Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Nov. 05, 2018 | |
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, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Common Stock, Shares Outstanding | 70,771,301 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Investments: | ||
Rental properties, net | $ 1,027,610 | $ 998,889 |
Loan held for investment, net | 790 | 782 |
Identified intangible assets, net | 553 | 1,796 |
Assets held for sale - rental properties | 15,254 | 0 |
Total investments | 1,044,207 | 1,001,467 |
Cash | 50,314 | 117,660 |
Restricted cash | 14,360 | 13,401 |
Subtotal- cash and restricted cash | 64,674 | 131,061 |
Due from related parties | 146 | 371 |
Tenant receivables, net | 195 | 251 |
Deposits | 229 | 227 |
Prepaid expenses and other assets | 3,271 | 1,745 |
Goodwill | 594 | 670 |
Total assets | 1,113,316 | 1,135,792 |
Liabilities: | ||
Mortgage notes payable, net | 839,220 | 794,671 |
Accounts payable | 729 | 791 |
Accrued expenses and other liabilities | 7,324 | 8,074 |
Accrued real estate taxes | 11,316 | 9,195 |
Due to related parties | 720 | 719 |
Tenant prepayments | 1,192 | 1,178 |
Security deposits | 2,713 | 2,572 |
Total liabilities | 863,214 | 817,200 |
Stockholders' 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; 70,563,588 and 71,299,467 shares issued and outstanding, respectively) | 706 | 713 |
Convertible stock (“promote shares”; par value $.01; 50,000 shares authorized; 49,995 shares issued and outstanding) | 1 | 1 |
Additional paid-in capital | 627,854 | 635,748 |
Accumulated other comprehensive loss | (441) | (562) |
Accumulated deficit | (378,018) | (317,308) |
Total stockholders’ equity | 250,102 | 318,592 |
Total liabilities and stockholders' equity | $ 1,113,316 | $ 1,135,792 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2018 | Dec. 31, 2017 |
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) | 70,563,588 | 71,299,467 |
Common stock, outstanding (in shares) | 70,563,588 | 71,299,467 |
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) | 49,995 | 49,995 |
Convertible stock (promote shares), outstanding (in shares) | 49,995 | 49,995 |
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, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Revenues: | ||||
Rental income | $ 33,791 | $ 29,847 | $ 96,995 | $ 86,557 |
Utility income | 2,060 | 1,847 | 6,079 | 5,275 |
Ancillary tenant fees | 664 | 565 | 1,683 | 1,571 |
Interest and dividend income | 65 | 74 | 240 | 165 |
Total revenues | 36,580 | 32,333 | 104,997 | 93,568 |
Expenses: | ||||
Rental operating - expenses | 8,419 | 7,162 | 23,477 | 20,009 |
Rental operating - payroll | 3,662 | 3,306 | 10,523 | 10,385 |
Rental operating - real estate taxes | 4,286 | 3,794 | 12,501 | 11,096 |
Subtotal - Rental operating expenses | 16,367 | 14,262 | 46,501 | 41,490 |
Acquisition costs | 0 | 1,290 | 9 | 3,065 |
Management fees | 4,920 | 4,323 | 14,312 | 12,530 |
General and administrative | 2,625 | 2,874 | 8,161 | 8,546 |
Loss on disposal of assets | 286 | 537 | 590 | 729 |
Depreciation and amortization expense | 14,851 | 13,193 | 44,234 | 38,527 |
Total expenses | 39,049 | 36,479 | 113,807 | 104,887 |
Loss before other income (expense) | (2,469) | (4,146) | (8,810) | (11,319) |
Other income (expense): | ||||
Net gains on dispositions of properties and joint venture interests | 6,195 | 14,300 | 6,195 | 22,735 |
Interest expense | (9,526) | (7,963) | (26,709) | (21,351) |
Insurance proceeds in excess of cost basis | 169 | 0 | 515 | 98 |
Total other (expense) income | (3,162) | 6,337 | (19,999) | 1,482 |
Net (loss) income | (5,631) | 2,191 | (28,809) | (9,837) |
Other comprehensive income (loss): | ||||
Reclassification adjustment for realized loss on designated derivatives | 62 | 42 | 144 | 117 |
Designated derivatives, fair value adjustments | (9) | (55) | (23) | (344) |
Total other comprehensive income (loss) | 53 | (13) | 121 | (227) |
Comprehensive (loss) income | $ (5,578) | $ 2,178 | $ (28,688) | $ (10,064) |
Weighted average common shares outstanding (in shares) | 70,790 | 71,703 | 71,064 | 71,967 |
Basic and diluted loss per common share: | ||||
Net loss per common share (in dollars per share) | $ (0.09) | $ 0.03 | $ (0.41) | $ (0.13) |
CONSOLIDATED STATEMENT OF CHANG
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY - 9 months ended Sep. 30, 2018 - USD ($) $ in Thousands | Total | Total Stockholders’ Equity | Common Stock | Convertible Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit |
Beginning balance at Dec. 31, 2017 | $ 318,592 | $ 318,592 | $ 713 | $ 1 | $ 635,748 | $ (562) | $ (317,308) |
Beginning balance (in shares) at Dec. 31, 2017 | 71,299,467 | 71,299,000 | 50,000 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Common stock issued through the distribution reinvestment plan | $ 19,560 | 19,560 | $ 19 | 19,541 | |||
Common stock issued through distribution reinvestment plan (in shares) | 1,900,000 | 1,869,000 | |||||
Distributions declared | (31,901) | (31,901) | |||||
Common stock redemptions | (27,461) | $ (26) | (27,435) | ||||
Common stock redemptions (in shares) | (2,604,000) | (2,604,000) | |||||
Other comprehensive income | $ 121 | 121 | 121 | ||||
Net loss | (28,809) | (28,809) | (28,809) | ||||
Ending balance at Sep. 30, 2018 | $ 250,102 | $ 250,102 | $ 706 | $ 1 | $ 627,854 | $ (441) | $ (378,018) |
Ending balance (in shares) at Sep. 30, 2018 | 70,563,588 | 70,564,000 | 50,000 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Cash flows from operating activities: | ||
Net loss | $ (28,809) | $ (9,837) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Loss on disposal of assets | 590 | 729 |
Casualty (gains) losses | (788) | 89 |
Net gains on dispositions of properties and joint venture interests | (6,195) | (22,735) |
Depreciation and amortization | 44,234 | 38,527 |
Amortization of deferred financing costs | 1,319 | 1,595 |
Amortization of debt premium (discount) | (260) | (359) |
Realized loss on change in fair value of interest rate cap | 144 | 117 |
Accretion of discount and direct loan fees and costs | (24) | (30) |
Changes in operating assets and liabilities, net of acquisitions: | ||
Tenant receivables, net | 56 | (214) |
Deposits | (2) | 31 |
Prepaid expenses and other assets | (1,353) | 793 |
Due to/from related parties, net | 226 | (68) |
Accounts payable and accrued expenses | 73 | 1,887 |
Tenant prepayments | 4 | 77 |
Security deposits | 113 | (42) |
Net cash provided by operating activities | 9,328 | 10,560 |
Cash flows from investing activities: | ||
Proceeds from disposal of properties and joint venture interests, net of closing costs | 9,635 | 31,403 |
Property acquisitions | (25,218) | (29,239) |
Insurance proceeds received for casualty losses | 1,783 | 0 |
Capital expenditures | (16,651) | (16,632) |
Principal payments received on loans held for investment | 16 | 21 |
Net cash used in investing activities | (30,435) | (14,447) |
Cash flows from financing activities: | ||
Redemptions of common stock | (27,461) | (25,452) |
Payment of deferred financing costs | (329) | (469) |
Borrowings on mortgages | 0 | 85,136 |
Principal repayments on mortgages | (5,149) | (4,921) |
Distributions paid on common stock | (12,341) | (11,893) |
Net cash (used in) provided by financing activities | (45,280) | 42,401 |
Net (decrease) increase in cash and restricted cash | (66,387) | 38,514 |
Cash and restricted cash at beginning of period | 131,061 | 125,119 |
Cash and restricted cash at end of period | $ 64,674 | $ 163,633 |
CONSOLIDATED STATEMENTS OF CA_2
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parentheticals) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Dec. 31, 2016 |
Reconciliation to consolidated balance sheets | ||||
Cash | $ 50,314 | $ 117,660 | $ 151,384 | |
Restricted cash | 14,360 | 13,401 | 12,249 | |
Subtotal- cash and restricted cash | $ 64,674 | $ 131,061 | $ 163,633 | $ 125,119 |
NATURE OF BUSINESS AND OPERATIO
NATURE OF BUSINESS AND OPERATIONS | 9 Months Ended |
Sep. 30, 2018 | |
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 for the purpose of owning 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 276,056 shares purchased by the Advisor and 1.2 million shares sold in the Company's distribution reinvestment plan. During the years ended December 31, 2017 and 2016 , the Company issued approximately 5.1 million additional shares for $55.6 million pursuant to its distribution reinvestment plan. During the nine months ended September 30, 2018 , the Company issued approximately 1.9 million additional shares for $19.6 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 predominantly 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, 2017 was derived from the audited consolidated financial statements as of and for the year ended December 31, 2017 . 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, 2017 . The results of operations for the nine months ended September 30, 2018 may not necessarily be indicative of the results of operations for the full year ending December 31, 2018 . |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2018 | |
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 accompanying consolidated financial statements have been prepared in conformity with GAAP. 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 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") (a) Evergreen at Coursey Place 352 Baton Rouge, LA PRIP 500, LLC ("Pinehurst") (a) Pinehurst 146 Kansas City, MO PRIP 1102, LLC ("Pheasant Run") (a) (b) Pheasant Run — Lee's Summit, MO PRIP 11128, LLC ("Retreat at Shawnee") (a) Retreat at Shawnee 342 Shawnee, KS PRIP Pines, LLC ("Pines of York") (a) Pines of York 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 RRE Courtney Meadows Holdings, LLC ("Courtney Meadows") Courtney Meadows Apartments 276 Jacksonville, FL RRE Sandy Springs Holdings, LLC ("Sandy Springs") Addison at Sandy Springs 236 Sandy Springs, GA RRE Grapevine Holdings, LLC ("Bristol Grapevine") Bristol Grapevine 376 Grapevine, TX 9,952 N/A - Not Applicable (a) Wholly-owned subsidiary of RRE Charlemagne Holdings, LLC. (b) Underlying investment sold on September 14, 2018. All intercompany accounts and transactions have been eliminated in consolidation. 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 amounts reported in the financial statements and the accompanying notes. Actual results could differ from those estimates. Adoption of New Accounting Standards In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-09, “Revenue from Contracts with Customers” ("ASU No. 2014-09"), which replaces most existing revenue recognition guidance in GAAP. Under the new standard, revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred, the fee is fixed or determinable, and collectability is probable. 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. The Company adopted ASU 2014-09 as of January 1, 2018 using the modified retrospective approach. The majority of the Company’s revenue is derived from residential rental income and other lease income, which are scoped out from this standard and included in the current lease accounting framework, and will be accounted for under ASU No. 2016-02, "Leases", as discussed below. Revenue streams that are in the scope of the new standards include (but are not limited to) administrative and late fees and revenue sharing arrangements of cable income from contracts with cable providers at the Company's properties. The accounting for these revenue streams were not affected by the adoption of ASU 2014-09, nor was there a cumulative effect of initially applying the standard. 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. On January 1, 2018, the Company adopted ASU No. 2016-15, and the adoption did not have a material impact on its consolidated financial statements and disclosures. In November 2016, FASB issued ASU No. 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash” (“ASU No. 2016-18”), which provides guidance on the classification of restricted cash in the statement of cash flows. The Company adopted ASU No. 2016-18 as of January 1, 2018, and the adoption did not have a material effect on the Company's consolidated financial statements and disclosures. As a result of adopting the new guidance, $723,000 and $81,000 of restricted cash, which were previously included as operating cash outflows and investing cash outflows within the consolidated statements of cash flows for the nine months ended September 30, 2017, respectively, have been removed and are now included in the cash and restricted cash line items at the beginning and end of the period. In January 2017, FASB issued ASU No. 2017-01, "Business Combinations (Topic 805): 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. The Company adopted ASU No. 2017-01 as of January 1, 2018. Acquisitions during the nine months ended September 30, 2018 were evaluated under the new standard and accounted for as asset acquisitions. The Company believes any future property acquisitions will be accounted for as asset acquisitions, not business combinations. Accounting Standards Issued But Not Yet Effective In February 2016, FASB issued ASU No. 2016-02, "Leases" ("ASU No. 2016-02") and amended by ASU No. 2018-09 "Codification Improvements" in July 2018, 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 No. 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. 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. For leases in which the Company is the lessee, primarily consisting of a parking space lease and 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 July 2018, FASB issued ASU No. 2018-11, “Leases: Targeted Improvements” an additional amendment to ASU No. 2016-02. Although the Company is still evaluating this guidance, the Company believes it will apply the practical expedient allowed in this new guidance to combine lease and associated nonlease components by class of underlying asset. In addition, the Company is expected to utilize the optional method for adopting the new leasing guidance and not restate comparative periods. 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 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 to eliminate Step 2. Step 2 required that, if the carrying amount of a reporting unit exceeded its fair value, the implied fair value of the goodwill must be compared to the carrying amount in order to determine impairment. 