FILED PURSUANT TO RULE 424(B)(3)
REGISTRATION NO. 333-160463
RESOURCE REAL ESTATE OPPORTUNITY REIT, INC.
SUPPLEMENT NO. 18 DATED DECEMBER 3, 2013
TO THE PROSPECTUS DATED JULY 13, 2012
This document supplements, and should be read in conjunction with, the prospectus of Resource Real Estate Opportunity REIT, Inc. dated July 13, 2012, as supplemented by Supplement No. 14 dated September 16, 2013, Supplement No. 15 dated October 8, 2013, Supplement No. 16 dated November 1, 2013, and Supplement No. 17 dated November 15, 2013. As used herein, the terms “we,” “our” and “us” refer to Resource Real Estate Opportunity REIT, Inc. and, as required by context, Resource Real Estate Opportunity OP, LP, which we refer to as our “Operating Partnership” and to their subsidiaries. Capitalized terms used in this supplement have the same meanings as set forth in the prospectus. The purpose of this supplement is to disclose certain updated prior performance tables for the year ended December 31, 2012.
Prior Performance Tables
The following Table III supersedes the Table III included under the heading “Prior Performance Tables” in Supplement No. 14 to this prospectus.
TABLE III
(UNAUDITED)
ANNUAL OPERATING RESULTS OF PRIOR REAL ESTATE PROGRAMS
This Table sets forth the annual operating results of Prior Real Estate Programs that have closed offerings since January 1, 2008 and that have similar investment objectives to Resource Real Estate Opportunity REIT, Inc.
Resource Real Estate presents the data in Prior Performance Table III for each program in conformity with accounting principles generally accepted in the United States of America, or GAAP, which incorporates accrual basis accounting. When a real estate program owns 100% of the property, 100% of the program’s operating results are presented for the relevant years. When a real estate program directly invests in and owns a partial tenant-in-common interest in the property (as an example, 25.0%) and the remaining interest of the property (75.0%) is owned by unaffiliated tenants-in-common, only the operating results relating to the program’s ownership in the property (25.0%) are presented for the relevant years. The allocation is based on the public or private program’s effective ownership in the property.
TABLE III
(UNAUDITED)
ANNUAL OPERATING RESULTS OF PRIOR REAL ESTATE PROGRAMS (cont’d)
As of December 31, 2012
Resource Real Estate Investors 6, L.P. | ||||||||||||||||||||
2008 | 2009 | 2010 | 2011 | 2012 | ||||||||||||||||
Gross Revenue | $ | 7,555,547 | $ | 7,720,000 | $ | 7,869,776 | $ | 8,360,272 | $ | 8,943,802 | ||||||||||
Income/loss on investment in unconsolidated entity | — | — | — | — | — | |||||||||||||||
Profit on sale of properties | — | — | — | — | — | |||||||||||||||
Less: Operating expenses | (5,269,225 | ) | (8,403,000 | ) | (5,060,578 | ) | (4,502,520 | ) | (5,637,723 | ) | ||||||||||
Interest expense | (2,454,141 | ) | (2,558,000 | ) | (2,712,362 | ) | (2,631,703 | ) | (2,637,162 | ) | ||||||||||
Depreciation | (3,553,760 | ) | (2,551,000 | ) | (2,638,702 | ) | (2,720,080 | ) | (2,816,463 | ) | ||||||||||
Depreciation from pass through investments | — | — | — | — | — | |||||||||||||||
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Net Income (Loss) – GAAP Basis | (3,721,579 | ) | (5,792,000 | ) | (2,541,866 | ) | (1,494,031 | ) | (2,147,546 | ) | ||||||||||
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Cash generated from operations | 1,210,836 | (44,000 | ) | 699,550 | 594,935 | 2,462,003 | ||||||||||||||
