Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Sep. 30, 2021 | Nov. 08, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2021 | |
Document Transition Report | false | |
Entity File Number | 000-54376 | |
Entity Registrant Name | STRATEGIC REALTY TRUST, INC. | |
Entity Incorporation, State or Country Code | MD | |
Entity Tax Identification Number | 90-0413866 | |
Entity Address, Address Line One | 550 W Adams St, Suite 200 | |
Entity Address, City or Town | Chicago, | |
Entity Address, State or Province | IL | |
Entity Address, Postal Zip Code | 60661 | |
City Area Code | 312 | |
Local Phone Number | 878-4860 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q3 | |
Entity Central Index Key | 0001446371 | |
Current Fiscal Year End Date | --12-31 | |
Entity Common Stock, Shares Outstanding | 10,739,814 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 | |
Investments in real estate | |||
Land | $ 25,400 | $ 25,400 | |
Building and improvements | 27,306 | 32,165 | |
Tenant improvements | 1,753 | 2,199 | |
Real Estate Investment Property, at Cost | 54,459 | 59,764 | |
Accumulated depreciation | (4,878) | (3,797) | |
Investments in real estate, net | 49,581 | 55,967 | |
Properties under development and development costs | |||
Land | 12,958 | 12,958 | |
Development costs | 3,973 | 2,441 | |
Properties under development and development costs | 16,931 | 15,399 | |
Cash, cash equivalents and restricted cash | 2,647 | 2,622 | |
Prepaid expenses and other assets | 183 | 106 | |
Tenant receivables, net of $224 and $708 bad debt reserve | 616 | 566 | |
Lease intangibles, net | 793 | 1,176 | |
Assets held for sale | 0 | 3,224 | |
Total assets | [1] | 70,751 | 79,060 |
LIABILITIES | |||
Notes payable, net | 38,741 | 38,339 | |
Accounts payable and accrued expenses | 872 | 674 | |
Amounts due to affiliates | 52 | 11 | |
Other Liabilities | 201 | 134 | |
Below-market lease liabilities, net | 136 | 247 | |
TOTAL LIABILITIES (1) | [1] | 40,002 | 39,405 |
Commitments and contingencies (Note 12) | |||
EQUITY | |||
Preferred stock, $0.01 par value; 50,000,000 shares authorized, none issued and outstanding | 0 | 0 | |
Common stock, $0.01 par value; 400,000,000 shares authorized; 10,739,814 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively | 110 | 110 | |
Additional paid-in capital | 94,602 | 94,602 | |
Accumulated deficit | (64,500) | (55,771) | |
Total stockholders’ equity | 30,212 | 38,941 | |
Non-controlling interests | 537 | 714 | |
TOTAL EQUITY | 30,749 | 39,655 | |
TOTAL LIABILITIES AND EQUITY | 70,751 | 79,060 | |
Bad Debt Reserve | $ 224 | $ 708 | |
Preferred Stock, Shares Outstanding | 0 | 0 | |
Preferred Stock, Shares Issued | 0 | 0 | |
Preferred Stock, Shares Authorized | 50,000,000 | 50,000,000 | |
Preferred Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 | |
Common Stock, Shares, Outstanding | 10,739,814 | 10,739,814 | |
Common Stock, Shares, Issued | 10,739,814 | 10,739,814 | |
Common Stock, Shares Authorized | 400,000,000 | 400,000,000 | |
Common Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 | |
Variable Interest Entity, Primary Beneficiary [Member] | |||
Investments in real estate | |||
Land | $ 13,026 | $ 13,026 | |
Building and improvements | 5,046 | 10,624 | |
Tenant improvements | 467 | 547 | |
Real Estate Investment Property, at Cost | 18,539 | 24,197 | |
Accumulated depreciation | (479) | (209) | |
Investments in real estate, net | 18,060 | 23,988 | |
Properties under development and development costs | |||
Land | 12,958 | 12,958 | |
Development costs | 3,973 | 2,441 | |
Properties under development and development costs | 16,931 | 15,399 | |
Cash, cash equivalents and restricted cash | 315 | 340 | |
Prepaid expenses and other assets | 21 | 11 | |
Tenant receivables, net of $224 and $708 bad debt reserve | 29 | 0 | |
Lease intangibles, net | 30 | 73 | |
Total assets | [2] | 35,386 | 39,811 |
LIABILITIES | |||
Notes payable, net | [3] | 21,070 | 20,868 |
Accounts payable and accrued expenses | 300 | 212 | |
Other Liabilities | 48 | 33 | |
TOTAL LIABILITIES (1) | $ 21,418 | $ 21,113 | |
[1] | As of September 30, 2021 and December 31, 2020, includes approximately $35.4 million and $39.8 million, respectively, of assets related to consolidated variable interest entities that can be used only to settle obligations of the consolidated variable interest entities and approximately $21.4 million and $21.1 million, respectively, of liabilities of consolidated variable interest entities for which creditors do not have recourse to the general credit of the Company. Refer to Note 4. “Variable Interest Entities”. | ||
[2] | The assets of the Sunset & Gardner Joint Venture and Wilshire Joint Venture can be used only to settle obligations of the respective consolidated joint ventures. | ||
[3] | As of both September 30, 2021 and December 31, 2020, includes approximately $0.2 million and $0.3 million, respectively, of deferred financing costs, net, as a contra-liability. The creditors of the consolidated joint ventures do not have recourse to the general credit of the Company. The notes payable of the Wilshire Joint Venture is partially guaranteed by the Company, refer to Note 7, “Notes Payable, Net”. The notes payable of the Sunset & Gardner Joint Venture is not guaranteed by the Company. |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Revenue: | ||||
Rental and reimbursements | $ 493 | $ 529 | $ 1,934 | $ 1,990 |
Expense: | ||||
Operating and maintenance | 469 | 455 | 1,747 | 1,264 |
General and administrative | 373 | 426 | 1,184 | 1,285 |
Depreciation and amortization | 680 | 386 | 1,756 | 988 |
Interest expense | 319 | 230 | 947 | 467 |
Loss on impairment of real estate | 5,628 | 0 | 5,628 | 0 |
Total expense | 7,469 | 1,497 | 11,262 | 4,004 |
Operating loss | (6,976) | (968) | (9,328) | (2,014) |
Other income: | ||||
Net gain on disposal of real estate | 0 | 0 | 422 | 947 |
Net loss | (6,976) | (968) | (8,906) | (1,067) |
Net loss attributable to non-controlling interests | (139) | (19) | (177) | (21) |
Net loss attributable to common shares | $ (6,837) | $ (949) | $ (8,729) | $ (1,046) |
Loss per common share - basic and diluted | $ (0.64) | $ (0.09) | $ (0.81) | $ (0.10) |
Weighted average shares outstanding used to calculate loss per common share - basic and diluted | 10,739,729 | 10,739,729 | 10,739,729 | 10,746,195 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENT OF EQUITY - USD ($) | Total | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Total Stockholders' Equity | Non-controlling Interests |
BALANCE at Dec. 31, 2019 | $ 55,280,000 | $ 110,000 | $ 94,719,000 | $ (40,571,000) | $ 54,258,000 | $ 1,022,000 |
BALANCE (in shares) at Dec. 31, 2019 | 10,759,721 | |||||
Redemption of common shares (in shares) | (19,907) | |||||
Redemption of common shares, value | (117,000) | $ 0 | (117,000) | 0 | (117,000) | 0 |
Net loss | (1,067,000) | 0 | 0 | (1,046,000) | (1,046,000) | (21,000) |
BALANCE at Sep. 30, 2020 | 54,096,000 | $ 110,000 | 94,602,000 | (41,617,000) | 53,095,000 | 1,001,000 |
BALANCE (in shares) at Sep. 30, 2020 | 10,739,814 | |||||
BALANCE at Jun. 30, 2020 | 55,064,000 | $ 110,000 | 94,602,000 | (40,668,000) | 54,044,000 | 1,020,000 |
BALANCE (in shares) at Jun. 30, 2020 | 10,739,814 | |||||
Net loss | (968,000) | $ 0 | 0 | (949,000) | (949,000) | (19,000) |
BALANCE at Sep. 30, 2020 | 54,096,000 | $ 110,000 | 94,602,000 | (41,617,000) | 53,095,000 | 1,001,000 |
BALANCE (in shares) at Sep. 30, 2020 | 10,739,814 | |||||
BALANCE at Dec. 31, 2020 | 39,655,000 | $ 110,000 | 94,602,000 | (55,771,000) | 38,941,000 | 714,000 |
BALANCE (in shares) at Dec. 31, 2020 | 10,739,814 | |||||
Net loss | (8,906,000) | $ 0 | 0 | (8,729,000) | (8,729,000) | (177,000) |
BALANCE at Sep. 30, 2021 | 30,749,000 | $ 110,000 | 94,602,000 | (64,500,000) | 30,212,000 | 537,000 |
BALANCE (in shares) at Sep. 30, 2021 | 10,739,814 | |||||
BALANCE at Jun. 30, 2021 | 37,725,000 | $ 110,000 | 94,602,000 | (57,663,000) | 37,049,000 | 676,000 |
BALANCE (in shares) at Jun. 30, 2021 | 10,739,814 | |||||
Net loss | (6,976,000) | $ 0 | 0 | (6,837,000) | (6,837,000) | (139,000) |
BALANCE at Sep. 30, 2021 | $ 30,749,000 | $ 110,000 | $ 94,602,000 | $ (64,500,000) | $ 30,212,000 | $ 537,000 |
BALANCE (in shares) at Sep. 30, 2021 | 10,739,814 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Cash flows from operating activities: | ||
Net loss | $ (8,906) | $ (1,067) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Net gain on disposal of real estate | (422) | (947) |
Loss on impairment of real estate | 5,628 | 0 |
Straight-line rent | (11) | 110 |
Amortization of deferred costs | 309 | 328 |
Depreciation and amortization | 1,756 | 988 |
Amortization of above and below-market leases | (80) | (34) |
Provision for losses on tenant receivable | 588 | 416 |
Changes in operating assets and liabilities: | ||
Prepaid expenses and other assets | (77) | (30) |
Tenant receivables | (627) | (658) |
Accounts payable and accrued expenses | (41) | (1,610) |
Amounts due to affiliates | 41 | (123) |
Other liabilities | 67 | 117 |
Net cash used in operating activities | (1,775) | (2,510) |
Cash flows from investing activities: | ||
Proceeds from the sale of real estate | 3,770 | 9,920 |
Investment in properties under development and development costs | (1,291) | (4,156) |
Improvements and capital expenditures | (410) | (511) |
Payments for leasing costs | (231) | (219) |
Net cash provided by investing activities | 1,838 | 5,034 |
Cash flows from financing activities: | ||
Redemption of common shares | 0 | (117) |
Quarterly distributions | 0 | (220) |
Proceeds from notes payable | 49 | 3,525 |
Repayment of notes payable | 0 | (8,926) |
Payment of loan fees from investments in consolidated variable interest entities | (87) | (174) |
Payment of loan fees and financing costs | 0 | (6) |
Net cash used in financing activities | (38) | (5,918) |
Net increase (decrease) in cash, cash equivalents and restricted cash | 25 | (3,394) |
Cash, cash equivalents and restricted cash – beginning of period | 2,622 | 7,241 |
Cash, cash equivalents and restricted cash – end of period | 2,647 | 3,847 |
Supplemental disclosure of non-cash investing and financing activities and other cash flow information: | ||
Change in accrued liabilities capitalized to investment in development | 110 | (725) |
Amortization of deferred loan fees capitalized to investment in development | 131 | 208 |
Changes in capital improvements and leasing costs, accrued but not paid | 14 | 100 |
Cash paid for interest, net of amounts capitalized | $ 642 | $ 144 |
ORGANIZATION AND BUSINESS
ORGANIZATION AND BUSINESS | 9 Months Ended |
