sponsor or any of their respective affiliates, but not at exercise prices less than the fair market value of the underlying securities on the date of grant and not for consideration (which may include services) that in the judgment of our independent directors has a market value less than the value of such options or warrants on the date of grant; | |
• | engage in investment activities that would cause us to be classified as an investment company under the Investment Company Act; or |
72
Table of Contents
• | make any investment that is inconsistent with our objectives of remaining qualified as a REIT unless and until our board of directors determines, in its sole discretion, that REIT qualification is not in our best interest. |
• | except for differences attributable to adjustable rate loans, equal periodic payments on a schedule that would be sufficient to fully amortize the loan over a 20- to 40-year period; | |
• | payments of interest only for a period of not greater than ten years with the remaining balance payable in equal periodic payments on a schedule that would fully amortize the loan over a 20- to 30-year period; or | |
• | payment of a portion of the current stated interest and deferral of the remaining interest for a period not greater than five years, with the remaining principal and interest payable in equal periodic payments on a schedule that would fully amortize the loan over a 20- to 35-year period. |
73
Table of Contents
• | positioning the overall portfolio to achieve an optimal mix of real estate and securities investments; | |
• | diversification benefits relative to the rest of the securities assets within our portfolio; | |
• | fundamental securities analysis; | |
• | quality and sustainability of underlying property cash flows; | |
• | broad assessment of macroeconomic data and regional property level supply and demand dynamics; | |
• | potential for delivering high current income and attractive risk-adjusted total returns; and | |
• | additional factors considered important to meeting our investment objectives. |
74
Table of Contents
• | distributions of beneficial interests in a liquidating trust established for the dissolution of our company and the liquidation of our assets in accordance with the terms of the MGCL; or | |
• | distributions of property which meet all of the following conditions: |
• | our board of directors advises each stockholder of the risks associated with direct ownership of the property; | |
• | our board of directors offers each stockholder the election of receiving in-kind property distributions; and | |
• | our board of directors distributes in-kind property only to those stockholders who accept the directors’ offer. |
75
Table of Contents
Ownership | Type of | Number | Purchase | Contract | Mortgage | Maturity | ||||||||||||||||||||||||
Property Name | Interest | Property | of Units | Occupancy | Date | Purchase Price | Debt(1) | Date | Location | |||||||||||||||||||||
Walker Ranch Apartment Homes | 100 | % | apartment | 325 | 88.9 | % | 10/31/2006 | $ | 30,750,000 | $ | 20,000,000 | 5/11/2017 | San Antonio, TX | |||||||||||||||||
Hidden Lake Apartment Homes | 100 | % | apartment | 380 | 88.2 | % | 12/28/2006 | $ | 32,030,000 | $ | 19,218,000 | 1/11/2017 | San Antonio, TX | |||||||||||||||||
Park at Northgate | 100 | % | apartment | 248 | 96.0 | % | 6/12/2007 | $ | 16,600,000 | $ | 10,295,000 | 8/1/2017 | Spring, TX | |||||||||||||||||
Residences at Braemar | 100 | % | apartment | 160 | 91.3 | % | 6/29/2007 | $ | 15,000,000 | $ | 9,474,000 | 6/1/2015 | Charlotte, NC | |||||||||||||||||
Baypoint Resort | 100 | % | apartment | 350 | 84.6 | % | 8/2/2007 | $ | 33,250,000 | $ | 21,612,000 | 8/1/2017 | Corpus Christi, TX | |||||||||||||||||
Towne Crossing Apartments | 100 | % | apartment | 268 | 93.3 | % | 8/29/2007 | $ | 21,600,000 | $ | 14,981,000 | 11/1/2014 | Mansfield, TX | |||||||||||||||||
Villas of El Dorado | 100 | % | apartment | 248 | 91.5 | % | 11/2/2007 | $ | 18,000,000 | $ | 13,600,000 | 12/1/2016 | McKinney, TX | |||||||||||||||||
The Heights at Olde Towne | 100 | % | apartment | 148 | 90.5 | % | 12/21/2007 | $ | 17,000,000 | $ | 10,475,000 | �� | 1/1/2018 | Portsmouth, VA | ||||||||||||||||
The Myrtles at Olde Towne | 100 | % | apartment | 246 | 93.9 | % | 12/21/2007 | $ | 36,000,000 | $ | 20,100,000 | 1/1/2018 | Portsmouth, VA | |||||||||||||||||
Arboleda Apartments | 100 | % | apartment | 312 | 86.9 | % | 3/31/2008 | $ | 29,250,000 | $ | 17,651,000 | 4/1/2015 | Cedar Park, TX | |||||||||||||||||
Creekside Crossing | 100 | % | apartment | 280 | 98.2 | % | 6/26/2008 | $ | 25,400,000 | $ | 17,000,000 | 7/1/2015 | Lithonia, GA | |||||||||||||||||
Kedron Village | 100 | % | apartment | 216 | 91.7 | % | 6/27/2008 | $ | 29,600,000 | $ | 20,000,000 | 7/1/2015 | Peachtree City, GA | |||||||||||||||||
Canyon Ridge Apartments | 100 | % | apartment | 350 | 93.1 | % | 9/15/2008 | $ | 36,050,000 | $ | 24,000,000 | 10/1/2015 | Hermitage, TN |
(1) | As of March 31, 2009, we had 10 fixed rate and three variable rate mortgage loans with effective interest rates ranging from 2.61% to 5.94% per annum and a weighted average effective interest rate of 4.76% per annum. Most of the mortgage loan payables may be prepaid in whole but not in part, subject to prepayment premiums. In the event of prepayment, the amount of the prepayment premium will be paid according to the terms of the applicable loan document. |
Properties Owned | ||||||||
As a Percentage of Aggregate | ||||||||
State | Number | Purchase Price | ||||||
Texas | 7 | 53.3 | % | |||||
Georgia | 2 | 16.1 | ||||||
Virginia | 2 | 15.6 | ||||||
Tennessee | 1 | 10.6 | ||||||
North Carolina | 1 | 4.4 | ||||||
Total | 13 | 100 | % | |||||
2005(1) | 2006(2) | 2007(2) | 2008(2) | 2009(2) | ||||||||||||||||
Average Effective Monthly Rent per Unit | N/A | $ | 889.38 | $ | 891.01 | $ | 934.06 | $ | 938.18 | |||||||||||
Occupancy Rate | N/A | 97.7 | % | 91.5 | % | 90.3 | % | 91.1 | % |
(1) | We were initially capitalized on January 10, 2006 and therefore we consider that our date of inception. We purchased our first property on October 31, 2006. | |
(2) | Based on leases in effect as of December 31, 2006, 2007, and 2008, and March 31, 2009, respectively. |
76
Table of Contents
77
Table of Contents
Property Name | Depreciable Tax Basis | |||
Walker Ranch Apartment Homes | $ | 28,790,000 | ||
Hidden Lake Apartment Homes | 30,242,000 | |||
Park at Northgate | 13,703,000 | |||
Residences at Braemar | 13,510,000 | |||
Baypoint Resort | 29,447,000 | |||
Towne Crossing Apartments | 20,368,000 | |||
Villas of El Dorado | 17,019,000 | |||
The Heights at Olde Towne | 15,294,000 | |||
The Myrtles at Olde Towne | 33,703,000 | |||
Arboleda Apartments | 26,352,000 | |||
Creekside Crossing | 21,255,000 | |||
Kedron Village | 26,748,000 | |||
Canyon Ridge Apartments | 33,738,000 | |||
$ | 310,169,000 | |||
78
Table of Contents
• | approving and overseeing our overall investment strategy, which will consist of elements such as (1) allocation of percentages of capital to be invested in real estate and real estate-related investments, (2) allocation of percentages of capital to be invested in apartment communities and other income-producing commercial properties, (3) diversification strategies, (4) investment selection criteria and (5) investment disposition strategies; | |
• | approving all real estate acquisitions, developments and dispositions, including the financing of such acquisitions and developments; |
79
Table of Contents
• | approving specific discretionary limits and authority to be granted to our advisor in connection with the purchase and disposition of real estate-related investments that fit within the asset allocation framework; | |
• | approving and overseeing our debt financing strategy; | |
• | approving and monitoring the performance of our advisor; | |
• | approving joint ventures, limited partnerships and other such relationships with third parties; | |
• | determining our distribution strategy and authorizing distributions from time to time; | |
• | approving amounts available for repurchases of shares of our common stock; and | |
• | approving a liquidity event, such as the listing of the shares of our common stock on a national securities exchange, the liquidation of our portfolio, our merger with another company or similar transaction providing liquidity to our stockholders. |
• | the amount of the advisory fee in relation to the size, composition and performance of our portfolio; | |
• | the success of our advisor in generating opportunities that meet our investment objectives; | |
• | the fees charged to similar REITs and to investors other than REITs by advisors performing similar services; | |
• | additional revenues realized by our advisor and any affiliate through their relationship with us, including acquisition fees, servicing and other fees, whether paid by us or by others with whom we do business; |
80
Table of Contents
• | the quality and extent of the service and advice furnished by our advisor; | |
• | the performance of our portfolio, including income, conservation or appreciation of capital, frequency of problem investments and competence in dealing with distress situations; and | |
• | the quality of our portfolio relative to the investments generated by our advisor for its own account. |
Name | Age* | Position | ||||
Stanley J. (“Jay”) Olander, Jr. | 54 | Chief Executive Officer, President and Chairman of the Board of Directors | ||||
David L. Carneal | 45 | Executive Vice President and Chief Operating Officer | ||||
Gustav G. Remppies | 48 | Executive Vice President and Chief Investment Officer | ||||
Shannon K S Johnson | 31 | Chief Financial Officer | ||||
Andrea R. Biller | 59 | Secretary and Director | ||||
Cora Lo | 34 | Assistant Secretary | ||||
Glenn W. Bunting, Jr. | 64 | Independent Director | ||||
Robert A. Gary, IV | 55 | Independent Director | ||||
W. Brand Inlow | 55 | Independent Director |
* | As of June 15, 2009. |
81
Table of Contents
82
Table of Contents
• | makes recommendations to our board of directors concerning the engagement of independent public accountants; | |
• | reviews the plans and results of the audit engagement with the independent public accountants; | |
• | approves professional services provided by, and the independence of, the independent public accountants; | |
• | considers the range of audit and non-audit fees; and | |
• | consults with the independent public accountants regarding the adequacy of our internal accounting controls. |
83
Table of Contents
• | Annual Retainer. Our independent directors receive an annual retainer of $15,000. | |
• | Meeting Fees. Our independent directors receive $1,000 for each board meeting and executive committee meeting attended in person or by telephone, and $500 for each committee meeting, other than an executive committee meeting, attended in person or by telephone, and an additional $2,000 to the audit committee chairman for each audit committee meeting attended in person or by telephone. If a board meeting is held on the same day as a committee meeting, an additional fee will not be paid for attending the committee meeting, except to the audit committee chairman. | |
• | Equity Compensation. Upon initial election to the board, each independent director receives 1,000 shares of restricted common stock, and an additional 1,000 shares of restricted common stock upon his or her subsequent election each year. The restricted shares vest as to 20.0% of the shares on the date of grant and on each anniversary thereafter over four years from the date of grant. |
84
Table of Contents
• | Other Compensation. We reimburse our directors for reasonable out-of-pocket expenses incurred in connection with attendance at meetings, including committee meetings, of our board of directors. Our independent directors do not receive other benefits from us. |
85
Table of Contents
• | net income; | |
• | pre-tax income; | |
• | operating income; | |
• | cash flows; | |
• | earnings per share; |
86
Table of Contents
• | earnings before interest, taxes, depreciation and/or amortization; | |
• | return on equity; | |
• | return on invested capital or assets; | |
• | FFO; | |
• | cost reductions or savings; or | |
• | appreciation in the fair market value of a share of our common stock. |
• | an act or omission of the director or officer was material to the cause of action adjudicated in the proceeding, and was committed in bad faith or was the result of active and deliberate dishonesty; | |
• | the director or officer actually received an improper personal benefit in money, property or services; or |
87
Table of Contents
• | with respect to any criminal proceeding, the director or officer had reasonable cause to believe his or her act or omission was unlawful. |
• | the indemnitee determined, in good faith, that the course of conduct which caused the loss or liability was in our best interest; | |
• | the indemnitee was acting on our behalf or performing services for us; | |
• | in the case of affiliated directors, our advisor or its affiliates, the liability or loss was not the result of negligence or misconduct by the party seeking indemnification; and | |
• | in the case of our independent directors, the liability or loss was not the result of gross negligence or willful misconduct by the party seeking indemnification. |
• | the proceeding relates to acts or omissions with respect to the performance of duties or services on our behalf; | |
• | the indemnitee provides us with written affirmation of his or her good faith belief that he or she has met the standard of conduct necessary for indemnification; | |
• | the legal proceeding was initiated by a third party who is not a stockholder or, if by a stockholder acting in his or her capacity as such, a court of competent jurisdiction approves such advancement; and | |
• | the indemnitee provides us with a written agreement to repay the amount paid or reimbursed, together with the applicable legal rate of interest thereon, if it is ultimately determined that he or she did not comply with the requisite standard of conduct and is not entitled to indemnification. |
88
Table of Contents
• | there has been a successful adjudication on the merits of each count involving alleged securities law violations; | |
• | such claims have been dismissed with prejudice on the merits by a court of competent jurisdiction; or | |
• | a court of competent jurisdiction approves a settlement of the claims against the indemnitee and finds that indemnification of the settlement and the related costs should be made, and the court considering the request for indemnification has been advised of the position of the SEC and of the published position of any state securities regulatory authority in the state in which our securities were offered as to indemnification for violations of securities laws. |
89
Table of Contents
Name | Age* | Position | ||||
Gary H. Hunt | 60 | Interim Chief Executive Officer and Director of Grubb & Ellis | ||||
Richard W. Pehlke | 55 | Executive Vice President and Chief Financial Officer of Grubb & Ellis | ||||
Jacob Van Berkel | 49 | Executive Vice President, Chief Operating Officer and President, Real Estate Services, of Grubb & Ellis | ||||
Andrea R. Biller | 59 | General Counsel, Executive Vice President and Secretary of Grubb & Ellis; General Counsel and Executive Vice President of Grubb & Ellis Realty Investors; and Secretary of Grubb & Ellis Securities | ||||
Jeffrey T. Hanson | 38 | Executive Vice President, Investment Programs, of Grubb & Ellis; President and Chief Investment Officer of Grubb & Ellis Realty Investors; President and Chief Executive Officer of Realty | ||||
Stanley J. Olander, Jr. | 54 | Executive Vice President, Multifamily Division, of Grubb & Ellis | ||||
Dylan Taylor | 38 | President of Global Client Services of Grubb & Ellis; President of Grubb & Ellis Management Services, Inc. | ||||
Kevin K. Hull | 42 | Chief Executive Officer and President of Grubb & Ellis Securities |
* | As of June 15, 2009. |
90
Table of Contents
91
Table of Contents
Name | Age* | Position | ||||
Stanley J. (“Jay”) Olander, Jr. | 54 | Chief Executive Officer and President | ||||
David L. Carneal | 45 | Executive Vice President and Chief Operating Officer | ||||
Gustav G. Remppies | 48 | Executive Vice President and Chief Investment Officer |
* | As of June 15, 2009. |
• | is responsible for our day-to-day operations; | |
• | administers our bookkeeping and accounting functions; | |
• | serves as our consultant in connection with strategic decisions to be made by our board of directors; | |
• | manages or causes to be managed our properties and other assets; and | |
• | renders other property-level services if our board of directors requests. |
92
Table of Contents
• | perform the advisory function for our company; and | |
• | justify the compensation provided for in the contract with our company. |
93
Table of Contents
• | the indemnified person determined, in good faith, that the course of conduct that caused a loss or liability was in our best interest; | |
• | the indemnified person was acting on behalf of, or performing services for, our company; | |
• | such liability or loss was not the result of negligence or misconduct; and | |
• | such indemnification or agreement to hold harmless is recoverable only out of our net assets and not from our stockholders. |
94
Table of Contents
Type of Compensation | Description and | |||
(Recipient) | Method of Computation | Estimated Amount | ||
Offering Stage | ||||
Selling Commissions (our dealer manager)(1) | Generally, up to 7.0% of gross offering proceeds from the sale of shares of our common stock pursuant to the primary offering (all or a portion of which may be reallowed by our dealer manager to participating broker-dealers). No selling commissions are payable on shares of our common stock sold pursuant to the DRIP. | Actual amount depends upon the number of shares of our common stock sold. We estimate that we will pay a total of $70,000,000 if we sell the maximum offering. | ||
Dealer Manager Fee (our dealer manager)(1) | Generally, up to 3.0% of gross offering proceeds from the sale of shares of our common stock pursuant to the primary offering (all or a portion of which may be reallowed by our dealer manager to participating broker-dealers). No dealer manager fee is payable on shares of our common stock sold pursuant to the DRIP. | Actual amount depends upon the number of shares of our common stock sold. We estimate that we will pay a total of $30,000,000 if we sell the maximum offering. | ||
Other Organizational and Offering Expenses (our advisor or its affiliates)(2) | Up to 1.0% of gross offering proceeds for shares of our common stock sold pursuant to the primary offering. No other organizational and offering expenses will be reimbursed with respect to shares of our common stock sold pursuant to the DRIP. | Actual amount depends upon the number of shares of our common stock sold. We estimate that we will pay a total of $10,000,000 if we sell the maximum offering. | ||
Acquisition Stage | ||||
Acquisition Fees (our advisor or its affiliates)(3)(4) | Up to 3.0% of the contract purchase price of each property we acquire, up to 4.0% of the total development cost of any development property, or up to 2.0% of the origination or purchase price of any real estate-related investment, as applicable. | $25,922,000 assuming no debt or $74,064,000 assuming leverage of 65.0% of the contract purchase price if we sell the maximum offering. | ||
Reimbursement of Acquisition Expenses (our advisor or its affiliates)(4) | All expenses actually incurred related to selecting, evaluating and acquiring assets, which will be paid regardless of whether an asset is acquired. | Actual amount depends upon the actual expenses incurred, and, therefore, cannot be determined at this time. |
95
Table of Contents
Type of Compensation | Description and | |||
(Recipient) | Method of Computation | Estimated Amount | ||
Operational Stage | ||||
Asset Management Fee (our advisor or its affiliates)(5) | Subject to our stockholders receiving distributions in an amount equal to 5.0% per annum of our invested capital, an amount equal to 0.5% per annum, cumulative, non-compounded, of average invested assets. The asset management fee is calculated and payable monthly in cash or shares of our common stock, at the option of our advisor or one of its affiliates, not to exceed one-twelfth of 0.5% of our average invested assets as of the last day of the immediately preceding quarter; provided that effective January 1, 2009, our advisor has agreed to waive the right to receive an asset management fee until the quarter following the quarter in which we generate funds from operations, or FFO, sufficient to cover 100% of the distributions declared to our stockholders for such quarter. For purposes of calculating FFO, non-recurring charges including, but not limited to, acquisition-related expenses, amortization of deferred financing fees on our line of credit or other equivalent mezzanine financing, interest expense associated with our line of credit, our loans from NNN Realty Advisors, an affiliate of our advisor, or other mezzanine loans, and gains or losses on future interest rate swaps, will be excluded. Average invested assets include any property-related debt; therefore, fully leveraging our portfolio could increase the asset management fee payable to our advisor or one of its affiliates. | Actual amount depends upon the average invested assets, and, therefore, cannot be determined at this time. | ||
Property Management Fees (Realty or Residential Management)(6) | Up to 4.0% of the gross monthly cash receipts from each property managed by the respective property manager, some of which may be reallowed to a third-party property manager. | Actual amount depends upon the gross monthly cash receipts of the properties, and, therefore, cannot be determined at this time. |
96
Table of Contents
Type of Compensation | Description and | |||
(Recipient) | Method of Computation | Estimated Amount | ||
Compensation for Additional Services (our advisor or its affiliates) | If we request our advisor or one of its affiliates to render services for our company other than those required to be rendered by our advisor under the advisory agreement, the additional services, if our advisor elects to perform them, will be compensated separately on terms to be agreed upon between our advisor or its affiliate and us. The rate of compensation for these services must be approved by a majority of our board of directors, including a majority of our independent directors, and cannot exceed the amount that would be paid to unaffiliated third parties for similar services. | Actual amount depends upon the services provided, and, therefore, cannot be determined at this time. | ||
Operating Expenses (our advisor or its affiliates)(5) | We reimburse our advisor or its affiliates for operating expenses incurred in rendering services to us, subject to certain limitations. | Actual amount depends upon the services provided, and, therefore, cannot be determined at this time. | ||
Liquidity Stage | ||||
Disposition Fees (our advisor or its affiliates)(7) | Up to the lesser of 1.75% of the contract sales price of each property or 50.0% of a competitive real estate commission that would have been paid to a third party. The amount of disposition fees paid, when added to the real estate commissions paid to unaffiliated parties, will not exceed the lesser of the customary competitive real estate commission or an amount equal to 6.0% of the contract sales price. | Actual amount depends upon the sale price of properties, and, therefore, cannot be determined at this time. |
97
Table of Contents
Type of Compensation | Description and | |||
(Recipient) | Method of Computation | Estimated Amount | ||
Subordinated Participation Interest (our advisor) | Our advisor has a subordinated participation interest in our operating partnership pursuant to which our advisor will receive cash distributions from our operating partnership under the following circumstances: | |||
•Incentive Distribution upon Sales(8) | Equal to 15.0% of the net proceeds of the sale of the property after we have received, and paid to our stockholders, the sum of: •our invested capital; and •any shortfall in our 8.0% annual cumulative, non-compounded return on our adjusted invested capital. Until such time as stockholders receive such 8.0% return, our advisor will not receive any incentive distributions. There is no assurance we will be able to pay an annual 8.0% return to our stockholders. Thus, the 8.0% return is disclosed solely as a measure for our advisor’s incentive compensation. | Actual amount depends upon the sale price of properties, and, therefore, cannot be determined at this time. | ||
•Incentive Distribution upon Listing(9) | In the event of termination of the advisory agreement due to listing of the shares of our common stock on a national securities exchange, our advisor will be entitled to an incentive distribution equal to 15.0% of the amount, if any, by which (1) the market value of our outstanding common stock plus distributions paid by us prior to listing, exceeds (2) the sum of the gross proceeds from the sale of shares of our common stock plus an 8.0% per annum cumulative, non-compounded return on the gross proceeds from the sale of shares of our common stock. This distribution may be in the form of cash, units of limited partnership interest in our operating partnership or shares of our common stock. | Actual amount depends upon the market value of our common stock at the time of listing, among other factors, and, therefore, cannot be determined at this time. |
98
Table of Contents
Type of Compensation | Description and | |||
(Recipient) | Method of Computation | Estimated Amount | ||
There is no assurance we will be able to pay an annual 8.0% return to our stockholders. Thus, the 8.0% return is disclosed solely as a measure for our advisor’s incentive compensation. Upon our advisor’s receipt of the incentive distribution upon listing, our advisor’s special limited partnership units will be redeemed and our advisor will not be entitled to receive any further incentive distributions upon sales of our properties. | ||||
•Fees Payable upon Termination of the Advisory Agreement | In the event of termination of the advisory agreement due to an internalization of our advisor in connection with our conversion to a self-administered REIT, our advisor will be entitled to compensation to be determined by negotiation between our advisor and our independent directors. Upon our advisor’s receipt of such compensation, our advisor’s special limited partnership units will be redeemed and our advisor will not be entitled to receive any further incentive distributions upon sales of our properties. In connection with the termination of the advisory agreement other than due to a listing of the shares of our common stock on a national securities exchange or due to the internalization of our advisor in connection with our conversion to a self-administered REIT, we may cause our operating partnership to redeem our advisor’s special limited partner units, for cash, units of limited partnership interests in our operating partnership or shares of our common stock, in an amount equal to what our advisor would have received pursuant to the incentive distribution upon sales if our operating partnership immediately sold all of its assets at fair market value. | Actual amount depends upon many factors to be negotiated between our advisor and our independent directors and, therefore, cannot be determined at this time. |
(1) | Assumes selling commissions equal to 7.0% of gross offering proceeds from the sale of shares of our common stock pursuant to the primary offering, which commissions may be reduced under certain circumstances, and a dealer manager fee equal to 3.0% of gross offering proceeds from the sale of shares |
99
Table of Contents
of our common stock pursuant to the primary offering. However, our dealer manager may, from time to time, enter into selected dealer agreements that provide for reduced selling commissions and an increased dealer manager fee, provided that in no event will the aggregate of the selling commissions and the dealer manager fee be greater than 10.0% of the gross offering proceeds for shares of our common stock sold pursuant to the primary offering. In addition, the amount of selling commissions we pay may be reduced in connection with certain categories of sales, such as sales for which a volume discount applies, sales through investment advisors or banks acting as trustees or fiduciaries and sales to our affiliates. See the “Plan of Distribution” section of this prospectus. | ||
(2) | Other organizational and offering expense reimbursement consists of compensation for incurrence on our behalf of legal, accounting, printing and other offering expenses, including for marketing, salaries and director expenses of our advisor’s employees, employees of its affiliates and others while engaged in registering and marketing the shares of our common stock. Activities of our advisor that may be reimbursed include, but are not limited to, development of marketing materials and marketing presentations, planning and participating in due diligence and marketing meetings and generally coordinating the marketing process for us. Our advisor will be responsible for the payment of our cumulative other organizational and offering expenses to the extent they exceed 1.0% of the aggregate gross offering proceeds from the sale of shares of our common stock pursuant to the primary offering without recourse against or reimbursement by us. | |
(3) | This estimate assumes the contract purchase price for our assets will be an amount equal to the estimated amount invested in assets in a maximum offering and that all of the assets purchased are real properties. We have assumed that no financing will be used to acquire assets. However, as disclosed throughout this prospectus, we have used, and expect to continue to use, leverage, which results in higher fees paid to our advisor and its affiliates. Assuming a maximum leverage of 65.0% of our assets, the maximum acquisition fees would be approximately $74,064,000. We pay our advisor or its affiliates the acquisition fee upon the closing of a real estate acquisition or upon the funding or acquisition of a real estate-related investment. |
(4) | Acquisition expenses include any and all expenses actually incurred in connection with the selection, evaluation and acquisition of, and investment in real estate and real estate-related investments, including, but not limited to, legal fees and expenses, travel and communications expenses, cost of appraisals and surveys, nonrefundable option payments on property not acquired, accounting fees and expenses, computer use related expenses, architectural, engineering and other property reports, environmental and asbestos audits, title insurance and escrow fees, loan fees or points or any fee of a similar nature paid to a third party, however designated, transfer taxes, and personnel and miscellaneous expenses related to the selection, evaluation and acquisition of properties. We estimate acquisition expenses to be 0.5% of the contract purchase price. We reimburse our advisor for acquisition expenses, whether or not the evaluated property is acquired. The total of all acquisition fees and expenses paid to our advisor or affiliates of our advisor, and real estate commissions and other fees paid to third parties, excluding development fees and construction fees paid to persons not affiliated with our sponsor in connection with the actual development and construction of a project, cannot exceed 6.0% of the contract purchase price of the property, or in the case of a loan, 6.0% of the funds advanced, unless fees in excess of such amount are determined to be commercially competitive, fair and reasonable to us by a majority of our directors not interested in the transaction and a majority of our independent directors not interested in the transaction. |
(5) | We reimburse our advisor or one of its affiliates for: |
• | our company’s organizational and offering expenses; provided, however, that within 60 days after the end of the month in which the offering terminates, our advisor will reimburse our company for any organizational and offering expenses reimbursement received by our advisor, to the extent that such reimbursement exceeds the maximum amount permitted or, at the option of our company, such excess shall be subtracted from the next reimbursement of expenses to be made by us; | |
• | acquisition expenses incurred in connection with the selection, evaluation and acquisition of our properties; |
100
Table of Contents
• | the actual cost of goods and services used by us and obtained from entities not affiliated with our advisor, other than acquisition expenses; | |
• | interest and other costs for borrowed money, including discounts, points and other similar fees; | |
• | taxes and assessments on income of our company or its real estate-related investments; | |
• | costs associated with insurance required in connection with our business or by our directors; | |
• | expenses of managing and operating properties owned by our company, payable to the property manager, whether or not the property manager is an affiliate of our company; | |
• | all compensation and expenses payable to our independent directors and all expenses payable to our non-independent directors in connection with their services to the company and the stockholders and their attendance at meetings of the directors and stockholders; | |
• | expenses associated with a listing, if applicable, or with the issuance and distribution of our common stock, such as selling commissions and fees, marketing and advertising expenses, taxes, legal and accounting fees, listing and registration fees, and other organizational and offering expenses; | |
• | expenses connected with payments of distributions in cash or otherwise made or caused to be made by our company to our stockholders; | |
• | expenses of amending, converting, liquidating or terminating our company or the charter; | |
• | expenses of maintaining communications with stockholders, including the cost of preparation, printing, and mailing annual and other stockholder reports, proxy statements and other reports required by governmental entities; | |
• | administrative services expenses (including personnel costs; provided, however, that no reimbursement shall be made for costs of personnel to the extent that such personnel perform services in transactions for which our advisor receives a separate fee); | |
• | transfer agent and registrar’s fees and charges paid to third parties; and | |
• | audit, accounting, legal and other professional fees. |
101
Table of Contents
(6) | This fee is paid monthly. Realty and Residential Management may subcontract certain property management services to third parties and would be responsible for paying all fees due such third party contractors. Property management fees paid to third parties by Realty or Residential Management may be less than the fee we pay to Realty or Residential Management, as the case may be. | |
(7) | The amount paid, when added to the sums paid to unaffiliated parties, will not exceed the lesser of (a) the real estate or brokerage commission paid for the purchase or sale of the property which is competitive in light of the size, type and location of such property or (b) an amount equal to 6.0% of the contract sales price. We will pay the disposition fee on all dispositions of properties, whether made in the ordinary course of business, upon liquidation or otherwise. | |
(8) | “Invested capital” means the gross proceeds from the sale of the shares of our common stock in this offering. When a property is sold, invested capital will be reduced by the lesser of (a) the net sale proceeds available for distribution from such sale or (b) the sum of (1) the portion of invested capital that initially was allocated to that property and (2) any remaining shortfall in the recovery of our invested capital with respect to prior sales of properties. If we and, in turn, our stockholders have not received a return of our invested capital or if there is a shortfall in the 8.0% return after the sale of the last property and our advisor previously has received incentive distributions, other than those that have previously been repaid, our advisor will be required to repay to our operating partnership an amount of those distributions sufficient to cause us and, in turn, our stockholders to receive a full return of the invested capital and a full distribution of the 8.0% return. In no event will the cumulative amount repaid by our advisor to our operating partnership exceed the cumulative amount of incentive distributions that our advisor previously has received. | |
(9) | A listing for these purposes means the listing of our common stock on (a) the New York Stock Exchange, the American Stock Exchange, or the Nasdaq Global Market (or any successor to such entities), or (b) a national securities exchange (or tier or segment thereof) that has listing standards that the SEC has determined by rule are substantially similar to the listing standards applicable to securities described in Section 18(b)(1)(A) of the Securities Act of 1933, as amended. |
• | the goods or services must be necessary to our prudent operation; and | |
• | the compensation, price or fee must be equal to the lesser of the compensation, price or fee we would be required to pay to independent parties rendering comparable services or selling or leasing comparable goods on competitive terms in the same geographic location, or the compensation, price or fee charged by our advisor or its affiliates for rendering comparable services or selling or leasing comparable goods on competitive terms. |
102
Table of Contents
103
Table of Contents
104
Table of Contents
105
Table of Contents
106
Table of Contents
No. of | ||||
Property Type | Properties | |||
Industrial | 1 | |||
Office | 56 | |||
Medical Office | 42 | |||
Apartment Communities | 40 | |||
Retail | 13 | |||
Healthcare Related Facilities | 5 | |||
Mixed Use | 2 | |||
Land | — | |||
Total | 159 | |||
107
Table of Contents
No. of | ||||
Location | Properties | |||
Alabama | 1 | |||
Arizona | 5 | |||
Arkansas | 1 | |||
California | 7 | |||
Colorado | 4 | |||
Delaware | 1 | |||
Florida | 7 | |||
Georgia | 22 | |||
Illinois | 7 | |||
Indiana | 6 | |||
Kansas | 1 | |||
Louisiana | 1 | |||
Maryland | 3 | |||
Massachusetts | 2 | |||
Minnesota | 3 | |||
Missouri | 4 | |||
Multi State | 5 | |||
Nevada | 2 | |||
New Hampshire | 1 | |||
New Jersey | 2 | |||
North Carolina | 11 | |||
Ohio | 12 | |||
Oklahoma | 1 | |||
Oregon | 1 | |||
Pennsylvania | 2 | |||
South Carolina | 4 | |||
Tennessee | 4 | |||
Texas | 31 | |||
Utah | 1 | |||
Virginia | 4 | |||
Wisconsin | 3 | |||
Total | 159 | |||
No. of | ||||
Method of Financing | Properties | |||
All Debt | — | |||
All Cash | 37 | |||
Combination of cash and debt | 122 | |||
Total | 159 | |||
108
Table of Contents
109
Table of Contents
110
Table of Contents
111
Table of Contents
• | Except as otherwise described in this prospectus, we do not accept goods or services from our advisor or its affiliates unless a majority of our directors, including a majority of our independent directors, not otherwise interested in the transactions, approve such transactions as fair and reasonable to us and on terms and conditions not less favorable to us than those available from unaffiliated third parties. | |
• | We do not purchase or lease any asset (including any property) in which our advisor, any of our directors or any of their respective affiliates has an interest without a determination by a majority of our directors, including a majority of our independent directors, not otherwise interested in such transaction, that such transaction is fair and reasonable to us and at a price to us no greater than the cost of the property to our advisor, such director or directors or any such affiliate, unless there is substantial justification for any amount that exceeds such cost and such excess amount is determined to be reasonable. In no event will we acquire any such asset at an amount in excess of its appraised value. We will not sell or lease assets to our advisor, any of our directors or any of their respective affiliates unless a majority of our directors, including a majority of our independent directors, not otherwise interested in the transaction, determine the transaction is fair and reasonable to us, which determination will be supported by an appraisal obtained from a qualified, independent appraiser selected by a majority of our independent directors. | |
• | We do not make any loans to our advisor, any of our directors or any of their respective affiliates except loans, if any, to our wholly owned subsidiaries. In addition, any loans made to us by our advisor, our directors or any of their respective affiliates must be approved by a majority of our directors, including a majority of our independent directors, not otherwise interested in the transaction, as fair, competitive and commercially reasonable, and no less favorable to us than comparable loans between unaffiliated parties. |
• | Our advisor and its affiliates are entitled to reimbursement, at cost, for actual expenses incurred by them on our behalf or on behalf of joint ventures in which we are a joint venture partner, subject to the limitation that our advisor and its affiliates are not entitled to reimbursement of operating expenses, generally, to the extent that they exceed the greater of 2.0% of our average invested assets or 25.0% of our net income, as described in the “Compensation Table” section of this prospectus. |
• | Our advisory agreement provides that if our advisor identifies an opportunity to make an investment in one or more Class A income-producing multi-family properties that satisfy our investment objectives and are placed under contract by our advisor or its affiliates, then our advisor will provide us with the first opportunity to purchase such investment. If our board of directors does not affirmatively authorize us to make such purchase within seven days of being offered such property, then our advisor may offer the investment opportunity to any other person or entity. |
112
Table of Contents
113
Table of Contents
• | the distributions reinvested during the year; | |
• | the number of shares of our common stock purchased during the year; | |
• | the per share purchase price for such shares of our common stock; and | |
• | the total number of shares of our common stock purchased on behalf of the participant pursuant to the DRIP. |
114
Table of Contents
115
Table of Contents
• | for stockholders who have continuously held their shares of our common stock for at least one year, the lower of $9.25 or 92.5% of the price paid per share to acquire shares of our common stock from us; | |
• | for stockholders who have continuously held their shares of our common stock for at least two years, the lower of $9.50 or 95.0% of the price paid per share to acquire shares of our common stock from us; | |
• | for stockholders who have continuously held their shares of our common stock for at least three years, the lower of $9.75 or 97.5% of the price paid per share to acquire shares of our common stock from us; and | |
• | for stockholders who have continuously held their shares of our common stock for at least four years, a price determined by our board of directors, but in no event less than 100% of the price paid per share to acquire shares of our common stock from us. |
116
Table of Contents
117
Table of Contents
• | are entitled to receive distributions authorized by our board of directors after payment of, or provision for, full cumulative distributions on and any required repurchases of shares of preferred stock then outstanding; | |
• | are entitled to share ratably in the distributable assets of our company remaining after satisfaction of the prior preferential rights of the preferred stock and the satisfaction of all of our debts and liabilities in the event of any voluntary or involuntary liquidation or dissolution of our company; | |
• | do not have preference, conversion, exchange, sinking fund or repurchase rights or preemptive rights to subscribe for any of our securities; and | |
• | do not have appraisal rights unless our board of directors determines that appraisal rights apply, with respect to all or any classes or series of stock, to a particular transaction or all transactions occurring after the date of such determination in connection with which such holders would otherwise be entitled to exercise appraisal rights. |
• | amend our charter, including, by way of illustration, amendments to provisions relating to director qualifications, fiduciary duty, liability and indemnification, conflicts of interest, investment policies or investment restrictions, except for amendments with respect to increases or decreases in the aggregate number of shares of our stock or the number of shares of stock of any class or series, changes in our name, changes in the name or other designation or the par value of any class or series of stock and the aggregate par value of our stock or certain reverse stock splits; |