Cash generated from equity investments | — | — | — | — | — | |||||||||||||||
Cash generated from sales and refinancing | — | — | — | — | — | |||||||||||||||
Cash generated from recapitalization | — | — | — | — | — | |||||||||||||||
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Cash generated from operations, sales and refinancing | 1,210,836 | (44,000 | ) | 699,550 | 594,935 | 2,462,003 | ||||||||||||||
Less: Cash distributions to investors | ||||||||||||||||||||
- from operating cash flow | (1,210,836 | ) | — | (699,550 | ) | (594,935 | ) | (1,112,556 | ) | |||||||||||
- from reserves | (272,241 | ) | (1,996,000 | ) | (634,752 | ) | (513,62 | ) | — | |||||||||||
- from sales and refinancing | — | — | — | — | — | |||||||||||||||
- from liquidating distributions | — | — | — | — | — | |||||||||||||||
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Cash generated (deficiency) after cash distributions | (272,241 | ) | (2,040,000 | ) | (634,752 | ) | (513,627 | ) | 1,349,447 | |||||||||||
Less: Special Items | — | — | — | — | — | |||||||||||||||
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Cash generated (deficiency) after cash distributions and special items | (272,241 | ) | (2,040,000 | ) | (634,752 | ) | (513,627 | ) | 1,349,447 | |||||||||||
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Distribution Data Per $1000 Invested | ||||||||||||||||||||
Cash Distributions to Investors | ||||||||||||||||||||
Source (on GAAP basis) | ||||||||||||||||||||
- Real estate rental activities | 33 | — | 19 | 16 | 30 | |||||||||||||||
- Reserves | 7 | 54 | 17 | 14 | — | |||||||||||||||
- Other | — | — | — | — | — | |||||||||||||||
- Return of capital | — | — | — | — | — | |||||||||||||||
Source (on cash basis) | ||||||||||||||||||||
- Sales | — | — | — | — | — | |||||||||||||||
- Refinancing | — | — | — | — | — | |||||||||||||||
- Reserves | 7 | 54 | 17 | 14 | — | |||||||||||||||
- Real estate operations | 33 | — | 19 | 16 | 30 | |||||||||||||||
Amount (in percentage terms) remaining invested in program properties at the end of the last year reported in the Table (original total acquisition cost of properties retained divided by original total acquisition cost of all properties in program) | 100 | % |
2
TABLE III
(UNAUDITED)
ANNUAL OPERATING RESULTS OF PRIOR REAL ESTATE PROGRAMS (cont’d)
As of December 31, 2012
Resource Real Estate Investors 7, L.P. | ||||||||||||||||||||
2008 | 2009 | 2010 | 2011 | 2012 | ||||||||||||||||
Gross Revenue | $ | 934,142 | $ | 7,405,605 | $ | 7,577,852 | $ | 7,945,155 | $ | 10,542,707 | ||||||||||
Income/loss on investment in unconsolidated entity | — | — | — | —�� | — | |||||||||||||||
Profit on sale of properties | — | — | — | — | — | |||||||||||||||
Less: Operating expenses | (483,291 | ) | (4,726,818 | ) | (4,544,245 | ) | (4,733,794 | ) | (7,166,618 | ) | ||||||||||
Interest expense | (329,048 | ) | (2,220,240 | ) | (2,274,741 | ) | (2,225,708 | ) | (2,533,731 | ) | ||||||||||
Depreciation | (316,830 | ) | (3,387,686 | ) | (2,044,858 | ) | (2,124,341 | ) | (3,076,016 | ) | ||||||||||
Depreciation from pass through investments | — | — | — | — | — | |||||||||||||||
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Net Income (Loss) – GAAP Basis | (195,027 | ) | (2,929,139 | ) | (1,285,992 | ) | (1,138,688 | ) | (2,233,658 | ) | ||||||||||
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Cash generated from operations | 233,172 | 1,038,578 | 1,091,846 | 1,379,953 | 1,936,000 | |||||||||||||||
