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The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. The prospectus is not an offer to sell the securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted. |
• | We have no prior operating history and there is no assurance that we will be able to successfully achieve our investment objectives. | |
• | Because there is no public trading market for shares of our common stock and we are not obligated to effectuate a liquidity event by a certain date or at all, it will be difficult for you to sell your shares of our common stock. | |
• | The amount of distributions we may make is uncertain. Our distributions may be paid from sources such as borrowings, offering proceeds or the deferral of fees and expense reimbursements by our advisor, in its sole discretion. Payment of distributions from sources other than our cash flow from operations would reduce the funds available to us for investments in real properties and real estate-related assets, which could reduce your overall return. |
• | The initial offering price of our shares of common stock was not established based upon any appraisals of assets we own or may own, and we do not intend to adjust the offering price based on any such appraisals during the first two years of this offering; therefore, the offering price may not accurately reflect the value of our assets when you invest. |
• | Because this is a “blind pool” offering, you will not have the opportunity to evaluate our investments prior to purchasing shares of our common stock. | |
• | We depend upon our advisor to conduct our operations. Our advisor is a newly formed entity and its management does not have significant experience operating a public company. |
• | All of our executive officers and some of our directors are also officers, managers, directors and/or holders of a controlling interest in our advisor, the dealer manager and other entities affiliated with us. As a result, they will face conflicts of interest as a result of compensation arrangements, time constraints and competition for investments, which could result in actions that are not in your best interests. |
• | We will pay substantial fees and expenses to our advisor, its affiliates and broker-dealers which will increase your risk of loss. These fees were not negotiated at arm’s length and therefore may be higher than fees payable to unaffiliated parties. | |
• | This is the first public offering sold by the dealer manager. Our ability to raise money and achieve our investment objectives depends on the ability of the dealer manager to successfully market our offering. | |
• | Continued disruptions in the financial markets and deteriorating economic conditions could have a material impact on our business. | |
• | We may incur debt exceeding 75% of the cost of our tangible assets with the approval of a majority of our independent directors. High debt levels increase the risk of your investment. | |
• | If we fail to qualify as a REIT, it would adversely affect our operations and our ability to make distributions to our stockholders and may have adverse tax consequences to our stockholders. |
Sales | Dealer | Proceeds to Us | ||||||||||||||
Price to Public(1) | Commission(1)(2) | Manager Fee(1)(2) | Before Expenses(1)(3) | |||||||||||||
Primary Offering Per Share | $ | 10.00 | $ | 0.65 | $ | 0.35 | $ | 9.00 | ||||||||
Total Minimum | $ | 2,000,000.00 | $ | 130,000.00 | $ | 70,000.00 | $ | 1,800,000.00 | ||||||||
Total Maximum | $ | 1,500,000,000.00 | $ | 97,500,000.00 | $ | 52,500,000.00 | $ | 1,350,000,000.00 | ||||||||
Distribution Reinvestment Plan Offering Per Share | $ | 9.50 | — | $ | — | $ | 9.50 | |||||||||
Total Maximum | $ | 150,000,000.00 | — | $ | — | $ | 150,000,000.00 |
(1) | Assumes we sell $1,500,000,000 in the primary offering and $150,000,000 pursuant to our distribution reinvestment plan. | |
(2) | Discounts are available for certain categories of purchasers. | |
(3) | Proceeds are calculated before reimbursing our advisor for organization and offering expenses. |
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• | a net worth (excluding the value of an investor’s home, furnishings and automobiles) of at least $250,000; or | |
• | a gross annual income of at least $70,000 and a net worth (excluding the value of an investor’s home, furnishings and automobiles) of at least $70,000. |
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• | Read this entire prospectus and any supplements accompanying this prospectus. | |
• | Complete the execution copy of the subscription agreement. A specimen copy of the subscription agreement, including instructions for completing it, is included in this prospectus as Appendix B. | |
• | Deliver a check for the full purchase price of the shares of our common stock being subscribed for along with the completed subscription agreement to your registered selling representative or investment advisor. |
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Q: | What is a “REIT”? | |
A: | In general, a real estate investment trust, or REIT, is a company that: | |