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. In July 2018, FASB issued ASU No. 2018-09, "Codification Improvements". This standard does not prescribe any new accounting guidance, but instead makes minor improvements and clarifications of several different FASB Accounting Standards Codification areas based on comments and suggestions made by various stakeholders. Certain updates are applicable immediately while others provide for a transition period to adopt as part of the next fiscal year beginning after December 15, 2018. The Company is evaluating this guidance to determine the impact it may have on its consolidated financial statements. In August 2018, FASB issued ASU No. 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement.” This update removes, modifies and adds certain disclosure requirements in FASB ASC 820, “Fair Value Measurement” (“ASC 820”). ASU No. 2018-13 will be effective for the Company beginning January 1, 2020 and early adoption is permitted. The Company is continuing to evaluate this guidance; however, the Company does not expect the adoption of ASU No. 2018-13 to have a significant impact on its consolidated financial statements. Assets Held for Sale The Company presents rental property assets that 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. Subsequent to classification of an asset as held for sale, no further depreciation is recorded. As of September 30, 2018 and December 31, 2017 , the Company had one and zero rental properties, respectively, included in assets held for sale. Rental Properties The Company records acquired rental properties at fair value on the 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 Lease intangibles Remaining term of related lease 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, 2018 , the payments due under these obligations totaled $179,000 . 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 losses recorded on long-lived assets during the three and nine months ended September 30, 2018 and 2017 . 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 On January 1, 2018, the Company adopted ASU 2017-01. Acquisitions that do not meet the definition of a business under this guidance are accounted for as asset acquisitions. In most cases, the Company believes acquisitions of real estate will no longer be considered a business combination, as in most cases substantially all of the fair value is concentrated in a single identifiable asset or group of tangible assets that are physically attached to each other (land and building). However, if the Company determines that substantially all of the fair value of the gross assets acquired is not concentrated in either a single identifiable asset or in a group of similar identifiable assets, the Company will then perform an assessment to determine whether the set is a business by using the framework outlined in the ASU. If the Company determines that the acquired asset is not a business, the Company will allocate the cost of the acquisition, including transaction costs, to the assets acquired or liabilities assumed based on their related fair value. Upon the acquisition of real properties, the Company allocates the purchase price of properties to acquired tangible assets consisting of land, buildings, fixtures and improvements, identified intangible lease assets, consisting of the value of above-market and below-market leases, as applicable, the value of in-place leases, the value of tenant relationships, and liabilities, based in each case on their fair values. 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 determined by independent appraisers (e.g., discounted cash flow analysis). Factors to be considered in the analysis include an estimate of carrying costs during hypothetical expected lease-up periods considering current market conditions and costs to execute similar leases. In estimating carrying costs, management includes real estate taxes, insurance and other operating expenses and estimates of lost rentals at market rates during the expected lease-up periods. 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 total amount of other intangible assets acquired is further allocated to in-place lease values and 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. 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. 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, 2018 . 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. The future minimum rental payments to be received from noncancelable operating leases for residential rental properties are $74.1 million and $196,000 for the 12 month periods ending September 30, 2019 and 2020 , respectively, and none thereafter. The future minimum rental payments to be received from noncancelable operating leases for commercial rental properties and antenna rentals are $447,000 , $398,000 , $302,000 , $239,000 , and $86,000 for the 12 month periods ending September 30, 2019 , through September 30, 2023 , respectively, and $202,000 thereafter. Revenue is primarily derived from the rental of residential housing units for which the Company receives minimum rents and utility reimbursements pursuant to underlying tenant lease agreements. The Company also receives other ancillary tenant fees for administration of leases, late payments, amenities, and revenue sharing arrangements of cable income from contracts with cable providers at the Company's properties. As discussed earlier, the Company adopted ASU No. 2014-09 beginning January 1, 2018. A performance obligation is a promise in a contract to transfer a distinct good or service to a customer. The Company records utility reimbursement income and ancillary charges in the period when the performance obligation is completed, either at a point in time or on a monthly basis as the service is utilized. Included in Accrued expenses and other liabilities on the consolidated balance sheet at September 30, 2018 is a $559,000 contract liability relating to contracts with cable providers. The Company recognizes income on a straight line basis over the contract period of 10 years to 12 years . In the nine months ended September 30, 2018 , approximately $60,000 of revenue from the contract liability was recognized as income. 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, 2018 and December 31, 2017 , there were allowances for uncollectible receivables of $7,756 and $149,300 , respectively. Income Taxes The Company elected to be taxed as a REIT commencing with its taxable year ended December 31, 2010. 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 any of its subsidiaries as taxable REIT subsidiaries (“TRSs”). In general, the Company’s TRSs 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. While a TRS may generate net income, a TRS can declare dividends to the Company which will be included in the Company's taxable income and necessitate a distribution to its stockholders. Conversely, if the Company retains earnings at a TRS level, no distribution is required and the Company can increase book equity of the consolidated entity. As of September 30, 2018 and December 31, 2017 , 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 2013 and prior. Legislation commonly known as the Tax Cuts and Jobs Act ("TCJA") was signed into law on December 22, 2017. The TCJA makes significant changes to the U.S. federal income tax rules for taxation of individuals and corporations (including REITs), generally effective for taxable years beginning after December 31, 2017. The Company is continuing to evaluate this legislation, but does not expect it to have a significant impact. 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 49,995 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, 2018 (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). |
SUPPLEMENTAL CASH FLOW INFORMAT
SUPPLEMENTAL CASH FLOW INFORMATION | 9 Months Ended |
Sep. 30, 2018 | |
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, 2018 2017 Non-cash financing and investing activities: Stock issued from the distribution reinvestment plan $ 19,560 $ 20,421 Deferred financing costs funded directly by mortgage notes 57 449 Accruals for construction in progress 937 922 Non-cash activity related to dispositions: Mortgage notes payable settled directly with proceeds from sale of rental property 6,250 26,976 Non-cash activity related to acquisitions: Mortgage notes payable used to acquire rental property 55,672 93,750 Cash paid during the period for: Interest $ 25,055 $ 19,328 |
RESTRICTED CASH
RESTRICTED CASH | 9 Months Ended |
Sep. 30, 2018 | |
Cash and Cash Equivalents [Abstract] | |
RESTRICTED CASH | 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, 2018 December 31, 2017 Real estate taxes $ 10,040 $ 8,876 Insurance 1,349 1,995 Capital improvements 2,971 2,530 Total $ 14,360 $ 13,401 In addition, the Company had unrestricted cash earmarked for capital expenditures of $25.4 million and $31.3 million as of September 30, 2018 and December 31, 2017 , respectively. |
RENTAL PROPERTIES, NET
RENTAL PROPERTIES, NET | 9 Months Ended |
Sep. 30, 2018 | |
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, 2018 December 31, 2017 Land $ 200,848 $ 196,765 Building and improvements 962,968 905,739 Furniture, fixtures and equipment 43,372 37,796 Construction in progress 1,472 6,297 1,208,660 1,146,597 Less: accumulated depreciation (181,050 ) (147,708 ) $ 1,027,610 $ 998,889 Depreciation expense for the three and nine months ended September 30, 2018 was $14.0 million and $41.1 million , respectively, and for the three and nine months ended September 30, 2017 depreciation expense was $12.3 million and $35.9 million , respectively. During the three months ended September 30, 2018 , the Company entered into an agreement to sell one rental property, Retreat at Shawnee, with a net book value of $15.3 million . The Company confirmed the intent and ability to sell this property in its present condition and this property qualified for held for sale accounting treatment upon meeting all applicable criteria prior to September 30, 2018 , at which time depreciation ceased. As such, the assets associated with this property were separately classified and included as assets held for sale on the Company's consolidated balance sheet as of September 30, 2018 . However, the sale of this property did not qualify for discontinued operations, and, therefore, the operations for all periods presented continue to be classified within continuing operations on the Company's consolidated statements of operations. The Company completed the sale on October 19, 2018. |
LOAN HELD FOR INVESTMENT, NET
LOAN HELD FOR INVESTMENT, NET | 9 Months Ended |
Sep. 30, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
LOAN HELD FOR INVESTMENT, NET | 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, 2018 and December 31, 2017 , 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, 2018 and December 31, 2017 (in thousands): September 30, 2018 December 31, 2017 Unpaid principal balance $ 918 $ 934 Unamortized discount and acquisition costs (128 ) (152 ) Net book value $ 790 $ 782 Maturity date 10/28/2021 Interest rate 7.5 % Average monthly payment $ 8 The Company has evaluated the loan for impairment and determined that, as of September 30, 2018 , it was not impaired. There were no allowances for credit losses as of both September 30, 2018 and December 31, 2017 . There were no charge-offs for both the nine months ended September 30, 2018 and the nine months ended September 30, 2017 . |
ACQUISTIONS ACQUISITIONS
ACQUISTIONS ACQUISITIONS | 9 Months Ended |
Sep. 30, 2018 | |
Business Combinations [Abstract] | |
ACQUISITIONS | ACQUISITIONS As of September 30, 2018 , the Company owned interests in 31 properties. On April 17, 2018, the Company, through its wholly-owned subsidiary, purchased Addison at Sandy Springs Apartments, a 236 -unit multifamily apartment complex in Sandy Springs, Georgia, for $34.0 million from an unrelated third party. On April 25, 2018, the Company, through its wholly-owned subsidiary, purchased Bristol at Grapevine, a 376 -unit multifamily apartment complex in Grapevine, Texas, for $44.7 million from an unrelated third party. The following table presents the allocated contract purchase price, acquisition fee, and acquisition costs during the nine months ended September 30, 2018 (in thousands): Bristol at Grapevine Contractual Purchase Acquisition Fee Acquisition Costs Total Real Estate Cost Land $ 3,279 $ 70 $ 15 $ 3,364 Building and Improvements 39,777 854 187 40,818 Furniture, fixtures and equipment 570 12 3 585 Intangible Assets 1,074 23 5 1,102 $ 44,700 $ 959 $ 210 $ 45,869 Addison at Sandy Springs Contractual Purchase Acquisition Fee Acquisition Costs Total Real Estate Cost Land $ 4,595 $ 100 $ 24 $ 4,719 Building and Improvements 28,241 613 145 28,999 Furniture, fixtures and equipment 424 9 2 435 Intangible Assets 740 16 4 760 $ 34,000 $ 738 $ 175 $ 34,913 |
DISPOSITION OF PROPERTIES AND D
DISPOSITION OF PROPERTIES AND DECONSOLIDATION OF INTERESTS | 9 Months Ended |
Sep. 30, 2018 | |
Discontinued Operations and Disposal Groups [Abstract] | |
DISPOSITION OF PROPERTIES AND DECONSOLIDATION OF INTERESTS | DISPOSITION OF PROPERTIES AND DECONSOLIDATION OF INTERESTS The Company disposed of one property during the three and nine months ended September 30, 2018 . The following table presents details of the Company's disposition and deconsolidation activity during the three and nine months ended September 30, 2018 and 2017 (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, 2018 Nine months ended September 30, 2018 2018 Dispositions: Pheasant Run Lee's Summit, MO September 14, 2018 $ 16,400 $ 6,195 $ 6,195 $ 6,195 $ 6,195 2017 Dispositions: Three months ended September 30, 2017 Nine months ended September 30, 2017 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 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, 2018 and 2017 (in thousands): Revenues Attributable to Properties Sold Net Income (Loss) Attributable to Properties Sold Multifamily Community Three months ended September 30, 2018 Nine months ended September 30, 2018 Three months ended September 30, 2018 Nine months ended September 30, 2018 2018 Dispositions: Pheasant Run $ 342 $ 1,169 $ 6,230 $ 6,217 $ 342 $ 1,169 $ 6,230 $ 6,217 2017 Dispositions: Three months ended September 30, 2017 Nine months ended September 30, 2017 Three months ended September 30, 2017 Nine months ended September 30, 2017 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 On September 4, 2018, the Company entered into an agreement to sell its interest in Retreat at Shawnee, located in Shawnee, Kansas, for $25.0 million . Retreat at Shawnee is included in assets held for sale-rental properties in the consolidated balance sheet as of September 30, 2018. The Company completed the sale on October 19, 2018 and expects to recognize a gain on sale during the three months ended December 31, 2018. |