118
Table of Contents
• | sell all or substantially all of our assets other than in the ordinary course of our business or as otherwise permitted by law; | |
• | cause a merger or reorganization of our company except that where the merger is effected through a wholly owned subsidiary and the consideration to be paid by us in the merger consists solely of cash, the merger may be approved solely by our board of directors unless a party to the merger is an affiliate of Grubb & Ellis Realty Investors or ROC REIT Advisors; or | |
• | dissolve or liquidate our company. |
119
Table of Contents
• | the value of outstanding shares of our capital stock; or | |
• | the value or number (whichever is more restrictive) of outstanding shares of our common stock. |
• | result in any person owning, directly or indirectly, shares of our capital stock in excess of the foregoing ownership limitations; | |
• | result in our capital stock being owned by fewer than 100 persons, determined without reference to any rules of attribution; | |
• | result in our company being “closely held” under the federal income tax laws; | |
• | cause our company to own, actually or constructively, 9.9% or more of the ownership interests in a tenant of our real property, under the federal income tax laws; or | |
• | before our shares of stock constitute a class of “publicly-offered securities,” result in 25.0% or more of our shares of stock being owned by ERISA investors. |
• | the price per share such prohibited owner paid for the shares of capital stock that were designated as shares-in-trust or, in the case of a gift or devise, the market price per share on the date of such transfer; or | |
• | the price per share received by the trust from the sale of such shares-in-trust. |
• | the price per share in the transaction that created such shares-in-trust or, in the case of a gift or devise, the market price per share on the date of such transfer; or | |
• | the market price per share on the date that our company, or our designee, accepts such offer. |
120
Table of Contents
121
Table of Contents
122
Table of Contents
• | the act or omission of the director or officer was material to the matter giving rise to the proceeding and (1) was committed in bad faith or (2) was the result of active and deliberate dishonesty; | |
• | the director or officer actually received an improper personal benefit in money, property or services; or | |
• | in the case of any criminal proceeding, the director or officer had reasonable cause to believe that the act or omission was unlawful. |
• | the party was acting on behalf of or performing services on the part of our company; | |
• | our directors, our advisor or our advisor’s affiliates have determined, in good faith, that the course of conduct which caused the loss or liability was in the best interest of our company; | |
• | such indemnification or agreement to be held harmless is recoverable only out of our net assets and not from our stockholders; and | |
• | such liability or loss was not the result of: |
• | negligence or misconduct by directors (other than our independent directors) or our advisor or their affiliates; or | |
• | gross negligence or willful misconduct by our independent directors. |
123
Table of Contents
• | there has been a successful determination on the merits of each count involving alleged securities law violations as to the party seeking indemnification; | |
• | such claims have been dismissed with prejudice on the merits by a court of competent jurisdiction as to the party seeking indemnification; or | |
• | a court of competent jurisdiction approves a settlement of the claims against the party seeking indemnification and finds that indemnification of the settlement and related costs should be made and the court considering the request has been advised of the position of the SEC and of the published opinions of any state securities regulatory authority in which shares of our stock were offered and sold as to indemnification for securities law violations. |
• | the proceeding legal action relates to acts or omissions with respect to the performance of duties or services by the indemnified party for or on behalf of our company; | |
• | the legal proceeding is initiated by a third party who is not a stockholder of our company or the legal proceeding is initiated by a stockholder of our company acting in his or her capacity as such and a court of competent jurisdiction specifically approves such advancement; | |
• | the party receiving such advances furnishes our company with a written statement of his or her good faith belief that he or she has met the standard of conduct described above; and | |
• | the indemnified party receiving such advances furnishes to our company a written undertaking, personally executed on his or her behalf, to repay the advanced funds to our company, together with the applicable legal rate of interest thereon, if it is ultimately determined that he or she did not meet the standard of conduct described above and is not entitled to indemnification. |
124
Table of Contents
125
Table of Contents
• | accepting the securities of the entity that would be created or would survive after the successful completion of the roll-up transaction offered in the proposed roll-up transaction; or | |
• | one of the following: |
• | remaining common stockholders of our company and preserving their interests in our company on the same terms and conditions as existed previously; or | |
• | receiving cash in an amount equal to the stockholder’s pro rata share of the appraised value of our net assets. |
• | which would result in the common stockholders having voting rights in the entity that would be created or would survive after the successful completion of the roll-up transaction that are less than those provided in our charter, including rights with respect to the election and removal of directors, annual reports, annual and special meetings, amendment of the charter and dissolution of our company; | |
• | which includes provisions that would operate as a material impediment to, or frustration of, the accumulation of shares by any purchaser of the securities of the entity that would be created or would survive after the successful completion of the roll-up transaction, except to the minimum extent necessary to preserve the tax status of such entity, or which would limit the ability of an investor to exercise the voting rights of its securities of the entity that would be created or would survive after the successful completion of the roll-up transaction on the basis of the number of shares held by that investor; | |
• | in which our stockholder’s rights to access of records of the entity that would be created or would survive after the successful completion of the roll-up transaction will be less than those provided in our charter and described in “— Inspection of Books and Records,” above; or | |
• | in which our company would bear any of the costs of the roll-up transaction if our stockholders do not approve the roll-up transaction. |
126
Table of Contents
127
Table of Contents
• | a classified board; | |
• | a two-thirds vote requirements for removing a director; | |
• | a requirement that the number of directors be fixed only by vote of the directors; | |
• | a requirement that a vacancy on the board be filled only by the remaining directors and for the remainder of the full term of the class of directors in which the vacancy occurred; and | |
• | a majority requirement for the calling of a special meeting of stockholders. |
128
Table of Contents
• | the fact of the common directorship or interest is disclosed to or known by the directors and the transaction is authorized, approved or ratified by the disinterested directors; | |
• | the fact of the common directorship or interest is disclosed to or known by our stockholders and the transaction is authorized approved or ratified by the disinterested stockholders; or | |
• | the transaction is fair and reasonable to our company. |
129
Table of Contents
130
Table of Contents
• | result in any person owning, directly or indirectly, stock in excess of the ownership limit; | |
• | result in our shares of capital stock being owned by fewer than 100 persons, determined without reference to any rules of attribution; | |
• | result in us being “closely held” under the federal income tax laws; | |
• | cause us to own, actually or constructively, 10.0% or more of the ownership interests in a tenant of our real property; or | |
• | cause the acquisition of shares of our common stock by such redeeming limited partner to be “integrated” with any other distribution of common stock for purposes of complying with the Securities Act of 1933, as amended. |
• | our Invested Capital, as defined below; and | |
• | any remaining shortfall in an 8.0% per annum cumulative, non-compounded return on adjusted Invested Capital as determined in the paragraph below, or 8.0% return. |
131
Table of Contents
132
Table of Contents
(1) | First, to the partners in accordance with their percentage interests in order to offset losses allocated to the partners pursuant to clause (2) under Losses from Capital Transactions below; | |
(2) | Second, to the partners in accordance with their percentage interests until the partners have been allocated an aggregate amount equal to the sum of (A) any depreciation or amortization recapture associated with the operating partnership’s investment in the property sold, and (B) any remaining shortfall in our 8.0% return that is distributed to us in connection with the sale of the property; and | |
(3) | Thereafter, any remaining gain will be allocated 85.0% to the partners in accordance with their percentage interests and 15.0% to our advisor, as the special limited partner. |
(1) | First, 85.0% to the partners in accordance with their percentage interests and 15.0% to our advisor to the extent of gain from property sales previously allocated pursuant to clause (3) under Gains from Capital Transactions above; and | |
(2) | Thereafter, any remaining loss will be allocated 100% to the partners in accordance with their percentage interests. |
(1) | First, to the partners in accordance with their percentage interests until their aggregate capital account balances equal the sum of (A) the Invested Capital and (B) the cumulative 8.0% return that has not previously been distributed; and | |
(2) | Thereafter, any remaining gain will be allocated 85.0% to the partners in accordance with their percentage interests and 15.0% to our advisor, as the special limited partner. |
133
Table of Contents
(1) | First, 85.0% to the partners in accordance with their percentage interests and 15.0% to our advisor, as the special limited partner, until the aggregate losses allocated under clause (1) under Losses from Capital Transactions above and allocated pursuant to this clause equals gains allocated pursuant to clause (3) under Gains from Capital Transactions above; and | |
(2) | Thereafter, any remaining loss will be allocated to the partners in accordance with their percentage interests. |
134
Table of Contents
135
Table of Contents
• | We will be taxed at regular corporate rates on our undistributed REIT taxable income, including undistributed net capital gains. | |
• | Under some circumstances, we may be subject to “alternative minimum tax.” | |
• | If we have net income from the sale or other disposition of “foreclosure property” (as described below) that is held primarily for sale to customers in the ordinary course of business or other non-qualifying income from foreclosure property, we will be subject to tax at the highest corporate rate on that income. | |
• | If we have net income from prohibited transactions (as described below), the income will be subject to a 100% tax. | |
• | If we fail to satisfy either of the 75.0% or 95.0% gross income tests (as described below) but have nonetheless maintained our qualification as a REIT because certain conditions have been met, we will be subject to a 100% tax on an amount equal to the greater of the amount by which we fail the 75.0% or 95.0% test multiplied by a fraction calculated to distinguish qualifying net income from non-qualifying income. | |
• | If we fail to satisfy the REIT Asset Tests (as described below) and continue to qualify as a REIT because we meet other requirements, we will have to pay a tax equal to the greater of $50,000 or the highest corporate income tax rate multiplied by the net income generated by the non-qualifying assets during the time we failed to satisfy the Asset Tests. If we fail to satisfy other REIT requirements (other than the Gross Income and Asset Tests), we can continue to qualify as a REIT if our failure was due to reasonable cause and not willful neglect, but we must pay $50,000 for each failure. | |
• | If we fail to distribute during each year at least the sum of (i) 85.0% of our REIT ordinary income for the year, (ii) 95.0% of our REIT capital gain net income for such year and (iii) any undistributed taxable income from prior periods, we will be subject to a 4.0% excise tax on the excess of the required distribution over the amounts actually distributed. | |
• | We may elect to retain and pay tax on our net long-term capital gain. In that case, a United States stockholder would be taxed on its proportionate share of our undistributed long-term capital gain and would receive a credit or refund for its proportionate share of the tax we paid. | |
• | If we acquire any asset from a C corporation (i.e., a corporation generally subject to corporate-level tax) in a transaction in which our basis in the asset is determined by reference to the basis of the asset (or any other property) in the hands of the C corporation and we subsequently recognize gain on the disposition of the asset during the ten-year period beginning on the date on which we acquired the asset, then a portion of the gain may be subject to tax at the highest regular corporate rate, unless the C corporation made an election to treat the asset as if it were sold for its fair market value at the time of our acquisition. We refer to this tax as the “Built-in Gains Tax.” |
136
Table of Contents
• | Our TRSs, if any, will be subject to federal and state income tax on their taxable incomes. Several provisions regarding the arrangements between a REIT and its TRSs ensure that a TRS will be subject to an appropriate level of federal income taxation. For example, the Internal Revenue Code limits the ability of a TRS to deduct interest payments made to the REIT in excess of a certain amount. In addition, the REIT must pay a 100% tax on some payments that it receives from, or on certain expenses deducted by, the TRS if the economic arrangements between it, its tenants and the TRS are not comparable to similar arrangements among unrelated parties. Any TRS we may utilize in the future may make interest and other payments to us and to third parties in connection with activities related to our properties. We cannot assure you that our TRSs, if any, will not be limited in their ability to deduct interest payments made to us. In addition, we cannot assure you that the IRS might not seek to impose the 100% tax on services performed by any such TRS for tenants of ours, or on a portion of the payments received by us from, or expenses deducted by, any such TRS. |
• | so that no asset we own, directly or through any subsidiary entities (other than TRSs), will be held for sale to customers in the ordinary course of our trade or business; or, | |
• | in order to comply with certain safe-harbor provisions of the Internal Revenue Code that would prevent such treatment. |
137
Table of Contents
(1) | which is managed by one or more trustees or directors; | |
(2) | the beneficial ownership of which is evidenced by transferable shares or by transferable certificates of beneficial interest; | |
(3) | which would be taxable as a domestic corporation but for Sections 856 through 859 of the Internal Revenue Code; | |
(4) | which is neither a financial institution nor an insurance company subject to certain provisions of the Internal Revenue Code; | |
(5) | the beneficial ownership of which is held by 100 or more persons; | |
(6) | not more than 50.0% in value of the outstanding stock of which is owned, directly or indirectly, by or for five or fewer individuals (as defined in the Internal Revenue Code to include certain entities); | |
(7) | which makes an election to be a REIT (or has made such election for a previous taxable year which has not been revoked or terminated) and satisfies all relevant filing and other administrative requirements established by the IRS that must be met to elect and maintain REIT status; | |
(8) | which uses the calendar year as its taxable year; and | |
(9) | which meets certain other tests, described below, regarding the nature of its income and assets and the amount of its distributions. |
138
Table of Contents
• | At least 75.0% of our gross income, excluding gross income from prohibited transactions, for each taxable year must be derived directly or indirectly from investments relating to real property or mortgages on real property (including “rents from real property” and interest income derived from mortgage loans secured by real property) and from other specified sources, including qualified temporary investment income, as described below. This is the “75.0% Gross Income Test.” | |
• | At least 95.0% of our gross income, excluding gross income from prohibited transactions, for each taxable year must be derived from the real property investments described above in the 75.0% Gross Income Test and generally from dividends and interest and gains from the sale or disposition of stock or securities or from any combination of the foregoing. This is the “95.0% Gross Income Test.” |
• | The amount of rent received from a tenant must not be based in whole or in part on the income or profits of any person. An amount received or accrued generally will not be excluded from the term “rents from real property” solely by reason of being based on a fixed percentage or percentages of gross receipts or sales. | |
• | In general, neither we nor an owner of 10.0% or more of our shares of stock may directly or constructively own 10.0% or more of a tenant or a subtenant of the tenant (in which case only rent attributable to the subtenant is disqualified). | |
• | Rent attributable to personal property leased in connection with a lease of real property cannot be greater than 15.0% of the total rent received under the lease, as determined based on the average of the fair market values as of the beginning and end of the taxable year. | |
• | We may, however, provide services with respect to our properties, and the income derived from the properties will qualify as “rents from real property,” if the services are “usually or customarily rendered” in connection with the rental of space only and are not otherwise considered “rendered to the occupant.” Even if the services provided by us with respect to a property are impermissible tenant services, the income so derived will qualify as “rents from real property” if such income does not exceed 1.0% of all amounts received or accrued with respect to that property. For this purpose, such services may not be valued at less than 150% of our direct cost of providing the services, and any gross income deemed to have been derived by us from the performance of noncustomary services pursuant to the 1.0% de minimis exception will constitute nonqualifying gross income under the 75.0% and 95.0% Gross Income Tests. | |
• | In addition, our TRSs may perform some impermissible tenant services without causing us to receive impermissible tenant services income under the REIT income tests. However, several provisions regarding the arrangements between a REIT and its TRSs ensure that a TRS will be subject to an |
139
Table of Contents
appropriate level of federal income taxation. For example, the Internal Revenue Code limits the ability of our TRSs to deduct interest payments in excess of a certain amount made to us. In addition, we must pay a 100% tax on some payments that we receive from, or on certain expenses deducted by, the TRS if the economic arrangements between us, our tenants and the TRS are not comparable to similar arrangements among unrelated parties. We cannot assure you that our TRSs will not be limited in their ability to deduct interest payments made to us. In addition, we cannot assure you that the IRS might not seek to impose the 100% tax on services performed by TRSs for tenants of ours (or on a portion of the payments received by us from, or expenses deducted by, our TRSs). |
140
Table of Contents
• | Our failure to meet these tests was due to reasonable cause and not due to willful neglect; and | |
• | Following our identification of the failure, we properly disclose such failure to the IRS. |
• | First, at least 75.0% of the value of our total assets must be represented by real estate assets, cash, cash items (including receivables) and government securities. The term “real estate assets” includes real property, mortgages on real property, shares of stock in other qualified REITs, property attributable to the temporary investment of new capital as described above and a proportionate share of any real estate assets owned by a partnership in which we are a partner or of any qualified REIT subsidiary of ours. | |
• | Second, no more than 25.0% of the value of our total assets may be represented by securities other than those described above in the 75.0% asset class. | |
• | Third, of the investments included in the 25.0% asset class, the value of any one issuer’s securities that we own may not exceed 5.0% of the value of our total assets. Additionally, we may not own more than 10.0% of the voting power of any one issuer’s outstanding securities. Furthermore, we may not own more than 10.0% of the total value of any one issuer’s outstanding debt and equity securities. The 10.0% value limitation will not apply, however, to: |
(1) | “straight debt” securities (i.e., generally, debt payable on demand or at a date certain where the interest rate and the interest payment dates are not contingent on profits, the borrower’s discretion or similar factors and there is no convertibility, directly or indirectly, into stock of the debtor, although a security will not fail to be “straight debt” if it is subject to certain customary or de minimis contingencies; a security issued by a corporation or partnership will qualify as “straight debt” only if we or any of our TRSs hold no more than 1.0% of the outstanding non-qualifying securities of such issuer); | |
(2) | loans to an individual or an estate; | |
(3) | certain rental agreements calling for deferred rents or increasing rents that are subject to Section 467 of the Internal Revenue Code, other than with a “related person”; | |
(4) | obligations to pay qualifying rents from real property; | |
(5) | securities issued by a state or any political subdivision of a state, the District of Columbia, a foreign government, any political subdivision of the foreign government, or the Commonwealth of Puerto Rico, but only if the determinations of any payment received or accrued under the security does not depend in whole or in part on the profits of any entity; | |
(6) | securities issued by another qualifying REIT; and |
141
Table of Contents
(7) | other arrangements identified in Treasury Regulations (which have not yet been issued or proposed). |
• | Fourth, no more than 25.0% of the value of our total assets may consist of the securities of one or more TRSs. Subject to certain exceptions, a TRS is any corporation, other than a REIT, in which we directly or indirectly own stock and with respect to which a joint election has been made by us and the corporation to treat the corporation as a TRS of ours. It also includes any corporation, other than a REIT or a qualified REIT subsidiary, in which a TRS of ours owns, directly or indirectly, more than 35.0% of the voting power or value. |
(1) | 90.0% of our “REIT taxable income” (computed without regard to the dividends paid deduction and our net capital gain); and |
142
Table of Contents
(2) | 90.0% of the net income, if any, from foreclosure property in excess of the special tax on income from foreclosure property; minus |
(a) | we declare the distributions in October, November or December, the distributions are payable to stockholders of record on a specified date in such a month, and we actually pay the distributions during January of the subsequent year; or |
(b) | we declare the distributions before we timely file our federal income tax return for such year, we pay the distributions in the 12-month period following the close of the prior year and not later than the first regular distribution payment after the declaration, and we elect on our federal income tax return for the prior year to have a specified amount of the subsequent distribution treated as if paid in the prior year. |
• | We would be required to pay the federal income tax on these gains; | |
• | Taxable U.S. stockholders, while required to include their proportionate share of the undistributed long-term capital gains in income, would receive a credit or refund for their share of the tax paid by the REIT; and | |
• | The basis of the stockholder’s shares of our stock would be increased by the amount of our undistributed long-term capital gains (minus its proportionate share of the amount of capital gains tax we pay) included in the stockholder’s long-term capital gains. |
143
Table of Contents
• | a citizen or resident of the United States; | |
• | a corporation or other entity treated as a corporation for U.S. federal income tax purposes created or organized in or under the laws of the United States or of any political subdivision thereof; | |
• | an estate, the income of which is subject to U.S. federal income taxation regardless of its source; or | |
• | a trust if a U.S. court is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust. |
144
Table of Contents
• | distributions received from a REIT may be treated as “qualified dividend income” to the extent that the REIT itself has received qualified dividend income from other corporations (such as TRSs) in which the REIT has invested; and | |
• | distributions paid by a REIT in a taxable year may be treated as qualified dividend income in an amount equal to the sum of (i) the excess of the REIT’s “REIT taxable income” for the preceding taxable year over the corporate-level federal income tax payable by the REIT for such preceding taxable year and (ii) the excess of the REIT’s income that was subject to the Built-in Gains Tax in the preceding taxable year over the tax payable by the REIT on such income for such preceding taxable year. |
145
Table of Contents
• | results in a “complete termination” of the stockholder’s interest in us under Section 302(b)(3) of the Internal Revenue Code; | |
• | is “substantially disproportionate” with respect to the stockholder under Section 302(b)(2) of the Internal Revenue Code (i.e., if the percentage of the voting stock of the corporation owned by a stockholder immediately after the repurchase is less than eighty percent of the percentage of that owned by such stockholder immediately before the repurchase (taking into account Internal Revenue Code Section 318 constructive ownership rules); or | |
• | is “not essentially equivalent to a dividend” with respect to the stockholder under Section 302(b)(1) of the Internal Revenue Code (i.e., if it results in a “meaningful reduction” in the stockholder’s interest in us; the IRS has published a ruling indicating that a repurchase which results in a reduction in the proportionate interest in a corporation (taking into account Section 318 constructive ownership rules) of a stockholder whose relative stock interest is minimal (an interest of less than 1.0% should satisfy this requirement) and who exercises no control over the corporation’s affairs should be treated as being “not essentially equivalent to a dividend.” |
146
Table of Contents
• | Fails to furnish its taxpayer identification number (for an individual, this would be his or her social security number); | |
• | Furnishes an incorrect taxpayer identification number; | |
• | Is notified by the IRS that the stockholder has failed properly to report payments of interest or dividends; or | |
• | Under some circumstances, fails to certify, under penalties of perjury, that it has furnished a correct taxpayer identification number and has not been notified by the IRS that the stockholder is subject to backup withholding for failure to report interest and dividend payments or has been notified by the IRS that the stockholder is no longer subject to backup withholding for failure to report those payments. |
147
Table of Contents
148
Table of Contents
• | 35.0% of designated capital gain distributions or, if greater, 35.0% of the amount of any distributions that could be designated as capital gain distributions; and | |
• | 30.0% of ordinary income distributions (i.e., distributions paid out of our earnings and profits). |
149
Table of Contents
150
Table of Contents
151
Table of Contents
152
Table of Contents
153
Table of Contents
• | whether the investment is consistent with the applicable provisions of ERISA and the Internal Revenue Code; | |
• | whether the investment will be in accordance with the documents and instruments governing such Benefit Plan or IRA; | |
• | whether the assets of the entity in which the investment is made will be treated as “plan assets” of the Benefit Plan or IRA investor; | |
• | whether the investment will result in UBTI to the Benefit Plan or IRA; | |
• | whether there is sufficient liquidity for the Benefit Plan or IRA considering the minimum distribution requirements under the Internal Revenue Code and the liquidity needs of such Benefit Plan or IRA, after taking this investment into account; | |
• | the need to value the assets of the Benefit Plan or IRA annually; | |
• | whether the investment would constitute or give rise to a prohibited transaction under ERISA or the Internal Revenue Code, if applicable; and | |
• | whether the investment satisfies the prudence and diversification and other fiduciary requirements of ERISA, if applicable. |
154
Table of Contents
155
Table of Contents
• | the estimated value per share would actually be realized by our stockholders upon liquidation, because these estimates do not necessarily indicate the price at which properties can be sold; | |
• | our stockholders would be able to realize estimated net asset values if they were to attempt to sell their shares of our common stock, because no public market for shares of our common stock exists or is likely to develop; or | |
• | that the value, or method used to establish value, would comply with ERISA or Internal Revenue Code requirements described above. |
• | in securities issued by an investment company registered under the Investment Company Act; | |
• | in “publicly-offered securities,” defined generally as interests that are “freely-transferable,” “widely held,” and registered with the SEC; |
156
Table of Contents
• | in which equity participation by “benefit plan investors” is not significant; or | |
• | in an “operating company” which includes “venture capital operating companies” and “real estate operating companies.” |
157
Table of Contents
158
Table of Contents
159
Table of Contents
160
Table of Contents
Percentage of | ||||||||
Amount | Primary Offering | |||||||
Selling commissions | 70,000,000 | 7.0 | % | |||||
Dealer manager fee | 30,000,000 | 3.0 | % | |||||
Expense reimbursement, including for wholesaling travel and expenses | ||||||||
Broker-dealer conference fees and training and education meetings | ||||||||
Legal fees of the dealer manager | ||||||||
Total(1) | $ | % | ||||||
(1) | Of this amount, $70,000,000 and $30,000,000 will be paid by us from the proceeds of this offering in the form of selling commissions and dealer manager fees, respectively. Subject to the cap on underwriting compensation described below, and in our accordance with our limits on reimbursement and payment of organization and offering expenses as disclosed elsewhere in this prospectus, we will reimburse our sponsor or its affiliates for certain expenses that constitute underwriting compensation. In some cases, these payments will serve to reimburse our sponsor or its affiliates for amounts it has paid to participating broker-dealers. Any remaining amounts will be paid by our sponsor without reimbursement by us. |
161
Table of Contents
Price per | ||||||||
Shares Purchased | Commission Rate | Share | ||||||
1 to 50,000 | 7.0 | % | $ | 10.00 | ||||
50,001 to 100,000 | 6.0 | % | $ | 9.90 | ||||
100,001 to 200,000 | 5.0 | % | $ | 9.80 | ||||
200,001 to 500,000 | 4.0 | % | $ | 9.70 | ||||
500,001 to 750,000 | 3.0 | % | $ | 9.60 | ||||
750,001 to 1,000,000 | 2.0 | % | $ | 9.50 | ||||
1,000,001 and up | 1.0 | % | $ | 9.40 |
• | 50,000 shares of our common stock at $10.00 per share (total: $500,000) and a 7.0% commission; | |
• | 50,000 shares of our common stock at $9.90 per share (total: $495,000) and a 6.0% commission; and | |
• | 51,530 shares of our common stock at $9.80 per share (total: $504,994) and a 5.0% commission. |
162
Table of Contents
• | an individual, his or her spouse and their children under the age of 21 who purchase the shares of our common stock for his, her or their own accounts; | |
• | a corporation, partnership, association, joint-stock company, trust fund or any organized group of persons, whether incorporated or not; | |
• | an employees’ trust, pension, profit sharing or other employee benefit plan qualified under Section 401(a) of the Internal Revenue Code; and | |
• | all commingled trust funds maintained by a given bank. |
163
Table of Contents
164
Table of Contents
• | financial statements, including a balance sheet, statement of operations, statement of stockholders’ equity, and statement of cash flows, prepared in accordance with GAAP, which are audited and reported on by an independent registered public accounting firm; | |
• | a statement of the aggregate amount of fees paid to our advisor and its affiliates; and | |
• | full disclosure of all material terms, factors and circumstances surrounding any and all transactions involving us and any of our directors, our advisor and its affiliates or any other of our affiliates occurring in the year for which the annual report is made. |
165
Table of Contents
• | Annual Report on Form 10-K for the fiscal year ended December 31, 2008 filed with the SEC on March 24, 2009; |
• | Quarterly Report on Form 10-Q for the quarter ended March 31, 2009 filed with the SEC on May 12, 2009; |
166
Table of Contents
• | Definitive Proxy Statement filed with the SEC on April 30, 2009 in connection with our Annual Meeting of Stockholders to be held on June 23, 2009; and |
• | Current Reports on Form 8-K and Form 8-K/A filed with the SEC on November 26, 2008, February 12, 2009, March 18, 2009 and April 6, 2009. |
167
Table of Contents
Table II — Compensation to Sponsor (Unaudited)
Table III — Operating Results of Prior Programs by Year (Unaudited)
Table IV — Results of Completed Programs (Unaudited)
Table V — Sales or Disposals of Properties (Unaudited)
A-1
Table of Contents
• | The primary difference between the cash method of accounting and accrual method (both GAAP and the accrual method of accounting for income tax purposes) is that the cash method of accounting generally reports income when received and expenses when paid while the accrual method generally requires income to be recorded when earned and expenses recognized when incurred. |
• | GAAP requires that, when reporting lease revenue, the minimum annual rental revenue be recognized on a straight-line basis over the term of the related lease, whereas the cash method of accounting for income tax purposes requires recognition of income when cash payments are actually received from tenants, and the accrual method of accounting for income tax purposes requires recognition of income when the income is earned pursuant to the lease contract. |
• | GAAP requires that when an asset is considered held for sale, depreciation ceases to be recognized on that asset, whereas for income tax purposes, depreciation continues until the asset either is sold or is no longer in service. |
• | GAAP requires that when a building is purchased certain intangible assets and liabilities (such as above-and below-market leases, tenant relationships and in place lease costs) are allocated separately from the building and are amortized over significantly shorter lives than the depreciation recognized on the building. These intangible assets and liabilities are not recognized for income tax purposes and are not allocated separately from the building for purposes of tax depreciation. |
• | GAAP requires that an asset is considered impaired when the carrying amount of the asset is greater than the sum of the future undiscounted cash flows expected to be generated by the asset, and an impairment loss must then be recognized to decrease the value of the asset to its fair value. For income tax purposes, losses are generally not recognized until the asset has been sold to an unrelated party or otherwise disposed of in an arm’s length transaction. |
A-2
Table of Contents
COMPENSATION TO SPONSOR (UNAUDITED)
PUBLIC PROGRAMS
December 31, 2008
Other Programs | ||||||||||||||||||||||||||||
NNN 2003 | NNN 2002 | Grubb & Ellis Apartment | Grubb & Ellis Healthcare | Total | ||||||||||||||||||||||||
G REIT, Inc.(1) | Value Fund, LLC | T REIT, Inc(2) | Value Fund, LLC | REIT, Inc. | REIT, Inc. | All Programs | ||||||||||||||||||||||
Date Offering Commenced | 7/22/2002 | 7/11/2003 | 2/22/2000 | 5/15/2002 | 7/19/2006 | 9/20/2006 | ||||||||||||||||||||||
Dollar Amount Raised | $ | 437,315,000 | $ | 50,000,000 | $ | 46,395,000 | $ | 29,799,000 | $ | 149,905,000 | (3) | $ | 737,398,000 | (3) | $ | 1,450,812,000 | ||||||||||||
Amounts Paid to Sponsor from Proceeds of Offering(4): | ||||||||||||||||||||||||||||
Selling Commissions to Selling Group Members | $ | 30,443,000 | $ | 3,898,000 | $ | 3,576,000 | $ | 2,089,000 | $ | 10,364,000 | $ | 50,875,000 | $ | 101,245,000 | ||||||||||||||
Marketing Support & Due Diligence Reimbursement | 10,818,000 | 1,251,000 | 671,000 | 2,005,000 | 3,749,000 | 18,410,000 | 36,904,000 | |||||||||||||||||||||
Organization & Offering Expenses | 3,036,000 | 1,394,000 | 860,000 | 249,000 | 2,251,000 | 8,800,000 | 16,590,000 | |||||||||||||||||||||
Due Diligence Allowance | — | — | — | — | 141,000 | 181,000 | 322,000 | |||||||||||||||||||||
Loan Fees | — | — | — | 1,000 | — | — | 1,000 | |||||||||||||||||||||
Acquisition Fees | — | 1,783,000 | — | 1,192,000 | — | — | 2,975,000 | |||||||||||||||||||||
Totals | $ | 44,297,000 | $ | 8,326,000 | $ | 5,107,000 | $ | 5,536,000 | $ | 16,505,000 | $ | 78,266,000 | $ | 158,037,000 | ||||||||||||||
Amounts Paid to Sponsor at Acquisition for Real Estate | ||||||||||||||||||||||||||||
Acquisition Fees | $ | — | $ | 1,612,000 | $ | — | $ | — | $ | 10,217,000 | $ | 28,479,000 | $ | 40,308,000 | ||||||||||||||
Dollar Amount of Cash Generated from Operations | ||||||||||||||||||||||||||||
Before Deducting Payments to Sponsor | $ | 11,997,000 | (5) | $ | (7,755,000 | ) | $ | 493,000 | (6) | $ | — | (7) | $ | 9,218,000 | $ | 39,925,000 | $ | 53,878,000 | ||||||||||
Amounts Paid to Sponsor from Operations — Year 2006: | ||||||||||||||||||||||||||||
Property Management Fees | $ | 4,811,000 | $ | 596,000 | $ | 84,000 | $ | — | $ | 24,000 | $ | — | $ | 5,515,000 | ||||||||||||||
Asset Management Fees | — | — | 265,000 | — | — | — | 265,000 | |||||||||||||||||||||
Leasing Commissions | 3,705,000 | 947,000 | — | — | — | — | 4,652,000 | |||||||||||||||||||||
Totals | $ | 8,516,000 | $ | 1,543,000 | $ | 349,000 | $ | — | $ | 24,000 | $ | — | $ | 10,432,000 | ||||||||||||||
Amounts Paid to Sponsor from Operations — Year 2007: | ||||||||||||||||||||||||||||
Property Management Fees | $ | 1,658,000 | $ | 403,000 | $ | — | $ | — | $ | 489,000 | $ | 591,000 | $ | 3,141,000 | ||||||||||||||
Asset Management Fees | — | — | 82,000 | — | 950,000 | $ | 1,590,000 | 2,622,000 | ||||||||||||||||||||
Leasing Commissions | 1,114,000 | 856,000 | — | — | — | $ | 265,000 | 2,235,000 | ||||||||||||||||||||
Totals | $ | 2,772,000 | $ | 1,259,000 | $ | 82,000 | $ | — | $ | 1,439,000 | $ | 2,446,000 | $ | 7,998,000 | ||||||||||||||
Amounts Paid to Sponsor from Operations — Year 2008: | ||||||||||||||||||||||||||||
Property Management Fees | $ | 466,000 | $ | 547,000 | $ | — | $ | — | $ | 1,129,000 | $ | 2,372,000 | $ | 4,514,000 | ||||||||||||||
Asset Management Fees | — | — | 62,000 | — | 2,563,000 | $ | 6,177,000 | 8,802,000 | ||||||||||||||||||||
Leasing Commissions | 243,000 | 303,000 | — | — | — | $ | 1,248,000 | 1,794,000 | ||||||||||||||||||||
Totals | $ | 709,000 | $ | 850,000 | $ | 62,000 | $ | — | $ | 3,692,000 | $ | 9,797,000 | $ | 15,110,000 | ||||||||||||||
Amounts Paid to Sponsor from Property Sales and Refinancings: | ||||||||||||||||||||||||||||
Disposition Fees | $ | 12,399,000 | $ | 982,000 | $ | 1,317,000 | $ | — | $ | — | $ | — | $ | 14,698,000 | ||||||||||||||
Incentive Fees | — | — | — | — | — | — | — | |||||||||||||||||||||
Construction Management Fees | — | 89,000 | — | — | — | — | 89,000 | |||||||||||||||||||||
Refinancing Fees | — | 118,000 | — | — | — | — | 118,000 | |||||||||||||||||||||
Totals | $ | 12,399,000 | $ | 1,189,000 | $ | 1,317,000 | $ | — | $ | — | $ | — | $ | 14,905,000 | ||||||||||||||
(1) | Includes amounts paid by G REIT Liquidating Trust, successor of G REIT, Inc. as of January 22, 2008. |
(2) | Includes amounts paid by T REIT Liquidating Trust, successor of T REIT, Inc. as of July 20, 2007. |
(3) | Amount is as of December 31, 2008 as the offering has not closed. Such amount excludes amounts issued under the distribution reinvestment plan. |
(4) | These figures are cumulative from inception through December 31, 2008. |
(5) | Amount for G REIT, Inc. represents no cash generated from operations due to the adoption of the liquidation basis of accounting as of December 31, 2005, plus payments to the sponsor from operations for the three years ended December 31, 2008. |
(6) | Amount for T REIT, Inc. represents no cash generated from operations due to the adoption of the liquidation basis of accounting as of June 30, 2005, plus payments to the sponsor from operations for the three years ended December 31, 2008. |
(7) | Amount for NNN 2002 Value Fund, LLC represents no cash generated from operations due to the adoption of liquidation basis of accounting as of August 31, 2005, plus payments to the sponsor from operations for the three years ended December 31, 2008. |
A-3
Table of Contents
OPERATING RESULTS OF PRIOR PROGRAMS BY YEAR (UNAUDITED)
PUBLIC PROGRAMS
G REIT, INC.
Years Ended December 31, | ||||||||||||
2005(4) | 2004 | Total | ||||||||||
Gross Revenues | $ | — | $ | — | $ | — | ||||||
Profit on Sale of Properties | 10,682,000 | 980,000 | 11,662,000 | |||||||||
Interest, Dividends & Other Income | 445,000 | 332,000 | 777,000 | |||||||||
Gain on Sale of Marketable Securities | 440,000 | 251,000 | 691,000 | |||||||||
Equity in Earnings (Loss) of Unconsolidated Real Estate | 1,337,000 | (604,000 | ) | 733,000 | ||||||||
Income (Loss) from Discontinued Operations | (4,215,000 | ) | 1,225,000 | (2,990,000 | ) | |||||||
Less: | ||||||||||||
Operating Expenses | — | — | — | |||||||||
General and Administrative Expenses | 4,006,000 | 2,419,000 | 6,425,000 | |||||||||
Interest Expense(1) | 2,054,000 | 1,243,000 | 3,297,000 | |||||||||
Depreciation & Amortization | — | — | — | |||||||||
Minority Interest | — | — | — | |||||||||
Income Taxes | — | 398,000 | 398,000 | |||||||||
Net Income (Loss) — GAAP Basis | $ | 2,629,000 | $ | (1,876,000 | ) | $ | 753,000 | |||||
Taxable Income (Loss) From: | ||||||||||||
Operations | 2,511,000 | 11,273,000 | 13,784,000 | |||||||||
Gain on Sale | 11,963,000 | 251,000 | 12,214,000 | |||||||||
Cash Generated From (Used By): | ||||||||||||
Operating Activities | 19,697,000 | 39,905,000 | 59,602,000 | |||||||||
Investing Activities | 80,432,000 | (563,218,000 | ) | (482,786,000 | ) | |||||||
Financing Activities(2) | (76,789,000 | ) | 552,058,000 | 475,269,000 | ||||||||
Cash Generated From (Used By) Operations, Investing & Financing | 23,340,000 | 28,745,000 | 52,085,000 | |||||||||
Less: Cash Distributions From: | ||||||||||||
Operating Activities — to Investors | 19,023,000 | 26,335,000 | 45,358,000 | |||||||||
Operating Activities — to Minority Interest | 674,000 | 376,000 | 1,050,000 | |||||||||
Investing & Financing Activities | — | — | — | |||||||||
Other (return of capital) | 13,865,000 | — | 13,865,000 | |||||||||
Cash Generated (Deficiency) after Cash Distributions | (10,222,000 | ) | 2,034,000 | (8,188,000 | ) | |||||||
Less: Special Items (not including Sales & Refinancing) | — | — | — | |||||||||
Cash Generated (Deficiency) after Cash Distributions and Special Items | $ | (10,222,000 | ) | $ | 2,034,000 | $ | (8,188,000 | ) | ||||
A-4
Table of Contents
OPERATING RESULTS OF PRIOR PROGRAMS BY YEAR (UNAUDITED) — (Continued)
PUBLIC PROGRAMS
G REIT, INC.