Cash generated from equity investments | — | — | — | — | — | |||||||||||||||
Cash generated from sales and refinancing | — | — | — | — | — | |||||||||||||||
Cash generated from recapitalization | — | — | — | — | — | |||||||||||||||
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Cash generated from operations, sales and refinancing | 233,172 | 1,038,578 | 1,091,846 | 1,379,953 | 1,936,000 | |||||||||||||||
Less: Cash distributions to investors | ||||||||||||||||||||
- from operating cash flow | (71,078 | ) | (1,038,578 | ) | (1,091,846 | ) | (1,379,953 | ) | (1,637,928 | ) | ||||||||||
- from reserves | — | (231,731 | ) | (545,099 | ) | (257,025 | ) | — | ||||||||||||
- from sales and refinancing | — | — | — | — | — | |||||||||||||||
- from liquidating distributions | — | — | — | — | — | |||||||||||||||
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Cash generated (deficiency) after cash distributions | 162,094 | (231,731 | ) | (545,099 | ) | (257,025 | ) | 298,072 | ||||||||||||
Less: Special Items | — | — | — | — | — | |||||||||||||||
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Cash generated (deficiency) after cash distributions and special items | 162,094 | (231,731 | ) | (545,099 | ) | (257,025 | ) | 298,072 | ||||||||||||
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Distribution Data Per $1000 Invested | ||||||||||||||||||||
Cash Distributions to Investors | ||||||||||||||||||||
Source (on GAAP basis) | ||||||||||||||||||||
- Real estate rental activities | 9 | 32 | 34 | 42 | 50 | |||||||||||||||
- Reserves | — | 7 | 17 | 8 | — | |||||||||||||||
- Other | — | — | — | — | — | |||||||||||||||
- Return of capital | — | — | — | — | — | |||||||||||||||
Source (on cash basis) | ||||||||||||||||||||
- Sales | — | — | — | — | — | |||||||||||||||
- Refinancing | — | — | — | — | — | |||||||||||||||
- Reserves | — | 7 | 17 | 8 | — | |||||||||||||||
- Real estate operations | 9 | 32 | 34 | 42 | 50 | |||||||||||||||
Amount (in percentage terms) remaining invested in program properties at the end of the last year reported in the Table (original total acquisition cost of properties retained divided by original total acquisition cost of all properties in program) | 100 | % |
3
TABLE III
(UNAUDITED)
ANNUAL OPERATING RESULTS OF PRIOR REAL ESTATE PROGRAMS (cont’d)
As of December 31, 2012
Resource Real Estate Opportunity Fund, L.P. | ||||||||||||||||
2009 | 2010 | 2011 | 2012 | |||||||||||||
Gross Revenue | $ | 416,475 | $ | 5,889,112 | $ | 11,626,593 | $ | 13,304,849 | ||||||||
Income/loss on investment in unconsolidated entity | — | — | — | 2,174,186 | ||||||||||||
Profit on sale of properties | — | 2,628,492 | 1,275,968 | — | ||||||||||||
Less: Operating expenses | (1,679,207 | ) | (10,230,577 | ) | (11,094,267 | ) | (10,819,315 | ) | ||||||||
Interest expense | (176,130 | ) | (1,531,529 | ) | (2,221,010 | ) | (2,005,927 | ) | ||||||||
Depreciation | (206,718 | ) | (3,556,343 | ) | (2,987,314 | ) | (3,355,974 | ) | ||||||||
Depreciation from pass through investments | — | — | — | — | ||||||||||||
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Net Income (Loss) – GAAP Basis | (1,645,580 | ) | (6,800,846 | ) | (3,400,030 | ) | (720,181 | ) | ||||||||
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Cash generated from operations | (1,160,440 | ) | (2,449,443 | ) | 589,400 | 1,649,293 | ||||||||||
Cash generated from equity investments | — | — | — | — | ||||||||||||
Cash generated from sales and refinancing | — | 10,256,915 | 2,388,854 | 9,916,294 | ||||||||||||