IDENTIFIED INTANGIBLE ASSETS, N
IDENTIFIED INTANGIBLE ASSETS, NET AND GOODWILL | 9 Months Ended |
Sep. 30, 2018 | |
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 $553,000 and $1.8 million as of September 30, 2018 and December 31, 2017 , respectively, net of accumulated amortization of $29.4 million and $26.6 million , respectively. The weighted-average remaining life of the acquired apartment unit rental leases was two months and five months as of September 30, 2018 and December 31, 2017 , respectively. Expected amortization for the antennae leases at the Vista Apartment Homes for the years ending September 30, 2019 , 2020 , 2021 , and 2022 are $12,544 , $10,768 , $5,358 , $674 , respectively, and none thereafter. Amortization of the apartment unit rental and antennae leases for the three and nine months ended September 30, 2018 was $840,100 and $3.1 million , respectively. 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. 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): 2019 $ 536 2020 11 2021 5 2022 1 Thereafter — $ 553 As of September 30, 2018 and December 31, 2017 , the Company had $594,000 and $670,000 , respectively, of goodwill included on the consolidated balance sheets. The following table presents the Company's activity in goodwill for the nine months ended September 30, 2018 (in thousands): Balance, January 1, 2018 $ 670 Sale of Pheasant Run (76 ) Balance, September 30, 2018 $ 594 |
MORTGAGE NOTES PAYABLE, NET
MORTGAGE NOTES PAYABLE, NET | 9 Months Ended |
Sep. 30, 2018 | |
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, 2018 December 31, 2017 Collateral Outstanding Borrowings Premium (Discount) Deferred finance costs, net Carrying Value Outstanding Borrowings Premium (Discount) Deferred finance costs, net Carrying Value Vista Apartment Homes $ 14,674 $ — $ (113 ) $ 14,561 $ 14,896 $ — $ (140 ) $ 14,756 Cannery Lofts 13,100 — (144 ) 12,956 13,100 — (165 ) 12,935 Trailpoint at the Woodlands 18,126 — (163 ) 17,963 18,368 — (188 ) 18,180 Verona Apartment Homes 32,970 — (433 ) 32,537 32,970 — (475 ) 32,495 Skyview Apartment Homes 28,400 — (376 ) 28,024 28,400 — (413 ) 27,987 Maxwell Townhomes 13,139 — (88 ) 13,051 13,342 — (109 ) 13,233 Pinehurst 7,249 — (111 ) 7,138 7,339 — (128 ) 7,211 Pheasant Run — — — — 6,250 — — 6,250 Retreat of Shawnee 12,486 — — 12,486 12,682 7 (2 ) 12,687 Evergreen at Coursey Place 26,272 61 (59 ) 26,274 26,639 77 (75 ) 26,641 Pines of York 14,498 (189 ) (36 ) 14,273 14,717 (235 ) (44 ) 14,438 The Estates at Johns Creek 47,836 — (199 ) 47,637 48,603 — (286 ) 48,317 Perimeter Circle 16,634 — (42 ) 16,592 16,923 — (84 ) 16,839 Perimeter 5550 13,128 — (35 ) 13,093 13,356 — (70 ) 13,286 Aston at Cinco Ranch 22,611 — (167 ) 22,444 22,942 — (210 ) 22,732 Sunset Ridge 1 18,907 138 (109 ) 18,936 19,254 189 (150 ) 19,293 Sunset Ridge 2 2,846 19 (14 ) 2,851 2,890 26 (19 ) 2,897 Calloway at Las Colinas 33,863 — (193 ) 33,670 34,396 — (241 ) 34,155 South Lamar Village 11,977 — (41 ) 11,936 12,177 — (80 ) 12,097 Heritage Pointe 25,498 — (252 ) 25,246 25,912 — (284 ) 25,628 The Bryant at Yorba Linda 67,500 — (356 ) 67,144 67,500 — (461 ) 67,039 Point Bonita Apartment Homes 26,225 1,435 (246 ) 27,414 26,525 1,660 (285 ) 27,900 The Westside Apartments 36,820 — (354 ) 36,466 36,820 — (390 ) 36,430 Tech Center Square 11,984 — (140 ) 11,844 12,141 — (164 ) 11,977 Williamsburg 53,995 — (613 ) 53,382 53,995 — (706 ) 53,289 Retreat at Rocky Ridge 11,375 — (193 ) 11,182 11,375 — (223 ) 11,152 Providence in the Park 47,000 — (456 ) 46,544 47,000 — (524 ) 46,476 Green Trails Apartment Homes 61,500 — (586 ) 60,914 61,500 — (667 ) 60,833 Meridian Pointe 39,500 — (518 ) 38,982 39,500 — (588 ) 38,912 Terraces at Lake Mary 32,250 — (333 ) 31,917 32,250 — (377 ) 31,873 Courtney Meadows Apartments 27,100 — (325 ) 26,775 27,100 — (367 ) 26,733 Addison at Sandy Springs 22,750 — (304 ) 22,446 — — — — Bristol at Grapevine 32,922 — (380 ) 32,542 — — — — $ 845,135 $ 1,464 $ (7,379 ) $ 839,220 $ 800,862 $ 1,724 $ (7,915 ) $ 794,671 The following table presents additional information about the Company's mortgage notes payable, net (in thousands, except percentages) as of September 30, 2018 : Collateral Maturity Date Annual Interest Rate Average Monthly Debt Service Average Monthly Escrow Vista Apartment Homes 1/1/2022 4.55% (1)(5) $ 79 $ 17 Cannery Lofts 11/1/2023 4.80% (1)(3) 52 26 Trailpoint at the Woodlands 11/1/2023 4.67% (1)(4) 95 47 Verona Apartment Homes 10/1/2026 4.62% (1)(3) 125 40 Skyview Apartment Homes 10/1/2026 4.62% (1)(3) 107 24 Maxwell Townhomes 1/1/2022 4.32% (2)(5) 71 78 Pinehurst 11/1/2023 4.68% (1)(3) 38 15 Retreat of Shawnee 2/1/2019 4.76% (1)(6) 78 28 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 79 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 4.14% (1)(4) 130 43 The Bryant at Yorba Linda 6/1/2020 4.01% (1)(3) 297 — Point Bonita Apartment Homes 10/1/2023 5.33% (2)(5) 152 61 The Westside Apartments 9/1/2026 4.38% (1)(3) 196 69 Tech Center Square 6/1/2023 4.84% (1)(5) 65 24 Williamsburg 1/1/2024 4.64% (1)(3) 252 167 Retreat at Rocky Ridge 1/1/2024 4.72% (1)(3) 54 23 Providence in the Park 2/1/2024 4.56% (1)(3) 212 138 Green Trails Apartment Homes 6/1/2024 4.25% (1)(3) 234 79 Meridian Pointe 8/1/2024 4.16% (1)(3) 138 56 Terraces at Lake Mary 9/1/2024 4.17% (1)(3) 110 46 Courtney Meadows Apartments 1/1/2025 4.10% (1)(3) 91 51 Addison at Sandy Springs 5/1/2025 4.02% (1)(3)(7) 74 38 Bristol at Grapevine 5/1/2025 3.97% (1)(3)(7) 106 78 (1) Variable rate based on one-month LIBOR of 2.2606% (as of September 30, 2018 ) 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) Mortgage note payable related to asset held for sale at September 30, 2018 . (7) New debt placed during the nine months ended September 30, 2018 . Loans assumed as part of the Point Bonita Apartment Homes, South Lamar Village, Paladin (Pinehurst, 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, 2018 and 2017 , interest expense was reduced by $85,000 and $120,000 , respectively, for the amortization of the premium or discount. For the nine months ended September 30, 2018 and 2017 , interest expense was reduced by $260,000 and $359,000 , 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): 2019 $ 63,305 2020 123,564 2021 57,351 2022 102,312 2023 21,163 Thereafter 477,440 $ 845,135 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 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. During the nine months ended September 30, 2018 , the Company paid $50,000 to the lender in connection with an amendment to the loan agreement to modify the debt service coverage ratio covenant. The Company was in compliance with all covenants related to this loan as of September 30, 2018 . Deferred financing costs incurred to obtain financing are amortized over the term of the related debt. During the three months ended September 30, 2018 and September 30, 2017 , $456,000 and $633,000 , respectively, of amortization of deferred financing costs was included in interest expense. During the nine months ended September 30, 2018 and September 30, 2017 , $1.3 million and $1.5 million , respectively, of amortization of deferred financing costs was included in interest expense. Accumulated amortization as of September 30, 2018 and December 31, 2017 was $5.3 million and $4.0 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): 2019 $ 1,758 2020 1,517 2021 1,209 2022 1,007 2023 948 Thereafter 940 $ 7,379 |
CREDIT FACILITY
CREDIT FACILITY | 9 Months Ended |
Sep. 30, 2018 | |
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. Deferred financing costs incurred to obtain financing were amortized over the term of the related debt. During the three months ended September 30, 2018 and 2017 , there was no amortization of deferred financing costs included in interest expense. During the nine months ended September 30, 2018 and 2017 , $0 and $68,000 , respectively, of amortization of deferred financing costs was included in interest expense. Deferred financing costs were fully amortized on the date of maturity. |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE LOSS | 9 Months Ended |
Sep. 30, 2018 | |
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, 2018 (in thousands): Balance, January 1, 2018 $ (562 ) Reclassification adjustment for realized loss on designated derivatives 144 Designated derivatives, fair value adjustments (23 ) Balance, September 30, 2018 $ (441 ) |
CERTAIN RELATIONSHIPS AND RELAT
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS | 9 Months Ended |
Sep. 30, 2018 | |
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 either a $25,000 or a $100,000 deductible per incident depending on the location and/or type of loss. 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, 2018 , the Company paid $940,327 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 covered 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. Directors and officers liability insurance. The Company participates in a liability insurance program for directors and officers coverage with other C-III managed entities and subsidiaries for coverage up to $100.0 million . The Company paid premiums of $283,533 during the year ended December 31, 2018 in connection with this insurance program for an annual policy through September 2019. 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, 2018. 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 for which they are reimbursed. Relationship with Other Related Parties 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 $ 146 $ 371 Due to related parties: Advisor: Asset management fees $ — $ 15 Operating expense reimbursements 62 32 Manager: Property management fees 531 476 Other operating expense reimbursements 127 196 $ 720 $ 719 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, 2018 2017 2018 2017 Fees earned / expenses paid to related parties: Advisor: Acquisition fees (1) $ — $ 953 $ 1,697 $ 2,565 Asset management fees (2) 3,307 2,893 9,663 8,370 Disposition fees (3) 73 144 73 361 Debt financing fees (4) — 358 278 901 Overhead allocation (5) 1,153 1,091 3,390 3,399 Internal audit (5) 27 21 75 47 Manager: Property management fees (2) $ 1,612 $ 1,429 $ 4,647 $ 4,158 Construction management fees (6) 197 188 633 712 Construction payroll reimbursements (6) 65 57 146 166 Acquisition-related reimbursements (5) — 20 53 38 Operating expense reimbursements (7) 114 218 342 723 Debt servicing fees (2) 1 1 2 2 Other: The Planning & Zoning Resource Company (1) — 2 2 3 Graphic Images (5) — — — 9 (1) For the three and nine months ended September 30, 2017 , Acquisition fees are included in Acquisition costs on the consolidated statements of operations and comprehensive income (loss). For the three and nine months ended September 30, 2018 , Acquisition fees are capitalized and included in Rental Properties, net on the consolidated balance sheet. (2) Included in Management fees on the consolidated statements of operations and comprehensive income (loss). (3) Included in Net gains on dispositions of properties on the consolidated statements of operations and comprehensive (loss) income. (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) Capitalized and 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). |
EQUITY
EQUITY | 9 Months Ended |
Sep. 30, 2018 | |
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, 2018 and December 31, 2017 , no shares of preferred stock were issued and outstanding. Common Stock As of September 30, 2018 , the Company had an aggregate of 70,563,588 shares of its $0.01 par value common stock outstanding 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 13,429,165 138,058 Shares issued in conjunction with the Advisor's initial investment, 15,500 155 Total 79,326,119 $ 772,872 Shares redeemed and retired (8,762,531 ) Total shares outstanding as of September 30, 2018 70,563,588 (1) Includes 276,056 shares issued to the Advisor. Convertible Stock As of September 30, 2018 and December 31, 2017 , the Company had 49,995 shares of $0.01 par value convertible stock outstanding of which the Advisor and affiliated persons own 49,063 shares and outside investors own 932 shares. In 2017, the Company repurchased and retired five 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. As of September 30, 2018 , no Triggering Event has occurred. Redemption of Securities During the nine months ended September 30, 2018 , the Company redeemed shares of its outstanding common stock as follows (in thousands, except per share data): Period Total Number of Shares Redeemed (1) Average Price Paid per Share January 2018 — — February 2018 — — March 2018 1,006 $10.94 April 2018 — — May 2018 — — June 2018 843 $10.26 July 2018 — — August 2018 — — September 2018 755 $10.29 2,604 (1) All redemptions of equity securities by the Company during the nine months ended September 30, 2018 were made pursuant to the Company's share redemption program. All redemptions requests tendered were honored during the three and nine months ended September 30, 2018 . 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. On March 28, 2018, the Company's Board of Directors approved and adopted a Second Amended and Restated Share Redemption Program (the “Amended SRP”). Pursuant to the Amended SRP, the Company redeems shares at a purchase price equal to 95% of the current net asset value per share redeemed, except for redemptions sought upon a stockholder's death, qualifying disability or confinement to a long-term care facility. The Amended SRP became effective for redemptions occurring after April 29, 2018. 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, 2018 , the Company paid aggregate distributions of $31.9 million , including $12.3 million of distributions paid in cash and $19.6 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, 2018 $0.05 January 31, 2018 $ 2,217 $ 1,352 $ 3,569 February 27, 2018 0.05 February 28, 2018 2,214 1,362 3,576 March 29, 2018 0.05 April 2, 2018 2,182 1,353 3,535 April 27, 2018 0.05 April 30, 2018 2,181 1,364 3,545 May 30, 2018 0.05 May 31, 2018 2,176 1,379 3,555 June 28, 2018 0.05 June 29, 2018 2,151 1,373 3,524 July 30, 2018 0.05 July 31, 2018 2,155 1,380 3,535 August 30, 2018 0.05 August 31, 2018 2,151 1,394 3,545 September 27, 2018 0.05 September 28, 2018 2,133 1,384 3,517 $0.45 $ 19,560 $ 12,341 $ 31,901 |
