Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Nov. 08, 2017 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Resource Real Estate Opportunity REIT, Inc. | |
Entity Central Index Key | 1,466,225 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 71,748,329 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Investments: | ||
Rental properties, net | $ 966,576 | $ 902,454 |
Other investments | 778 | 769 |
Identified intangible assets, net | 1,937 | 1,855 |
Total investments | 969,291 | 905,078 |
Cash | 151,384 | 114,842 |
Restricted cash | 12,249 | 10,277 |
Due from related parties | 280 | 1,375 |
Tenant receivables, net | 303 | 89 |
Deposits | 231 | 262 |
Prepaid expenses and other assets | 2,312 | 2,351 |
Goodwill | 670 | 711 |
Total assets | 1,136,720 | 1,034,985 |
Liabilities: | ||
Mortgage notes payable, net | 769,306 | 622,152 |
Accounts payable | 905 | 1,125 |
Accrued expenses and other liabilities | 7,360 | 6,738 |
Accrued real estate taxes | 9,935 | 7,262 |
Due to related parties | 873 | 2,055 |
Tenant prepayments | 1,139 | 1,069 |
Security deposits | 2,592 | 2,565 |
Total liabilities | 792,110 | 642,966 |
Equity: | ||
Preferred stock (par value $.01; 10,000,000 shares authorized, none issued) | 0 | 0 |
Common stock (par value $.01; 1,000,000,000 shares authorized; 76,845,782 and 74,975,022 shares issued, respectively; and 71,543,818 and 72,006,589 shares outstanding, respectively) | 715 | 720 |
Convertible stock (“promote shares”; par value $.01; 50,000 shares authorized, issued and outstanding) | 1 | 1 |
Additional paid-in capital | 638,419 | 642,523 |
Accumulated other comprehensive loss | (572) | (345) |
Accumulated deficit | (294,457) | (252,306) |
Total stockholders’ equity | 344,106 | 390,593 |
Noncontrolling interests | 504 | 1,426 |
Total equity | 344,610 | 392,019 |
Total liabilities and equity | $ 1,136,720 | $ 1,034,985 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, issued (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized (in shares) | 1,000,000,000 | 1,000,000,000 |
Common stock, issued (in shares) | 76,845,782 | 74,975,022 |
Common stock, outstanding (in shares) | 71,543,818 | 72,006,589 |
Convertible stock ('promote shares'), par value (in dollars per share) | $ 0.01 | $ 0.01 |
Convertible stock ('promote shares'), authorized (in shares) | 50,000 | 50,000 |
Convertible stock ('promote shares'), issued (in shares) | 50,000 | 50,000 |
Convertible stock ('promote shares'), outstanding (in shares) | 50,000 | 50,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Revenues: | ||||
Rental income | $ 32,259 | $ 28,524 | $ 93,403 | $ 89,272 |
Interest and dividend income | 74 | 51 | 165 | 580 |
Total revenues | 32,333 | 28,575 | 93,568 | 89,852 |
Expenses: | ||||
Rental operating - expenses | 7,162 | 6,297 | 20,009 | 21,124 |
Rental operating - payroll | 3,306 | 3,578 | 10,385 | 11,166 |
Rental operating - real estate taxes | 3,794 | 2,832 | 11,096 | 9,859 |
Subtotal - Rental operating expenses | 14,262 | 12,707 | 41,490 | 42,149 |
Acquisition costs | 1,290 | 0 | 3,065 | 0 |
Management fees | 4,323 | 3,811 | 12,530 | 11,898 |
General and administrative | 2,874 | 2,758 | 8,546 | 9,286 |
Loss on disposal of assets | 537 | 334 | 729 | 620 |
Depreciation and amortization expense | 13,193 | 10,828 | 38,527 | 33,167 |
Total expenses | 36,479 | 30,438 | 104,887 | 97,120 |
Loss before other income (expense) | (4,146) | (1,863) | (11,319) | (7,268) |
Other income (expense): | ||||
Net gains on dispositions of properties and joint venture interests | 14,300 | 17,601 | 22,735 | 45,057 |
Interest expense | (7,963) | (6,154) | (21,351) | (17,509) |
Insurance proceeds in excess of cost basis | 0 | 53 | 98 | 264 |
Total other income | 6,337 | 11,500 | 1,482 | 27,812 |
Net income (loss) | 2,191 | 9,637 | (9,837) | 20,544 |
Net income attributable to noncontrolling interests | 0 | 0 | 0 | (6,306) |
Net income (loss) attributable to common stockholders | 2,191 | 9,637 | (9,837) | 14,238 |
Other comprehensive (loss) income: | ||||
Reclassification adjustment for realized loss on designated derivatives | 42 | 45 | 117 | 130 |
Designated derivatives, fair value adjustments | (55) | (32) | (344) | (68) |
Total other comprehensive (loss) income | (13) | 13 | (227) | 62 |
Comprehensive income (loss) | 2,178 | 9,650 | (10,064) | 20,606 |
Comprehensive income attributable to noncontrolling interests | 0 | 0 | 0 | (6,306) |
Total comprehensive income (loss) attributable to stockholders | $ 2,178 | $ 9,650 | $ (10,064) | $ 14,300 |
Weighted average common shares outstanding (in shares) | 71,703 | 71,621 | 71,967 | 71,781 |
Basic and diluted income (loss) per common share: | ||||
Net (loss) income per common share (in dollars per share) | $ 0.03 | $ 0.14 | $ (0.13) | $ 0.20 |
CONSOLIDATED STATEMENT OF CHANG
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY - 9 months ended Sep. 30, 2017 - USD ($) $ in Thousands | Total | Total Stockholders’ Equity | Common Stock | Convertible Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit | Noncontrolling interests |
Beginning balance at Dec. 31, 2016 | $ 392,019 | $ 390,593 | $ 720 | $ 1 | $ 642,523 | $ (345) | $ (252,306) | $ 1,426 |
Beginning balance (in shares) at Dec. 31, 2016 | 72,006,589 | 72,006,589 | 50,000 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Common stock issued through distribution reinvestment plan | $ 20,421 | 20,421 | $ 18 | 20,403 | ||||
Common stock issued through distribution reinvestment plan (in shares) | 1,900,000 | 1,871,000 | ||||||
Distributions declared | $ (32,314) | (32,314) | (32,314) | |||||
Common stock redemptions | $ (25,452) | (25,452) | $ (23) | (25,429) | ||||
Common stock redemptions (in shares) | (2,334,000) | (2,334,000) | ||||||
Deconsolidation of noncontrolling interest | 922 | 922 | (922) | |||||
Other comprehensive loss | $ (227) | (227) | (227) | |||||
Net loss | (9,837) | (9,837) | (9,837) | |||||
Ending balance at Sep. 30, 2017 | $ 344,610 | $ 344,106 | $ 715 | $ 1 | $ 638,419 | $ (572) | $ (294,457) | $ 504 |
Ending balance (in shares) at Sep. 30, 2017 | 71,543,818 | 71,544,000 | 50,000 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Cash flows from operating activities: | ||
Net (loss) income | $ (9,837) | $ 20,544 |
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | ||
Loss on disposal of assets | 729 | 620 |
Casualty losses | 89 | 324 |
Loss on extinguishment of debt | 0 | 854 |
Net gains on dispositions of properties and joint venture interests | (22,735) | (45,057) |
Depreciation and amortization | 38,527 | 33,167 |
Amortization of deferred financing costs | 1,595 | 1,758 |
Amortization of debt premium (discount) | (359) | (364) |
Realized loss on change in fair value of interest rate cap | 117 | 105 |
Accretion of discount and direct loan fees and costs | (30) | (33) |
Changes in operating assets and liabilities, net of acquisitions: | ||
Restricted cash | (723) | (1,860) |
Tenant receivables, net | (214) | (55) |
Deposits | 31 | (52) |
Prepaid expenses and other assets | 793 | (954) |
Due to/from related parties, net | (68) | (408) |
Accounts payable and accrued expenses | 1,887 | (369) |
Tenant prepayments | 77 | (153) |
Security deposits | (42) | 156 |
Net cash provided by operating activities | 9,837 | 8,223 |
Cash flows from investing activities: | ||
Proceeds from disposal of properties and joint venture interests, net of closing costs | 31,926 | 80,173 |
Property acquisitions | (30,291) | 0 |
Insurance proceeds received for casualty losses | 0 | 1,916 |
Acquisition of preferred equity interest | 0 | (408) |
Resolution of preferred equity interest | 0 | 4,300 |
Capital expenditures | (16,632) | (20,213) |
Restricted cash | (81) | 655 |
Principal payments received on loans held for investment | 21 | 17 |
Net cash (used in) provided by investing activities | (15,057) | 66,440 |
Cash flows from financing activities: | ||
Redemptions of common stock | (25,452) | (21,381) |
Payment of deferred financing costs | (469) | (1,670) |
Borrowings on mortgages | 84,497 | 110,690 |
Principal repayments on mortgages | (4,921) | (80,403) |
Borrowings on credit facility | 0 | 12,500 |
Repayments on credit facility | 0 | (34,394) |
Distributions paid on common stock | (11,893) | (10,762) |
Purchase of interest rate caps | 0 | (75) |
Distributions to noncontrolling interests | 0 | (9,120) |
Net cash provided by (used in) financing activities | 41,762 | (34,615) |
Net increase in cash | 36,542 | 40,048 |
Cash at beginning of period | 114,842 | 78,442 |
Cash at end of period | $ 151,384 | $ 118,490 |
NATURE OF BUSINESS AND OPERATIO
NATURE OF BUSINESS AND OPERATIONS | 9 Months Ended |
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
NATURE OF BUSINESS AND OPERATIONS | NATURE OF BUSINESS AND OPERATIONS Resource Real Estate Opportunity REIT, Inc. (the “Company”) was organized in Maryland on June 3, 2009 to purchase a diversified portfolio of discounted U.S. commercial real estate and real estate-related assets in order to generate gains to stockholders from the potential appreciation in the value of the assets and to generate current income for stockholders by distributing cash flow from the Company’s investments. Resource Real Estate Opportunity Advisor, LLC (the “Advisor”), an indirect wholly-owned subsidiary of Resource America, Inc. (“RAI”) has been engaged to manage the day-to-day operations of the Company. RAI is a wholly-owned subsidiary of C-III Capital Partners LLC, ("C-III"), a leading commercial real estate investment management and services company engaged in a broad range of activities. C-III controls both our Advisor and Resource Real Estate Opportunity Manager, LLC (the "Manager"), the Company's property manager; C-III also controls all of the shares of common stock held by the Advisor. Through its private offering and primary public offering, which concluded on December 13, 2013, the Company raised aggregate gross offering proceeds of $645.8 million , which resulted in the issuance of 64.9 million shares of common stock, including approximately 276,000 shares purchased by the Advisor and 1.2 million shares sold in the Company's distribution reinvestment plan. During the years ended December 31, 2016 and 2015 , the Company issued approximately 5.5 million additional shares for $57.5 million pursuant to its distribution reinvestment plan. During the nine months ended September 30, 2017 , the Company issued approximately 1.9 million additional shares for $20.4 million pursuant to its distribution reinvestment plan. The Company's distribution reinvestment plan offering is ongoing. The Company has acquired, and may continue to acquire, real estate and real estate-related debt. The Company has a particular focus on owning and operating multifamily assets, and it has targeted, and intends to continue to target, this asset class while also possibly acquiring interests in other types of commercial property assets consistent with its investment objectives. The Company’s portfolio consists of multifamily rental properties to which the Company has added or will add value with a capital infusion (referred to as “value add properties”). However, the Company is not limited in the types of real estate assets in which it may invest and, accordingly, it may invest in other real estate-related assets either directly or together with a co-investor or joint venture partner. The Company is organized and conducts its operations in a manner intended to allow it to qualify as a real estate investment trust (“REIT”) for U.S. federal income tax purposes under Subchapter M of the Internal Revenue Code of 1986, as amended. The Company also operates its business in a manner intended to maintain its exemption from registration under the Investment Company Act of 1940, as amended. The consolidated financial statements and the information and tables contained in the notes to the consolidated financial statements are unaudited. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). However, in the opinion of management, these interim financial statements include all the necessary adjustments to fairly present the results of the interim periods presented. The consolidated balance sheet as of December 31, 2016 was derived from the audited consolidated financial statements as of and for the year ended December 31, 2016 . The unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 . The results of operations for the nine months ended September 30, 2017 may not necessarily be indicative of the results of operations for the full year ending December 31, 2017 . |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A summary of the significant accounting policies consistently applied in the preparation of the accompanying consolidated financial statements follows: Basis of Presentation The consolidated financial statements have been prepared in conformity with GAAP. Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries as follows: Subsidiary Apartment Complex Number of Units Property Location RRE Opportunity Holdings, LLC N/A N/A N/A Resource Real Estate Opportunity OP, LP N/A N/A N/A RRE Charlemagne Holdings, LLC N/A N/A N/A RRE Iroquois, LP (“Vista”) Vista Apartment Homes 133 Philadelphia, PA RRE Iroquois Holdings, LLC N/A N/A N/A RRE Cannery Holdings, LLC (“Cannery”) Cannery Lofts 156 Dayton, OH RRE Williamsburg Holdings, LLC (“Williamsburg”) Williamsburg 976 Cincinnati, OH WPL Holdings, LLC N/A (a) N/A Cincinnati, OH RRE Autumn Wood Holdings, LLC ("Autumn Wood") Retreat at Rocky Ridge 206 Hoover, AL RRE Village Square Holdings, LLC ("Village Square") Trailpoint at the Woodlands 271 Houston, TX RRE Brentdale Holdings, LLC ("Brentdale") The Westside Apartments 412 Plano, TX RRE Jefferson Point Holdings, LLC ("Jefferson Point") Tech Center Square 208 Newport News, VA RRE Centennial Holdings, LLC ("Centennial") Verona Apartment Homes 276 Littleton, CO RRE Pinnacle Holdings, LLC ("Pinnacle") Skyview Apartment Homes 224 Westminster, CO RRE River Oaks Holdings, LLC ("River Oaks") Maxwell Townhomes 316 San Antonio, TX RRE Nicollet Ridge Holdings, LLC ("Nicollet Ridge") Meridian Pointe 339 Burnsville, MN RRE Addison Place Holdings, LLC ("Addison Place") The Estates at Johns Creek 403 Alpharetta, GA PRIP Coursey, LLC ("Evergreen at Coursey Place") Evergreen at Coursey Place (b) 352 Baton Rouge, LA PRIP 500, LLC ("Pinehurst") Pinehurst (b) 146 Kansas City, MO PRIP 1102, LLC ("Pheasant Run") Pheasant Run (b) 160 Lee's Summit, MO PRIP 11128, LLC ("Retreat at Shawnee") Retreat at Shawnee (b) 342 Shawnee, KS PRIP Pines, LLC ("Pines of York") Pines of York (b) 248 Yorktown, VA RRE Berkeley Run Holdings, LLC ("Berkley Run") Perimeter Circle 194 Atlanta, GA RRE Berkeley Trace Holdings LLC ("Berkley Trace") Perimeter 5550 165 Atlanta, GA RRE Merrywood Holdings, LLC ("Merrywood") Aston at Cinco Ranch 228 Katy, TX RRE Sunset Ridge Holdings, LLC ("Sunset Ridge") Sunset Ridge 324 San Antonio, TX RRE Parkridge Place Holdings, LLC ("Parkridge Place") Calloway at Las Colinas 536 Irving, TX RRE Woodmoor Holdings, LLC ("Woodmoor") South Lamar Village 208 Austin, TX RRE Gilbert Holdings, LLC ("Springs at Gilbert") Heritage Pointe 458 Gilbert, AZ RRE Bonita Glen Holdings, LLC ("Bonita") Point Bonita Apartment Homes 295 Chula Vista, CA RRE Yorba Linda Holdings, LLC ("Yorba Linda") The Bryant at Yorba Linda 400 Yorba Linda, CA RRE Providence Holdings, LLC ("Providence in the Park") Providence in the Park 524 Arlington, TX RRE Green Trails Holdings, LLC ("Green Trails") Green Trails Apartment Homes 440 Lisle, IL RRE Terraces at Lake Mary Holdings, LLC ("Lake Mary") Terraces at Lake Mary 284 Lake Mary, FL 9,224 N/A - Not Applicable (a) Subsidiary transferred its interest in a portion of the Williamsburg parking lot to RRE Williamsburg Holdings, LLC in 2016. (b) Wholly-owned subsidiary of RRE Charlemagne Holdings, LLC. All intercompany accounts and transactions have been eliminated in consolidation. The company's consolidated financial statements also include the accounts of this non-wholly owned subsidiary: Subsidiary Ownership % Apartment Complex Number Property Location DT Stone Ridge, LLC 83.4% Stone Ridge 188 Columbia, SC The property held by DT Stone Ridge, LLC was sold during the three months ended September 30, 2017. Distributions to the Company’s partners in the venture will occur in the fourth quarter of 2017. Thereafter, the Company will no longer have noncontrolling interests. Until June 16, 2016, the Company had a preferred equity investment that was repaid in full on that date. The Company's preferred equity investment was a Variable Interest Entity (VIE) for which the Company had determined it was not the primary beneficiary; therefore, the Company did not consolidate the entity. The Company was not considered the primary beneficiary of the preferred equity investee because it did not possess the unilateral power to direct the key activities of the investee that were considered most significant. The Company has no further continuing involvement with the investee. Additional information with respect to the preferred equity investment is disclosed in Note 6. Dividend income was recognized when earned based on the contractual terms of the preferred equity agreement. Segment Reporting The Company does not evaluate performance on a relationship-specific or transactional basis and does not distinguish its principal business or group its operations on a geographical basis for purposes of measuring performance. Accordingly, the Company believes it has a single operating segment for reporting purposes in accordance with GAAP. Use of Estimates The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Assets Held for Sale The Company presents the assets and liabilities of any rental properties which qualify as held for sale, separately in the consolidated balance sheets. Real estate assets held for sale are measured at the lower of carrying amount or fair value less cost to sell. Both the real estate and the corresponding liabilities are presented separately in the consolidated balance sheets. Subsequent to classification of an asset as held for sale, no further depreciation is recorded. As of September 30, 2017 and December 31, 2016 , the Company had no rental properties included in assets held for sale. Rental Properties The Company records acquired rental properties at fair value on their respective acquisition date. The Company considers the period of future benefit of an asset to determine its appropriate useful life and depreciates the asset using the straight line method. The Company anticipates the estimated useful lives of its assets by class as follows: Buildings 27.5 years Building improvements 5.0 to 27.5 years Furniture, fixtures, and equipment 3.0 to 5.0 years Tenant improvements Shorter of lease term or expected useful life Improvements and replacements in excess of $1,000 are capitalized when they have a useful life greater than or equal to one year. The Manager earns a construction management fee of 5.0% of actual aggregate costs to construct improvements, or to repair, rehab or reconstruct a property. These costs are capitalized along with the related asset. Costs of repairs and maintenance are expensed as incurred. Contractual Obligations The Company leases parking space and equipment under leases with varying expiration dates through 2023. As of September 30, 2017 , the payments due under these obligations totaled $236,000 . Impairment of Long Lived Assets When circumstances indicate the carrying value of a property may not be recoverable, the Company reviews the asset for impairment. This review is based on an estimate of the future undiscounted cash flows, excluding interest charges, expected to result from the property’s use and eventual disposition. The review also considers factors such as expected future operating income, market and other applicable trends and residual value, as well as the effects of leasing demand, competition and other factors. An impairment loss will be recorded to the extent that the carrying value exceeds the estimated fair value of a property to be held and used. For properties held for sale, the impairment loss would be the adjustment to fair value less the estimated cost to dispose of the asset. There were no impairment charges recorded on long-lived assets during the three and nine months ended September 30, 2017 and 2016 . Loans Held for Investment, Net The Company records acquired performing loans held for investment at cost and reviews them for potential impairment at each balance sheet date. The Company considers a loan to be impaired if one of two conditions exists. The first condition is if, based on current information and events, management believes it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement. The second condition is if the loan is deemed to be a troubled-debt restructuring (“TDR”) where a concession has been given to a borrower in financial difficulty. A TDR may not have an associated specific loan loss allowance if the principal and interest amount is considered recoverable based on current market conditions, expected collateral performance and/or guarantees made by the borrowers. The amount of impairment, if any, is measured by comparing the recorded amount of the loan to the present value of the expected cash flows or, as a practical expedient, the fair value of the collateral. If a loan is deemed to be impaired, the Company records a reserve for loan losses through a charge to income for any shortfall. Interest income from performing loans held for investment is recognized based on the contractual terms of the loan agreement. Fees related to any buy down of the interest rate are deferred as prepaid interest income and amortized over the term of the loan as an adjustment to interest income. The initial investment made in a purchased performing loan includes the amount paid to the seller plus fees. The initial investment frequently differs from the related loan’s principal amount at the date of the purchase. The difference is recognized as an adjustment of the yield over the life of the loan. Closing costs related to the purchase of a performing loan held for investment are amortized over the term of the loan and accreted as an adjustment to interest income. The Company may acquire real estate loans at a discount due to the credit quality of such loans and the respective borrowers under such loans. Revenues from these loans are recorded under the effective interest method. Under this method, an effective interest rate (“EIR”) is applied to the cost basis of the real estate loan held for investment. The EIR that is calculated when the loan held for investment is acquired remains constant and is the basis for subsequent impairment testing and income recognition. However, if the amount and timing of future cash collections are not reasonably estimable, the Company accounts for the real estate receivable on the cost recovery method. Under the cost recovery method of accounting, no income is recognized until the basis of the loan held for investment has been fully recovered. Allocation of the Purchase Price of Acquired and Foreclosed Assets The cost of rental properties acquired directly as fee