Sep. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND BUSINESS | ORGANIZATION AND BUSINESS Strategic Realty Trust, Inc. (the “Company”) was formed on September 18, 2008, as a Maryland corporation. Effective August 22, 2013, the Company changed its name from TNP Strategic Retail Trust, Inc. to Strategic Realty Trust, Inc. The Company believes it qualifies as a real estate investment trust (“REIT”) under the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), and has elected REIT status beginning with the taxable year ended December 31, 2009, the year in which the Company began material operations. Since the Company’s inception, its business has been managed by an external advisor. The Company has no direct employees and all management and administrative personnel responsible for conducting the Company’s business are employed by its advisor. As of September 30, 2021, the Company was externally managed and advised by SRT Advisor, LLC, a Delaware limited liability company (the “Advisor”) pursuant to an advisory agreement with the Advisor (the “Advisory Agreement”) initially executed on August 10, 2013, and subsequently renewed every year through 2022. The current term of the Advisory Agreement terminates on August 9, 2022. Effective April 1, 2021, the Advisor was acquired by PUR SRT Advisors LLC, an affiliate of PUR Management LLC, which is an affiliate of L3 Capital, LLC. L3 Capital, LLC is a real estate investment firm focused on institutional quality, value-add, prime urban retail and mixed-use investment within first tier U.S. metropolitan markets. As a result of this transaction, PUR SRT Advisors LLC, controls SRT Advisor, LLC. Previously, the Advisor was an affiliate of Glenborough, LLC (together with its affiliates, "Glenborough"), a privately held real estate investment and management company. Also effective April 1, 2021, Glenborough and PUR SRT Advisor LLC entered into an agreement pursuant to which PUR SRT Advisor LLC would perform the duties required and receive the benefits of the property management agreements between Glenborough and the Company, subject to Glenborough’s supervision. The above-mentioned transaction had no impact to the Company. Substantially all of the Company’s business is conducted through Strategic Realty Operating Partnership, L.P. (the “OP”). During the Company’s initial public offering (“Offering”), as the Company accepted subscriptions for shares of its common stock, it transferred substantially all of the net proceeds of the Offering to the OP as a capital contribution. The Company is the sole general partner of the OP. As of September 30, 2021 and December 31, 2020, the Company owned 98.0% of the limited partnership interests in the OP. The Company’s principal demand for funds has been for the acquisition of real estate assets, the payment of operating expenses, interest on outstanding indebtedness, the payment of distributions to stockholders, and investments in development of properties. Substantially all of the proceeds of the Offering, which terminated in February 2013, have been used to fund investments in real properties and other real estate-related assets, for payment of operating expenses, for payment of interest, for payment of various fees and expenses, such as acquisition fees and management fees, and for payment of distributions to stockholders. The Company’s available capital resources, cash and cash equivalents on hand and sources of liquidity are currently limited. The Company expects its future cash needs will be funded using cash from operations, future asset sales, debt financing and the proceeds to the Company from any sale of equity that it may conduct in the future. The Company invests in and manages a portfolio of income-producing retail properties, located in the United States, real estate-owning entities and real estate-related assets. The Company has invested directly, and indirectly through joint ventures, in a portfolio of income-producing retail properties located throughout the United States, with a focus on multi-tenant retail centers, including neighborhood, community and lifestyle shopping centers, multi-tenant shopping centers and free standing single-tenant retail properties. During the first quarter of 2016, the Company invested, through joint ventures, in two significant retail projects under development. During the third quarter of 2020, construction of one of the development projects was completed and placed in service. As of September 30, 2021, this property had approximately 12,000 rentable square feet of retail space, which was 45% leased. As of September 30, 2021, in addition to one development project and the property placed in service, the Company’s portfolio of wholly-owned properties was comprised of six properties, with approximately 27,000 rentable square feet of retail space located in one state, as well as an improved land parcel. As of September 30, 2021, the rentable space at the Company’s retail properties was 91% leased, excluding the property placed in service noted above. COVID-19 Pandemic and Liquidity Currently, a material risk and uncertainty facing the Company, the retail industry, the real estate industry and the economy generally is the adverse effect of the ongoing public health crisis of the novel coronavirus disease (COVID-19) pandemic. The Company continues to monitor the impact of the COVID-19 pandemic on all aspects of its business, including how the pandemic is impacting its tenants and business partners. A majority of the Company’s tenants requested rent deferral or rent abatement as a result of the pandemic. Recently, some of the tenants have resumed paying full or partial rent, as restrictions have been lifted in mid-June 2021. As such, the Company is unable to predict the full impact that the pandemic will have on its financial condition, results of operations and cash flows. The full extent to which the COVID-19 pandemic impacts the Company’s operations and those of its tenants will depend on future developments, which are uncertain and cannot be predicted with confidence, including the scope, severity and duration of the pandemic, the actions taken to contain the pandemic or mitigate its impact, and the direct and indirect economic effects of the pandemic and containment measures, among others. Since the termination of the Offering in 2013, the Company’s cash flows have been primarily funded by cash provided by property operations and the sales of properties. The COVID-19 pandemic has had a material detrimental impact on the Company’s retail tenants and their ability to pay rent and consequently on the Company’s liquidity. As of September 30, 2021, the Company had approximately $1.7 million in cash and cash equivalents. In addition, the Company had approximately $1.0 million of restricted cash (funds held by the lenders for property taxes, insurance, tenant improvements, leasing commissions, capital expenditures, rollover reserves and other financing needs). The Company has taken several steps to preserve capital and increase liquidity, such as: • On March 27, 2020, the Company’s board of directors (the “Board”) decided to suspend the payment of any dividend for the quarter ending March 31, 2020, and will reconsider future dividend payments on a quarter by quarter basis as more information becomes available on the impact of COVID-19 and related impact to the Company. Dividend payments were not reinstated as of September 30, 2021. • Effective May 21, 2020, the Company suspended its Amended and Restated Share Redemption Program (the “SRP”). The SRP will remain suspended and no further redemptions will be made unless and until the Board approves the resumption of the SRP. • Furthermore, the sale of Shops at Turkey Creek, on April 27, 2021, provided the Company with $3.8 million in net proceeds as additional liquidity. Refer to Note 3, “Real Estate Investments” for additional information regarding the sale of Shops at Turkey Creek. The Company remains in compliance with all the terms of the Wilshire Construction Loan (as defined below), which matures on May 10, 2022 with options to extend for two additional twelve-month periods, subject to certain conditions. Similarly, the Company remains in compliance with the Sunset & Gardner Loan (as defined below), which matures on October 31, 2022. The SRT Loan (as defined below) is secured by six of the Company’s core urban properties in Los Angeles and San Francisco. The SRT Loan does not have restrictive covenants that could trigger a default caused by tenants not paying rent or seeking rent relief. The Company is in constant communication with its tenants and has assisted tenants in identifying local, state and federal resources that may be available to support their businesses and employees during the pandemic, including stimulus funds that may be available under the Coronavirus Aid, Relief, and Economic Security Act of 2020. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation and Basis of Presentation The accompanying interim unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) as contained within the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) and the rules and regulations of the Securities and Exchange Commission (the “SEC”), including the instructions to Form 10-K and Regulation S-X. The interim unaudited condensed consolidated financial statements include the accounts of the Company, the OP, their direct and indirect owned subsidiaries, and the accounts of joint ventures that are determined to be variable interest entities for which the Company is the primary beneficiary. All significant intercompany balances and transactions are eliminated in consolidation. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) necessary to present fairly the Company’s condensed consolidated financial position, results of operations and cash flows have been included. The Company evaluates the need to consolidate joint ventures and variable interest entities based on standards set forth in ASC Topic 810, Consolidation (“ASC 810”). In determining whether the Company has a controlling interest in a joint venture or a variable interest entity and the requirement to consolidate the accounts of that entity, management considers factors such as ownership interest, authority to make decisions and contractual and substantive participating rights of the partners/members, as well as whether the entity is a variable interest entity for which the Company is the primary beneficiary. As of September 30, 2021 and 2020, the Company held variable interests in two variable interest entities and consolidated those entities. Refer to Note 4. “Variable Interest Entities” for additional information. Cash, Cash Equivalents and Restricted Cash Cash and cash equivalents represent current bank accounts and other bank deposits free of encumbrances and having maturity dates of three months or less from the respective dates of deposit. The Company limits cash investments to financial institutions with high credit standing; therefore, the Company believes it is not exposed to any significant credit risk in cash. Restricted cash includes escrow accounts for real property taxes, insurance, capital expenditures and tenant improvements, debt service and leasing costs held by lenders. The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported on the condensed consolidated balance sheets that sum to the total of the same such amounts shown on the condensed consolidated statement of cash flows (amounts in thousands): September 30, 2021 December 31, 2020 Cash and cash equivalents $ 1,661 $ 1,816 Restricted cash 986 806 Total cash, cash equivalents, and restricted cash $ 2,647 $ 2,622 Reclassifications Certain prior period amounts have been reclassified to conform with current period’s presentation. The reclassifications had no effect on the Company’s condensed consolidated financial condition, results of operations, or cash flows. Recent Accounting Pronouncements The FASB issued the following ASUs, which could have potential impact to the Company’s condensed consolidated financial statements: In July 2021, the FASB issued ASU No. 2021-05, Leases (Topic 842): Lessors - Certain Leases with Variable Lease Payments (“ASU 2021-05”). ASU 2021-05 amends the lease classification requirements for lessors to align them with practice under Topic 840. Lessors should classify and account for a lease with variable lease payments that do not depend on a reference index or a rate as an operating lease, if both of the following criteria are met: (1) the lease would have been classified as a sales-type lease or a direct financing lease; (2) the lessor would have otherwise recognized a day-one loss. ASU 2021-05 is effective for fiscal years beginning after December 31, 2021. The adoption of ASU 2021-05 is not expected to have an impact on the Company’s condensed consolidated financial statements. In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”). ASU 2020-04 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance in ASU No. 2020-04 is optional and may be elected over time through December 31, 2022. The Company is evaluating the impact of reference rate reform and whether it will apply any of these practical expedients. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (“ASU 2016-13”). ASU 2016-13 requires a financial asset, measured at amortized cost basis to be presented at the net amount expected to be collected. ASU 2016-13 was effective for fiscal years beginning after December 15, 2019, with adoption permitted for fiscal years beginning after December 15, 2018. Adjustments resulting from adopting ASU 2016-13 shall be applied through a cumulative-effect adjustment to retained earnings. In November 2019, the FASB issued ASU No. 2019-10, Financial Instruments—Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842) Effective Dates (“ASU 2019-10”). ASU 2019-10 extended the mandatory effective date for smaller reporting companies to beginning after December 15, 2022. The adoption of Financial Instruments - Credit Losses is not expected to have an impact on the Company’s condensed consolidated financial statements. |