FAIR VALUE MEASURES AND DISCLOS
FAIR VALUE MEASURES AND DISCLOSURES | 9 Months Ended |
Sep. 30, 2018 | |
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, 2018 Assets: Interest rate caps $ — $ 67 $ — $ 67 $ — $ 67 $ — $ 67 December 31, 2017 Assets: Interest rate caps $ — $ 49 $ — $ 49 $ — $ 49 $ — $ 49 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, 2018 December 31, 2017 Carrying Amount Fair Value Carrying Amount Fair Value Loan held for investment, net $ 790 $ 982 $ 782 $ 1,057 Mortgage notes payable- outstanding borrowings $ (845,135 ) $ (836,431 ) $ (800,862 ) $ (802,523 ) 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, 2018 | |
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, 2018 , 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, 2018 , the Company had losses of $62,000 and $144,000 , respectively. During the three and nine months ended September 30, 2017 , the Company had losses of $42,000 and $117,000 , 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 $278,000 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, 2018 (dollars in thousands): Interest Rate Derivative Number of Instruments Notional Maturity Dates Interest Rate Caps 17 $ 507,000 November 1, 2018 to May 1, 2021 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, 2018 and December 31, 2017 (in thousands): Asset Derivatives Liability Derivatives September 30, 2018 December 31, 2017 September 30, 2018 December 31, 2017 Balance Sheet Fair Value Balance Sheet Fair Value Balance Sheet Fair Value Balance Sheet Fair Value Prepaid expenses and other assets $ 67 Prepaid expenses and other assets $ 49 — $ — — $ — |
OPERATING EXPENSE LIMITATION
OPERATING EXPENSE LIMITATION | 9 Months Ended |
Sep. 30, 2018 | |
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, 2018 were in compliance with the charter-imposed limitation. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2018 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS On October 30, 2018, 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, 2018, November 29, 2018, and December 28, 2018. Such distributions were paid or will be paid on October 31, 2018, November 30, 2018, and December 31, 2018, respectively. The Company has evaluated subsequent events and determined that no events have occurred, other than those disclosed above or elsewhere in the financial statements, which would require an adjustment to or additional disclosure in the consolidated financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying 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 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") (a) Evergreen at Coursey Place 352 Baton Rouge, LA PRIP 500, LLC ("Pinehurst") (a) Pinehurst 146 Kansas City, MO PRIP 1102, LLC ("Pheasant Run") (a) (b) Pheasant Run — Lee's Summit, MO PRIP 11128, LLC ("Retreat at Shawnee") (a) Retreat at Shawnee 342 Shawnee, KS PRIP Pines, LLC ("Pines of York") (a) Pines of York 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 RRE Courtney Meadows Holdings, LLC ("Courtney Meadows") Courtney Meadows Apartments 276 Jacksonville, FL RRE Sandy Springs Holdings, LLC ("Sandy Springs") Addison at Sandy Springs 236 Sandy Springs, GA RRE Grapevine Holdings, LLC ("Bristol Grapevine") Bristol Grapevine 376 Grapevine, TX 9,952 N/A - Not Applicable (a) Wholly-owned subsidiary of RRE Charlemagne Holdings, LLC. (b) Underlying investment sold on September 14, 2018. All intercompany accounts and transactions have been eliminated in consolidation. |
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 amounts reported in the financial statements and the accompanying notes. Actual results could differ from those estimates. |
Adoption of New Accounting Standards | Adoption of New Accounting Standards In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-09, “Revenue from Contracts with Customers” ("ASU No. 2014-09"), which replaces most existing revenue recognition guidance in GAAP. Under the new standard, revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred, the fee is fixed or determinable, and collectability is probable. 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. The Company adopted ASU 2014-09 as of January 1, 2018 using the modified retrospective approach. The majority of the Company’s revenue is derived from residential rental income and other lease income, which are scoped out from this standard and included in the current lease accounting framework, and will be accounted for under ASU No. 2016-02, "Leases", as discussed below. Revenue streams that are in the scope of the new standards include (but are not limited to) administrative and late fees and revenue sharing arrangements of cable income from contracts with cable providers at the Company's properties. The accounting for these revenue streams were not affected by the adoption of ASU 2014-09, nor was there a cumulative effect of initially applying the standard. 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. On January 1, 2018, the Company adopted ASU No. 2016-15, and the adoption did not have a material impact on its consolidated financial statements and disclosures. In November 2016, FASB issued ASU No. 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash” (“ASU No. 2016-18”), which provides guidance on the classification of restricted cash in the statement of cash flows. The Company adopted ASU No. 2016-18 as of January 1, 2018, and the adoption did not have a material effect on the Company's consolidated financial statements and disclosures. As a result of adopting the new guidance, $723,000 and $81,000 of restricted cash, which were previously included as operating cash outflows and investing cash outflows within the consolidated statements of cash flows for the nine months ended September 30, 2017, respectively, have been removed and are now included in the cash and restricted cash line items at the beginning and end of the period. In January 2017, FASB issued ASU No. 2017-01, "Business Combinations (Topic 805): 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. The Company adopted ASU No. 2017-01 as of January 1, 2018. Acquisitions during the nine months ended September 30, 2018 were evaluated under the new standard and accounted for as asset acquisitions. The Company believes any future property acquisitions will be accounted for as asset acquisitions, not business combinations. Accounting Standards Issued But Not Yet Effective In February 2016, FASB issued ASU No. 2016-02, "Leases" ("ASU No. 2016-02") and amended by ASU No. 2018-09 "Codification Improvements" in July 2018, 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 No. 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. 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. For leases in which the Company is the lessee, primarily consisting of a parking space lease and 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 July 2018, FASB issued ASU No. 2018-11, “Leases: Targeted Improvements” an additional amendment to ASU No. 2016-02. Although the Company is still evaluating this guidance, the Company believes it will apply the practical expedient allowed in this new guidance to combine lease and associated nonlease components by class of underlying asset. In addition, the Company is expected to utilize the optional method for adopting the new leasing guidance and not restate comparative periods. 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 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 to eliminate Step 2. Step 2 required that, if the carrying amount of a reporting unit exceeded its fair value, the implied fair value of the goodwill must be compared to the carrying amount in order to determine impairment. 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. In July 2018, FASB issued ASU No. 2018-09, "Codification Improvements". This standard does not prescribe any new accounting guidance, but instead makes minor improvements and clarifications of several different FASB Accounting Standards Codification areas based on comments and suggestions made by various stakeholders. Certain updates are applicable immediately while others provide for a transition period to adopt as part of the next fiscal year beginning after December 15, 2018. The Company is evaluating this guidance to determine the impact it may have on its consolidated financial statements. In August 2018, FASB issued ASU No. 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement.” This update removes, modifies and adds certain disclosure requirements in FASB ASC 820, “Fair Value Measurement” (“ASC 820”). ASU No. 2018-13 will be effective for the Company beginning January 1, 2020 and early adoption is permitted. The Company is continuing to evaluate this guidance; however, the Company does not expect the adoption of ASU No. 2018-13 to have a significant impact on its consolidated financial statements. |
Assets Held for Sale | Assets Held for Sale The Company presents rental property assets that 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. Subsequent to classification of an asset as held for sale, no further depreciation is recorded. |
Rental Properties | Rental Properties The Company records acquired rental properties at fair value on the 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 Lease intangibles Remaining term of related lease 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. |
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. |
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 On January 1, 2018, the Company adopted ASU 2017-01. Acquisitions that do not meet the definition of a business under this guidance are accounted for as asset acquisitions. In most cases, the Company believes acquisitions of real estate will no longer be considered a business combination, as in most cases substantially all of the fair value is concentrated in a single identifiable asset or group of tangible assets that are physically attached to each other (land and building). However, if the Company determines that substantially all of the fair value of the gross assets acquired is not concentrated in either a single identifiable asset or in a group of similar identifiable assets, the Company will then perform an assessment to determine whether the set is a business by using the framework outlined in the ASU. If the Company determines that the acquired asset is not a business, the Company will allocate the cost of the acquisition, including transaction costs, to the assets acquired or liabilities assumed based on their related fair value. Upon the acquisition of real properties, the Company allocates the purchase price of properties to acquired tangible assets consisting of land, buildings, fixtures and improvements, identified intangible lease assets, consisting of the value of above-market and below-market leases, as applicable, the value of in-place leases, the value of tenant relationships, and liabilities, based in each case on their fair values. 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 determined by independent appraisers (e.g., discounted cash flow analysis). Factors to be considered in the analysis include an estimate of carrying costs during hypothetical expected lease-up periods considering current market conditions and costs to execute similar leases. In estimating carrying costs, management includes real estate taxes, insurance and other operating expenses and estimates of lost rentals at market rates during the expected lease-up periods. 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 total amount of other intangible assets acquired is further allocated to in-place lease values and 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. 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. |
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. |
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. The future minimum rental payments to be received from noncancelable operating leases for residential rental properties are $74.1 million and $196,000 for the 12 month periods ending September 30, 2019 and 2020 , respectively, and none thereafter. The future minimum rental payments to be received from noncancelable operating leases for commercial rental properties and antenna rentals are $447,000 , $398,000 , $302,000 , $239,000 , and $86,000 for the 12 month periods ending September 30, 2019 , through September 30, 2023 , respectively, and $202,000 thereafter. Revenue is primarily derived from the rental of residential housing units for which the Company receives minimum rents and utility reimbursements pursuant to underlying tenant lease agreements. The Company also receives other ancillary tenant fees for administration of leases, late payments, amenities, and revenue sharing arrangements of cable income from contracts with cable providers at the Company's properties. As discussed earlier, the Company adopted ASU No. 2014-09 beginning January 1, 2018. A performance obligation is a promise in a contract to transfer a distinct good or service to a customer. The Company records utility reimbursement income and ancillary charges in the period when the performance obligation is completed, either at a point in time or on a monthly basis as the service is utilized. Included in Accrued expenses and other liabilities on the consolidated balance sheet at September 30, 2018 is a $559,000 contract liability relating to contracts with cable providers. The Company recognizes income on a straight line basis over the contract period of 10 years to 12 years . In the nine months ended September 30, 2018 , approximately $60,000 of revenue from the contract liability was recognized as income. |
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. |
Income Taxes | Income Taxes The Company elected to be taxed as a REIT commencing with its taxable year ended December 31, 2010. 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 any of its subsidiaries as taxable REIT subsidiaries (“TRSs”). In general, the Company’s TRSs 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. While a TRS may generate net income, a TRS can declare dividends to the Company which will be included in the Company's taxable income and necessitate a distribution to its stockholders. Conversely, if the Company retains earnings at a TRS level, no distribution is required and the Company can increase book equity of the consolidated entity. As of September 30, 2018 and December 31, 2017 , 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 2013 and prior. Legislation commonly known as the Tax Cuts and Jobs Act ("TCJA") was signed into law on December 22, 2017. The TCJA makes significant changes to the U.S. federal income tax rules for taxation of individuals and corporations (including REITs), generally effective for taxable years beginning after December 31, 2017. The Company is continuing to evaluate this legislation, but does not expect it to have a significant impact. |