Years Ended December 31, | ||||||||
2005(4) | 2004 | |||||||
Tax and Distribution Data Per $1,000 Invested | ||||||||
Federal Income Tax Results: | ||||||||
Ordinary Income (Loss) | ||||||||
— from operations | $ | 5.72 | $ | 30.19 | ||||
— from recapture | — | — | ||||||
Capital Gain (Loss) | 27.27 | 0.67 | ||||||
Cash Distributions to Investors(3): | ||||||||
Sources (on GAAP basis): | ||||||||
— Operating Activities | 43.37 | 70.54 | ||||||
— Investing & Financing Activities | — | — | ||||||
— Other (Return of Capital) | 31.61 | — | ||||||
Sources (on Cash basis): | ||||||||
— Sales | — | — | ||||||
— Investing & Financing Activities | — | — | ||||||
— Operations | 43.37 | 70.54 | ||||||
— Other (Return of Capital) | $ | 31.61 | $ | — | ||||
(1) Includes amortization of deferred financing costs. | ||||||||
(2) Includes proceeds from issuance of common stock — net of $236,109,000 for the year ended December 31, 2004. | ||||||||
(3) Cash Distributions per $1,000 invested excludes distributions to minority interests. | ||||||||
(4) The program adopted the liquidation basis of accounting as of December 31, 2005 and for all subsequent periods. |
A-5
Table of Contents
OPERATING RESULTS OF PRIOR PROGRAMS BY YEAR (UNAUDITED)
PUBLIC PROGRAMS
NNN 2003 VALUE FUND, LLC
Years Ended December 31, | ||||||||||||||||||||||||
2008 | 2007 | 2006 | 2005 | 2004 | Total | |||||||||||||||||||
Gross Revenues | $ | 3,087,000 | $ | 2,965,000 | $ | 766,000 | $ | 776,000 | $ | 653,000 | $ | 8,247,000 | ||||||||||||
Profit on Sale of Properties | — | 9,702,000 | 7,056,000 | 5,802,000 | — | 22,560,000 | ||||||||||||||||||
Interest, Dividends & Other Income | (697,000 | )(1) | 545,000 | 523,000 | 416,000 | 86,000 | 873,000 | |||||||||||||||||
(Loss) Gain on Sale of Marketable Securities | (808,000 | ) | 12,000 | 134,000 | 344,000 | — | (318,000 | ) | ||||||||||||||||
Equity in Earnings (Loss) of Unconsolidated Real Estate | (1,031,000 | ) | (1,421,000 | ) | (1,139,000 | ) | 2,510,000 | (682,000 | ) | (1,763,000 | ) | |||||||||||||
Income (Loss) from Discontinued Operations | (16,163,000 | ) | (4,164,000 | ) | (4,431,000 | ) | 253,000 | (145,000 | ) | (24,650,000 | ) | |||||||||||||
Less: | ||||||||||||||||||||||||
Operating Expenses | 8,458,000 | (2) | 1,871,000 | 909,000 | 971,000 | 1,084,000 | 13,293,000 | |||||||||||||||||
General and Administrative Expenses | 788,000 | 1,050,000 | 709,000 | 1,272,000 | 339,000 | 4,158,000 | ||||||||||||||||||
Interest Expense(3) | 2,314,000 | 2,046,000 | 560,000 | 447,000 | 638,000 | 6,005,000 | ||||||||||||||||||
Depreciation & Amortization | 1,956,000 | 1,950,000 | 342,000 | 332,000 | 286,000 | 4,866,000 | ||||||||||||||||||
Minority Interest | (246,000 | ) | (107,000 | ) | 8,000 | 166,000 | (133,000 | ) | (312,000 | ) | ||||||||||||||
Income Taxes | — | — | — | — | — | — | ||||||||||||||||||
Net Income (Loss) — GAAP Basis | $ | (28,882,000 | ) | $ | 829,000 | $ | 381,000 | $ | 6,913,000 | $ | (2,302,000 | ) | $ | (23,061,000 | ) | |||||||||
Taxable Income (Loss) From: | ||||||||||||||||||||||||
Operations | 5,267,000 | (6,336,000 | ) | (1,954,000 | ) | 95,000 | 680,000 | (2,248,000 | ) | |||||||||||||||
(Loss) Gain on Sale | (814,000 | ) | 8,540,000 | 5,952,000 | 3,354,000 | — | 17,032,000 | |||||||||||||||||
Cash Generated From (Used By): | ||||||||||||||||||||||||
Operating Activities | (2,600,000 | ) | (4,018,000 | ) | (4,789,000 | ) | 238,000 | 2,476,000 | (8,693,000 | ) | ||||||||||||||
Investing Activities | 352,000 | (17,530,000 | ) | 15,867,000 | (64,529,000 | ) | (45,158,000 | ) | (110,998,000 | ) | ||||||||||||||
Financing Activities | (1,591,000 | ) | 33,255,000 | (12,015,000 | ) | 70,050,000 | 52,269,000 | 141,968,000 | ||||||||||||||||
Cash Generated From (Used By) Operations, Investing & Financing | (3,839,000 | ) | 11,707,000 | (937,000 | ) | 5,759,000 | 9,587,000 | 22,277,000 | ||||||||||||||||
Less: Cash Distributions From: | ||||||||||||||||||||||||
Operating Activities — to Investors | — | — | — | — | 1,908,000 | 1,908,000 | ||||||||||||||||||
Operating Activities — to Minority Interest | — | — | — | 238,000 | 408,000 | 646,000 | ||||||||||||||||||
Investing & Financing Activities | — | — | — | — | — | — | ||||||||||||||||||
Other (return of capital)(4),(5) | 2,910,000 | 4,143,000 | 9,179,000 | 4,657,000 | — | 20,889,000 | ||||||||||||||||||
Cash Generated (Deficiency) after Cash Distributions | (6,749,000 | ) | 7,564,000 | (10,116,000 | ) | 864,000 | 7,271,000 | (1,166,000 | ) | |||||||||||||||
Less: Special Items (not including Sales & Refinancing) | — | — | — | — | — | — | ||||||||||||||||||
Cash Generated (Deficiency) after Cash Distributions and Special Items | $ | (6,749,000 | ) | $ | 7,564,000 | $ | (10,116,000 | ) | $ | 864,000 | $ | 7,271,000 | $ | (1,166,000 | ) | |||||||||
A-6
Table of Contents
OPERATING RESULTS OF PRIOR PROGRAMS BY YEAR (UNAUDITED) — (Continued)
PUBLIC PROGRAMS
NNN 2003 VALUE FUND, LLC
Years Ended December 31, | ||||||||||||||||||||
2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||||||||
Tax and Distribution Data Per $1,000 Invested | ||||||||||||||||||||
Federal Income Tax Results: | ||||||||||||||||||||
Ordinary Income (Loss) | ||||||||||||||||||||
— from operations | $ | 105.66 | $ | (127.10 | ) | $ | (39.17 | ) | $ | 1.90 | $ | 22.09 | ||||||||
— from recapture | — | — | — | — | — | |||||||||||||||
Capital Gain (Loss) | (16.33 | ) | 171.31 | 119.33 | 67.08 | — | ||||||||||||||
Cash Distributions to Investors(6): | ||||||||||||||||||||
Sources (on GAAP basis): | ||||||||||||||||||||
— Operating Activities | — | — | — | — | 61.97 | |||||||||||||||
— Investing & Financing Activities | — | — | — | — | — | |||||||||||||||
— Other (Return of Capital) | 58.34 | 82.05 | 120.23 | 69.86 | — | |||||||||||||||
Sources (on Cash basis): | ||||||||||||||||||||
— Sales | — | — | — | — | — | |||||||||||||||
— Investing & Financing Activities | — | — | — | — | — | |||||||||||||||
— Operations | — | — | — | — | 61.97 | |||||||||||||||
— Other (Return of Capital) | $ | 58.34 | $ | 82.05 | $ | 120.23 | $ | 69.86 | $ | — |
(1) | Includes $900,000 of investment related impairments. |
(2) | Includes $6,400,000 of real estate related impairments. |
(3) | Includes amortization of deferred financing costs. |
(4) | Includes cash distributions of $2,000, $53,000, $3,182,000 and $1,164,000 to minority interests for the year ended December 31, 2008, 2007, 2006 and 2005, respectively. |
(5) | Pursuant to NNN 2003 Value Fund, LLC’s Operating Agreement, cash proceeds from capital transactions are first treated as a return of capital. |
(6) | Cash Distributions per $1,000 invested excludes distributions to minority interests. |
A-7
Table of Contents
SALES OR DISPOSALS OF PROPERTIES (UNAUDITED)
PUBLIC PROGRAMS
December 31, 2008
Cost of Properties | ||||||||||||||||||||||||||||||||||||||||||||||||
Selling Price, Net of Closing Costs & GAAP Adjustments | Including Closing & Soft Costs | Excess | ||||||||||||||||||||||||||||||||||||||||||||||
Purchase | Total | (Deficiency) | ||||||||||||||||||||||||||||||||||||||||||||||
Cash | Money | Adjustments | Acquisition | of Property | ||||||||||||||||||||||||||||||||||||||||||||
Received | Mortgage | Resulting | Costs, Capital | Operating | ||||||||||||||||||||||||||||||||||||||||||||
Net of | Mortgage | Taken | from | Original | Improvements, | Gain (loss) | Cash Receipts | |||||||||||||||||||||||||||||||||||||||||
Date | Date | Closing | Balance at | Back By | Application | Mortgage | Closing & | on sale of | Over Cash | |||||||||||||||||||||||||||||||||||||||
Property | Acquired | of Sale(1) | Costs(2) | Time of Sale | Program(3) | of GAAP | Total(14) | Financing | Soft Costs(4) | Total | Investment | Expenditures | ||||||||||||||||||||||||||||||||||||
T REIT, Inc. | ||||||||||||||||||||||||||||||||||||||||||||||||
Reno Trademark Building(5) | Sep-01 | Jan-06 | $ | 2,310,000 | $ | 1,778,000 | N/A | N/A | $ | 4,088,000 | $ | 1,080,000 | $ | 1,728,000 | $ | 2,808,000 | $ | 1,280,000 | (13) | N/A | ||||||||||||||||||||||||||||
Oakey Building(6) | Apr-04 | Jan-06 | $ | 917,000 | $ | 863,000 | N/A | N/A | $ | 1,780,000 | $ | 392,000 | $ | 808,000 | $ | 1,200,000 | $ | 580,000 | (13) | N/A | ||||||||||||||||||||||||||||
University Heights | Aug-02 | Jan-06 | $ | 2,765,000 | $ | 4,209,000 | N/A | N/A | $ | 6,974,000 | $ | — | $ | 6,518,000 | $ | 6,518,000 | $ | 456,000 | (13) | N/A | ||||||||||||||||||||||||||||
AmberOaks Corporate Center(7) | Jan-04 | Jun-06 | $ | 12,167,000 | $ | 11,229,000 | N/A | N/A | $ | 23,396,000 | $ | 11,250,000 | $ | 2,260,000 | $ | 13,510,000 | $ | 9,886,000 | (13) | N/A | ||||||||||||||||||||||||||||
Titan Building & Plaza(8) | Apr-02 | Jul-06 | $ | 3,725,000 | $ | 2,862,000 | N/A | N/A | $ | 6,587,000 | $ | 2,910,000 | $ | 1,279,000 | $ | 4,189,000 | $ | 2,398,000 | (13) | N/A | ||||||||||||||||||||||||||||
Enclave Parkway | Dec-03 | Jun-07 | $ | 725,000 | $ | 743,000 | N/A | N/A | $ | 1,468,000 | $ | 779,000 | $ | 302,000 | $ | 1,081,000 | $ | 387,000 | (13) | N/A | ||||||||||||||||||||||||||||
G REIT, Inc. | ||||||||||||||||||||||||||||||||||||||||||||||||
600 B Street (Comerica)(9) | Jun-04 | Jul-06 | $ | 91,730,000 | $ | — | N/A | N/A | $ | 91,730,000 | $ | 56,057,000 | $ | 11,638,000 | $ | 67,695,000 | $ | 24,035,000 | (13) | N/A | ||||||||||||||||||||||||||||
Hawthorne Plaza | Apr-04 | Sep-06 | $ | 68,261,000 | $ | 51,719,000 | N/A | N/A | $ | 119,980,000 | $ | 62,750,000 | $ | 27,274,000 | $ | 90,024,000 | $ | 29,956,000 | (13) | N/A | ||||||||||||||||||||||||||||
AmberOaks Corporate Center | Jan-04 | Sep-06 | $ | 27,584,000 | $ | 18,050,000 | N/A | N/A | $ | 45,634,000 | $ | 14,250,000 | $ | 20,455,000 | $ | 34,705,000 | $ | 10,929,000 | (13) | N/A | ||||||||||||||||||||||||||||
Brunswig Square | Apr-04 | Oct-06 | $ | 9,639,000 | $ | 15,543,000 | N/A | N/A | $ | 25,182,000 | $ | 15,830,000 | $ | 7,327,000 | $ | 23,157,000 | $ | 2,025,000 | (13) | N/A | ||||||||||||||||||||||||||||
Centerpoint Corporate Park | Dec-03 | Oct-06 | $ | 33,707,000 | $ | 40,000,000 | N/A | N/A | $ | 73,707,000 | $ | 25,029,000 | $ | 28,139,000 | $ | 53,168,000 | $ | 20,539,000 | (13) | N/A | ||||||||||||||||||||||||||||
5508 Highway 290 West | Sep-02 | Nov-06 | $ | (862,000 | ) | $ | 9,588,000 | N/A | N/A | $ | 8,726,000 | $ | 6,700,000 | $ | 2,026,000 | $ | 8,726,000 | $ | — | (13) | N/A | |||||||||||||||||||||||||||
Department of Children and Families Campus | Apr-03 | Nov-06 | $ | 2,898,000 | $ | 8,881,000 | N/A | N/A | $ | 11,779,000 | $ | 7,605,000 | $ | 3,004,000 | $ | 10,609,000 | $ | 1,170,000 | (13) | N/A | ||||||||||||||||||||||||||||
Public Ledger Building | Feb-04 | Nov-06 | $ | 13,933,000 | $ | 24,520,000 | N/A | N/A | $ | 38,453,000 | $ | 25,000,000 | $ | 12,171,000 | $ | 37,171,000 | $ | 1,282,000 | (13) | N/A | ||||||||||||||||||||||||||||
Atrium Building | Jan-03 | Dec-06 | $ | (219,000 | ) | $ | 3,448,000 | N/A | N/A | $ | 3,229,000 | $ | 2,200,000 | $ | 2,171,000 | $ | 4,371,000 | $ | (1,142,000 | )(13) | N/A | |||||||||||||||||||||||||||
Gemini Plaza | May-03 | Dec-06 | $ | 5,633,000 | $ | 10,089,000 | N/A | N/A | $ | 15,722,000 | $ | 9,815,000 | $ | 3,178,000 | $ | 12,993,000 | $ | 2,729,000 | (13) | N/A | ||||||||||||||||||||||||||||
Two Corporate Plaza | Nov-02 | Jan-07 | $ | 7,127,000 | $ | 9,633,000 | N/A | N/A | $ | 16,760,000 | $ | 10,160,000 | $ | 3,051,000 | $ | 13,211,000 | $ | 3,549,000 | (13) | N/A | ||||||||||||||||||||||||||||
One World Trade Center | Dec-03 | Mar-07 | $ | 54,165,000 | $ | 90,000,000 | N/A | N/A | $ | 144,165,000 | $ | 77,000,000 | $ | 33,144,000 | $ | 110,144,000 | $ | 34,021,000 | (13) | N/A | ||||||||||||||||||||||||||||
One Financial Plaza | Aug-04 | Mar-07 | $ | 11,487,000 | $ | 23,870,000 | N/A | N/A | $ | 35,357,000 | $ | 23,870,000 | $ | 8,657,000 | $ | 32,527,000 | $ | 2,830,000 | (13) | N/A | ||||||||||||||||||||||||||||
824 Market Street | Oct-03 | Jun-07 | $ | 16,636,000 | $ | 18,230,000 | N/A | N/A | $ | 34,866,000 | $ | — | $ | 35,813,000 | $ | 35,813,000 | $ | (947,000 | )(13) | N/A | ||||||||||||||||||||||||||||
North Belt Corporate Center | Apr-04 | Jun-07 | $ | 6,952,000 | $ | 9,731,000 | N/A | N/A | $ | 16,683,000 | $ | — | $ | 14,208,000 | $ | 14,208,000 | $ | 2,475,000 | (13) | N/A | ||||||||||||||||||||||||||||
Opus Plaza at Ken Caryl | Sep-05 | Jul-07 | $ | 3,207,000 | $ | 6,700,000 | N/A | N/A | $ | 9,907,000 | $ | 6,700,000 | $ | 3,612,000 | $ | 10,312,000 | $ | (405,000 | )(13) | N/A | ||||||||||||||||||||||||||||
Madrona Buildings | Mar-04 | Aug-07 | $ | 15,034,000 | $ | 32,901,000 | N/A | N/A | $ | 47,935,000 | $ | 28,458,000 | $ | 16,907,000 | $ | 45,365,000 | $ | 2,570,000 | (13) | N/A | ||||||||||||||||||||||||||||
Eaton Freeway Industrial Park | Oct-05 | Sep-07 | $ | 2,326,000 | $ | 5,000,000 | N/A | N/A | $ | 7,326,000 | $ | 5,000,000 | $ | 2,885,000 | $ | 7,885,000 | $ | (559,000 | )(13) | N/A | ||||||||||||||||||||||||||||
North Pointe Corporate Center(10) | Aug-03 | Sep-07 | $ | 23,007,000 | $ | — | N/A | N/A | $ | 23,007,000 | $ | 15,600,000 | $ | 8,213,000 | $ | 23,813,000 | $ | (806,000 | )(13) | N/A | ||||||||||||||||||||||||||||
Bay View Plaza | Jul-03 | Nov-07 | $ | 3,828,000 | $ | 5,577,000 | N/A | N/A | $ | 9,405,000 | $ | — | $ | 11,602,000 | $ | 11,602,000 | $ | (2,197,000 | )(13) | N/A | ||||||||||||||||||||||||||||
Pax River Office Park | Aug-04 | Mar-08 | $ | 13,984,000 | $ | — | N/A | N/A | $ | 13,984,000 | $ | — | $ | 13,934,000 | $ | 13,934,000 | $ | 50,000 | (13) | N/A | ||||||||||||||||||||||||||||
NNN 2003 Value Fund, LLC | ||||||||||||||||||||||||||||||||||||||||||||||||
Oakey Building(11) | Apr-04 | Jan-06 | $ | 7,052,000 | $ | 6,639,000 | N/A | N/A | $ | 13,691,000 | $ | 3,016,000 | $ | 5,132,000 | $ | 8,148,000 | $ | 5,543,000 | N/A | |||||||||||||||||||||||||||||
3500 Maple(12) | Dec-05 | Oct-06 | $ | 21,726,000 | $ | 46,530,000 | N/A | N/A | $ | 68,256,000 | $ | 57,737,000 | $ | 9,346,000 | $ | 67,083,000 | $ | 1,173,000 | N/A | |||||||||||||||||||||||||||||
Interwood | Jan-05 | Mar-07 | $ | 4,900,000 | $ | 5,500,000 | N/A | N/A | $ | 10,400,000 | $ | 5,500,000 | $ | 2,223,000 | $ | 7,723,000 | $ | 2,677,000 | N/A | |||||||||||||||||||||||||||||
Daniels Road land parcel | Oct-05 | Mar-07 | $ | 1,193,000 | $ | — | N/A | N/A | $ | 1,193,000 | $ | — | $ | 736,000 | $ | 736,000 | $ | 457,000 | N/A | |||||||||||||||||||||||||||||
Woodside Corporate Park | Sep-05 | Dec-07 | $ | 11,257,000 | $ | 16,754,000 | N/A | N/A | $ | 28,011,000 | $ | 15,915,000 | $ | 5,528,000 | $ | 21,443,000 | $ | 6,568,000 | N/A |
(1) | No sales were to affiliated parties. |
(2) | Net cash received plus assumption of certain liabilities by buyer. |
A-8
Table of Contents
SALES OR DISPOSALS OF PROPERTIES (UNAUDITED) — (Continued)
PUBLIC PROGRAMS
December 31, 2008
(3) | The amounts shown are the face amounts and do not represent discounted current value. |
(4) | Does not include pro-rata share of original offering costs. Amount shown is net of depreciation for consolidated properties and net of previous distributions received for unconsolidated properties. |
(5) | Represents results only for T REIT’s 40.0% tenant in common interest. |
(6) | Represents results only for T REIT’s 9.8% interest. |
(7) | Represents results only for T REIT’s 75.0% tenant in common interest. |
(8) | Represents results only for T REIT’s 48.5% tenant in common interest. |
(9) | The mortgage associated with 600 B Street (Comerica) was paid off in connection with a prior property sale. |
(10) | The debt associated with North Pointe Corporate Center was paid off in connection with a prior property sale. |
(11) | Represents results only for NNN 2003 Value Fund, LLC’s 75.4% interest. |
(12) | Date of sale represents the date of sale of NNN 2003 Value Fund, LLC’s last remaining interest in the property. Represents results only for NNN 2003 Value Fund, LLC’s 99.0% interest. |
(13) | Represents the book value gain (loss). Under liquidation accounting, adopted as of June 30, 2005 for T REIT, Inc. and December 31, 2005 for G REIT, Inc., an investment is carried at its estimated fair value less costs to sell. |
A-9
Table of Contents
SALES OR DISPOSALS OF PROPERTIES (UNAUDITED) — (Continued)
PUBLIC PROGRAMS
December 31, 2008
(14) | The allocation of the taxable gain between ordinary and capital is as follows: |
Ordinary | ||||||||||||
Capital Gain/(Loss) | Income/(Loss) | Total | ||||||||||
T REIT, Inc. | ||||||||||||
Reno Trademark Building | $ | 1,425,000 | $ | — | $ | 1,425,000 | ||||||
Oakey Building | $ | 365,000 | $ | — | $ | 365,000 | ||||||
University Heights | $ | 1,470,000 | $ | — | $ | 1,470,000 | ||||||
AmberOaks Corporate Center | $ | 9,974,000 | $ | — | $ | 9,974,000 | ||||||
Titan Building & Plaza | $ | 3,314,000 | $ | — | $ | 3,314,000 | ||||||
Enclave Parkway | $ | 369,000 | $ | — | $ | 369,000 | ||||||
G REIT, Inc. | ||||||||||||
600 B Street (Comerica) | $ | 24,919,000 | $ | — | $ | 24,919,000 | ||||||
Hawthorne Plaza | $ | 26,026,000 | $ | — | $ | 26,026,000 | ||||||
AmberOaks Corporate Center | $ | 10,259,000 | $ | — | $ | 10,259,000 | ||||||
Brunswig Square | $ | 1,641,000 | $ | — | $ | 1,641,000 | ||||||
Centerpoint Corporate Park | $ | 20,997,000 | $ | — | $ | 20,997,000 | ||||||
5508 Highway West 290 | $ | 1,446,000 | $ | — | $ | 1,446,000 | ||||||
Department of Children and Families Campus | $ | 818,000 | $ | — | $ | 818,000 | ||||||
Public Ledger Building | $ | 4,465,000 | $ | — | $ | 4,465,000 | ||||||
Atrium Building | $ | 665,000 | $ | — | $ | 665,000 | ||||||
Gemini Plaza | $ | 2,125,000 | $ | — | $ | 2,125,000 | ||||||
Two Corporate Plaza | $ | 5,651,000 | $ | — | $ | 5,651,000 | ||||||
One World Trade Center | $ | 36,854,000 | $ | — | $ | 36,854,000 | ||||||
One Financial Plaza | $ | 6,970,000 | $ | — | $ | 6,970,000 | ||||||
824 Market Street | $ | 2,795,000 | $ | — | $ | 2,795,000 | ||||||
North Belt Corporate Center | $ | 2,797,000 | $ | — | $ | 2,797,000 | ||||||
Opus Plaza at Ken Caryl | $ | 6,000 | $ | — | $ | 6,000 | ||||||
Madrona Buildings | $ | 7,307,000 | $ | — | $ | 7,307,000 | ||||||
Eaton Freeway Industrial Park | $ | (210,000 | ) | $ | — | $ | (210,000 | ) | ||||
North Pointe Corporate Center | $ | 952,000 | $ | — | $ | 952,000 | ||||||
Bay View Plaza | $ | (1,345,000 | ) | $ | — | $ | (1,345,000 | ) | ||||
Pax River Office Park | $ | 397,000 | $ | — | $ | 397,000 | ||||||
NNN 2003 Value Fund, LLC | ||||||||||||
Oakey Building | $ | 2,816,000 | $ | — | $ | 2,816,000 | ||||||
3500 Maple | $ | — | $ | 1,440,000 | $ | 1,440,000 | ||||||
Interwood | $ | 1,952,000 | $ | — | $ | 1,952,000 | ||||||
Daniels Road land parcel | $ | 459,000 | $ | — | $ | 459,000 | ||||||
Woodside Corporate Park | $ | 3,824,000 | $ | — | $ | 3,824,000 |
A-10
Table of Contents
EXPERIENCE IN RAISING AND INVESTING IN FUNDS (UNAUDITED)
CONSOLIDATED PRIVATE PROGRAMS
DECEMBER 31, 2008
A-11
Table of Contents
EXPERIENCE IN RAISING AND INVESTING IN FUNDS (UNAUDITED) — (Continued)
CONSOLIDATED PRIVATE PROGRAMS
DECEMBER 31, 2008
NNN | NNN | 3 | 87 | 92 | ||||||||||||||||
Opportunity | Collateralized | Institutional | TIC | Total Private | ||||||||||||||||
Fund VIII, LLC | Senior Notes, LLC | Programs | Programs | Programs | ||||||||||||||||
Dollar Amount Offered | $ | 20,000,000 | $ | 50,000,000 | $ | 193,290,000 | $ | 1,145,122,000 | $ | 1,408,412,000 | ||||||||||
Dollar Amount Raised | $ | 11,806,000 | $ | 16,277,000 | $ | 193,290,000 | $ | 1,144,765,000 | $ | 1,366,138,000 | ||||||||||
Percentage Amount Raised | 59.0 | % | 32.6 | % | 100 | % | 100 | % | 97.0 | % | ||||||||||
Less Offering Expenses: | ||||||||||||||||||||
Selling Commissions | 7.0 | % | 5.8 | % | 0.2 | % | 6.9 | % | 5.9 | % | ||||||||||
Marketing Support & Due Diligence Reimbursement | 3.5 | % | 1.5 | % | 0.2 | % | 3.3 | % | 2.8 | % | ||||||||||
Organization & Offering Expenses(1) | 2.5 | % | 1.0 | % | 0.1 | % | 2.5 | % | 2.1 | % | ||||||||||
Reserves | 8.0 | % | — | % | 1.2 | % | 4.7 | % | 4.2 | % | ||||||||||
Percent Available for Investment | 79.0 | % | 91.7 | % | 98.3 | % | 82.6 | % | 85.0 | % | ||||||||||
Acquisition Cost: | ||||||||||||||||||||
Cash Down Payment | 76.5 | % | 91.7 | % | 98.1 | % | 77.8 | % | 80.8 | % | ||||||||||
Loan Fees(2) | 2.5 | % | — | % | 0.2 | % | 4.8 | % | 4.2 | % | ||||||||||
Acquisition Fees Paid to Affiliates | — | — | % | — | % | — | % | — | % | |||||||||||
Total Acquisition Cost | 79.0 | % | 91.7 | % | 98.3 | % | 82.6 | % | 85.0 | % | ||||||||||
Percent Leveraged | 92.1 | % | n/a | 12.0 | % | 73.0 | % | 69.3 | % | |||||||||||
Date Offering Began | December 13, 2004 | August 1, 2006 | January 29, 2008 | May 22, 2005 to February 28, 2008 | ||||||||||||||||
Date Offering Ended | June 16, 2006 | March 26, 2007 | June 25, 2008 | January 3, 2006 to August 25, 2008 | ||||||||||||||||
Length of Offering (months) | 18 months | 8 months | 1 day | 1 to 18 months | ||||||||||||||||
Months to Invest 90% of Amount Available for Investment (Measured from Beginning of Offering) | n/a | n/a | n/a | 1 to 12 months | ||||||||||||||||
Number of Investors | ||||||||||||||||||||
Note Unit Holders | — | 222 | — | — | 222 | |||||||||||||||
LLC Members | 336 | — | 3 | 1,756 | 2,095 | |||||||||||||||
Tenants In Common (TICs) | — | — | — | 2,395 | 2,395 | |||||||||||||||
Total | 336 | 222 | 3 | 4,151 | 4,712 | |||||||||||||||
(1) | Includes legal, accounting, printing and other offering expenses, including amounts for the reimbursement for marketing, salaries and direct expenses of employees engaged in marketing and other organization expenses. |
(2) | Includes amounts paid to the Grubb & Ellis Group, its affiliates and third parties. |
A-12
Table of Contents
COMPENSATION TO SPONSOR (UNAUDITED)
PRIVATE PROGRAMS
December 31, 2008
Total Private | ||||||||||||||||||||
Programs | ||||||||||||||||||||
91 | 122 | 213 | Less | Excluding | ||||||||||||||||
Private | Other | Private | 14 Affiliated | Affiliated | ||||||||||||||||
Programs | Programs | Programs | Programs | Ownership | ||||||||||||||||
June 24, 2005 to | July 1, 1998 to | |||||||||||||||||||
Date Offering Commenced | June 25, 2008 | September 27, 2008 | ||||||||||||||||||
Dollar Amount Raised | $ | 1,349,861,000 | $ | 1,202,225,000 | $ | 2,552,086,000 | $ | 61,635,000 | $ | 2,490,451,000 | ||||||||||
Amounts Paid to Sponsor from Proceeds of Offering: | ||||||||||||||||||||
Selling Commissions to Selling Group Members | $ | 63,145,000 | $ | 8,449,000 | $ | 71,594,000 | $ | — | $ | 71,594,000 | ||||||||||
Marketing Support & Due Diligence Reimbursement | 33,217,000 | 4,457,000 | 37,674,000 | — | 37,674,000 | |||||||||||||||
Organization & Offering Expenses | 20,148,000 | 1,914,000 | 22,062,000 | — | 22,062,000 | |||||||||||||||
Loan Fees | 11,532,000 | 234,000 | 11,766,000 | — | 11,766,000 | |||||||||||||||
Acquisition Fees | — | — | — | — | — | |||||||||||||||
Prepaid Management Fees(1) | 1,637,000 | 202,000 | 1,839,000 | — | 1,839,000 | |||||||||||||||
Totals | $ | 129,679,000 | $ | 15,256,000 | $ | 144,935,000 | $ | — | $ | 144,935,000 | ||||||||||
Amounts Paid to Sponsor at Acquisition for Real Estate Acquisition Fees | $ | 70,639,000 | $ | 4,551,000 | $ | 75,190,000 | $ | — | $ | 75,190,000 | ||||||||||
Dollar Amount of Cash Generated from Operations Before Deducting Payments to Sponsor | $ | 189,997,000 | $ | 223,052,000 | $ | 413,049,000 | $ | 8,160,000 | $ | 404,889,000 | ||||||||||
Amounts Paid to Sponsor from Operations — Year 2006: | ||||||||||||||||||||
Property Management Fees(2) | $ | 4,208,000 | $ | 13,980,000 | $ | 18,188,000 | $ | 697,000 | $ | 17,491,000 | ||||||||||
Asset Management Fees | — | — | — | — | — | |||||||||||||||
Leasing Commissions(2) | 2,368,000 | 8,447,000 | 10,815,000 | 269,000 | 10,546,000 | |||||||||||||||
Totals | $ | 6,576,000 | $ | 22,427,000 | $ | 29,003,000 | $ | 966,000 | $ | 28,037,000 | ||||||||||
Amounts Paid to Sponsor from Operations — Year 2007: | ||||||||||||||||||||
Property Management Fees(2) | $ | 10,070,000 | $ | 9,113,000 | $ | 19,183,000 | $ | 236,000 | $ | 18,947,000 | ||||||||||
Asset Management Fees | 64,000 | — | 64,000 | — | 64,000 | |||||||||||||||
Leasing Commissions(2) | 3,928,000 | 5,719,000 | 9,647,000 | 67,000 | 9,580,000 | |||||||||||||||
Totals | $ | 14,062,000 | $ | 14,832,000 | $ | 28,894,000 | $ | 303,000 | $ | 28,591,000 | ||||||||||
Amounts Paid to Sponsor from Operations — Year 2008: | ||||||||||||||||||||
Property Management Fees(2) | $ | 10,205,000 | $ | 7,844,000 | $ | 18,049,000 | $ | 5,000 | $ | 18,044,000 | ||||||||||
Asset Management Fees | 126,000 | — | 126,000 | — | 126,000 | |||||||||||||||
Leasing Commissions(2) | 5,617,000 | 10,101,000 | 15,718,000 | 184,000 | 15,534,000 | |||||||||||||||
Totals | $ | 15,948,000 | $ | 17,495,000 | $ | 33,893,000 | $ | 189,000 | $ | 33,704,000 | ||||||||||
Amounts Paid to Sponsor from property sales and refinancings: | ||||||||||||||||||||
Real Estate Commissions | $ | 9,427,000 | $ | 25,268,000 | $ | 34,695,000 | $ | 1,289,000 | $ | 33,406,000 | ||||||||||
Incentive Fees | 22,000 | 3,039,000 | 3,061,000 | 501,000 | 2,560,000 | |||||||||||||||
Construction Management Fees(2) | 410,000 | 1,495,000 | 1,905,000 | 197,000 | 1,708,000 | |||||||||||||||
Refinancing Fees(2) | 361,000 | 447,000 | 808,000 | — | 808,000 | |||||||||||||||
Totals | $ | 10,220,000 | $ | 30,249,000 | $ | 40,469,000 | $ | 1,987,000 | $ | 38,482,000 | ||||||||||
(1) | Prepaid Management Fees are amounts paid to the sponsor as proceeds are raised from the offerings and represent up to the first two years of budgeted property management fees. |
(2) | Includes amounts paid to the sponsor which were then subsequently paid to third parties. |
A-13
Table of Contents
OPERATING RESULTS OF PRIOR PROGRAMS BY YEAR (UNAUDITED)
PRIVATE PROGRAMS
TENANT IN COMMON (TIC) PROGRAMS
2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||||||||
132 | 136 | 104 | 69 | 29 | ||||||||||||||||
TIC Programs | TIC Programs | TIC Programs | TIC Programs | TIC Programs | ||||||||||||||||
Gross Revenues | $ | 454,839,000 | $ | 438,548,000 | $ | 316,191,000 | $ | 170,427,000 | $ | 64,141,000 | ||||||||||
Profit on Sale of Properties | 17,337,000 | 42,985,000 | 24,963,000 | 23,957,000 | — | |||||||||||||||
Less: Operating Expenses | 152,781,000 | 163,711,000 | 111,808,000 | 58,895,000 | 17,909,000 | |||||||||||||||
Owners Expenses | 35,056,000 | 14,792,000 | 8,083,000 | 2,487,000 | 493,000 | |||||||||||||||
Interest Expense | 171,950,000 | 161,609,000 | 117,575,000 | 54,394,000 | 14,353,000 | |||||||||||||||
Depreciation & Amortization(1) | ||||||||||||||||||||
Net Income(1) | $ | 112,389,000 | $ | 141,421,000 | $ | 103,688,000 | $ | 78,608,000 | $ | 31,386,000 | ||||||||||
Taxable Income (Loss)(1): | ||||||||||||||||||||
Cash Generated From: | ||||||||||||||||||||
Operations | $ | 95,052,000 | $ | 105,617,000 | $ | 79,221,000 | $ | 55,263,000 | $ | 31,386,000 | ||||||||||
Sales | 70,973,000 | 142,430,000 | 70,766,000 | 87,035,000 | — | |||||||||||||||
Refinancing | — | 4,025,000 | 2,929,000 | 2,108,000 | — | |||||||||||||||
Cash Generated From Operations, Sales & Refinancing | ||||||||||||||||||||
Before Additional Cash Adjustments | 166,025,000 | 252,072,000 | 152,916,000 | 144,406,000 | 31,386,000 | |||||||||||||||
Additional Cash Adjustments | — | — | — | — | — | |||||||||||||||
Less: Monthly Mortgage Principal Repayments | 5,288,000 | 5,489,000 | 4,481,000 | 4,989,000 | 2,515,000 | |||||||||||||||
Cash Generated From Operations, Sales & Refinancing | 160,737,000 | 246,583,000 | 148,435,000 | 139,417,000 | 28,871,000 | |||||||||||||||
Less: Cash Distributions to Investors From: | ||||||||||||||||||||
Operating Cash Flow | 76,224,000 | 87,245,000 | 63,627,000 | 38,167,000 | 14,367,000 | |||||||||||||||
Sales & Refinancing | 69,315,000 | 144,023,000 | 72,029,000 | 84,795,000 | — | |||||||||||||||
Other (return of capital)(2) | 20,643,000 | 7,040,000 | 3,833,000 | 325,000 | — | |||||||||||||||
Cash Generated (Deficiency) after Cash Distributions | (5,445,000 | ) | 8,275,000 | 8,946,000 | 16,130,000 | 14,504,000 | ||||||||||||||
Less: Special Items (not including Sales & Refinancing) | — | — | — | — | — | |||||||||||||||
Cash Generated (Deficiency) after Cash Distributions and Special Items | $ | (5,445,000 | ) | $ | 8,275,000 | $ | 8,946,000 | $ | 16,130,000 | $ | 14,504,000 | |||||||||
Tax and Distribution Data Per $1,000 Invested(3) | ||||||||||||||||||||
Federal Income Tax Results(1): | ||||||||||||||||||||
Cash Distributions to Investors: | ||||||||||||||||||||
Sources (on Tax basis): | ||||||||||||||||||||
— Investment Income | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
— Return of Capital | 12.62 | 4.18 | 2.94 | 0.37 | — | |||||||||||||||
Sources (on Cash basis): | ||||||||||||||||||||
— Sales and Refinancing | 42.39 | 85.44 | 55.19 | 96.74 | — | |||||||||||||||
— Operations | $ | 46.61 | $ | 51.76 | $ | 48.75 | $ | 43.54 | $ | 37.40 |
(1) | For the TIC programs, individual investors are involved in a tax deferred exchange. Each TIC has an individual tax basis for depreciation and amortization and is responsible for their own calculations of depreciation and amortization. |
(2) | Amounts may be the result of several reasons, including but not limited to the following: utilization of equity funded reserves for designated repairs in apartment programs; utilization of equity funded reserves for payment of mezzanine interest; acceleration of payments for interest expense and property taxes for income tax purposes; unbilled common area maintenance, or CAM, and rents at the year end; unanticipated expenses due to hurricane damage at two properties. |
(3) | Based on the total offering raised at the close of the program. |
A-14
Table of Contents
OPERATING RESULTS OF PRIOR PROGRAMS BY YEAR (UNAUDITED)
PRIVATE PROGRAMS
AFFILIATED OWNERSHIP IN TENANT IN COMMON (TIC) PROGRAMS
2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||||||||
1 Affiliated | 2 Affiliated | 8 Affiliated | 8 Affiliated | 8 Affiliated | ||||||||||||||||
Program | Programs | Programs | Programs | Programs | ||||||||||||||||
Gross Revenues | $ | 603,000 | $ | 748,000 | $ | 2,303,000 | $ | 6,850,000 | $ | 7,649,000 | ||||||||||
Profit on Sale of Properties | — | 271,000 | 7,151,000 | 2,595,000 | — | |||||||||||||||
Less: Operating Expenses | 349,000 | 399,000 | 1,264,000 | 3,245,000 | 1,910,000 | |||||||||||||||
Owners Expenses | 27,000 | 17,000 | 102,000 | 92,000 | 23,000 | |||||||||||||||
Interest Expense | 190,000 | 224,000 | 854,000 | 1,604,000 | 1,334,000 | |||||||||||||||
Depreciation & Amortization(1) | ||||||||||||||||||||
Net Income(1) | $ | 37,000 | $ | 379,000 | $ | 7,234,000 | $ | 4,504,000 | $ | 4,382,000 | ||||||||||
Taxable Income (Loss)(1): | ||||||||||||||||||||
Cash Generated From: | ||||||||||||||||||||
Operations | $ | 37,000 | $ | 144,000 | $ | 506,000 | $ | 1,936,000 | $ | 4,382,000 | ||||||||||
Sales | — | 724,000 | 20,676,000 | 10,028,000 | — | |||||||||||||||
Refinancing | — | — | — | (10,000 | ) | — | ||||||||||||||
Cash Generated From Operations, Sales & Refinancing | ||||||||||||||||||||
Before Additional Cash Adjustments | 37,000 | 868,000 | 21,182,000 | 11,954,000 | 4,382,000 | |||||||||||||||
Additional Cash Adjustments | — | — | — | — | — | |||||||||||||||
Less: Monthly Mortgage Principal Repayments | 62,000 | 62,000 | 86,000 | 61,000 | 37,000 | |||||||||||||||
Cash Generated From Operations, Sales & Refinancing | (25,000 | ) | 806,000 | 21,096,000 | 11,893,000 | 4,345,000 | ||||||||||||||
Less: Cash Distributions to Investors From: | ||||||||||||||||||||
Operating Cash Flow | — | 155,000 | 510,000 | 1,732,000 | 1,523,000 | |||||||||||||||
Sales & Refinancing | — | 723,000 | 21,727,000 | 9,826,000 | — | |||||||||||||||
Other (return of capital) | — | — | — | — | — | |||||||||||||||
Cash Generated (Deficiency) after Cash Distributions | (25,000 | ) | (72,000 | ) | (1,141,000 | ) | 335,000 | 2,822,000 | ||||||||||||
Less: Special Items (not including Sales & Refinancing) | — | — | — | — | — | |||||||||||||||
Cash Generated (Deficiency) after Cash Distributions and Special Items | $ | (25,000 | ) | $ | (72,000 | ) | $ | (1,141,000 | ) | $ | 335,000 | $ | 2,822,000 | |||||||
Tax and Distribution Data Per $1,000 Invested(2) | ||||||||||||||||||||
Federal Income Tax Results(1): | ||||||||||||||||||||
Cash Distributions to Investors: | ||||||||||||||||||||