interests and through foreclosing on a loan are allocated to net tangible and intangible assets based on their relative fair values . The Company allocates the purchase price of properties to acquired tangible assets, consisting of land, buildings, fixtures and improvements, and to identified intangible lease assets and liabilities, consisting of the value of above-market and below-market leases, as applicable, the value of in-place leases and the value of tenant relationships. Fair value estimates are based on information obtained from a number of sources, including information obtained about each property as a result of pre-acquisition due diligence, marketing and leasing activities. In addition, the Company may obtain independent appraisal reports. The information in the appraisal reports along with the aforementioned information available to the Company's management is used in allocating the purchase price. The independent appraisers have no involvement in management's allocation decisions other than providing market information. In allocating the purchase price, management also includes real estate taxes, insurance and other operating expenses and estimates of lost rentals at market rates during the expected lease-up period. Management also estimates costs to execute similar leases, including leasing commissions and legal and other related expenses, to the extent that such costs have not already been incurred in connection with a new lease origination as part of the transaction. The Company records above-market and below-market in-place lease values for acquired properties based on the present value (using an interest rate that reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to the in-place leases and (ii) management’s estimate of fair market lease rates for the corresponding in-place leases, measured over a period equal to the remaining non-cancelable term of the lease. The Company amortizes any capitalized above-market or below-market lease values as an increase or reduction to rental income over the remaining non-cancelable terms of the respective leases. The Company measures the aggregate value of other intangible assets acquired based on the difference between (i) the property valued with existing in-place leases adjusted to market rental rates and (ii) the property valued as if it were vacant. Management’s estimates of value are made using methods similar to those used by independent appraisers (e.g., discounted cash flow analysis). Factors to be considered by management in its analysis include an estimate of carrying costs during hypothetical expected lease-up periods considering current market conditions and costs to execute similar leases. The total amount of other intangible assets acquired is further allocated to customer relationship intangible values based on management’s evaluation of the specific characteristics of each tenant’s lease and the Company’s overall relationship with that respective tenant. Characteristics to be considered by management in allocating these values include the nature and extent of the Company’s existing relationships with the tenant, the tenant’s credit quality and expectations of lease renewals (including those existing under the terms of the lease agreement), among other factors. The Company amortizes the value of in-place leases to expense over the average remaining term of the respective leases. The value of customer relationship intangibles are amortized to expense over the initial term and any renewal periods in the respective leases, but in no event will the amortization periods for the intangible assets exceed the remaining depreciable life of the building. Should a tenant terminate its lease, the unamortized portion of the in-place lease value and customer relationship intangibles associated with that tenant would be charged to expense in that period. The determination of the fair value of assets and liabilities acquired requires the use of significant assumptions with regard to current market rental rates, discount rates and other variables. The use of inappropriate estimates would result in an incorrect assessment of the purchase price allocations, which could impact the amount of the Company’s reported net income. Initial purchase price allocations are subject to change until all information is finalized, which is generally within one year of the acquisition date. Goodwill The Company records the excess of the cost of an acquired entity over the difference between the amounts assigned to assets acquired (including identified intangible assets) and liabilities assumed as goodwill. Goodwill is not amortized but is tested for impairment at a level of reporting referred to as a reporting unit during the fourth quarter of each calendar year, or more frequently if events or changes in circumstances indicate that the asset might be impaired. There have been no such events or changes in circumstances during the three and nine months ended September 30, 2017 . Revenue Recognition The Company recognizes minimum rent, including rental abatements and contractual fixed increases attributable to operating leases, on a straight-line basis over the term of the related lease and includes amounts expected to be received in later years in deferred rents. The future minimum rental payments to be received from noncancelable operating leases for residential rental properties are $63.2 million and $35,831 for the 12 month periods ending September 30, 2018 and 2019 , respectively, and none thereafter. The future minimum rental payments to be received from noncancelable operating leases for commercial rental properties and antenna rentals are $380,000 , $321,000 , $273,000 , $193,000 , and $137,000 for the 12 month periods ending September 30, 2018 , 2019 , 2020 , 2021 , and 2022 , respectively, and none thereafter. Revenue is primarily derived from the rental of residential housing units, however, included within rental income is other income such as pet fees, parking fees, and late fees, as well as property operating expense reimbursements due from tenants for common area maintenance, real estate taxes and other recoverable costs. The Company records the ancillary charges in the period in which they are earned or received and records the reimbursements in the period in which the related expenses are incurred. Total other income included within rental income was $3.3 million and $2.9 million , respectively, for the three months ended September 30, 2017 and 2016 . Total other income included within rental income was $9.4 million and $9.0 million , respectively, for the nine months ended September 30, 2017 and 2016 . Tenant Receivables Tenant receivables are stated in the consolidated financial statements as amounts due from tenants net of an allowance for uncollectible receivables. Payment terms vary and receivables outstanding longer than the payment terms are considered past due. The Company determines its allowance by considering a number of factors, including the length of time receivables are past due, security deposits held, the Company’s previous loss history, the tenants’ current ability to pay their obligations to the Company, the condition of the general economy and the industry as a whole. The Company writes off receivables when they become uncollectible. As of September 30, 2017 and December 31, 2016 , there were allowances for uncollectible receivables of $12,081 and $5,200 , respectively. Income Taxes To maintain its REIT qualification for U.S. federal income tax purposes, the Company is generally required to distribute at least 90% of its taxable net income (excluding net capital gains) to its stockholders as well as comply with other requirements, including certain asset, income and stock ownership tests. As a REIT, the Company is not subject to federal corporate income tax to the extent that it distributes 100% of its REIT taxable income each year. If the Company fails to qualify as a REIT, and does not qualify for certain statutory relief provisions, it is subject to U.S. federal, state and local income taxes and may be precluded from qualifying as a REIT for the subsequent four taxable years following the year in which it fails its REIT qualification. Accordingly, the Company’s failure to qualify as a REIT could have a material adverse impact on its results of operations and amounts available for distribution to its stockholders. The dividends-paid deduction of a REIT for qualifying dividends to its stockholders is computed using the Company’s taxable income as opposed to net income reported on the financial statements. Generally, taxable income differs from net income reported on the financial statements because the determination of taxable income is based on tax provisions and not financial accounting principles. The Company may elect to treat certain of its subsidiaries as taxable REIT subsidiaries (“TRS”). In general, a TRS may hold assets and engage in activities that the Company cannot hold or engage in directly and generally may engage in any real estate or non-real estate-related business. A TRS is subject to U.S. federal, state and local corporate income taxes. As of September 30, 2017 and December 31, 2016 , the Company had no TRSs. The Company evaluates the benefits from tax positions taken or expected to be taken in its tax return. Only the largest amount of benefits from tax positions that will more likely than not be sustainable upon examination are recognized by the Company. The Company does not have any unrecognized tax benefits, nor interest and penalties, recorded in its consolidated financial statements and does not anticipate significant adjustments to the total amount of unrecognized tax benefits within the next 12 months. The Company is subject to examination by the U.S. Internal Revenue Service and by the taxing authorities in other states in which the Company has significant business operations. The Company is not currently undergoing any examinations by taxing authorities. The Company is not subject to IRS examination for tax return years 2012 and prior. Earnings Per Share Basic earnings per share is calculated on the basis of the weighted-average number of common shares outstanding during the year. Basic earnings per share is computed by dividing income available to common stockholders by the weighted-average common shares outstanding during the period. Diluted earnings per share takes into account the potential dilution that could occur if securities or other contracts to issue common stock were exercised and converted to common stock. None of the 50,000 shares of convertible stock (see Note 14 ) are included in the diluted earnings per share calculations because the necessary conditions for conversion have not been satisfied as of September 30, 2017 (were such date to represent the end of the contingency period). Reclassifications Certain amounts in the prior year financial statements have been reclassified to conform to the current-year presentation. The impact of the reclassifications made to prior year amounts are not material and did not affect net income (loss). Adoption of New Accounting Standards Accounting Standards Issued But Not Yet Effective In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-09, “Revenue from Contracts with Customers”, which will replace most existing revenue recognition guidance in GAAP. The core principle of ASU No. 2014-09 is that an entity should recognize revenue for the transfer of goods or services equal to the amount that it expects to be entitled to receive for those goods or services. ASU No. 2014-09 requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments. ASU No. 2014-09 will be effective for the Company beginning January 1, 2018, including interim periods in 2018, and allows for both retrospective and prospective methods of adoption. In accordance with the Company’s plan for the adoption of ASU 2014-09, the Company has identified revenue streams and is performing an in-depth review to identify the related performance obligations and to evaluate the impact on the Company’s consolidated financial statements and internal accounting processes and controls. As the majority of the Company’s revenue is derived from lease contracts, the Company does not expect that the adoption of ASU 2014-09 or related amendments and modifications issued by the FASB will have a material impact on its consolidated financial statements. In February 2016, FASB issued ASU No. 2016-02, "Leases" ("ASU No. 2016-02"), which is intended to improve financial reporting about leasing transactions and requires organizations that lease assets to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases. In September 2017, the FASB issued ASU 2017-13, "Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842)", which provides additional implementation guidance on the previously issued ASU No. 2016-02 Leases (Topic 842). ASU No. 2016-02 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company is continuing to evaluate this guidance, however, the Company expects that its operating leases where it is the lessor will be accounted for on its balance sheet similar to its current accounting with the underlying leased asset recognized as real estate. The Company expects that executory costs and certain other non-lease components will need to be accounted for separately from the lease component of the lease with the lease component continuing to be recognized on a straight-line basis over the lease term and the executory costs and certain other non-lease components being accounted for under the new revenue recognition guidance in ASU 2014-09. For leases in which the Company is the lessee, primarily consisting of office equipment leases, the Company expects to recognize a right-of-use asset and a lease liability equal to the present value of the minimum lease payments with rental payments being applied to the lease liability and to interest expense and the right-of-use asset being amortized to expense on a straight-line basis over the term of the lease. In June 2016, FASB issued ASU No. 2016-13, “Financial Instruments - Credit Losses”, which requires measurement and recognition of expected credit losses for financial assets held. ASU No. 2016-13 will be effective for the Company beginning January 1, 2019. The Company is evaluating this guidance; however, it does not expect the adoption of ASU No. 2016-13 to have a significant impact on its consolidated financial statements. In August 2016, FASB issued ASU No. 2016-15, "Classification of Certain Cash Receipts and Cash Payments", which addresses eight specific cash flow issues with the objective of reducing existing diversity in practice. ASU No. 2016-15 will be effective for the Company beginning January 1, 2018. Early application is permitted. The Company is evaluating this guidance; however, it does not expect the adoption of ASU No. 2016-15 to have a significant impact on its reporting of consolidated cash flows. In January 2017, FASB issued ASU No. 2017-01, "Business Combinations (Topic 850): Clarifying the Definition of Business", which clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of businesses. ASU No. 2017-01 will be effective for the Company beginning January 1, 2018. Early application is permitted. The Company is evaluating this guidance and assessing the impact of this guidance on its consolidated financial statements. In January 2017, FASB issued ASU No. 2017-04, "Intangibles- Goodwill and Other (Topic 350): Simplifying the Accounting for Goodwill Impairment", which alters the current goodwill impairment testing procedures. ASU No. 2017-04 will be effective for the Company beginning December 15, 2019. Early application is permitted. The Company is evaluating this guidance and assessing the impact of this guidance on its consolidated financial statements. In August 2017, FASB issued ASU No. 2017-12, "Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities", which expands and refines hedge accounting for both financial and non-financial risk components, aligns the recognition and presentation of the effects of hedging instruments and hedge items in the financial statements, and includes certain targeted improvements to ease the application of current guidance related to the assessment of hedge effectiveness. The update to the standard is effective for the Company on January 1, 2019, with early adoption permitted in any interim period. The Company is continuing to evaluate this guidance and assessing the impact of this guidance on its consolidated financial statements. |
SUPPLEMENTAL CASH FLOW INFORMAT
SUPPLEMENTAL CASH FLOW INFORMATION | 9 Months Ended |
Sep. 30, 2017 | |
Supplemental Cash Flow Elements [Abstract] | |
SUPPLEMENTAL CASH FLOW INFORMATION | SUPPLEMENTAL CASH FLOW INFORMATION The following table presents the Company's supplemental cash flow information (in thousands): Nine Months Ended September 30, 2017 2016 Non-cash financing and investing activities: Stock issued from the distribution reinvestment plan $ 20,421 $ 21,480 Deferred financing costs and escrow deposits funded directly by mortgage notes 1,917 933 Accruals for construction in progress 922 2,833 Non-cash activity related to dispositions: Deconsolidation of subsidiary and removal of related mortgage notes payable and noncontrolling interest — 35,152 Mortgage notes payable settled with proceeds from disposition of rental property 26,976 55,720 Non-cash activity related to acquisitions: Mortgage notes payable used to acquire rental property 93,750 — Cash paid during the period for: Interest $ 19,328 $ 15,454 |
RESTRICTED CASH Restricted Cash
RESTRICTED CASH Restricted Cash | 9 Months Ended |
Sep. 30, 2017 | |
Cash and Cash Equivalents [Abstract] | |
Cash and Cash Equivalents Disclosure | RESTRICTED CASH Restricted cash represents escrow deposits with lenders to be used to pay real estate taxes, insurance, and capital improvements. The following table presents a summary of the components of the Company's restricted cash (in thousands): September 30, 2017 December 31, 2016 Real estate taxes $ 8,771 $ 6,853 Insurance 1,400 1,854 Capital improvements 2,078 1,570 Total $ 12,249 $ 10,277 In addition, the Company had unrestricted cash earmarked for capital expenditures of $24.5 million and $33.9 million as of September 30, 2017 and December 31, 2016 , respectively. |
RENTAL PROPERTIES, NET
RENTAL PROPERTIES, NET | 9 Months Ended |
Sep. 30, 2017 | |
Real Estate Investments, Net [Abstract] | |
RENTAL PROPERTIES, NET | RENTAL PROPERTIES, NET The following table presents the Company’s investments in rental properties (in thousands): September 30, 2017 December 31, 2016 Land $ 190,606 $ 176,418 Building and improvements 869,277 795,665 Furniture, fixtures and equipment 36,154 32,198 Construction in progress 5,751 5,983 1,101,788 1,010,264 Less: accumulated depreciation (135,212 ) (107,810 ) $ 966,576 $ 902,454 Depreciation expense for the three and nine months ended September 30, 2017 was $12.3 million and $35.9 million , respectively, and for the three and nine months ended September 30, 2016 was $10.8 million and $32.9 million , respectively. |
OTHER INVESTMENTS
OTHER INVESTMENTS | 9 Months Ended |
Sep. 30, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
OTHER INVESTMENTS | OTHER INVESTMENTS Preferred equity investment: On November 12, 2014, the Company, through its wholly owned subsidiary, RRE Spring Hill Holdings, LLC, made a $3.5 million preferred equity investment in Spring Hill Investors Limited Partner, LLC (the “Investment Vehicle”) and became the Preferred Member. An unaffiliated limited liability company, Presidium AMC Spring Hill Venture, LLC, owned the common equity and acted as the managing member of the Investment Vehicle. In October 2015 and March 2016, the Company increased its investment by $800,000 . The Company was paid a dividend equal to 12% of the total amount invested, of which 7% was paid monthly and the remaining amount was accrued. This preferred equity investment, including accrued interest, was repaid in full on June 6, 2016. Loan held for investment, net: In 2011, the Company purchased, at a discount, one performing promissory note (the "Trail Ridge Note”), which is secured by a first priority mortgage on a multifamily rental apartment community. The contract purchase price for the Trail Ridge Note was $700,000 , excluding closing costs. As of both September 30, 2017 and December 31, 2016 , the Trail Ridge Note was both current and performing. The following table presents details of the balance and terms of the Trail Ridge Note as of September 30, 2017 and December 31, 2016 (in thousands): September 30, 2017 December 31, 2016 Unpaid principal balance $ 939 $ 960 Unamortized discount and acquisition costs (161 ) (191 ) Net book value $ 778 $ 769 Maturity date 10/28/2021 Interest rate 7.5 % Average monthly payment $ 8 |
ACQUISTIONS ACQUISITIONS
ACQUISTIONS ACQUISITIONS | 9 Months Ended |
Sep. 30, 2017 | |
Business Combinations [Abstract] | |
ACQUISITIONS | ACQUISITIONS As of September 30, 2017 , the Company owned interests in 29 properties. The Company estimated the fair values of certain of the acquired assets and liabilities based on preliminary valuations at the date of purchase. The Company has up to 12 months from the date of acquisition to finalize the valuation for each property. All valuations for acquisitions in 2016 and prior had been finalized as of December 31, 2016. The initial purchase price allocations for both Green Trails Apartment Homes and Terraces at Lake Mary have not been finalized as of September 30, 2017. The following table presents the Company's wholly-owned acquisitions during the nine months ended September 30, 2017 and the respective fair values assigned (dollars in thousands): Fair Value Assigned Multifamily City and State Date of Contractual Purchase (1) Land Building and Improvements Furniture, Fixture and Equipment Intangible Assets Other Assets Liabilities Terraces at Lake Mary Lake Mary, FL 8/31/2017 $ 44,100 $ 5,402 $ 37,297 $ 433 $ 968 $ — $ (423 ) Green Trails Apartment Homes Lisle, IL 5/31/2017 $ 78,000 $ 14,727 $ 61,283 $ 1,117 $ 1,695 $ 14 $ (898 ) (1) Contractual purchase price excludes closing costs, acquisition expenses, and other immaterial settlement date adjustments and pro-rations. The following table presents the total revenues, net losses, and acquisition costs of the Company's acquisitions during the three and nine months ended September 30, 2017 (dollars in thousands): Three Months Ended September 30, 2017 Nine Months Ended September 30, 2017 Multifamily Community Total Revenues Net Loss Acquisition Costs Total Revenues Net Loss Acquisition Costs Green Trails Apartment Homes $ 1,807 $ (678 ) $ — $ 2,408 $ (1,067 ) $ (1,775 ) Terraces at Lake Mary $ 347 $ (958 ) $ (1,290 ) $ 347 $ (958 ) $ (1,290 ) $ 2,154 $ (1,636 ) $ (1,290 ) $ 2,755 $ (2,025 ) $ (3,065 ) |
DISPOSITION OF PROPERTIES AND D
DISPOSITION OF PROPERTIES AND DECONSOLIDATION OF INTERESTS | 9 Months Ended |
Sep. 30, 2017 | |
Discontinued Operations and Disposal Groups [Abstract] | |