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. |
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). |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Wholly Owned Subsidiaries Information | 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 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") (a) Evergreen at Coursey Place 352 Baton Rouge, LA PRIP 500, LLC ("Pinehurst") (a) Pinehurst 146 Kansas City, MO PRIP 1102, LLC ("Pheasant Run") (a) (b) Pheasant Run — Lee's Summit, MO PRIP 11128, LLC ("Retreat at Shawnee") (a) Retreat at Shawnee 342 Shawnee, KS PRIP Pines, LLC ("Pines of York") (a) Pines of York 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 RRE Courtney Meadows Holdings, LLC ("Courtney Meadows") Courtney Meadows Apartments 276 Jacksonville, FL RRE Sandy Springs Holdings, LLC ("Sandy Springs") Addison at Sandy Springs 236 Sandy Springs, GA RRE Grapevine Holdings, LLC ("Bristol Grapevine") Bristol Grapevine 376 Grapevine, TX 9,952 N/A - Not Applicable (a) Wholly-owned subsidiary of RRE Charlemagne Holdings, LLC. (b) Underlying investment sold on September 14, 2018. |
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 Lease intangibles Remaining term of related lease |
SUPPLEMENTAL CASH FLOW INFORM_2
SUPPLEMENTAL CASH FLOW INFORMATION (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
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, 2018 2017 Non-cash financing and investing activities: Stock issued from the distribution reinvestment plan $ 19,560 $ 20,421 Deferred financing costs funded directly by mortgage notes 57 449 Accruals for construction in progress 937 922 Non-cash activity related to dispositions: Mortgage notes payable settled directly with proceeds from sale of rental property 6,250 26,976 Non-cash activity related to acquisitions: Mortgage notes payable used to acquire rental property 55,672 93,750 Cash paid during the period for: Interest $ 25,055 $ 19,328 |
RESTRICTED CASH (Tables)
RESTRICTED CASH (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
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, 2018 December 31, 2017 Real estate taxes $ 10,040 $ 8,876 Insurance 1,349 1,995 Capital improvements 2,971 2,530 Total $ 14,360 $ 13,401 |
RENTAL PROPERTIES, NET (Tables)
RENTAL PROPERTIES, NET (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
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, 2018 December 31, 2017 Land $ 200,848 $ 196,765 Building and improvements 962,968 905,739 Furniture, fixtures and equipment 43,372 37,796 Construction in progress 1,472 6,297 1,208,660 1,146,597 Less: accumulated depreciation (181,050 ) (147,708 ) $ 1,027,610 $ 998,889 |
LOAN HELD FOR INVESTMENT, NET (
LOAN HELD FOR INVESTMENT, NET (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
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, 2018 and December 31, 2017 (in thousands): September 30, 2018 December 31, 2017 Unpaid principal balance $ 918 $ 934 Unamortized discount and acquisition costs (128 ) (152 ) Net book value $ 790 $ 782 Maturity date 10/28/2021 Interest rate 7.5 % Average monthly payment $ 8 |
ACQUISTIONS (Tables)
ACQUISTIONS (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Business Combinations [Abstract] | |
Schedule of Allocated Contract Purchase Price, Acquisition Fee, and Acquisition Costs | The following table presents the allocated contract purchase price, acquisition fee, and acquisition costs during the nine months ended September 30, 2018 (in thousands): Bristol at Grapevine Contractual Purchase Acquisition Fee Acquisition Costs Total Real Estate Cost Land $ 3,279 $ 70 $ 15 $ 3,364 Building and Improvements 39,777 854 187 40,818 Furniture, fixtures and equipment 570 12 3 585 Intangible Assets 1,074 23 5 1,102 $ 44,700 $ 959 $ 210 $ 45,869 Addison at Sandy Springs Contractual Purchase Acquisition Fee Acquisition Costs Total Real Estate Cost Land $ 4,595 $ 100 $ 24 $ 4,719 Building and Improvements 28,241 613 145 28,999 Furniture, fixtures and equipment 424 9 2 435 Intangible Assets 740 16 4 760 $ 34,000 $ 738 $ 175 $ 34,913 |
Schedule of Acquisitions | The following table presents the allocated contract purchase price, acquisition fee, and acquisition costs during the nine months ended September 30, 2018 (in thousands): Bristol at Grapevine Contractual Purchase Acquisition Fee Acquisition Costs Total Real Estate Cost Land $ 3,279 $ 70 $ 15 $ 3,364 Building and Improvements 39,777 854 187 40,818 Furniture, fixtures and equipment 570 12 3 585 Intangible Assets 1,074 23 5 1,102 $ 44,700 $ 959 $ 210 $ 45,869 Addison at Sandy Springs Contractual Purchase Acquisition Fee Acquisition Costs Total Real Estate Cost Land $ 4,595 $ 100 $ 24 $ 4,719 Building and Improvements 28,241 613 145 28,999 Furniture, fixtures and equipment 424 9 2 435 Intangible Assets 740 16 4 760 $ 34,000 $ 738 $ 175 $ 34,913 |
DISPOSITION OF PROPERTIES AND_2
DISPOSITION OF PROPERTIES AND DECONSOLIDATION OF INTERESTS (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Summary of Disposition and Deconsolidation Activity | The following table presents details of the Company's disposition and deconsolidation activity during the three and nine months ended September 30, 2018 and 2017 (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, 2018 Nine months ended September 30, 2018 2018 Dispositions: Pheasant Run Lee's Summit, MO September 14, 2018 $ 16,400 $ 6,195 $ 6,195 $ 6,195 $ 6,195 2017 Dispositions: Three months ended September 30, 2017 Nine months ended September 30, 2017 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 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, 2018 and 2017 (in thousands): Revenues Attributable to Properties Sold Net Income (Loss) Attributable to Properties Sold Multifamily Community Three months ended September 30, 2018 Nine months ended September 30, 2018 Three months ended September 30, 2018 Nine months ended September 30, 2018 2018 Dispositions: Pheasant Run $ 342 $ 1,169 $ 6,230 $ 6,217 $ 342 $ 1,169 $ 6,230 $ 6,217 2017 Dispositions: Three months ended September 30, 2017 Nine months ended September 30, 2017 Three months ended September 30, 2017 Nine months ended September 30, 2017 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 |
IDENTIFIED INTANGIBLE ASSETS,_2
IDENTIFIED INTANGIBLE ASSETS, NET AND GOODWILL (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
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): 2019 $ 536 2020 11 2021 5 2022 1 Thereafter — $ 553 |
Summary of Goodwill | The following table presents the Company's activity in goodwill for the nine months ended September 30, 2018 (in thousands): Balance, January 1, 2018 $ 670 Sale of Pheasant Run (76 ) Balance, September 30, 2018 $ 594 |
MORTGAGE NOTES PAYABLE, NET (Ta
MORTGAGE NOTES PAYABLE, NET (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
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, 2018 December 31, 2017 Collateral Outstanding Borrowings Premium (Discount) Deferred finance costs, net Carrying Value Outstanding Borrowings Premium (Discount) Deferred finance costs, net Carrying Value Vista Apartment Homes $ 14,674 $ — $ (113 ) $ 14,561 $ 14,896 $ — $ (140 ) $ 14,756 Cannery Lofts 13,100 — (144 ) 12,956 13,100 — (165 ) 12,935 Trailpoint at the Woodlands 18,126 — (163 ) 17,963 18,368 — (188 ) 18,180 Verona Apartment Homes 32,970 — (433 ) 32,537 32,970 — (475 ) 32,495 Skyview Apartment Homes 28,400 — (376 ) 28,024 28,400 — (413 ) 27,987 Maxwell Townhomes 13,139 — (88 ) 13,051 13,342 — (109 ) 13,233 Pinehurst 7,249 — (111 ) 7,138 7,339 — (128 ) 7,211 Pheasant Run — — — — 6,250 — — 6,250 Retreat of Shawnee 12,486 — — 12,486 12,682 7 (2 ) 12,687 Evergreen at Coursey Place 26,272 61 (59 ) 26,274 26,639 77 (75 ) 26,641 Pines of York 14,498 (189 ) (36 ) 14,273 14,717 (235 ) (44 ) 14,438 The Estates at Johns Creek 47,836 — (199 ) 47,637 48,603 — (286 ) 48,317 Perimeter Circle 16,634 — (42 ) 16,592 16,923 — (84 ) 16,839 Perimeter 5550 13,128 — (35 ) 13,093 13,356 — (70 ) 13,286 Aston at Cinco Ranch 22,611 — (167 ) 22,444 22,942 — (210 ) 22,732 Sunset Ridge 1 18,907 138 (109 ) 18,936 19,254 189 (150 ) 19,293 Sunset Ridge 2 2,846 19 (14 ) 2,851 2,890 26 (19 ) 2,897 Calloway at Las Colinas 33,863 — (193 ) 33,670 34,396 — (241 ) 34,155 South Lamar Village 11,977 — (41 ) 11,936 12,177 — (80 ) 12,097 Heritage Pointe 25,498 — (252 ) 25,246 25,912 — (284 ) 25,628 The Bryant at Yorba Linda 67,500 — (356 ) 67,144 67,500 — (461 ) 67,039 Point Bonita Apartment Homes 26,225 1,435 (246 ) 27,414 26,525 1,660 (285 ) 27,900 The Westside Apartments 36,820 — (354 ) 36,466 36,820 — (390 ) 36,430 Tech Center Square 11,984 — (140 ) 11,844 12,141 — (164 ) 11,977 Williamsburg 53,995 — (613 ) 53,382 53,995 — (706 ) 53,289 Retreat at Rocky Ridge 11,375 — (193 ) 11,182 11,375 — (223 ) 11,152 Providence in the Park 47,000 — (456 ) 46,544 47,000 — (524 ) 46,476 Green Trails Apartment Homes 61,500 — (586 ) 60,914 61,500 — (667 ) 60,833 Meridian Pointe 39,500 — (518 ) 38,982 39,500 — (588 ) 38,912 Terraces at Lake Mary 32,250 — (333 ) 31,917 32,250 — (377 ) 31,873 Courtney Meadows Apartments 27,100 — (325 ) 26,775 27,100 — (367 ) 26,733 Addison at Sandy Springs 22,750 — (304 ) 22,446 — — — — Bristol at Grapevine 32,922 — (380 ) 32,542 — — — — $ 845,135 $ 1,464 $ (7,379 ) $ 839,220 $ 800,862 $ 1,724 $ (7,915 ) $ 794,671 The following table presents additional information about the Company's mortgage notes payable, net (in thousands, except percentages) as of September 30, 2018 : Collateral Maturity Date Annual Interest Rate Average Monthly Debt Service Average Monthly Escrow Vista Apartment Homes 1/1/2022 4.55% (1)(5) $ 79 $ 17 Cannery Lofts 11/1/2023 4.80% (1)(3) 52 26 Trailpoint at the Woodlands 11/1/2023 4.67% (1)(4) 95 47 Verona Apartment Homes 10/1/2026 4.62% (1)(3) 125 40 Skyview Apartment Homes 10/1/2026 4.62% (1)(3) 107 24 Maxwell Townhomes 1/1/2022 4.32% (2)(5) 71 78 Pinehurst 11/1/2023 4.68% (1)(3) 38 15 Retreat of Shawnee 2/1/2019 4.76% (1)(6) 78 28 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 79 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 4.14% (1)(4) 130 43 The Bryant at Yorba Linda 6/1/2020 4.01% (1)(3) 297 — Point Bonita Apartment Homes 10/1/2023 5.33% (2)(5) 152 61 The Westside Apartments 9/1/2026 4.38% (1)(3) 196 69 Tech Center Square 6/1/2023 4.84% (1)(5) 65 24 Williamsburg 1/1/2024 4.64% (1)(3) 252 167 Retreat at Rocky Ridge 1/1/2024 4.72% (1)(3) 54 23 Providence in the Park 2/1/2024 4.56% (1)(3) 212 138 Green Trails Apartment Homes 6/1/2024 4.25% (1)(3) 234 79 Meridian Pointe 8/1/2024 4.16% (1)(3) 138 56 Terraces at Lake Mary 9/1/2024 4.17% (1)(3) 110 46 Courtney Meadows Apartments 1/1/2025 4.10% (1)(3) 91 51 Addison at Sandy Springs 5/1/2025 4.02% (1)(3)(7) 74 38 Bristol at Grapevine 5/1/2025 3.97% (1)(3)(7) 106 78 (1) Variable rate based on one-month LIBOR of 2.2606% (as of September 30, 2018 ) 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) Mortgage note payable related to asset held for sale at September 30, 2018 . (7) New debt placed during the nine months ended September 30, 2018 . |
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): 2019 $ 63,305 2020 123,564 2021 57,351 2022 102,312 2023 21,163 Thereafter 477,440 $ 845,135 |
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): 2019 $ 1,758 2020 1,517 2021 1,209 2022 1,007 2023 948 Thereafter 940 $ 7,379 |
ACCUMULATED OTHER COMPREHENSI_2
ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
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, 2018 (in thousands): Balance, January 1, 2018 $ (562 ) Reclassification adjustment for realized loss on designated derivatives 144 Designated derivatives, fair value adjustments (23 ) Balance, September 30, 2018 $ (441 ) |
CERTAIN RELATIONSHIPS AND REL_2
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Related Party Transactions [Abstract] | |
Fees Earned From/Expenses Paid to Related Parties | 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 $ 146 $ 371 Due to related parties: Advisor: Asset management fees $ — $ 15 Operating expense reimbursements 62 32 Manager: Property management fees 531 476 Other operating expense reimbursements 127 196 $ 720 $ 719 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, 2018 2017 2018 2017 Fees earned / expenses paid to related parties: Advisor: Acquisition fees (1) $ — $ 953 $ 1,697 $ 2,565 Asset management fees (2) 3,307 2,893 9,663 8,370 Disposition fees (3) 73 144 73 361 Debt financing fees (4) — 358 278 901 Overhead allocation (5) 1,153 1,091 3,390 3,399 Internal audit (5) 27 21 75 47 Manager: Property management fees (2) $ 1,612 $ 1,429 $ 4,647 $ 4,158 Construction management fees (6) 197 188 633 712 Construction payroll reimbursements (6) 65 57 146 166 Acquisition-related reimbursements (5) — 20 53 38 Operating expense reimbursements (7) 114 218 342 723 Debt servicing fees (2) 1 1 2 2 Other: The Planning & Zoning Resource Company (1) — 2 2 3 Graphic Images (5) — — — 9 (1) For the three and nine months ended September 30, 2017 , Acquisition fees are included in Acquisition costs on the consolidated statements of operations and comprehensive income (loss). For the three and nine months ended September 30, 2018 , Acquisition fees are capitalized and included in Rental Properties, net on the consolidated balance sheet. (2) Included in Management fees on the consolidated statements of operations and comprehensive income (loss). (3) Included in Net gains on dispositions of properties on the consolidated statements of operations and comprehensive (loss) income. (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) Capitalized and 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). |
EQUITY (Tables)
EQUITY (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Equity [Abstract] | |
Schedule of Shares Issued | As of September 30, 2018 , the Company had an aggregate of 70,563,588 shares of its $0.01 par value common stock outstanding 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 13,429,165 138,058 Shares issued in conjunction with the Advisor's initial investment, 15,500 155 Total 79,326,119 $ 772,872 Shares redeemed and retired (8,762,531 ) Total shares outstanding as of September 30, 2018 70,563,588 (1) Includes 276,056 shares issued to the Advisor. |