Sources (on Tax basis): | ||||||||||||||||||||
— Investment Income | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
— Return of Capital | — | — | — | — | — | |||||||||||||||
Sources (on Cash basis): | ||||||||||||||||||||
— Sales and Refinancings | — | 224.01 | 776.17 | 351.02 | — | |||||||||||||||
— Operations | $ | — | $ | 47.96 | $ | 18.22 | $ | 61.87 | $ | 54.41 |
(1) | For the TIC programs, individual investors are involved in a tax deferred exchange. Each TIC has an individual tax basis for depreciation and amortization and is responsible for their own calculations of depreciation and amortization. |
(2) | Based on the total offering raised at the close of the program. |
A-15
Table of Contents
OPERATING RESULTS OF PRIOR PROGRAMS BY YEAR (UNAUDITED)
PRIVATE PROGRAMS
TENANT IN COMMON (TIC) PROGRAMS EXCLUDING AFFILIATED OWNERSHIP
2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||||||||
132 | 136 | 104 | 69 | 29 | ||||||||||||||||
TIC Programs | TIC Programs | TIC Programs | TIC Programs | TIC Programs | ||||||||||||||||
Gross Revenues | $ | 454,236,000 | $ | 437,800,000 | $ | 313,888,000 | $ | 163,577,000 | $ | 56,492,000 | ||||||||||
Profit on Sale of Properties | 17,337,000 | 42,714,000 | 17,812,000 | 21,362,000 | — | |||||||||||||||
Less: Operating Expenses | 152,432,000 | 163,312,000 | 110,544,000 | 55,650,000 | 15,999,000 | |||||||||||||||
Owners Expenses | 35,029,000 | 14,775,000 | 7,981,000 | 2,395,000 | 470,000 | |||||||||||||||
Interest Expense | 171,760,000 | 161,385,000 | 116,721,000 | 52,790,000 | 13,019,000 | |||||||||||||||
Depreciation & Amortization(1) | ||||||||||||||||||||
Net Income(1) | $ | 112,352,000 | $ | 141,042,000 | $ | 96,454,000 | $ | 74,104,000 | $ | 27,004,000 | ||||||||||
Taxable Income (Loss)(1): | ||||||||||||||||||||
Cash Generated From: | ||||||||||||||||||||
Operations | $ | 95,015,000 | $ | 105,473,000 | $ | 78,715,000 | $ | 53,327,000 | $ | 27,004,000 | ||||||||||
Sales | 70,973,000 | 141,706,000 | 50,090,000 | 77,007,000 | — | |||||||||||||||
Refinancing | — | 4,025,000 | 2,929,000 | 2,118,000 | — | |||||||||||||||
Cash Generated From Operations, Sales & Refinancing | ||||||||||||||||||||
Before Additional Cash Adjustments | 165,988,000 | 251,204,000 | 131,734,000 | 132,452,000 | 27,004,000 | |||||||||||||||
Additional Cash Adjustments | — | — | — | — | — | |||||||||||||||
Less: Monthly Mortgage Principal Repayments | 5,226,000 | 5,427,000 | 4,395,000 | 4,928,000 | 2,478,000 | |||||||||||||||
Cash Generated From Operations, Sales & Refinancing | 160,762,000 | 245,777,000 | 127,339,000 | 127,524,000 | 24,526,000 | |||||||||||||||
Less: Cash Distributions to Investors From: | ||||||||||||||||||||
Operating Cash Flow | 76,224,000 | 87,090,000 | 63,117,000 | 36,435,000 | 12,844,000 | |||||||||||||||
Sales & Refinancing | 69,315,000 | 143,300,000 | 50,302,000 | 74,969,000 | — | |||||||||||||||
Other (return of capital)(2) | 20,643,000 | 7,040,000 | 3,833,000 | 325,000 | — | |||||||||||||||
Cash Generated (Deficiency) after Cash Distributions | (5,420,000 | ) | 8,347,000 | 10,087,000 | 15,795,000 | 11,682,000 | ||||||||||||||
Less: Special Items (not including Sales & Refinancing) | — | — | — | — | — | |||||||||||||||
Cash Generated (Deficiency) after Cash Distributions and Special Items | $ | (5,420,000 | ) | $ | 8,347,000 | $ | 10,087,000 | $ | 15,795,000 | $ | 11,682,000 | |||||||||
Tax and Distribution Data Per $1,000 Invested(3) | ||||||||||||||||||||
Federal Income Tax Results(1): | ||||||||||||||||||||
Cash Distributions to Investors: | ||||||||||||||||||||
Sources (on Tax basis): | ||||||||||||||||||||
— Investment Income | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
— Return of Capital | 12.64 | 4.18 | 3.00 | 0.38 | — | |||||||||||||||
Sources (on Cash basis): | ||||||||||||||||||||
— Sales and Refinancings | 42.46 | 85.17 | 39.39 | 88.35 | — | |||||||||||||||
— Operations | $ | 46.69 | $ | 51.76 | $ | 49.42 | $ | 42.94 | $ | 36.06 |
(1) | For the TIC programs, individual investors are involved in a tax deferred exchange. Each TIC has an individual tax basis for depreciation and amortization and is responsible for their own calculations of depreciation and amortization. |
(2) | Amounts may be the result of several reasons, including but not limited to the following: utilization of equity funded reserves for designated repairs in apartment programs; utilization of equity funded reserves for payment of mezzanine interest; acceleration of payments for interest expense and property taxes for income tax purposes; unbilled CAM and rents at the year end; unanticipated expenses due to hurricane damage at two properties. |
(3) | Based on the total offering raised at the close of the program. |
A-16
Table of Contents
OPERATING RESULTS OF PRIOR PROGRAMS BY YEAR (UNAUDITED)
PRIVATE PROGRAMS
MULTIPLE PROPERTY INVESTMENT FUNDS
NNN Opportunity | NNN Opportunity | NNN Opportunity | NNN Opportunity | |||||||||||||
Fund VIII, LLC | Fund VIII, LLC | Fund VIII, LLC | Fund VIII, LLC | |||||||||||||
2008 | 2007 | 2006 | 2005 | |||||||||||||
Gross Revenues | $ | 5,809,000 | $ | 5,229,000 | $ | 2,514,000 | $ | 5,000 | ||||||||
Profit on Sale of Properties | — | — | 848,000 | — | ||||||||||||
Less: Operating Expenses | 3,462,000 | 2,482,000 | 880,000 | — | ||||||||||||
Owners Expenses | 25,000 | 133,000 | 77,000 | 1,000 | ||||||||||||
Interest Expense | 2,715,000 | 3,338,000 | 1,577,000 | — | ||||||||||||
Depreciation & Amortization | 1,820,000 | 1,318,000 | 606,000 | — | ||||||||||||
Net Income — Tax Basis | $ | (2,213,000 | ) | $ | (2,042,000 | ) | $ | 222,000 | $ | 4,000 | ||||||
Taxable Income (Loss) From: | ||||||||||||||||
Operations | $ | (2,213,000 | ) | $ | (2,042,000 | ) | $ | (626,000 | ) | $ | 4,000 | |||||
Gain on Sale | — | — | 848,000 | — | ||||||||||||
Cash Generated From: | ||||||||||||||||
Operations | (393,000 | ) | (724,000 | ) | (20,000 | ) | 4,000 | |||||||||
Sales | — | — | 1,614,000 | — | ||||||||||||
Refinancing | — | — | — | — | ||||||||||||
Cash Generated From Operations, Sales & Refinancing | ||||||||||||||||
Before Additional Cash Adjustments | (393,000 | ) | (724,000 | ) | 1,594,000 | 4,000 | ||||||||||
Additional Cash Adjustments | — | — | — | — | ||||||||||||
Less: Monthly Mortgage Principal Repayments | — | — | — | — | ||||||||||||
Cash Generated From Operations, Sales & Refinancing | (393,000 | ) | (724,000 | ) | 1,594,000 | 4,000 | ||||||||||
Less: Cash Distributions to Investors From: | ||||||||||||||||
Operating Cash Flow | — | — | — | — | ||||||||||||
Sales & Refinancing | — | 525,000 | 346,000 | — | ||||||||||||
Other (return of capital)(1) | 246,000 | 65,000 | — | — | ||||||||||||
Cash Generated (Deficiency) after Cash Distributions | (639,000 | ) | (1,314,000 | ) | 1,248,000 | 4,000 | ||||||||||
Less: Special Items (not including Sales & Refinancing) | — | — | — | — | ||||||||||||
Cash Generated (Deficiency) after Cash Distributions and Special Items | $ | (639,000 | ) | $ | (1,314,000 | ) | $ | 1,248,000 | $ | 4,000 | ||||||
Tax and Distribution Data Per $1,000 Invested(2) | ||||||||||||||||
Federal Income Tax Results: | ||||||||||||||||
Ordinary Income (Loss) | ||||||||||||||||
— from operations | $ | (187.45 | ) | $ | (172.96 | ) | $ | (53.02 | ) | $ | 0.34 | |||||
— from recapture | — | — | — | — | ||||||||||||
Capital Gain (Loss) | — | — | 71.83 | — | ||||||||||||
Cash Distributions to Investors: | ||||||||||||||||
Sources (on Tax basis): | ||||||||||||||||
— Investment Income | — | — | — | — | ||||||||||||
— Return of Capital | 20.84 | 5.51 | — | — | ||||||||||||
Sources (on Cash basis): | ||||||||||||||||
— Sales | — | 44.47 | 29.31 | — | ||||||||||||
— Refinancing | — | — | — | — | ||||||||||||
— Operations | $ | — | $ | — | $ | — | $ | — |
(1) | Amounts may be the result of several reasons, including but not limited to the following: utilization of equity funded reserves for designated repairs in apartment programs; utilization of equity funded reserves for payment of mezzanine interest; acceleration of payments for interest expense and property taxes for income tax purposes; unbilled CAM and rents at the year end; unanticipated expenses due to hurricane damage at two properties. |
(2) | Based on the total offering raised at the close of the program. |
A-17
Table of Contents
OPERATING RESULTS OF PRIOR PROGRAMS BY YEAR (UNAUDITED)
PRIVATE PROGRAMS
NOTES PROGRAMS
NNN Collateralized | NNN Collateralized | NNN Collateralized | ||||||||||
Senior Notes, LLC | Senior Notes, LLC | Senior Notes, LLC | ||||||||||
2008 | 2007 | 2006 | ||||||||||
Gross Revenues | $ | 1,144,000 | (1) | $ | 676,000 | (1) | $ | 15,000 | (1) | |||
Profit on Sale of Properties | — | — | ||||||||||
Less: Operating Expenses | — | — | — | |||||||||
Owners Expenses | 4,000 | 2,000 | — | |||||||||
Interest Expense | 1,424,000 | (2) | 1,404,000 | (2) | 100,000 | (2) | ||||||
Depreciation & Amortization | 290,000 | 288,000 | 31,000 | |||||||||
Net Income — Tax Basis | $ | (574,000 | ) | $ | (1,018,000 | ) | $ | (116,000 | ) | |||
Taxable Income (Loss) From: | ||||||||||||
Operations | $ | (574,000 | ) | $ | (1,018,000 | ) | $ | (116,000 | ) | |||
Gain on Sale | — | — | ||||||||||
Cash Generated From: | — | — | ||||||||||
Operations | (284,000 | ) | (730,000 | ) | (85,000 | ) | ||||||
Sales | — | — | — | |||||||||
Refinancing | — | — | — | |||||||||
Cash Generated From Operations, Sales & Refinancing | (284,000 | ) | (730,000 | ) | (85,000 | ) | ||||||
Less: Cash Distributions to Investors From: | ||||||||||||
Operating Cash Flow | — | — | — | |||||||||
Sales & Refinancing | — | — | — | |||||||||
Other (return of capital) | — | — | — | |||||||||
Cash Generated (Deficiency) after Cash Distributions | (284,000 | ) | (730,000 | ) | (85,000 | ) | ||||||
Less: Special Items (not including Sales & Refinancing) | — | — | — | |||||||||
Cash Generated (Deficiency) after Cash Distributions and Special Items | $ | (284,000 | ) | $ | (730,000 | ) | $ | (85,000 | ) | |||
Tax and Distribution Data Per $1,000 Invested(3) | ||||||||||||
Cash Distributions to Investors: | ||||||||||||
Sources (on Tax basis): | ||||||||||||
— Investment Income | $ | 8.75 | $ | 8.75 | $ | 8.75 | ||||||
— Return of Capital | — | — | — | |||||||||
Sources (on Cash basis): | ||||||||||||
— Sales and Refinancing | — | — | — | |||||||||
— Operations | $ | — | $ | — | $ | — |
(1) | Gross Revenue represents interest income from loans made to other affiliated programs of Grubb & Ellis Realty Investors. |
(2) | Cash distributions to the note unit holders are included in Interest Expense above. |
(3) | Based on the total offering raised at the close of the program. |
A-18
Table of Contents
OPERATING RESULTS OF PRIOR PROGRAMS BY YEAR (UNAUDITED)
PRIVATE PROGRAMS
INSTITUTIONAL PROGRAMS
2008 | ||||
3 | ||||
Institutional Programs | ||||
Gross Revenues | $ | 13,314,000 | ||
Profit on Sale of Properties | — | |||
Less: Operating Expenses | 2,706,000 | |||
Owners Expenses | 227,000 | |||
Interest Expense | 380,000 | |||
Depreciation & Amortization | — | |||
Net Income — Tax Basis | $ | 10,001,000 | ||
Taxable Income From: | ||||
Operations | $ | 10,001,000 | ||
Gain on Sale | — | |||
Cash Generated From: | ||||
Operations | 10,001,000 | |||
Sales | — | |||
Refinancing | — | |||
Cash Generated From Operations, Sales & Refinancing | ||||
Before Additional Cash Adjustments | 10,001,000 | |||
Additional Cash Adjustments | ||||
Less: Monthly Mortgage Principal Repayments | — | |||
Cash Generated From Operations, Sales & Refinancing | 10,001,000 | |||
Less: Cash Distributions to Investors From: | ||||
Operating Cash Flow | 8,018,000 | |||
Sales & Refinancing | — | |||
Other (return of capital) | — | |||
Cash Generated (Deficiency) after Cash Distributions | 1,983,000 | |||
Less: Special Items (not including Sales & Refinancing) | — | |||
Cash Generated (Deficiency) after Cash Distributions and Special Items | $ | 1,983,000 | ||
Tax and Distribution Data Per $1,000 Invested(1) | ||||
Federal Income Tax Results: | ||||
Ordinary Income (Loss) | ||||
— from operations | $ | 51.74 | ||
— from recapture | — | |||
Capital Gain (Loss) | — | |||
Cash Distributions to Investors: | ||||
Sources (on Tax basis): | ||||
— Investment Income | — | |||
— Return of Capital | — | |||
Sources (on Cash basis): | ||||
— Sales | — | |||
— Refinancing | — | |||
— Operations | $ | 41.48 |
(1) | Based on total offering raised at the close of the program. |
A-19
Table of Contents
RESULTS OF COMPLETED PROGRAMS (UNAUDITED)
PRIVATE PROGRAMS
DECEMBER 31, 2008
NNN | NNN | NNN | ||||||||||||||||||||||||||||||
NNN | Town | NNN | NNN | Yerington | Tech | NNN | County | |||||||||||||||||||||||||
Fund | & | Bryant | Saddleback | Shopping | Fund | Alamosa | Center | |||||||||||||||||||||||||
VIII, | Country, | Ranch, | Financial, | Center, | III, | Plaza, | Drive, | |||||||||||||||||||||||||
LLC | LLC | LLC | LLC | LLC | LLC | LLC | LLC | |||||||||||||||||||||||||
Dollar Amount Raised | $ | 8,000,000 | $ | 7,200,000 | $ | 5,000,000 | $ | 3,866,000 | $ | 1,625,000 | $ | 3,699,000 | $ | 6,650,000 | $ | 3,094,000 | ||||||||||||||||
Number of Properties Purchased | 3 | 1 | 1 | 1 | 1 | 3 | 1 | 1 | ||||||||||||||||||||||||
Date of Closing of Offering | 7-Mar-00 | 29-Mar-00 | 12-Nov-02 | 29-Oct-02 | 3-Aug-99 | 20-Jun-00 | 25-Oct-02 | 6-Feb-02 | ||||||||||||||||||||||||
Date of First Sale of Property | 26-Mar-02 | 25-Jun-04 | 2-Nov-04 | 27-Dec-04 | 17-Jan-05 | 3-Jul-01 | 24-Mar-05 | 14-Apr-05 | ||||||||||||||||||||||||
Date of Final Sale of Property | 6-Jan-04 | 25-Jun-04 | 2-Nov-04 | 27-Dec-04 | 17-Jan-05 | 7-Feb-05 | 24-Mar-05 | 14-Apr-05 | ||||||||||||||||||||||||
Tax and Distribution Data Per $1,000 Invested | ||||||||||||||||||||||||||||||||
Federal Income Tax Results(1) | ||||||||||||||||||||||||||||||||
Cash Distributions to Investors | ||||||||||||||||||||||||||||||||
Sources (on Tax basis) | ||||||||||||||||||||||||||||||||
— Investment Income | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||
— Return of Capital | $ | 125.22 | $ | 71.23 | $ | — | $ | 11.83 | $ | 54.24 | $ | — | $ | 13.82 | $ | — | ||||||||||||||||
Sources (on Cash basis) | ||||||||||||||||||||||||||||||||
— Sales | $ | 1,305.19 | $ | 1,221.31 | $ | 1,206.17 | $ | 1,384.96 | $ | 1,132.76 | $ | 1,293.88 | $ | 1,266.59 | $ | 1,206.37 | ||||||||||||||||
— Refinancing | $ | — | $ | 68.33 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||
— Operations | $ | 129.11 | $ | 268.98 | $ | 184.74 | $ | 181.08 | $ | 496.14 | $ | 446.45 | $ | 210.94 | $ | 247.48 |
(1) | There are three notes programs that have completed operations and are closed. The notes programs report interest income to the note unit holders. The remaining programs included in this table are TIC programs with investors generally involved in tax deferred exchanges. Accordingly, each TIC has an individual tax basis for determining amortization and depreciation. Neither type of program requires depreciation or amortization, therefore, there is no presentation of Federal Income Tax Results. |
A-20
Table of Contents
RESULTS OF COMPLETED PROGRAMS (UNAUDITED) — (Continued)
PRIVATE PROGRAMS
DECEMBER 31, 2008
Truckee | (2) | |||||||||||||||||||||||||||||||
River | NNN | NNN | NNN | NNN | ||||||||||||||||||||||||||||
Office | NNN | Rocky Mountain | Jefferson | City Center | NNN | LV 1900 | ||||||||||||||||||||||||||
Tower, | North Reno, | Exchange, | Square, | West A, | 801 K Street, | Aerojet Way, | ||||||||||||||||||||||||||
LLC | LLC | LLC | LLC | LLC | LLC | LLC | ||||||||||||||||||||||||||
Dollar Amount Raised | $ | 5,550,000 | $ | 2,750,000 | $ | 2,670,000 | $ | 9,200,000 | $ | 1,238,000 | $ | 29,600,000 | $ | 2,000,000 | ||||||||||||||||||
Number of Properties Purchased | 1 | 1 | 1 | 2 | 1 | 1 | 1 | |||||||||||||||||||||||||
Date of Closing of Offering | 15-Jul-99 | 19-Jun-02 | 15-Feb-01 | 26-Aug-03 | 15-Mar-02 | 31-Mar-04 | 31-Aug-01 | |||||||||||||||||||||||||
Date of First Sale of Property | 15-Apr-05 | 19-May-05 | 31-May-05 | 22-Jul-05 | 28-Jul-05 | 26-Aug-05 | 27-Sep-05 | |||||||||||||||||||||||||
Date of Final Sale of Property | 15-Apr-05 | 19-May-05 | 31-May-05 | 22-Jul-05 | 28-Jul-05 | 26-Aug-05 | 27-Sep-05 | |||||||||||||||||||||||||
Tax and Distribution Data Per $1,000 Invested | ||||||||||||||||||||||||||||||||
Federal Income Tax Results(1) | ||||||||||||||||||||||||||||||||
Cash Distributions to Investors | ||||||||||||||||||||||||||||||||
Sources (on Tax basis) | ||||||||||||||||||||||||||||||||
— Investment Income | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||||
— Return of Capital | $ | — | $ | — | $ | 24.79 | $ | — | $ | 13.68 | $ | — | $ | — | ||||||||||||||||||
Sources (on Cash basis) | ||||||||||||||||||||||||||||||||
— Sales | $ | 953.00 | $ | 1,758.24 | $ | 829.87 | $ | 1,308.76 | $ | 1,300.67 | $ | 1,124.72 | $ | 1,123.45 | ||||||||||||||||||
— Refinancing | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||||
— Operations | $ | 619.55 | $ | 323.12 | $ | 187.30 | $ | 189.41 | $ | 262.83 | $ | 113.57 | $ | 319.50 |
(1) | There are three notes programs that have completed operations and are closed. The notes programs report interest income to the note unit holders. The remaining programs included in this table are TIC programs with investors generally involved in tax deferred exchanges. Accordingly, each TIC has an individual tax basis for determining amortization and depreciation. Neither type of program requires depreciation or amortization, therefore, there is no presentation of Federal Income Tax Results. |
(2) | The investors received a note from Buyer as distributed proceeds from the sale. |
A-21
Table of Contents
RESULTS OF COMPLETED PROGRAMS (UNAUDITED) — (Continued)
PRIVATE PROGRAMS
DECEMBER 31, 2008
NNN | NNN | NNN | NNN | NNN | NNN | NNN | ||||||||||||||||||||||||||||||
NNN | Springtown | Emerald | Kahana | Exchange | Park | NNN | 1851 E 1st | Reno | ||||||||||||||||||||||||||||
Timberhills, | Mall, | Plaza, | Gateway, | Fund III, | Sahara, | PCP 1, | Street, | Trademark, | ||||||||||||||||||||||||||||
LLC | LLC | LLC | LLC | LLC | LLC | LLC | LLC | LLC | ||||||||||||||||||||||||||||
Dollar Amount Raised | $ | 3,695,000 | $ | 2,550,000 | $ | 42,800,000 | $ | 8,140,000 | $ | 6,300,000 | $ | 4,953,000 | $ | 5,800,000 | $ | 20,500,000 | $ | 3,850,000 | ||||||||||||||||||
Number of Properties Purchased | 1 | 1 | 1 | 3 | 1 | 5 | 6 | 1 | 1 | |||||||||||||||||||||||||||
Date of Closing of Offering | 27-Nov-01 | 21-Mar-03 | 20-Jan-05 | 6-Mar-03 | 31-May-00 | 17-Mar-03 | 25-Jun-02 | 29-Jul-03 | 29-Sep-01 | |||||||||||||||||||||||||||
Date of First Sale of Property | 19-Oct-05 | 2-Nov-05 | 10-Nov-05 | 15-Nov-05 | 9-Dec-05 | 20-Dec-05 | 10-Oct-02 | 9-Jan-06 | 23-Jan-06 | |||||||||||||||||||||||||||
Date of Final Sale of Property | 19-Oct-05 | 2-Nov-05 | 10-Nov-05 | 15-Nov-05 | 9-Dec-05 | 20-Dec-05 | 28-Dec-05 | 9-Jan-06 | 23-Jan-06 | |||||||||||||||||||||||||||
Tax and Distribution Data Per $1,000 Invested | ||||||||||||||||||||||||||||||||||||
Federal Income Tax Results(1) | ||||||||||||||||||||||||||||||||||||
Cash Distributions to Investors | ||||||||||||||||||||||||||||||||||||
Sources (on Tax basis) | ||||||||||||||||||||||||||||||||||||
— Investment Income | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||||
— Return of Capital | $ | — | $ | — | $ | — | $ | — | $ | 14.36 | $ | 35.18 | $ | — | $ | — | $ | — | ||||||||||||||||||
Sources (on Cash basis) | ||||||||||||||||||||||||||||||||||||
— Sales | $ | 1,387.80 | $ | 1,206.35 | $ | 1,203.34 | $ | 1,638.63 | $ | 427.98 | $ | 1,102.58 | $ | 1,016.63 | $ | 1,262.45 | $ | 1,256.62 | ||||||||||||||||||
— Refinancing | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 36.59 | $ | 283.64 | ||||||||||||||||||
— Operations | $ | 305.43 | $ | 439.16 | $ | 92.28 | $ | 252.29 | $ | 235.35 | $ | 128.07 | $ | 283.85 | $ | 238.01 | $ | 361.45 |
(1) | There are three notes programs that have completed operations and are closed. The notes programs report interest income to the note unit holders. The remaining programs included in this table are TIC programs with investors generally involved in tax deferred exchanges. Accordingly, each TIC has an individual tax basis for determining amortization and depreciation. Neither type of program requires depreciation or amortization, therefore, there is no presentation of Federal Income Tax Results. |
A-22
Table of Contents
RESULTS OF COMPLETED PROGRAMS (UNAUDITED) — (Continued)
PRIVATE PROGRAMS
DECEMBER 31, 2008
NNN | NNN | |||||||||||||||||||||||||||||||
Oakey | NNN | NNN | NNN | NNN | 901 | NNN | NNN | |||||||||||||||||||||||||
Building | City Center | Amber Oaks | Titan Building | Las Cimas | Corporate | Sacramento | Parkwood | |||||||||||||||||||||||||
2003, | West B, | III, | and Plaza, | II and III, | Center, | Corporate, | Complex, | |||||||||||||||||||||||||
LLC | LLC | LLC | LLC | LLC | LLC | LLC | LLC | |||||||||||||||||||||||||
Dollar Amount Raised | $ | 8,270,000 | $ | 8,200,000 | $ | 10,070,000 | $ | 2,220,000 | $ | 32,250,000 | $ | 6,292,000 | $ | 12,000,000 | $ | 7,472,000 | ||||||||||||||||
Number of Properties Purchased | 1 | 1 | 1 | 1 | 2 | 1 | 1 | 2 | ||||||||||||||||||||||||
Date of Closing of Offering | 19-May-04 | 15-Jun-02 | 20-Jan-04 | 28-May-02 | 9-Dec-04 | 3-Oct-03 | 21-May-01 | 23-Apr-03 | ||||||||||||||||||||||||
Date of First Sale of Property | 24-Jan-06 | 17-Apr-06 | 15-Jun-06 | 21-Jul-06 | 7-Aug-06 | 22-Aug-06 | 17-Nov-06 | 27-May-05 | ||||||||||||||||||||||||
Date of Final Sale of Property | 24-Jan-06 | 17-Apr-06 | 15-Jun-06 | 21-Jul-06 | 7-Aug-06 | 22-Aug-06 | 17-Nov-06 | 27-Dec-06 | ||||||||||||||||||||||||
Tax and Distribution Data Per $1,000 Invested | ||||||||||||||||||||||||||||||||
Federal Income Tax Results(1) | ||||||||||||||||||||||||||||||||
Cash Distributions to Investors | ||||||||||||||||||||||||||||||||
Sources (on Tax basis) | ||||||||||||||||||||||||||||||||
— Investment Income | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||
— Return of Capital | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 10.89 | $ | — | $ | — | ||||||||||||||||
Sources (on Cash basis) | ||||||||||||||||||||||||||||||||
— Sales | $ | 1,343.87 | $ | 1,882.87 | $ | 1,622.67 | $ | 1,582.58 | $ | 1,328.68 | $ | 1,190.72 | $ | 1,396.11 | $ | 1,319.02 | ||||||||||||||||
— Refinancing | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||
— Operations | $ | 136.48 | $ | 306.07 | $ | 190.19 | $ | 589.44 | $ | 199.70 | $ | 172.94 | $ | 405.69 | $ | 377.68 |
(1) | There are three notes programs that have completed operations and are closed. The notes programs report interest income to the note unit holders. The remaining programs included in this table are TIC programs with investors generally involved in tax deferred exchanges. Accordingly, each TIC has an individual tax basis for determining amortization and depreciation. Neither type of program requires depreciation or amortization, therefore, there is no presentation of Federal Income Tax Results. |
A-23
Table of Contents
RESULTS OF COMPLETED PROGRAMS (UNAUDITED) — (Continued)
PRIVATE PROGRAMS
DECEMBER 31, 2008
NNN | ||||||||||||||||||||||||||||||||||||
NNN | Arapahoe | NNN | NNN | NNN | ||||||||||||||||||||||||||||||||
NNN | Wolf Pen | NNN | NNN | Service | NNN | Parkway | Enclave | Fountain | ||||||||||||||||||||||||||||
Twain, | Plaza, | Financial Plaza, | 4 Hutton, | Center II, | Buschwood, | Towers, | Parkway, | Square, | ||||||||||||||||||||||||||||
LLC | LLC | LLC | LLC | LLC | LLC | LLC | LLC | LLC | ||||||||||||||||||||||||||||
Dollar Amount Raised | $ | 2,925,000 | $ | 5,500,000 | $ | 3,625,000 | $ | 21,250,000 | $ | 4,000,000 | $ | 3,200,000 | $ | 7,343,000 | $ | 15,350,000 | $ | 19,600,000 | ||||||||||||||||||
Number of Properties Purchased | 1 | 1 | 1 | 1 | 1 | 1 | 1 | 1 | 1 | |||||||||||||||||||||||||||
Date of Closing of Offering | 20-May-04 | 23-Oct-02 | 30-Aug-04 | 11-Apr-05 | 20-Jun-02 | 25-Mar-03 | 18-Aug-03 | 27-May-04 | 17-Feb-05 | |||||||||||||||||||||||||||
Date of First Sale of Property | 16-Mar-07 | 30-Mar-07 | 30-Mar-07 | 19-Apr-07 | 10-May-07 | 16-May-07 | 8-Jun-07 | 14-Jun-07 | 25-Jun-07 | |||||||||||||||||||||||||||
Date of Final Sale of Property | 16-Mar-07 | 30-Mar-07 | 30-Mar-07 | 19-Apr-07 | 10-May-07 | 16-May-07 | 8-Jun-07 | 14-Jun-07 | 25-Jun-07 | |||||||||||||||||||||||||||
Tax and Distribution Data Per $1,000 Invested | ||||||||||||||||||||||||||||||||||||
Federal Income Tax Results(1) | ||||||||||||||||||||||||||||||||||||
Cash Distributions to Investors | ||||||||||||||||||||||||||||||||||||
Sources (on Tax basis) | ||||||||||||||||||||||||||||||||||||
— Investment Income | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||||
— Return of Capital | $ | 47.72 | $ | 2.33 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||||
Sources (on Cash basis) | ||||||||||||||||||||||||||||||||||||
— Sales | $ | 1,265.15 | $ | 1,432.80 | $ | 961.21 | $ | 1,302.83 | $ | 1,356.47 | $ | 1,266.69 | $ | 1,079.97 | $ | 1,447.06 | $ | 1,125.83 | ||||||||||||||||||
— Refinancing | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||||
— Operations | $ | 273.03 | $ | 370.44 | $ | 175.53 | $ | 128.37 | $ | 742.95 | $ | 317.62 | $ | 367.82 | $ | 355.73 | $ | 184.45 |
(1) | There are three notes programs that have completed operations and are closed. The notes programs report interest income to the note unit holders. The remaining programs included in this table are TIC programs with investors generally involved in tax deferred exchanges. Accordingly, each TIC has an individual tax basis for determining amortization and depreciation. Neither type of program requires depreciation or amortization, therefore, there is no presentation of Federal Income Tax Results. |
A-24
Table of Contents
RESULTS OF COMPLETED PROGRAMS (UNAUDITED) — (Continued)
PRIVATE PROGRAMS
DECEMBER 31, 2008
Western | ||||||||||||||||||||||||||||||||||||
NNN | NNN | Real | NNN | |||||||||||||||||||||||||||||||||
Washington | 4241 | Estate | NNN | NNN | NNN | NNN | 2800 | |||||||||||||||||||||||||||||
Square | Bowling | Investment | 633 17th | NNN | Brookhollow | Caledon | Meadows | East | ||||||||||||||||||||||||||||
Center, | Green, | Trust, | Street, | Bay View Plaza, | Park, | Wood, | Apartments, | Commerce, | ||||||||||||||||||||||||||||
LLC | LLC | Inc. | LLC | LLC | LLC | LLC | LLC | LLC | ||||||||||||||||||||||||||||
Dollar Amount Raised | $ | 3,000,000 | $ | 2,850,000 | $ | 14,051,000 | $ | 34,000,000 | $ | 330,000 | $ | 6,550,000 | $ | 8,840,000 | $ | 10,525,000 | $ | 8,000,000 | ||||||||||||||||||
Number of Properties Purchased | 1 | 1 | 7 | 1 | 1 | 1 | 1 | 1 | 1 | |||||||||||||||||||||||||||
Date of Closing of Offering | 21-Nov-01 | 27-Dec-02 | 27-Apr-00 | 30-Mar-06 | 31-Jul-03 | 5-Jul-02 | 9-May-06 | 23-May-06 | 13-May-05 | |||||||||||||||||||||||||||
Date of First Sale of Property | 26-Jul-07 | 28-Aug-07 | 14-Apr-00 | 28-Sep-07 | 6-Nov-07 | 20-Dec-07 | 27-Dec-07 | 27-Dec-07 | 7-Feb-08 | |||||||||||||||||||||||||||
Date of Final Sale of Property | 26-Jul-07 | 28-Aug-07 | 11-Sep-07 | 28-Sep-07 | 6-Nov-07 | 20-Dec-07 | 27-Dec-07 | 27-Dec-07 | 7-Feb-08 | |||||||||||||||||||||||||||
Tax and Distribution Data Per $1,000 Invested | ||||||||||||||||||||||||||||||||||||
Federal Income Tax Results(1) | ||||||||||||||||||||||||||||||||||||
Cash Distributions to Investors | ||||||||||||||||||||||||||||||||||||
Sources (on Tax basis) | ||||||||||||||||||||||||||||||||||||
— Investment Income | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||||
— Return of Capital | $ | 7.45 | $ | 29.65 | $ | — | $ | — | $ | 13.66 | $ | — | $ | 5.79 | $ | 13.55 | $ | — | ||||||||||||||||||
Sources (on Cash basis) | ||||||||||||||||||||||||||||||||||||
— Sales | $ | 1,170.16 | $ | 1,062.43 | $ | 1,110.35 | $ | 1,244.42 | $ | 274.41 | $ | 977.33 | $ | 1,141.64 | $ | 1,076.55 | $ | 1,102.98 | ||||||||||||||||||
— Refinancing | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||||
— Operations | $ | 431.79 | $ | 357.04 | $ | 259.05 | $ | 137.14 | $ | 117.48 | $ | 443.44 | $ | 107.64 | $ | 91.22 | $ | 226.50 |
(1) | There are three notes programs that have completed operations and are closed. The notes programs report interest income to the note unit holders. The remaining programs included in this table are TIC programs with investors generally involved in tax deferred exchanges. Accordingly, each TIC has an individual tax basis for determining amortization and depreciation. Neither type of program requires depreciation or amortization, therefore, there is no presentation of Federal Income Tax Results. |
A-25
Table of Contents
RESULTS OF COMPLETED PROGRAMS (UNAUDITED) — (Continued)
PRIVATE PROGRAMS
DECEMBER 31, 2008
NNN | NNN | NNN | NNN | |||||||||||||||||||||||||||||
NNN | Pueblo | Westway | NNN | NNN | Great | 2004 | ||||||||||||||||||||||||||
NNN | Reserve at | Shopping | Shopping | Maitland | 1410 | Oaks | Notes | |||||||||||||||||||||||||
Fountainhead, | Maitland, | Center, | Center, | Promenade, | Renner, | Center, | Program, | |||||||||||||||||||||||||
LLC | LLC | LLC | LLC | LLC | LLC | LLC | LLC | |||||||||||||||||||||||||
Dollar Amount Raised | $ | 11,000,000 | $ | 10,800,000 | $ | 2,500,000 | $ | 3,278,000 | $ | 15,000,000 | $ | 7,300,000 | $ | 11,000,000 | $ | 5,000,000 | ||||||||||||||||
Number of Properties Purchased | 1 | 1 | 1 | 1 | 1 | 1 | 1 | N/A | ||||||||||||||||||||||||
Date of Closing of Offering | 12-May-05 | 13-Sep-04 | 12-Feb-01 | 6-Feb-01 | 3-Jan-06 | 8-Dec-03 | 22-Oct-04 | 14-Aug-01 | ||||||||||||||||||||||||
Date of First Sale of Property | 16-May-08 | 13-Jun-08 | 17-Jun-08 | 18-Jun-08 | 25-Jun-08 | 9-Jul-08 | 18-Jul-08 | N/A | ||||||||||||||||||||||||
Date of Final Sale of Property | 16-May-08 | 13-Jun-08 | 17-Jun-08 | 18-Jun-08 | 25-Jun-08 | 9-Jul-08 | 18-Jul-08 | N/A | ||||||||||||||||||||||||
Tax and Distribution Data Per $1,000 Invested | ||||||||||||||||||||||||||||||||
Federal Income Tax Results(1) | ||||||||||||||||||||||||||||||||
Cash Distributions to Investors | ||||||||||||||||||||||||||||||||
Sources (on Tax basis) | ||||||||||||||||||||||||||||||||
— Investment Income | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 66.00 | ||||||||||||||||
— Return of Capital | $ | — | $ | — | $ | 20.36 | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||
Sources (on Cash basis) | ||||||||||||||||||||||||||||||||
— Sales | $ | 1,150.53 | $ | 1,574.63 | $ | 387.43 | $ | 372.37 | $ | 1,260.37 | $ | 667.41 | $ | 1,083.98 | $ | — | ||||||||||||||||
— Refinancing | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||
— Operations | $ | 299.36 | $ | 374.50 | $ | 360.06 | $ | 413.75 | $ | 193.25 | $ | 182.72 | $ | 339.69 | $ | — |
(1) | There are three notes programs that have completed operations and are closed. The notes programs report interest income to the note unit holders. The remaining programs included in this table are TIC programs with investors generally involved in tax deferred exchanges. Accordingly, each TIC has an individual tax basis for determining amortization and depreciation. Neither type of program requires depreciation or amortization, therefore, there is no presentation of Federal Income Tax Results. |
A-26
Table of Contents
RESULTS OF COMPLETED PROGRAMS (UNAUDITED) — (Continued)
PRIVATE PROGRAMS
DECEMBER 31, 2008
NNN | NNN | |||||||||||
2005 | 2006 | |||||||||||
Notes | Notes | |||||||||||
Program, | Program, | Program | ||||||||||
LLC | LLC | Totals | ||||||||||
Dollar Amount Raised | $ | 2,300,000 | $ | 1,045,000 | $ | 517,666,000 | ||||||
Number of Properties Purchased | N/A | N/A | 81 | |||||||||
Date of Closing of Offering | 14-Aug-01 | 22-May-03 | ||||||||||
Date of First Sale of Property | N/A | N/A | ||||||||||
Date of Final Sale of Property | N/A | N/A | ||||||||||
Tax and Distribution Data Per $1,000 Invested | ||||||||||||
Federal Income Tax Results(1) | ||||||||||||
Cash Distributions to Investors | ||||||||||||
Sources (on Tax basis) | ||||||||||||
— Investment Income | $ | 33.00 | $ | 30.00 | ||||||||
— Return of Capital | $ | — | $ | — | ||||||||
Sources (on Cash basis) | ||||||||||||
— Sales | $ | — | $ | — | ||||||||
— Refinancing | $ | — | $ | — | ||||||||
— Operations | $ | — | $ | — |