DISPOSITION OF PROPERTIES AND DECONSOLIDATION OF INTERESTS | DISPOSITION OF PROPERTIES AND DECONSOLIDATION OF INTERESTS The following table presents details of the Company's disposition and deconsolidation activity during the three and nine months ended September 30, 2017 and 2016 (in thousands): Net Gains on Dispositions of Properties and Joint Venture Interests Multifamily Community Location Sale Date Contract Sales Price Three months ended September 30, 2017 Nine months ended September 30, 2017 2017 Dispositions: Chisholm Place Plano, Texas May 10, 2017 $ 21,250 $ — $ 6,922 Mosaic Oklahoma City, Oklahoma May 12, 2017 6,100 — 1,513 Deerfield Hermantown, Minnesota August 16, 2017 23,600 11,035 11,035 Stone Ridge Columbia, South Carolina September 27, 2017 10,534 3,265 3,265 $ 14,300 $ 22,735 2016 Dispositions: Three months ended September 30, 2016 Nine months ended September 30, 2016 Conifer Place (1) Norcross, Georgia January 27, 2016 $ 42,500 $ — $ 9,897 Champion Farms (2) Louisville, Kentucky January 29, 2016 7,590 — 1,066 The Ivy at Clear Creek Houston, Texas February 17, 2016 19,400 — 6,792 Affinity at Winter Park Winter Park, Florida June 9, 2016 17,500 — 5,605 Fieldstone (3) Woodland, Ohio June 30, 2016 7,514 — 4,096 The Nesbit Palisades Alpharetta, Georgia July 8, 2016 45,500 17,601 17,601 $ 17,601 $ 45,057 The following table presents the Company's revenues and net income (loss) attributable to properties sold, which includes gain on sale, for the three and nine months ended September 30, 2017 and 2016 (in thousands): Revenues Attributable to Properties Sold Net Income (Loss) Attributable to Properties Sold Multifamily Community Three months ended September 30, 2017 Nine months ended September 30, 2017 Three months ended September 30, 2017 Nine months ended September 30, 2017 2017 Dispositions: Chisholm Place $ — $ 825 $ (4 ) $ 6,659 Mosaic (2 ) 473 (26 ) 1,441 Deerfield 326 1,653 10,827 11,042 Stone Ridge 435 1,286 3,196 3,099 $ 759 $ 4,237 $ 13,993 $ 22,241 2016 Dispositions: Three months ended September 30, 2016 Nine months ended September 30, 2016 Three months ended September 30, 2016 Nine months ended September 30, 2016 Conifer Place (1) $ — $ 365 $ — $ 9,942 Champion Farms (2) — 220 — 1,125 The Ivy at Clear Creek — 386 2 6,629 Affinity at Winter Park 2 1,010 (1 ) 5,747 Fieldstone (3) — 1,548 — 4,325 The Nesbit Palisades 167 2,615 17,273 17,742 $ 169 $ 6,144 $ 17,274 $ 45,510 (1) On January 27, 2016, the Company and its joint venture partner sold Conifer Place, which resulted in the deconsolidation of the entity. Net income attributable to properties sold includes $6.2 million attributable to noncontrolling interests. (2) On January 29, 2016, the Company sold its joint venture interest in Champion Farms to its joint venture partner. As such, the Company deconsolidated the entity as of January 29, 2016. The Company has no continuing involvement with this joint venture. (3) On June 30, 2016, the Company sold its joint venture interest in Fieldstone to its joint venture partner. As such, the Company deconsolidated the entity as of June 30, 2016. The Company has no continuing involvement with this joint venture. |
IDENTIFIED INTANGIBLE ASSETS, N
IDENTIFIED INTANGIBLE ASSETS, NET AND GOODWILL | 9 Months Ended |
Sep. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
IDENTIFIED INTANGIBLE ASSETS, NET AND GOODWILL | IDENTIFIED INTANGIBLE ASSETS, NET AND GOODWILL Identified intangible assets, net, relate to in-place apartment unit rental and antennae leases. The net carrying value of the acquired in-place leases totaled $1.9 million as of September 30, 2017 and December 31, 2016 , net of accumulated amortization of $25.6 million and $24.3 million , respectively. The weighted-average remaining life of the acquired apartment unit rental leases was six months and seven months as of September 30, 2017 and December 31, 2016 , respectively. Expected amortization for the antennae leases at the Vista Apartment Homes is $16,000 annually through 2025. Amortization of the apartment unit rental and antennae leases for the three and nine months ended September 30, 2017 was $842,000 and $2.6 million , respectively. Amortization of the apartment unit rental and antennae leases for the three and nine months ended September 30, 2016 was $4,000 and $224,000 , respectively. The following table presents the Company's expected amortization for the rental and antennae leases for the next five 12-month periods ending September 30, and thereafter (in thousands): 2018 $ 1,819 2019 16 2020 16 2021 16 2022 16 Thereafter 54 $ 1,937 As of September 30, 2017 and December 31, 2016 , the Company had $670,000 and $711,000 , respectively, of goodwill included on the consolidated balance sheets. The following table presents a rollforward of the Company's activity in goodwill for the nine months ended September 30, 2017 (in thousands): Balance, January 1, 2017 $ 711 Sale of Stone Ridge (41 ) Balance, September 30, 2017 $ 670 |
MORTGAGE NOTES PAYABLE, NET
MORTGAGE NOTES PAYABLE, NET | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
MORTGAGE NOTES PAYABLE, NET | MORTGAGE NOTES PAYABLE, NET The following table presents a summary of the Company's mortgage notes payable, net (in thousands): September 30, 2017 December 31, 2016 Collateral Outstanding Borrowings Premium (Discount) Deferred finance costs, net Carrying Value Outstanding Borrowings Premium (Discount) Deferred finance costs, net Carrying Value Vista Apartment Homes $ 14,977 $ — $ (149 ) $ 14,828 $ 15,225 $ — $ (178 ) $ 15,047 Cannery Lofts 13,100 — (172 ) 12,928 13,100 — (197 ) 12,903 Deerfield — — — — 10,359 — (125 ) 10,234 Trailpoint at the Woodlands 18,449 — (196 ) 18,253 18,690 — (222 ) 18,468 Verona Apartment Homes 32,970 — (490 ) 32,480 32,970 — (532 ) 32,438 Skyview Apartment Homes 28,400 — (426 ) 27,974 28,400 — (462 ) 27,938 Maxwell Townhomes 13,408 — (116 ) 13,292 13,602 — (137 ) 13,465 Pinehurst 7,350 — (134 ) 7,216 7,350 — (154 ) 7,196 Pheasant Run 6,250 — — 6,250 6,250 43 (9 ) 6,284 Retreat of Shawnee 12,736 26 (7 ) 12,755 12,893 85 (23 ) 12,955 Evergreen at Coursey Place 26,759 83 (80 ) 26,762 27,107 100 (96 ) 27,111 Pines of York 14,789 (251 ) (47 ) 14,491 14,999 (299 ) (56 ) 14,644 The Estates at Johns Creek 48,854 — (316 ) 48,538 49,596 — (405 ) 49,191 Chisholm Place — — — — 11,587 — (143 ) 11,444 Perimeter Circle 17,018 — (99 ) 16,919 17,298 — (143 ) 17,155 Perimeter 5550 13,431 — (82 ) 13,349 13,651 — (118 ) 13,533 Aston at Cinco Ranch 23,051 — (225 ) 22,826 23,367 — (268 ) 23,099 Sunset Ridge 1 19,368 207 (164 ) 19,411 19,699 259 (205 ) 19,753 Sunset Ridge 2 2,905 28 (21 ) 2,912 2,948 35 (26 ) 2,957 Calloway at Las Colinas 34,571 — (257 ) 34,314 35,083 — (306 ) 34,777 South Lamar Village 12,242 — (92 ) 12,150 12,435 — (131 ) 12,304 Heritage Pointe 26,050 — (295 ) 25,755 26,280 — (327 ) 25,953 The Bryant at Yorba Linda 67,500 — (511 ) 66,989 67,500 — (661 ) 66,839 Point Bonita Apartment Homes 26,624 1,737 (298 ) 28,063 26,907 1,966 (338 ) 28,535 Stone Ridge — — — — 5,227 — (130 ) 5,097 The Westside Apartments 36,820 — (403 ) 36,417 36,820 — (448 ) 36,372 Tech Center Square 12,199 — (172 ) 12,027 12,375 — (196 ) 12,179 Williamsburg 53,995 — (736 ) 53,259 53,995 — (828 ) 53,167 Retreat at Rocky Ridge 11,375 — (232 ) 11,143 11,375 — (261 ) 11,114 Providence in the Park 47,000 — (546 ) 46,454 — — — — Green Trails Apartment Homes 61,500 — (695 ) 60,805 — — — — Meridian Pointe 39,500 — (611 ) 38,889 — — — — Terraces at Lake Mary 32,250 — (393 ) 31,857 — — — — $ 775,441 $ 1,830 $ (7,965 ) $ 769,306 $ 627,088 $ 2,189 $ (7,125 ) $ 622,152 The following table presents additional information about the Company's mortgage notes payable, net (in thousands, except percentages): Collateral Maturity Date Annual Interest Rate Average Monthly Debt Service Average Monthly Escrow Vista Apartment Homes 1/1/2022 3.52% (1)(5) $ 71 $ 17 Cannery Lofts 11/1/2023 3.77% (1)(3) 42 26 Trailpoint at the Woodlands 11/1/2023 3.64% (1)(4) 83 47 Verona Apartment Homes 10/1/2026 3.59% (1)(3) 100 40 Skyview Apartment Homes 10/1/2026 3.59% (1)(3) 86 24 Maxwell Townhomes 1/1/2022 4.32% (2)(5) 71 78 Pinehurst 11/1/2023 3.65% (1)(3) 32 15 Pheasant Run 10/1/2018 3.73% (2)(3)(7) 19 12 Retreat of Shawnee 2/1/2018 5.58% (2)(5) 78 29 Evergreen at Coursey Place 8/1/2021 5.07% (2)(5) 154 37 Pines of York 12/1/2021 4.46% (2)(5) 80 25 The Estates at Johns Creek 7/1/2020 3.38% (2)(5) 221 102 Perimeter Circle 7/1/2019 3.42% (2)(5) 81 44 Perimeter 5550 7/1/2019 3.42% (2)(5) 64 32 Aston at Cinco Ranch 10/1/2021 4.34% (2)(5) 120 70 Sunset Ridge 1 11/1/2020 4.58% (2)(5) 113 89 Sunset Ridge 2 11/1/2020 4.54% (2)(5) 16 — Calloway at Las Colinas 12/1/2021 3.87% (2)(5) 171 115 South Lamar Village 8/1/2019 3.64% (2)(5) 59 57 Heritage Pointe 4/1/2025 3.11% (1)(4) 114 43 The Bryant at Yorba Linda 6/1/2020 2.98% (1)(3) 186 — Point Bonita Apartment Homes 10/1/2023 5.33% (2)(5) 152 61 The Westside Apartments 9/1/2026 3.35% (1)(3) 104 69 Tech Center Square 6/1/2023 3.81% (1)(5) 58 24 Williamsburg 1/1/2024 3.61% (1)(3) 165 167 Retreat at Rocky Ridge 1/1/2024 3.69% (1)(3) 36 23 Providence in the Park 2/1/2024 3.53% (1)(3)(6) 141 138 Green Trails Apartment Homes 6/1/2024 3.22% (1)(3)(6) 168 79 Meridian Pointe 8/1/2024 3.13% (1)(3)(6) 104 56 Terraces at Lake Mary 9/1/2024 3.14% (1)(3)(6) 86 46 (1) Variable rate based on one-month LIBOR of 1.2322% (as of September 30, 2017 ) plus a fixed margin. (2) Fixed rate. (3) Monthly interest-only payment currently required. (4) Monthly fixed principal plus interest payment required. (5) Fixed monthly principal and interest payment required. (6) New debt placed during the nine months ended September 30, 2017. (7) Automatic extension to October 1, 2018 occurred on October 1, 2017 at which time the fixed interest rate converted to a variable rate. Loans assumed as part of the Point Bonita Apartment Homes, South Lamar Village, Paladin (Pinehurst, Pheasant Run, Retreat of Shawnee, Evergreen at Coursey Place, Pines of York), Sunset Ridge and Maxwell Townhomes acquisitions were recorded at their fair values. The premium or discount is amortized over the remaining term of the loans and included in interest expense. For the three months ended September 30, 2017 and 2016 , interest expense was reduced by $120,000 and $122,000 , respectively, for the amortization of the premium or discount. For the nine months ended September 30, 2017 and 2016 , interest expense was reduced by $359,000 and $364,000 , respectively, for the amortization of the premium or discount. All mortgage notes are collateralized by a first mortgage lien on the assets of the respective property as named in the table above. The amount outstanding on the mortgages may be prepaid in full during the entire term with a prepayment penalty on the majority of mortgages held. The following table presents the Company's annual principal payments on outstanding borrowings for each of the next five 12-month periods ending September 30, and thereafter (in thousands): 2018 $ 7,207 2019 69,608 2020 124,078 2021 57,223 2022 101,546 Thereafter 415,779 $ 775,441 The mortgage notes payable are recourse only with respect to the properties that secure the notes, subject to certain limited standard exceptions, as defined in each mortgage note. These exceptions are referred to as “carveouts.” The Company has guaranteed the carveouts under mortgage notes by executing a guarantee with respect to the properties. In general, carveouts relate to damages suffered by the lender for a borrower’s failure to pay rents, insurance or condemnation proceeds to lender, failure to pay water, sewer and other public assessments or charges, failure to pay environmental compliance costs or to deliver books and records, in each case as required in the loan documents. The exceptions also require the Company to guarantee payment of audit costs, lender’s enforcement of its rights under the loan documents and payment of the loan if the borrower voluntarily files for bankruptcy or seeks reorganization, or if a related party of the borrower does so with respect to the subsidiary. The Company had also guaranteed the completion and payment of costs of completion of no less than $7.0 million for renovations to The Estates at Johns Creek by July 1, 2018. These renovations were completed as of September 30, 2017 , and the guaranty was released. The Company may borrow an additional $7.5 million on the mortgage secured by The Bryant at Yorba Linda when certain debt service coverage and loan to value criteria are met. The Bryant at Yorba Linda mortgage loan includes a net worth and liquidity covenant. The Company was in compliance with all covenants related to this loan as of September 30, 2017 . The loan also includes an additional debt service coverage covenant that is only required to be met as of December 31, 2017 and for periods thereafter. Deferred financing costs incurred to obtain financing are amortized over the term of the related debt. During the three months ended September 30, 2017 and September 30, 2016 , $633,000 and $622,000 , respectively, of amortization of deferred financing costs was included in interest expense. During the nine months ended September 30, 2017 and September 30, 2016 , $1.5 million and $1.6 million , respectively, of amortization of deferred financing costs was included in interest expense. Accumulated amortization as of September 30, 2017 and December 31, 2016 was $3.6 million and $2.6 million , respectively. The following table presents the Company's estimated amortization of the existing deferred financing costs for the next five 12-month periods ending September 30, and thereafter (in thousands): 2018 $ 1,638 2019 1,572 2020 1,338 2021 1,050 2022 851 Thereafter 1,516 $ 7,965 |
CREDIT FACILITY
CREDIT FACILITY | 9 Months Ended |
Sep. 30, 2017 | |
Line of Credit Facility [Abstract] | |
CREDIT FACILITY | CREDIT FACILITY The secured revolving credit facility with Bank of America, N.A. (“Bank of America”), as amended, matured on May 23, 2017 and was closed; all collateral subject to the revolving credit line was released. During the nine months ended September 30, 2017 , the Company paid an unused line of credit fee to Bank of America of $250,000 , which is included in interest expense in the consolidated statements of operations and comprehensive income (loss). Deferred financing costs incurred to obtain financing were amortized over the term of the related debt. During the three months ended September 30, 2017 and 2016 , $0 and $48,000 , respectively, of amortization of deferred financing costs was included in interest expense. During the nine months ended September 30, 2017 and 2016 , $68,000 and $268,000 , respectively, of amortization of deferred financing costs was included in interest expense. Deferred financing costs were fully amortized on the date of maturity. Accumulated amortization as of September 30, 2017 and December 31, 2016 was $925,000 and $857,000 , respectively. |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE LOSS | 9 Months Ended |
Sep. 30, 2017 | |
Equity [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE LOSS | ACCUMULATED OTHER COMPREHENSIVE LOSS The following table presents the changes in each component of the Company's accumulated other comprehensive loss for the nine months ended September 30, 2017 (in thousands): Balance, January 1, 2017 $ (345 ) Reclassification adjustment for realized loss on designated derivatives 117 Designated derivatives, fair value adjustments (344 ) Balance, September 30, 2017 $ (572 ) |
CERTAIN RELATIONSHIPS AND RELAT
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS | 9 Months Ended |
Sep. 30, 2017 | |
Related Party Transactions [Abstract] | |
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS | CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS In the ordinary course of its business operations, the Company has ongoing relationships with several related parties. Relationship with RAI and C-III Property loss pool. The Company's properties participate in a property loss self-insurance pool with other properties directly and indirectly managed by RAI and C-III, which is backed by a catastrophic insurance policy. Substantially all of the receivables from related parties represent insurance deposits held in escrow by RAI and C-III to the self-insurance pool which, if unused, will be returned to the Company. The pool covers losses up to $2.5 million , after a $25,000 deductible per incident. Claims beyond the insurance pool limits will be covered by the catastrophic insurance policy, which covers claims up to $250 million , after a $100,000 deductible per incident. Therefore, unforeseen or catastrophic losses in excess of the Company's insured limits could have a material adverse effect on the Company's financial condition and operating results. During the nine months ended September 30, 2017 , the Company paid and $1.0 million into the insurance pool. General liability loss pool. The Company's properties participated in a general liability pool with other properties directly or indirectly managed by RAI and C-III until April 22, 2017. The pool covers claims up to $50,000 per incident through April 22, 2017. Effective April 23, 2017, the loss pool was eliminated, and the Company now participates (with other properties directly or indirectly managed by RAI and C-III) in a general liability policy. The insured limit for the general liability policy is $76 million in total claims, after a 25,000 deductible per incident. Internal audit . RAI performs internal audit services for the Company. Other expenses. The Company utilizes the services of The Planning and Zoning Resource Company, an affiliate of C-III, for zoning reports for acquisitions. Relationship with the Advisor In September 2009, the Company entered into an advisory agreement (the “Advisory Agreement”) pursuant to which the Advisor provides the Company with investment management, administrative and related services. The Advisory Agreement was amended in January 2010 and further amended in January 2011 and March 2015. The Advisory Agreement has a one -year term and renews for an unlimited number of successive one -year terms upon the approval of the conflicts committee of the Company's board of directors. The Company renewed the Advisory Agreement for another year on September 15, 2017. Under the Advisory Agreement, the Advisor receives fees and is reimbursed for its expenses as set forth below: Acquisition fees. The Company pays the Advisor an acquisition fee of 2.0% of the cost of investments acquired on behalf of the Company, plus any capital expenditure reserves allocated, or the amount funded by the Company to acquire loans, including acquisition expenses and any debt attributable to such investments. Asset management fees. The Company pays the Advisor a monthly asset management fee equal to one-twelfth of 1.0% of the higher of the cost or the independently appraised value of each asset, without deduction for depreciation, bad debts or other non-cash reserves. The asset management fee is based only on the portion of the costs or value attributable to the Company’s investment in an asset if the Company does not own all or a majority of an asset and does not manage or control the asset. Disposition fees. The Advisor earns a disposition fee in connection with the sale of a property equal to the lesser of one-half of the aggregate brokerage commission paid, or if none is paid, 2.75% of the contract sales price. Debt financing fees. The Advisor earns a debt financing fee equal to 0.5% of the amount available under any debt financing obtained for which it provided substantial services. Expense reimbursements. The Company also pays directly or reimburses the Advisor for all of the expenses paid or incurred by the Advisor or its affiliates on behalf of the Company or in connection with the services provided to the Company in relation to its public offering, including its ongoing distribution reinvestment plan offering. Reimbursements also include expenses the Advisor incurs in connection with providing services to the Company, including the Company’s allocable share of costs for Advisor personnel and overhead, out of pocket expenses incurred in connection with the selection and acquisition of properties or other real estate related debt investments, whether or not the Company ultimately acquires the investment. However, the Company will not reimburse the Advisor or its affiliates for employee costs in connection with services for which the Advisor earns acquisition or disposition fees. Relationship with Resource Real Estate Opportunity Manager The Manager manages the Company's real estate properties and real estate-related debt investments and coordinates the leasing of, and manages construction activities related to, some of the Company’s real estate properties pursuant to the terms of the management agreement with the Manager. Property management fees. The Manager earns 4.5% of the gross receipts from the Company's properties, provided that for properties that are less than 75% occupied, the manager receives a minimum fee for the first 12 months of ownership for performing certain property management and leasing activities. Construction management fees. The Manager earns a construction management fee of 5.0% of actual aggregate costs to construct improvements, or to repair, rehab or reconstruct a property. Debt servicing fees. The Manager earns a debt servicing fee of 2.75% on payments received from loans held by the Company for investment. Information technology fees and operating expense reimbursement. During the ordinary course of business, the Manager or other affiliates of RAI may pay certain shared information technology fees and operating expenses on behalf of the Company. Relationship with Other Related Parties The Company has also made payment for legal services to the law firm of Ledgewood P.C. (“Ledgewood”). Until 1996, the former Chairman of RAI was of counsel to Ledgewood. In connection with the termination of his affiliation with Ledgewood and its redemption of his interest, RAI's former Chairman continued to receive certain payments from Ledgewood, but as of September 8, 2016 is no longer the Chairman of RAI. Until March 2006, an executive of RAI was the managing member of Ledgewood. This executive remained of counsel to Ledgewood through June 2007, at which time he became an Executive Vice President of RAI, but as of September 8, 2016 is no longer an executive of RAI. The Company utilizes the services of a printing company, Graphic Images, LLC (“Graphic Images”), whose principal owner is the father of RAI’s Chief Financial Officer. The following table presents the Company's amounts payable to and amounts receivable from such related parties (in thousands): September 30, December 31, Due from related parties: RAI and affiliates $ 280 $ 1,375 Due to related parties: Advisor: Operating expense reimbursements $ 49 $ 1,285 Resource Real Estate Opportunity Manager, LLC: Property management fees 482 456 Other operating expense reimbursements 342 314 $ 873 $ 2,055 The following table presents the Company's fees earned by and expenses paid to such related parties (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Fees earned / expenses paid to related parties: Advisor: Acquisition fees (1) $ 953 $ — $ 2,565 $ 8 Asset management fees (2) 2,893 2,543 8,370 7,924 Disposition fees (3) 144 273 361 686 Debt financing fees (4) 358 166 901 166 Overhead allocation (5) 1,091 1,033 3,399 3,475 Internal audit (5) 21 43 47 43 Resource Real Estate Opportunity Manager LLC: Property management fees (2) $ 1,429 $ 1,267 $ 4,158 $ 3,872 Construction management fees (6) 188 246 712 738 Information technology fees (5) — 101 — 317 Operating expense reimbursements (7) — 56 — 186 Debt servicing fees (2) 1 — 2 14 Other: Ledgewood (5) $ — $ 44 $ — $ 74 The Planning & Zoning Resource Company (1) 2 — 3 — Graphic Images (5) — 23 9 83 (1) Included in Acquisition costs on the consolidated statements of operations and comprehensive income (loss). (2) Included in Management fees on the consolidated statements of operations and comprehensive income (loss). (3) Included in Net gains on dispositions of properties and joint venture interests on the consolidated statements of operations and comprehensive income (loss). (4) Included in Mortgage notes payable, net, on the consolidated balance sheets. (5) Included in General and administrative on the consolidated statements of operations and comprehensive income (loss). (6) Included in Rental properties, net, on the consolidated balance sheets. (7) Included in Rental operating expenses on the consolidated statements of operations and comprehensive income (loss). Amount excludes the allocated payroll expenses described in Note 17- Operating Expenses. |