Schedule of Stockholders Equity | During the nine months ended September 30, 2018 , the Company redeemed shares of its outstanding common stock as follows (in thousands, except per share data): Period Total Number of Shares Redeemed (1) Average Price Paid per Share January 2018 — — February 2018 — — March 2018 1,006 $10.94 April 2018 — — May 2018 — — June 2018 843 $10.26 July 2018 — — August 2018 — — September 2018 755 $10.29 2,604 (1) All redemptions of equity securities by the Company during the nine months ended September 30, 2018 were made pursuant to the Company's share redemption program. |
Schedule of Distributions | For the nine months ended September 30, 2018 , the Company paid aggregate distributions of $31.9 million , including $12.3 million of distributions paid in cash and $19.6 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, 2018 $0.05 January 31, 2018 $ 2,217 $ 1,352 $ 3,569 February 27, 2018 0.05 February 28, 2018 2,214 1,362 3,576 March 29, 2018 0.05 April 2, 2018 2,182 1,353 3,535 April 27, 2018 0.05 April 30, 2018 2,181 1,364 3,545 May 30, 2018 0.05 May 31, 2018 2,176 1,379 3,555 June 28, 2018 0.05 June 29, 2018 2,151 1,373 3,524 July 30, 2018 0.05 July 31, 2018 2,155 1,380 3,535 August 30, 2018 0.05 August 31, 2018 2,151 1,394 3,545 September 27, 2018 0.05 September 28, 2018 2,133 1,384 3,517 $0.45 $ 19,560 $ 12,341 $ 31,901 |
FAIR VALUE MEASURES AND DISCL_2
FAIR VALUE MEASURES AND DISCLOSURES (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
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, 2018 Assets: Interest rate caps $ — $ 67 $ — $ 67 $ — $ 67 $ — $ 67 December 31, 2017 Assets: Interest rate caps $ — $ 49 $ — $ 49 $ — $ 49 $ — $ 49 |
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, 2018 December 31, 2017 Carrying Amount Fair Value Carrying Amount Fair Value Loan held for investment, net $ 790 $ 982 $ 782 $ 1,057 Mortgage notes payable- outstanding borrowings $ (845,135 ) $ (836,431 ) $ (800,862 ) $ (802,523 ) |
DERIVATIVES AND HEDGING ACTIV_2
DERIVATIVES AND HEDGING ACTIVITIES (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
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, 2018 (dollars in thousands): Interest Rate Derivative Number of Instruments Notional Maturity Dates Interest Rate Caps 17 $ 507,000 November 1, 2018 to May 1, 2021 |
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, 2018 and December 31, 2017 (in thousands): Asset Derivatives Liability Derivatives September 30, 2018 December 31, 2017 September 30, 2018 December 31, 2017 Balance Sheet Fair Value Balance Sheet Fair Value Balance Sheet Fair Value Balance Sheet Fair Value Prepaid expenses and other assets $ 67 Prepaid expenses and other assets $ 49 — $ — — $ — |
NATURE OF BUSINESS AND OPERAT_2
NATURE OF BUSINESS AND OPERATIONS - Narrative (Details) - USD ($) $ in Thousands | 9 Months Ended | 24 Months Ended | 54 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 13, 2013 | |
Securities Financing Transaction [Line Items] | ||||
Common stock issued through distribution reinvestment plan (in shares) | 1,900,000 | 5,100,000 | 1,200,000 | |
Common stock issued through the distribution reinvestment plan | $ 19,560 | $ 20,421 | $ 55,600 | |
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) | 64,900,000 | |||
Public offering | Common Stock | Advisor | ||||
Securities Financing Transaction [Line Items] | ||||
Issuance of common stock (in shares) | 276,056 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Principles of Consolidation (Details) | Sep. 30, 2018unit |
Subsidiary or Equity Method Investee [Line Items] | |
Number of Units | 9,952 |
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 | 0 |
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 |
RRE Courtney Meadows Holdings, LLC (Courtney Meadows) | |
Subsidiary or Equity Method Investee [Line Items] | |
Number of Units | 276 |
RRE Sandy Springs Holdings, LLC (Sandy Springs) | |
Subsidiary or Equity Method Investee [Line Items] | |
Number of Units | 236 |
RRE Grapevine Holdings, LLC (Bristol Grapevine) | |
Subsidiary or Equity Method Investee [Line Items] | |
Number of Units | 376 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($)propertyshares | Sep. 30, 2017USD ($) | Dec. 31, 2017USD ($)property | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |||||
Net cash provided by operating activities | $ (9,328,000) | $ (10,560,000) | |||
Net cash used in investing activities | $ 30,435,000 | 14,447,000 | |||
Assets Held for Sale [Abstract] | |||||
Number of rental properties held for sale (in property) | property | 1 | 0 | |||
Rental Properties [Abstract] | |||||
Capitalization threshold for improvements and replacements | $ 1,000 | ||||
Leases [Abstract] | |||||
Payments due for lease obligations | $ 179,000 | 179,000 | |||
Asset Impairment Charges [Abstract] | |||||
Impairment losses | 0 | $ 0 | 0 | 0 | |
Revenue Recognition [Abstract] | |||||
Contract liability | 559,000 | $ 559,000 | |||
Revenue contract period | 10 years to 12 years | ||||
Revenue from contract liability recognized into income | $ 60,000 | ||||
Tenant Receivable [Abstract] | |||||
Allowance for uncollectable receivables | 7,756 | $ 7,756 | $ 149,300 | ||
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 | 49,995 | ||||
Operating leases for residential rental properties | |||||
Revenue Recognition [Abstract] | |||||
Future minimum rental payments, current | 74,100,000 | $ 74,100,000 | |||
Future minimum rental payments, in two years | 196,000 | 196,000 | |||
Future minimum rental payments, thereafter | 0 | 0 | |||
Commercial rental properties and antenna rentals | |||||
Revenue Recognition [Abstract] | |||||
Future minimum rental payments, current | 447,000 | 447,000 | |||
Future minimum rental payments, in two years | 398,000 | 398,000 | |||
Future minimum rental payments, in three years | 302,000 | 302,000 | |||
Future minimum rental payments, in four years | 239,000 | 239,000 | |||
Future minimum rental payments, in five years | 86,000 | 86,000 | |||
Future minimum rental payments, thereafter | $ 202,000 | $ 202,000 | |||
Manager | |||||
Rental Properties [Abstract] | |||||
Construction management fee (as percent) | 5.00% | ||||
Improvements and replacements | |||||
Rental Properties [Abstract] | |||||
Estimated useful lives (greater than or equal to) | 1 year | ||||
Accounting Standards Update 2016-18 | |||||
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |||||
Net cash provided by operating activities | 723,000 | ||||
Net cash used in investing activities | $ 81,000 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Rental Property Useful Lives (Details) | 9 Months Ended |
Sep. 30, 2018 | |
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 INFORM_3
SUPPLEMENTAL CASH FLOW INFORMATION (Details) - USD ($) $ in Thousands | 9 Months Ended | 24 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Non-cash financing and investing activities: | |||
Stock issued from the distribution reinvestment plan | $ 19,560 | $ 20,421 | $ 55,600 |
Deferred financing costs funded directly by mortgage notes | 57 | 449 | |
Accruals for construction in progress | 937 | 922 | |
Non-cash activity related to dispositions: Mortgage notes payable settled directly with proceeds from sale of rental property | 6,250 | 26,976 | |
Non-cash activity related to acquisitions: Mortgage notes payable used to acquire rental property | 55,672 | 93,750 | |
Cash paid during the period for: | |||
Interest | $ 25,055 | $ 19,328 |
RESTRICTED CASH - Schedule of R
RESTRICTED CASH - Schedule of Restricted Cash and Cash Equivalents (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 |
Restricted Cash and Cash Equivalents Items [Line Items] | |||
Restricted cash | $ 14,360 | $ 13,401 | $ 12,249 |
Real estate taxes | |||
Restricted Cash and Cash Equivalents Items [Line Items] | |||
Restricted cash | 10,040 | 8,876 | |
Insurance | |||
Restricted Cash and Cash Equivalents Items [Line Items] | |||
Restricted cash | 1,349 | 1,995 | |
Capital improvements | |||
Restricted Cash and Cash Equivalents Items [Line Items] | |||
Restricted cash | $ 2,971 | $ 2,530 |
RESTRICTED CASH - Narrative (De
RESTRICTED CASH - Narrative (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Cash and Cash Equivalents [Abstract] | ||
Unrestricted cash designated for capital expenditures | $ 25.4 | $ 31.3 |
RENTAL PROPERTIES, NET (Details
RENTAL PROPERTIES, NET (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018USD ($)unitproperty | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($)unitproperty | Sep. 30, 2017USD ($) | Dec. 31, 2017USD ($) | |
Investments in rental properties [Abstract] | |||||
Land | $ 200,848 | $ 200,848 | $ 196,765 | ||
Building and improvements | 962,968 | 962,968 | 905,739 | ||
Furniture, fixtures and equipment | 43,372 | 43,372 | 37,796 | ||
Construction in progress | 1,472 | 1,472 | 6,297 | ||
Rental properties, gross | 1,208,660 | 1,208,660 | 1,146,597 | ||
Less: accumulated depreciation | (181,050) | (181,050) | (147,708) | ||
Rental properties, net | 1,027,610 | 1,027,610 | 998,889 | ||
Depreciation expense | $ 14,000 | $ 12,300 | $ 41,100 | $ 35,900 | |
Real Estate [Line Items] | |||||
Number of real estate properties | property | 31 | 31 | |||
Assets held for sale - rental properties | $ 15,254 | $ 15,254 | $ 0 | ||
Retreat of Shawnee | |||||
Real Estate [Line Items] | |||||
Assets held for sale - rental properties | $ 15,300 | $ 15,300 | |||
Retreat of Shawnee | Held-for-sale | |||||
Real Estate [Line Items] | |||||
Number of real estate properties | unit | 1 | 1 |
LOAN HELD FOR INVESTMENT, NET -
LOAN HELD FOR INVESTMENT, NET - Narrative (Details) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Dec. 31, 2011USD ($)loan | Dec. 31, 2017USD ($) | |
Investments, Debt and Equity Securities [Abstract] | ||||
Number of performing promissory notes (in loan) | loan | 1 | |||
Purchase price of promissory note | $ 700,000 | |||
Allowance for credit losses | $ 0 | $ 0 | ||
Charge-offs | $ 0 | $ 0 |
LOAN HELD FOR INVESTMENT, NET_2
LOAN HELD FOR INVESTMENT, NET - Terms of Loans Held for Investment (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Dec. 31, 2017 | |
Investments, Debt and Equity Securities [Abstract] | ||
Unpaid principal balance | $ 918 | $ 934 |
Unamortized discount and acquisition costs | (128) | (152) |
Net book value | $ 790 | $ 782 |
Interest rate (as percent) | 7.50% | |
Average monthly payment | $ 8 |
ACQUISTIONS - Narrative (Detail
ACQUISTIONS - Narrative (Details) $ in Thousands | Apr. 25, 2018USD ($)unit | Apr. 17, 2018USD ($)unit | Sep. 30, 2018unitproperty |
Business Acquisition [Line Items] | |||
Number of real estate properties | property | 31 | ||
Number of units | 9,952 | ||
Addison at Sandy Springs | |||
Business Acquisition [Line Items] | |||
Number of units | 236 | ||
Consideration transferred for acquisition | $ | $ 34,000 | ||
Bristol at Grapevine | |||
Business Acquisition [Line Items] | |||
Number of units | 376 | ||
Consideration transferred for acquisition | $ | $ 44,700 |
ACQUISTIONS - Acquisitions and
ACQUISTIONS - Acquisitions and Fair Value Assignment (Details) - USD ($) $ in Thousands | Apr. 25, 2018 | Apr. 17, 2018 | Sep. 30, 2018 | Dec. 31, 2017 |
Business Acquisition [Line Items] | ||||
Land | $ 200,848 | $ 196,765 | ||
Building and Improvements | 962,968 | 905,739 | ||
Furniture, fixtures and equipment | 43,372 | 37,796 | ||
Total assets | $ 1,113,316 | $ 1,135,792 | ||
Bristol at Grapevine | ||||
Business Acquisition [Line Items] | ||||
Intangible Assets, Contractual Purchase Price | $ 1,074 | |||
Contractual Purchase Price | 44,700 | |||
Intangible Assets, Acquisition Fee | 23 | |||
Acquisition Fee | 959 | |||
Intangible Assets, Acquisition Costs | 5 | |||
Acquisition Costs | 210 | |||
Land | 3,364 | |||
Building and Improvements | 40,818 | |||
Furniture, fixtures and equipment | 585 | |||
Intangible Assets | 1,102 | |||
Total assets | 45,869 | |||
Bristol at Grapevine | Land | ||||
Business Acquisition [Line Items] | ||||
Property and Equipment, Contract Purchase Price | 3,279 | |||
Property, Plant and Equipment, Acquisition Fee | 70 | |||
Property, Plant and Equipment, Acquisition Costs | 15 | |||
Bristol at Grapevine | Building and Improvements | ||||
Business Acquisition [Line Items] | ||||
Property and Equipment, Contract Purchase Price | 39,777 | |||
Property, Plant and Equipment, Acquisition Fee | 854 | |||
Property, Plant and Equipment, Acquisition Costs | 187 | |||
Bristol at Grapevine | Furniture, fixtures and equipment | ||||
Business Acquisition [Line Items] | ||||
Property and Equipment, Contract Purchase Price | 570 | |||
Property, Plant and Equipment, Acquisition Fee | 12 | |||
Property, Plant and Equipment, Acquisition Costs | $ 3 | |||
Addison at Sandy Springs | ||||
Business Acquisition [Line Items] | ||||
Intangible Assets, Contractual Purchase Price | $ 740 | |||
Contractual Purchase Price | 34,000 | |||
Intangible Assets, Acquisition Fee | 16 | |||
Acquisition Fee | 738 | |||
Intangible Assets, Acquisition Costs | 4 | |||
Acquisition Costs | 175 | |||
Land | 4,719 | |||
Building and Improvements | 28,999 | |||
Furniture, fixtures and equipment | 435 | |||
Intangible Assets | 760 | |||
Total assets | 34,913 | |||
Addison at Sandy Springs | Land | ||||
Business Acquisition [Line Items] | ||||
Property and Equipment, Contract Purchase Price | 4,595 | |||
Property, Plant and Equipment, Acquisition Fee | 100 | |||
Property, Plant and Equipment, Acquisition Costs | 24 | |||
Addison at Sandy Springs | Building and Improvements | ||||
Business Acquisition [Line Items] | ||||
Property and Equipment, Contract Purchase Price | 28,241 | |||
Property, Plant and Equipment, Acquisition Fee | 613 | |||
Property, Plant and Equipment, Acquisition Costs | 145 | |||
Addison at Sandy Springs | Furniture, fixtures and equipment | ||||
Business Acquisition [Line Items] | ||||
Property and Equipment, Contract Purchase Price | 424 | |||
Property, Plant and Equipment, Acquisition Fee | 9 | |||
Property, Plant and Equipment, Acquisition Costs | $ 2 |
DISPOSITION OF PROPERTIES AND_3
DISPOSITION OF PROPERTIES AND DECONSOLIDATION OF INTERESTS - Sales Activity (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||||
Sep. 30, 2018USD ($)unitproperty | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($)unitproperty | Sep. 30, 2017USD ($) | Oct. 19, 2018USD ($) | Sep. 14, 2018USD ($) | Sep. 27, 2017USD ($) | Aug. 16, 2017USD ($) | May 12, 2017USD ($) | May 10, 2017USD ($) | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||