Cash generated from recapitalization | — | — | — | — | ||||||||||||
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Cash generated from operations, sales and refinancing | (1,160,440 | ) | 7,807,472 | 2,978,254 | 11,565,587 | |||||||||||
Less: Cash distributions to investors | ||||||||||||||||
- from operating cash flow | — | (1,129,572 | ) | (510,325 | ) | — | ||||||||||
- from reserves | — | — | — | — | ||||||||||||
- from sales and refinancing | — | — | (4,337,096 | ) | (1,987,161 | ) | ||||||||||
- from liquidating distributions | — | — | — | — | ||||||||||||
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Cash generated (deficiency) after cash distributions | (1,160,440 | ) | 6,677,900 | (1,869,167 | ) | 9,578,426 | ||||||||||
Less: Special Items | — | — | — | — | ||||||||||||
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Cash generated (deficiency) after cash distributions and special items | (1,160,440 | ) | 6,677,900 | (1,869,167 | ) | 9,578,426 | ||||||||||
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Distribution Data Per $1000 Invested | ||||||||||||||||
Cash Distributions to Investors | ||||||||||||||||
Source (on GAAP basis) | ||||||||||||||||
- Real estate rental activities | — | 27 | 12 | — | ||||||||||||
- Reserves | — | — | — | — | ||||||||||||
- Other | — | — | — | — | ||||||||||||
- Return of capital | — | — | 105 | 48 | ||||||||||||
Source (on cash basis) | ||||||||||||||||
- Sales | — | — | 105 | 48 | ||||||||||||
- Refinancing | — | — | — | — | ||||||||||||
- Reserves | — | — | — | — | ||||||||||||
- Real estate operations | — | 27 | 12 | — | ||||||||||||
Amount (in percentage terms) remaining invested in program properties at the end of the last year reported in the Table (original total acquisition cost of properties retained divided by original total acquisition cost of all properties in program) | 100 | % |
4
TABLE III
(UNAUDITED)
ANNUAL OPERATING RESULTS OF PRIOR REAL ESTATE PROGRAMS (cont’d)
(Dollars in Thousands)
As of December 31, 2012
Resource Capital Corp. and Subsidiaries | ||||||||||||||||||||
2008 | 2009 | 2010 | 2011 | 2012 | ||||||||||||||||
REVENUES | ||||||||||||||||||||
Interest Income: | ||||||||||||||||||||
Loans | $ | 117,108 | $ | 84,563 | $ | 77,694 | $ | 86,739 | $ | 109,030 | ||||||||||
Securities | 6,378 | 7,225 | 11,434 | 12,424 | 14,296 | |||||||||||||||
Leases | 8,180 | 4,336 | 11,306 | — | — | |||||||||||||||
Interest income - Other | 2,675 | 1,469 | 3,477 | 10,711 | 10,004 | |||||||||||||||
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Total interest income | 134,341 | 97,593 | 103,911 | 109,874 | 133,330 | |||||||||||||||
Interest Expense | 79,619 | 45,427 | 36,466 | 32,186 | 42,792 | |||||||||||||||
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Net interest income | 54,722 | 52,166 | 67,445 | 77,688 | 90,538 | |||||||||||||||
Rental income | — | — | 35 | 3,656 | 11,463 | |||||||||||||||
Dividend income | — | — | 99 | 3,045 | 69 | |||||||||||||||
Equity in (losses) earnings of unconsolidated subsidiaries | — | — | 231 | 112 | (2,709 | ) | ||||||||||||||
Fee Income | — | — | — | 7,789 | 7,068 | |||||||||||||||
Net realized gain on sales of investment securities available-for-sale and loans | (1,637 | ) | 1,890 | 4,821 | 2,643 | 4,106 | ||||||||||||||
Net realized and unrealized gain on investment securities, trading | — | — | 14,791 | 837 | 12,435 | |||||||||||||||
Unrealized gain and net interest income on linked transactions, net | — | — | — | 216 | 728 | |||||||||||||||