EQUITY
EQUITY | 9 Months Ended |
Sep. 30, 2017 | |
Equity [Abstract] | |
EQUITY | EQUITY Preferred Stock The Company’s charter authorizes the Company to issue 10.0 million shares of its $0.01 par value preferred stock. As of September 30, 2017 and December 31, 2016 , no shares of preferred stock were issued and outstanding. Common Stock As of September 30, 2017 , the Company had issued 76,845,782 shares of its $0.01 par value common stock as follows (dollars in thousands): Shares Issued Gross Proceeds Shares issued through private offering 1,263,727 $ 12,582 Shares issued through primary public offering (1) 62,485,461 622,077 Shares issued through stock distributions 2,132,266 — Shares issued through distribution reinvestment plan 10,948,828 111,811 Shares issued in conjunction with the Advisor's initial investment, 15,500 155 Total 76,845,782 $ 746,625 Shares redeemed and retired (5,301,964 ) Total shares outstanding as of September 30, 2017 71,543,818 (1) Includes 276,056 shares issued to the Advisor. Convertible Stock As of September 30, 2017 and December 31, 2016 , the Company had 50,000 shares of $0.01 par value convertible stock outstanding of which the Advisor and affiliated persons own 49,063 shares and outside investors own 937 shares. The convertible stock will convert into shares of the Company’s common stock upon the occurrence of (a) the Company having paid distributions to common stockholders that in the aggregate equal 100% of the price at which the Company originally sold the shares plus an amount sufficient to produce a 10% cumulative, non-compounded annual return on the shares at that price; or (b) if the Company lists its common stock on a national securities exchange and, on the 31st trading day after listing, the Company’s value based on the average trading price of its common stock since the listing, plus prior distributions, combine to meet the same 10% return threshold. Each of these two events is a “Triggering Event.” Upon a Triggering Event, the Company's convertible stock will, unless its advisory agreement has been terminated or not renewed on account of a material breach by its Advisor, generally be converted into a number of shares of common stock equal to 1 / 50,000 of the quotient of: (A) the lesser of (i) 25% of the amount, if any, by which (1) the value of the Company as of the date of the event triggering the conversion plus the total distributions paid to its stockholders through such date on the then-outstanding shares of its common stock exceeds (2) the sum of the aggregate issue price of those outstanding shares plus a 10% cumulative, non-compounded, annual return on the issue price of those outstanding shares as of the date of the event triggering the conversion, or (ii) 15% of the amount, if any, by which (1) the value of the Company as of the date of the event triggering the conversion plus the total distributions paid to its stockholders through such date on the then-outstanding shares of its common stock exceeds (2) the sum of the aggregate issue price of those outstanding shares plus a 6% cumulative, non-compounded, annual return on the issue price of those outstanding shares as of the date of the event triggering the conversion, divided by (B) the value of the Company divided by the number of outstanding shares of common stock, in each case, as of the date of the event triggering the conversion. Redemption of Securities During the nine months ended September 30, 2017 , the Company redeemed shares of its outstanding common stock as follows (in thousands, except per share data): Period Total Number of Shares Redeemed Average Price Paid per Share January 2017 — — February 2017 — — March 2017 696 $ 10.83 April 2017 — — May 2017 — — June 2017 957 $ 10.94 July 2017 — — August 2017 — — September 2017 681 $ 10.94 2,334 All redemptions requests tendered were honored during the three and nine months ended September 30, 2017 . The Company will not redeem in excess of 5% of the weighted-average number of shares outstanding during the 12 -month period immediately prior to the effective date of redemption. The Company's board of directors will determine at least quarterly whether it has sufficient excess cash to repurchase shares. Generally, the cash available for redemptions will be limited to proceeds from the Company's distribution reinvestment plan plus, if the Company has positive operating cash flow from the previous fiscal year, 1% of all operating cash flow from the previous year. The Company's board of directors, in its sole discretion, may suspend, terminate or amend the Company's share redemption program without stockholder approval upon 30 days ' notice if it determines that such suspension, termination or amendment is in the Company's best interest. The Company's board may also reduce the number of shares purchased under the share redemption program if it determines the funds otherwise available to fund the Company's share redemption program are needed for other purposes. These limitations apply to all redemptions, including redemptions sought upon a stockholder's death, qualifying disability or confinement to a long-term care facility. Distributions For the nine months ended September 30, 2017 , the Company paid aggregate distributions of $32.3 million , including $11.9 million of distributions paid in cash and $20.4 million of distributions reinvested in shares of common stock through the Company's distribution reinvestment plan, as follows (in thousands): Record Date Per Common Distribution Date Distributions Net Total January 30, 2017 $ 0.05 January 31, 2017 $ 2,329 $ 1,272 $ 3,601 February 27, 2017 0.05 February 28, 2017 2,308 1,303 3,611 March 30, 2017 0.05 March 31, 2017 2,274 1,314 3,588 April 27, 2017 0.05 April 28, 2017 2,273 1,324 3,597 May 30, 2017 0.05 May 31, 2017 2,258 1,350 3,608 June 29, 2017 0.05 June 30, 2017 2,249 1,322 3,571 July 28, 2017 0.05 July 31, 2017 2,247 1,333 3,580 August 30, 2017 0.05 August 31, 2017 2,250 1,340 3,590 September 28, 2017 0.05 September 29, 2017 2,233 1,335 3,568 $ 0.45 $ 20,421 $ 11,893 $ 32,314 |
FAIR VALUE MEASURES AND DISCLOS
FAIR VALUE MEASURES AND DISCLOSURES | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASURES AND DISCLOSURES | FAIR VALUE MEASURES AND DISCLOSURES In analyzing the fair value of its investments accounted for on a fair value basis, the Company follows the fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The Company determines fair value based on quoted prices when available or, if quoted prices are not available, through the use of alternative approaches, such as discounting the expected cash flows using market interest rates commensurate with the credit quality and duration of the investment. The fair value of cash, tenant receivables and accounts payable, approximate their carrying value due to their short nature. The hierarchy followed defines three levels of inputs that may be used to measure fair value: Level 1 - Quoted prices in active markets for identical assets and liabilities that the reporting entity has the ability to access at the measurement date. Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset and liability or can be corroborated with observable market data for substantially the entire contractual term of the asset or liability. Level 3 - Unobservable inputs that reflect the entity’s own assumptions about the assumptions that market participants would use in the pricing of the asset or liability and are consequently not based on market activity, but rather through particular valuation techniques. The determination of where an asset or liability falls in the hierarchy requires significant judgment. The Company evaluates its hierarchy disclosures each quarter; depending on various factors, it is possible that an asset or liability may be classified differently from quarter to quarter. However, the Company expects that changes in classifications between levels will be rare. Derivatives (interest rate caps), which are reported at fair value in the consolidated balance sheets, are valued by a third-party pricing agent using an income approach with models that use, as their primary inputs, readily observable market parameters. This valuation process considers factors including interest rate yield curves, time value, credit and volatility factors. (Level 2) The following table presents information about the Company's assets measured at fair value on a recurring basis and indicates the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair value (in thousands): Level 1 Level 2 Level 3 Total September 30, 2017 Assets: Interest rate caps $ — $ 66 $ — $ 66 $ — $ 66 $ — $ 66 December 31, 2016 Assets: Interest rate caps $ — $ 242 $ — $ 242 $ — $ 242 $ — $ 242 The following table presents the carrying and fair values of the Company’s loan held for investment, net, and mortgage notes payable-outstanding borrowings (in thousands): September 30, 2017 December 31, 2016 Carrying Amount Fair Value Carrying Amount Fair Value Loan held for investment, net $ 778 $ 1,038 $ 769 $ 1,104 Mortgage notes payable- outstanding borrowings $ (775,441 ) $ (752,228 ) $ (627,088 ) $ (620,578 ) The fair value of the loan held for investment, net was estimated using rates available to the Company for debt with similar terms and remaining maturities. (Level 3) The carrying amount of the mortgage notes payable presented is the outstanding borrowings excluding premium or discount and deferred finance costs, net. The fair value of the mortgage notes payable was estimated using a discounted cash flows model and rates available to the Company for both fixed rate and variable rate debt with similar terms and remaining maturities. (Level 3) |
DERIVATIVES AND HEDGING ACTIVIT
DERIVATIVES AND HEDGING ACTIVITIES | 9 Months Ended |
Sep. 30, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVES AND HEDGING ACTIVITIES | DERIVATIVES AND HEDGING ACTIVITIES Risk Management Objective of Using Derivatives The Company is exposed to certain risk arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity, and credit risk primarily by managing the amount, sources, and duration of its debt funding and the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. The Company’s derivative financial instruments are used to manage differences in the amount, timing, and duration of the Company’s known or expected cash receipts and its known or expected cash payments principally related to the Company’s investments and borrowings. As a condition to certain of the Company’s financing facilities, from time to time the Company may be required to enter into certain derivative transactions as may be required by the lender. These transactions would generally be in line with the Company’s own risk management objectives and also serve to protect the lender. Cash Flow Hedges of Interest Rate Risk The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company entered into a total of 17 interest rate caps that were designated as cash flow hedges. Interest rate caps designated as cash flow hedges involve the receipt of variable amounts from a counterparty if interest rates rise above the strike rate on the contract in exchange for an up-front premium. The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in accumulated other comprehensive income and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. During the three and nine months ended September 30, 2017 , such derivatives were used to hedge the variable cash flows, indexed to USD-LIBOR, associated with existing variable-rate loan agreements. The ineffective portion of the change in fair value of the derivatives is recognized directly in earnings. During the three and nine months ended September 30, 2017 , the Company had losses of $42,000 and $117,000 , respectively. During the three and nine months ended September 30, 2016 , the Company had losses of $45,000 and $130,000 , respectively. Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable-rate debt. During the next 12 months, the Company estimates that an additional $189,535 will be reclassified as an increase to interest expense. The following table presents the Company's outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk as of September 30, 2017 (dollars in thousands): Interest Rate Derivative Number of Instruments Notional Maturity Dates Interest Rate Caps 17 $ 450,725 January 1, 2018 to October 1, 2020 Tabular Disclosure of Fair Values of Derivative Instruments on the Balance Sheet The following table presents the fair value of the Company’s derivative financial instruments on the consolidated balance sheets as of September 30, 2017 and December 31, 2016 (in thousands): Asset Derivatives Liability Derivatives September 30, 2017 December 31, 2016 September 30, 2017 December 31, 2016 Balance Sheet Fair Value Balance Sheet Fair Value Balance Sheet Fair Value Balance Sheet Fair Value Prepaid expenses and other assets $ 66 Prepaid expenses and other assets $ 242 — $ — — $ — |
OPERATING EXPENSE LIMITATION
OPERATING EXPENSE LIMITATION | 9 Months Ended |
Sep. 30, 2017 | |
Operating Expense [Abstract] | |
OPERATING EXPENSE LIMITATION | OPERATING EXPENSE LIMITATION Under its charter, the Company must limit its total operating expenses to the greater of 2% of its average invested assets or 25% of its net income for the four most recently completed fiscal quarters, unless the conflicts committee of the Company’s board of directors has determined that such excess expenses were justified based on unusual and non-recurring factors. Operating expenses for the four quarters ended September 30, 2017 were in compliance with the charter imposed limitation. Allocated payroll expense associated with a portion of the compensation paid by the Advisor or its affiliates to the Company's executive officers was included in general and administrative in the consolidated statements of operations and comprehensive (loss) income and was reimbursed to the Advisor during the three and nine months ended September 30, 2017 and September 30, 2016 . This expense is included in "overhead allocation" in Note 13. Allocated payroll expense from the Manager is included in rental operating expenses in the consolidated statements of operations and comprehensive (loss) income. Allocated payroll for the three months ended September 30, 2017 and September 30, 2016 was $225,405 and $533,288 , respectively. Allocated payroll for the nine months ended September 30, 2017 and September 30, 2016 was $730,658 and $1.65 million , respectively. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2017 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS On October 6, 2017, the Company's Board of Directors declared a $0.05 per share cash distribution to its common stockholders of record at the close of business on each of the following record dates: October 30, 2017, November 29, 2017, and December 28, 2017. Such distributions were paid or will be paid on October 31, 2017, November 30, 2017, and December 29, 2017, respectively. The Company has evaluated subsequent events and determined that no events have occurred, other than those disclosed above, which would require an adjustment to or additional disclosure in the consolidated financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN25
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The consolidated financial statements have been prepared in conformity with GAAP. |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries as follows: Subsidiary Apartment Complex Number of Units Property Location RRE Opportunity Holdings, LLC N/A N/A N/A Resource Real Estate Opportunity OP, LP N/A N/A N/A RRE Charlemagne Holdings, LLC N/A N/A N/A RRE Iroquois, LP (“Vista”) Vista Apartment Homes 133 Philadelphia, PA RRE Iroquois Holdings, LLC N/A N/A N/A RRE Cannery Holdings, LLC (“Cannery”) Cannery Lofts 156 Dayton, OH RRE Williamsburg Holdings, LLC (“Williamsburg”) Williamsburg 976 Cincinnati, OH WPL Holdings, LLC N/A (a) N/A Cincinnati, OH RRE Autumn Wood Holdings, LLC ("Autumn Wood") Retreat at Rocky Ridge 206 Hoover, AL RRE Village Square Holdings, LLC ("Village Square") Trailpoint at the Woodlands 271 Houston, TX RRE Brentdale Holdings, LLC ("Brentdale") The Westside Apartments 412 Plano, TX RRE Jefferson Point Holdings, LLC ("Jefferson Point") Tech Center Square 208 Newport News, VA RRE Centennial Holdings, LLC ("Centennial") Verona Apartment Homes 276 Littleton, CO RRE Pinnacle Holdings, LLC ("Pinnacle") Skyview Apartment Homes 224 Westminster, CO RRE River Oaks Holdings, LLC ("River Oaks") Maxwell Townhomes 316 San Antonio, TX RRE Nicollet Ridge Holdings, LLC ("Nicollet Ridge") Meridian Pointe 339 Burnsville, MN RRE Addison Place Holdings, LLC ("Addison Place") The Estates at Johns Creek 403 Alpharetta, GA PRIP Coursey, LLC ("Evergreen at Coursey Place") Evergreen at Coursey Place (b) 352 Baton Rouge, LA PRIP 500, LLC ("Pinehurst") Pinehurst (b) 146 Kansas City, MO PRIP 1102, LLC ("Pheasant Run") Pheasant Run (b) 160 Lee's Summit, MO PRIP 11128, LLC ("Retreat at Shawnee") Retreat at Shawnee (b) 342 Shawnee, KS PRIP Pines, LLC ("Pines of York") Pines of York (b) 248 Yorktown, VA RRE Berkeley Run Holdings, LLC ("Berkley Run") Perimeter Circle 194 Atlanta, GA RRE Berkeley Trace Holdings LLC ("Berkley Trace") Perimeter 5550 165 Atlanta, GA RRE Merrywood Holdings, LLC ("Merrywood") Aston at Cinco Ranch 228 Katy, TX RRE Sunset Ridge Holdings, LLC ("Sunset Ridge") Sunset Ridge 324 San Antonio, TX RRE Parkridge Place Holdings, LLC ("Parkridge Place") Calloway at Las Colinas 536 Irving, TX RRE Woodmoor Holdings, LLC ("Woodmoor") South Lamar Village 208 Austin, TX RRE Gilbert Holdings, LLC ("Springs at Gilbert") Heritage Pointe 458 Gilbert, AZ RRE Bonita Glen Holdings, LLC ("Bonita") Point Bonita Apartment Homes 295 Chula Vista, CA RRE Yorba Linda Holdings, LLC ("Yorba Linda") The Bryant at Yorba Linda 400 Yorba Linda, CA RRE Providence Holdings, LLC ("Providence in the Park") Providence in the Park 524 Arlington, TX RRE Green Trails Holdings, LLC ("Green Trails") Green Trails Apartment Homes 440 Lisle, IL RRE Terraces at Lake Mary Holdings, LLC ("Lake Mary") Terraces at Lake Mary 284 Lake Mary, FL 9,224 N/A - Not Applicable (a) Subsidiary transferred its interest in a portion of the Williamsburg parking lot to RRE Williamsburg Holdings, LLC in 2016. (b) Wholly-owned subsidiary of RRE Charlemagne Holdings, LLC. All intercompany accounts and transactions have been eliminated in consolidation. The company's consolidated financial statements also include the accounts of this non-wholly owned subsidiary: Subsidiary Ownership % Apartment Complex Number Property Location DT Stone Ridge, LLC 83.4% Stone Ridge 188 Columbia, SC The property held by DT Stone Ridge, LLC was sold during the three months ended September 30, 2017. Distributions to the Company’s partners in the venture will occur in the fourth quarter of 2017. Thereafter, the Company will no longer have noncontrolling interests. Until June 16, 2016, the Company had a preferred equity investment that was repaid in full on that date. The Company's preferred equity investment was a Variable Interest Entity (VIE) for which the Company had determined it was not the primary beneficiary; therefore, the Company did not consolidate the entity. The Company was not considered the primary beneficiary of the preferred equity investee because it did not possess the unilateral power to direct the key activities of the investee that were considered most significant. The Company has no further continuing involvement with the investee. Additional information with respect to the preferred equity investment is disclosed in Note 6. Dividend income was recognized when earned based on the contractual terms of the preferred equity agreement. |
Segment Reporting | Segment Reporting The Company does not evaluate performance on a relationship-specific or transactional basis and does not distinguish its principal business or group its operations on a geographical basis for purposes of measuring performance. Accordingly, the Company believes it has a single operating segment for reporting purposes in accordance with GAAP. |
Use of Estimates | Use of Estimates The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Assets Held for Sale | Assets Held for Sale The Company presents the assets and liabilities of any rental properties which qualify as held for sale, separately in the consolidated balance sheets. Real estate assets held for sale are measured at the lower of carrying amount or fair value less cost to sell. Both the real estate and the corresponding liabilities are presented separately in the consolidated balance sheets. Subsequent to classification of an asset as held for sale, no further depreciation is recorded. As of September 30, 2017 and December 31, 2016 , the Company had no rental properties included in assets held for sale. |
Rental Properties | Rental Properties The Company records acquired rental properties at fair value on their respective acquisition date. The Company considers the period of future benefit of an asset to determine its appropriate useful life and depreciates the asset using the straight line method. The Company anticipates the estimated useful lives of its assets by class as follows: Buildings 27.5 years Building improvements 5.0 to 27.5 years Furniture, fixtures, and equipment 3.0 to 5.0 years Tenant improvements Shorter of lease term or expected useful life Improvements and replacements in excess of $1,000 are capitalized when they have a useful life greater than or equal to one year. The Manager earns a construction management fee of 5.0% of actual aggregate costs to construct improvements, or to repair, rehab or reconstruct a property. These costs are capitalized along with the related asset. Costs of repairs and maintenance are expensed as incurred. |