Number of real estate properties | property | 31 | 31 | ||||||||
Disposed of by sale | ||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||
Number of real estate properties | unit | 1 | 1 | ||||||||
Net Gains on Dispositions of Properties and Joint Venture Interests | $ 6,195 | $ 14,300 | $ 6,195 | $ 22,735 | ||||||
Revenues Attributable to Properties Sold | 342 | 759 | 1,169 | 4,237 | ||||||
Net Income (Loss) Attributable to Properties Sold | 6,230 | 13,993 | 6,217 | 22,241 | ||||||
Disposed of by sale | Pheasant Run | ||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||
Contract Sales Price | $ 16,400 | |||||||||
Net Gains on Dispositions of Properties and Joint Venture Interests | 6,195 | 6,195 | ||||||||
Revenues Attributable to Properties Sold | 342 | 1,169 | ||||||||
Net Income (Loss) Attributable to Properties Sold | $ 6,230 | $ 6,217 | ||||||||
Disposed of by sale | 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 | ||||||||
Disposed of by sale | 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 | ||||||||
Disposed of by sale | 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 | ||||||||
Disposed of by sale | 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 | ||||||||
Disposed of by sale | Retreat of Shawnee | Subsequent event | ||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||
Contract Sales Price | $ 25,000 |
IDENTIFIED INTANGIBLE ASSETS,_3
IDENTIFIED INTANGIBLE ASSETS, NET AND GOODWILL - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Finite-Lived Intangible Assets [Line Items] | |||||
Identified intangible assets, net | $ 553,000 | $ 553,000 | $ 1,796,000 | ||
Weighted average remaining life | 2 months | 5 months | |||
Expected amortization, 2019 | 536,000 | $ 536,000 | |||
Amortization expense | 840,100 | $ 842,000 | 3,100,000 | $ 2,600,000 | |
Goodwill | 594,000 | 594,000 | $ 670,000 | ||
Acquired in-place leases | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Identified intangible assets, net | 553,000 | 553,000 | 1,800,000 | ||
Accumulated amortization | 29,400,000 | 29,400,000 | $ 26,600,000 | ||
Antennae leases | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Expected amortization, 2019 | 12,544 | 12,544 | |||
Expected amortization, 2020 | 10,768 | 10,768 | |||
Expected amortization, 2021 | 5,358 | 5,358 | |||
Expected amortization, 2022 | 674 | 674 | |||
Expected amortization, thereafter | $ 0 | $ 0 |
IDENTIFIED INTANGIBLE ASSETS,_4
IDENTIFIED INTANGIBLE ASSETS, NET AND GOODWILL - Expected Amortization (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2,019 | $ 536 | |
2,020 | 11 | |
2,021 | 5 | |
2,022 | 1 | |
Thereafter | 0 | |
Total | $ 553 | $ 1,796 |
IDENTIFIED INTANGIBLE ASSETS,_5
IDENTIFIED INTANGIBLE ASSETS, NET AND GOODWILL - Goodwill (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Goodwill [Roll Forward] | |
Beginning balance | $ 670 |
Sale of Pheasant Run | (76) |
Ending balance | $ 594 |
MORTGAGE NOTES PAYABLE, NET - S
MORTGAGE NOTES PAYABLE, NET - Summary (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Dec. 31, 2017 | |
Participating Mortgage Loans [Line Items] | ||
Outstanding Borrowings | $ 845,135 | $ 800,862 |
Premium (Discount) | 1,464 | 1,724 |
Deferred finance costs, net | (7,379) | (7,915) |
Carrying Value | $ 839,220 | 794,671 |
Revolving credit facility | LIBOR | ||
Participating Mortgage Loans [Line Items] | ||
Basis spread on variable rate (as percent) | 2.2606% | |
Vista Apartment Homes | ||
Participating Mortgage Loans [Line Items] | ||
Outstanding Borrowings | $ 14,674 | 14,896 |
Premium (Discount) | 0 | 0 |
Deferred finance costs, net | (113) | (140) |
Carrying Value | $ 14,561 | 14,756 |
Annual Interest Rate (as percent) | 4.55% | |
Average Monthly Debt Service | $ 79 | |
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 | (144) | (165) |
Carrying Value | $ 12,956 | 12,935 |
Annual Interest Rate (as percent) | 4.80% | |
Average Monthly Debt Service | $ 52 | |
Average Monthly Escrow | 26 | |
Trailpoint at the Woodlands | ||
Participating Mortgage Loans [Line Items] | ||
Outstanding Borrowings | 18,126 | 18,368 |
Premium (Discount) | 0 | 0 |
Deferred finance costs, net | (163) | (188) |
Carrying Value | $ 17,963 | 18,180 |
Annual Interest Rate (as percent) | 4.67% | |
Average Monthly Debt Service | $ 95 | |
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 | (433) | (475) |
Carrying Value | $ 32,537 | 32,495 |
Annual Interest Rate (as percent) | 4.62% | |
Average Monthly Debt Service | $ 125 | |
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 | (376) | (413) |
Carrying Value | $ 28,024 | 27,987 |
Annual Interest Rate (as percent) | 4.62% | |
Average Monthly Debt Service | $ 107 | |
Average Monthly Escrow | 24 | |
Maxwell Townhomes | ||
Participating Mortgage Loans [Line Items] | ||
Outstanding Borrowings | 13,139 | 13,342 |
Premium (Discount) | 0 | 0 |
Deferred finance costs, net | (88) | (109) |
Carrying Value | $ 13,051 | 13,233 |
Annual Interest Rate (as percent) | 4.32% | |
Average Monthly Debt Service | $ 71 | |
Average Monthly Escrow | 78 | |
Pinehurst | ||
Participating Mortgage Loans [Line Items] | ||
Outstanding Borrowings | 7,249 | 7,339 |
Premium (Discount) | 0 | 0 |
Deferred finance costs, net | (111) | (128) |
Carrying Value | $ 7,138 | 7,211 |
Annual Interest Rate (as percent) | 4.68% | |
Average Monthly Debt Service | $ 38 | |
Average Monthly Escrow | 15 | |
Pheasant Run | ||
Participating Mortgage Loans [Line Items] | ||
Outstanding Borrowings | 0 | 6,250 |
Premium (Discount) | 0 | 0 |
Deferred finance costs, net | 0 | 0 |
Carrying Value | 0 | 6,250 |
Retreat of Shawnee | ||
Participating Mortgage Loans [Line Items] | ||
Outstanding Borrowings | 12,486 | 12,682 |
Premium (Discount) | 0 | 7 |
Deferred finance costs, net | 0 | (2) |
Carrying Value | $ 12,486 | 12,687 |
Annual Interest Rate (as percent) | 4.76% | |
Average Monthly Debt Service | $ 78 | |
Average Monthly Escrow | 28 | |
Evergreen at Coursey Place | ||
Participating Mortgage Loans [Line Items] | ||
Outstanding Borrowings | 26,272 | 26,639 |
Premium (Discount) | 61 | 77 |
Deferred finance costs, net | (59) | (75) |
Carrying Value | $ 26,274 | 26,641 |
Annual Interest Rate (as percent) | 5.07% | |
Average Monthly Debt Service | $ 154 | |
Average Monthly Escrow | 37 | |
Pines of York | ||
Participating Mortgage Loans [Line Items] | ||
Outstanding Borrowings | 14,498 | 14,717 |
Premium (Discount) | (189) | (235) |
Deferred finance costs, net | (36) | (44) |
Carrying Value | $ 14,273 | 14,438 |
Annual Interest Rate (as percent) | 4.46% | |
Average Monthly Debt Service | $ 80 | |
Average Monthly Escrow | 25 | |
The Estates at Johns Creek | ||
Participating Mortgage Loans [Line Items] | ||
Outstanding Borrowings | 47,836 | 48,603 |
Premium (Discount) | 0 | 0 |
Deferred finance costs, net | (199) | (286) |
Carrying Value | $ 47,637 | 48,317 |
Annual Interest Rate (as percent) | 3.38% | |
Average Monthly Debt Service | $ 221 | |
Average Monthly Escrow | 79 | |
Perimeter Circle | ||
Participating Mortgage Loans [Line Items] | ||
Outstanding Borrowings | 16,634 | 16,923 |
Premium (Discount) | 0 | 0 |
Deferred finance costs, net | (42) | (84) |
Carrying Value | $ 16,592 | 16,839 |
Annual Interest Rate (as percent) | 3.42% | |
Average Monthly Debt Service | $ 81 | |
Average Monthly Escrow | 44 | |
Perimeter 5,550 | ||
Participating Mortgage Loans [Line Items] | ||
Outstanding Borrowings | 13,128 | 13,356 |
Premium (Discount) | 0 | 0 |
Deferred finance costs, net | (35) | (70) |
Carrying Value | $ 13,093 | 13,286 |
Annual Interest Rate (as percent) | 3.42% | |
Average Monthly Debt Service | $ 64 | |
Average Monthly Escrow | 32 | |
Aston at Cinco Ranch | ||
Participating Mortgage Loans [Line Items] | ||
Outstanding Borrowings | 22,611 | 22,942 |
Premium (Discount) | 0 | 0 |
Deferred finance costs, net | (167) | (210) |
Carrying Value | $ 22,444 | 22,732 |
Annual Interest Rate (as percent) | 4.34% | |
Average Monthly Debt Service | $ 120 | |
Average Monthly Escrow | 70 | |
Sunset Ridge 1 | ||
Participating Mortgage Loans [Line Items] | ||
Outstanding Borrowings | 18,907 | 19,254 |
Premium (Discount) | 138 | 189 |
Deferred finance costs, net | (109) | (150) |
Carrying Value | $ 18,936 | 19,293 |
Annual Interest Rate (as percent) | 4.58% | |
Average Monthly Debt Service | $ 113 | |
Average Monthly Escrow | 89 | |
Sunset Ridge 2 | ||
Participating Mortgage Loans [Line Items] | ||
Outstanding Borrowings | 2,846 | 2,890 |
Premium (Discount) | 19 | 26 |
Deferred finance costs, net | (14) | (19) |
Carrying Value | $ 2,851 | 2,897 |
Annual Interest Rate (as percent) | 4.54% | |
Average Monthly Debt Service | $ 16 | |
Average Monthly Escrow | 0 | |
Calloway at Las Colinas | ||
Participating Mortgage Loans [Line Items] | ||
Outstanding Borrowings | 33,863 | 34,396 |
Premium (Discount) | 0 | 0 |
Deferred finance costs, net | (193) | (241) |
Carrying Value | $ 33,670 | 34,155 |
Annual Interest Rate (as percent) | 3.87% | |
Average Monthly Debt Service | $ 171 | |
Average Monthly Escrow | 115 | |
South Lamar Village | ||
Participating Mortgage Loans [Line Items] | ||
Outstanding Borrowings | 11,977 | 12,177 |
Premium (Discount) | 0 | 0 |
Deferred finance costs, net | (41) | (80) |
Carrying Value | $ 11,936 | 12,097 |
Annual Interest Rate (as percent) | 3.64% | |
Average Monthly Debt Service | $ 59 | |
Average Monthly Escrow | 57 | |
Heritage Pointe | ||
Participating Mortgage Loans [Line Items] | ||
Outstanding Borrowings | 25,498 | 25,912 |
Premium (Discount) | 0 | 0 |
Deferred finance costs, net | (252) | (284) |
Carrying Value | $ 25,246 | 25,628 |
Annual Interest Rate (as percent) | 4.14% | |
Average Monthly Debt Service | $ 130 | |
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 | (356) | (461) |
Carrying Value | $ 67,144 | 67,039 |
Annual Interest Rate (as percent) | 4.01% | |
Average Monthly Debt Service | $ 297 | |
Average Monthly Escrow | 0 | |
Point Bonita Apartment Homes | ||
Participating Mortgage Loans [Line Items] | ||
Outstanding Borrowings | 26,225 | 26,525 |
Premium (Discount) | 1,435 | 1,660 |
Deferred finance costs, net | (246) | (285) |
Carrying Value | $ 27,414 | 27,900 |
Annual Interest Rate (as percent) | 5.33% | |
Average Monthly Debt Service | $ 152 | |
Average Monthly Escrow | 61 | |
The Westside Apartments | ||
Participating Mortgage Loans [Line Items] | ||
Outstanding Borrowings | 36,820 | 36,820 |
Premium (Discount) | 0 | 0 |
Deferred finance costs, net | (354) | (390) |
Carrying Value | $ 36,466 | 36,430 |
Annual Interest Rate (as percent) | 4.38% | |
Average Monthly Debt Service | $ 196 | |
Average Monthly Escrow | 69 | |
Tech Center Square | ||
Participating Mortgage Loans [Line Items] | ||
Outstanding Borrowings | 11,984 | 12,141 |
Premium (Discount) | 0 | 0 |
Deferred finance costs, net | (140) | (164) |
Carrying Value | $ 11,844 | 11,977 |
Annual Interest Rate (as percent) | 4.84% | |
Average Monthly Debt Service | $ 65 | |
Average Monthly Escrow | 24 | |
Williamsburg | ||
Participating Mortgage Loans [Line Items] | ||
Outstanding Borrowings | 53,995 | 53,995 |
Premium (Discount) | 0 | 0 |
Deferred finance costs, net | (613) | (706) |
Carrying Value | $ 53,382 | 53,289 |
Annual Interest Rate (as percent) | 4.64% | |
Average Monthly Debt Service | $ 252 | |
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 | (193) | (223) |
Carrying Value | $ 11,182 | 11,152 |
Annual Interest Rate (as percent) | 4.72% | |
Average Monthly Debt Service | $ 54 | |
Average Monthly Escrow | 23 | |
Providence in the Park | ||
Participating Mortgage Loans [Line Items] | ||
Outstanding Borrowings | 47,000 | 47,000 |
Premium (Discount) | 0 | 0 |
Deferred finance costs, net | (456) | (524) |
Carrying Value | $ 46,544 | 46,476 |
Annual Interest Rate (as percent) | 4.56% | |
Average Monthly Debt Service | $ 212 | |
Average Monthly Escrow | 138 | |
Green Trails Apartment Homes | ||
Participating Mortgage Loans [Line Items] | ||
Outstanding Borrowings | 61,500 | 61,500 |
Premium (Discount) | 0 | 0 |
Deferred finance costs, net | (586) | (667) |
Carrying Value | $ 60,914 | 60,833 |
Annual Interest Rate (as percent) | 4.25% | |
Average Monthly Debt Service | $ 234 | |
Average Monthly Escrow | 79 | |
Meridian Pointe | ||
Participating Mortgage Loans [Line Items] | ||
Outstanding Borrowings | 39,500 | 39,500 |
Premium (Discount) | 0 | 0 |
Deferred finance costs, net | (518) | (588) |
Carrying Value | $ 38,982 | 38,912 |
Annual Interest Rate (as percent) | 4.16% | |
Average Monthly Debt Service | $ 138 | |
Average Monthly Escrow | 56 | |
Terraces at Lake Mary | ||
Participating Mortgage Loans [Line Items] | ||
Outstanding Borrowings | 32,250 | 32,250 |
Premium (Discount) | 0 | 0 |
Deferred finance costs, net | (333) | (377) |
Carrying Value | $ 31,917 | 31,873 |
Annual Interest Rate (as percent) | 4.17% | |
Average Monthly Debt Service | $ 110 | |
Average Monthly Escrow | 46 | |
Courtney Meadows Apartments | ||
Participating Mortgage Loans [Line Items] | ||
Outstanding Borrowings | 27,100 | 27,100 |
Premium (Discount) | 0 | 0 |
Deferred finance costs, net | (325) | (367) |
Carrying Value | $ 26,775 | 26,733 |
Annual Interest Rate (as percent) | 4.10% | |
Average Monthly Debt Service | $ 91 | |
Average Monthly Escrow | 51 | |
Addison at Sandy Springs | ||
Participating Mortgage Loans [Line Items] | ||
Outstanding Borrowings | 22,750 | 0 |
Premium (Discount) | 0 | 0 |
Deferred finance costs, net | (304) | 0 |
Carrying Value | $ 22,446 | 0 |
Annual Interest Rate (as percent) | 4.02% | |
Average Monthly Debt Service | $ 74 | |
Average Monthly Escrow | 38 | |
Bristol at Grapevine | ||
Participating Mortgage Loans [Line Items] | ||
Outstanding Borrowings | 32,922 | 0 |
Premium (Discount) | 0 | 0 |
Deferred finance costs, net | (380) | 0 |
Carrying Value | $ 32,542 | $ 0 |
Annual Interest Rate (as percent) | 3.97% | |
Average Monthly Debt Service | $ 106 | |
Average Monthly Escrow | $ 78 |
MORTGAGE NOTES PAYABLE, NET - N
MORTGAGE NOTES PAYABLE, NET - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Debt Instrument [Line Items] | |||||
Repayment on mortgages | $ 329,000 | $ 469,000 | |||
Amortization of deferred financing costs | 1,319,000 | 1,595,000 | |||
Accumulated amortization, deferred finance costs | $ 5,300,000 | 5,300,000 | $ 4,000,000 | ||
Mortgages | |||||
Debt Instrument [Line Items] | |||||
Repayment on mortgages | 50,000 | ||||
Interest expense | Mortgages | |||||
Debt Instrument [Line Items] | |||||
Amortization of deferred financing costs | 456,000 | $ 633,000 | 1,300,000 | 1,500,000 | |