REAL ESTATE INVESTMENTS REAL ES
REAL ESTATE INVESTMENTS REAL ESTATE INVESTMENTS | 9 Months Ended |
Sep. 30, 2021 | |
Real Estate [Abstract] | |
REAL ESTATE INVESTMENTS | REAL ESTATE INVESTMENTS Sale of Properties On April 27, 2021, the Company consummated the disposition of Shops at Turkey Creek, located in Knoxville, Tennessee, for $4.0 million in cash. The disposition of Shops at Turkey Creek resulted in a gain of approximately $0.4 million, which was included in the Company’s condensed consolidated statement of operations. Since the sale of this property did not represent a strategic shift that will have a major effect on the Company’s operations and financial results, the results of operations of this property were not reported as discontinued operations in the Company’s condensed consolidated financial statements. The following table represents the net operating income related to Shops at Turkey Creek, which is included in the Company’s condensed consolidated statements of operations (amounts in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Operating income (loss) $ (1) $ 31 $ 71 $ 38 |
VARIABLE INTEREST ENTITIES
VARIABLE INTEREST ENTITIES | 9 Months Ended |
Sep. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
VARIABLE INTEREST ENTITIES | VARIABLE INTEREST ENTITIES The Company has variable interests in, and is the primary beneficiary of, variable interest entities (“VIEs”) through its investments in (i) the Sunset & Gardner Joint Venture and (ii) the 3032 Wilshire Joint Venture. The Company has consolidated the accounts of these variable interest entities. Through September 30, 2021, post the initial capital contributions, the Company made additional capital contributions totaling $8.1 million and $8.9 million to the Sunset & Gardner Joint Venture and Wilshire Joint Venture, respectively. During the year ended December 31, 2020, construction of the Wilshire Property was completed and placed in service. The following table reflects the aggregate assets and liabilities of the Sunset & Gardner Joint Venture and the Wilshire Joint Venture, which were consolidated by the Company, as of September 30, 2021 and December 31, 2020 (amounts in thousands): September 30, December 31, 2021 2020 ASSETS Investments in real estate Land $ 13,026 $ 13,026 Building and improvements 5,046 10,624 Tenant improvements 467 547 18,539 24,197 Accumulated depreciation (479) (209) Investments in real estate, net 18,060 23,988 Properties under development and development costs: Land 12,958 12,958 Development costs 3,973 2,441 Properties under development and development costs 16,931 15,399 Cash, cash equivalents and restricted cash 315 340 Prepaid expenses and other assets, net 21 11 Other receivables, net 29 — Lease intangibles, net 30 73 TOTAL ASSETS (1) $ 35,386 $ 39,811 LIABILITIES Notes payable, net (2) $ 21,070 $ 20,868 Accounts payable and accrued expenses 300 212 Other liabilities 48 33 TOTAL LIABILITIES $ 21,418 $ 21,113 (1) The assets of the Sunset & Gardner Joint Venture and Wilshire Joint Venture can be used only to settle obligations of the respective consolidated joint ventures. (2) As of both September 30, 2021 and December 31, 2020, includes approximately $0.2 million and $0.3 million, respectively, of deferred financing costs, net, as a contra-liability. The creditors of the consolidated joint ventures do not have recourse to the general credit of the Company. The notes payable of the Wilshire Joint Venture is partially guaranteed by the Company, refer to Note 7, “Notes Payable, Net”. The notes payable of the Sunset & Gardner Joint Venture is not guaranteed by the Company. |
LEASES
LEASES | 9 Months Ended |
Sep. 30, 2021 | |
Operating Leases, Future Minimum Payments Receivable [Abstract] | |
FUTURE MINIMUM RENTAL INCOME | LEASES Operating Leases The Company’s real estate properties are leased to tenants under operating leases for which the terms and expirations vary. As of September 30, 2021, the leases at the Company’s properties have remaining terms (excluding options to extend) of up to 10.2 years with a weighted-average remaining term (excluding options to extend) of approximately 6.5 years. The leases may have provisions to extend the lease agreements, options for early termination after paying a specified penalty, rights of first refusal to purchase the property at competitive market rates, and other terms and conditions as negotiated. The Company retains substantially all of the risks and benefits of ownership of the real estate assets leased to tenants. Generally, upon the execution of a lease, the Company requires security deposits from tenants in the form of a cash deposit and/or a letter of credit. Amounts required as security deposits vary depending upon the terms of the respective leases and the creditworthiness of the tenant, but generally are not significant amounts. Therefore, exposure to credit risk exists to the extent that a receivable from a tenant exceeds the amount of its security deposit. Security deposits received in cash related to tenant leases are included in other liabilities in the accompanying condensed consolidated balance sheets and totaled approximately $0.1 million as of September 30, 2021 and December 31, 2020, respectively. The following table presents the components of income from real estate operations for the three and nine months ended September 30, 2021 and 2020 (amounts in thousands): Three Months Ended Nine Months Ended 2021 2020 2021 2020 Lease income - operating leases $ 358 $ 351 $ 1,503 $ 1,540 Variable lease income (1) 135 178 431 450 Rental and reimbursements income $ 493 $ 529 $ 1,934 $ 1,990 (1) Primarily includes tenant reimbursements for real estate taxes, insurance and common area maintenance. At the start of the COVID-19 pandemic and shelter-in-place orders, a majority of the Company’s tenants requested rent deferral or rent abatement due to the pandemic and government-mandated restrictions. These tenants totaled approximately 94% of the leased square footage in the Company’s wholly-owned properties. Not all tenant requests resulted in modified agreements nor did the Company forgo its contractual rights under its lease agreements. The Company reviewed these requests on a case-by-case basis and agreed to modifications to some of the tenant leases, while other leases were not modified. Of the total leased square footage in the Company’s wholly-owned properties, 47% of the leases were either (i) not modified and the tenants were able to continue to make their payments or (ii) the leases were modified to provide for a short-term temporary rent deferral or abatement. The rent deferrals generally were one to two months and were to be repaid within 12 months. Any rent abatement was typically one to two months and involved an extension of the tenant's lease. Another 28% of the leases in the Company’s wholly-owned properties were modified to provide ongoing rent relief to the tenant. These lease modifications involved some combination of lease extensions, application of security deposits, temporary rent deferrals, partial rent forgiveness or abatement, and new percentage rent clauses to protect the landlord in the event sales returned to prior levels during the period of the lease modifications. Temporary deferrals resulted in increased receivable balances, with continued recognition of revenue during the deferral period. Lease term extensions with partial rent forgiveness and/or abatement, resulted in adjustments to the amount of revenue recognized on a straight-line basis. The tenants making up the remaining 25% of the Company’s wholly-owned properties’ leased square footage requested lease concessions; however, the Company could not agree with these tenants on lease changes acceptable to both parties. During the nine months ended September 30, 2021, these tenants terminated their leases and were replaced with new tenants. As of September 30, 2021, approximately $0.3 million of rental income due and payable was outstanding. The Company collected a total of approximately $0.03 million, or 10%, of the outstanding balance in October 2021. Additionally, approximately $3 thousand of rental income earned and recognized to date, was deferred and is expected to be collected in future periods. As of September 30, 2021, the future minimum rental income from the Company’s wholly-owned properties under non-cancelable operating leases was as follows (amounts in thousands): Remainder 2021 $ 405 2022 1,893 2023 1,928 2024 1,889 2025 1,644 Thereafter 6,556 Total $ 14,315 |
LEASE INTANGIBLES AND BELOW-MAR
LEASE INTANGIBLES AND BELOW-MARKET LEASE LIABILITIES | 9 Months Ended |
Sep. 30, 2021 | |
Finite-Lived Intangible Assets, Net [Abstract] | |
ACQUIRED LEASE INTANGIBLES AND BELOW-MARKET LEASE LIABILITIES | LEASE INTANGIBLES AND BELOW-MARKET LEASE LIABILITIES, NET As of September 30, 2021 and December 31, 2020, the Company’s acquired lease intangibles and below-market lease liabilities were as follows (amounts in thousands): Lease Intangibles Below-Market Lease Liabilities September 30, 2021 December 31, 2020 September 30, 2021 December 31, 2020 Cost $ 2,057 $ 1,892 $ (389) $ (389) Accumulated amortization (1,264) (716) 253 142 Total $ 793 $ 1,176 $ (136) $ (247) The Company’s amortization of lease intangibles and below-market lease liabilities for the three and nine months ended September 30, 2021 and 2020, were as follows (amounts in thousands): Lease Intangibles Below-Market Lease Liabilities Three Months Ended Three Months Ended 2021 2020 2021 2020 Amortization $ (281) $ (63) $ 6 $ 11 Lease Intangibles Below-Market Lease Liabilities Nine Months Ended Nine Months Ended 2021 2020 2021 2020 Amortization $ (604) $ (188) $ 111 $ 41 |
NOTES PAYABLE, NET
NOTES PAYABLE, NET | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