(1) | There are three notes programs that have completed operations and are closed. The notes programs report interest income to the note unit holders. The remaining programs included in this table are TIC programs with investors generally involved in tax deferred exchanges. Accordingly, each TIC has an individual tax basis for determining amortization and depreciation. Neither type of program requires depreciation or amortization, therefore, there is no presentation of Federal Income Tax Results. |
A-27
Table of Contents
SALES OR DISPOSALS OF PROPERTIES (UNAUDITED)
PRIVATE PROGRAMS
December 31, 2008
Cost of Properties | ||||||||||||||||||||||||||||||||||||||||||||||||
Selling Price, Net of Closing Costs & GAAP Adjustments | Including Closing & Soft Costs | Excess | ||||||||||||||||||||||||||||||||||||||||||||||
Total | (Deficiency) | |||||||||||||||||||||||||||||||||||||||||||||||
Purchase | Acquisition | of Property | ||||||||||||||||||||||||||||||||||||||||||||||
Money | Adjustments | Costs, Capital | Operating | |||||||||||||||||||||||||||||||||||||||||||||
Cash Received | Mortgage | Mortgage | Resulting from | Original | Improvements, | Gain (loss) on | Cash Receipts | |||||||||||||||||||||||||||||||||||||||||
Date | Date | Net of Closing | Balance at | Taken Back | Application | Mortgage | Closing | sale of | Over Cash | |||||||||||||||||||||||||||||||||||||||
Property(1) | Acquired | of Sale | Costs(2) | Time of Sale | by Program | of GAAP | Total | Financing | & Soft Costs(3) | Total | Investment | Expenditures(4) | ||||||||||||||||||||||||||||||||||||
1851 E 1st Street, Santa Ana, CA | Jun-03 | Jan-06 | $ | 24,141,000 | $ | 49,000,000 | N/A | N/A | $ | 73,141,000 | $ | 45,375,000 | $ | 18,588,000 | $ | 63,963,000 | $ | 9,178,000 | $ | (977,000 | ) | |||||||||||||||||||||||||||
Reno Trademark, Reno, NV(5) | Sep-01 | Jan-06 | $ | 5,743,000 | $ | 4,445,000 | N/A | N/A | $ | 10,188,000 | $ | 2,700,000 | $ | 4,920,000 | $ | 7,620,000 | $ | 2,568,000 | $ | 78,000 | ||||||||||||||||||||||||||||
Oakey Building, Las Vegas, NV(6) | Apr-04 | Jan-06 | $ | 7,428,000 | $ | 10,650,000 | N/A | N/A | $ | 18,078,000 | $ | 4,000,000 | $ | 11,441,000 | $ | 15,441,000 | $ | 2,637,000 | $ | 1,626,000 | ||||||||||||||||||||||||||||
Kress Entergy Center, Wichita, KS | Jul-98 | Jan-06 | $ | 769,000 | $ | 1,200,000 | N/A | N/A | $ | 1,969,000 | $ | 925,000 | $ | 1,298,000 | $ | 2,223,000 | $ | (254,000 | ) | N/A | (11) | |||||||||||||||||||||||||||
City Center West ’B’, Las Vegas, NV | Jan-02 | Apr-06 | $ | 18,319,000 | $ | 14,116,000 | N/A | N/A | $ | 32,435,000 | $ | 14,650,000 | $ | 7,516,000 | $ | 22,166,000 | $ | 10,269,000 | $ | (3,257,000 | ) | |||||||||||||||||||||||||||
Amber Oaks III, Austin, TX(7) | Jan-04 | Jun-06 | $ | 16,253,000 | $ | 15,000,000 | N/A | N/A | $ | 31,253,000 | $ | 15,000,000 | $ | 9,737,000 | $ | 24,737,000 | $ | 6,516,000 | $ | 1,412,000 | ||||||||||||||||||||||||||||
Titan Building and Plaza, San Antonio, TX(8) | Apr-02 | Jul-06 | $ | 6,522,000 | $ | 6,900,000 | N/A | N/A | $ | 13,422,000 | $ | 6,000,000 | $ | 4,130,000 | $ | 10,130,000 | $ | 3,292,000 | $ | 1,565,000 | ||||||||||||||||||||||||||||
Las Cimas II and III, Austin, TX | Sep-04 | Aug-06 | $ | 44,215,000 | $ | 45,218,000 | N/A | N/A | $ | 89,433,000 | $ | 46,800,000 | $ | 27,046,000 | $ | 73,846,000 | $ | 15,587,000 | $ | (569,000 | ) | |||||||||||||||||||||||||||
901 Corporate Center, Monterey Park, CA | Aug-03 | Aug-06 | $ | 8,602,000 | $ | 10,906,000 | N/A | N/A | $ | 19,508,000 | $ | 11,310,000 | $ | 5,362,000 | $ | 16,672,000 | $ | 2,836,000 | $ | (918,000 | ) | |||||||||||||||||||||||||||
Sacramento Corporate Center, Sacramento, CA | Mar-01 | Nov-06 | $ | 22,735,000 | $ | 21,213,000 | N/A | N/A | $ | 43,948,000 | $ | 22,250,000 | $ | 14,334,000 | $ | 36,584,000 | $ | 7,364,000 | $ | (255,000 | ) | |||||||||||||||||||||||||||
Parkwood I and II, Woodlands, TX | Dec-02 | Dec-06 | $ | 10,198,000 | $ | 14,531,000 | N/A | N/A | $ | 24,729,000 | $ | 13,922,000 | $ | 8,535,000 | $ | 22,457,000 | $ | 2,272,000 | $ | 3,218,000 | ||||||||||||||||||||||||||||
Twain Business Bank of Nevada, Las Vegas, NV | Dec-03 | Mar-07 | $ | 3,756,000 | $ | 3,507,000 | N/A | N/A | $ | 7,263,000 | $ | 3,750,000 | $ | 2,024,000 | $ | 5,774,000 | $ | 1,489,000 | $ | (268,000 | ) | |||||||||||||||||||||||||||
Wolf Pen Plaza, College Station, TX | Sep-02 | Mar-07 | $ | 8,184,000 | $ | 11,617,000 | N/A | N/A | $ | 19,801,000 | $ | 12,265,000 | $ | 4,612,000 | $ | 16,877,000 | $ | 2,924,000 | $ | 342,000 | ||||||||||||||||||||||||||||
One Financial Plaza, Saint Louis, MO(9) | Aug-04 | Mar-07 | $ | 15,031,000 | $ | 30,750,000 | N/A | N/A | $ | 45,781,000 | $ | 30,750,000 | $ | 12,934,000 | $ | 43,684,000 | $ | 2,097,000 | $ | 206,000 | ||||||||||||||||||||||||||||
4 Hutton Centre, Santa Ana, CA | Jan-05 | Apr-07 | $ | 28,358,000 | $ | 31,971,000 | N/A | N/A | $ | 60,329,000 | $ | 32,250,000 | $ | 19,038,000 | $ | 51,288,000 | $ | 9,041,000 | $ | (178,000 | ) | |||||||||||||||||||||||||||
Arapahoe Service Center II, Englewood, CO | Apr-02 | May-07 | $ | 6,414,000 | $ | 4,574,000 | N/A | N/A | $ | 10,988,000 | $ | 5,000,000 | $ | 3,329,000 | $ | 8,329,000 | $ | 2,659,000 | $ | (621,000 | ) | |||||||||||||||||||||||||||
Buschwood III, Tampa, FL | Mar-03 | May-07 | $ | 4,648,000 | $ | 4,372,000 | N/A | N/A | $ | 9,020,000 | $ | 4,600,000 | $ | 2,841,000 | $ | 7,441,000 | $ | 1,579,000 | $ | (167,000 | ) | |||||||||||||||||||||||||||
Parkway Towers, Nashville, TN | May-03 | Jun-07 | $ | 8,631,000 | $ | 8,307,000 | N/A | N/A | $ | 16,938,000 | $ | 8,700,000 | $ | 6,247,000 | $ | 14,947,000 | $ | 1,991,000 | $ | (161,000 | ) | |||||||||||||||||||||||||||
Enclave Parkway, Houston, TX | Dec-03 | Jun-07 | $ | 23,287,000 | $ | 22,525,000 | N/A | N/A | $ | 45,812,000 | $ | 23,600,000 | $ | 13,879,000 | $ | 37,479,000 | $ | 8,333,000 | $ | 1,070,000 |
A-28
Table of Contents
SALES OR DISPOSALS OF PROPERTIES (UNAUDITED) — (Continued)
PRIVATE PROGRAMS
December 31, 2008
Cost of Properties | ||||||||||||||||||||||||||||||||||||||||||||||||
Selling Price, Net of Closing Costs & GAAP Adjustments | Including Closing & Soft Costs | Excess | ||||||||||||||||||||||||||||||||||||||||||||||
Total | (Deficiency) | |||||||||||||||||||||||||||||||||||||||||||||||
Purchase | Acquisition | of Property | ||||||||||||||||||||||||||||||||||||||||||||||
Money | Adjustments | Costs, Capital | Operating | |||||||||||||||||||||||||||||||||||||||||||||
Cash Received | Mortgage | Mortgage | Resulting from | Original | Improvements, | Gain (loss) | Cash Receipts | |||||||||||||||||||||||||||||||||||||||||
Date | Date | Net of Closing | Balance at | Taken Back | Application | Mortgage | Closing | on sale of | Over Cash | |||||||||||||||||||||||||||||||||||||||
Property(1) | Acquired | of Sale | Costs(2) | Time of Sale | by Program | of GAAP | Total | Financing | & Soft Costs(3) | Total | Investment | Expenditures(4) | ||||||||||||||||||||||||||||||||||||
Fountain Square, Boca Raton, FL | Oct-04 | Jun-07 | $ | 24,181,000 | $ | 35,209,000 | N/A | N/A | $ | 59,390,000 | $ | 35,476,000 | $ | 18,427,000 | $ | 53,903,000 | $ | 5,487,000 | $ | (914,000 | ) | |||||||||||||||||||||||||||
Washington Square, Stephenville, TX | Nov-01 | Jul-07 | $ | 4,339,000 | $ | 4,618,000 | N/A | N/A | $ | 8,957,000 | $ | 4,890,000 | $ | 2,727,000 | $ | 7,617,000 | $ | 1,340,000 | $ | (343,000 | ) | |||||||||||||||||||||||||||
4241 Bowling Green, Sacramento, CA | Sep-02 | Aug-07 | $ | 3,056,000 | $ | 2,814,000 | N/A | N/A | $ | 5,870,000 | $ | 3,092,000 | $ | 2,205,000 | $ | 5,297,000 | $ | 573,000 | $ | 77,000 | ||||||||||||||||||||||||||||
Brookings Mall, Brookings, SD(10) | May-00 | Sep-07 | $ | 2,603,000 | $ | 976,000 | N/A | N/A | $ | 3,579,000 | $ | 962,000 | $ | 3,542,000 | $ | 4,504,000 | $ | (925,000 | ) | N/A | (11) | |||||||||||||||||||||||||||
633 17th Street, Denver, CO | Dec-05 | Sep-07 | $ | 44,645,000 | $ | 63,331,000 | N/A | N/A | $ | 107,976,000 | $ | 67,500,000 | $ | 27,231,000 | $ | 94,731,000 | $ | 13,245,000 | $ | (1,591,000 | ) | |||||||||||||||||||||||||||
Bay View Plaza, Alameda, CA(12) | Jul-03 | Nov-07 | $ | 3,532,000 | $ | 5,710,000 | N/A | N/A | $ | 9,242,000 | $ | 6,200,000 | $ | 6,035,000 | $ | 12,235,000 | $ | (2,993,000 | ) | $ | 915,000 | |||||||||||||||||||||||||||
Brookhollow Park, San Antonio, TX | Jul-02 | Dec-07 | $ | 7,069,000 | $ | 9,542,000 | N/A | N/A | $ | 16,611,000 | $ | 10,250,000 | $ | 6,275,000 | $ | 16,525,000 | $ | 86,000 | $ | 1,115,000 | ||||||||||||||||||||||||||||
Caledon Wood Apartments, Greenville, SC | Jan-06 | Dec-07 | $ | 10,037,000 | $ | 17,000,000 | N/A | N/A | $ | 27,037,000 | $ | 17,000,000 | $ | 7,911,000 | $ | 24,911,000 | $ | 2,126,000 | $ | (106,000 | ) | |||||||||||||||||||||||||||
The Meadows Apartments, Asheville, NC | Mar-06 | Dec-07 | $ | 11,306,000 | $ | 21,300,000 | N/A | N/A | $ | 32,606,000 | $ | 21,300,000 | $ | 8,513,000 | $ | 29,813,000 | $ | 2,793,000 | $ | (167,000 | ) | |||||||||||||||||||||||||||
2800 E. Commerce Center Place, Tucson, AZ | Nov-04 | Feb-08 | $ | 9,695,000 | $ | 10,859,000 | N/A | N/A | $ | 20,554,000 | $ | 11,375,000 | $ | 7,495,000 | $ | 18,870,000 | $ | 1,684,000 | $ | 195,000 | ||||||||||||||||||||||||||||
Fountainhead, San Antonio, TX | Dec-04 | May-08 | $ | 14,451,000 | $ | 18,007,000 | N/A | N/A | $ | 32,458,000 | $ | 18,900,000 | $ | 10,187,000 | $ | 29,087,000 | $ | 3,371,000 | $ | (410,000 | ) | |||||||||||||||||||||||||||
Reserve at Maitland, Keller, Maitland, FL | Aug-04 | Jun-08 | $ | 17,070,000 | $ | 20,585,000 | N/A | N/A | $ | 37,655,000 | $ | 21,750,000 | $ | 9,639,000 | $ | 31,389,000 | $ | 6,266,000 | $ | 1,764,000 | ||||||||||||||||||||||||||||
Pueblo Shopping Center, Pueblo, CO | Nov-99 | Jun-08 | $ | 1,688,000 | $ | 4,818,000 | N/A | N/A | $ | 6,506,000 | $ | 5,306,000 | $ | 2,490,000 | $ | 7,796,000 | $ | (1,290,000 | ) | $ | 222,000 | |||||||||||||||||||||||||||
Westway Shopping Center Wichita, KS | Aug-00 | Jun-08 | $ | 1,445,000 | $ | 6,668,000 | N/A | N/A | $ | 8,113,000 | $ | 7,125,000 | $ | 3,046,000 | $ | 10,171,000 | $ | (2,058,000 | ) | $ | 865,000 | |||||||||||||||||||||||||||
Maitland Promenade Orlando, FL | Sep-05 | Jun-08 | $ | 17,915,000 | $ | 32,250,000 | N/A | N/A | $ | 50,165,000 | $ | 32,250,000 | $ | 12,911,000 | $ | 45,161,000 | $ | 5,004,000 | $ | 992,000 | ||||||||||||||||||||||||||||
1410 Renner Road, Richardson, TX | Oct-03 | Jul-08 | $ | 3,520,000 | $ | 7,858,000 | N/A | N/A | $ | 11,378,000 | $ | 8,740,000 | $ | 5,315,000 | $ | 14,055,000 | $ | (2,677,000 | ) | $ | 1,875,000 | |||||||||||||||||||||||||||
Great Oaks, Alpharetta, GA | Jul-04 | Jul-08 | $ | 11,842,000 | $ | 19,002,000 | N/A | N/A | $ | 30,844,000 | $ | 20,000,000 | $ | 9,832,000 | $ | 29,832,000 | $ | 1,012,000 | $ | 1,650,000 |
(1) | No sales were to affiliated parties except as noted below. |
(2) | Net cash received plus assumption of certain liabilities by buyer. |
(3) | Does not include pro-rata share of original offering costs. |
(4) | Includes add back of monthly principal reductions during the operating cycle (see Table III) as total cost includes balance of Original Mortgage Financing. |
(5) | A Private Program owned 60.0% of the property. TREIT, Inc., an affiliate owned 40.0% of the property. The above reflects property level sale results, or 100% ownership. |
(6) | NNN 2003 Value Fund, LLC and TREIT, Inc., affiliates, respectively owned a 75.4% and 9.8% membership interests in NNN Oakey 2003, LLC which owned 100% of the property. |
(7) | TREIT, Inc, an affiliate owned a 75.0% tenant in common interest in NNN Amber Oaks, LLC. The private program owned 100% of the property. |
(8) | A Private Program owned 51.5% of the property. TREIT, Inc., an affiliate, owned 48.5% of the property. The above reflects property level sale results, or 100% ownership. |
(9) | A Private Program owned 22.375% of the property. GREIT, Inc., an affiliate, owned 77.625% of the property. The above reflects property level sale results, or 100% ownership. |
(10) | A Private Program owned 68.5% of the property. An unaffiliated TIC owned 31.5% of the property outside of program. The above reflects property level sale results, or 100% ownership. |
(11) | Excess cash flow was distributed to Western Real Estate Investment Trust, Inc. for distributions to its shareholders. No excess or deficiency existed at the property level. |
(12) | A Private Program owned 2.32% of the property. GREIT, Inc., an affiliate owned 97.68% of the property outside of program. The above reflects the property level sale results, or 100% ownership. |
* | Partial sales of the White Lakes Mall, Netpark and Camelot Plaza have occurred; however, a portion of the original acquisitions still remain in the program. No reporting of these sales will occur until the entire original acquisition has been disposed of. |
A-29
Table of Contents
Table of Contents
![Apartment Reit 5](https://capedge.com/proxy/S-11A/0000950123-09-014099/a51111a1a5111156.gif)
B-2
Table of Contents
![Apartment Reit Sig1](https://capedge.com/proxy/S-11A/0000950123-09-014099/a51111a1a5111157.gif)
B-3
Table of Contents
![Apartment Reit Sig5](https://capedge.com/proxy/S-11A/0000950123-09-014099/a51111a1a5111158.gif)
B-4
Table of Contents
![](https://capedge.com/proxy/S-11A/0000950123-09-014099/a51111a1a5111162.gif)
B-5
Table of Contents
![Wiring Instructions](https://capedge.com/proxy/S-11A/0000950123-09-014099/a51111a1a5111159.gif)
B-6
Table of Contents
![HEALTHCARE REIT II](https://capedge.com/proxy/S-11A/0000950123-09-014099/a51111a1a5111169.gif)
B-7
Table of Contents
![Transfer On Death Form](https://capedge.com/proxy/S-11A/0000950123-09-014099/a51111a1a5111160.gif)
B-8
Table of Contents
![Direct Deposit Authorization](https://capedge.com/proxy/S-11A/0000950123-09-014099/a51111a1a5111161.gif)
B-9
Table of Contents
C-1
Table of Contents
C-2
Table of Contents
C-3
Table of Contents
C-4
Table of Contents
Signature | Date | |
Signature of Joint Owner | Date |
C-5
Table of Contents
2. | Share Repurchases. |
(1) | For stockholders who have continuously held their Shares for at least one year, the lower of $9.25 or 92.5% of the price paid to acquire Shares from the Company; | |
(2) | For stockholders who have continuously held their Shares for at least two years, the lower of $9.50 or 95.0% of the price paid to acquire Shares from the Company; | |
(3) | For stockholders who have continuously held their Shares for at least three years, the lower of $9.75 or 97.5% of the price paid to acquire Shares from the Company; and | |
(4) | For stockholders who have continuously held their Shares for at least four years, a price determined by our board of directors, but in no event less than 100% of the price paid to acquire Shares from the Company. |
D-1
Table of Contents
D-2
Table of Contents
5. | Miscellaneous. |
D-3
Table of Contents
SHARE REPURCHASE REQUEST
D-4
Table of Contents
![(GRUBB & ELLIS APARTMENT REIT LOGO)](https://capedge.com/proxy/S-11A/0000950123-09-014099/a51111a1a5111170.gif)
Table of Contents
Item 30. | Quantitative and Qualitative Disclosure About Market Risk |
Item 31. | Other Expenses of Issuance and Distribution |
SEC registration fee | $ | 41,167 | ||
FINRA filing fee | 75,500 | |||
Printing and postage | 2,000,000 | |||
Legal fees and expenses | 1,000,000 | |||
Accounting fees and expenses | 500,000 | |||
Advertising | 2,000,000 | |||
Blue Sky Expenses | 350,000 | |||
Transfer agent fees | 833,333 | |||
Miscellaneous | 770,000 | |||
Total | $ | 7,570,000 | ||
Item 32. | Sales to Special Parties |
II-1
Table of Contents
Item 33. | Recent Sales of Unregistered Securities |
Item 34. | Indemnification of Directors and Officers |
II-2
Table of Contents
Item 35. | Treatment of Proceeds from Stock Being Registered |
Item 36. | Financial Statements and Exhibits |
Item 37. | Undertakings |
II-3
Table of Contents
II-4
Table of Contents
II-5
Table of Contents
ACQUISITION OF PROPERTIES BY PROGRAM (UNAUDITED)
PUBLIC PROGRAMS
December 31, 2008
Program: Name, location, type of property | NNN 2003 Value Fund, LLC 901 Civic Center Drive(1) Santa Ana, CA Office | NNN 2003 Value Fund, LLC Chase Tower(2) Austin, TX Office | ||||||
Gross leasable square footage | 99,000 | 386,000 | ||||||
Date of purchase: | 4/24/2006 | 7/3/2006 | ||||||
Mortgage financing at date of purchase | $— | $54,800,000 | ||||||
Cash down payment | $15,147,000 | $17,700,000 | ||||||
Contract purchase price plus acquisition fee | $15,147,000 | $72,500,000 | ||||||
Other cash expenditures expensed/(credited) | $— | $— | ||||||
Other cash expenditures capitalized | $(281,000 | ) | $397,000 | |||||
Total acquisition cost | $14,866,000 | $72,897,000 | ||||||
Program: Name, location, type of property | NNN 2003 Value Fund, LLC Tiffany Square Colorado Springs, CO Office | NNN 2003 Value Fund, LLC Four Resource Square Charlotte, NC Office | ||||||
Gross leasable square footage | 184,000 | 152,000 | ||||||
Date of purchase: | 11/15/2006 | 3/7/2007 | ||||||
Mortgage financing at date of purchase | $— | $21,150,000 | ||||||
Cash down payment | $11,052,000 | $2,514,000 | ||||||
Contract purchase price plus acquisition fee | $11,052,000 | $23,664,000 | ||||||
Other cash expenditures expensed/(credited) | $— | $— | ||||||
Other cash expenditures capitalized | $540,000 | $(158,000 | ) | |||||
Total acquisition cost | $11,592,000 | $23,506,000 | ||||||
Program: Name, location, type of property | NNN 2003 Value Fund, LLC The Sevens Building St. Louis, MO Office | |||||||
Gross leasable square footage | 197,000 | |||||||
Date of purchase: | 10/25/2007 | |||||||
Mortgage financing at date of purchase | $23,500,000 | |||||||
Cash down payment | $5,598,000 | |||||||
Contract purchase price plus acquisition fee | $29,098,000 | |||||||
Other cash expenditures expensed/(credited) | $— | |||||||
Other cash expenditures capitalized | $94,000 | |||||||
Total acquisition cost | $29,192,000 |
(1) | NNN 2003 Value Fund, LLC owns 96.9% of the property as the sole member of NNN VF 901 Civic, LLC. |
(2) | NNN 2003 Value Fund, LLC owns a 14.8% tenant in common interest in the property. |
II-6
Table of Contents
ACQUISITION OF PROPERTIES BY PROGRAM (UNAUDITED) — (Continued)
PUBLIC PROGRAMS
December 31, 2008
Program: Name, location, type of property | Grubb & Ellis Apartment REIT, Inc. Walker Ranch Apartment Homes San Antonio, TX Apartment | Grubb & Ellis Apartment REIT, Inc. Hidden Lake Apartment Homes San Antonio, TX Apartment | ||||||
Number of units and total square feet of units | 325/285,000 | 380/304,000 | ||||||
Date of purchase: | 10/31/2006 | 12/28/2006 | ||||||
Mortgage financing at date of purchase | $— | (1) | $19,218,000 | (2) | ||||
Cash down payment | $31,673,000 | $13,773,000 | ||||||
Contract purchase price plus acquisition fee | $31,673,000 | $32,991,000 | ||||||
Other cash expenditures expensed/(credited) | $— | $— | ||||||
Other cash expenditures capitalized | $99,000 | $112,000 | ||||||
Total acquisition cost | $31,772,000 | $33,103,000 | ||||||
Program: Name, location, type of property | Grubb & Ellis Apartment REIT, Inc. Park at Northgate Spring, TX Apartment | Grubb & Ellis Apartment REIT, Inc. Residences at Braemar Charlotte, NC Apartment | ||||||
Number of units and total square feet of units | 248/202,000 | 160/169,000 | ||||||
Date of purchase: | 6/12/2007 | 6/29/2007 | ||||||
Mortgage financing at date of purchase | $— | (3) | $9,722,000 | (4) | ||||
Cash down payment | $17,098,000 | $5,728,000 | ||||||
Contract purchase price plus acquisition fee | $17,098,000 | $15,450,000 | ||||||
Other cash expenditures expensed/(credited) | $— | $— | ||||||
Other cash expenditures capitalized | $50,000 | $112,000 | ||||||
Total acquisition cost | $17,148,000 | $15,562,000 |
(1) | Represents the mortgage loan payable on the date of purchase. The applicable REIT also borrowed $22,120,000 under its line of credit and $4,740,000 under its mezzanine line of credit to finance the purchase price. The property obtained a $20,000,000 mortgage loan payable subsequent to acquisition in April 2007. |
(2) | Represents the mortgage loan payable on the date of purchase. The applicable REIT also borrowed $2,500,000 under its line of credit and $10,000,000 under an unsecured note from an affiliate to finance the purchase price. |
(3) | Represents the mortgage loan payable on the date of purchase. The property obtained a $10,295,000 mortgage loan payable subsequent to acquisition in August 2007. |
(4) | Represents the mortgage loan payable on the date of purchase. The applicable REIT also borrowed $3,300,000 under an unsecured note from an affiliate to finance the purchase price. |
II-7
Table of Contents
ACQUISITION OF PROPERTIES BY PROGRAM (UNAUDITED) — (Continued)
PUBLIC PROGRAMS
December 31, 2008
Program: Name, location, type of property | Grubb & Ellis Apartment REIT, Inc. Baypoint Resort Corpus Christi, TX Apartment | Grubb & Ellis Apartment REIT, Inc. Towne Crossing Apartments Mansfield, TX Apartment | ||||||
Number of units and total square feet of units | 350/313,000 | 268/232,000 | ||||||
Date of purchase: | 8/2/2007 | 8/29/2007 | ||||||
Mortgage financing at date of purchase | $21,612,000 | (1) | $15,366,000 | (2) | ||||
Cash down payment | $12,636,000 | $6,882,000 | ||||||
Contract purchase price plus acquisition fee | $34,248,000 | $22,248,000 | ||||||
Other cash expenditures expensed/(credited) | $— | $— | ||||||
Other cash expenditures capitalized | $59,000 | $104,000 | ||||||
Total acquisition cost | $34,307,000 | $22,352,000 | ||||||
Program: Name, location, type of property | Grubb & Ellis Apartment REIT, Inc. Villas of El Dorado McKinney, TX Apartment | Grubb & Ellis Apartment REIT, Inc. The Heights at Olde Towne Portsmouth, VA Apartment | ||||||
Number of units and total square feet of units | 248/193,000 | 148/118,000 | ||||||
Date of purchase: | 11/2/2007 | 12/21/2007 | ||||||
Mortgage financing at date of purchase | $13,600,000 | (3) | $10,475,000 | (4) | ||||
Cash down payment | $4,940,000 | $7,035,000 | ||||||
Contract purchase price plus acquisition fee | $18,540,000 | $17,510,000 | ||||||
Other cash expenditures expensed/(credited) | $— | $— | ||||||
Other cash expenditures capitalized | $96,000 | $205,000 | ||||||
Total acquisition cost | $18,636,000 | $17,715,000 |
(1) | Represents the mortgage loan payable on the date of purchase. The applicable REIT also borrowed $13,200,000 under an unsecured note from an affiliate to finance the purchase price. |
(2) | Represents the mortgage loan payable on the date of purchase. The applicable REIT also borrowed $5,400,000 under an unsecured note from an affiliate to finance the purchase price. |
(3) | Represents the mortgage loan payable on the date of purchase. The applicable REIT also borrowed $3,195,000 under its line of credit to finance the purchase price. |
(4) | Represents the mortgage loan payable on the date of purchase. The applicable REIT also borrowed $3,205,000 under its line of credit and $3,208,000 under an unsecured note from an affiliate to finance the purchase price. |
II-8
Table of Contents
ACQUISITION OF PROPERTIES BY PROGRAM (UNAUDITED) — (Continued)
PUBLIC PROGRAMS
December 31, 2008
Program: Name, location, type of property | Grubb & Ellis Apartment REIT, Inc. The Myrtles at Olde Towne Portsmouth, VA Apartment | Grubb & Ellis Apartment REIT, Inc. Arboleda Apartments Cedar Park, TX Apartment | ||||||
Number of units and total square feet of units | 246/222,000 | 312/251,000 | ||||||
Date of purchase: | 12/21/2007 | 3/31/2008 | ||||||
Mortgage financing at date of purchase | $20,100,000 | (1) | $17,651,000 | (2) | ||||
Cash down payment | $16,980,000 | $12,477,000 | ||||||
Contract purchase price plus acquisition fee | $37,080,000 | $30,128,000 | ||||||
Other cash expenditures expensed/(credited) | $— | $— | ||||||
Other cash expenditures capitalized | $325,000 | $111,000 | ||||||
Total acquisition cost | $37,405,000 | $30,239,000 | ||||||
Program: Name, location, type of property | Grubb & Ellis Apartment REIT, Inc. Creekside Crossing Lithonia, GA Apartment | Grubb & Ellis Apartment REIT, Inc. Kedron Village Peachtree City, GA Apartment | ||||||
Number of units and total square feet of units | 280/281,000 | 216/252,000 | ||||||
Date of purchase: | 6/26/2008 | 6/27/2008 | ||||||
Mortgage financing at date of purchase | $17,000,000 | (3) | $20,000,000 | (4) | ||||
Cash down payment | $9,162,000 | $10,488,000 | ||||||
Contract purchase price plus acquisition fee | $26,162,000 | $30,488,000 | ||||||
Other cash expenditures expensed/(credited) | $— | $— | ||||||
Other cash expenditures capitalized | $108,000 | $78,000 | ||||||
Total acquisition cost | $26,270,000 | $30,566,000 |
(1) | Represents the mortgage loan payable on the date of purchase. The applicable REIT also borrowed $6,788,000 under its line of credit and $6,792,000 under an unsecured note from an affiliate to finance the purchase price. |
(2) | Represents the mortgage loan payable on the date of purchase. The applicable REIT also borrowed $11,550,000 under its line of credit to finance the purchase price. |
(3) | Represents the mortgage loan payable on the date of purchase. The applicable REIT also borrowed $9,487,000 under its line of credit to finance the purchase price. |
(4) | Represents the mortgage loan payable on the date of purchase. The applicable REIT also borrowed $6,513,000 under its line of credit and $3,700,000 under an unsecured note from an affiliate to finance the purchase price. |
II-9
Table of Contents
ACQUISITION OF PROPERTIES BY PROGRAM (UNAUDITED) — (Continued)
PUBLIC PROGRAMS
December 31, 2008
Program: Name, location, type of property | Grubb & Ellis Apartment REIT, Inc. Canyon Ridge Apartments Hermitage, TN Apartment | |||||||
Number of units and total square feet of units | 350/341,000 | |||||||
Date of purchase: | 9/15/2008 | |||||||
Mortgage financing at date of purchase | $24,000,000 | (1) | ||||||
Cash down payment | $13,132,000 | |||||||
Contract purchase price plus acquisition fee | $37,132,000 | |||||||
Other cash expenditures expensed/(credited) | $— | |||||||
Other cash expenditures capitalized | $274,000 | |||||||
Total acquisition cost | $37,406,000 | |||||||
Program: Name, location, type of property | Grubb & Ellis Healthcare REIT, Inc. Southpointe Office Parke and Epler Parke 1 Indianapolis, IN Medical Office | Grubb & Ellis Healthcare REIT, Inc. Crawfordsville Medical Office Park and Athens Surgery Center Crawfordsville, IN Medical Office | ||||||
Gross leasable square footage | 97,000 | 29,000 | ||||||
Date of purchase: | 1/22/2007 | 1/22/2007 | ||||||
Mortgage financing at date of purchase | $9,146,000 | (2) | $4,264,000 | (3) | ||||
Cash down payment | $6,098,000 | $2,843,000 | ||||||
Contract purchase price plus acquisition fee | $15,244,000 | $7,107,000 | ||||||
Other cash expenditures expensed/(credited) | $— | $— | ||||||
Other cash expenditures capitalized | $425,000 | $140,000 | ||||||
Total acquisition cost | $15,669,000 | $7,247,000 |
(1) | Represents the mortgage loan payable on the date of purchase. The applicable REIT also borrowed $7,300,000 under its line of credit and $5,400,000 under an unsecured note from an affiliate to finance the purchase price. |
(2) | Represents the mortgage loan payable on the date of purchase. The applicable REIT also borrowed $5,115,000 under an unsecured note from an affiliate to finance the purchase price. |
(3) | Represents the mortgage loan payable on the date of purchase. The applicable REIT also borrowed $2,385,000 under an unsecured note from an affiliate to finance the purchase price. |
II-10
Table of Contents
ACQUISITION OF PROPERTIES BY PROGRAM (UNAUDITED) — (Continued)
PUBLIC PROGRAMS
December 31, 2008
Program: Name, location, type of property | Grubb & Ellis Healthcare REIT, Inc. The Gallery Professional Building St. Paul, MN Medical Office | Grubb & Ellis Healthcare REIT, Inc. Lenox Office Park, Building G Memphis, TN Office | ||||||
Gross leasable square footage | 106,000 | 98,000 | ||||||
Date of purchase: | 3/9/2007 | 3/23/2007 | ||||||
Mortgage financing at date of purchase | $6,000,000 | (1) | $12,000,000 | |||||
Cash down payment | $3,064,000 | $7,055,000 | ||||||
Contract purchase price plus acquisition fee | $9,064,000 | $19,055,000 | ||||||
Other cash expenditures expensed/(credited) | $— | $— | ||||||
Other cash expenditures capitalized | $53,000 | $(512,000 | ) | |||||
Total acquisition cost | $9,117,000 | $18,543,000 | ||||||
Program: Name, location, type of property | Grubb & Ellis Healthcare REIT, Inc. Commons V Medical Office Building Naples, FL Medical Office | Grubb & Ellis Healthcare REIT, Inc. Yorktown Medical Center and Shakerag Medical Center Fayetteville and Peachtree City, GA Medical Office | ||||||
Gross leasable square footage | 55,000 | 115,000 | ||||||
Date of purchase: | 4/24/2007 | 5/2/2007 | ||||||
Mortgage financing at date of purchase | $— | (2) | $13,530,000 | |||||
Cash down payment | $14,523,000 | $8,615,000 | ||||||
Contract purchase price plus acquisition fee | $14,523,000 | $22,145,000 | ||||||
Other cash expenditures expensed/(credited) | $— | $— | ||||||
Other cash expenditures capitalized | $350,000 | $76,000 | ||||||
Total acquisition cost | $14,873,000 | $22,221,000 |
(1) | Represents the mortgage loan payable on the date of purchase. The applicable REIT also borrowed $1,000,000 under an unsecured note from an affiliate to finance the purchase price. |
(2) | Represents the mortgage loan payable on the date of purchase. The property obtained a $10,000,000 mortgage loan payable subsequent to acquisition in May 2007 and such net proceeds from the mortgage loan payable were used to purchase Thunderbird Medical Plaza. |
II-11
Table of Contents
ACQUISITION OF PROPERTIES BY PROGRAM (UNAUDITED) — (Continued)
PUBLIC PROGRAMS
December 31, 2008
Program: Name, location, type of property | Grubb & Ellis Healthcare REIT, Inc. Thunderbird Medical Plaza Glendale, AZ Medical Office | Grubb & Ellis Healthcare REIT, Inc. Triumph Hospital Northwest and Triumph Hospital Southwest Houston and Sugar Land, TX Healthcare-Related Facility | ||||||
Gross leasable square footage | 110,000 | 151,000 | ||||||
Date of purchase: | 5/15/2007 | 6/8/2007 | ||||||
Mortgage financing at date of purchase | $— | (1) | $— | (2) | ||||
Cash down payment | $25,750,000 | $37,595,000 | ||||||
Contract purchase price plus acquisition fee | $25,750,000 | $37,595,000 | ||||||
Other cash expenditures expensed/(credited) | $— | $— | ||||||
Other cash expenditures capitalized | $65,000 | $67,000 | ||||||
Total acquisition cost | $25,815,000 | $37,662,000 | ||||||
Program: Name, location, type of property | Grubb & Ellis Healthcare REIT, Inc. Gwinnett Professional Center Lawrenceville, GA Medical Office | Grubb & Ellis Healthcare REIT, Inc. 1 & 4 Market Exchange Columbus, OH Medical Office | ||||||
Gross leasable square footage | 60,000 | 116,000 | ||||||
Date of purchase: | 7/27/2007 | 8/15/2007 | ||||||
Mortgage financing at date of purchase | $5,734,000 | $— | (3) | |||||
Cash down payment | $3,845,000 | $22,557,000 | ||||||
Contract purchase price plus acquisition fee | $9,579,000 | $22,557,000 | ||||||
Other cash expenditures expensed/(credited) | $— | $— | ||||||
Other cash expenditures capitalized | $140,000 | $(35,000 | ) | |||||
Total acquisition cost | $9,719,000 | $22,522,000 |
(1) | Represents the mortgage loan payable on the date of purchase. The property obtained a $14,000,000 mortgage loan payable subsequent to acquisition in June 2007 and such net proceeds from the mortgage loan payable were used to purchase Triumph Hospital Northwest and Triumph Hospital Southwest. |
(2) | Represents the mortgage loan payable on the date of purchase. The applicable REIT also borrowed $4,000,000 under an unsecured note from an affiliate to finance the purchase price. |
(3) | Represents the mortgage loan payable on the date of purchase. The property obtained a $14,500,000 mortgage loan payable subsequent to acquisition in September 2007. |
II-12
Table of Contents
ACQUISITION OF PROPERTIES BY PROGRAM (UNAUDITED) — (Continued)
PUBLIC PROGRAMS
December 31, 2008
Program: Name, location, type of property | Grubb & Ellis Healthcare REIT, Inc. Kokomo Medical Office Park Kokomo, IN Medical Office | Grubb & Ellis Healthcare REIT, Inc. St. Mary Physicians Center Long Beach, CA Medical Office | ||||||