Acquisitions of Rental Property | Interest expense | |||||
Debt Instrument [Line Items] | |||||
Decrease in interest expense due to fair value adjustments | 85,000 | $ 120,000 | 260,000 | $ 359,000 | |
Covenants included in Mortgage for Archstone Yorba Linda | |||||
Debt Instrument [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, 2018USD ($) |
Debt Disclosure [Abstract] | |
2,019 | $ 63,305 |
2,020 | 123,564 |
2,021 | 57,351 |
2,022 | 102,312 |
2,023 | 21,163 |
Thereafter | 477,440 |
Total | $ 845,135 |
MORTGAGE NOTES PAYABLE, NET - D
MORTGAGE NOTES PAYABLE, NET - Deferred Financing Costs (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Debt Disclosure [Abstract] | ||
2,019 | $ 1,758 | |
2,020 | 1,517 | |
2,021 | 1,209 | |
2,022 | 1,007 | |
2,023 | 948 | |
Thereafter | 940 | |
Deferred financing costs, net | $ 7,379 | $ 7,915 |
CREDIT FACILITY - Narrative (De
CREDIT FACILITY - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Line of Credit Facility [Line Items] | ||||
Amortization of deferred financing costs | $ 1,319,000 | $ 1,595,000 | ||
Bank of America | Interest expense | ||||
Line of Credit Facility [Line Items] | ||||
Amortization of deferred financing costs | $ 0 | $ 0 | $ 0 | $ 68,000 |
ACCUMULATED OTHER COMPREHENSI_3
ACCUMULATED OTHER COMPREHENSIVE LOSS (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Accumulated Other Comprehensive Loss | |
Accumulated Other Comprehensive Income [Rollforward] | |
Beginning balance | $ (562) |
Ending balance | (441) |
Designated derivatives | |
Accumulated Other Comprehensive Income [Rollforward] | |
Reclassification adjustment for realized loss on designated derivatives | 144 |
Designated derivatives, fair value adjustments | $ (23) |
CERTAIN RELATIONSHIPS AND REL_3
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS - Narrative (Details) - USD ($) | 9 Months Ended | ||
Sep. 30, 2018 | Apr. 23, 2017 | Apr. 22, 2017 | |
Related Party Transaction [Line Items] | |||
Terms of agreement | 1 year | ||
Directors and Officers Liability Insurance | |||
Related Party Transaction [Line Items] | |||
Payment into insurance pools | $ 283,533 | ||
Malpractice insurance coverage limit | 100,000,000 | ||
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 | ||
Payment into insurance pools | 940,327 | ||
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 (as percent) | 2.00% | ||
Monthly asset management fee (as percent) | 0.083% | ||
Percentage annual asset management fee (as percent) | 1.00% | ||
Disposition fee (as percent) | 2.75% | ||
Debt financing fee (as percent) | 0.50% | ||
Manager | |||
Related Party Transaction [Line Items] | |||
Property management fee (as percent) | 4.50% | ||
Occupancy (as percent) | 75.00% | ||
Term for which Manager receives minimum property management fee if properties are less than 75% occupied | 12 months | ||
Construction management fee (as percent) | 5.00% | ||
Debt servicing fee (as percent) | 2.75% | ||
Minimum | RAI | |||
Related Party Transaction [Line Items] | |||
Catastrophic insurance, deductible amount per incident | $ 25,000 | ||
Maximum | RAI | |||
Related Party Transaction [Line Items] | |||
Catastrophic insurance, deductible amount per incident | $ 100,000 |
CERTAIN RELATIONSHIPS AND REL_4
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS - Schedule of Transactions (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Related Party Transaction [Line Items] | |||||
Due from related parties | $ 146 | $ 146 | $ 371 | ||
Due to related parties | 720 | 720 | 719 | ||
RAI and affiliates | Insurance fund held in escrow | |||||
Related Party Transaction [Line Items] | |||||
Due from related parties | 146 | 146 | 371 | ||
Advisor | Acquisition fees | |||||
Related Party Transaction [Line Items] | |||||
Fees earned / expenses paid to related parties | 0 | $ 953 | 1,697 | $ 2,565 | |
Advisor | Asset management fees | |||||
Related Party Transaction [Line Items] | |||||
Due to related parties | 0 | 0 | 15 | ||
Fees earned / expenses paid to related parties | 3,307 | 2,893 | 9,663 | 8,370 | |
Advisor | Disposition fees | |||||
Related Party Transaction [Line Items] | |||||
Fees earned / expenses paid to related parties | 73 | 144 | 73 | 361 | |
Advisor | Debt financing fees | |||||
Related Party Transaction [Line Items] | |||||
Fees earned / expenses paid to related parties | 0 | 358 | 278 | 901 | |
Advisor | Overhead allocation | |||||
Related Party Transaction [Line Items] | |||||
Fees earned / expenses paid to related parties | 1,153 | 1,091 | 3,390 | 3,399 | |
Advisor | Internal audit | |||||
Related Party Transaction [Line Items] | |||||
Fees earned / expenses paid to related parties | 27 | 21 | 75 | 47 | |
Advisor | Operating expense reimbursements | |||||
Related Party Transaction [Line Items] | |||||
Due to related parties | 62 | 62 | 32 | ||
Manager | Property management fees | |||||
Related Party Transaction [Line Items] | |||||
Due to related parties | 531 | 531 | 476 | ||
Fees earned / expenses paid to related parties | 1,612 | 1,429 | 4,647 | 4,158 | |
Manager | Construction management fees | |||||
Related Party Transaction [Line Items] | |||||
Fees earned / expenses paid to related parties | 197 | 188 | 633 | 712 | |
Manager | Construction payroll reimbursements | |||||
Related Party Transaction [Line Items] | |||||
Fees earned / expenses paid to related parties | 65 | 57 | 146 | 166 | |
Manager | Acquisition-related reimbursements | |||||
Related Party Transaction [Line Items] | |||||
Fees earned / expenses paid to related parties | 0 | 20 | 53 | 38 | |
Manager | Operating expense reimbursements | |||||
Related Party Transaction [Line Items] | |||||
Due to related parties | 127 | 127 | $ 196 | ||
Fees earned / expenses paid to related parties | 114 | 218 | 342 | 723 | |
Manager | Debt servicing fees | |||||
Related Party Transaction [Line Items] | |||||
Fees earned / expenses paid to related parties | 1 | 1 | 2 | 2 | |
The Planning & Zoning Resource Company | |||||
Related Party Transaction [Line Items] | |||||
Fees earned / expenses paid to related parties | 0 | 2 | 2 | 3 | |
Graphic Images | |||||
Related Party Transaction [Line Items] | |||||
Fees earned / expenses paid to related parties | $ 0 | $ 0 | $ 0 | $ 9 |
EQUITY - Preferred Stock (Detai
EQUITY - Preferred Stock (Details) - $ / shares | Sep. 30, 2018 | Dec. 31, 2017 |
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, 2018 | Dec. 31, 2017 | |
Class of Stock [Line Items] | ||
Total (in shares) | 79,326,119 | |
Shares redeemed and retired (in shares) | (8,762,531) | |
Total shares outstanding at end of period (in shares) | 70,563,588 | |
Gross Proceeds | $ 772,872 | |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Shares issued through private offering | ||
Class of Stock [Line Items] | ||
Total (in shares) | 1,263,727 | |
Gross Proceeds | $ 12,582 | |
Shares issued through primary public offering | ||
Class of Stock [Line Items] | ||
Total (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] | ||
Total (in shares) | 2,132,266 | |
Gross Proceeds | $ 0 | |
Shares issued through distribution reinvestment plan | ||
Class of Stock [Line Items] | ||
Total (in shares) | 13,429,165 | |
Gross Proceeds, distribution reinvestment plan | $ 138,058 | |
Advisor | ||
Class of Stock [Line Items] | ||
Total (in shares) | 15,500 | |
Gross Proceeds | $ 155 | |
Shares converted (in shares) | 4,500 |
EQUITY - Convertible Stock (Det
EQUITY - Convertible Stock (Details) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018event$ / sharesshares | Dec. 31, 2017$ / sharesshares | |
Equity [Abstract] | ||
Convertible stock shares outstanding (in shares) | 49,995 | 49,995 |
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) | 932 | 932 |
Convertible stock repurchased and retired (in shares) | 5 | |
Percentage on original share price (as percent) | 100.00% | |
Percentage non-compounded annual return, option one (as percent) | 10.00% | |
Aggregate percentage return (as percent) | 10.00% | |
Number of possible triggering events | event | 2 | |
Conversion ratio | 0.00002 | |
Common stock, convertible, triggering event, if lesser of, option one (as percent) | 25.00% | |
Common stock, convertible, triggering event, if lesser of, option two (as percent) | 15.00% | |
Percentage non-compounded annual return, option two (as percent) | 6.00% | |
Number of triggering events | event | 0 |
EQUITY - Redemption of Securiti
EQUITY - Redemption of Securities (Details) - $ / shares shares in Thousands | Apr. 29, 2018 | Sep. 30, 2018 | Aug. 31, 2018 | Jul. 31, 2018 | Jun. 30, 2018 | May 31, 2018 | Apr. 30, 2018 | Mar. 31, 2018 | Feb. 28, 2018 | Jan. 31, 2018 | Sep. 30, 2018 |
Subsidiary, Sale of Stock [Line Items] | |||||||||||
Total Number of Shares Redeemed (in shares) | 755 | 0 | 0 | 843 | 0 | 0 | 1,006 | 0 | 0 | 2,604 | |
Average Price Paid per Share (in dollars per share) | $ 10.29 | $ 0 | $ 0 | $ 10.26 | $ 0 | $ 0 | $ 10.94 | $ 0 | $ 0 | $ 10.29 | |
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%) (as percent) | 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 (as percent) | 1.00% | ||||||||||
Number of days' notice required to suspend, terminate or amend share redemption program | 30 days | ||||||||||
Share Redemption Program | |||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||
Price of stock as percentage of current per share net asset value (as percent) | 95.00% |
EQUITY - Distributions (Details
EQUITY - Distributions (Details) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | 24 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Securities Financing Transaction [Line Items] | |||
Per Common Share (in dollars per share) | $ 0.45 | ||
Distributions reinvested in Shares of Common Stock | $ 19,560 | $ 20,421 | $ 55,600 |
Net Cash Distribution | 12,341 | ||
Total Aggregate Distribution | $ 31,901 | ||
Record date of January 30, 2018 | |||
Securities Financing Transaction [Line Items] | |||
Per Common Share (in dollars per share) | $ 0.05 | ||
Distributions reinvested in Shares of Common Stock | $ 2,217 | ||
Net Cash Distribution | 1,352 | ||
Total Aggregate Distribution | $ 3,569 | ||
Record date of February 27, 2018 | |||
Securities Financing Transaction [Line Items] | |||
Per Common Share (in dollars per share) | $ 0.05 | ||
Distributions reinvested in Shares of Common Stock | $ 2,214 | ||
Net Cash Distribution | 1,362 | ||
Total Aggregate Distribution | $ 3,576 | ||
Record date of March 29, 2018 | |||
Securities Financing Transaction [Line Items] | |||
Per Common Share (in dollars per share) | $ 0.05 | ||
Distributions reinvested in Shares of Common Stock | $ 2,182 | ||
Net Cash Distribution | 1,353 | ||
Total Aggregate Distribution | $ 3,535 | ||
Record date of April 27, 2018 | |||
Securities Financing Transaction [Line Items] | |||
Per Common Share (in dollars per share) | $ 0.05 | ||
Distributions reinvested in Shares of Common Stock | $ 2,181 | ||
Net Cash Distribution | 1,364 | ||
Total Aggregate Distribution | $ 3,545 | ||
Record date of May 30, 2018 | |||
Securities Financing Transaction [Line Items] | |||
Per Common Share (in dollars per share) | $ 0.05 | ||
Distributions reinvested in Shares of Common Stock | $ 2,176 | ||
Net Cash Distribution | 1,379 | ||
Total Aggregate Distribution | $ 3,555 | ||
Record date of June 28, 2018 | |||
Securities Financing Transaction [Line Items] | |||
Per Common Share (in dollars per share) | $ 0.05 | ||
Distributions reinvested in Shares of Common Stock | $ 2,151 | ||
Net Cash Distribution | 1,373 | ||
Total Aggregate Distribution | $ 3,524 | ||
Record date of July 30, 2018 | |||
Securities Financing Transaction [Line Items] | |||
Per Common Share (in dollars per share) | $ 0.05 | ||
Distributions reinvested in Shares of Common Stock | $ 2,155 | ||
Net Cash Distribution | 1,380 | ||
Total Aggregate Distribution | $ 3,535 | ||
Record date of August 30, 2018 | |||
Securities Financing Transaction [Line Items] | |||
Per Common Share (in dollars per share) | $ 0.05 | ||
Distributions reinvested in Shares of Common Stock | $ 2,151 | ||
Net Cash Distribution | 1,394 | ||
Total Aggregate Distribution | $ 3,545 | ||
Record date of September 27, 2018 | |||
Securities Financing Transaction [Line Items] | |||
Per Common Share (in dollars per share) | $ 0.05 | ||
Distributions reinvested in Shares of Common Stock | $ 2,133 | ||
Net Cash Distribution | 1,384 | ||
Total Aggregate Distribution | $ 3,517 |
FAIR VALUE MEASURES AND DISCL_3
FAIR VALUE MEASURES AND DISCLOSURES - Assets Measured at Fair Value on a Recurring Basis (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate caps | $ 67 | $ 49 |
Assets, fair value | 67 | 49 |
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 | 67 | 49 |
Assets, fair value | 67 | 49 |
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 DISCL_4
FAIR VALUE MEASURES AND DISCLOSURES - Schedule of Carrying and Fair Values (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Carrying Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Loan held for investment, net | $ 790 | $ 782 |
Mortgage notes payable- outstanding borrowings | (845,135) | (800,862) |
Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Loan held for investment, net | 982 | 1,057 |
Mortgage notes payable- outstanding borrowings | $ (836,431) | $ (802,523) |
DERIVATIVES AND HEDGING ACTIV_3
DERIVATIVES AND HEDGING ACTIVITIES (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018USD ($)derivative | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($)derivative | Sep. 30, 2017USD ($) | Dec. 31, 2017USD ($) | |
Prepaid expenses and other assets | |||||
Derivatives, Fair Value [Line Items] | |||||
Asset derivatives, fair value | $ 67 | $ 67 | $ 49 | ||
Cash flow hedges | |||||
Derivatives, Fair Value [Line Items] | |||||
Loss due to hedge ineffectiveness | 62 | $ 42 | 144 | $ 117 | |
Reclassified AOCI | $ 278 | $ 278 | |||
Cash flow hedges | Interest Rate Caps | |||||
Derivatives, Fair Value [Line Items] | |||||
Number of Instruments (in derivatives) | derivative | 17 | 17 | |||
Notional Amount | $ 507,000 | $ 507,000 |
OPERATING EXPENSE LIMITATION (D
OPERATING EXPENSE LIMITATION (Details) | 9 Months Ended |
Sep. 30, 2018 | |
Operating Expense [Abstract] | |
Percent of average invested assets | 2.00% |
Percent of net income | 25.00% |
Operating expense limitation, term | 1 year |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) | Oct. 30, 2018$ / shares |
Subsequent event | |
Subsequent Event [Line Items] | |
Dividends declared (in dollars per share) | $ 0.05 |