NOTES PAYABLE | NOTES PAYABLE, NET On December 24, 2019, the Company entered into a Loan Agreement (the “SRT Loan Agreement”) with PFP Holding Company, LLC (the “SRT Lender”) for a non-recourse secured loan (the “SRT Loan”). The SRT Loan is secured by first deeds of trust on the Company’s five San Francisco assets (Fulton Shops, 8 Octavia, 400 Grove, 450 Hayes and 388 Fulton Street) as well as the Company’s Silverlake Collection located in Los Angeles. The SRT Loan matures on January 9, 2023. The Company has an option to extend the term of the loan for two additional twelve-month periods, subject to the satisfaction of certain covenants and conditions contained in the SRT Loan Agreement. The Company has the right to prepay the SRT Loan in whole at any time or in part from time to time, subject to the payment of yield maintenance payments if such prepayment occurs in the first 18 months of the loan term, calculated through the 18th monthly payment date, as well as certain expenses, costs or liabilities potentially incurred by the SRT Lender as a result of the prepayment and subject to certain other conditions contained in the loan documents. Individual properties may be released from the SRT Loan collateral in connection with bona fide third-party sales, subject to compliance with certain covenants and conditions contained in the SRT Loan Agreement. Any prepayment or repayment on or before the first 12 months of the loan term in connection with a bona fide third-party sale of a property securing the SRT Loan shall only require the payment of yield maintenance payments calculated through the 12th monthly payment date. As of September 30, 2021, the SRT Loan had a principal balance of approximately $18.0 million. The SRT Loan is a floating LIBOR rate loan which bears interest at 30-day LIBOR (with a floor of 1.50%) plus 2.80%. The default rate is equal to 5% above the rate that otherwise would be in effect. Monthly payments are interest-only with the entire principal balance and all outstanding interest due at maturity. Pursuant to the SRT Loan, the Company must comply with certain matters contained in the loan documents including but not limited to, (i) requirements to deliver audited and unaudited financial statements, SEC filings, tax returns, pro forma budgets, and quarterly compliance certificates, and (ii) minimum limits on the Company’s liquidity and tangible net worth. The SRT Loan contains customary covenants, including, without limitation, covenants with respect to maintenance of properties and insurance, compliance with laws and environmental matters, covenants limiting or prohibiting the creation of liens, and transactions with affiliates. At September 30, 2021, the Company was in compliance with the loan requirements in effect as of that date. In connection with the SRT Loan, the Company executed customary non-recourse carveout and environmental guaranties, together with limited additional assurances with regard to the condominium structures of the San Francisco assets. On May 7, 2019, the Company refinanced and repaid its financing from Loan Oak Fund, LLC with a new construction loan from ReadyCap Commercial, LLC (the “Lender”) (the “Wilshire Construction Loan”). As of September 30, 2021, the Wilshire Construction Loan had a principal balance of approximately $12.6 million, with future funding available up to a total of approximately $13.9 million, and bears an interest rate of 1-month LIBOR (with a floor of 2.467%) plus an interest margin of 4.25% per annum, payable monthly. The Wilshire Loan is scheduled to mature on May 10, 2022, with options to extend for two additional twelve-month periods, subject to certain conditions as stated in the loan agreement. The Wilshire Construction Loan is secured by a first Deed of Trust on the Wilshire Property. The Company executed a guaranty that guaranties that the loan interest reserve amounts are kept in compliance with the terms of the loan agreement. The Lender also required that a principal in the upstream owner of the Company’s joint venture partner in the Wilshire Joint Venture (the “Guarantor”), guarantees performance of borrower’s obligations under the loan agreement with respect to the completion of capital improvements to the property. The Company executed an Indemnity Agreement in favor of the Guarantor against liability under that completion guaranty except to the extent caused by gross negligence or willful misconduct, as well as for liabilities incurred under the Environmental Indemnity Agreement executed by the Guarantor in favor of the Lender. The Company used working capital funds of approximately $3.1 million to repay the difference between the Wilshire Construction Loan initial advance and the prior loan, to pay transaction costs, as well as to fund certain required interest and construction reserves. Pursuant to the Wilshire Construction Loan, the Company must comply with certain matters contained in the loan documents including but not limited to minimum limits on the Company’s liquidity and tangible net worth. The Company remains in compliance with all the terms of the Wilshire Construction Loan. On October 29, 2018, the Company entered into a loan agreement with Lone Oak Fund, LLC (the “Sunset & Gardner Loan”). The Sunset & Gardner Loan has a principal balance of approximately $8.7 million, and had an interest rate of 6.9% per annum. The original Sunset & Gardner Loan agreement matured on October 31, 2019. The Company extended the Sunset & Gardner Loan for an additional twelve-month period under the same terms, with an interest rate of 6.5% per annum. On July 31, 2020, the Company extended the Sunset & Gardner Loan for an additional twelve-month period under the same terms, with an interest rate of 7.3% per annum. On July 21, 2021, the Company extended the Sunset & Gardner Loan for an additional twelve-month period under the same terms, with an interest rate of 7.9% per annum. The new maturity date is October 31, 2022. The Sunset & Gardner Loan is secured by a first Deed of Trust on the Sunset & Gardner Property. The following is a schedule of future principal payments for all of the Company’s notes payable outstanding as of September 30, 2021 (amounts in thousands): Remainder of 2021 $ — 2022 21,258 2023 18,000 Total future principal payments 39,258 Unamortized financing costs, net 517 Notes payable, net $ 38,741 The following table sets forth interest costs incurred by the Company for the periods presented (amounts in thousands): Three Months Ended Nine Months Ended 2021 2020 2021 2020 Expensed Interest costs, net of amortization of deferred financing costs $ 216 $ 139 $ 638 $ 139 Amortization of deferred financing costs 103 91 309 328 Total interest costs $ 319 $ 230 $ 947 $ 467 Capitalized Interest costs, net of amortization of deferred financing costs $ 356 $ 444 $ 1,063 $ 1,500 Amortization of deferred financing costs 44 56 131 200 Total interest costs $ 400 $ 500 $ 1,194 $ 1,700 |
FAIR VALUE DISCLOSURES
FAIR VALUE DISCLOSURES | 9 Months Ended |
Sep. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE DISCLOSURES | FAIR VALUE DISCLOSURES The Company believes the total carrying values reflected on its consolidated balance sheets for cash, cash equivalents and restricted cash, accounts receivable, accounts payable and accrued expenses, amounts due to affiliates, mortgage loan and construction loan secured by properties under development, and the Company’s multi-property secured financing, reasonably approximated their fair values based on their nature, terms, and interest rates that approximate current market rates at September 30, 2021. As part of the Company’s ongoing evaluation of the Company’s real estate portfolio, the Company estimates the fair value of its investments in real estate by obtaining outside independent appraisals on all of the operating properties. The appraised values are compared with the carrying values of its real estate portfolio to determine if there are indications of impairment. Using Level 3 measurements, including each property’s undiscounted cash flow, which took into account each property’s expected cash flow from operations, anticipated holding period and estimated proceeds from disposition, as well as a terminal capitalization rate of 4.75%, the Company determined that the carrying values of the operating property it owns through the Wilshire Joint Venture was not fully recoverable. As such, for the three and nine months ended September 30, 2021, the Company recorded an impairment loss of approximately $5.6 million related to the Wilshire Property. The Company did not record any impairment losses for both the three and nine months ended September 30, 2020. |
EQUITY
EQUITY | 9 Months Ended |
Sep. 30, 2021 | |
Stockholders' Equity Note [Abstract] | |
EQUITY | EQUITY Share Redemption Program On April 1, 2015, the Company’s board of directors approved the reinstatement of the share redemption program (which had been suspended since January 15, 2013) and adopted the SRP. Under the SRP, only shares submitted for repurchase in connection with the death or “qualifying disability” (as defined in the SRP) of a stockholder are eligible for repurchase by the Company. Under the current SRP, as amended to date, the number of shares to be redeemed is limited to the lesser of (i) a total of $3.8 million for redemptions sought upon a stockholder’s death and a total of $1.2 million for redemptions sought upon a stockholder’s qualifying disability, and (ii) 5% of the weighted-average number of shares of the Company’s common stock outstanding during the prior calendar year. Share repurchases pursuant to the SRP are made at the sole discretion of the Company. The Company reserves the right to reject any redemption request for any reason or no reason or to amend or terminate the share redemption program at any time subject to the notice requirements in the SRP. The redemption price for shares that are redeemed is 100% of the Company’s most recent estimated net asset value per share as of the applicable redemption date. A redemption request must be made within one year after the stockholder’s death or qualifying disability. The SRP provides that any request to redeem less than $5,000 worth of shares will be treated as a request to redeem all of the stockholder’s shares. If the Company cannot honor all redemption requests received in a given quarter, all requests, including death and qualifying disability redemptions, will be honored on a pro rata basis. If the Company does not completely satisfy a redemption request in one quarter, it will treat the unsatisfied portion as a request for redemption in the next quarter when funds are available for redemption, unless the request is withdrawn. The Company may increase or decrease the amount of funding available for redemptions under the SRP on ten business days’ notice to stockholders. Shares submitted for redemption during any quarter will be redeemed on the penultimate business day of such quarter. The record date for quarterly distributions has historically been and is expected to continue to be the last business day of each quarter; therefore, shares that are redeemed during any quarter are expected to be redeemed prior to the record date and thus would not be eligible to receive the distribution declared for such quarter. In order to preserve cash in light of the uncertainty relating to the duration of shelter-in-place orders and the economic impact of COVID-19 on the Company, by unanimous written consent executed on April 21, 2020, the board of directors approved the suspension of the SRP, which offered redemption opportunities only in connection with a stockholder’s death or qualifying disability. The suspension of the SRP became effective on May 21, 2020. The SRP will remain suspended and no further redemptions will be made until the board of directors approves the resumption of the SRP. During the suspension, the Company will continue to accept death and qualifying disability redemption filings from stockholders, but will not take any action with regard to those requests until the board of directors has elected to lift the suspension and provided the terms and conditions for any continuation of the SRP. There is no guarantee if or when the board of directors will lift the suspension, and if they do, what the terms will be. The following table summarizes share redemption activity during the nine months ended September 30, 2021 and 2020 (amounts in thousands, except shares): Nine Months Ended 2021 2020 Shares of common stock redeemed — 19,907 Purchase price $ — $ 117 There were no share redemptions during the three months ended September 30, 2021 and 2020. Cumulatively, through September 30, 2021, pursuant to the Original Share Redemption Program and the Amended and Restated SRP, the Company has redeemed 878,458 shares sold in the Offering and/or its dividend reinvestment plan for $6.2 million. Quarterly Distributions In order to qualify as a REIT, the Company is required to distribute at least 90% of its annual REIT taxable income, subject to certain adjustments, to its stockholders. Some or all of the Company’s distributions have been paid, and in the future may continue to be paid from sources other than cash flows from operations. The Company’s board of directors evaluates the Company’s ability to make quarterly distributions based on the Company’s operational cash needs. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 9 Months Ended |