Gross leasable square footage | 87,000 | 67,000 | ||||||
Date of purchase: | 08/30/07 | 09/05/07 | ||||||
Mortgage financing at date of purchase | $— | (1) | $8,280,000 | (2) | ||||
Cash down payment | $13,751,000 | $5,934,000 | ||||||
Contract purchase price plus acquisition fee | $13,751,000 | $14,214,000 | ||||||
Other cash expenditures expensed/(credited) | $— | $— | ||||||
Other cash expenditures capitalized | $34,000 | $85,000 | ||||||
Total acquisition cost | $13,785,000 | $14,299,000 | ||||||
Program: Name, location, type of property | Grubb & Ellis Healthcare REIT, Inc. 2750 Monroe Boulevard Valley Forge, PA Office | Grubb & Ellis Healthcare REIT, Inc. East Florida Senior Care Portfolio Jacksonville, Winter Park and Sunrise, FL Healthcare-Related Facility | ||||||
Gross leasable square footage | 109,000 | 355,000 | ||||||
Date of purchase: | 9/10/2007 | 9/28/2007 | ||||||
Mortgage financing at date of purchase | $— | (3) | $26,000,000 | (4) | ||||
Cash down payment | $27,501,000 | $27,560,000 | ||||||
Contract purchase price plus acquisition fee | $27,501,000 | $53,560,000 | ||||||
Other cash expenditures expensed/(credited) | $— | $— | ||||||
Other cash expenditures capitalized | $315,000 | $316,000 | ||||||
Total acquisition cost | $27,816,000 | $53,876,000 |
(1) | Represents the mortgage loan payable on the date of purchase. The applicable REIT also borrowed $1,300,000 under an unsecured note from an affiliate to finance the purchase price. The property obtained a $8,300,000 mortgage loan payable subsequent to acquisition in December 2007. |
(2) | Represents the mortgage loan payable on the date of purchase. The applicable REIT also borrowed $6,100,000 under an unsecured note from an affiliate to finance the purchase price. |
(3) | Represents the mortgage loan payable on the date of purchase. The applicable REIT also borrowed $27,870,000 under its line of credit to finance the purchase price. |
(4) | Represents the mortgage loan payable of $30,500,000, net of a lender holdback of $4,500,000, on the date of purchase. The lender holdback was received in October 2007. The applicable REIT also borrowed $11,000,000 under its line of credit to finance the purchase price. |
II-13
Table of Contents
ACQUISITION OF PROPERTIES BY PROGRAM (UNAUDITED) — (Continued)
PUBLIC PROGRAMS
December 31, 2008
Program: Name, location, type of property | Grubb & Ellis Healthcare REIT, Inc. Northmeadow Medical Center Roswell, GA Medical Office | Grubb & Ellis Healthcare REIT, Inc. Tucson Medical Office Portfolio Tucson, AZ Medical Office | ||||||
Gross leasable square footage | 51,000 | 111,000 | ||||||
Date of purchase: | 11/15/2007 | 11/20/2007 | ||||||
Mortgage financing at date of purchase | $— | (1) | $— | (2) | ||||
Cash down payment | $12,206,000 | $21,682,000 | ||||||
Contract purchase price plus acquisition fee | $12,206,000 | $21,682,000 | ||||||
Other cash expenditures expensed/(credited) | $— | $— | ||||||
Other cash expenditures capitalized | $(67,000 | ) | $125,000 | |||||
Total acquisition cost | $12,139,000 | $21,807,000 | ||||||
Program: Name, location, type of property | Grubb & Ellis Healthcare REIT, Inc. Lima Medical Office Portfolio Lima, OH Medical Office | Grubb & Ellis Healthcare REIT, Inc. Highlands Ranch Medical Plaza Highlands Ranch, CO Medical Office | ||||||
Gross leasable square footage | 195,000 | 79,000 | ||||||
Date of purchase: | 12/7/2007 | 12/19/2007 | ||||||
Mortgage financing at date of purchase | $— | (3) | $8,853,000 | (4) | ||||
Cash down payment | $26,008,000 | $6,082,000 | ||||||
Contract purchase price plus acquisition fee | $26,008,000 | $14,935,000 | ||||||
Other cash expenditures expensed/(credited) | $— | $— | ||||||
Other cash expenditures capitalized | $344,000 | $109,000 | ||||||
Total acquisition cost | $26,352,000 | $15,044,000 |
(1) | Represents the mortgage loan payable on the date of purchase. The applicable REIT also borrowed $12,400,000 under its line of credit to finance the purchase price. The property obtained a $8,000,000 mortgage loan payable subsequent to acquisition in November 2007. |
(2) | Represents the mortgage loan payable on the date of purchase. The applicable REIT also borrowed $22,000,000 under its line of credit to finance the purchase price. |
(3) | Represents the mortgage loan payable on the date of purchase. The applicable REIT also borrowed $26,000,000 under its line of credit to finance the purchase price. |
(4) | Represents the mortgage loan payable on the date of purchase. The applicable REIT also borrowed $2,901,000 under its line of credit to finance the purchase price. |
II-14
Table of Contents
ACQUISITION OF PROPERTIES BY PROGRAM (UNAUDITED) — (Continued)
PUBLIC PROGRAMS
December 31, 2008
Program: Name, location, type of property | Grubb & Ellis Healthcare REIT, Inc. Chesterfield Rehabilitation Center(1) Chesterfield, MO Healthcare-Related Facility | Grubb & Ellis Healthcare REIT, Inc. Park Place Office Park Dayton, OH Medical Office | ||||||
Gross leasable square footage | 112,000 | 133,000 | ||||||
Date of purchase: | 12/19/2007 | 12/20/2007 | ||||||
Mortgage financing at date of purchase | $22,000,000 | (2) | $10,943,000 | (3) | ||||
Cash down payment | $15,533,000 | $5,743,000 | ||||||
Contract purchase price plus acquisition fee | $37,533,000 | $16,686,000 | ||||||
Other cash expenditures expensed/(credited) | $— | $— | ||||||
Other cash expenditures capitalized | $(641,000 | ) | $530,000 | |||||
Total acquisition cost | $36,892,000 | $17,216,000 | ||||||
Program: Name, location, type of property | Grubb & Ellis Healthcare REIT, Inc. Medical Portfolio 1 Overland, KS and Largo, Brandon and Lakeland, FL Medical Office | Grubb & Ellis Healthcare REIT, Inc. Fort Road Medical Building St. Paul, Minnesota Medical Office | ||||||
Gross leasable square footage | 163,000 | 50,000 | ||||||
Date of purchase: | 2/1/2008 | 3/6/2008 | ||||||
Mortgage financing at date of purchase | $22,000,000 | (4) | $5,800,000 | (5) | ||||
Cash down payment | $16,059,000 | $3,110,000 | ||||||
Contract purchase price plus acquisition fee | $38,059,000 | $8,910,000 | ||||||
Other cash expenditures expensed/(credited) | $— | $— | ||||||
Other cash expenditures capitalized | $(562,000 | ) | $98,000 | |||||
Total acquisition cost | $37,497,000 | $9,008,000 |
(1) | Grubb & Ellis Healthcare REIT, Inc. owns 80.0% of the property. |
(2) | Represents the mortgage loan payable on the date of purchase. The applicable REIT also borrowed $12,800,000 under its line of credit to finance the purchase price. |
(3) | Represents the mortgage loan payable on the date of purchase. The applicable REIT also borrowed $500,000 under its line of credit to finance the purchase price. |
(4) | Represents the mortgage loan payable on the date of purchase. The applicable REIT also borrowed $16,000,000 under its line of credit to finance the purchase price. |
(5) | Represents the mortgage loan payable on the date of purchase. The applicable REIT also borrowed $3,000,000 under its line of credit to finance the purchase price. |
II-15
Table of Contents
ACQUISITION OF PROPERTIES BY PROGRAM (UNAUDITED) — (Continued)
PUBLIC PROGRAMS
December 31, 2008
Program: Name, location, type of property | Grubb & Ellis Healthcare REIT, Inc. Liberty Falls Medical Plaza Liberty Township, OH Medical Office | Grubb & Ellis Healthcare REIT, Inc. Epler Parke Building B Indianapolis, IN Medical Office | ||||||
Gross leasable square footage | 44,000 | 34,000 | ||||||
Date of purchase: | 3/19/2008 | 3/24/2008 | ||||||
Mortgage financing at date of purchase | $— | (1) | $— | (2) | ||||
Cash down payment | $8,395,000 | $6,026,000 | ||||||
Contract purchase price plus acquisition fee | $8,395,000 | $6,026,000 | ||||||
Other cash expenditures expensed/(credited) | $— | $— | ||||||
Other cash expenditures capitalized | $(772,000 | ) | $355,000 | |||||
Total acquisition cost | $7,623,000 | $6,381,000 | ||||||
Program: Name, location, type of property | Grubb & Ellis Healthcare REIT, Inc. Cypress Station Medical Office Building Houston, TX Medical Office | Grubb & Ellis Healthcare REIT, Inc. Vista Professional Center Lakeland, FL Medical Office | ||||||
Gross leasable square footage | 52,000 | 32,000 | ||||||
Date of purchase: | 3/25/2008 | 3/27/2008 | ||||||
Mortgage financing at date of purchase | $7,300,000 | (3) | $— | (4) | ||||
Cash down payment | $4,236,000 | $5,408,000 | ||||||
Contract purchase price plus acquisition fee | $11,536,000 | $5,408,000 | ||||||
Other cash expenditures expensed/(credited) | $— | $— | ||||||
Other cash expenditures capitalized | $104,000 | $(100,000 | ) | |||||
Total acquisition cost | $11,640,000 | $5,308,000 |
(1) | Represents the mortgage loan payable on the date of purchase. The applicable REIT also borrowed $7,600,000 under its line of credit to finance the purchase price. |
(2) | Represents the mortgage loan payable on the date of purchase. The applicable REIT also borrowed $6,100,000 under its line of credit to finance the purchase price. The property was secured by a pool loan in the amount of $3,861,000 subsequent to acquisition in June 2008. |
(3) | Represents the mortgage loan payable on the date of purchase. The applicable REIT also borrowed $4,500,000 under its line of credit to finance the purchase price. |
(4) | Represents the mortgage loan payable on the date of purchase. The applicable REIT also borrowed $5,300,000 under its line of credit to finance the purchase price. |
II-16
Table of Contents
ACQUISITION OF PROPERTIES BY PROGRAM (UNAUDITED) — (Continued)
PUBLIC PROGRAMS
December 31, 2008
Program: Name, location, type of property | Grubb & Ellis Healthcare REIT, Inc. Senior Care Portfolio 1 Arlington, Galveston, Port Arthur and Texas City, TX and Lomita and El Monte, CA Healthcare-Related Facility | Grubb & Ellis Healthcare REIT, Inc. Amarillo Hospital Amarillo, TX Healthcare-Related Facility | ||||||
Gross leasable square footage | 226,000 | 65,000 | ||||||
Date of purchase: | 3/31/2008 and 6/30/2008 | 5/15/2008 | ||||||
Mortgage financing at date of purchase | $18,000,000 | (1) | $— | (2) | ||||
Cash down payment | $22,788,000 | $20,600,000 | ||||||
Contract purchase price plus acquisition fee | $40,788,000 | $20,600,000 | ||||||
Other cash expenditures expensed/(credited) | $— | $— | ||||||
Other cash expenditures capitalized | $193,000 | $79,000 | ||||||
Total acquisition cost | $40,981,000 | $20,679,000 | ||||||
Program: Name, location, type of property | Grubb & Ellis Healthcare REIT, Inc. 5995 Plaza Drive Cypress, CA Office | Grubb & Ellis Healthcare REIT, Inc. Nutfield Professional Center Derry, NH Medical Office | ||||||
Gross leasable square footage | 104,000 | 70,000 | ||||||
Date of purchase: | 5/29/2008 | 6/3/2008 | ||||||
Mortgage financing at date of purchase | $— | (3) | $— | (4) | ||||
Cash down payment | $26,471,000 | $14,626,000 | ||||||
Contract purchase price plus acquisition fee | $26,471,000 | $14,626,000 | ||||||
Other cash expenditures expensed/(credited) | $— | $— | ||||||
Other cash expenditures capitalized | $(900,000 | ) | $(343,000 | ) | ||||
Total acquisition cost | $25,571,000 | $14,283,000 |
(1) | Represents the mortgage loan payable on the date of purchase. The applicable REIT also borrowed $14,800,000 under its line of credit and $6,000,000 under an unsecured note from an affiliate to finance the purchase price. The property obtained an additional amount of $6,800,000 under the mortgage loan payable in July 2008. |
(2) | Represents the mortgage loan payable on the date of purchase. The applicable REIT also borrowed $20,000,000 under its line of credit to finance the purchase price. |
(3) | Represents the mortgage loan payable on the date of purchase. The applicable REIT also borrowed $26,050,000 under its line of credit to finance the purchase price. The property was secured by a pool loan in the amount of $16,830,000 subsequent to acquisition in June 2008. |
(4) | Represents the mortgage loan payable on the date of purchase. The applicable REIT also borrowed $14,800,000 under its line of credit to finance the purchase price. The property was secured by a pool loan in the amount of $8,808,000 subsequent to acquisition in June 2008. |
II-17
Table of Contents
ACQUISITION OF PROPERTIES BY PROGRAM (UNAUDITED) — (Continued)
PUBLIC PROGRAMS
December 31, 2008
Program: Name, location, type of property | Grubb & Ellis Healthcare REIT, Inc. SouthCrest Medical Plaza Stockbridge, GA Medical Office | Grubb & Ellis Healthcare REIT, Inc. Medical Portfolio 2 O’Fallon and St. Louis, MO and Keller and Wichita Falls, TX Medical Office | ||||||
Gross leasable square footage | 81,000 | 173,000 | ||||||
Date of purchase: | 6/24/2008 | 6/24/08, 6/27/08 and 6/30/08 | ||||||
Mortgage financing at date of purchase | $12,870,000 | $30,304,000 | (1) | |||||
Cash down payment | $8,942,000 | $15,840,000 | ||||||
Contract purchase price plus acquisition fee | $21,812,000 | $46,144,000 | ||||||
Other cash expenditures expensed/(credited) | $— | $— | ||||||
Other cash expenditures capitalized | $(470,000 | ) | $7,000 | |||||
Total acquisition cost | $21,342,000 | $46,151,000 | ||||||
Program: Name, location, type of property | Grubb & Ellis Healthcare REIT, Inc. Medical Portfolio 3 Indianapolis, IN Medical Office | Grubb & Ellis Healthcare REIT, Inc. Academy Medical Center Tucson, AZ Medical Office | ||||||
Gross leasable square footage | 689,000 | 41,000 | ||||||
Date of purchase: | 6/26/2008 | 6/26/2008 | ||||||
Mortgage financing at date of purchase | $58,000,000 | (2) | $— | (3) | ||||
Cash down payment | $34,803,000 | $8,343,000 | ||||||
Contract purchase price plus acquisition fee | $92,803,000 | $8,343,000 | ||||||
Other cash expenditures expensed/(credited) | $— | $— | ||||||
Other cash expenditures capitalized | $(84,000 | ) | $76,000 | |||||
Total acquisition cost | $92,719,000 | $8,419,000 |
(1) | Represents the mortgage loan payable on the date of purchase. $15,807,000 of this amount is secured by a pool loan. |
(2) | Represents the mortgage loan payable on the date of purchase. The applicable REIT also borrowed $32,735,000 under its line of credit to finance the purchase price. |
(3) | Represents the mortgage loan payable on the date of purchase. The applicable REIT also borrowed $8,200,000 under its line of credit to finance the purchase price. The property was secured by a pool loan in the amount of $5,016,000 subsequent to acquisition in June 2008. |
II-18
Table of Contents
ACQUISITION OF PROPERTIES BY PROGRAM (UNAUDITED) — (Continued)
PUBLIC PROGRAMS
December 31, 2008
Program: Name, location, type of property | Grubb & Ellis Healthcare REIT, Inc. Decatur Medical Plaza Decatur, GA Medical Office | Grubb & Ellis Healthcare REIT, Inc. Renaissance Medical Centre Bountiful, UT Medical Office | ||||||
Gross leasable square footage | 43,000 | 112,000 | ||||||
Date of purchase: | 6/27/2008 | 6/30/2008 | ||||||
Mortgage financing at date of purchase | $— | (1) | $20,495,000 | |||||
Cash down payment | $12,360,000 | $10,611,000 | ||||||
Contract purchase price plus acquisition fee | $12,360,000 | $31,106,000 | ||||||
Other cash expenditures expensed/(credited) | $— | $— | ||||||
Other cash expenditures capitalized | $(343,000 | ) | $144,000 | |||||
Total acquisition cost | $12,017,000 | $31,250,000 | ||||||
Program: Name, location, type of property | Grubb & Ellis Healthcare REIT, Inc. Medical Portfolio 4 Phoenix, AZ, Parma and Jefferson West, OH Waxahachie, Greenville and Cedar Hill, TX Medical Office | Grubb & Ellis Healthcare REIT, Inc. Mountain Empire Portfolio Kingsport and Bristol, TN and Pennington Gap and Norton, VA Medical Office | ||||||
Gross leasable square footage | 227,000 | 277,000 | ||||||
Date of purchase: | 8/29/2008, 9/9/2008 and 9/23/2008 | 9/12/2008 | ||||||
Mortgage financing at date of purchase | $29,989,000 | (2) | $— | (3) | ||||
Cash down payment | $19,451,000 | $26,265,000 | ||||||
Contract purchase price plus acquisition fee | $49,440,000 | $26,265,000 | ||||||
Other cash expenditures expensed/(credited) | $— | $— | ||||||
Other cash expenditures capitalized | $20,000 | $374,000 | ||||||
Total acquisition cost | $49,460,000 | $26,639,000 |
(1) | Represents the mortgage loan payable on the date of purchase. The applicable REIT also borrowed $12,600,000 under its line of credit to finance the purchase price. The property obtained a $7,900,000 mortgage loan payable subsequent to acquisition in September 2008. |
(2) | Represents the assumption of an existing mortgage loan payable of $8,589,000 and a new mortgage loan payable of $21,400,000 obtained on September 24, 2008 in connection with the purchase. Due to the multiple closing dates for the various buildings within this property, the applicable REIT also borrowed $40,750,000 under its line of credit, of which $39,750,000 was applied towards the closing of these particular buildings and $1,000,000 was refunded for a building that was not purchased. |
(3) | Represents the mortgage loan payable on the date of purchase. The applicable REIT also borrowed $12,000,000 under its line of credit to finance the purchase price. The property obtained a $17,304,000 mortgage loan payable subsequent to acquisition in September 2008. |
II-19
Table of Contents
ACQUISITION OF PROPERTIES BY PROGRAM (UNAUDITED) — (Continued)
PUBLIC PROGRAMS
December 31, 2008
Program: Name, location, type of property | Grubb & Ellis Healthcare REIT, Inc. Oklahoma City Medical Portfolio Oklahoma City, OK Medical Office | Grubb & Ellis Healthcare REIT, Inc. Mountain Plains Portfolio San Antonio and Webster, TX Medical Office | ||||||
Gross leasable square footage | 186,000 | 170,000 | ||||||
Date of purchase: | 9/16/2008 | 12/18/2008 | ||||||
Mortgage financing at date of purchase | $— | (1) | $— | |||||
Cash down payment | $30,128,000 | $44,075,000 | ||||||
Contract purchase price plus acquisition fee | $30,128,000 | $44,075,000 | ||||||
Other cash expenditures expensed/(credited) | $— | $— | ||||||
Other cash expenditures capitalized | $97,000 | $123,000 | ||||||
Total acquisition cost | $30,225,000 | $44,198,000 | ||||||
Program: Name, location, type of property | Grubb & Ellis Healthcare REIT, Inc. Marietta Health Park Marietta, GA Medical Office | |||||||
Gross leasable square footage | 81,000 | |||||||
Date of purchase: | 12/22/2008 | |||||||
Mortgage financing at date of purchase | $7,200,000 | |||||||
Cash down payment | $8,483,000 | |||||||
Contract purchase price plus acquisition fee | $15,683,000 | |||||||
Contract purchase price plus acquisition fee | $— | |||||||
Other cash expenditures capitalized | $114,000 | |||||||
Total acquisition cost | $15,797,000 |
(1) | Represents the mortgage loan payable on the date of purchase. The applicable REIT also borrowed $29,700,000 under its line of credit to finance the purchase price. |
II-20
Table of Contents
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED)
PRIVATE PROGRAMS
DECEMBER 31, 2008
Program: Name, location, type of property | NNN Caledon Wood, LLC Caledon Wood Apartments Greenville, SC Apartment | NNN Mission Square, LLC Misson Square Riverside, CA Office | ||||||
Gross leasable square footage | 350/348,000 | * | 128,000 | |||||
Date of purchase: | 1/3/2006 | 1/10/2006 | ||||||
Mortgage financing at date of purchase | $17,000,000 | $24,225,000 | ||||||
Cash down payment | $6,816,000 | $9,275,000 | ||||||
Contract purchase price plus acquisition fee | $23,816,000 | $33,500,000 | ||||||
Other cash expenditures expensed/(credited) | $51,000 | $(10,000 | ) | |||||
Other cash expenditures capitalized | $89,000 | $365,000 | ||||||
Total acquisition cost | $23,956,000 | $33,855,000 | ||||||
Program: Name, location, type of property | NNN Highbrook Apartments, LLC Highbrook Apartments High Point, NC Apartment | NNN Gateway One, LLC 701 Market Street St. Louis, MO Office | ||||||
Gross leasable square footage | 312/280,000 | * | 410,000 | |||||
Date of purchase: | 1/19/2006 | 2/9/2006 | ||||||
Mortgage financing at date of purchase | $16,925,000 | $50,000,000 | ||||||
Cash down payment | $6,466,000 | $16,600,000 | ||||||
Contract purchase price plus acquisition fee | $23,391,000 | $66,600,000 | ||||||
Other cash expenditures expensed/(credited) | $(4,000 | ) | $(139,000 | ) | ||||
Other cash expenditures capitalized | $330,000 | $753,000 | ||||||
Total acquisition cost | $23,717,000 | $67,214,000 | ||||||
Program: Name, location, type of property | NNN 1818 Market Street, LLC 1818 Market Street Philadelphia, PA Office | NNN Meadows Apartments, LLC The Meadows Apartments Asheville, NC Apartment | ||||||
Gross leasable square footage | 983,000 | 392/387,000 | * | |||||
Date of purchase: | 2/21/2006 | 3/15/2006 | ||||||
Mortgage financing at date of purchase | $132,000,000 | $21,300,000 | ||||||
Cash down payment | $25,384,000 | $7,100,000 | ||||||
Contract purchase price plus acquisition fee | $157,384,000 | $28,400,000 | ||||||
Other cash expenditures expensed/(credited) | $1,943,000 | $(73,000 | ) | |||||
Other cash expenditures capitalized | $5,384,000 | $121,000 | ||||||
Total acquisition cost | $164,711,000 | $28,448,000 |
* | Represents the number of units and total square footage of units. |
II-21
Table of Contents
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) — (Continued)
PRIVATE PROGRAMS
DECEMBER 31, 2008
Program: Name, location, type of property | NNN Enclave at Deep River, LLC The Enclave at Deep River Plantation High Point, NC Apartment | NNN OF8 Executive Center, LLC Executive Center VI Brookfield, WI Office | ||||||
Gross leasable square footage | 220/224,000 | * | 102,000 | |||||
Date of purchase: | 3/17/2006 | 4/18/2006 | ||||||
Mortgage financing at date of purchase | $13,725,000 | $8,750,000 | ||||||
Cash down payment | $5,307,000 | $950,000 | ||||||
Contract purchase price plus acquisition fee | $19,032,000 | $9,700,000 | ||||||
Other cash expenditures expensed/(credited) | $(81,000 | ) | $35,000 | |||||
Other cash expenditures capitalized | $112,000 | $232,000 | ||||||
Total acquisition cost | $19,063,000 | $9,967,000 | ||||||
Program: Name, location, type of property | NNN 901 Civic, LLC 901 West Civic Drive Santa Ana, CA Office | NNN Aventura Harbour, LLC Harbour Centre Aventura, FL Office | ||||||
Gross leasable square footage | 104,000 | 214,000 | ||||||
Date of purchase: | 4/24/2006 | 4/28/2006 | ||||||
Mortgage financing at date of purchase | $— | $51,180,000 | ||||||
Cash down payment | $15,000,000 | $20,015,000 | ||||||
Contract purchase price plus acquisition fee | $15,000,000 | $71,195,000 | ||||||
Other cash expenditures expensed/(credited) | $111,000 | $(660,000 | ) | |||||
Other cash expenditures capitalized | $155,000 | $5,276,000 | ||||||
Total acquisition cost | $15,266,000 | $75,811,000 | ||||||
Program: Name, location, type of property | NNN Arbor Trace Apartments, LLC Arbor Trace Apartments Virginia Beach, VA Apartment | NNN Lake Center, LLC Lake Center Four Marlton, NJ Office | ||||||
Gross leasable square footage | 148/125,000 | * | 89,000 | |||||
Date of purchase: | 5/1/2006 | 5/18/2006 | ||||||
Mortgage financing at date of purchase | $11,063,000 | $14,830,000 | ||||||
Cash down payment | $4,129,000 | $4,969,000 | ||||||
Contract purchase price plus acquisition fee | $15,192,000 | $19,799,000 | ||||||
Other cash expenditures expensed/(credited) | $108,000 | $(56,000 | ) | |||||
Other cash expenditures capitalized | $290,000 | $791,000 | ||||||
Total acquisition cost | $15,590,000 | $20,534,000 |
* | Represents the number of units and total square footage of units. |
II-22
Table of Contents
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) — (Continued)
PRIVATE PROGRAMS
DECEMBER 31, 2008
Program: Name, location, type of property | NNN 3050 Superior, LLC 3050 Superior Drive NW Rochester, MN Office | NNN Las Colinas Highlands, LLC Las Colinas Highlands Irving, TX Office | ||||||
Gross leasable square footage | 205,000 | 199,000 | ||||||
Date of purchase: | 5/18/2006 | 6/27/2006 | ||||||
Mortgage financing at date of purchase | $28,100,000 | $32,000,000 | ||||||
Cash down payment | $8,775,000 | $12,148,000 | ||||||
Contract purchase price plus acquisition fee | $36,875,000 | $44,148,000 | ||||||
Other cash expenditures expensed/(credited) | $(441,000 | ) | $(235,000 | ) | ||||
Other cash expenditures capitalized | $873,000 | $784,000 | ||||||
Total acquisition cost | $37,307,000 | $44,697,000 | ||||||
Program: Name, location, type of property | NNN 220 Virginia Avenue, LLC 220 Virginia Avenue Indianapolis, IN Office | NNN Chase Tower, LLC(1) Chase Tower Austin, TX Office | ||||||
Gross leasable square footage | 562,000 | 389,000 | ||||||
Date of purchase: | 6/29/2006 | 7/3/2006 | ||||||
Mortgage financing at date of purchase | $84,405,000 | $54,800,000 | ||||||
Cash down payment | $16,395,000 | $17,700,000 | ||||||
Contract purchase price plus acquisition fee | $100,800,000 | $72,500,000 | ||||||
Other cash expenditures expensed/(credited) | $(594,000 | ) | $5,000 | |||||
Other cash expenditures capitalized | $420,000 | $1,475,000 | ||||||
Total acquisition cost | $100,626,000 | $73,980,000 | ||||||
Program: Name, location, type of property | NNN Villa Apartments, LLC Villas by the Lakes Apartments Jonesboro, GA Apartment | NNN 2716 North Tenaya, LLC Sierra Health Building Las Vegas, NV Office | ||||||
Gross leasable square footage | 256/283,000 | * | 204,000 | |||||
Date of purchase: | 7/7/2006 | 7/25/2006 | ||||||
Mortgage financing at date of purchase | $14,925,000 | $50,750,000 | ||||||
Cash down payment | $5,572,000 | $23,500,000 | ||||||
Contract purchase price plus acquisition fee | $20,497,000 | $74,250,000 | ||||||
Other cash expenditures expensed/(credited) | $(41,000 | ) | $(42,000 | ) | ||||
Other cash expenditures capitalized | $598,000 | $1,892,000 | ||||||
Total acquisition cost | $21,054,000 | $76,100,000 |
(1) | This program owns 26.8% of the property. The balance of the property is owned by two affiliated programs, NNN Opportunity Fund VIII, LLC with 47.5% ownership and NNN 2003 Value Fund, LLC with 14.8% ownership. The remaining 10.9% of the property is owned by an unaffiliated entity. |
* | Represents the number of units and total square footage of units. |
II-23
Table of Contents
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) — (Continued)
PRIVATE PROGRAMS
DECEMBER 31, 2008
Program: Name, location, type of property | NNN Westlake Villa, LLC Westlake Villas Apartments San Antonio, TX Apartment | NNN 400 Capitol, LLC The Regions Center Little Rock, AR Office | ||||||
Gross leasable square footage | 325/223,000 | * | 532,000 | |||||
Date of purchase: | 8/8/2006 | 8/18/2006 | ||||||
Mortgage financing at date of purchase | $11,325,000 | $32,000,000 | ||||||
Cash down payment | $4,228,000 | $6,368,000 | ||||||
Contract purchase price plus acquisition fee | $15,553,000 | $38,368,000 | ||||||
Other cash expenditures expensed/(credited) | $(313,000 | ) | $(167,000 | ) | ||||
Other cash expenditures capitalized | $373,000 | $1,746,000 | ||||||
Total acquisition cost | $15,613,000 | $39,947,000 | ||||||
Program: Name, location, type of property | NNN Southcreek Corporate, LLC Southcreek Corporate Center II Overland Park, KS Office | NNN Chatham Court/Reflections, LLC Chatham Court Dallas, TX Apartment | ||||||
Gross leasable square footage | 56,000 | 494/378,000 | * | |||||
Date of purchase: | 9/1/2006 | 9/8/2006 | ||||||
Mortgage financing at date of purchase | $6,000,000 | $18,938,000 | ||||||
Cash down payment | $2,000,000 | $7,070,000 | ||||||
Contract purchase price plus acquisition fee | $8,000,000 | $26,008,000 | ||||||
Other cash expenditures expensed/(credited) | $(48,000 | ) | $(207,000 | ) | ||||
Other cash expenditures capitalized | $59,000 | $826,000 | ||||||
Total acquisition cost | $8,011,000 | $26,627,000 | ||||||
Program: Name, location, type of property | NNN Arbors at Fairview, LLC Arbors at Fairview Apartments Simpsonville, SC Apartment | NNN 1 & 2 Met Center, LLC Met Center 1 & 2 Austin, TX Office | ||||||
Gross leasable square footage | 168/181,000 | * | 95,000 | |||||
Date of purchase: | 10/12/2006 | 10/13/2006 | ||||||
Mortgage financing at date of purchase | $10,500,000 | $8,600,000 | ||||||
Cash down payment | $3,920,000 | $3,420,000 | ||||||
Contract purchase price plus acquisition fee | $14,420,000 | $12,020,000 | ||||||
Other cash expenditures expensed/(credited) | $(53,000 | ) | $(234,000 | ) | ||||
Other cash expenditures capitalized | $834,000 | $104,000 | ||||||
Total acquisition cost | $15,201,000 | $11,890,000 |
* | Represents the number of units and total square footage of units. |
II-24
Table of Contents
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) — (Continued)
PRIVATE PROGRAMS
DECEMBER 31, 2008
Program: Name, location, type of property | NNN 250 East 5th Street, LLC 250 East 5th Street Cincinnati, OH Office | One Northlake Place, LLC 11500 Northlake Drive Cincinnati, OH Office | ||||||
Gross leasable square footage | 537,000 | 177,000 | ||||||
Date of purchase: | 10/25/2006 | 10/27/2006 | ||||||
Mortgage financing at date of purchase | $65,000,000 | $13,350,000 | ||||||
Cash down payment | $27,756,000 | $4,100,000 | ||||||
Contract purchase price plus acquisition fee | $92,756,000 | $17,450,000 | ||||||
Other cash expenditures expensed/(credited) | $(153,000 | ) | $4,000 | |||||
Other cash expenditures capitalized | $805,000 | $272,000 | ||||||
Total acquisition cost | $93,408,000 | $17,726,000 | ||||||
Program: Name, location, type of property | NNN DCF Campus, LLC Department of Children and Families Plantation, FL Office | NNN Beechwood Apartments, LLC Beechwood Apartments Greensboro, NC Apartment | ||||||
Gross leasable square footage | 118,000 | 208/173,000 | * | |||||
Date of purchase: | 11/15/2006 | 11/17/2006 | ||||||
Mortgage financing at date of purchase | $10,090,000 | $8,625,000 | ||||||
Cash down payment | $3,300,000 | $3,220,000 | ||||||
Contract purchase price plus acquisition fee | $13,390,000 | $11,845,000 | ||||||
Other cash expenditures expensed/(credited) | $(229,000 | ) | $(7,000 | ) | ||||
Other cash expenditures capitalized | $369,000 | $268,000 | ||||||
Total acquisition cost | $13,530,000 | $12,106,000 | ||||||
Program: Name, location, type of property | NNN Westpoint, LLC 1255 Corporate Drive Irving, TX Office | NNN Castaic Town Center, LLC Castaic Town Center Castaic, CA Retail | ||||||
Gross leasable square footage | 150,000 | 40,000 | ||||||
Date of purchase: | 11/29/2006 | 11/30/2006 | ||||||
Mortgage financing at date of purchase | $15,125,000 | $11,250,000 | ||||||
Cash down payment | $5,675,000 | $4,150,000 | ||||||
Contract purchase price plus acquisition fee | $20,800,000 | $15,400,000 | ||||||
Other cash expenditures expensed/(credited) | $(11,000 | ) | $26,000 | |||||
Other cash expenditures capitalized | $269,000 | $572,000 | ||||||
Total acquisition cost | $21,058,000 | $15,998,000 |
* | Represents the number of units and total square footage of units. |
II-25
Table of Contents
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) — (Continued)
PRIVATE PROGRAMS
DECEMBER 31, 2008
Program: Name, location, type of property | NNN Northwoods, LLC Northwoods II Columbus, OH Office | NNN 50 Lake Center, LLC Lake Center V Marlton, NJ Office | ||||||
Gross leasable square footage | 116,000 | 89,000 | ||||||
Date of purchase: | 12/8/2006 | 12/15/2006 | ||||||
Mortgage financing at date of purchase | $8,200,000 | $16,425,000 | ||||||
Cash down payment | $2,770,000 | $6,075,000 | ||||||
Contract purchase price plus acquisition fee | $10,970,000 | $22,500,000 | ||||||
Other cash expenditures expensed/(credited) | $(43,000 | ) | $(634,000 | ) | ||||
Other cash expenditures capitalized | $186,000 | $628,000 | ||||||
Total acquisition cost | $11,113,000 | $22,494,000 | ||||||
Program: Name, location, type of property | NNN Mt. Moriah Apartments, LLC The Trails at Mt. Moriah Apartments Memphis, TN Apartment | NNN 1600 Parkwood, LLC 1600 Parkwood Circle Atlanta, GA Office | ||||||
Gross leasable square footage | 630/539,000 | * | 151,000 | |||||
Date of purchase: | 12/28/2006 | 12/28/2006 | ||||||
Mortgage financing at date of purchase | $22,875,000 | $18,250,000 | ||||||
Cash down payment | $8,540,000 | $9,275,000 | ||||||
Contract purchase price plus acquisition fee | $31,415,000 | $27,525,000 | ||||||