Contractual Obligations | Contractual Obligations The Company leases parking space and equipment under leases with varying expiration dates through 2023. As of September 30, 2017 , the payments due under these obligations totaled $236,000 . |
Impairment of Long-Lived Assets | Impairment of Long Lived Assets When circumstances indicate the carrying value of a property may not be recoverable, the Company reviews the asset for impairment. This review is based on an estimate of the future undiscounted cash flows, excluding interest charges, expected to result from the property’s use and eventual disposition. The review also considers factors such as expected future operating income, market and other applicable trends and residual value, as well as the effects of leasing demand, competition and other factors. An impairment loss will be recorded to the extent that the carrying value exceeds the estimated fair value of a property to be held and used. For properties held for sale, the impairment loss would be the adjustment to fair value less the estimated cost to dispose of the asset. There were no impairment charges recorded on long-lived assets during the three and nine months ended September 30, 2017 and 2016 . |
Loans Held for Investment, Net | Loans Held for Investment, Net The Company records acquired performing loans held for investment at cost and reviews them for potential impairment at each balance sheet date. The Company considers a loan to be impaired if one of two conditions exists. The first condition is if, based on current information and events, management believes it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement. The second condition is if the loan is deemed to be a troubled-debt restructuring (“TDR”) where a concession has been given to a borrower in financial difficulty. A TDR may not have an associated specific loan loss allowance if the principal and interest amount is considered recoverable based on current market conditions, expected collateral performance and/or guarantees made by the borrowers. The amount of impairment, if any, is measured by comparing the recorded amount of the loan to the present value of the expected cash flows or, as a practical expedient, the fair value of the collateral. If a loan is deemed to be impaired, the Company records a reserve for loan losses through a charge to income for any shortfall. Interest income from performing loans held for investment is recognized based on the contractual terms of the loan agreement. Fees related to any buy down of the interest rate are deferred as prepaid interest income and amortized over the term of the loan as an adjustment to interest income. The initial investment made in a purchased performing loan includes the amount paid to the seller plus fees. The initial investment frequently differs from the related loan’s principal amount at the date of the purchase. The difference is recognized as an adjustment of the yield over the life of the loan. Closing costs related to the purchase of a performing loan held for investment are amortized over the term of the loan and accreted as an adjustment to interest income. The Company may acquire real estate loans at a discount due to the credit quality of such loans and the respective borrowers under such loans. Revenues from these loans are recorded under the effective interest method. Under this method, an effective interest rate (“EIR”) is applied to the cost basis of the real estate loan held for investment. The EIR that is calculated when the loan held for investment is acquired remains constant and is the basis for subsequent impairment testing and income recognition. However, if the amount and timing of future cash collections are not reasonably estimable, the Company accounts for the real estate receivable on the cost recovery method. Under the cost recovery method of accounting, no income is recognized until the basis of the loan held for investment has been fully recovered. |
Allocation of Purchase Price of Acquired and Foreclosed Assets | Allocation of the Purchase Price of Acquired and Foreclosed Assets The cost of rental properties acquired directly as fee interests and through foreclosing on a loan are allocated to net tangible and intangible assets based on their relative fair values . The Company allocates the purchase price of properties to acquired tangible assets, consisting of land, buildings, fixtures and improvements, and to identified intangible lease assets and liabilities, consisting of the value of above-market and below-market leases, as applicable, the value of in-place leases and the value of tenant relationships. Fair value estimates are based on information obtained from a number of sources, including information obtained about each property as a result of pre-acquisition due diligence, marketing and leasing activities. In addition, the Company may obtain independent appraisal reports. The information in the appraisal reports along with the aforementioned information available to the Company's management is used in allocating the purchase price. The independent appraisers have no involvement in management's allocation decisions other than providing market information. In allocating the purchase price, management also includes real estate taxes, insurance and other operating expenses and estimates of lost rentals at market rates during the expected lease-up period. Management also estimates costs to execute similar leases, including leasing commissions and legal and other related expenses, to the extent that such costs have not already been incurred in connection with a new lease origination as part of the transaction. The Company records above-market and below-market in-place lease values for acquired properties based on the present value (using an interest rate that reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to the in-place leases and (ii) management’s estimate of fair market lease rates for the corresponding in-place leases, measured over a period equal to the remaining non-cancelable term of the lease. The Company amortizes any capitalized above-market or below-market lease values as an increase or reduction to rental income over the remaining non-cancelable terms of the respective leases. The Company measures the aggregate value of other intangible assets acquired based on the difference between (i) the property valued with existing in-place leases adjusted to market rental rates and (ii) the property valued as if it were vacant. Management’s estimates of value are made using methods similar to those used by independent appraisers (e.g., discounted cash flow analysis). Factors to be considered by management in its analysis include an estimate of carrying costs during hypothetical expected lease-up periods considering current market conditions and costs to execute similar leases. The total amount of other intangible assets acquired is further allocated to customer relationship intangible values based on management’s evaluation of the specific characteristics of each tenant’s lease and the Company’s overall relationship with that respective tenant. Characteristics to be considered by management in allocating these values include the nature and extent of the Company’s existing relationships with the tenant, the tenant’s credit quality and expectations of lease renewals (including those existing under the terms of the lease agreement), among other factors. The Company amortizes the value of in-place leases to expense over the average remaining term of the respective leases. The value of customer relationship intangibles are amortized to expense over the initial term and any renewal periods in the respective leases, but in no event will the amortization periods for the intangible assets exceed the remaining depreciable life of the building. Should a tenant terminate its lease, the unamortized portion of the in-place lease value and customer relationship intangibles associated with that tenant would be charged to expense in that period. The determination of the fair value of assets and liabilities acquired requires the use of significant assumptions with regard to current market rental rates, discount rates and other variables. The use of inappropriate estimates would result in an incorrect assessment of the purchase price allocations, which could impact the amount of the Company’s reported net income. Initial purchase price allocations are subject to change until all information is finalized, which is generally within one year of the acquisition date. |
Goodwill | Goodwill The Company records the excess of the cost of an acquired entity over the difference between the amounts assigned to assets acquired (including identified intangible assets) and liabilities assumed as goodwill. Goodwill is not amortized but is tested for impairment at a level of reporting referred to as a reporting unit during the fourth quarter of each calendar year, or more frequently if events or changes in circumstances indicate that the asset might be impaired. There have been no such events or changes in circumstances during the three and nine months ended September 30, 2017 . |
Revenue Recognition | Revenue Recognition The Company recognizes minimum rent, including rental abatements and contractual fixed increases attributable to operating leases, on a straight-line basis over the term of the related lease and includes amounts expected to be received in later years in deferred rents. The future minimum rental payments to be received from noncancelable operating leases for residential rental properties are $63.2 million and $35,831 for the 12 month periods ending September 30, 2018 and 2019 , respectively, and none thereafter. The future minimum rental payments to be received from noncancelable operating leases for commercial rental properties and antenna rentals are $380,000 , $321,000 , $273,000 , $193,000 , and $137,000 for the 12 month periods ending September 30, 2018 , 2019 , 2020 , 2021 , and 2022 , respectively, and none thereafter. Revenue is primarily derived from the rental of residential housing units, however, included within rental income is other income such as pet fees, parking fees, and late fees, as well as property operating expense reimbursements due from tenants for common area maintenance, real estate taxes and other recoverable costs. The Company records the ancillary charges in the period in which they are earned or received and records the reimbursements in the period in which the related expenses are incurred. Total other income included within rental income was $3.3 million and $2.9 million , respectively, for the three months ended September 30, 2017 and 2016 . Total other income included within rental income was $9.4 million and $9.0 million , respectively, for the nine months ended September 30, 2017 and 2016 . |
Tenant Receivables | Tenant Receivables Tenant receivables are stated in the consolidated financial statements as amounts due from tenants net of an allowance for uncollectible receivables. Payment terms vary and receivables outstanding longer than the payment terms are considered past due. The Company determines its allowance by considering a number of factors, including the length of time receivables are past due, security deposits held, the Company’s previous loss history, the tenants’ current ability to pay their obligations to the Company, the condition of the general economy and the industry as a whole. The Company writes off receivables when they become uncollectible. As of September 30, 2017 and December 31, 2016 , there were allowances for uncollectible receivables of $12,081 and $5,200 , respectively. |
Income Taxes | Income Taxes To maintain its REIT qualification for U.S. federal income tax purposes, the Company is generally required to distribute at least 90% of its taxable net income (excluding net capital gains) to its stockholders as well as comply with other requirements, including certain asset, income and stock ownership tests. As a REIT, the Company is not subject to federal corporate income tax to the extent that it distributes 100% of its REIT taxable income each year. If the Company fails to qualify as a REIT, and does not qualify for certain statutory relief provisions, it is subject to U.S. federal, state and local income taxes and may be precluded from qualifying as a REIT for the subsequent four taxable years following the year in which it fails its REIT qualification. Accordingly, the Company’s failure to qualify as a REIT could have a material adverse impact on its results of operations and amounts available for distribution to its stockholders. The dividends-paid deduction of a REIT for qualifying dividends to its stockholders is computed using the Company’s taxable income as opposed to net income reported on the financial statements. Generally, taxable income differs from net income reported on the financial statements because the determination of taxable income is based on tax provisions and not financial accounting principles. The Company may elect to treat certain of its subsidiaries as taxable REIT subsidiaries (“TRS”). In general, a TRS may hold assets and engage in activities that the Company cannot hold or engage in directly and generally may engage in any real estate or non-real estate-related business. A TRS is subject to U.S. federal, state and local corporate income taxes. As of September 30, 2017 and December 31, 2016 , the Company had no TRSs. The Company evaluates the benefits from tax positions taken or expected to be taken in its tax return. Only the largest amount of benefits from tax positions that will more likely than not be sustainable upon examination are recognized by the Company. The Company does not have any unrecognized tax benefits, nor interest and penalties, recorded in its consolidated financial statements and does not anticipate significant adjustments to the total amount of unrecognized tax benefits within the next 12 months. The Company is subject to examination by the U.S. Internal Revenue Service and by the taxing authorities in other states in which the Company has significant business operations. The Company is not currently undergoing any examinations by taxing authorities. The Company is not subject to IRS examination for tax return years 2012 and prior. |
Earnings Per Share | Earnings Per Share Basic earnings per share is calculated on the basis of the weighted-average number of common shares outstanding during the year. Basic earnings per share is computed by dividing income available to common stockholders by the weighted-average common shares outstanding during the period. Diluted earnings per share takes into account the potential dilution that could occur if securities or other contracts to issue common stock were exercised and converted to common stock. None of the 50,000 shares of convertible stock (see Note 14 ) are included in the diluted earnings per share calculations because the necessary conditions for conversion have not been satisfied as of September 30, 2017 (were such date to represent the end of the contingency period). |
Reclassifications | Reclassifications Certain amounts in the prior year financial statements have been reclassified to conform to the current-year presentation. The impact of the reclassifications made to prior year amounts are not material and did not affect net income (loss). |
Adoption of New Accounting Standards | Adoption of New Accounting Standards Accounting Standards Issued But Not Yet Effective In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-09, “Revenue from Contracts with Customers”, which will replace most existing revenue recognition guidance in GAAP. The core principle of ASU No. 2014-09 is that an entity should recognize revenue for the transfer of goods or services equal to the amount that it expects to be entitled to receive for those goods or services. ASU No. 2014-09 requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments. ASU No. 2014-09 will be effective for the Company beginning January 1, 2018, including interim periods in 2018, and allows for both retrospective and prospective methods of adoption. In accordance with the Company’s plan for the adoption of ASU 2014-09, the Company has identified revenue streams and is performing an in-depth review to identify the related performance obligations and to evaluate the impact on the Company’s consolidated financial statements and internal accounting processes and controls. As the majority of the Company’s revenue is derived from lease contracts, the Company does not expect that the adoption of ASU 2014-09 or related amendments and modifications issued by the FASB will have a material impact on its consolidated financial statements. In February 2016, FASB issued ASU No. 2016-02, "Leases" ("ASU No. 2016-02"), which is intended to improve financial reporting about leasing transactions and requires organizations that lease assets to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases. In September 2017, the FASB issued ASU 2017-13, "Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842)", which provides additional implementation guidance on the previously issued ASU No. 2016-02 Leases (Topic 842). ASU No. 2016-02 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company is continuing to evaluate this guidance, however, the Company expects that its operating leases where it is the lessor will be accounted for on its balance sheet similar to its current accounting with the underlying leased asset recognized as real estate. The Company expects that executory costs and certain other non-lease components will need to be accounted for separately from the lease component of the lease with the lease component continuing to be recognized on a straight-line basis over the lease term and the executory costs and certain other non-lease components being accounted for under the new revenue recognition guidance in ASU 2014-09. For leases in which the Company is the lessee, primarily consisting of office equipment leases, the Company expects to recognize a right-of-use asset and a lease liability equal to the present value of the minimum lease payments with rental payments being applied to the lease liability and to interest expense and the right-of-use asset being amortized to expense on a straight-line basis over the term of the lease. In June 2016, FASB issued ASU No. 2016-13, “Financial Instruments - Credit Losses”, which requires measurement and recognition of expected credit losses for financial assets held. ASU No. 2016-13 will be effective for the Company beginning January 1, 2019. The Company is evaluating this guidance; however, it does not expect the adoption of ASU No. 2016-13 to have a significant impact on its consolidated financial statements. In August 2016, FASB issued ASU No. 2016-15, "Classification of Certain Cash Receipts and Cash Payments", which addresses eight specific cash flow issues with the objective of reducing existing diversity in practice. ASU No. 2016-15 will be effective for the Company beginning January 1, 2018. Early application is permitted. The Company is evaluating this guidance; however, it does not expect the adoption of ASU No. 2016-15 to have a significant impact on its reporting of consolidated cash flows. In January 2017, FASB issued ASU No. 2017-01, "Business Combinations (Topic 850): Clarifying the Definition of Business", which clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of businesses. ASU No. 2017-01 will be effective for the Company beginning January 1, 2018. Early application is permitted. The Company is evaluating this guidance and assessing the impact of this guidance on its consolidated financial statements. In January 2017, FASB issued ASU No. 2017-04, "Intangibles- Goodwill and Other (Topic 350): Simplifying the Accounting for Goodwill Impairment", which alters the current goodwill impairment testing procedures. ASU No. 2017-04 will be effective for the Company beginning December 15, 2019. Early application is permitted. The Company is evaluating this guidance and assessing the impact of this guidance on its consolidated financial statements. In August 2017, FASB issued ASU No. 2017-12, "Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities", which expands and refines hedge accounting for both financial and non-financial risk components, aligns the recognition and presentation of the effects of hedging instruments and hedge items in the financial statements, and includes certain targeted improvements to ease the application of current guidance related to the assessment of hedge effectiveness. The update to the standard is effective for the Company on January 1, 2019, with early adoption permitted in any interim period. The Company is continuing to evaluate this guidance and assessing the impact of this guidance on its consolidated financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN26
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Wholly Owned Subsidiaries Information | The company's consolidated financial statements also include the accounts of this non-wholly owned subsidiary: Subsidiary Ownership % Apartment Complex Number Property Location DT Stone Ridge, LLC 83.4% Stone Ridge 188 Columbia, SC The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries as follows: Subsidiary Apartment Complex Number of Units Property Location RRE Opportunity Holdings, LLC N/A N/A N/A Resource Real Estate Opportunity OP, LP N/A N/A N/A RRE Charlemagne Holdings, LLC N/A N/A N/A RRE Iroquois, LP (“Vista”) Vista Apartment Homes 133 Philadelphia, PA RRE Iroquois Holdings, LLC N/A N/A N/A RRE Cannery Holdings, LLC (“Cannery”) Cannery Lofts 156 Dayton, OH RRE Williamsburg Holdings, LLC (“Williamsburg”) Williamsburg 976 Cincinnati, OH WPL Holdings, LLC N/A (a) N/A Cincinnati, OH RRE Autumn Wood Holdings, LLC ("Autumn Wood") Retreat at Rocky Ridge 206 Hoover, AL RRE Village Square Holdings, LLC ("Village Square") Trailpoint at the Woodlands 271 Houston, TX RRE Brentdale Holdings, LLC ("Brentdale") The Westside Apartments 412 Plano, TX RRE Jefferson Point Holdings, LLC ("Jefferson Point") Tech Center Square 208 Newport News, VA RRE Centennial Holdings, LLC ("Centennial") Verona Apartment Homes 276 Littleton, CO RRE Pinnacle Holdings, LLC ("Pinnacle") Skyview Apartment Homes 224 Westminster, CO RRE River Oaks Holdings, LLC ("River Oaks") Maxwell Townhomes 316 San Antonio, TX RRE Nicollet Ridge Holdings, LLC ("Nicollet Ridge") Meridian Pointe 339 Burnsville, MN RRE Addison Place Holdings, LLC ("Addison Place") The Estates at Johns Creek 403 Alpharetta, GA PRIP Coursey, LLC ("Evergreen at Coursey Place") Evergreen at Coursey Place (b) 352 Baton Rouge, LA PRIP 500, LLC ("Pinehurst") Pinehurst (b) 146 Kansas City, MO PRIP 1102, LLC ("Pheasant Run") Pheasant Run (b) 160 Lee's Summit, MO PRIP 11128, LLC ("Retreat at Shawnee") Retreat at Shawnee (b) 342 Shawnee, KS PRIP Pines, LLC ("Pines of York") Pines of York (b) 248 Yorktown, VA RRE Berkeley Run Holdings, LLC ("Berkley Run") Perimeter Circle 194 Atlanta, GA RRE Berkeley Trace Holdings LLC ("Berkley Trace") Perimeter 5550 165 Atlanta, GA RRE Merrywood Holdings, LLC ("Merrywood") Aston at Cinco Ranch 228 Katy, TX RRE Sunset Ridge Holdings, LLC ("Sunset Ridge") Sunset Ridge 324 San Antonio, TX RRE Parkridge Place Holdings, LLC ("Parkridge Place") Calloway at Las Colinas 536 Irving, TX RRE Woodmoor Holdings, LLC ("Woodmoor") South Lamar Village 208 Austin, TX RRE Gilbert Holdings, LLC ("Springs at Gilbert") Heritage Pointe 458 Gilbert, AZ RRE Bonita Glen Holdings, LLC ("Bonita") Point Bonita Apartment Homes 295 Chula Vista, CA RRE Yorba Linda Holdings, LLC ("Yorba Linda") The Bryant at Yorba Linda 400 Yorba Linda, CA RRE Providence Holdings, LLC ("Providence in the Park") Providence in the Park 524 Arlington, TX RRE Green Trails Holdings, LLC ("Green Trails") Green Trails Apartment Homes 440 Lisle, IL RRE Terraces at Lake Mary Holdings, LLC ("Lake Mary") Terraces at Lake Mary 284 Lake Mary, FL 9,224 N/A - Not Applicable (a) Subsidiary transferred its interest in a portion of the Williamsburg parking lot to RRE Williamsburg Holdings, LLC in 2016. (b) Wholly-owned subsidiary of RRE Charlemagne Holdings, LLC. |