Sep. 30, 2021 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE EPS is computed by dividing net income (loss) attributable to common stockholders by the weighted average number of common shares outstanding during each period. The following table sets forth the computation of the Company’s basic and diluted earnings per share for the three and nine months ended September 30, 2021 and 2020 (amounts in thousands, except shares and per share amounts): Three Months Ended Nine Months Ended 2021 2020 2021 2020 Numerator - basic and diluted Net loss $ (6,976) $ (968) $ (8,906) $ (1,067) Net loss attributable to non-controlling interests (139) (19) (177) (21) Net loss attributable to common shares $ (6,837) $ (949) $ (8,729) $ (1,046) Denominator - basic and diluted Basic weighted average common shares 10,739,729 10,739,729 10,739,729 10,746,195 Common Units (1) — — — — Diluted weighted average common shares 10,739,729 10,739,729 10,739,729 10,746,195 Loss per common share - basic and diluted Net loss attributable to common shares $ (0.64) $ (0.09) $ (0.81) $ (0.10) (1) The effect of 217,475 convertible Common Units pursuant to the redemption rights outlined in the Company’s registration statement on Form S-11 have not been included as they would not be dilutive. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Sep. 30, 2021 | |
Related Party Transaction, Due from (to) Related Party [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONSOn August 7, 2013, the Company entered into the Advisory Agreement with the Advisor, which has been renewed for successive terms with a current expiration date of August 9, 2022. The Advisor manages the Company’s business as the Company’s external advisor pursuant to the Advisory Agreement. Pursuant to the Advisory Agreement, the Company will pay the Advisor specified fees for services related to the investment of funds in real estate and real estate-related investments, management of the Company’s investments and for other services. Effective April 1, 2021, PUR SRT Advisors LLC, controls SRT Advisor, LLC. Previously, Glenborough controlled the Advisor. The Company is party to property management agreements with respect to each of its properties pursuant to which Glenborough was engaged to serve as property manager. Effective April 1, 2021, Glenborough and PUR SRT Advisor LLC entered into an agreement pursuant to which PUR SRT Advisor LLC would perform the duties required and receive the benefits of the property management agreements, subject to Glenborough’s supervision. As a result, PUR SRT Advisor LLC is currently providing property management services to the Company and receiving the fees described below. The property management agreements expire August 10, 2022 and will automatically renew every year, unless expressly terminated. On March 3, 2021, the Company obtained a $2.5 million Standby Loan Commitment (the “Loan”) from Glenborough Property Partners, LLC, an affiliate of the Advisor prior to April 1, 2021. If the Company elects to act on the Standby Commitment, the Loan would have a term of 12 months with an interest rate of 7.0% per annum, payable monthly. The Company would have the right to prepay or repay the Loan in whole or in part at any time without penalty. There are no other loan fees or financing coordination fees paid or payable in connection with this loan. The Loan would be secured by first deed of trust on Shops at Turkey Creek. As a result of the sale of Shops at Turkey Creek, refer to Note 3, “Real Estate Investments”, the Loan was not executed and as such, the Standby Commitment expired. Summary of Related Party Fees The following table sets forth the Advisor related party costs incurred and payable by the Company for the periods presented (amounts in thousands): Incurred Payable as of Three Months Ended Nine Months Ended September 30, December 31, Expensed 2021 2020 2021 2020 2021 2020 Legal leasing fees $ — $ — $ 2 $ — $ — $ — Asset management fees 144 158 446 481 48 — Reimbursement of operating expenses — 6 — 17 — — Property management fees 13 22 48 58 4 9 Disposition fees — — 50 157 — — Total $ 157 $ 186 $ 546 $ 713 $ 52 $ 9 Capitalized Acquisition fees $ 2 $ 7 $ 7 $ 16 $ — $ — Leasing fees — 13 20 113 — — Legal leasing fees — 10 10 38 — — Construction management fees — 8 35 136 — 2 Financing coordination fees — 44 — 44 — — Total $ 2 $ 82 $ 72 $ 347 $ — $ 2 Acquisition Fees Under the Advisory Agreement, the Advisor is entitled to receive an acquisition fee equal to 1% of (1) the cost of each investment acquired directly by the Company or (2) the Company’s allocable cost of an investment acquired pursuant to a joint venture, in each case including purchase price, acquisition expenses and any debt attributable to such investments. An acquisition fee is capitalized by the Company when the related transaction does not qualify as a business combination; otherwise an acquisition fee is expensed. Financing Coordination Fees Under the Advisory Agreement, the Advisor is entitled to receive a financing coordination fee equal to 1% of the amount made available and/or outstanding under any (1) financing obtained or assumed, directly or indirectly, by the Company or the OP and used to acquire or originate investments, or (2) the refinancing of any financing obtained or assumed, directly or indirectly, by the Company or the OP. Asset Management Fees Under the Advisory Agreement, the Advisor is entitled to receive an asset management fee equal to a monthly fee of one-twelfth (1/12th) of 0.6% of the higher of (1) aggregate cost on a GAAP basis (before non-cash reserves and depreciation) of all investments the Company owns, including any debt attributable to such investments, or (2) the fair market value of the Company’s investments (before non-cash reserves and depreciation) if the board of directors has authorized the estimate of a fair market value of the Company’s investments; provided, however, that the asset management fee will not be less than $250,000 in the aggregate during any one calendar year. Reimbursement of Operating Expenses The Company reimburses the Advisor for all expenses paid or incurred by the Advisor in connection with the services provided to the Company, subject to the limitation that the Company will not reimburse the Advisor for any amount by which the Company’s total operating expenses (including the asset management fee described above) at the end of the four preceding fiscal quarters exceeded the greater of (1) 2% of its average invested assets (as defined in the Company’s Articles of Amendment and Restatement (the “Charter”)); or (2) 25% of its net income (as defined in the Charter) determined without reduction for any additions to depreciation, bad debts or other similar non-cash expenses and excluding any gain from the sale of the Company’s assets for that period (the “2%/25% Guideline”). The Advisor is required to reimburse the Company quarterly for any amounts by which total operating expenses exceed the 2%/25% Guideline in the previous expense year that the independent directors do not approve. The Company will not reimburse the Advisor for any of its personnel costs or other overhead costs except for customary reimbursements for personnel costs under property management agreements entered into between the OP and the Advisor or its affiliates. Notwithstanding the above, the Company may reimburse the Advisor for expenses in excess of the 2%/25% Guideline if a majority of the independent directors determine that such excess expenses are justified based on unusual and non-recurring factors. Pursuant to an amendment to the Advisory Agreement entered on August 2, 2018, the board of directors, including a majority of the independent directors identified certain unusual and non-recurring factors that would justify reimbursement to the Advisor of amounts in excess of the 2%/25% Guidelines and confirmed that the Advisor would not be obligated to reimburse the Company for these excess amounts to the extent the excess was caused by such factors. For the three and nine months ended September 30, 2021 and 2020, the Company’s total operating expenses (as defined in the Charter) did not exceed the 2%/25% Guideline. Property Management Fees Under the property management agreements the Company pays property management fees calculated at a maximum of up to 4% of the properties’ gross revenue. Disposition Fees Under the Advisory Agreement, if the Advisor or its affiliates provide a substantial amount of services, as determined by the Company’s independent directors, in connection with the sale of a real property, the Advisor or its affiliates may be paid disposition fees up to 50% of a customary and competitive real estate commission, but not to exceed 3% of the contract sales price of each property sold. Leasing Fees Under the property management agreements, the Company pays a separate fee for the leases of new tenants, and for expansions, extensions and renewals of existing tenants in an amount not to exceed the fee customarily charged by similarly situated parties rendering similar services in the same geographic area for similar properties. Legal Leasing Fees Under the property management agreements, the Company pays a market-based legal leasing fee for the negotiation and production of new leases, renewals, and amendments. Construction Management Fees In connection with the construction or repair in or about a property, the property manager is responsible for coordinating and facilitating the planning and the performance of all construction and in exchange the Company pays a fee equal to 5% of the hard costs for the project in question. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Economic Dependency The Company is dependent on the Advisor and its affiliates for certain services that are essential to the Company, including the identification, evaluation, negotiation, purchase, and disposition of real estate and real estate-related investments, management of the daily operations of the Company’s real estate and real estate-related investment portfolio, and other general and administrative responsibilities. In the event that the Advisor is unable to provide such services to the Company, the Company will be required to obtain such services from other sources. Environmental As an owner of real estate, the Company is subject to various environmental laws of federal, state and local governments. The Company is not aware of any environmental liability that could have a material adverse effect on its condensed consolidated financial condition or results of operations. However, changes in applicable environmental laws and regulations, the uses and conditions of properties in the vicinity of the Company’s properties, the activities of its tenants and other environmental conditions of which the Company is unaware with respect to the properties could result in future environmental liabilities. |