Other cash expenditures expensed/(credited) | $57,000 | $2,000 | ||||||
Other cash expenditures capitalized | $2,691,000 | $704,000 | ||||||
Total acquisition cost | $34,163,000 | $28,231,000 | ||||||
Program: Name, location, type of property | NNN Royal 400, LLC Royal 400 Business Park Alpharetta, GA Office | NNN Lenox Park, LLC Lenox Office Park (Bldg A and B) Memphis, TN Office | ||||||
Gross leasable square footage | 140,000 | 193,000 | ||||||
Date of purchase: | 12/29/2006 | 1/3/2007 | ||||||
Mortgage financing at date of purchase | $9,400,000 | $17,300,000 | ||||||
Cash down payment | $4,400,000 | $6,925,000 | ||||||
Contract purchase price plus acquisition fee | $13,800,000 | $24,225,000 | ||||||
Other cash expenditures expensed/(credited) | $19,000 | $133,000 | ||||||
Other cash expenditures capitalized | $942,000 | $342,000 | ||||||
Total acquisition cost | $14,761,000 | $24,700,000 |
* | Represents the number of units and total square footage of units. |
II-26
Table of Contents
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) — (Continued)
PRIVATE PROGRAMS
DECEMBER 31, 2008
Program: Name, location, type of property | NNN Advanced Orthopaedic, LLC Advanced Orthopaedic Center Richmond, VA Medical Office | NNN Woodbridge Apartments, LLC Woodbridge Apartments San Antonio, TX Apartment | ||||||
Gross leasable square footage | 60,000 | 253/224,000 | * | |||||
Date of purchase: | 1/5/2007 | 1/16/2007 | ||||||
Mortgage financing at date of purchase | $12,500,000 | $9,750,000 | ||||||
Cash down payment | $4,238,000 | $3,640,000 | ||||||
Contract purchase price plus acquisition fee | $16,738,000 | $13,390,000 | ||||||
Other cash expenditures expensed/(credited) | $63,000 | $(25,000 | ) | |||||
Other cash expenditures capitalized | $298,000 | $344,000 | ||||||
Total acquisition cost | $17,099,000 | $13,709,000 | ||||||
Program: Name, location, type of property | NNN Hunter Plaza, LLC Hunter Plaza Irving, TX Retail | NNN Three Resource Square, LLC Three Resource Square Charlotte, NC Office | ||||||
Gross leasable square footage | 106,000 | 122,000 | ||||||
Date of purchase: | 2/27/2007 | 3/7/2007 | ||||||
Mortgage financing at date of purchase | $22,500,000 | $16,250,000 | ||||||
Cash down payment | $7,500,000 | $7,283,000 | ||||||
Contract purchase price plus acquisition fee | $30,000,000 | $23,533,000 | ||||||
Other cash expenditures expensed/(credited) | $31,000 | $54,000 | ||||||
Other cash expenditures capitalized | $461,000 | $505,000 | ||||||
Total acquisition cost | $30,492,000 | $24,092,000 | ||||||
Program: Name, location, type of property | NNN Durham Office Portfolio, LLC Durham Office Portfolio Durham, NC Office | NNN 4101 Interwood, LLC Interwood Office Park Houston, TX Office | ||||||
Gross leasable square footage | 276,000 | 80,000 | ||||||
Date of purchase: | 3/12/2007 | 3/14/2007 | ||||||
Mortgage financing at date of purchase | $26,000,000 | $8,250,000 | ||||||
Cash down payment | $9,225,000 | $3,080,000 | ||||||
Contract purchase price plus acquisition fee | $35,225,000 | $11,330,000 | ||||||
Other cash expenditures expensed/(credited) | $(71,000 | ) | $(47,000 | ) | ||||
Other cash expenditures capitalized | $348,000 | $107,000 | ||||||
Total acquisition cost | $35,502,000 | $11,390,000 |
* | Represents the number of units and total square footage of units. |
II-27
Table of Contents
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) — (Continued)
PRIVATE PROGRAMS
DECEMBER 31, 2008
Program: Name, location, type of property | NNN Vineyard Springs Apartments, LLC Vineyard Springs Apartments San Antonio, TX Apartment | NNN Parkway 400, LLC Parkway 400 Alpharetta, GA Office | ||||||
Gross leasable square footage | 364/338,000 | * | 193,000 | |||||
Date of purchase: | 3/20/2007 | 3/26/2007 | ||||||
Mortgage financing at date of purchase | $21,825,000 | $25,500,000 | ||||||
Cash down payment | $8,148,000 | $9,280,000 | ||||||
Contract purchase price plus acquisition fee | $29,973,000 | $34,780,000 | ||||||
Other cash expenditures expensed/(credited) | $(11,000 | ) | $40,000 | |||||
Other cash expenditures capitalized | $978,000 | $401,000 | ||||||
Total acquisition cost | $30,940,000 | $35,221,000 | ||||||
Program: Name, location, type of property | NNN Springfield Apartments, LLC Springfield Apartments Durham, NC Apartment | NNN North Scottsdale Medical Office, LLC North Scottsdale Medical Office Portfolio Scottsdale, AZ Medical Office | ||||||
Gross leasable square footage | 288/204,000 | * | 154,000 | |||||
Date of purchase: | 3/29/2007 | 3/29/2007 | ||||||
Mortgage financing at date of purchase | $13,575,000 | $36,500,000 | ||||||
Cash down payment | $5,068,000 | $9,850,000 | ||||||
Contract purchase price plus acquisition fee | $18,643,000 | $46,350,000 | ||||||
Other cash expenditures expensed/(credited) | $31,000 | $69,000 | ||||||
Other cash expenditures capitalized | $1,264,000 | $1,221,000 | ||||||
Total acquisition cost | $19,938,000 | $47,640,000 | ||||||
Program: Name, location, type of property | NNN Culver Medical Plaza, LLC Culver Medical Plaza Culver City, CA Medical Office | NNN Northmark Business Center II, LLC Northmark Business Center II Cincinnati, OH Office | ||||||
Gross leasable square footage | 52,000 | 100,000 | ||||||
Date of purchase: | 4/23/2007 | 5/15/2007 | ||||||
Mortgage financing at date of purchase | $14,120,000 | $9,120,000 | ||||||
Cash down payment | $4,060,000 | $2,622,000 | ||||||
Contract purchase price plus acquisition fee | $18,180,000 | $11,742,000 | ||||||
Other cash expenditures expensed/(credited) | $24,000 | $49,000 | ||||||
Other cash expenditures capitalized | $286,000 | $58,000 | ||||||
Total acquisition cost | $18,490,000 | $11,849,000 |
* | Represents the number of units and total square footage of units. |
II-28
Table of Contents
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) — (Continued)
PRIVATE PROGRAMS
DECEMBER 31, 2008
Program: Name, location, type of property | NNN Chartwell Court, LLC Chartwell Court Apartments Houston, TX Apartment | NNN Siena Office Park I, LLC Siena Office Park I Henderson, NV Office | ||||||
Gross leasable square footage | 243/254,000 | * | 101,000 | |||||
Date of purchase: | 5/25/2007 | 6/4/2007 | ||||||
Mortgage financing at date of purchase | $12,450,000 | $28,620,000 | ||||||
Cash down payment | $4,648,000 | $8,228,000 | ||||||
Contract purchase price plus acquisition fee | $17,098,000 | $36,848,000 | ||||||
Other cash expenditures expensed/(credited) | $15,000 | $52,000 | ||||||
Other cash expenditures capitalized | $487,000 | $229,000 | ||||||
Total acquisition cost | $17,600,000 | $37,129,000 | ||||||
Program: Name, location, type of property | NNN 8555 University Place, LLC Express Scripts St. Louis, MO Office | NNN San Marin Apartments, LLC San Marin Apartments Corpus Christi, TX Apartment | ||||||
Gross leasable square footage | 315,000 | 220/192,000 | * | |||||
Date of purchase: | 6/4/2007 | 6/5/2007 | ||||||
Mortgage financing at date of purchase | $45,000,000 | $12,000,000 | ||||||
Cash down payment | $15,179,000 | $4,480,000 | ||||||
Contract purchase price plus acquisition fee | $60,179,000 | $16,480,000 | ||||||
Other cash expenditures expensed/(credited) | $76,000 | $(66,000 | ) | |||||
Other cash expenditures capitalized | $1,867,000 | $444,000 | ||||||
Total acquisition cost | $62,122,000 | $16,858,000 | ||||||
Program: Name, location, type of property | NNN Cypresswood Drive, LLC 9720 Cypresswood Drive Houston, TX Office / Restaurant | NNN Mainstreet at Flatiron, LLC Mainstreet at Flatiron Broomfield, CO Office / Retail | ||||||
Gross leasable square footage | 99,000 | 93,000 | ||||||
Date of purchase: | 6/20/2007 | 6/21/2007 | ||||||
Mortgage financing at date of purchase | $17,500,000 | $12,640,000 | ||||||
Cash down payment | $5,490,000 | $3,634,000 | ||||||
Contract purchase price plus acquisition fee | $22,990,000 | $16,274,000 | ||||||
Other cash expenditures expensed/(credited) | $1,000 | $(8,000 | ) | |||||
Other cash expenditures capitalized | $378,000 | $96,000 | ||||||
Total acquisition cost | $23,369,000 | $16,362,000 |
* | Represents the number of units and total square footage of units. |
II-29
Table of Contents
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) — (Continued)
PRIVATE PROGRAMS
DECEMBER 31, 2008
Program: Name, location, type of property | NNN 824 North Market Street, LLC 824 North Market Street Wilmington, DE Office | NNN Century Hills, LLC Century Hills Apartments Augusta, GA Apartment | ||||||
Gross leasable square footage | 203,000 | 200/221,000 | * | |||||
Date of purchase: | 6/29/2007 | 6/29/2007 | ||||||
Mortgage financing at date of purchase | $29,280,000 | $15,750,000 | ||||||
Cash down payment | $8,367,000 | $5,880,000 | ||||||
Contract purchase price plus acquisition fee | $37,647,000 | $21,630,000 | ||||||
Other cash expenditures expensed/(credited) | $12,000 | $27,000 | ||||||
Other cash expenditures capitalized | $768,000 | $401,000 | ||||||
Total acquisition cost | $38,427,000 | $22,058,000 | ||||||
Program: Name, location, type of property | NNN Retreat at Stonecrest, LLC Retreat at Stonecrest Apartments Lithonia, GA Apartment | NNN Engineering Drive, LLC 3550 Engineering Drive Norcross, GA Office | ||||||
Gross leasable square footage | 276/288,000 | * | 99,000 | |||||
Date of purchase: | 7/2/2007 | 7/6/2007 | ||||||
Mortgage financing at date of purchase | $16,650,000 | $13,522,000 | ||||||
Cash down payment | $6,216,000 | $6,233,000 | ||||||
Contract purchase price plus acquisition fee | $22,866,000 | $19,755,000 | ||||||
Other cash expenditures expensed/(credited) | $164,000 | $58,000 | ||||||
Other cash expenditures capitalized | $619,000 | $151,000 | ||||||
Total acquisition cost | $23,649,000 | $19,964,000 | ||||||
Program: Name, location, type of property | NNN Sugar Land Medical Center, LLC Sugar Land Medical Center Sugar Land, TX Medical Office | NNN Harbour Landing, LLC Harbour Landing Apartments Corpus Christi, TX Apartment | ||||||
Gross leasable square footage | 80,000 | 284/193,000 | * | |||||
Date of purchase: | 7/26/2007 | 7/31/2007 | ||||||
Mortgage financing at date of purchase | $12,000,000 | $11,063,000 | ||||||
Cash down payment | $3,347,000 | $4,130,000 | ||||||
Contract purchase price plus acquisition fee | $15,347,000 | $15,193,000 | ||||||
Other cash expenditures expensed/(credited) | $(7,000 | ) | $(3,000 | ) | ||||
Other cash expenditures capitalized | $957,000 | $729,000 | ||||||
Total acquisition cost | $16,297,000 | $15,919,000 |
* | Represents the number of units and total square footage of units. |
II-30
Table of Contents
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) — (Continued)
PRIVATE PROGRAMS
DECEMBER 31, 2008
Program: Name, location, type of property | NNN Church Street Office Center, LLC Church Street Office Center Evanston, IL Office | NNN River Ridge, LLC River Ridge Apartments Asheville, NC Apartment | ||||||
Gross leasable square footage | 153,000 | 252/270,000 | * | |||||
Date of purchase: | 8/16/2007 | 8/16/2007 | ||||||
Mortgage financing at date of purchase | $21,600,000 | $19,646,000 | ||||||
Cash down payment | $5,400,000 | $7,335,000 | ||||||
Contract purchase price plus acquisition fee | $27,000,000 | $26,981,000 | ||||||
Other cash expenditures expensed/(credited) | $(110,000 | ) | $60,000 | |||||
Other cash expenditures capitalized | $1,049,000 | $918,000 | ||||||
Total acquisition cost | $27,939,000 | $27,959,000 | ||||||
Program: Name, location, type of property | NNN Riverwood Place, LLC One and Two Riverwood Place Pewaukee, WI Office | NNN Old Line Professional Centre, LLC Old Line Professional Centre Waldorf, MD Medical Office | ||||||
Gross leasable square footage | 196,000 | 81,000 | ||||||
Date of purchase: | 8/17/2007 | 8/17/2007 | ||||||
Mortgage financing at date of purchase | $26,500,000 | $9,400,000 | ||||||
Cash down payment | $10,745,000 | $2,960,000 | ||||||
Contract purchase price plus acquisition fee | $37,245,000 | $12,360,000 | ||||||
Other cash expenditures expensed/(credited) | $138,000 | $95,000 | ||||||
Other cash expenditures capitalized | $1,195,000 | $688,000 | ||||||
Total acquisition cost | $38,578,000 | $13,143,000 | ||||||
Program: Name, location, type of property | NNN One Ridgmar Centre, LLC One Ridgmar Centre Fort Worth, TX Office | NNN Wesley Paces, LLC Wesley Paces Norcross, GA Apartment | ||||||
Gross leasable square footage | 177,000 | 260/296,000 | * | |||||
Date of purchase: | 8/17/2007 | 8/17/2007 | ||||||
Mortgage financing at date of purchase | $15,500,000 | $20,089,000 | ||||||
Cash down payment | $6,020,000 | $7,500,000 | ||||||
Contract purchase price plus acquisition fee | $21,520,000 | $27,589,000 | ||||||
Other cash expenditures expensed/(credited) | $(46,000 | ) | $(7,000 | ) | ||||
Other cash expenditures capitalized | $855,000 | $1,036,000 | ||||||
Total acquisition cost | $22,329,000 | $28,618,000 |
* | Represents the number of units and total square footage of units. |
II-31
Table of Contents
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) — (Continued)
PRIVATE PROGRAMS
DECEMBER 31, 2008
Program: Name, location, type of property | NNN Biewend Building, LLC Biewend Building Boston, MA Medical Office | NNN Tupper Building, LLC Tupper Building Boston, MA Medical Office | ||||||
Gross leasable square footage | 155,000 | 98,000 | ||||||
Date of purchase: | 9/5/2007 | 9/5/2007 | ||||||
Mortgage financing at date of purchase | $48,880,000 | $43,920,000 | ||||||
Cash down payment | $13,676,000 | $12,293,000 | ||||||
Contract purchase price plus acquisition fee | $62,556,000 | $56,213,000 | ||||||
Other cash expenditures expensed/(credited) | $213,000 | $191,000 | ||||||
Other cash expenditures capitalized | $1,554,000 | $1,309,000 | ||||||
Total acquisition cost | $64,323,000 | $57,713,000 | ||||||
Program: Name, location, type of property | NNN Darien Business Center, LLC Darien Business Center Darien, IL Office | NNN Ashley Overlook, LLC Ashley Overlook North Charleston, SC Office | ||||||
Gross leasable square footage | 176,000 | 107,000 | ||||||
Date of purchase: | 9/25/2007 | 10/1/2007 | ||||||
Mortgage financing at date of purchase | $23,040,000 | $15,100,000 | ||||||
Cash down payment | $6,406,000 | $8,900,000 | ||||||
Contract purchase price plus acquisition fee | $29,446,000 | $24,000,000 | ||||||
Other cash expenditures expensed/(credited) | $56,000 | $12,000 | ||||||
Other cash expenditures capitalized | $1,003,000 | $48,000 | ||||||
Total acquisition cost | $30,505,000 | $24,060,000 | ||||||
Program: Name, location, type of property | NNN Park Central, LLC Park Central Atlanta, GA Office | NNN Emberwood Apartments, LLC Emberwood Apartments Lafayette, LA Apartment | ||||||
Gross leasable square footage | 212,000 | 296/267,000 | * | |||||
Date of purchase: | 11/29/2007 | 12/4/2007 | ||||||
Mortgage financing at date of purchase | $20,000,000 | $16,050,000 | ||||||
Cash down payment | $9,865,000 | $5,992,000 | ||||||
Contract purchase price plus acquisition fee | $29,865,000 | $22,042,000 | ||||||
Other cash expenditures expensed/(credited) | $82,000 | $41,000 | ||||||
Other cash expenditures capitalized | $1,779,000 | $1,696,000 | ||||||
Total acquisition cost | $31,726,000 | $23,779,000 |
* | Represents the number of units and total square footage of units. |
II-32
Table of Contents
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) — (Continued)
PRIVATE PROGRAMS
DECEMBER 31, 2008
Program: Name, location, type of property | NNN Exchange South, LLC Exchange South Jacksonville, FL Office | NNN Woodside, LLC Woodside Corporate Park Beaverton, OR Office | ||||||
Gross leasable square footage | 194,000 | 193,000 | ||||||
Date of purchase: | 12/13/2007 | 12/13/2007 | ||||||
Mortgage financing at date of purchase | $16,800,000 | $19,380,000 | ||||||
Cash down payment | $7,800,000 | $12,865,000 | ||||||
Contract purchase price plus acquisition fee | $24,600,000 | $32,245,000 | ||||||
Other cash expenditures expensed/(credited) | $146,000 | $58,000 | ||||||
Other cash expenditures capitalized | $1,115,000 | $1,025,000 | ||||||
Total acquisition cost | $25,861,000 | $33,328,000 | ||||||
Program: Name, location, type of property | NNN Townley Business Park, LLC Townley Business Park Phoenix, AZ Office | NNN Eastern Wisconsin Medical Portfolio, LLC Aurora Health Care - Multi Site Milwaukee, WI Medical Office | ||||||
Gross leasable square footage | 122,000 | 153,000 | ||||||
Date of purchase: | 12/21/2007 | 12/21/2007 | ||||||
Mortgage financing at date of purchase | $9,900,000 | $32,300,000 | ||||||
Cash down payment | $4,726,000 | $9,401,000 | ||||||
Contract purchase price plus acquisition fee | $14,626,000 | $41,701,000 | ||||||
Other cash expenditures expensed/(credited) | $(20,000 | ) | $(20,000 | ) | ||||
Other cash expenditures capitalized | $541,000 | $1,271,000 | ||||||
Total acquisition cost | $15,147,000 | $42,952,000 | ||||||
Program: Name, location, type of property | Washington Park Office Center, LLC Washington Park Office Center Dayton, OH Office | Six Forks Station, LLC Six Forks Station Apartments Raleigh, NC Apartment | ||||||
Gross leasable square footage | 154,000 | 321/359,000 | * | |||||
Date of purchase: | 1/31/2008 | 3/31/2008 | ||||||
Mortgage financing at date of purchase | $14,700,000 | $20,700,000 | ||||||
Cash down payment | $6,618,000 | $8,472,000 | ||||||
Contract purchase price plus acquisition fee | $21,318,000 | $29,172,000 | ||||||
Other cash expenditures expensed/(credited) | $(37,000 | ) | $19,000 | |||||
Other cash expenditures capitalized | $356,000 | $365,000 | ||||||
Total acquisition cost | $21,637,000 | $29,556,000 |
* | Represents the number of units and total square footage of units. |
II-33
Table of Contents
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) — (Continued)
PRIVATE PROGRAMS
DECEMBER 31, 2008
Program: Name, location, type of property | Jacksonville Medical Plaza, LLC Jacksonville Medical Plaza I & II Jacksonville, FL Medical Office | 5001 Enclave, LLC Enclave on Golden Triangle Apartments Keller, TX Apartment | ||||||
Gross leasable square footage | 132,000 | 273/224,000 | * | |||||
Date of purchase: | 3/31/2008 | 4/7/2008 | ||||||
Mortgage financing at date of purchase | $19,100,000 | $21,400,000 | ||||||
Cash down payment | $8,616,000 | $8,633,000 | ||||||
Contract purchase price plus acquisition fee | $27,716,000 | $30,033,000 | ||||||
Other cash expenditures expensed/(credited) | $31,000 | $104,000 | ||||||
Other cash expenditures capitalized | $2,203,000 | $511,000 | ||||||
Total acquisition cost | $29,950,000 | $30,648,000 | ||||||
Program: Name, location, type of property | 5200 Upper Metro, LLC 5200 Upper Metro Place Dublin, OH Office | 3100 River Exchange Member, LLC AMLI at River Park Apartments Sandy Springs, GA Apartment | ||||||
Gross leasable square footage | 96,000 | 222/227,000 | * | |||||
Date of purchase: | 4/29/2008 | 6/26/2008 | ||||||
Mortgage financing at date of purchase | $6,370,000 | $15,810,000 | ||||||
Cash down payment | $3,827,000 | $10,200,000 | ||||||
Contract purchase price plus acquisition fee | $10,197,000 | $26,010,000 | ||||||
Other cash expenditures expensed/(credited) | $1,000 | $(23,000 | ) | |||||
Other cash expenditures capitalized | $263,000 | $312,000 | ||||||
Total acquisition cost | $10,461,000 | $26,299,000 | ||||||
Program: Name, location, type of property | Plantations at Haywood, LLC Plantations at Haywood Apartments Greenville, SC Apartment | One Live Oak, LLC One Live Oak Atlanta, GA Office | ||||||
Gross leasable square footage | 562/662,000 | * | 199,000 | |||||
Date of purchase: | 6/27/2008 | 8/14/2008 | ||||||
Mortgage financing at date of purchase | $24,180,000 | $24,115,000 | ||||||
Cash down payment | $15,600,000 | $11,196,000 | ||||||
Contract purchase price plus acquisition fee | $39,780,000 | $35,311,000 | ||||||
Other cash expenditures expensed/(credited) | $(9,000 | ) | $(417,000 | ) | ||||
Other cash expenditures capitalized | $894,000 | $2,150,000 | ||||||
Total acquisition cost | $40,665,000 | $37,044,000 |
* | Represents the number of units and total square footage of units. |
II-34
Table of Contents
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) — (Continued)
PRIVATE PROGRAMS
DECEMBER 31, 2008
Program: Name, location, type of property | 1600 Barberry Lane, LLC AMLI at Peachtree City Apartments Peachtree City, GA Apartment | Oak Park Office Center, LLC Oak Park Office Center III Houston, TX Office | ||||||
Gross leasable square footage | 312/306,000 | * | 151,000 | |||||
Date of purchase: | 8/29/2008 | 10/30/2008 | ||||||
Mortgage financing at date of purchase | $23,790,000 | $17,600,000 | ||||||
Cash down payment | $13,908,000 | $15,040,000 | ||||||
Contract purchase price plus acquisition fee | $37,698,000 | $32,640,000 | ||||||
Other cash expenditures expensed/(credited) | $(7,000 | ) | $16,000 | |||||
Other cash expenditures capitalized | $1,164,000 | $665,000 | ||||||
Total acquisition cost | $38,855,000 | $33,321,000 | ||||||
Program: Name, location, type of property | 1650 Sunflower, LLC 1650 Sunflower Avenue Costa Mesa, CA Industrial | |||||||
Gross leasable square footage | 112,000 | |||||||
Date of purchase: | 10/30/2008 | |||||||
Mortgage financing at date of purchase | $17,559,000 | |||||||
Cash down payment | $12,438,000 | |||||||
Contract purchase price plus acquisition fee | $29,997,000 | |||||||
Other cash expenditures expensed/(credited) | $(4,000 | ) | ||||||
Other cash expenditures capitalized | $1,067,000 | |||||||
Total acquisition cost | $31,060,000 |
Program: Name, location, type of property | NNN 5202 President’s Court, LLC 5202 President’s Court Frederick, MD Office | CSAA Portfolio - TIAA Building TIAA Building Broomfield, CO Office | ||||||
Gross leasable square footage | 233,000 | 93,000 | ||||||
Date of purchase: | 1/29/2008 | 2/29/2008 | ||||||
Mortgage financing at date of purchase | $— | $— | ||||||
Cash down payment | $52,530,000 | $16,565,000 | ||||||
Contract purchase price plus acquisition fee | $52,530,000 | $16,565,000 | ||||||
Other cash expenditures expensed/(credited) | $(27,000 | ) | $(3,000 | ) | ||||
Other cash expenditures capitalized | $557,000 | $28,000 | ||||||
Total acquisition cost | $53,060,000 | $16,590,000 |
* | Represents the number of units and total square footage of units. |
II-35
Table of Contents
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) — (Continued)
PRIVATE PROGRAMS
DECEMBER 31, 2008
Program: Name, location, type of property | CSAA Portfolio - Fifth Third Bank Fifth Third Bank Montgomery, IL Retail | CSAA Portfolio - CVS Pharmacy CVS Pharmacy (Decatur) Decatur, GA Retail | ||||||
Gross leasable square footage | 55,000 | 16,000 | ||||||
Date of purchase: | 2/29/2008 | 2/29/2008 | ||||||
Mortgage financing at date of purchase | $— | $— | ||||||
Cash down payment | $3,238,000 | $5,573,000 | ||||||
Contract purchase price plus acquisition fee | $3,238,000 | $5,573,000 | ||||||
Other cash expenditures expensed/(credited) | $— | $2,000 | ||||||
Other cash expenditures capitalized | $24,000 | $29,000 | ||||||
Total acquisition cost | $3,262,000 | $5,604,000 | ||||||
Program: Name, location, type of property | CSAA Portfolio - Chase Bank Chase Bank (Carpentersville) Carpentersville, IL Retail | CSAA Portfolio - Chase Bank Chase Bank (Northlake) Northlake, IL Retail | ||||||
Gross leasable square footage | 4,000 | 4,000 | ||||||
Date of purchase: | 2/29/2008 | 2/29/2008 | ||||||
Mortgage financing at date of purchase | $— | $— | ||||||
Cash down payment | $3,615,000 | $4,208,000 | ||||||
Contract purchase price plus acquisition fee | $3,615,000 | $4,208,000 | ||||||
Other cash expenditures expensed/(credited) | $(1,000 | ) | $(1,000 | ) | ||||
Other cash expenditures capitalized | $22,000 | $24,000 | ||||||
Total acquisition cost | $3,636,000 | $4,231,000 | ||||||
Program: Name, location, type of property | CSAA Portfolio - Home Depot Home Depot (Austell) Austell, GA Retail | CSAA Portfolio - Walgreens Walgreens (Austin) Austin, TX Retail | ||||||
Gross leasable square footage | 131,000 | 15,000 | ||||||
Date of purchase: | 3/7/2008 | 3/28/2008 | ||||||
Mortgage financing at date of purchase | $— | $— | ||||||
Cash down payment | $9,816,000 | $6,442,000 | ||||||
Contract purchase price plus acquisition fee | $9,816,000 | $6,442,000 | ||||||
Other cash expenditures expensed/(credited) | $(42,000 | ) | $(4,000 | ) | ||||
Other cash expenditures capitalized | $44,000 | $21,000 | ||||||
Total acquisition cost | $9,818,000 | $6,459,000 |
II-36
Table of Contents
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) — (Continued)
PRIVATE PROGRAMS
DECEMBER 31, 2008
Program: Name, location, type of property | Tech Hill 511, LLC Tech Hill I & II Silver Spring, MD Office | CSAA Portfolio - Walgreens Walgreens (Marysville) Marysville, OH Retail | ||||||
Gross leasable square footage | 143,000 | 15,000 | ||||||
Date of purchase: | 3/28/2008 | 4/21/2008 | ||||||
Mortgage financing at date of purchase | $12,000,000 | $— | ||||||
Cash down payment | $27,140,000 | $5,279,000 | ||||||
Contract purchase price plus acquisition fee | $39,140,000 | $5,279,000 | ||||||
Other cash expenditures expensed/(credited) | $10,000 | $— | ||||||
Other cash expenditures capitalized | $771,000 | $14,000 | ||||||
Total acquisition cost | $39,921,000 | $5,293,000 | ||||||
Program: Name, location, type of property | CSAA Portfolio - Walgreens Walgreens (Upper Arlington) Columbus, OH Retail | CSAA Portfolio - Fifth Third Bank Fifth Third Bank (Schaumburg) Schaumburg, IL Retail | ||||||
Gross leasable square footage | 21,000 | 4,000 | ||||||
Date of purchase: | 4/21/2008 | 5/5/2008 | ||||||
Mortgage financing at date of purchase | $— | $— | ||||||
Cash down payment | $7,457,000 | $4,370,000 | ||||||
Contract purchase price plus acquisition fee | $7,457,000 | $4,370,000 | ||||||
Other cash expenditures expensed/(credited) | $(13,000 | ) | $(18,000 | ) | ||||
Other cash expenditures capitalized | $16,000 | $28,000 | ||||||
Total acquisition cost | $7,460,000 | $4,380,000 | ||||||
Program: Name, location, type of property | CSAA Portfolio - Walgreens Walgreens (Chelsea) Chelsea, AL Retail | NNN Fountainhead, LLC Shorecliff Investments, LLC San Antonio, TX Office | ||||||
Gross leasable square footage | 15,000 | 171,000 | ||||||
Date of purchase: | 5/15/2008 | 5/16/2008 | ||||||
Mortgage financing at date of purchase | $— | $12,750,000 | ||||||
Cash down payment | $7,873,000 | $21,313,000 | ||||||
Contract purchase price plus acquisition fee | $7,873,000 | $34,063,000 | ||||||
Other cash expenditures expensed/(credited) | $(21,000 | ) | $(131,000 | ) | ||||
Other cash expenditures capitalized | $37,000 | $1,461,000 | ||||||
Total acquisition cost | $7,889,000 | $35,393,000 |
II-37
Table of Contents
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) — (Continued)
PRIVATE PROGRAMS
DECEMBER 31, 2008
Program: Name, location, type of property | CSAA Portfolio - Walgreens Walgreens (Joliet) Joliet, IL Retail | |||||||
Gross leasable square footage | 14,000 | |||||||
Date of purchase: | 6/25/2008 | |||||||
Mortgage financing at date of purchase | $— | |||||||
Cash down payment | $4,960,000 | |||||||
Contract purchase price plus acquisition fee | $4,960,000 | |||||||
Other cash expenditures expensed/(credited) | $(1,000 | ) | ||||||
Other cash expenditures capitalized | $20,000 | |||||||
Total acquisition cost | $4,979,000 |
II-38
Table of Contents
By: | /s/ Stanley J. Olander, Jr. |
Signature | Title | Date | ||||
/s/ Stanley J. Olander, Jr. Stanley J. Olander, Jr. | Chief Executive Officer, President and Chairman of the Board (Principal Executive Officer) | June 15, 2009 | ||||
/s/ Shannon K S Johnson Shannon K S Johnson | Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) | June 15, 2009 | ||||
/s/ Glenn W. Bunting Glenn W. Bunting | Director | June 15, 2009 | ||||
/s/ Robert A. Gary, IV Robert A. Gary, IV | Director | June 15, 2009 | ||||
/s/ W. Brand Inlow W. Brand Inlow | Director | June 15, 2009 | ||||
/s/ Andrea R. Biller Andrea R. Biller | Director | June 15, 2009 |
II-39
Table of Contents
Exhibit | ||||
Number | Exhibit | |||
1 | .1** | Form of Dealer Manager Agreement between Grubb & Ellis Apartment REIT, Inc. and Grubb & Ellis Securities, Inc. | ||
3 | .1 | Articles of Amendment and Restatement of the Registrant (included as Exhibit 3.1 to our Form 10-Q filed on November 9, 2006 and incorporated herein by reference) | ||
3 | .2 | Articles of Amendment to the Articles of Amendment and Restatement of the Registrant (included as Exhibit 3.1 to our Form 8-K filed on December 10, 2007 and incorporated herein by reference) | ||
3 | .3 | Amended and Restated Bylaws of the Registrant (included as Exhibit 3.2 to our Form 10-Q filed on November 9, 2006 and incorporated herein by reference) | ||
3 | .4 | Amendment to Amended and Restated Bylaws (included as Exhibit 3.6 to Post-Effective Amendment No. 1 to our Registration Statement on Form S-11 (File No. 333-130945) filed January 31, 2007 and incorporated herein by reference) | ||
3 | .5 | Agreement of Limited Partnership of NNN Apartment REIT Holdings, L.P. (included as Exhibit 3.3 to our Form 10-Q filed on November 9, 2006 and incorporated herein by reference) | ||
4 | .1* | Form of Subscription Agreement (included as Exhibit B to the prospectus) | ||
5 | .1* | Form of Opinion of Venable LLP, as to the legality of the shares being registered | ||
8 | .1* | Form of Opinion of Morris, Manning & Martin, LLP as to tax matters | ||
10 | .1* | Amended and Restated Distribution Reinvestment Plan (included as Exhibit C to the prospectus) | ||
10 | .2* | Share Repurchase Plan (included as Exhibit D to the prospectus) | ||
10 | .3 | 2006 Incentive Award Plan (included as Exhibit 10.3 to our Registration Statement on Form S-11, Amendment No. 3 filed on April 21, 2006 (File No. 333-130945) and incorporated herein by reference) | ||
10 | .4 | First Amended and Restated Advisory Agreement between Grubb & Ellis Apartment REIT, Inc. and Grubb & Ellis Apartment REIT Advisor, LLC (included as Exhibit 10.1 to our Form 8-K filed on July 21, 2008 and incorporated herein by reference) | ||
10 | .4.1 | Amendment No. 1 to the First Amended and Restated Advisory Agreement between Grubb & Ellis Apartment REIT, Inc. and Grubb & Ellis Apartment REIT Advisor, LLC (included as Exhibit 10.1 to our Current Report on Form 8-K filed on December 2, 2008 and incorporated herein by reference) | ||
10 | .4.2* | Form of Amendment No. 2 to the First Amended and Restated Advisory Agreement between Grubb & Ellis Apartment REIT, Inc. and Grubb & Ellis Apartment REIT Advisor, LLC | ||
10 | .5 | Escrow Agreement (included as Exhibit 10.5 to our Form 10-Q filed on November 9, 2006 and incorporated herein by reference) | ||
10 | .6 | Amendment to 2006 Incentive Award Plan (included as Exhibit 10.6 to our Form 10-Q filed on November 9, 2006 and incorporated herein by reference) | ||
10 | .7 | Assignment of Contract dated October 30, 2006 by Triple Net Properties, LLC to Apartment REIT Walker Ranch, L.P. (included as Exhibit 10.8 to our Form 8-K filed on November 3, 2006 and incorporated herein by reference) | ||
10 | .8 | Credit Agreement dated October 31, 2006 by and among NNN Apartment REIT Holdings, L.P. and Wachovia Bank, National Association (included as Exhibit 10.9 to our Form 8-K filed on November 3, 2006 and incorporated herein by reference) | ||
10 | .9 | Deed of Trust, Security Agreement and Fixture Filing dated October 31, 2006 by and among NNN Apartment REIT Holdings, L.P. and Wachovia Bank, National Association (included as Exhibit 10.10 to our Form 8-K filed on November 3, 2006 and incorporated herein by reference) |
Table of Contents
Exhibit | ||||
Number | Exhibit | |||
10 | .10 | Revolving Note dated October 31, 2006 by and among NNN Apartment REIT Holdings, L.P. and Wachovia Bank, National Association (included as Exhibit 10.11 to our Form 8-K filed on November 3, 2006 and incorporated herein by reference) | ||
10 | .11 | Swingline Note dated October 31, 2006 by and among NNN Apartment REIT Holdings, L.P. and Wachovia Bank, National Association (included as Exhibit 10.12 to our Form 8-K filed on November 3, 2006 and incorporated herein by reference) | ||