Estimated Useful Lives of Assets | The Company anticipates the estimated useful lives of its assets by class as follows: Buildings 27.5 years Building improvements 5.0 to 27.5 years Furniture, fixtures, and equipment 3.0 to 5.0 years Tenant improvements Shorter of lease term or expected useful life |
SUPPLEMENTAL CASH FLOW INFORM27
SUPPLEMENTAL CASH FLOW INFORMATION (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Supplemental Cash Flow Elements [Abstract] | |
Schedule of Supplemental Cash Flow Information | The following table presents the Company's supplemental cash flow information (in thousands): Nine Months Ended September 30, 2017 2016 Non-cash financing and investing activities: Stock issued from the distribution reinvestment plan $ 20,421 $ 21,480 Deferred financing costs and escrow deposits funded directly by mortgage notes 1,917 933 Accruals for construction in progress 922 2,833 Non-cash activity related to dispositions: Deconsolidation of subsidiary and removal of related mortgage notes payable and noncontrolling interest — 35,152 Mortgage notes payable settled with proceeds from disposition of rental property 26,976 55,720 Non-cash activity related to acquisitions: Mortgage notes payable used to acquire rental property 93,750 — Cash paid during the period for: Interest $ 19,328 $ 15,454 |
RESTRICTED CASH (Tables)
RESTRICTED CASH (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Cash and Cash Equivalents [Abstract] | |
Schedule of Restricted Cash and Cash Equivalents | The following table presents a summary of the components of the Company's restricted cash (in thousands): September 30, 2017 December 31, 2016 Real estate taxes $ 8,771 $ 6,853 Insurance 1,400 1,854 Capital improvements 2,078 1,570 Total $ 12,249 $ 10,277 |
RENTAL PROPERTIES, NET (Tables)
RENTAL PROPERTIES, NET (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Real Estate Investments, Net [Abstract] | |
Summary of Investments in Rental Properties | The following table presents the Company’s investments in rental properties (in thousands): September 30, 2017 December 31, 2016 Land $ 190,606 $ 176,418 Building and improvements 869,277 795,665 Furniture, fixtures and equipment 36,154 32,198 Construction in progress 5,751 5,983 1,101,788 1,010,264 Less: accumulated depreciation (135,212 ) (107,810 ) $ 966,576 $ 902,454 |
OTHER INVESTMENTS (Tables)
OTHER INVESTMENTS (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
Terms of Loan Held for Investment | The following table presents details of the balance and terms of the Trail Ridge Note as of September 30, 2017 and December 31, 2016 (in thousands): September 30, 2017 December 31, 2016 Unpaid principal balance $ 939 $ 960 Unamortized discount and acquisition costs (161 ) (191 ) Net book value $ 778 $ 769 Maturity date 10/28/2021 Interest rate 7.5 % Average monthly payment $ 8 |
ACQUISTIONS (Tables)
ACQUISTIONS (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Business Combinations [Abstract] | |
Schedule of Fair Value and Purchase Price Allocation | The following table presents the Company's wholly-owned acquisitions during the nine months ended September 30, 2017 and the respective fair values assigned (dollars in thousands): Fair Value Assigned Multifamily City and State Date of Contractual Purchase (1) Land Building and Improvements Furniture, Fixture and Equipment Intangible Assets Other Assets Liabilities Terraces at Lake Mary Lake Mary, FL 8/31/2017 $ 44,100 $ 5,402 $ 37,297 $ 433 $ 968 $ — $ (423 ) Green Trails Apartment Homes Lisle, IL 5/31/2017 $ 78,000 $ 14,727 $ 61,283 $ 1,117 $ 1,695 $ 14 $ (898 ) (1) Contractual purchase price excludes closing costs, acquisition expenses, and other immaterial settlement date adjustments and pro-rations. |
Schedule of Acquisitions | The following table presents the total revenues, net losses, and acquisition costs of the Company's acquisitions during the three and nine months ended September 30, 2017 (dollars in thousands): Three Months Ended September 30, 2017 Nine Months Ended September 30, 2017 Multifamily Community Total Revenues Net Loss Acquisition Costs Total Revenues Net Loss Acquisition Costs Green Trails Apartment Homes $ 1,807 $ (678 ) $ — $ 2,408 $ (1,067 ) $ (1,775 ) Terraces at Lake Mary $ 347 $ (958 ) $ (1,290 ) $ 347 $ (958 ) $ (1,290 ) $ 2,154 $ (1,636 ) $ (1,290 ) $ 2,755 $ (2,025 ) $ (3,065 ) |
DISPOSITION OF PROPERTIES AND32
DISPOSITION OF PROPERTIES AND DECONSOLIDATION OF INTERESTS (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Summary of Disposition Activity | The following table presents details of the Company's disposition and deconsolidation activity during the three and nine months ended September 30, 2017 and 2016 (in thousands): Net Gains on Dispositions of Properties and Joint Venture Interests Multifamily Community Location Sale Date Contract Sales Price Three months ended September 30, 2017 Nine months ended September 30, 2017 2017 Dispositions: Chisholm Place Plano, Texas May 10, 2017 $ 21,250 $ — $ 6,922 Mosaic Oklahoma City, Oklahoma May 12, 2017 6,100 — 1,513 Deerfield Hermantown, Minnesota August 16, 2017 23,600 11,035 11,035 Stone Ridge Columbia, South Carolina September 27, 2017 10,534 3,265 3,265 $ 14,300 $ 22,735 2016 Dispositions: Three months ended September 30, 2016 Nine months ended September 30, 2016 Conifer Place (1) Norcross, Georgia January 27, 2016 $ 42,500 $ — $ 9,897 Champion Farms (2) Louisville, Kentucky January 29, 2016 7,590 — 1,066 The Ivy at Clear Creek Houston, Texas February 17, 2016 19,400 — 6,792 Affinity at Winter Park Winter Park, Florida June 9, 2016 17,500 — 5,605 Fieldstone (3) Woodland, Ohio June 30, 2016 7,514 — 4,096 The Nesbit Palisades Alpharetta, Georgia July 8, 2016 45,500 17,601 17,601 $ 17,601 $ 45,057 The following table presents the Company's revenues and net income (loss) attributable to properties sold, which includes gain on sale, for the three and nine months ended September 30, 2017 and 2016 (in thousands): Revenues Attributable to Properties Sold Net Income (Loss) Attributable to Properties Sold Multifamily Community Three months ended September 30, 2017 Nine months ended September 30, 2017 Three months ended September 30, 2017 Nine months ended September 30, 2017 2017 Dispositions: Chisholm Place $ — $ 825 $ (4 ) $ 6,659 Mosaic (2 ) 473 (26 ) 1,441 Deerfield 326 1,653 10,827 11,042 Stone Ridge 435 1,286 3,196 3,099 $ 759 $ 4,237 $ 13,993 $ 22,241 2016 Dispositions: Three months ended September 30, 2016 Nine months ended September 30, 2016 Three months ended September 30, 2016 Nine months ended September 30, 2016 Conifer Place (1) $ — $ 365 $ — $ 9,942 Champion Farms (2) — 220 — 1,125 The Ivy at Clear Creek — 386 2 6,629 Affinity at Winter Park 2 1,010 (1 ) 5,747 Fieldstone (3) — 1,548 — 4,325 The Nesbit Palisades 167 2,615 17,273 17,742 $ 169 $ 6,144 $ 17,274 $ 45,510 (1) On January 27, 2016, the Company and its joint venture partner sold Conifer Place, which resulted in the deconsolidation of the entity. Net income attributable to properties sold includes $6.2 million attributable to noncontrolling interests. (2) On January 29, 2016, the Company sold its joint venture interest in Champion Farms to its joint venture partner. As such, the Company deconsolidated the entity as of January 29, 2016. The Company has no continuing involvement with this joint venture. (3) On June 30, 2016, the Company sold its joint venture interest in Fieldstone to its joint venture partner. As such, the Company deconsolidated the entity as of June 30, 2016. The Company has no continuing involvement with this joint venture. |
IDENTIFIED INTANGIBLE ASSETS,33
IDENTIFIED INTANGIBLE ASSETS, NET AND GOODWILL (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of Expected Amortization of Rental and Antennae Leases | The following table presents the Company's expected amortization for the rental and antennae leases for the next five 12-month periods ending September 30, and thereafter (in thousands): 2018 $ 1,819 2019 16 2020 16 2021 16 2022 16 Thereafter 54 $ 1,937 |
Schedule of Goodwill | The following table presents a rollforward of the Company's activity in goodwill for the nine months ended September 30, 2017 (in thousands): Balance, January 1, 2017 $ 711 Sale of Stone Ridge (41 ) Balance, September 30, 2017 $ 670 |
MORTGAGE NOTES PAYABLE, NET (Ta
MORTGAGE NOTES PAYABLE, NET (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Summary of Mortgage Notes Payable | The following table presents a summary of the Company's mortgage notes payable, net (in thousands): September 30, 2017 December 31, 2016 Collateral Outstanding Borrowings Premium (Discount) Deferred finance costs, net Carrying Value Outstanding Borrowings Premium (Discount) Deferred finance costs, net Carrying Value Vista Apartment Homes $ 14,977 $ — $ (149 ) $ 14,828 $ 15,225 $ — $ (178 ) $ 15,047 Cannery Lofts 13,100 — (172 ) 12,928 13,100 — (197 ) 12,903 Deerfield — — — — 10,359 — (125 ) 10,234 Trailpoint at the Woodlands 18,449 — (196 ) 18,253 18,690 — (222 ) 18,468 Verona Apartment Homes 32,970 — (490 ) 32,480 32,970 — (532 ) 32,438 Skyview Apartment Homes 28,400 — (426 ) 27,974 28,400 — (462 ) 27,938 Maxwell Townhomes 13,408 — (116 ) 13,292 13,602 — (137 ) 13,465 Pinehurst 7,350 — (134 ) 7,216 7,350 — (154 ) 7,196 Pheasant Run 6,250 — — 6,250 6,250 43 (9 ) 6,284 Retreat of Shawnee 12,736 26 (7 ) 12,755 12,893 85 (23 ) 12,955 Evergreen at Coursey Place 26,759 83 (80 ) 26,762 27,107 100 (96 ) 27,111 Pines of York 14,789 (251 ) (47 ) 14,491 14,999 (299 ) (56 ) 14,644 The Estates at Johns Creek 48,854 — (316 ) 48,538 49,596 — (405 ) 49,191 Chisholm Place — — — — 11,587 — (143 ) 11,444 Perimeter Circle 17,018 — (99 ) 16,919 17,298 — (143 ) 17,155 Perimeter 5550 13,431 — (82 ) 13,349 13,651 — (118 ) 13,533 Aston at Cinco Ranch 23,051 — (225 ) 22,826 23,367 — (268 ) 23,099 Sunset Ridge 1 19,368 207 (164 ) 19,411 19,699 259 (205 ) 19,753 Sunset Ridge 2 2,905 28 (21 ) 2,912 2,948 35 (26 ) 2,957 Calloway at Las Colinas 34,571 — (257 ) 34,314 35,083 — (306 ) 34,777 South Lamar Village 12,242 — (92 ) 12,150 12,435 — (131 ) 12,304 Heritage Pointe 26,050 — (295 ) 25,755 26,280 — (327 ) 25,953 The Bryant at Yorba Linda 67,500 — (511 ) 66,989 67,500 — (661 ) 66,839 Point Bonita Apartment Homes 26,624 1,737 (298 ) 28,063 26,907 1,966 (338 ) 28,535 Stone Ridge — — — — 5,227 — (130 ) 5,097 The Westside Apartments 36,820 — (403 ) 36,417 36,820 — (448 ) 36,372 Tech Center Square 12,199 — (172 ) 12,027 12,375 — (196 ) 12,179 Williamsburg 53,995 — (736 ) 53,259 53,995 — (828 ) 53,167 Retreat at Rocky Ridge 11,375 — (232 ) 11,143 11,375 — (261 ) 11,114 Providence in the Park 47,000 — (546 ) 46,454 — — — — Green Trails Apartment Homes 61,500 — (695 ) 60,805 — — — — Meridian Pointe 39,500 — (611 ) 38,889 — — — — Terraces at Lake Mary 32,250 — (393 ) 31,857 — — — — $ 775,441 $ 1,830 $ (7,965 ) $ 769,306 $ 627,088 $ 2,189 $ (7,125 ) $ 622,152 The following table presents additional information about the Company's mortgage notes payable, net (in thousands, except percentages): Collateral Maturity Date Annual Interest Rate Average Monthly Debt Service Average Monthly Escrow Vista Apartment Homes 1/1/2022 3.52% (1)(5) $ 71 $ 17 Cannery Lofts 11/1/2023 3.77% (1)(3) 42 26 Trailpoint at the Woodlands 11/1/2023 3.64% (1)(4) 83 47 Verona Apartment Homes 10/1/2026 3.59% (1)(3) 100 40 Skyview Apartment Homes 10/1/2026 3.59% (1)(3) 86 24 Maxwell Townhomes 1/1/2022 4.32% (2)(5) 71 78 Pinehurst 11/1/2023 3.65% (1)(3) 32 15 Pheasant Run 10/1/2018 3.73% (2)(3)(7) 19 12 Retreat of Shawnee 2/1/2018 5.58% (2)(5) 78 29 Evergreen at Coursey Place 8/1/2021 5.07% (2)(5) 154 37 Pines of York 12/1/2021 4.46% (2)(5) 80 25 The Estates at Johns Creek 7/1/2020 3.38% (2)(5) 221 102 Perimeter Circle 7/1/2019 3.42% (2)(5) 81 44 Perimeter 5550 7/1/2019 3.42% (2)(5) 64 32 Aston at Cinco Ranch 10/1/2021 4.34% (2)(5) 120 70 Sunset Ridge 1 11/1/2020 4.58% (2)(5) 113 89 Sunset Ridge 2 11/1/2020 4.54% (2)(5) 16 — Calloway at Las Colinas 12/1/2021 3.87% (2)(5) 171 115 South Lamar Village 8/1/2019 3.64% (2)(5) 59 57 Heritage Pointe 4/1/2025 3.11% (1)(4) 114 43 The Bryant at Yorba Linda 6/1/2020 2.98% (1)(3) 186 — Point Bonita Apartment Homes 10/1/2023 5.33% (2)(5) 152 61 The Westside Apartments 9/1/2026 3.35% (1)(3) 104 69 Tech Center Square 6/1/2023 3.81% (1)(5) 58 24 Williamsburg 1/1/2024 3.61% (1)(3) 165 167 Retreat at Rocky Ridge 1/1/2024 3.69% (1)(3) 36 23 Providence in the Park 2/1/2024 3.53% (1)(3)(6) 141 138 Green Trails Apartment Homes 6/1/2024 3.22% (1)(3)(6) 168 79 Meridian Pointe 8/1/2024 3.13% (1)(3)(6) 104 56 Terraces at Lake Mary 9/1/2024 3.14% (1)(3)(6) 86 46 (1) Variable rate based on one-month LIBOR of 1.2322% (as of September 30, 2017 ) plus a fixed margin. (2) Fixed rate. (3) Monthly interest-only payment currently required. (4) Monthly fixed principal plus interest payment required. (5) Fixed monthly principal and interest payment required. (6) New debt placed during the nine months ended September 30, 2017. (7) Automatic extension to October 1, 2018 occurred on October 1, 2017 at which time the fixed interest rate converted to a variable rate. |
Annual Principal Payments on the Mortgage Notes Payable | The following table presents the Company's annual principal payments on outstanding borrowings for each of the next five 12-month periods ending September 30, and thereafter (in thousands): 2018 $ 7,207 2019 69,608 2020 124,078 2021 57,223 2022 101,546 Thereafter 415,779 $ 775,441 |
Estimated Amortization of Deferred Financing Costs | The following table presents the Company's estimated amortization of the existing deferred financing costs for the next five 12-month periods ending September 30, and thereafter (in thousands): 2018 $ 1,638 2019 1,572 2020 1,338 2021 1,050 2022 851 Thereafter 1,516 $ 7,965 |
ACCUMULATED OTHER COMPREHENSI35
ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Equity [Abstract] | |
Components of Accumulated Other Comprehensive Loss | The following table presents the changes in each component of the Company's accumulated other comprehensive loss for the nine months ended September 30, 2017 (in thousands): Balance, January 1, 2017 $ (345 ) Reclassification adjustment for realized loss on designated derivatives 117 Designated derivatives, fair value adjustments (344 ) Balance, September 30, 2017 $ (572 ) |
CERTAIN RELATIONSHIPS AND REL36
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Related Party Transactions [Abstract] | |
Fees Earned From/Expenses Paid to Related Parties | September 30, December 31, Due from related parties: RAI and affiliates $ 280 $ 1,375 Due to related parties: Advisor: Operating expense reimbursements $ 49 $ 1,285 Resource Real Estate Opportunity Manager, LLC: Property management fees 482 456 Other operating expense reimbursements 342 314 $ 873 $ 2,055 The following table presents the Company's fees earned by and expenses paid to such related parties (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Fees earned / expenses paid to related parties: Advisor: Acquisition fees (1) $ 953 $ — $ 2,565 $ 8 Asset management fees (2) 2,893 2,543 8,370 7,924 Disposition fees (3) 144 273 361 686 Debt financing fees (4) 358 166 901 166 Overhead allocation (5) 1,091 1,033 3,399 3,475 Internal audit (5) 21 43 47 43 Resource Real Estate Opportunity Manager LLC: Property management fees (2) $ 1,429 $ 1,267 $ 4,158 $ 3,872 Construction management fees (6) 188 246 712 738 Information technology fees (5) — 101 — 317 Operating expense reimbursements (7) — 56 — 186 Debt servicing fees (2) 1 — 2 14 Other: Ledgewood (5) $ — $ 44 $ — $ 74 The Planning & Zoning Resource Company (1) 2 — 3 — Graphic Images (5) — 23 9 83 (1) Included in Acquisition costs on the consolidated statements of operations and comprehensive income (loss). (2) Included in Management fees on the consolidated statements of operations and comprehensive income (loss). (3) Included in Net gains on dispositions of properties and joint venture interests on the consolidated statements of operations and comprehensive income (loss). (4) Included in Mortgage notes payable, net, on the consolidated balance sheets. (5) Included in General and administrative on the consolidated statements of operations and comprehensive income (loss). (6) Included in Rental properties, net, on the consolidated balance sheets. (7) Included in Rental operating expenses on the consolidated statements of operations and comprehensive income (loss). Amount excludes the allocated payroll expenses described in Note 17- Operating Expenses. |
EQUITY (Tables)
EQUITY (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Equity [Abstract] | |
Schedule of Shares Issued | As of September 30, 2017 , the Company had issued 76,845,782 shares of its $0.01 par value common stock as follows (dollars in thousands): Shares Issued Gross Proceeds Shares issued through private offering 1,263,727 $ 12,582 Shares issued through primary public offering (1) 62,485,461 622,077 Shares issued through stock distributions 2,132,266 — Shares issued through distribution reinvestment plan 10,948,828 111,811 Shares issued in conjunction with the Advisor's initial investment, 15,500 155 Total 76,845,782 $ 746,625 Shares redeemed and retired (5,301,964 ) Total shares outstanding as of September 30, 2017 71,543,818 (1) Includes 276,056 shares issued to the Advisor. |
Schedule of Stockholders Equity | During the nine months ended September 30, 2017 , the Company redeemed shares of its outstanding common stock as follows (in thousands, except per share data): Period Total Number of Shares Redeemed Average Price Paid per Share January 2017 — — February 2017 — — March 2017 696 $ 10.83 April 2017 — — May 2017 — — June 2017 957 $ 10.94 July 2017 — — August 2017 — — September 2017 681 $ 10.94 2,334 |
Schedule of Distributions | For the nine months ended September 30, 2017 , the Company paid aggregate distributions of $32.3 million , including $11.9 million of distributions paid in cash and $20.4 million of distributions reinvested in shares of common stock through the Company's distribution reinvestment plan, as follows (in thousands): Record Date Per Common Distribution Date Distributions Net Total January 30, 2017 $ 0.05 January 31, 2017 $ 2,329 $ 1,272 $ 3,601 February 27, 2017 0.05 February 28, 2017 2,308 1,303 3,611 March 30, 2017 0.05 March 31, 2017 2,274 1,314 3,588 April 27, 2017 0.05 April 28, 2017 2,273 1,324 3,597 May 30, 2017 0.05 May 31, 2017 2,258 1,350 3,608 June 29, 2017 0.05 June 30, 2017 2,249 1,322 3,571 July 28, 2017 0.05 July 31, 2017 2,247 1,333 3,580 August 30, 2017 0.05 August 31, 2017 2,250 1,340 3,590 September 28, 2017 0.05 September 29, 2017 2,233 1,335 3,568 $ 0.45 $ 20,421 $ 11,893 $ 32,314 |
FAIR VALUE MEASURES AND DISCL38
FAIR VALUE MEASURES AND DISCLOSURES (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Assets Measured at Fair Value on a Recurring Basis | The following table presents information about the Company's assets measured at fair value on a recurring basis and indicates the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair value (in thousands): Level 1 Level 2 Level 3 Total September 30, 2017 Assets: Interest rate caps $ — $ 66 $ — $ 66 $ — $ 66 $ — $ 66 December 31, 2016 Assets: Interest rate caps $ — $ 242 $ — $ 242 $ — $ 242 $ — $ 242 |
Carrying and Fair Values of Loan Held for Investment, Net, Preferred Equity Investment, Mortgage Notes Payable, and Revolving Credit Facility | The following table presents the carrying and fair values of the Company’s loan held for investment, net, and mortgage notes payable-outstanding borrowings (in thousands): September 30, 2017 December 31, 2016 Carrying Amount Fair Value Carrying Amount Fair Value Loan held for investment, net $ 778 $ 1,038 $ 769 $ 1,104 Mortgage notes payable- outstanding borrowings $ (775,441 ) $ (752,228 ) $ (627,088 ) $ (620,578 ) |
DERIVATIVES AND HEDGING ACTIV39
DERIVATIVES AND HEDGING ACTIVITIES (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Outstanding Interest Rate Derivatives | The following table presents the Company's outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk as of September 30, 2017 (dollars in thousands): Interest Rate Derivative Number of Instruments Notional Maturity Dates Interest Rate Caps 17 $ 450,725 January 1, 2018 to October 1, 2020 |
Fair Value and Balance Sheet Location of Derivatives | The following table presents the fair value of the Company’s derivative financial instruments on the consolidated balance sheets as of September 30, 2017 and December 31, 2016 (in thousands): Asset Derivatives Liability Derivatives September 30, 2017 December 31, 2016 September 30, 2017 December 31, 2016 Balance Sheet Fair Value Balance Sheet Fair Value Balance Sheet Fair Value Balance Sheet Fair Value Prepaid expenses and other assets $ 66 Prepaid expenses and other assets $ 242 — $ — — $ — |
NATURE OF BUSINESS AND OPERAT40
NATURE OF BUSINESS AND OPERATIONS - Narrative (Details) - USD ($) shares in Thousands, $ in Thousands | 9 Months Ended | 24 Months Ended | 54 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 13, 2013 | |
Securities Financing Transaction [Line Items] | ||||
Common stock issued through distribution reinvestment plan (in shares) | 1,900 | 5,500 | 1,200 | |
Common stock issued through distribution reinvestment plan | $ 20,421 | $ 21,480 | $ 57,500 | |
Public offering | Common Stock | ||||
Securities Financing Transaction [Line Items] | ||||
Proceeds from issuance of stock under private offering | $ 645,800 | |||
Issuance of common stock (in shares) | 64,900 | |||
Public offering | Common Stock | Advisor | ||||
Securities Financing Transaction [Line Items] | ||||
Issuance of common stock (in shares) | 276 |
SUMMARY OF SIGNIFICANT ACCOUN41
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Principles of Consolidation (Details) | Sep. 30, 2017Unit |
Subsidiary or Equity Method Investee [Line Items] | |
Number of Units | 9,224 |
RRE Iroquois, LP (“Vista”) | |
Subsidiary or Equity Method Investee [Line Items] | |