SUBSEQUENT EVENTS SUBSEQUENT EV
SUBSEQUENT EVENTS SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | SUBSEQUENT EVENTS Financing On November 9, 2021, the Company obtained a $4.0 million unsecured loan (the “Unsecured Loan”) from PUR Holdings Lender, LLC, an affiliate of the Advisor. The Unsecured Loan has a term of 12 months with an interest rate of 7.0% per annum, compounding monthly with the ability to pay-off during the term of the loan. The Unsecured Loan requires draw downs in increments of no less than approximately $0.3 million. The Company has the right to prepay or repay the Unsecured Loan in whole or in part at any time without penalty. The Unsecured Loan will be due and payable upon the earlier of 12 months or the termination of the Advisory Agreement by the Company. The Unsecured Loan is guaranteed by the Company. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Principles of Consolidation and Basis of Presentation | Principles of Consolidation and Basis of Presentation The accompanying interim unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) as contained within the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) and the rules and regulations of the Securities and Exchange Commission (the “SEC”), including the instructions to Form 10-K and Regulation S-X. The interim unaudited condensed consolidated financial statements include the accounts of the Company, the OP, their direct and indirect owned subsidiaries, and the accounts of joint ventures that are determined to be variable interest entities for which the Company is the primary beneficiary. All significant intercompany balances and transactions are eliminated in consolidation. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) necessary to present fairly the Company’s condensed consolidated financial position, results of operations and cash flows have been included. The Company evaluates the need to consolidate joint ventures and variable interest entities based on standards set forth in ASC Topic 810, Consolidation (“ASC 810”). In determining whether the Company has a controlling interest in a joint venture or a variable interest entity and the requirement to consolidate the accounts of that entity, management considers factors such as ownership interest, authority to make decisions and contractual and substantive participating rights of the partners/members, as well as whether the entity is a variable interest entity for which the Company is the primary beneficiary. As of September 30, 2021 and 2020, the Company held variable interests in two variable interest entities and consolidated those entities. Refer to Note 4. “Variable Interest Entities” for additional information. |
Cash, Cash Equivalents and Restricted Cash | Cash, Cash Equivalents and Restricted Cash Cash and cash equivalents represent current bank accounts and other bank deposits free of encumbrances and having maturity dates of three months or less from the respective dates of deposit. The Company limits cash investments to financial institutions with high credit standing; therefore, the Company believes it is not exposed to any significant credit risk in cash. Restricted cash includes escrow accounts for real property taxes, insurance, capital expenditures and tenant improvements, debt service and leasing costs held by lenders. The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported on the condensed consolidated balance sheets that sum to the total of the same such amounts shown on the condensed consolidated statement of cash flows (amounts in thousands): September 30, 2021 December 31, 2020 Cash and cash equivalents $ 1,661 $ 1,816 Restricted cash 986 806 Total cash, cash equivalents, and restricted cash $ 2,647 $ 2,622 |
Reclassifications | Reclassifications Certain prior period amounts have been reclassified to conform with current period’s presentation. The reclassifications had no effect on the Company’s condensed consolidated financial condition, results of operations, or cash flows. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements The FASB issued the following ASUs, which could have potential impact to the Company’s condensed consolidated financial statements: In July 2021, the FASB issued ASU No. 2021-05, Leases (Topic 842): Lessors - Certain Leases with Variable Lease Payments (“ASU 2021-05”). ASU 2021-05 amends the lease classification requirements for lessors to align them with practice under Topic 840. Lessors should classify and account for a lease with variable lease payments that do not depend on a reference index or a rate as an operating lease, if both of the following criteria are met: (1) the lease would have been classified as a sales-type lease or a direct financing lease; (2) the lessor would have otherwise recognized a day-one loss. ASU 2021-05 is effective for fiscal years beginning after December 31, 2021. The adoption of ASU 2021-05 is not expected to have an impact on the Company’s condensed consolidated financial statements. In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”). ASU 2020-04 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance in ASU No. 2020-04 is optional and may be elected over time through December 31, 2022. The Company is evaluating the impact of reference rate reform and whether it will apply any of these practical expedients. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (“ASU 2016-13”). ASU 2016-13 requires a financial asset, measured at amortized cost basis to be presented at the net amount expected to be collected. ASU 2016-13 was effective for fiscal years beginning after December 15, 2019, with adoption permitted for fiscal years beginning after December 15, 2018. Adjustments resulting from adopting ASU 2016-13 shall be applied through a cumulative-effect adjustment to retained earnings. In November 2019, the FASB issued ASU No. 2019-10, Financial Instruments—Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842) Effective Dates (“ASU 2019-10”). ASU 2019-10 extended the mandatory effective date for smaller reporting companies to beginning after December 15, 2022. The adoption of Financial Instruments - Credit Losses is not expected to have an impact on the Company’s condensed consolidated financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents [Abstract] | |
Cash, Cash Equivalents and Restricted Cash [Table Text Block] | The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported on the condensed consolidated balance sheets that sum to the total of the same such amounts shown on the condensed consolidated statement of cash flows (amounts in thousands): September 30, 2021 December 31, 2020 Cash and cash equivalents $ 1,661 $ 1,816 Restricted cash 986 806 Total cash, cash equivalents, and restricted cash $ 2,647 $ 2,622 |
REAL ESTATE INVESTMENTS REAL _2
REAL ESTATE INVESTMENTS REAL ESTATE INVESTMENTS (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Real Estate [Abstract] | |
Disposal Groups, Including Discontinued Operations [Table Text Block] | The following table represents the net operating income related to Shops at Turkey Creek, which is included in the Company’s condensed consolidated statements of operations (amounts in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Operating income (loss) $ (1) $ 31 $ 71 $ 38 |
VARIABLE INTEREST ENTITIES (Tab
VARIABLE INTEREST ENTITIES (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Variable Interest Entities | The following table reflects the aggregate assets and liabilities of the Sunset & Gardner Joint Venture and the Wilshire Joint Venture, which were consolidated by the Company, as of September 30, 2021 and December 31, 2020 (amounts in thousands): September 30, December 31, 2021 2020 ASSETS Investments in real estate Land $ 13,026 $ 13,026 Building and improvements 5,046 10,624 Tenant improvements 467 547 18,539 24,197 Accumulated depreciation (479) (209) Investments in real estate, net 18,060 23,988 Properties under development and development costs: Land 12,958 12,958 Development costs 3,973 2,441 Properties under development and development costs 16,931 15,399 Cash, cash equivalents and restricted cash 315 340 Prepaid expenses and other assets, net 21 11 Other receivables, net 29 — Lease intangibles, net 30 73 TOTAL ASSETS (1) $ 35,386 $ 39,811 LIABILITIES Notes payable, net (2) $ 21,070 $ 20,868 Accounts payable and accrued expenses 300 212 Other liabilities 48 33 TOTAL LIABILITIES $ 21,418 $ 21,113 (1) The assets of the Sunset & Gardner Joint Venture and Wilshire Joint Venture can be used only to settle obligations of the respective consolidated joint ventures. (2) As of both September 30, 2021 and December 31, 2020, includes approximately $0.2 million and $0.3 million, respectively, of deferred financing costs, net, as a contra-liability. The creditors of the consolidated joint ventures do not have recourse to the general credit of the Company. The notes payable of the Wilshire Joint Venture is partially guaranteed by the Company, refer to Note 7, “Notes Payable, Net”. The notes payable of the Sunset & Gardner Joint Venture is not guaranteed by the Company. |
LEASES (Tables)
LEASES (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Operating Leased Assets [Line Items] | |
Operating Lease, Lease Income [Table Text Block] | The following table presents the components of income from real estate operations for the three and nine months ended September 30, 2021 and 2020 (amounts in thousands): Three Months Ended Nine Months Ended 2021 2020 2021 2020 Lease income - operating leases $ 358 $ 351 $ 1,503 $ 1,540 Variable lease income (1) 135 178 431 450 Rental and reimbursements income $ 493 $ 529 $ 1,934 $ 1,990 (1) Primarily includes tenant reimbursements for real estate taxes, insurance and common area maintenance. |
Lessor, Operating Lease, Payment to be Received, Fiscal Year Maturity | As of September 30, 2021, the future minimum rental income from the Company’s wholly-owned properties under non-cancelable operating leases was as follows (amounts in thousands): Remainder 2021 $ 405 2022 1,893 2023 1,928 2024 1,889 2025 1,644 Thereafter 6,556 Total $ 14,315 |
LEASE INTANGIBLES AND BELOW-M_2
LEASE INTANGIBLES AND BELOW-MARKET LEASE LIABILITIES (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Finite-Lived Intangible Assets, Net [Abstract] | |
Acquired Lease Intangibles and Below Market Lease Liabilities | As of September 30, 2021 and December 31, 2020, the Company’s acquired lease intangibles and below-market lease liabilities were as follows (amounts in thousands): Lease Intangibles Below-Market Lease Liabilities September 30, 2021 December 31, 2020 September 30, 2021 December 31, 2020 Cost $ 2,057 $ 1,892 $ (389) $ (389) Accumulated amortization (1,264) (716) 253 142 Total $ 793 $ 1,176 $ (136) $ (247) |