10 | .12 | Guaranty dated October 31, 2006 by and among NNN Apartment REIT Holdings, L.P. and Wachovia Bank, National Association (included as Exhibit 10.13 to our Form 8-K filed on November 3, 2006 and incorporated herein by reference) | ||
10 | .13 | Assignment of Leases and Rents dated October 31, 2006 by and among NNN Apartment REIT Holdings, L.P. and Wachovia Bank, National Association (included as Exhibit 10.14 to our Form 8-K filed on November 3, 2006 and incorporated herein by reference) | ||
10 | .14 | Mezzanine Credit Agreement dated October 31, 2006 by and among NNN Apartment REIT Holdings, L.P. and Wachovia Bank, National Association (included as Exhibit 10.15 to our Form 8-K filed on November 3, 2006 and incorporated herein by reference) | ||
10 | .15 | Second Deed of Trust, Security Agreement and Fixture Filing dated October 31, 2006 by and among NNN Apartment REIT Holdings, L.P. and Wachovia Bank, National Association (included as Exhibit 10.16 to our Form 8-K filed on November 3, 2006 and incorporated herein by reference) | ||
10 | .16 | Note (Mezzanine Loan) for the Walker Ranch Property dated October 31, 2006 by and among NNN Apartment REIT Holdings, L.P. and Wachovia Bank, National Association (included as Exhibit 10.17 to our Form 8-K filed on November 3, 2006 and incorporated herein by reference) | ||
10 | .17 | Guaranty (Mezzanine Loan) dated October 31, 2006 by and among NNN Apartment REIT Holdings, L.P. and Wachovia Bank, National Association (included as Exhibit 10.18 to our Form 8-K filed on November 3, 2006 and incorporated herein by reference) | ||
10 | .18 | Second Assignment of Leases and Rents dated October 31, 2006 by and among NNN Apartment REIT Holdings, L.P. and Wachovia Bank, National Association (included as Exhibit 10.19 to our Form 8-K filed on November 3, 2006 and incorporated herein by reference) | ||
10 | .19 | Senior Credit Agreement Waiver dated October 31, 2006 by and among NNN Apartment REIT Holdings, L.P. and Wachovia Bank, National Association (included as Exhibit 10.20 to our Form 8-K filed on November 3, 2006 and incorporated herein by reference) | ||
10 | .20 | Mezzanine Credit Agreement Waiver dated October 31, 2006 by and among NNN Apartment REIT Holdings, L.P. and Wachovia Bank, National Association (included as Exhibit 10.21 to our Form 8-K filed on November 3, 2006 and incorporated herein by reference) | ||
10 | .21 | Assignment and Acceptance Agreement dated November 22, 2006 by and among Wachovia Bank, National Association, LaSalle Bank National Association and Wachovia Bank, National Association (included as Exhibit 10.1 to our Form 8-K filed on November 28, 2006 and incorporated herein by reference) | ||
10 | .22 | First Amendment to Credit Agreement dated November 22, 2006 among NNN Apartment REIT Holdings, L.P., NNN Apartment REIT, Inc., Apartment REIT Walker Ranch, LP and Apartment REIT Walker Ranch GP, LLC, Wachovia Bank, National Association and the Lenders (included as Exhibit 10.2 to our Form 8-K filed on November 28, 2006 and incorporated herein by reference) | ||
10 | .23 | Revolving Note dated November 22, 2006 by and among NNN Apartment REIT Holdings, L.P. and Wachovia Bank, National Association (included as Exhibit 10.3 to our Form 8-K filed on November 28, 2006 and incorporated herein by reference) | ||
10 | .24 | Revolving Note dated November 22, 2006 by and among NNN Apartment REIT Holdings, L.P. and LaSalle Bank National Association (included as Exhibit 10.4 to our Form 8-K filed on November 28, 2006 and incorporated herein by reference) | ||
10 | .25 | Amendment to the Contract of Sale dated November 27, 2006 by and between TR Hidden Lake Partners, Ltd. and Triple Net Properties, LLC (included as Exhibit 10.7 to our Form 8-K filed on January 4, 2007 and incorporated herein by reference) |
Table of Contents
Exhibit | ||||
Number | Exhibit | |||
10 | .26 | Deed of Trust, Security Agreement, Fixture Financing Statement and Assignment of Leases and Rents by El Dorado Apartments, LLC for the benefit of Royal Bank of Canada, dated November 29, 2006 (included as Exhibit 10.6 to our Form 8-K filed on November 7, 2007 and incorporated herein by reference) | ||
10 | .27 | Assignment of Contract dated December 28, 2006 by Triple Net Properties, LLC to Apartment REIT Hidden Lakes, L.P. (included as Exhibit 10.8 to our Form 8-K filed on January 4, 2007 and incorporated herein by reference) | ||
10 | .28 | Promissory Note dated December 28, 2006 issued by Apartment REIT Hidden Lakes, LP to Wachovia Bank, National Association (included as Exhibit 10.9 to our Form 8-K filed on January 4, 2007 and incorporated herein by reference) | ||
10 | .35 | Unsecured Promissory Note dated December 28, 2006 issued by NNN Apartment REIT Holdings, L.P. in favor of NNN Realty Advisors, Inc. (included as Exhibit 10.16 to our Form 8-K filed on January 4, 2007 and incorporated herein by reference) | ||
10 | .36 | Purchase and Sale Agreement by and between Northspring Park, LLC and Triple Net Properties, LLC entered into as of February 21, 2007 (included as Exhibit 10.1 to our Form 8-K filed on June 18, 2007 and incorporated herein by reference) | ||
10 | .37 | Purchase and Sale Agreement dated February 21, 2007 by and between FS Towne Crossing, LTD and Triple Net Properties, LLC (included as Exhibit 10.1 to our Form 8-K filed on August 31, 2007 and incorporated herein by reference) | ||
10 | .38 | Purchase and Sale Agreement by and between El Dorado Apartments, LLC and Triple Net Properties, LLC, dated February 21, 2007 (included as Exhibit 10.1 to our Form 8-K filed on November 7, 2007 and incorporated herein by reference) | ||
10 | .39 | Deed of Trust, Security Agreement and Fixture Filing made and given by Braemar Housing Limited Partnership to J. Lindsay Stradley, Jr. as Trustee for Transamerica Occidental Life Insurance Company as of March 25, 2005 (included as Exhibit 10.5 to our Form 8-K filed July 6, 2007 and incorporated herein by reference) | ||
10 | .40 | Promissory Note dated April 12, 2007 issued by Apartment REIT Walker Ranch, LP to Wachovia Bank, National Association (included as Exhibit 10.1 to our Form 8-K filed on April 17, 2007 and incorporated herein by reference) | ||
10 | .41 | Deed of Trust, Security Agreement and Fixture Filing dated April 12, 2007 by Apartment REIT Walker Ranch, LP for the benefit of Wachovia Bank, National Association (included as Exhibit 10.2 to our Form 8-K filed on April 17, 2007 and incorporated herein by reference) | ||
10 | .42 | Indemnity and Guaranty Agreement dated April 12, 2007 by NNN Apartment REIT, Inc. in favor of Wachovia Bank, National Association (included as Exhibit 10.3 to our Form 8-K filed on April 17, 2007 and incorporated herein by reference) | ||
10 | .43 | Assignment of Leases and Rents dated April 12, 2007 by Apartment REIT Walker Ranch, LP to Wachovia Bank, National Association (included as Exhibit 10.4 to our Form 8-K filed on April 17, 2007 and incorporated herein by reference) | ||
10 | .44 | Assignment of Warranties and Other Contract Rights dated April 12, 2007 by Apartment REIT Walker Ranch, LP in favor of Wachovia Bank, National Association (included as Exhibit 10.5 to our Form 8-K filed on April 17, 2007 and incorporated herein by reference) | ||
10 | .45 | Environmental Indemnity Agreement dated April 12, 2007 by NNN Apartment REIT, Inc. in favor of Wachovia Bank, National Association (included as Exhibit 10.6 to our Form 8-K filed on April 17, 2007 and incorporated herein by reference) | ||
10 | .46 | SEC Indemnity and Guaranty Agreement dated April 12, 2007 by NNN Apartment REIT, Inc. in favor of Wachovia Bank, National Association (included as Exhibit 10.7 to our Form 8-K filed on April 17, 2007 and incorporated herein by reference) | ||
10 | .47 | Purchase and Sale Agreement by and between Braemar Housing Limited Partnership and Triple Net Properties, LLC entered into as of April 26, 2007 (included as Exhibit 10.1 to our Form 8-K filed July 6, 2007 and incorporated herein by reference) | ||
10 | .48 | Secured Promissory Note issued by Braemar Housing Limited Partnership in favor of Transamerica Occidental Life Insurance Company dated May 25, 2005 (included as Exhibit 10.4 to our Form 8-K filed July 6, 2007 and incorporated herein by reference) |
Table of Contents
Exhibit | ||||
Number | Exhibit | |||
10 | .49 | Absolute Assignment of Leases and Rents by Braemar Housing Limited Partnership in favor of Transamerica Occidental Life Insurance Company dated May 25, 2005 (included as Exhibit 10.6 to our Form 8-K filed July 6, 2007 and incorporated herein by reference) | ||
10 | .50 | Sale Agreement dated June 8, 2007 by and between Bay Point Resort Corpus Christi, L.P. and Triple Net Properties, LLC (included as Exhibit 10.1 to our Form 8-K filed on August 7, 2007 and incorporated herein by reference) | ||
10 | .51 | Reinstatement of and First Amendment to and Joinder and Ratification of Purchase and Sale Agreement dated June 8, 2007 by and between FS Towne Crossing, LP, Fountain Green, LLC, and Triple Net Properties, LLC (included as Exhibit 10.2 to our Form 8-K filed on August 31, 2007 and incorporated herein by reference) | ||
10 | .52 | Reinstatement of and First Amendment to Purchase and Sale Agreement by and between North Spring Park, LLC and Triple Net Properties, LLC made as of June 12, 2007 (included as Exhibit 10.2 to our Form 8-K filed on June 18, 2007 and incorporated herein by reference) | ||
10 | .53 | Assignment of Contract by Triple Net Properties, LLC to Apartment REIT Park at North Gate, LP made as of June 12, 2007 (included as Exhibit 10.3 to our Form 8-K filed on June 18, 2007 and incorporated herein by reference) | ||
10 | .54 | Reinstatement of and First Amendment to Purchase and Sale Agreement by and between El Dorado Apartments, LLC and Triple Net Properties, LLC, dated June 12, 2007 (included as Exhibit 10.2 to our Form 8-K filed on November 7, 2007 and incorporated herein by reference) | ||
10 | .55 | Amendment to Sale Agreement dated June 14, 2007 by and between Bay Point Resort Corpus Christi, L.P. and Triple Net Properties, LLC (included as Exhibit 10.2 to our Form 8-K filed on August 7, 2007 and incorporated herein by reference) | ||
10 | .56 | Assignment and Assumption of Real Estate Purchase Agreement by and between Triple Net Properties, LLC and Apartment REIT Residences at Braemar, LLC as of June 29, 2007 (included as Exhibit 10.2 to our Form 8-K filed July 6, 2007 and incorporated herein by reference) | ||
10 | .57 | Loan Assumption and Modification Agreement by and between Apartment REIT Residences at Braemar, LLC, and Transamerica Occidental Life Insurance Company and is joined by Braemar Housing Limited Partnership, et al. made and entered into and effective as of June 29, 2007 (included as Exhibit 10.3 to our Form 8-K filed July 6, 2007 and incorporated herein by reference) | ||
10 | .58 | Supplemental Carveout Guarantee and Indemnity Agreement by NNN Apartment REIT, Inc. in favor of Transamerica Occidental Life Insurance Company dated June 29, 2007 (included as Exhibit 10.7 to our Form 8-K filed July 6, 2007 and incorporated herein by reference) | ||
10 | .59 | Supplemental Environmental Indemnity Agreement by Apartment REIT Residences at Braemar, LLC and NNN Apartment REIT, Inc. in favor of Transamerica Occidental Life Insurance Company dated June 29, 2007 (included as Exhibit 10.8 to our Form 8-K filed July 6, 2007 and incorporated herein by reference) | ||
10 | .60 | Assignment and Subordination of Management Agreement by Apartment REIT Residences at Braemar, LLC, Triple Net Properties Realty, Inc. and Transamerica Occidental Life Insurance Company dated June 29, 2007 (included as Exhibit 10.9 to our Form 8-K filed July 6, 2007 and incorporated herein by reference) | ||
10 | .61 | Unsecured Promissory Note dated June 29, 2007 issued by NNN Apartment REIT Holdings, L.P. in favor of NNN Realty Advisors, Inc. (included as Exhibit 10.10 to our Form 8-K filed July 6, 2007 and incorporated herein by reference) | ||
10 | .62 | Amendment Letter regarding Credit Agreement dated July 10, 2007 by and among NNN Apartment REIT Holdings, L.P., NNN Apartment REIT, Inc., Wachovia Bank, National Association and LaSalle Bank National Association (included as Exhibit 10.1 to our Form 8-K filed July 13, 2007 and incorporated herein by reference) | ||
10 | .63 | Amendment Letter regarding Mezzanine Credit Agreement dated July 10, 2007 by and among NNN Apartment REIT Holdings, L.P., NNN Apartment REIT, Inc. and Wachovia Bank, National Association (included as Exhibit 10.2 to our Form 8-K filed July 13, 2007 and incorporated herein by reference) |
Table of Contents
Exhibit | ||||
Number | Exhibit | |||
10 | .64 | Sale Agreement Assignment dated August 1, 2007 by and between Triple Net Properties, LLC and Apartment REIT Bay Point Resort, LLC (included as Exhibit 10.3 to our Form 8-K filed on August 7, 2007 and incorporated herein by reference) | ||
10 | .65 | Fixed+1 Multifamily Note dated August 1, 2007 by Apartment REIT Bay Point Resort, LLC in favor of PNC ARCS LLC (included as Exhibit 10.4 to our Form 8-K filed on August 7, 2007 and incorporated herein by reference) | ||
10 | .66 | Multifamily Deed of Trust, Assignment of Rents, and Security Agreement and Fixture Filing dated August 1, 2007 by Apartment REIT Bay Point Resort, LLC to Lawyers Title Insurance Corporation for the benefit of PNC ARCS LLC (included as Exhibit 10.5 to our Form 8-K filed on August 7, 2007 and incorporated herein by reference) | ||
10 | .67 | Unsecured Promissory Note dated August 1, 2007 by NNN Apartment REIT Holdings, L.P. in favor of NNN Realty Advisors, Inc. (included as Exhibit 10.6 to our Form 8-K filed on August 7, 2007 and incorporated herein by reference) | ||
10 | .68 | Fixed+1 Multifamily Note dated August 1, 2007 by Apartment REIT Park at North Gate, LP in favor of PNC ARCS LLC (included as Exhibit 10.7 to our Form 8-K filed on August 7, 2007 and incorporated herein by reference) | ||
10 | .69 | Multifamily Deed of Trust, Assignment of Rents, and Security Agreement and Fixture Filing dated August 1, 2007 by Apartment REIT Park at North Gate, LP to Lawyers Title Insurance Company for the benefit of PNC ARCS LLC (included as Exhibit 10.8 to our Form 8-K filed on August 7, 2007 and incorporated herein by reference) | ||
10 | .70 | Assumption Agreement dated August 24, 2007 by and among FS Towne Crossing, LP, Bowler Holdings, LLC, Fountain Green, LLC, Apartment REIT Towne Crossing, LP, and the Federal Home Loan Mortgage Corporation acknowledged and consented to by Wendell A. Jacobson (included as Exhibit 10.4 to our Form 8-K filed on August 31, 2007 and incorporated herein by reference) | ||
10 | .71 | Guaranty dated August 28, 2007 by NNN Apartment REIT, Inc. for the benefit of Federal Home Loan Mortgage Corporation (included as Exhibit 10.7 to our Form 8-K filed on August 31, 2007 and incorporated herein by reference) | ||
10 | .72 | Assignment of Contract dated August 29, 2007 by Triple Net Properties, LLC to Apartment REIT Towne Crossing, LP (included as Exhibit 10.3 to our Form 8-K filed on August 31, 2007 and incorporated herein by reference) | ||
10 | .73 | Unsecured Promissory Note dated August 29, 2007 by NNN Apartment REIT Holdings, LP in favor of NNN Realty Advisors, Inc. (included as Exhibit 10.8 to our Form 8-K filed on August 31, 2007 and incorporated herein by reference) | ||
10 | .74 | Assignment of Contract by Triple Net Properties, LLC to Apartment REIT Villas of El Dorado, LLC, dated November 1, 2007 (included as Exhibit 10.3 to our Form 8-K filed on November 7, 2007 and incorporated herein by reference) | ||
10 | .75 | Agreement of Assumption and Modification of Security Instrument and Other Loan Documents by and among El Dorado Apartments, LLC; Wendell A. Jacobson; Apartment REIT Villas of El Dorado, LLC; NNN Apartment REIT, Inc.; and The Bank of New York Trust Company, National Association, as Trustee for the Registered Holders of Morgan Stanley Capital I Inc., Commercial Mortgage Pass-Through Certificates, Series 2007-IQ14, dated as of November 1, 2007 (included as Exhibit 10.4 to our Form 8-K filed on November 7, 2007 and incorporated herein by reference) | ||
10 | .76 | Limited Guaranty by NNN Apartment REIT, Inc. in favor of The Bank of New York Trust Company, National Association, as Trustee for the Registered Holders of Morgan Stanley Capital I Inc., Commercial Mortgage Pass-Through Certificates, Series 2007-IQ14, dated November 1, 2007 (included as Exhibit 10.7 to our Form 8-K filed on November 7, 2007 and incorporated herein by reference) | ||
10 | .77 | Environmental Indemnity Agreement by Apartment REIT Villas of El Dorado, LLC and NNN Apartment REIT, Inc. for the benefit of The Bank of New York Trust Company, National Association, as Trustee for the Registered Holders of Morgan Stanley Capital I Inc., Commercial Mortgage Pass-Through Certificates, Series 2007-IQ14, dated November 1, 2007 (included as Exhibit 10.8 to our Form 8-K filed on November 7, 2007 and incorporated herein by reference) |
Table of Contents
Exhibit | ||||
Number | Exhibit | |||
10 | .78 | Loan Agreement by and between NNN Apartment REIT, Inc. and Wachovia Bank, National Association, dated November 1, 2007 (included as Exhibit 10.9 to our Form 8-K filed on November 7, 2007 and incorporated herein by reference) | ||
10 | .79 | Promissory Note by NNN Apartment REIT, Inc. in favor of Wachovia Bank, National Association, dated November 1, 2007 (included as Exhibit 10.10 to our Form 8-K filed on November 7, 2007 and incorporated herein by reference) | ||
10 | .80 | Pledge Agreement (Partnership Interests) by and between Wachovia Bank, National Association and NNN Apartment REIT Holdings, L.P., dated November 1, 2007 (included as Exhibit 10.11 to our Form 8-K filed on November 7, 2007 and incorporated herein by reference) | ||
10 | .81 | Promissory Note by El Dorado Apartments, LLC in favor of Royal Bank of Canada, dated November 29, 2007 (included as Exhibit 10.5 to our Form 8-K filed on November 7, 2007 and incorporated herein by reference) | ||
10 | .82 | Purchase and Sale Agreement by and between Fort Nelson Apartments, L.L.C. and Triple Net Properties, LLC, dated December 10, 2007 (included as Exhibit 10.1 to our Current Report on Form 8-K filed December 31, 2007 and incorporated herein by reference) | ||
10 | .83 | Purchase and Sale Agreement by and between The Myrtles at Old Towne, L.L.C. and Triple Net Properties, LLC, dated December 10, 2007 (included as Exhibit 10.2 to our Current Report on Form 8-K filed December 31, 2007 and incorporated herein by reference) | ||
10 | .84 | Amendment Letter by and between Triple Net Properties, LLC, Fort Nelson Apartments, L.L.C. and The Myrtles at Old Towne, L.L.C., dated December 19, 2007 (included as Exhibit 10.3 to our Current Report on Form 8-K filed December 31, 2007 and incorporated herein by reference) | ||
10 | .85 | Sale Agreement Assignment by and between Triple Net, Properties, LLC and G&E Apartment REIT The Heights at Old Towne, LLC, dated December 21, 2007 (included as Exhibit 10.4 to our Current Report on Form 8-K filed December 31, 2007 and incorporated herein by reference) | ||
10 | .86 | Sale Agreement Assignment by and between Triple Net, Properties, LLC and G&E Apartment REIT The Myrtles at Old Towne, LLC, dated December 21, 2007 (included as Exhibit 10.5 to our Current Report on Form 8-K filed December 31, 2007 and incorporated herein by reference) | ||
10 | .87 | Multifamily Note by G&E Apartment REIT The Heights at Old Towne, LLC issued to Capmark Bank for Freddie Mac, dated December 21, 2007 (included as Exhibit 10.6 to our Current Report on Form 8-K filed December 31, 2007 and incorporated herein by reference) | ||
10 | .88 | Multifamily Deed of Trust, Assignment of Rents and Security Agreement, by G&E Apartment REIT The Heights at Old Towne, LLC, dated December 21, 2007 (included as Exhibit 10.7 to our Current Report on Form 8-K filed December 31, 2007 and incorporated herein by reference) | ||
10 | .89 | Guaranty by G&E Apartment REIT The Heights at Old Towne, LLC for the benefit of Capmark Bank, dated December 21, 2007 (included as Exhibit 10.8 to our Current Report on Form 8-K filed December 31, 2007 and incorporated herein by reference) | ||
10 | .90 | Multifamily Note by G&E Apartment REIT The Myrtles at Old Towne, LLC issued to Capmark Bank for Freddie Mac, dated December 21, 2007 (included as Exhibit 10.9 to our Current Report on Form 8-K filed December 31, 2007 and incorporated herein by reference) | ||
10 | .91 | Multifamily Deed of Trust, Assignment of Rents and Security Agreement, by G&E Apartment REIT The Myrtles at Old Towne, LLC, dated December 21, 2007 (included as Exhibit 10.10 to our Current Report on Form 8-K filed December 31, 2007 and incorporated herein by reference) | ||
10 | .92 | Guaranty by G&E Apartment REIT The Myrtles at Old Towne, LLC for the benefit of Capmark Bank, dated December 21, 2007 (included as Exhibit 10.11 to our Current Report on Form 8-K filed December 31, 2007 and incorporated herein by reference) | ||
10 | .93 | First Amendment to and Waiver of Loan Agreement between Grubb & Ellis Apartment REIT, Inc. and Wachovia Bank, National Association, dated December 21, 2007 (included as Exhibit 10.12 to our Current Report on Form 8-K filed December 31, 2007 and incorporated herein by reference) | ||
10 | .94 | First Amended and Restated Pledge Agreement by and between Wachovia Bank, N.A. and Grubb and Ellis Apartment REIT Holdings, L.P., dated December 21, 2007 (included as Exhibit 10.13 to our Current Report on Form 8-K filed December 31, 2007 and incorporated herein by reference) |
Table of Contents
Exhibit | ||||
Number | Exhibit | |||
10 | .95 | Unsecured Promissory Note issued by Grubb and Ellis Apartment REIT Holdings, L.P. in favor of NNN Realty Advisors, Inc., dated December 21, 2007 (included as Exhibit 10.14 to our Current Report on Form 8-K filed December 31, 2007 and incorporated herein by reference) | ||
10 | .96 | Contract of Sale by and between Cedar Park Multifamily, Ltd. and Triple Net Properties, LLC, dated January 8, 2008 (included as Exhibit 10.1 to our Current Report on Form 8-K filed April 4, 2008 and incorporated herein by reference) | ||
10 | .97 | Amendment to Contract of Sale by and between Cedar Park Multifamily, Ltd. and Triple Net Properties, LLC, dated February 26, 2008 (included as Exhibit 10.2 to our Current Report on Form 8-K filed April 4, 2008 and incorporated herein by reference) | ||
10 | .98 | Second Amendment to Contract of Sale by and between Cedar Park Multifamily, Ltd. and Grubb & Ellis Realty Investors, LLC, dated March 7, 2008 (included as Exhibit 10.3 to our Current Report on Form 8-K filed April 4, 2008 and incorporated herein by reference) | ||
10 | .99 | Third Amendment to Contract of Sale by and between Cedar Park Multifamily, Ltd. and Grubb & Ellis Realty Investors, LLC, dated March 27, 2008 (included as Exhibit 10.4 to our Current Report on Form 8-K filed April 4, 2008 and incorporated herein by reference) | ||
10 | .100 | Sale Agreement Assignment by and between Grubb & Ellis Realty Investors, LLC and G&E Apartment REIT Arboleda, LLC, dated March 27, 2008 (included as Exhibit 10.5 to our Current Report on Form 8-K filed April 4, 2008 and incorporated herein by reference) | ||
10 | .101 | Fixed+1 Multifamily Note by G&E Apartment REIT Arboleda, LLC in favor of PNC ARCS, LLC, dated March 31, 2008 (included as Exhibit 10.6 to our Current Report on Form 8-K filed April 4, 2008 and incorporated herein by reference) | ||
10 | .102 | Multifamily Deed of Trust, Assignment of Rents and Security Agreement and Fixture Filing by G&E Apartment REIT Arboleda, LLC for the benefit of PNC ARCS, LLC, dated March 31, 2008 (included as Exhibit 10.7 to our Current Report on Form 8-K filed April 4, 2008 and incorporated herein by reference) | ||
10 | .103 | Second Amendment to and Waiver of Loan Agreement by and between Grubb & Ellis Apartment REIT, Inc. and Wachovia Bank, National Association, dated March 31, 2008 (included as Exhibit 10.8 to our Current Report on Form 8-K filed April 4, 2008 and incorporated herein by reference) | ||
10 | .104 | Amended and Restated Promissory Note by Grubb & Ellis Apartment REIT, Inc. in favor of Wachovia Bank, National Association, dated March 31, 2008 (included as Exhibit 10.9 to our Current Report on Form 8-K filed April 4, 2008 and incorporated herein by reference) | ||
10 | .105 | Second Amended and Restated Pledge Agreement (Membership and Partnership Interests) by and between Wachovia Bank, National Association and Grubb & Ellis Apartment REIT Holdings, L.P., dated March 31, 2008 (included as Exhibit 10.10 to our Current Report on Form 8-K filed April 4, 2008 and incorporated herein by reference) | ||
10 | .106 | Purchase and Sale Agreement by and between Atlanta Creekside Gardens Associates, LLC and Grubb & Ellis Realty Investors, LLC, dated June 12, 2008 (included as Exhibit 10.1 to our Current Report on Form 8-K filed July 2, 2008 and incorporated herein by reference) | ||
10 | .107 | First Amendment to Purchase and Sale Agreement by and between Atlanta Creekside Gardens Associates, LLC and Grubb & Ellis Realty Investors, LLC, dated June 18, 2008 (included as Exhibit 10.2 to our Current Report on Form 8-K filed July 2, 2008 and incorporated herein by reference) | ||
10 | .108 | Purchase and Sale Agreement by and between AMLI at Peachtree City-Phase I, LLC, AMLI at Peachtree City-Phase II, LLC and Grubb and Ellis Realty Investors, LLC, dated June 23, 2008 (included as Exhibit 10.4 to our Current Report on Form 8-K filed July 2, 2008 and incorporated herein by reference) | ||
10 | .109 | Purchase and Sale Agreement Assignment by and between Grubb & Ellis Realty Investors, LLC and G&E Apartment REIT Creekside Crossing, LLC, dated June 26, 2008 (included as Exhibit 10.3 to our Current Report on Form 8-K filed July 2, 2008 and incorporated herein by reference) | ||
10 | .110 | Multifamily Note by G&E Apartment REIT Creekside Crossing, LLC to the order of Capmark Bank for Freddie Mac, dated June 26, 2008 (included as Exhibit 10.6 to our Current Report on Form 8-K filed July 2, 2008 and incorporated herein by reference) |
Table of Contents
Exhibit | ||||
Number | Exhibit | |||
10 | .111 | Multifamily Deed of Trust, Assignment of Rents and Security Agreement by G&E Apartment REIT Creekside Crossing, LLC and Capmark Bank, dated June 26, 2008 (included as Exhibit 10.7 to our Current Report on Form 8-K filed July 2, 2008 and incorporated herein by reference) | ||
10 | .112 | Guaranty by Grubb & Ellis Apartment REIT, Inc. for the benefit of Capmark Bank, dated June 26, 2008 (included as Exhibit 10.8 to our Current Report on Form 8-K filed July 2, 2008 and incorporated herein by reference) | ||
10 | .113 | Multifamily Note by G&E Apartment REIT Kedron Village, LLC to the order of Capmark Bank for Freddie Mac, dated June 26, 2008 (included as Exhibit 10.9 to our Current Report on Form 8-K filed July 2, 2008 and incorporated herein by reference) | ||
10 | .114 | Multifamily Deed of Trust, Assignment of Rents and Security Agreement by G&E Apartment REIT Kedron Village, LLC and Capmark Bank, dated June 26, 2008 (included as Exhibit 10.10 to our Current Report on Form 8-K filed July 2, 2008 and incorporated herein by reference) | ||
10 | .115 | Guaranty by Grubb & Ellis Apartment REIT, Inc. for the benefit of Capmark Bank, dated June 26, 2008 (included as Exhibit 10.11 to our Current Report on Form 8-K filed July 2, 2008 and incorporated herein by reference) | ||
10 | .116 | Third Amendment to and Waiver of Loan Agreement between Grubb & Ellis Apartment REIT, Inc. and Wachovia Bank, National Association, dated June 26, 2008 (included as Exhibit 10.12 to our Current Report on Form 8-K filed July 2, 2008 and incorporated herein by reference) | ||
10 | .117 | Third Amended and Restated Pledge Agreement by and between Wachovia Bank, National Association and Grubb and Ellis Apartment REIT Holdings, L.P., dated June 26, 2008 (included as Exhibit 10.13 to our Current Report on Form 8-K filed July 2, 2008 and incorporated herein by reference) | ||
10 | .118 | Assignment and Assumption of Real Estate Purchase Agreement by and between Grubb & Ellis Realty Investors, LLC and G&E Apartment REIT Kedron Village, LLC, dated June 27, 2008 (included as Exhibit 10.5 to our Current Report on Form 8-K filed July 2, 2008 and incorporated herein by reference) | ||
10 | .119 | Unsecured Promissory Note by Grubb & Ellis Apartment REIT Holdings, LP in favor of NNN Realty Advisors, Inc., dated June 27, 2008 (included as Exhibit 10.14 to our Current Report on Form 8-K filed July 2, 2008 and incorporated herein by reference) | ||
10 | .120 | Real Estate Purchase and Sale Agreement by and between Apartments at Canyon Ridge, LLC and Grubb & Ellis Realty Investors, LLC, dated July 10, 2008 (included as Exhibit 10.1 to our Current Report on Form 8-K filed September 19, 2008 and incorporated herein by reference) | ||
10 | .121 | First Amendment to Real Estate Purchase and Sale Agreement by and between Apartments at Canyon Ridge, LLC and Grubb & Ellis Realty Investors, LLC, dated August 15, 2008 (included as Exhibit 10.2 to our Current Report on Form 8-K filed September 19, 2008 and incorporated herein by reference) | ||
10 | .122 | Assignment and Assumption of Real Estate Purchase and Sale Agreement by and between Grubb & Ellis Realty Investors, LLC and G&E Apartment REIT Canyon Ridge, LLC, dated September 15, 2008 (included as Exhibit 10.3 to our Current Report on Form 8-K filed September 19, 2008 and incorporated herein by reference) | ||
10 | .123 | Multifamily Note by G&E Apartment REIT Canyon Ridge, LLC to the order of Capmark Bank, dated September 15, 2008 (included as Exhibit 10.4 to our Current Report on Form 8-K filed September 19, 2008 and incorporated herein by reference) | ||
10 | .124 | Multifamily Deed of Trust, Assignment of Rents and Security Agreement by G&E Apartment REIT Canyon Ridge, LLC for the benefit of Capmark Bank, dated September 15, 2008 (included as Exhibit 10.5 to our Current Report on Form 8-K filed September 19, 2008 and incorporated herein by reference) | ||
10 | .125 | Guaranty by Grubb & Ellis Apartment REIT, Inc. for the benefit of Capmark Bank, dated September 15, 2008 (included as Exhibit 10.6 to our Current Report on Form 8-K filed September 19, 2008 and incorporated herein by reference) | ||
10 | .126 | Fourth Amendment to and Waiver of Loan Agreement between Grubb & Ellis Apartment REIT, Inc. and Wachovia Bank, National Association, dated September 15, 2008 (included as Exhibit 10.7 to our Current Report on Form 8-K filed September 19, 2008 and incorporated herein by reference) |
Table of Contents
Exhibit | ||||
Number | Exhibit | |||
10 | .127 | Fourth Amended and Restated Pledge Agreement by and between Wachovia Bank, National Association and Grubb and Ellis Apartment REIT Holdings, L.P., dated September 15, 2008 (included as Exhibit 10.8 to our Current Report on Form 8-K filed September 19, 2008 and incorporated herein by reference) | ||
10 | .128 | Unsecured Promissory Note by Grubb & Ellis Apartment REIT Holdings, LP in favor of NNN Realty Advisors, Inc., dated September 15, 2008 (included as Exhibit 10.9 to our Current Report on Form 8-K filed September 19, 2008 and incorporated herein by reference) | ||
10 | .129 | Assignment and Assumption of Real Estate Purchase and Sale Agreement by and between Grubb & Ellis Realty Investors, LLC and G&E Apartment REIT Canyon Ridge, LLC, dated September 15, 2008 (included as Exhibit 10.3 to our Current Report on Form 8-K/A filed September 25, 2008 and incorporated herein by reference) | ||
21 | .1** | Subsidiaries of Grubb & Ellis Apartment REIT, Inc. | ||
23 | .1* | Form of Consent of Venable LLP (included in Exhibit 5.1) | ||
23 | .2* | Form of Consent of Morris, Manning & Martin, LLP (included in Exhibit 8.1) | ||
23 | .3* | Consent of Deloitte & Touche LLP | ||
23 | .4* | Consent of KMJ Corbin & Company LLP | ||
24 | .1* | Power of Attorney (included on Signature Page) |
* | Filed herewith. |
** | Previously filed. |