Number of Units | 133 |
RRE Cannery Holdings, LLC (“Cannery”) | |
Subsidiary or Equity Method Investee [Line Items] | |
Number of Units | 156 |
RRE Williamsburg Holdings, LLC (“Williamsburg”) | |
Subsidiary or Equity Method Investee [Line Items] | |
Number of Units | 976 |
RRE Autumn Wood Holdings, LLC (Autumn Wood) | |
Subsidiary or Equity Method Investee [Line Items] | |
Number of Units | 206 |
RRE Village Square Holdings, LLC (Village Square) | |
Subsidiary or Equity Method Investee [Line Items] | |
Number of Units | 271 |
RRE Brentdale Holdings, LLC (Brentdale) | |
Subsidiary or Equity Method Investee [Line Items] | |
Number of Units | 412 |
RRE Jefferson Point Holdings, LLC (Jefferson Point) | |
Subsidiary or Equity Method Investee [Line Items] | |
Number of Units | 208 |
RRE Centennial Holdings, LLC (Centennial) | |
Subsidiary or Equity Method Investee [Line Items] | |
Number of Units | 276 |
RRE Pinnacle Holdings, LLC (Pinnacle) | |
Subsidiary or Equity Method Investee [Line Items] | |
Number of Units | 224 |
RRE River Oaks Holdings, LLC (River Oaks) | |
Subsidiary or Equity Method Investee [Line Items] | |
Number of Units | 316 |
RRE Nicollet Ridge Holdings, LLC (Nicollet Ridge) | |
Subsidiary or Equity Method Investee [Line Items] | |
Number of Units | 339 |
RRE Addison Place Holdings, LLC (Addison Place) | |
Subsidiary or Equity Method Investee [Line Items] | |
Number of Units | 403 |
PRIP Coursey, LLC (Evergreen at Coursey Place) | |
Subsidiary or Equity Method Investee [Line Items] | |
Number of Units | 352 |
PRIP 500, LLC (Pinehurst) | |
Subsidiary or Equity Method Investee [Line Items] | |
Number of Units | 146 |
PRIP 1102, LLC (Pheasant Run) | |
Subsidiary or Equity Method Investee [Line Items] | |
Number of Units | 160 |
PRIP 11128, LLC (Retreat at Shawnee) | |
Subsidiary or Equity Method Investee [Line Items] | |
Number of Units | 342 |
PRIP Pines, LLC (Pines of York) | |
Subsidiary or Equity Method Investee [Line Items] | |
Number of Units | 248 |
RRE Berkeley Run Holdings, LLC (Berkley Run) | |
Subsidiary or Equity Method Investee [Line Items] | |
Number of Units | 194 |
RRE Berkeley Trace Holdings LLC (Berkley Trace) | |
Subsidiary or Equity Method Investee [Line Items] | |
Number of Units | 165 |
RRE Merrywood Holdings, LLC (Merrywood) | |
Subsidiary or Equity Method Investee [Line Items] | |
Number of Units | 228 |
RRE Sunset Ridge Holdings, LLC (Sunset Ridge) | |
Subsidiary or Equity Method Investee [Line Items] | |
Number of Units | 324 |
RRE Parkridge Place Holdings, LLC (Parkridge Place) | |
Subsidiary or Equity Method Investee [Line Items] | |
Number of Units | 536 |
RRE Woodmoor Holdings, LLC (Woodmoor) | |
Subsidiary or Equity Method Investee [Line Items] | |
Number of Units | 208 |
RRE Gilbert Holdings, LLC (Springs at Gilbert) | |
Subsidiary or Equity Method Investee [Line Items] | |
Number of Units | 458 |
RRE Bonita Glen Holdings, LLC (Bonita) | |
Subsidiary or Equity Method Investee [Line Items] | |
Number of Units | 295 |
RRE Yorba Linda Holdings, LLC (Yorba Linda) | |
Subsidiary or Equity Method Investee [Line Items] | |
Number of Units | 400 |
RRE Providence Holdings, LLC (Providence in the Park) | |
Subsidiary or Equity Method Investee [Line Items] | |
Number of Units | 524 |
RRE Green Trails Holdings, LLC (Green Trails) | |
Subsidiary or Equity Method Investee [Line Items] | |
Number of Units | 440 |
RRE Terraces at Lake Mary Holdings, LLC (Lake Mary) | |
Subsidiary or Equity Method Investee [Line Items] | |
Number of Units | 284 |
DT Stone Ridge, LLC | |
Subsidiary or Equity Method Investee [Line Items] | |
Number of Units | 188 |
Ownership % | 83.40% |
SUMMARY OF SIGNIFICANT ACCOUN42
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)Propertyshares | Sep. 30, 2016USD ($) | Dec. 31, 2016USD ($)Property | |
Assets Held for Sale [Abstract] | |||||
Number of rental properties held for sale (in property) | Property | 0 | 0 | |||
Rental Properties [Abstract] | |||||
Capitalization threshold for improvements and replacements | $ 1,000 | ||||
Leases [Abstract] | |||||
Payments due for lease obligations | $ 236,000 | 236,000 | |||
Asset Impairment Charges [Abstract] | |||||
Impairment charges | 0 | $ 0 | $ 0 | $ 0 | |
Allocation of Purchase Price of Acquired Assets [Abstract] | |||||
Initial purchase price allocation subject to change, period | 1 year | ||||
Revenue Recognition [Abstract] | |||||
Total other income | 3,300,000 | $ 2,900,000 | $ 9,400,000 | $ 9,000,000 | |
Tenant Receivable [Abstract] | |||||
Allowance for uncollectable receivables | 12,000 | $ 12,000 | $ 5,200 | ||
Income Taxes [Abstract] | |||||
Number of years entity may be precluded from REIT qualifications | 4 years | ||||
Earnings Per Share [Abstract] | |||||
Antidilutive securities not included in the diluted earnings per share calculations (in shares) | shares | 50,000 | ||||
Operating leases for residential rental properties | |||||
Revenue Recognition [Abstract] | |||||
Future minimum rental payments, current | 63,200,000 | $ 63,200,000 | |||
Future minimum rental payments, in two years | 36,000 | 36,000 | |||
Future minimum rental payments, thereafter | 0 | 0 | |||
Commercial rental properties and antenna rentals | |||||
Revenue Recognition [Abstract] | |||||
Future minimum rental payments, current | 380,000 | 380,000 | |||
Future minimum rental payments, in two years | 321,000 | 321,000 | |||
Future minimum rental payments, in three years | 273,000 | 273,000 | |||
Future minimum rental payments, in four years | 193,000 | 193,000 | |||
Future minimum rental payments, in five years | 137,000 | 137,000 | |||
Future minimum rental payments, thereafter | $ 0 | $ 0 | |||
Manager | |||||
Rental Properties [Abstract] | |||||
Construction management fee | 5.00% | ||||
Improvements and replacements | |||||
Rental Properties [Abstract] | |||||
Estimated useful lives (greater than or equal to) | 1 year |
SUMMARY OF SIGNIFICANT ACCOUN43
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Rental Property Useful Lives (Details) | 9 Months Ended |
Sep. 30, 2017 | |
Buildings | |
Real Estate Properties [Line Items] | |
Estimated useful lives | 27 years 6 months |
Building improvements | Minimum | |
Real Estate Properties [Line Items] | |
Estimated useful lives | 5 years |
Building improvements | Maximum | |
Real Estate Properties [Line Items] | |
Estimated useful lives | 27 years 6 months |
Furniture, fixtures, and equipment | Minimum | |
Real Estate Properties [Line Items] | |
Estimated useful lives | 3 years |
Furniture, fixtures, and equipment | Maximum | |
Real Estate Properties [Line Items] | |
Estimated useful lives | 5 years |
SUPPLEMENTAL CASH FLOW INFORM44
SUPPLEMENTAL CASH FLOW INFORMATION (Details) - USD ($) $ in Thousands | 9 Months Ended | 24 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Non-cash financing and investing activities: | |||
Stock issued from the distribution reinvestment plan | $ 20,421 | $ 21,480 | $ 57,500 |
Deferred financing costs and escrow deposits funded directly by mortgage notes | 1,917 | 933 | |
Accruals for construction in progress | 922 | 2,833 | |
Non-cash activity related to dispositions: | |||
Deconsolidation of subsidiary and removal of related mortgage notes payable and noncontrolling interest | 0 | 35,152 | |
Mortgage notes payable settled with proceeds from disposition of rental property | 26,976 | 55,720 | |
Non-cash activity related to acquisitions: | |||
Mortgage notes payable used to acquire rental property | 93,750 | 0 | |
Cash paid during the period for: | |||
Interest | $ 19,328 | $ 15,454 |
RESTRICTED CASH - Schedule of R
RESTRICTED CASH - Schedule of Restricted Cash and Cash Equivalents (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Restricted cash | $ 12,249 | $ 10,277 |
Real estate taxes | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Restricted cash | 8,771 | 6,853 |
Insurance | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Restricted cash | 1,400 | 1,854 |
Capital improvements | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Restricted cash | $ 2,078 | $ 1,570 |
RESTRICTED CASH - Narrative (De
RESTRICTED CASH - Narrative (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Cash and Cash Equivalents [Abstract] | ||
Unrestricted cash designated for capital expenditures | $ 24.5 | $ 33.9 |
RENTAL PROPERTIES, NET (Details
RENTAL PROPERTIES, NET (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Investments in rental properties [Abstract] | |||||
Land | $ 190,606 | $ 190,606 | $ 176,418 | ||
Building and improvements | 869,277 | 869,277 | 795,665 | ||
Furniture, fixtures and equipment | 36,154 | 36,154 | 32,198 | ||
Construction in progress | 5,751 | 5,751 | 5,983 | ||
Rental properties, gross | 1,101,788 | 1,101,788 | 1,010,264 | ||
Less: accumulated depreciation | (135,212) | (135,212) | (107,810) | ||
Rental properties, net | 966,576 | 966,576 | $ 902,454 | ||
Depreciation expense | $ 12,300 | $ 10,800 | $ 35,900 | $ 32,900 |
OTHER INVESTMENTS - Narrative (
OTHER INVESTMENTS - Narrative (Details) $ in Thousands | Nov. 12, 2014USD ($) | Mar. 31, 2016USD ($) | Oct. 31, 2015USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Dec. 31, 2011USD ($)Loan |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Acquisition of preferred equity interest | $ 0 | $ 408 | ||||
Number of performing promissory notes (in loan) | Loan | 1 | |||||
Purchase price of promissory note | $ 700 | |||||
Spring Hills Investors Limited Partner, LLC | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Acquisition of preferred equity interest | $ 3,500 | $ 800 | $ 800 | |||
Dividend receivable rate | 12.00% | |||||
Monthly dividend receivable rate | 7.00% |
OTHER INVESTMENTS - Terms of Lo
OTHER INVESTMENTS - Terms of Loans Held for Investment (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2016 | |
Investments, Debt and Equity Securities [Abstract] | ||
Unpaid principal balance | $ 939 | $ 960 |
Unamortized discount and acquisition costs | (161) | (191) |
Net book value | $ 778 | $ 769 |
Interest rate | 7.50% | |
Average monthly payment | $ 8 |
ACQUISTIONS - Narrative (Detail
ACQUISTIONS - Narrative (Details) | Sep. 30, 2017Property |
Business Combinations [Abstract] | |
Number of real estate properties | 29 |
ACQUISTIONS - Acquisitions and
ACQUISTIONS - Acquisitions and Fair Value Assignment (Details) - USD ($) $ in Thousands | Aug. 31, 2017 | May 31, 2017 |
Terraces at Lake Mary | ||
Business Acquisition [Line Items] | ||
Contractual Purchase Price | $ 44,100 | |
Land | 5,402 | |
Building and Improvements | 37,297 | |
Furniture, Fixture and Equipment | 433 | |
Intangible Assets | 968 | |
Other Assets | 0 | |
Liabilities | $ (423) | |
Green Trails Apartment Homes | ||
Business Acquisition [Line Items] | ||
Contractual Purchase Price | $ 78,000 | |
Land | 14,727 | |
Building and Improvements | 61,283 | |
Furniture, Fixture and Equipment | 1,117 | |
Intangible Assets | 1,695 | |
Other Assets | 14 | |
Liabilities | $ (898) |
ACQUISTIONS - Revenues, Losses,
ACQUISTIONS - Revenues, Losses, and Acquisition Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Business Acquisition [Line Items] | ||||
Total Revenues | $ 32,333 | $ 28,575 | $ 93,568 | $ 89,852 |
Net loss | 2,191 | $ 9,637 | (9,837) | $ 20,544 |
Green Trails Apartment Homes | ||||
Business Acquisition [Line Items] | ||||
Total Revenues | 1,807 | 2,408 | ||
Net loss | (678) | (1,067) | ||
Acquisition Costs | 0 | (1,775) | ||
Terraces at Lake Mary | ||||
Business Acquisition [Line Items] | ||||
Total Revenues | 347 | 347 | ||
Net loss | (958) | (958) | ||
Acquisition Costs | (1,290) | (1,290) | ||
Multifamily residential apartment community | ||||
Business Acquisition [Line Items] | ||||
Total Revenues | 2,154 | 2,755 | ||
Net loss | (1,636) | (2,025) | ||
Acquisition Costs | $ (1,290) | $ (3,065) |
DISPOSITION OF PROPERTIES AND53
DISPOSITION OF PROPERTIES AND DECONSOLIDATION OF INTERESTS - Sales Activity (Details) - USD ($) $ in Thousands | Jan. 27, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 27, 2017 | Aug. 16, 2017 | Jul. 08, 2017 | May 12, 2017 | May 10, 2017 | Jun. 30, 2016 | Jun. 09, 2016 | Feb. 17, 2016 | Jan. 29, 2016 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||||||
Net Income (Loss) Attributable to Properties Sold | $ 2,191 | $ 9,637 | $ (9,837) | $ 20,544 | ||||||||||
Chisholm Place | ||||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||||||
Contract Sales Price | $ 21,250 | |||||||||||||
Net Gains on Dispositions of Properties and Joint Venture Interests | 0 | 6,922 | ||||||||||||
Revenues Attributable to Properties Sold | 0 | 825 | ||||||||||||
Net Income (Loss) Attributable to Properties Sold | (4) | 6,659 | ||||||||||||
Mosaic | ||||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||||||
Contract Sales Price | $ 6,100 | |||||||||||||
Net Gains on Dispositions of Properties and Joint Venture Interests | 0 | 1,513 | ||||||||||||
Revenues Attributable to Properties Sold | (2) | 473 | ||||||||||||
Net Income (Loss) Attributable to Properties Sold | (26) | 1,441 | ||||||||||||
Deerfield | ||||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||||||
Contract Sales Price | $ 23,600 | |||||||||||||
Net Gains on Dispositions of Properties and Joint Venture Interests | 11,035 | 11,035 | ||||||||||||
Revenues Attributable to Properties Sold | 326 | 1,653 | ||||||||||||
Net Income (Loss) Attributable to Properties Sold | 10,827 | 11,042 | ||||||||||||
Stone Ridge | ||||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||||||
Contract Sales Price | $ 10,534 | |||||||||||||
Net Gains on Dispositions of Properties and Joint Venture Interests | 3,265 | 3,265 | ||||||||||||
Revenues Attributable to Properties Sold | 435 | 1,286 | ||||||||||||
Net Income (Loss) Attributable to Properties Sold | 3,196 | 3,099 | ||||||||||||
Conifer Place | ||||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||||||
Contract Sales Price | $ 42,500 | |||||||||||||
Net Gains on Dispositions of Properties and Joint Venture Interests | 0 | 9,897 | ||||||||||||
Revenues Attributable to Properties Sold | 0 | 365 | ||||||||||||
Net Income (Loss) Attributable to Properties Sold | 0 | 9,942 | ||||||||||||
Conifer Place | Noncontrolling interests | ||||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||||||
Net Gains on Dispositions of Properties and Joint Venture Interests | $ 6,200 | |||||||||||||
Champion Farms | ||||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||||||
Contract Sales Price | $ 7,590 | |||||||||||||
Net Gains on Dispositions of Properties and Joint Venture Interests | 0 | 1,066 | ||||||||||||
Revenues Attributable to Properties Sold | 0 | 220 | ||||||||||||
Net Income (Loss) Attributable to Properties Sold | 0 | 1,125 | ||||||||||||
The Ivy at Clear Creek | ||||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||||||
Contract Sales Price | $ 19,400 | |||||||||||||
Net Gains on Dispositions of Properties and Joint Venture Interests | 0 | 6,792 | ||||||||||||
Revenues Attributable to Properties Sold | 0 | 386 | ||||||||||||
Net Income (Loss) Attributable to Properties Sold | 2 | 6,629 | ||||||||||||
Affinity at Winter Park | ||||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||||||
Contract Sales Price | $ 17,500 | |||||||||||||
Net Gains on Dispositions of Properties and Joint Venture Interests | 0 | 5,605 | ||||||||||||
Revenues Attributable to Properties Sold | 2 | 1,010 | ||||||||||||
Net Income (Loss) Attributable to Properties Sold | (1) | 5,747 | ||||||||||||
Fieldstone | ||||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||||||
Contract Sales Price | $ 7,514 | |||||||||||||
Net Gains on Dispositions of Properties and Joint Venture Interests | 0 | 4,096 | ||||||||||||
Revenues Attributable to Properties Sold | 0 | 1,548 | ||||||||||||
Net Income (Loss) Attributable to Properties Sold | 0 | 4,325 | ||||||||||||
The Nesbit Palisades | ||||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||||||
Contract Sales Price | $ 45,500 | |||||||||||||
Net Gains on Dispositions of Properties and Joint Venture Interests | 17,601 | 17,601 | ||||||||||||
Revenues Attributable to Properties Sold | 167 | 2,615 | ||||||||||||
Net Income (Loss) Attributable to Properties Sold | 17,273 | 17,742 | ||||||||||||
Multifamily residential apartment community | ||||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||||||
Net Gains on Dispositions of Properties and Joint Venture Interests | 14,300 | 17,601 | 22,735 | 45,057 | ||||||||||
Revenues Attributable to Properties Sold | 759 | 169 | 4,237 | 6,144 | ||||||||||
Net Income (Loss) Attributable to Properties Sold | $ 13,993 | $ 17,274 | $ 22,241 | $ 45,510 |
IDENTIFIED INTANGIBLE ASSETS,54
IDENTIFIED INTANGIBLE ASSETS, NET AND GOODWILL - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Finite-Lived Intangible Assets [Line Items] | |||||
Identified intangible assets, net | $ 1,937 | $ 1,937 | $ 1,855 | ||
Weighted average remaining life | 6 months | 7 months | |||
Amortization expense | 842 | $ 4 | $ 2,600 | $ 224 | |
Goodwill | 670 | 670 | $ 711 | ||
Acquired in-place leases | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Identified intangible assets, net | 1,900 | 1,900 | 1,900 | ||
Accumulated amortization | 25,600 | 25,600 | $ 24,300 | ||
Antennae leases | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Annual expected amortization expense through 2025 | $ 16 | $ 16 |
IDENTIFIED INTANGIBLE ASSETS,55
IDENTIFIED INTANGIBLE ASSETS, NET AND GOODWILL - Antennae Leases (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2,018 | $ 1,819 | |
2,019 | 16 | |
2,020 | 16 | |
2,021 | 16 | |
2,022 | 16 | |
Thereafter | 54 | |
Total | $ 1,937 | $ 1,855 |
IDENTIFIED INTANGIBLE ASSETS,56
IDENTIFIED INTANGIBLE ASSETS, NET AND GOODWILL - Goodwill Rollforward (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2017USD ($) | |
Goodwill [Roll Forward] | |
Beginning balance | $ 711 |
Ending balance | 670 |
Stone Ridge | |
Goodwill [Roll Forward] | |
Sale of Stone Ridge | $ (41) |
MORTGAGE NOTES PAYABLE, NET - S
MORTGAGE NOTES PAYABLE, NET - Summary (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2016 | |
Participating Mortgage Loans [Line Items] | ||
Outstanding Borrowings | $ 775,441 | $ 627,088 |
Premium (Discount) | 1,830 | 2,189 |
Deferred finance costs, net | (7,965) | (7,125) |
Carrying Value | $ 769,306 | 622,152 |
Revolving credit facility | LIBOR | ||
Participating Mortgage Loans [Line Items] | ||
Basis spread on variable rate | 1.23222% | |
Vista Apartment Homes | ||
Participating Mortgage Loans [Line Items] | ||
Outstanding Borrowings | $ 14,977 | 15,225 |
Premium (Discount) | 0 | 0 |
Deferred finance costs, net | (149) | (178) |
Carrying Value | $ 14,828 | 15,047 |
Annual Interest Rate | 3.52% | |
Average Monthly Debt Service | $ 71 | |
Average Monthly Escrow | 17 | |
Cannery Lofts | ||
Participating Mortgage Loans [Line Items] | ||
Outstanding Borrowings | 13,100 | 13,100 |
Premium (Discount) | 0 | 0 |
Deferred finance costs, net | (172) | (197) |
Carrying Value | $ 12,928 | 12,903 |
Annual Interest Rate | 3.77% | |
Average Monthly Debt Service | $ 42 | |
Average Monthly Escrow | 26 | |
Deerfield | ||
Participating Mortgage Loans [Line Items] | ||
Outstanding Borrowings | 0 | 10,359 |
Premium (Discount) | 0 | 0 |
Deferred finance costs, net | 0 | (125) |
Carrying Value | 0 | 10,234 |
Trailpoint at the Woodlands | ||
Participating Mortgage Loans [Line Items] | ||
Outstanding Borrowings | 18,449 | 18,690 |
Premium (Discount) | 0 | 0 |
Deferred finance costs, net | (196) | (222) |
Carrying Value | $ 18,253 | 18,468 |
Annual Interest Rate | 3.64% | |
Average Monthly Debt Service | $ 83 | |
Average Monthly Escrow | 47 | |
Verona Apartment Homes | ||
Participating Mortgage Loans [Line Items] | ||
Outstanding Borrowings | 32,970 | 32,970 |
Premium (Discount) | 0 | 0 |
Deferred finance costs, net | (490) | (532) |
Carrying Value | $ 32,480 | 32,438 |
Annual Interest Rate | 3.59% | |
Average Monthly Debt Service | $ 100 | |
Average Monthly Escrow | 40 | |
Skyview Apartment Homes | ||
Participating Mortgage Loans [Line Items] | ||
Outstanding Borrowings | 28,400 | 28,400 |
Premium (Discount) | 0 | 0 |
Deferred finance costs, net | (426) | (462) |
Carrying Value | $ 27,974 | 27,938 |
Annual Interest Rate | 3.59% | |
Average Monthly Debt Service | $ 86 | |
Average Monthly Escrow | 24 | |
Maxwell Townhomes | ||
Participating Mortgage Loans [Line Items] | ||
Outstanding Borrowings | 13,408 | 13,602 |
Premium (Discount) | 0 | 0 |
Deferred finance costs, net | (116) | (137) |
Carrying Value | $ 13,292 | 13,465 |
Annual Interest Rate | 4.32% | |
Average Monthly Debt Service | $ 71 | |
Average Monthly Escrow | 78 | |
Pinehurst | ||
Participating Mortgage Loans [Line Items] | ||
Outstanding Borrowings | 7,350 | 7,350 |
Premium (Discount) | 0 | 0 |
Deferred finance costs, net | (134) | (154) |
Carrying Value | $ 7,216 | 7,196 |
Annual Interest Rate | 3.65% | |
Average Monthly Debt Service | $ 32 | |
Average Monthly Escrow | 15 | |
Pheasant Run | ||
Participating Mortgage Loans [Line Items] | ||
Outstanding Borrowings | 6,250 | 6,250 |
Premium (Discount) | 0 | 43 |
Deferred finance costs, net | 0 | (9) |
Carrying Value | $ 6,250 | 6,284 |
Annual Interest Rate | 3.73% | |
Average Monthly Debt Service | $ 19 | |
Average Monthly Escrow | 12 | |
Retreat of Shawnee | ||
Participating Mortgage Loans [Line Items] | ||
Outstanding Borrowings | 12,736 | 12,893 |
Premium (Discount) | 26 | 85 |
Deferred finance costs, net | (7) | (23) |
Carrying Value | $ 12,755 | 12,955 |
Annual Interest Rate | 5.58% | |
Average Monthly Debt Service | $ 78 | |
Average Monthly Escrow | 29 | |
Evergreen at Coursey Place | ||
Participating Mortgage Loans [Line Items] | ||
Outstanding Borrowings | 26,759 | 27,107 |
Premium (Discount) | 83 | 100 |
Deferred finance costs, net | (80) | (96) |
Carrying Value | $ 26,762 | 27,111 |
Annual Interest Rate | 5.07% | |
Average Monthly Debt Service | $ 154 | |
Average Monthly Escrow | 37 | |
Pines of York | ||
Participating Mortgage Loans [Line Items] | ||
Outstanding Borrowings | 14,789 | 14,999 |
Premium (Discount) | (251) | (299) |
Deferred finance costs, net | (47) | (56) |
Carrying Value | $ 14,491 | 14,644 |
Annual Interest Rate | 4.46% | |
Average Monthly Debt Service | $ 80 | |
Average Monthly Escrow | 25 | |
The Estates at Johns Creek | ||
Participating Mortgage Loans [Line Items] | ||
Outstanding Borrowings | 48,854 | 49,596 |
Premium (Discount) | 0 | 0 |
Deferred finance costs, net | (316) | (405) |
Carrying Value | $ 48,538 | 49,191 |
Annual Interest Rate | 3.38% | |
Average Monthly Debt Service | $ 221 | |
Average Monthly Escrow | 102 | |
Chisholm Place | ||
Participating Mortgage Loans [Line Items] | ||
Outstanding Borrowings | 0 | 11,587 |
Premium (Discount) | 0 | 0 |
Deferred finance costs, net | 0 | (143) |
Carrying Value | 0 | 11,444 |
Perimeter Circle | ||
Participating Mortgage Loans [Line Items] | ||
Outstanding Borrowings | 17,018 | 17,298 |
Premium (Discount) | 0 | 0 |
Deferred finance costs, net | (99) | (143) |
Carrying Value | $ 16,919 | 17,155 |
Annual Interest Rate | 3.42% | |
Average Monthly Debt Service | $ 81 | |
Average Monthly Escrow | 44 | |
Perimeter 5,550 | ||
Participating Mortgage Loans [Line Items] | ||