Amortization Of Finite Lease Intangibles and Below-Market Lease Liabilities | The Company’s amortization of lease intangibles and below-market lease liabilities for the three and nine months ended September 30, 2021 and 2020, were as follows (amounts in thousands): Lease Intangibles Below-Market Lease Liabilities Three Months Ended Three Months Ended 2021 2020 2021 2020 Amortization $ (281) $ (63) $ 6 $ 11 Lease Intangibles Below-Market Lease Liabilities Nine Months Ended Nine Months Ended 2021 2020 2021 2020 Amortization $ (604) $ (188) $ 111 $ 41 |
NOTES PAYABLE, NET (Tables)
NOTES PAYABLE, NET (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of maturities for notes payable outstanding | The following is a schedule of future principal payments for all of the Company’s notes payable outstanding as of September 30, 2021 (amounts in thousands): Remainder of 2021 $ — 2022 21,258 2023 18,000 Total future principal payments 39,258 Unamortized financing costs, net 517 Notes payable, net $ 38,741 |
Interest Income and Interest Expense Disclosure | The following table sets forth interest costs incurred by the Company for the periods presented (amounts in thousands): Three Months Ended Nine Months Ended 2021 2020 2021 2020 Expensed Interest costs, net of amortization of deferred financing costs $ 216 $ 139 $ 638 $ 139 Amortization of deferred financing costs 103 91 309 328 Total interest costs $ 319 $ 230 $ 947 $ 467 Capitalized Interest costs, net of amortization of deferred financing costs $ 356 $ 444 $ 1,063 $ 1,500 Amortization of deferred financing costs 44 56 131 200 Total interest costs $ 400 $ 500 $ 1,194 $ 1,700 |
EQUITY (Tables)
EQUITY (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Stockholders' Equity Note [Abstract] | |
Share Redemption Program | The following table summarizes share redemption activity during the nine months ended September 30, 2021 and 2020 (amounts in thousands, except shares): Nine Months Ended 2021 2020 Shares of common stock redeemed — 19,907 Purchase price $ — $ 117 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Earnings Per Share [Abstract] | |
Company's basic and diluted (loss)earnings per share | The following table sets forth the computation of the Company’s basic and diluted earnings per share for the three and nine months ended September 30, 2021 and 2020 (amounts in thousands, except shares and per share amounts): Three Months Ended Nine Months Ended 2021 2020 2021 2020 Numerator - basic and diluted Net loss $ (6,976) $ (968) $ (8,906) $ (1,067) Net loss attributable to non-controlling interests (139) (19) (177) (21) Net loss attributable to common shares $ (6,837) $ (949) $ (8,729) $ (1,046) Denominator - basic and diluted Basic weighted average common shares 10,739,729 10,739,729 10,739,729 10,746,195 Common Units (1) — — — — Diluted weighted average common shares 10,739,729 10,739,729 10,739,729 10,746,195 Loss per common share - basic and diluted Net loss attributable to common shares $ (0.64) $ (0.09) $ (0.81) $ (0.10) (1) The effect of 217,475 convertible Common Units pursuant to the redemption rights outlined in the Company’s registration statement on Form S-11 have not been included as they would not be dilutive. |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Related Party Transaction, Due from (to) Related Party [Abstract] | |
Related Party Transactions | The following table sets forth the Advisor related party costs incurred and payable by the Company for the periods presented (amounts in thousands): Incurred Payable as of Three Months Ended Nine Months Ended September 30, December 31, Expensed 2021 2020 2021 2020 2021 2020 Legal leasing fees $ — $ — $ 2 $ — $ — $ — Asset management fees 144 158 446 481 48 — Reimbursement of operating expenses — 6 — 17 — — Property management fees 13 22 48 58 4 9 Disposition fees — — 50 157 — — Total $ 157 $ 186 $ 546 $ 713 $ 52 $ 9 Capitalized Acquisition fees $ 2 $ 7 $ 7 $ 16 $ — $ — Leasing fees — 13 20 113 — — Legal leasing fees — 10 10 38 — — Construction management fees — 8 35 136 — 2 Financing coordination fees — 44 — 44 — — Total $ 2 $ 82 $ 72 $ 347 $ — $ 2 |
ORGANIZATION AND BUSINESS (Deta
ORGANIZATION AND BUSINESS (Details Textual) - ft² ft² in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Real Estate Properties [Line Items] | ||
Number of Real Estate Properties | 6 | |
Net Rentable Area | 27 | |
Number of States in which Entity Operates | 1 | |
Percent of Real Estate Properties Leased | 91.00% | |
Wilshire Joint Venture [Member] | ||
Real Estate Properties [Line Items] | ||
Net Rentable Area | 12 | |
Percent of Real Estate Properties Leased | 45.00% | |
Strategic Realty Trust [Member] | ||
Real Estate Properties [Line Items] | ||
Partnership Interest Ownership Percentage | 98.00% | 98.00% |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Dec. 31, 2019 |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents [Abstract] | ||||
Cash and Cash Equivalents | $ 1,661 | $ 1,816 | ||
Restricted Cash | 986 | 806 | ||
Cash, cash equivalents and restricted cash | $ 2,647 | $ 2,622 | $ 3,847 | $ 7,241 |
REAL ESTATE INVESTMENTS (Detail
REAL ESTATE INVESTMENTS (Details) - USD ($) $ in Thousands | Apr. 27, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Net gain on disposal of real estate | $ 0 | $ 0 | $ 422 | $ 947 | |
Operating Income (loss) | (6,976) | (968) | (9,328) | (2,014) | |
Shops at Turkey Creek | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Sales Price | $ 4,000 | ||||
Net gain on disposal of real estate | $ 400 | ||||
Operating Income (loss) | $ (1) | $ 31 | $ 71 | $ 38 |
VARIABLE INTEREST ENTITIES SUNS
VARIABLE INTEREST ENTITIES SUNSET & GARDER (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2021USD ($) | |
Sunset and Gardner Joint Venture [Member] | Subsequent Contribution [Member] | |
Variable Interest Entity [Line Items] | |
Payments to Acquire Interest in Joint Venture | $ 8.1 |
VARIABLE INTEREST ENTITIES 3032
VARIABLE INTEREST ENTITIES 3032 WILSHIRE (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2021USD ($) | |
Wilshire Joint Venture [Member] | Subsequent Contribution [Member] | |
Variable Interest Entity [Line Items] | |
Payments to Acquire Interest in Joint Venture | $ 8.9 |
VARIABLE INTEREST ENTITIES (Det
VARIABLE INTEREST ENTITIES (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Dec. 31, 2019 | |
Real Estate Investment Property, Net [Abstract] | |||||
Land | $ 25,400 | $ 25,400 | |||
Building and improvements | 27,306 | 32,165 | |||
Tenant improvements | 1,753 | 2,199 | |||
Real Estate Investment Property, at Cost | 54,459 | 59,764 | |||
Accumulated depreciation | (4,878) | (3,797) | |||
Investments in real estate, net | 49,581 | 55,967 | |||
Properties under development and development costs: | |||||
Land | 12,958 | 12,958 | |||
Development costs | 3,973 | 2,441 | |||
Properties under development and development costs | 16,931 | 15,399 | |||
Cash, cash equivalents and restricted cash | 2,647 | 2,622 | $ 3,847 | $ 7,241 | |
Prepaid expenses and other assets, net | 183 | 106 | |||
Other receivables, net | 616 | 566 | |||
Lease intangibles, net | 793 | 1,176 | |||
Total assets | [1] | 70,751 | 79,060 | ||
LIABILITIES | |||||
Notes payable | 38,741 | 38,339 | |||
Accounts payable and accrued expenses | 872 | 674 | |||
Amounts due to affiliates | 52 | 11 | |||
Other liabilities | 201 | 134 | |||
TOTAL LIABILITIES (1) | [1] | 40,002 | 39,405 | ||
Deferred Costs | 517 | ||||
Variable Interest Entity, Primary Beneficiary [Member] | |||||
Real Estate Investment Property, Net [Abstract] | |||||
Land | 13,026 | 13,026 | |||
Building and improvements | 5,046 | 10,624 | |||
Tenant improvements | 467 | 547 | |||
Real Estate Investment Property, at Cost | 18,539 | 24,197 | |||
Accumulated depreciation | (479) | (209) | |||
Investments in real estate, net | 18,060 | 23,988 | |||
Properties under development and development costs: | |||||
Land | 12,958 | 12,958 | |||
Development costs | 3,973 | 2,441 | |||
Properties under development and development costs | 16,931 | 15,399 | |||
Cash, cash equivalents and restricted cash | 315 | 340 | |||
Prepaid expenses and other assets, net | 21 | 11 | |||
Other receivables, net | 29 | 0 | |||
Lease intangibles, net | 30 | 73 | |||
Total assets | [2] | 35,386 | 39,811 | ||
LIABILITIES | |||||
Notes payable | [3] | 21,070 | 20,868 | ||
Accounts payable and accrued expenses | 300 | 212 | |||
Other liabilities | 48 | 33 | |||
TOTAL LIABILITIES (1) | 21,418 | 21,113 | |||
Deferred Costs | $ 200 | $ 300 | |||
[1] | As of September 30, 2021 and December 31, 2020, includes approximately $35.4 million and $39.8 million, respectively, of assets related to consolidated variable interest entities that can be used only to settle obligations of the consolidated variable interest entities and approximately $21.4 million and $21.1 million, respectively, of liabilities of consolidated variable interest entities for which creditors do not have recourse to the general credit of the Company. Refer to Note 4. “Variable Interest Entities”. | ||||
[2] | The assets of the Sunset & Gardner Joint Venture and Wilshire Joint Venture can be used only to settle obligations of the respective consolidated joint ventures. | ||||
[3] | As of both September 30, 2021 and December 31, 2020, includes approximately $0.2 million and $0.3 million, respectively, of deferred financing costs, net, as a contra-liability. The creditors of the consolidated joint ventures do not have recourse to the general credit of the Company. The notes payable of the Wilshire Joint Venture is partially guaranteed by the Company, refer to Note 7, “Notes Payable, Net”. The notes payable of the Sunset & Gardner Joint Venture is not guaranteed by the Company. |
LEASES (Details Textual)
LEASES (Details Textual) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Dec. 31, 2020 | |
Leases [Abstract] | ||
Lessee, Operating Lease, Term of Contract | 10 years 2 months 12 days | |
Operating Leases Weighted Average Remaining Term | 6 years 6 months | |
Security Deposit | $ 100 | $ 100 |
COVID-19 [Member] | ||
Real Estate Properties [Line Items] | ||
Percentage of Tenants Requested Relief Square Feet | 94.00% | |
Unmodified leases | 47.00% | |
Modified leases | 28.00% | |
Leases in default | 25.00% |
LEASES LEASES (Income from Real
LEASES LEASES (Income from Real Estate Operations) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | ||
Leases [Abstract] | |||||
Lease income - operating leases | $ 358 | $ 351 | $ 1,503 | $ 1,540 | |
Variable lease income (1) | [1] | 135 | 178 | 431 | 450 |
Rental and reimbursements income | $ 493 | $ 529 | $ 1,934 | $ 1,990 | |
[1] | Primarily includes tenant reimbursements for real estate taxes, insurance and common area maintenance. |
LEASES LEASES (Rental Income Ou
LEASES LEASES (Rental Income Outstanding and Deferred) (Details) - USD ($) $ in Thousands | Oct. 31, 2021 | Sep. 30, 2021 |
Tenant Receivables [Line Items] | ||
Accounts Receivable, before Allowance for Credit Loss | $ 300 | |
Deferred Accounts Receivable | $ 3 | |
Subsequent Event [Member] | ||
Tenant Receivables [Line Items] | ||
Subsequent collection of outstanding accounts receivable | $ 30 | |
Subsequent collection of outstanding accounts receivable, percent | 10.00% |
LEASES (Future Minimum Lease Pa
LEASES (Future Minimum Lease Payments) (Details) $ in Thousands | Sep. 30, 2021USD ($) |
Operating Leases, Future Minimum Payments Receivable [Abstract] | |
Remainder 2021 | $ 405 |
2022 | 1,893 |
2023 | 1,928 |
2024 | 1,889 |
2025 | 1,644 |
Thereafter | 6,556 |
Total | $ 14,315 |
LEASE INTANGIBLES AND BELOW-M_3
LEASE INTANGIBLES AND BELOW-MARKET LEASE LIABILITIES (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Finite-Lived Intangible Assets, Net [Abstract] | ||
Lease Intangibles, Cost | $ 2,057 | $ 1,892 |