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Total revenues | 53,085 | 54,056 | 87,422 | 95,986 | 123,698 | |||||||||||||||
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OPERATING EXPENSES | ||||||||||||||||||||
Management fees - related party | 6,301 | 8,363 | 13,216 | 11,022 | 18,512 | |||||||||||||||
Equity compensation - related party | 540 | 1,240 | 2,221 | 2,526 | 4,636 | |||||||||||||||
Professional services | 3,349 | 3,866 | 3,627 | 3,791 | 4,700 | |||||||||||||||
Insurance | 641 | 828 | 759 | 658 | 639 | |||||||||||||||
Rental operating expense | — | — | 46 | 2,743 | 8,046 | |||||||||||||||
General and administrative | 1,848 | 1,764 | 3,015 | 3,950 | 4,434 | |||||||||||||||
Depreciation on operating leases | — | — | 4,003 | — | — | |||||||||||||||
Depreciation and amortization | — | — | — | 4,619 | 5,885 | |||||||||||||||
Income tax expense (benefit) | (241 | ) | (2 | ) | 5,721 | 12,036 | 14,602 | |||||||||||||
Net impairment losses recognized in earnings | — | 13,471 | 26,804 | 6,898 | 180 | |||||||||||||||
Provision for loan losses | 46,160 | 61,383 | 43,321 | 13,896 | 16,818 | |||||||||||||||
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Total operating expenses | 58,598 | 90,913 | 102,733 | 62,139 | 78,452 | |||||||||||||||
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(5,513 | ) | (36,857 | ) | (15,311 | ) | 33,847 | 45,246 | |||||||||||||
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OTHER REVENUE (EXPENSE) | ||||||||||||||||||||
Gain on consolidation | — | — | — | — | 2,498 | |||||||||||||||
Gain on the extinguishment of debt | 1,750 | 44,546 | 34,610 | 3,875 | 16,699 | |||||||||||||||
Other income (expense) | 689 | (1,350 | ) | 148 | (6 | ) | — | |||||||||||||
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Total other revenue (expense) | 2,439 | 43,196 | 34,758 | 3,869 | 19,197 | |||||||||||||||
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NET INCOME (LOSS) | (3,074 | ) | 6,339 | 19,447 | 37,716 | 64,443 | ||||||||||||||
Cash generated from (used in) operations | 50,950 | 46,622 | 20,534 | 33,037 | 40,997 | |||||||||||||||
Cash generated from (used in) investing activities | 65,706 | 17,785 | (47,416 | ) | (438,209 | ) | 101,621 | |||||||||||||
Cash generated from (used in) financing activities | (66,936 | ) | (26,999 | ) | 4,379 | 418,800 | (100,456 | ) | ||||||||||||
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Total cash generated (used) | 49,720 | 37,408 | (22,503 | ) | 13,628 | 42,162 | ||||||||||||||
Less Cash Distributions to Investors | ||||||||||||||||||||
from operating cash flow | (41,166 | ) | (32,564 | ) | (45,680 | ) | (69,689 | ) | (74,050 | ) | ||||||||||
from sales and refinancing | — | — | — | — | — | |||||||||||||||
from other sources | — | — | — | — | — | |||||||||||||||
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Cash generated (used) after distributions to investors | 8,554 | 4,844 | (68,183 | ) | (56,061 | ) | (31,888 | ) | ||||||||||||
Distribution Data per $1,000 invested | ||||||||||||||||||||
Cash distributions to investors | ||||||||||||||||||||
Source (on GAAP Basis) | ||||||||||||||||||||
Operations | 118 | 131 | 145 | 178 | 203 | |||||||||||||||
Return of Capital | — | — | — | — | — | |||||||||||||||
Source (on Cash Basis) | ||||||||||||||||||||
Sales | — | — | — | — | — | |||||||||||||||
Refinancing | — | — | — | — | — | |||||||||||||||
Operations | 118 | 131 | 145 | 178 | 203 | |||||||||||||||
Other | — | — | — | — | — |
5