Outstanding Borrowings | 13,431 | 13,651 |
Premium (Discount) | 0 | 0 |
Deferred finance costs, net | (82) | (118) |
Carrying Value | $ 13,349 | 13,533 |
Annual Interest Rate | 3.42% | |
Average Monthly Debt Service | $ 64 | |
Average Monthly Escrow | 32 | |
Aston at Cinco Ranch | ||
Participating Mortgage Loans [Line Items] | ||
Outstanding Borrowings | 23,051 | 23,367 |
Premium (Discount) | 0 | 0 |
Deferred finance costs, net | (225) | (268) |
Carrying Value | $ 22,826 | 23,099 |
Annual Interest Rate | 4.34% | |
Average Monthly Debt Service | $ 120 | |
Average Monthly Escrow | 70 | |
Sunset Ridge 1 | ||
Participating Mortgage Loans [Line Items] | ||
Outstanding Borrowings | 19,368 | 19,699 |
Premium (Discount) | 207 | 259 |
Deferred finance costs, net | (164) | (205) |
Carrying Value | $ 19,411 | 19,753 |
Annual Interest Rate | 4.58% | |
Average Monthly Debt Service | $ 113 | |
Average Monthly Escrow | 89 | |
Sunset Ridge 2 | ||
Participating Mortgage Loans [Line Items] | ||
Outstanding Borrowings | 2,905 | 2,948 |
Premium (Discount) | 28 | 35 |
Deferred finance costs, net | (21) | (26) |
Carrying Value | $ 2,912 | 2,957 |
Annual Interest Rate | 4.54% | |
Average Monthly Debt Service | $ 16 | |
Average Monthly Escrow | 0 | |
Calloway at Las Colinas | ||
Participating Mortgage Loans [Line Items] | ||
Outstanding Borrowings | 34,571 | 35,083 |
Premium (Discount) | 0 | 0 |
Deferred finance costs, net | (257) | (306) |
Carrying Value | $ 34,314 | 34,777 |
Annual Interest Rate | 3.87% | |
Average Monthly Debt Service | $ 171 | |
Average Monthly Escrow | 115 | |
South Lamar Village | ||
Participating Mortgage Loans [Line Items] | ||
Outstanding Borrowings | 12,242 | 12,435 |
Premium (Discount) | 0 | 0 |
Deferred finance costs, net | (92) | (131) |
Carrying Value | $ 12,150 | 12,304 |
Annual Interest Rate | 3.64% | |
Average Monthly Debt Service | $ 59 | |
Average Monthly Escrow | 57 | |
Heritage Pointe | ||
Participating Mortgage Loans [Line Items] | ||
Outstanding Borrowings | 26,050 | 26,280 |
Premium (Discount) | 0 | 0 |
Deferred finance costs, net | (295) | (327) |
Carrying Value | $ 25,755 | 25,953 |
Annual Interest Rate | 3.11% | |
Average Monthly Debt Service | $ 114 | |
Average Monthly Escrow | 43 | |
The Bryant at Yorba Linda | ||
Participating Mortgage Loans [Line Items] | ||
Outstanding Borrowings | 67,500 | 67,500 |
Premium (Discount) | 0 | 0 |
Deferred finance costs, net | (511) | (661) |
Carrying Value | $ 66,989 | 66,839 |
Annual Interest Rate | 2.98% | |
Average Monthly Debt Service | $ 186 | |
Average Monthly Escrow | 0 | |
Point Bonita Apartment Homes | ||
Participating Mortgage Loans [Line Items] | ||
Outstanding Borrowings | 26,624 | 26,907 |
Premium (Discount) | 1,737 | 1,966 |
Deferred finance costs, net | (298) | (338) |
Carrying Value | $ 28,063 | 28,535 |
Annual Interest Rate | 5.33% | |
Average Monthly Debt Service | $ 152 | |
Average Monthly Escrow | 61 | |
Stone Ridge | ||
Participating Mortgage Loans [Line Items] | ||
Outstanding Borrowings | 0 | 5,227 |
Premium (Discount) | 0 | 0 |
Deferred finance costs, net | 0 | (130) |
Carrying Value | 0 | 5,097 |
The Westside Apartments | ||
Participating Mortgage Loans [Line Items] | ||
Outstanding Borrowings | 36,820 | 36,820 |
Premium (Discount) | 0 | 0 |
Deferred finance costs, net | (403) | (448) |
Carrying Value | $ 36,417 | 36,372 |
Annual Interest Rate | 3.35% | |
Average Monthly Debt Service | $ 104 | |
Average Monthly Escrow | 69 | |
Tech Center Square | ||
Participating Mortgage Loans [Line Items] | ||
Outstanding Borrowings | 12,199 | 12,375 |
Premium (Discount) | 0 | 0 |
Deferred finance costs, net | (172) | (196) |
Carrying Value | $ 12,027 | 12,179 |
Annual Interest Rate | 3.81% | |
Average Monthly Debt Service | $ 58 | |
Average Monthly Escrow | 24 | |
Williamsburg | ||
Participating Mortgage Loans [Line Items] | ||
Outstanding Borrowings | 53,995 | 53,995 |
Premium (Discount) | 0 | 0 |
Deferred finance costs, net | (736) | (828) |
Carrying Value | $ 53,259 | 53,167 |
Annual Interest Rate | 3.61% | |
Average Monthly Debt Service | $ 165 | |
Average Monthly Escrow | 167 | |
Retreat at Rocky Ridge | ||
Participating Mortgage Loans [Line Items] | ||
Outstanding Borrowings | 11,375 | 11,375 |
Premium (Discount) | 0 | 0 |
Deferred finance costs, net | (232) | (261) |
Carrying Value | $ 11,143 | 11,114 |
Annual Interest Rate | 3.69% | |
Average Monthly Debt Service | $ 36 | |
Average Monthly Escrow | 23 | |
Providence in the Park | ||
Participating Mortgage Loans [Line Items] | ||
Outstanding Borrowings | 47,000 | 0 |
Premium (Discount) | 0 | 0 |
Deferred finance costs, net | (546) | 0 |
Carrying Value | $ 46,454 | 0 |
Annual Interest Rate | 3.53% | |
Average Monthly Debt Service | $ 141 | |
Average Monthly Escrow | 138 | |
Green Trails Apartment Homes | ||
Participating Mortgage Loans [Line Items] | ||
Outstanding Borrowings | 61,500 | 0 |
Premium (Discount) | 0 | 0 |
Deferred finance costs, net | (695) | 0 |
Carrying Value | $ 60,805 | 0 |
Annual Interest Rate | 3.22% | |
Average Monthly Debt Service | $ 168 | |
Average Monthly Escrow | 79 | |
Meridian Pointe | ||
Participating Mortgage Loans [Line Items] | ||
Outstanding Borrowings | 39,500 | 0 |
Premium (Discount) | 0 | 0 |
Deferred finance costs, net | (611) | 0 |
Carrying Value | $ 38,889 | 0 |
Annual Interest Rate | 3.13% | |
Average Monthly Debt Service | $ 104 | |
Average Monthly Escrow | 56 | |
Terraces at Lake Mary | ||
Participating Mortgage Loans [Line Items] | ||
Outstanding Borrowings | 32,250 | 0 |
Premium (Discount) | 0 | 0 |
Deferred finance costs, net | (393) | 0 |
Carrying Value | $ 31,857 | $ 0 |
Annual Interest Rate | 3.14% | |
Average Monthly Debt Service | $ 86 | |
Average Monthly Escrow | $ 46 |
MORTGAGE NOTES PAYABLE, NET - N
MORTGAGE NOTES PAYABLE, NET - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Guarantor Obligations [Line Items] | |||||
Amortization of deferred financing costs | $ 1,595,000 | $ 1,758,000 | |||
Accumulated amortization, deferred finance costs | $ 3,600,000 | 3,600,000 | $ 2,600,000 | ||
Interest expense | Mortgages | |||||
Guarantor Obligations [Line Items] | |||||
Amortization of deferred financing costs | 633,000 | $ 622,000 | 1,500,000 | 1,600,000 | |
Payment guarantee | The Estates at Johns Creek | |||||
Guarantor Obligations [Line Items] | |||||
Guaranty for completion and payment of costs of completion (no less than) | 7,000,000 | 7,000,000 | |||
Acquisitions of rental property | Interest expense | |||||
Guarantor Obligations [Line Items] | |||||
Decrease in interest expense due to fair value adjustments | 120,000 | $ 122,000 | 359,000 | $ 364,000 | |
Covenants included in mortgage for Yorba Linda | |||||
Guarantor Obligations [Line Items] | |||||
Earn-out holdback allowed when criteria are met | $ 7,500,000 | $ 7,500,000 |
MORTGAGE NOTES PAYABLE, NET - A
MORTGAGE NOTES PAYABLE, NET - Annual Principal Payments (Details) $ in Thousands | Sep. 30, 2017USD ($) |
Debt Disclosure [Abstract] | |
2,018 | $ 7,207 |
2,019 | 69,608 |
2,020 | 124,078 |
2,021 | 57,223 |
2,022 | 101,546 |
Thereafter | 415,779 |
Total | $ 775,441 |
MORTGAGE NOTES PAYABLE, NET - D
MORTGAGE NOTES PAYABLE, NET - Deferred Financing Costs (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Debt Disclosure [Abstract] | ||
2,018 | $ 1,638 | |
2,019 | 1,572 | |
2,020 | 1,338 | |
2,021 | 1,050 | |
2,022 | 851 | |
Thereafter | 1,516 | |
Deferred financing costs, net | $ 7,965 | $ 7,125 |
CREDIT FACILITY - Narrative (De
CREDIT FACILITY - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Line of Credit Facility [Line Items] | |||||
Amortization of deferred financing costs | $ 1,595 | $ 1,758 | |||
Accumulated amortization, deferred finance costs | $ 3,600 | 3,600 | $ 2,600 | ||
Bank of America | |||||
Line of Credit Facility [Line Items] | |||||
Accumulated amortization, deferred finance costs | 925 | 925 | $ 857 | ||
Bank of America | Interest expense | |||||
Line of Credit Facility [Line Items] | |||||
Amortization of deferred financing costs | $ 0 | $ 48 | 68 | $ 268 | |
Bank of America | Revolving credit facility | Interest expense | |||||
Line of Credit Facility [Line Items] | |||||
Unused line of credit fee | $ 250 |
ACCUMULATED OTHER COMPREHENSI62
ACCUMULATED OTHER COMPREHENSIVE LOSS (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Accumulated Other Comprehensive Income [Rollforward] | ||||
Beginning balance | $ 392,019 | |||
Reclassification adjustment for realized loss on designated derivatives | $ 42 | $ 45 | 117 | $ 130 |
Ending balance | 344,610 | 344,610 | ||
Designated derivatives | ||||
Accumulated Other Comprehensive Income [Rollforward] | ||||
Beginning balance | (345) | |||
Reclassification adjustment for realized loss on designated derivatives | 117 | |||
Designated derivatives, fair value adjustments | (344) | |||
Ending balance | $ (572) | $ (572) |
CERTAIN RELATIONSHIPS AND REL63
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS - Narrative (Details) - USD ($) | 9 Months Ended | ||
Sep. 30, 2017 | Apr. 23, 2017 | Apr. 22, 2017 | |
Related Party Transaction [Line Items] | |||
Terms of agreement | 1 year | ||
RAI | |||
Related Party Transaction [Line Items] | |||
Insurance pool, amount of property losses covered | $ 2,500,000 | ||
Property loss pool, deductible amount per incident | 25,000 | ||
Catastrophic insurance, amount of losses covered | 250,000,000 | ||
Catastrophic insurance, deductible amount per incident | 100,000 | ||
Payment into insurance pools | 1,000,000 | ||
General liability pool, deductible amount per incident | $ 25,000 | $ 50,000 | |
General liability insurance, loss covered in excess of insurance pool, limit | $ 76,000,000 | ||
Advisor | |||
Related Party Transaction [Line Items] | |||
Terms of agreement, renewal period | 1 year | ||
Percentage acquisition fee paid to advisor | 2.00% | ||
Monthly asset management fee (percentage) | 0.083% | ||
Percentage annual asset management fee | 1.00% | ||
Disposition fee | 2.75% | ||
Debt financing fee | 0.50% | ||
Manager | |||
Related Party Transaction [Line Items] | |||
Property management fee | 4.50% | ||
Occupancy | 75.00% | ||
Term for which Manager receives minimum property management fee if properties are less than 75% occupied | 12 months | ||
Construction management fee | 5.00% | ||
Debt servicing fee | 2.75% |
CERTAIN RELATIONSHIPS AND REL64
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS - Schedule of Transactions (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Related Party Transaction [Line Items] | |||||
Due from related parties | $ 280 | $ 280 | $ 1,375 | ||
Due to related parties | 873 | 873 | 2,055 | ||
RAI and affiliates | Insurance fund held in escrow | |||||
Related Party Transaction [Line Items] | |||||
Due from related parties | 280 | 280 | 1,375 | ||
Advisor | Operating expense reimbursements | |||||
Related Party Transaction [Line Items] | |||||
Due to related parties | 49 | 49 | 1,285 | ||
Advisor | Acquisition fees | |||||
Related Party Transaction [Line Items] | |||||
Fees earned / expenses paid to related parties | 953 | $ 0 | 2,565 | $ 8 | |
Advisor | Asset management fees | |||||
Related Party Transaction [Line Items] | |||||
Fees earned / expenses paid to related parties | 2,893 | 2,543 | 8,370 | 7,924 | |
Advisor | Disposition fees | |||||
Related Party Transaction [Line Items] | |||||
Fees earned / expenses paid to related parties | 144 | 273 | 361 | 686 | |
Advisor | Debt financing fees | |||||
Related Party Transaction [Line Items] | |||||
Fees earned / expenses paid to related parties | 358 | 166 | 901 | 166 | |
Advisor | Overhead allocation | |||||
Related Party Transaction [Line Items] | |||||
Fees earned / expenses paid to related parties | 1,091 | 1,033 | 3,399 | 3,475 | |
Advisor | Internal audit | |||||
Related Party Transaction [Line Items] | |||||
Fees earned / expenses paid to related parties | 21 | 43 | 47 | 43 | |
Resource Real Estate Opportunity Manager, LLC | Operating expense reimbursements | |||||
Related Party Transaction [Line Items] | |||||
Due to related parties | 342 | 342 | 314 | ||
Fees earned / expenses paid to related parties | 0 | 56 | 0 | 186 | |
Resource Real Estate Opportunity Manager, LLC | Property management fees | |||||
Related Party Transaction [Line Items] | |||||
Due to related parties | 482 | 482 | $ 456 | ||
Fees earned / expenses paid to related parties | 1,429 | 1,267 | 4,158 | 3,872 | |
Resource Real Estate Opportunity Manager, LLC | Construction management fees | |||||
Related Party Transaction [Line Items] | |||||
Fees earned / expenses paid to related parties | 188 | 246 | 712 | 738 | |
Resource Real Estate Opportunity Manager, LLC | Information technology fees | |||||
Related Party Transaction [Line Items] | |||||
Fees earned / expenses paid to related parties | 0 | 101 | 0 | 317 | |
Resource Real Estate Opportunity Manager, LLC | Debt servicing fees | |||||
Related Party Transaction [Line Items] | |||||
Fees earned / expenses paid to related parties | 1 | 0 | 2 | 14 | |
Ledgewood | |||||
Related Party Transaction [Line Items] | |||||
Fees earned / expenses paid to related parties | 0 | 44 | 0 | 74 | |
The Planning & Zoning Resource Company | |||||
Related Party Transaction [Line Items] | |||||
Fees earned / expenses paid to related parties | 2 | 0 | 3 | 0 | |
Graphic Images | |||||
Related Party Transaction [Line Items] | |||||
Fees earned / expenses paid to related parties | $ 0 | $ 23 | $ 9 | $ 83 |
EQUITY - Preferred Stock (Detai
EQUITY - Preferred Stock (Details) - $ / shares | Sep. 30, 2017 | Dec. 31, 2016 |
Equity [Abstract] | ||
Preferred stock, authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, issued (in shares) | 0 | 0 |
Preferred stock, outstanding (in shares) | 0 | 0 |
EQUITY - Common Stock (Details)
EQUITY - Common Stock (Details) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2016 | |
Class of Stock [Line Items] | ||
Shares Issued (in shares) | 76,845,782 | 74,975,022 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Shares redeemed (in shares) | (5,301,964) | |
Total shares outstanding at end of period (in shares) | 71,543,818 | |
Gross Proceeds | $ 746,625 | |
Shares issued through private offering | ||
Class of Stock [Line Items] | ||
Shares Issued (in shares) | 1,263,727 | |
Gross Proceeds | $ 12,582 | |
Shares issued through primary public offering | ||
Class of Stock [Line Items] | ||
Shares Issued (in shares) | 62,485,461 | |
Gross Proceeds | $ 622,077 | |
Shares issued through primary public offering | Advisor | Common Stock | ||
Class of Stock [Line Items] | ||
Shares issued to the Advisor (in shares) | 276,056 | |
Shares issued through stock distributions | ||
Class of Stock [Line Items] | ||
Shares Issued (in shares) | 2,132,266 | |
Gross Proceeds | $ 0 | |
Shares issued through distribution reinvestment plan | ||
Class of Stock [Line Items] | ||
Shares Issued (in shares) | 10,948,828 | |
Gross Proceeds, distribution reinvestment plan | $ 111,811 | |
Advisor | ||
Class of Stock [Line Items] | ||
Shares Issued (in shares) | 15,500 | |
Shares converted (in shares) | 4,500 | |
Gross Proceeds | $ 155 |
EQUITY - Convertible Stock (Det
EQUITY - Convertible Stock (Details) | 9 Months Ended | |
Sep. 30, 2017Event$ / sharesshares | Dec. 31, 2016$ / sharesshares | |
Equity [Abstract] | ||
Convertible stock shares outstanding (in shares) | 50,000 | 50,000 |
Convertible stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 |
Convertible stock held by advisor and affiliated persons (in shares) | 49,063 | 49,063 |
Convertible stock held by outside investors (in shares) | 937 | 937 |
Percentage on original share price | 100.00% | |
Percentage non-compounded annual return, option one | 10.00% | |
Aggregate percentage return | 10.00% | |
Number of triggering events | Event | 2 | |
Conversion ratio | 0.00002 | |
Common stock, convertible, triggering event, if lesser of, option one | 25.00% | |
Common stock, convertible, triggering event, if lesser of, option two | 15.00% | |
Percentage non-compounded annual return, option two | 6.00% |
EQUITY - Redemption of Securiti
EQUITY - Redemption of Securities (Details) - $ / shares shares in Thousands | 1 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Sep. 30, 2017 | |
Equity [Abstract] | ||||
Common share redemptions (in shares) | 681 | 957 | 696 | 2,334 |
Average Price Paid per Share (USD per share) | $ 10.94 | $ 10.94 | $ 10.83 | |
Percentage of weighted-average number of outstanding shares during the 12-month period immediately prior to the effective date of the redemption that company will not redeem in excess of (in excess of 5%) | 5.00% | 5.00% | ||
Period of time shares are outstanding prior to the effective date of redemption | 12 months | |||
Cash available for redemption, percentage of previous fiscal year operating cash flow | 1.00% | |||
Number of days' notice required to suspend, terminate or amend share redemption program | 30 days |
EQUITY - Distributions (Details
EQUITY - Distributions (Details) - USD ($) $ / shares in Units, $ in Thousands | Sep. 29, 2017 | Aug. 31, 2017 | Jul. 31, 2017 | Jun. 30, 2017 | May 31, 2017 | Apr. 28, 2017 | Mar. 31, 2017 | Feb. 28, 2017 | Jan. 31, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 |
Securities Financing Transaction [Line Items] | ||||||||||||
Per Common Share (in dollars per share) | $ 0.45 | |||||||||||
Distributions reinvested in Shares of Common Stock | $ 20,421 | $ 21,480 | $ 57,500 | |||||||||
Net Cash Distribution | 11,893 | |||||||||||
Total Aggregate Distribution | $ 32,314 | |||||||||||
Record date of January 30, 2017 | ||||||||||||
Securities Financing Transaction [Line Items] | ||||||||||||
Per Common Share (in dollars per share) | $ 0.05 | |||||||||||
Distributions reinvested in Shares of Common Stock | $ 2,329 | |||||||||||
Net Cash Distribution | 1,272 | |||||||||||
Total Aggregate Distribution | $ 3,601 | |||||||||||
Record date of February 27, 2017 | ||||||||||||
Securities Financing Transaction [Line Items] | ||||||||||||
Per Common Share (in dollars per share) | $ 0.05 | |||||||||||
Distributions reinvested in Shares of Common Stock | $ 2,308 | |||||||||||
Net Cash Distribution | 1,303 | |||||||||||
Total Aggregate Distribution | $ 3,611 | |||||||||||
Record date of March 30, 2017 | ||||||||||||
Securities Financing Transaction [Line Items] | ||||||||||||
Per Common Share (in dollars per share) | $ 0.05 | |||||||||||
Distributions reinvested in Shares of Common Stock | $ 2,274 | |||||||||||
Net Cash Distribution | 1,314 | |||||||||||
Total Aggregate Distribution | $ 3,588 | |||||||||||
Record Date as of April 27, 2017 | ||||||||||||
Securities Financing Transaction [Line Items] | ||||||||||||
Per Common Share (in dollars per share) | $ 0.050 | |||||||||||
Distributions reinvested in Shares of Common Stock | $ 2,273 | |||||||||||
Net Cash Distribution | 1,324 | |||||||||||
Total Aggregate Distribution | $ 3,597 | |||||||||||
Record Date as of May 30, 2017 | ||||||||||||
Securities Financing Transaction [Line Items] | ||||||||||||
Per Common Share (in dollars per share) | $ 0.050 | |||||||||||
Distributions reinvested in Shares of Common Stock | $ 2,258 | |||||||||||
Net Cash Distribution | 1,350 | |||||||||||
Total Aggregate Distribution | $ 3,608 | |||||||||||
Record Date as of June 29, 2017 | ||||||||||||
Securities Financing Transaction [Line Items] | ||||||||||||
Per Common Share (in dollars per share) | $ 0.050 | |||||||||||
Distributions reinvested in Shares of Common Stock | $ 2,249 | |||||||||||
Net Cash Distribution | 1,322 | |||||||||||
Total Aggregate Distribution | $ 3,571 | |||||||||||
Record Date as of July 28, 2017 | ||||||||||||
Securities Financing Transaction [Line Items] | ||||||||||||
Per Common Share (in dollars per share) | $ 0.05 | |||||||||||
Distributions reinvested in Shares of Common Stock | $ 2,247 | |||||||||||
Net Cash Distribution | 1,333 | |||||||||||
Total Aggregate Distribution | $ 3,580 | |||||||||||
Record Date as of August 30, 2017 | ||||||||||||
Securities Financing Transaction [Line Items] | ||||||||||||
Per Common Share (in dollars per share) | $ 0.05 | |||||||||||
Distributions reinvested in Shares of Common Stock | $ 2,250 | |||||||||||
Net Cash Distribution | 1,340 | |||||||||||
Total Aggregate Distribution | $ 3,590 | |||||||||||
Record Date as of September 28, 2017 | ||||||||||||
Securities Financing Transaction [Line Items] | ||||||||||||
Per Common Share (in dollars per share) | $ 0.05 | |||||||||||
Distributions reinvested in Shares of Common Stock | $ 2,233 | |||||||||||
Net Cash Distribution | 1,335 | |||||||||||
Total Aggregate Distribution | $ 3,568 |
FAIR VALUE MEASURES AND DISCL70
FAIR VALUE MEASURES AND DISCLOSURES - Assets Measured at Fair Value on a Recurring Basis (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate caps | $ 66 | $ 242 |
Assets, fair value | 66 | 242 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate caps | 0 | 0 |
Assets, fair value | 0 | 0 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate caps | 66 | 242 |
Assets, fair value | 66 | 242 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate caps | 0 | 0 |
Assets, fair value | $ 0 | $ 0 |
FAIR VALUE MEASURES AND DISCL71
FAIR VALUE MEASURES AND DISCLOSURES - Schedule of Carrying and Fair Values (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Carrying Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Loan held for investment, net | $ 778 | $ 769 |
Mortgage notes payable- outstanding borrowings | (775,441) | (627,088) |
Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Loan held for investment, net | 1,038 | 1,104 |
Mortgage notes payable- outstanding borrowings | $ (752,228) | $ (620,578) |
DERIVATIVES AND HEDGING ACTIV72
DERIVATIVES AND HEDGING ACTIVITIES (Details) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017USD ($)derivative | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)derivative | Sep. 30, 2016USD ($) | Dec. 31, 2016USD ($) | |
Prepaid expenses and other assets | |||||
Derivatives, Fair Value [Line Items] | |||||
Asset derivatives, fair value | $ 66,000 | $ 66,000 | $ 242,000 | ||
Cash flow hedges | |||||
Derivatives, Fair Value [Line Items] | |||||
Loss due to hedge ineffectiveness | 42,000 | $ 45,000 | 117,000 | $ 130,000 | |
Reclassified AOCI | $ 189,535 | $ 189,535 | |||
Cash flow hedges | Interest Rate Caps | |||||
Derivatives, Fair Value [Line Items] | |||||
Number of Instruments (in derivatives) | derivative | 17 | 17 | |||
Notional Amount | $ 450,725,000 | $ 450,725,000 |
OPERATING EXPENSE LIMITATION (D
OPERATING EXPENSE LIMITATION (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Operating Expenses [Line Items] | ||||
Percent of average invested assets | 2.00% | 2.00% | ||
Net income of operating expense, percent | 25.00% | 25.00% | ||
Operating expense limitation, term (in years) | 1 year | |||
Allocated payroll | $ 3,306 | $ 3,578 | $ 10,385 | $ 11,166 |
Resource Real Estate Opportunity Manager, LLC | ||||
Operating Expenses [Line Items] | ||||
Allocated payroll | $ 225 | $ 533 | $ 731 | $ 1,650 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) | Oct. 06, 2017$ / shares |
Subsequent event | |
Subsequent Event [Line Items] | |
Dividends declared (in dollars per share) | $ 0.05 |