Lease Intangibles, Accumulated amortization | (1,264) | (716) |
Lease intangibles, net | 793 | 1,176 |
Below - Market Lease Liabilities, Cost | (389) | (389) |
Below - Market Lease Liabilities, Accumulated amortization | 253 | 142 |
Below Market Lease, Net | $ (136) | $ (247) |
LEASE INTANGIBLES AND BELOW-M_4
LEASE INTANGIBLES AND BELOW-MARKET LEASE LIABILITIES LEASE INTANGIBLE AND BELOW-MARKET LEASE AMORTIZATION (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Amortization [Abstract] | ||||
Amortization of Intangible Assets | $ (281) | $ (63) | $ (604) | $ (188) |
Amortization of Below-Market Lease Liabilities | $ 6 | $ 11 | $ 111 | $ 41 |
NOTES PAYABLE, NET NOTES PAYABL
NOTES PAYABLE, NET NOTES PAYABLE, NET (Multi-Property Secured Financing) (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2021USD ($) | |
Debt Instrument [Line Items] | |
Secured Debt | $ 18 |
Secured Debt [Member] | |
Debt Instrument [Line Items] | |
Debt Instrument, Maturity Date | Jan. 9, 2023 |
Debt Instrument, Description of Variable Rate Basis | 30-day LIBOR |
Debt Instrument, Basis Spread on Variable Rate | 2.80% |
Secured Debt [Member] | Minimum [Member] | |
Debt Instrument [Line Items] | |
Debt Instrument, Basis Spread on Variable Rate | 1.50% |
Measurement Input, Default Rate [Member] | Secured Debt [Member] | |
Debt Instrument [Line Items] | |
Debt Instrument, Basis Spread on Variable Rate | 5.00% |
NOTES PAYABLE, NET (Loans Secur
NOTES PAYABLE, NET (Loans Secured by Properties Under Development) (Details) - USD ($) | May 07, 2019 | Sep. 30, 2021 | Jul. 21, 2021 | Mar. 31, 2021 | Mar. 03, 2021 | Oct. 31, 2019 |
Short-term Debt [Line Items] | ||||||
Interest Rate | 7.00% | |||||
Secured Debt [Member] | ||||||
Short-term Debt [Line Items] | ||||||
Debt Instrument, Description of Variable Rate Basis | 30-day LIBOR | |||||
Debt Instrument, Basis Spread on Variable Rate | 2.80% | |||||
Debt Instrument, Maturity Date | Jan. 9, 2023 | |||||
Wilshire Joint Venture [Member] | ||||||
Short-term Debt [Line Items] | ||||||
Proceeds from Loan Originations | $ 12,600,000 | |||||
Debt Instrument, Description of Variable Rate Basis | 1-month LIBOR | |||||
Debt Instrument, Basis Spread on Variable Rate | 4.25% | |||||
Debt Instrument, Maturity Date | May 10, 2022 | |||||
Sunset and Gardner Joint Venture [Member] | ||||||
Short-term Debt [Line Items] | ||||||
Proceeds from Loan Originations | $ 8,700,000 | |||||
Interest Rate | 7.90% | 6.50% | 6.90% | |||
Debt Instrument, Interest Rate, Effective Percentage | 7.30% | |||||
Debt Instrument, Maturity Date | Oct. 31, 2022 | |||||
Maximum [Member] | Wilshire Joint Venture [Member] | ||||||
Short-term Debt [Line Items] | ||||||
Proceeds from Loan Originations | $ 13,900,000 | |||||
Minimum [Member] | Secured Debt [Member] | ||||||
Short-term Debt [Line Items] | ||||||
Debt Instrument, Basis Spread on Variable Rate | 1.50% | |||||
Minimum [Member] | Wilshire Joint Venture [Member] | ||||||
Short-term Debt [Line Items] | ||||||
Debt Instrument, Basis Spread on Variable Rate | 2.467% | |||||
Subsequent Contribution [Member] | Wilshire Joint Venture [Member] | ||||||
Short-term Debt [Line Items] | ||||||
Payments to Acquire Interest in Joint Venture | $ 3,100,000 |
NOTES PAYABLE, NET (Future Prin
NOTES PAYABLE, NET (Future Principal Payments) (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Schedule of maturities for notes payable outstanding | ||
Remainder of 2021 | $ 0 | |
2022 | 21,258 | |
2023 | 18,000 | |
Total (1) | 39,258 | |
Deferred Costs | 517 | |
Notes payable, net | $ 38,741 | $ 38,339 |
NOTES PAYABLE, NET NOTES PAYA_2
NOTES PAYABLE, NET NOTES PAYABLE, NET (Interest Expense) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Short-term Debt [Line Items] | |||||
Interest Income (Expense), Net | $ 216 | $ 139 | $ 638 | $ 139 | |
Amortization of Deferred Financing Costs | 103 | 91 | 309 | 328 | |
Interest expense | 319 | 230 | 947 | 467 | |
Interest Payable | 200 | 200 | $ 200 | ||
Variable Interest Entity, Primary Beneficiary [Member] | |||||
Short-term Debt [Line Items] | |||||
Amortization of Deferred Financing Costs | 44 | 56 | 131 | 200 | |
Interest Costs Incurred | 356 | 444 | 1,063 | 1,500 | |
Interest Costs Capitalized | 400 | $ 500 | 1,194 | $ 1,700 | |
Interest Payable | $ 100 | $ 100 | $ 100 |
FAIR VALUE DISCLOSURES (Details
FAIR VALUE DISCLOSURES (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Loss on impairment of real estate | $ 5,628 | $ 0 | $ 5,628 | $ 0 |
Fair Value, Inputs, Level 3 | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
FairValueInputsTerminalCapitalizationRate | 4.75% | 4.75% | ||
Wilshire Joint Venture [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Loss on impairment of real estate | $ 5,600 | $ 5,600 |
EQUITY (Share Redemption) (Deta
EQUITY (Share Redemption) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Class of Stock [Line Items] | ||||
Common Stock Outstanding Percentage | 5.00% | 5.00% | ||
Redemption Price for Shares Percentage | 100.00% | 100.00% | ||
Share Redemption Amount Minimum Limit | $ 5,000 | $ 5,000 | ||
Stock Redeemed or Called During Period, Value | $ 117,000 | |||
Common Stock | ||||
Class of Stock [Line Items] | ||||
Stock Redeemed or Called During Period, Shares | 0 | 0 | 0 | 19,907 |
Stock Redeemed or Called During Period, Value | $ 0 | $ 117,000 | ||
Cumulative stock redeemed to date, shares | 878,458 | 878,458 | ||
Cumulative stock redeemed to date, value | $ 6,200,000 | $ 6,200,000 | ||
Death of a shareholder [Member] | ||||
Class of Stock [Line Items] | ||||
Stock Repurchase Program, Authorized Amount | 3,800,000 | 3,800,000 | ||
Disability of a Shareholder [Member] | ||||
Class of Stock [Line Items] | ||||
Stock Repurchase Program, Authorized Amount | $ 1,200,000 | $ 1,200,000 |
EQUITY EQUITY (Quarterly Distri
EQUITY EQUITY (Quarterly Distribution (Details) | 9 Months Ended |
Sep. 30, 2021 | |
Stockholders' Equity Note [Abstract] | |
Minimum Percentage of Taxable Income Distributed to Shareholders | 90.00% |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | ||
Numerator - basic and diluted | |||||
Net loss | $ (6,976) | $ (968) | $ (8,906) | $ (1,067) | |
Net loss attributable to non-controlling interests | (139) | (19) | (177) | (21) | |
Net loss attributable to common shares | $ (6,837) | $ (949) | $ (8,729) | $ (1,046) | |
Denominator - basic and diluted | |||||
Basic weighted average common shares | 10,739,729 | 10,739,729 | 10,739,729 | 10,746,195 | |
Common Units (1) | [1] | 0 | 0 | 0 | 0 |
Diluted weighted average common shares | 10,739,729 | 10,739,729 | 10,739,729 | 10,746,195 | |
Loss per common share - basic and diluted | |||||
Net loss attributable to common shares | $ (0.64) | $ (0.09) | $ (0.81) | $ (0.10) | |
[1] | The effect of 217,475 convertible Common Units pursuant to the redemption rights outlined in the Company’s registration statement on Form S-11 have not been included as they would not be dilutive. |
EARNINGS PER SHARE (Details Tex
EARNINGS PER SHARE (Details Textual) | 9 Months Ended |
Sep. 30, 2021shares | |
Earnings Per Share [Abstract] | |
Antidiluted Convertible Common Units of Redemption | 217,475 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - Advisor Fees [Member] - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Expensed legal leasing fees | |||||
Summarized below are the related-party transactions | |||||
Related-party costs, Incurred | $ 0 | $ 0 | $ 2 | $ 0 | |
Related-party costs, Payable | 0 | 0 | $ 0 | ||
Expensed Asset management Fees [Member] | |||||
Summarized below are the related-party transactions | |||||
Related-party costs, Incurred | 144 | 158 | 446 | 481 | |
Related-party costs, Payable | 48 | 48 | 0 | ||
Expensed Reimbursement Of Operating Expenses [Member] | |||||
Summarized below are the related-party transactions | |||||
Related-party costs, Incurred | 0 | 6 | 0 | 17 | |
Related-party costs, Payable | 0 | 0 | 0 | ||
Expensed Property Management Fees [Member] | |||||
Summarized below are the related-party transactions | |||||
Related-party costs, Incurred | 13 | 22 | 48 | 58 | |
Related-party costs, Payable | 4 | 4 | 9 | ||
Expensed Disposition Fees [Member] | |||||
Summarized below are the related-party transactions | |||||
Related-party costs, Incurred | 0 | 0 | 50 | 157 | |
Related-party costs, Payable | 0 | 0 | 0 | ||
Capitalized Acquisition Fees [Member] | |||||
Summarized below are the related-party transactions | |||||
Related-party costs, Incurred | 2 | 7 | 7 | 16 | |
Related-party costs, Payable | 0 | 0 | 0 | ||
Capitalized Leasing Fees [Member] | |||||
Summarized below are the related-party transactions | |||||
Related-party costs, Incurred | 0 | 13 | 20 | 113 | |
Related-party costs, Payable | 0 | 0 | 0 | ||
Capitalized Legal Leasing Fees [Member] | |||||
Summarized below are the related-party transactions | |||||
Related-party costs, Incurred | 0 | 10 | 10 | 38 | |
Related-party costs, Payable | 0 | 0 | 0 | ||
Capitalized Construction Management Fees [Member] | |||||
Summarized below are the related-party transactions | |||||
Related-party costs, Incurred | 0 | 8 | 35 | 136 | |
Related-party costs, Payable | 0 | 0 | 2 | ||
Financing Coordination Fees, Capitalized [Member] | |||||
Summarized below are the related-party transactions | |||||
Related-party costs, Incurred | 0 | 44 | 0 | 44 | |
Related-party costs, Payable | 0 | 0 | 0 | ||
Expensed [Member] | |||||
Summarized below are the related-party transactions | |||||
Related-party costs, Incurred | 157 | 186 | 546 | 713 | |
Related-party costs, Payable | 52 | 52 | 9 | ||
Capitalized [Member] | |||||
Summarized below are the related-party transactions | |||||
Related-party costs, Incurred | 2 | $ 82 | 72 | $ 347 | |
Related-party costs, Payable | $ 0 | $ 0 | $ 2 |
RELATED PARTY TRANSACTIONS (D_2
RELATED PARTY TRANSACTIONS (Details) (Narrative) - USD ($) | 9 Months Ended | |
Sep. 30, 2021 | Mar. 03, 2021 | |
Related Party Transaction [Line Items] | ||
Line of Credit Facility, Maximum Borrowing Capacity | $ 2,500,000 | |
Debt Instrument, Interest Rate, Stated Percentage | 7.00% | |
Advisor Fees [Member] | ||
Related Party Transaction [Line Items] | ||
Company pays Advisor an acquisition and origination fee for cost of investments acquired | 1.00% | |
Financing Coordination Fee, percentage | 1.00% | |
Company pays Advisor a monthly asset management fee on all real estate investments | 0.60% | |
Percentage of Average Invested Assets | 2.00% | |
Percent of Net Income | 25.00% | |
Advisor or its affiliates also will be paid disposition fees of a customary and competitive real estate commission | 50.00% | |
SRT Manager [Member] | ||
Related Party Transaction [Line Items] | ||
Property Management Fee, Percent Fee | 4.00% | |
Construction Management Fee, percentage | 5.00% | |
Asset Management [Member] | ||
Related Party Transaction [Line Items] | ||
Asset Management Fees | $ 250,000 | |
Maximum [Member] | Advisor Fees [Member] | ||
Related Party Transaction [Line Items] | ||
Advisor or its affiliates also will be paid disposition fees of the contract price | 3.00% |
SUBSEQUENT EVENTS MORTGAGE FINA
SUBSEQUENT EVENTS MORTGAGE FINANCING (Details) - USD ($) $ in Millions | Nov. 09, 2021 | Mar. 03, 2021 |
Subsequent Event [Line Items] | ||
Line of Credit Facility, Maximum Borrowing Capacity | $ 2.5 | |
Debt Instrument, Interest Rate, Stated Percentage | 7.00% | |
Subsequent Event [Member] | ||
Subsequent Event [Line Items] | ||
Line of Credit Facility, Maximum Borrowing Capacity | $ 4 | |
Debt Instrument, Interest Rate, Stated Percentage | 7.00% | |
Subsequent Event [Member] | Minimum [Member] | ||
Subsequent Event [Line Items] | ||
Line of Credit Facility, Current Borrowing Capacity | $ 0.3 |