• offers the benefits of a diversified real estate portfolio under professional management; | ||
• is required to make distributions to investors of at least 90% of its taxable income for each year; | ||
• avoids the federal “double taxation” treatment of income that generally results from investments in a corporation because a REIT is not generally subject to federal corporate income taxes on the portion of its net income that is distributed to the REIT’s stockholders; and | ||
• combines the capital of many investors to acquire or provide financing for real estate assets. | ||
Q: | How will you structure the ownership and operation of your assets? | |
A: | We plan to own substantially all of our assets and conduct our operations through Steadfast Secure Income REIT Operating Partnership, L.P., a Delaware limited partnership organized in July 2009, which we refer to as our “operating partnership.” We are the sole general partner of our operating partnership. Because we will conduct substantially all of our operations through an operating partnership, we are organized in what is referred to as an “UPREIT” structure. | |
Q: | What is an “UPREIT”? | |
A: | UPREIT stands for Umbrella Partnership Real Estate Investment Trust. We use the UPREIT structure because a contribution of property directly to us is generally a taxable transaction to the contributing property owner. In contrast, a contributor of a property who desires to defer taxable gain on the transfer of his or her property may transfer the property to our operating partnership in exchange for limited partnership interests and defer taxation of gain until the contributor later disposes of his or her limited partnership interests. We believe that using an UPREIT structure gives us an advantage in acquiring desired properties from persons who may not otherwise sell their properties because of unfavorable tax results. | |
Q: | Why should I consider an investment in commercial real estate? | |
A: | Allocating some portion of your investment portfolio to commercial real estate investments may provide you with (1) portfolio diversification, (2) a reduction of overall portfolio risk, (3) a hedge against inflation, (4) a stable level of income relative to more traditional asset classes like stocks and bonds and (5) attractive risk-adjusted returns. For these reasons, commercial real estate has been embraced as a major asset class for purposes of asset allocations within investment portfolios. | |
Q: | Who might benefit from an investment in our shares? | |
A: | An investment in our shares may be beneficial for you if you meet the minimum suitability standards described in this prospectus, seek to diversify your personal portfolio with a REIT investment focused on investments in high quality multifamily properties and other real estate and real estate-related assets, seek to receive current income, seek to preserve capital, seek to realize potential capital appreciation in the value of your investment and are able to hold your investment for a time period consistent with our liquidity strategy. On the other hand, we caution persons who require immediate liquidity or guaranteed income, or who seek a short-term investment, that an investment in our shares will not meet those needs. | |
Q: | Do you currently have any shares outstanding? |
A: | Yes. Our sponsor has invested $200,007 in us through the purchase of 22,223 shares of our common stock, and our advisor has contributed $1,000 in exchange for 1,000 shares of our convertible stock. In addition, on October 13, 2009, we commenced a private offering of up to $94,000,000 in shares of our common |
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stock, subject to an option to increase the offering by up to $18,800,000 in shares of our common stock, at a purchase price of $9.40 per share (with discounts available for certain categories of purchasers), which we refer to as the “private offering.” We are offering shares of our common stock for sale in the private offering pursuant to a confidential private placement memorandum and only to persons that are “accredited investors,” as that term is defined under the Securities Act and Regulation D promulgated thereunder. As of , 2009, we had received aggregate gross offering proceeds, net of certain discounts, of approximately $ from the sale of approximately shares in the private offering. We intend to terminate the private offering upon the commencement of this offering. | ||
Q: | Do you currently own any assets? | |
A: | No. This offering is a “blind pool” offering in that we have not yet identified any specific real estate assets to acquire using the proceeds of this offering. As a result, you will not have the opportunity to evaluate our investments prior to purchasing shares of our common stock. If we are delayed or unable to find suitable investments, we may not be able to achieve our investment objectives. | |
Q: | Will you provide stockholders with information concerning the estimated value of their shares of common stock? | |
A: | Yes, we will publicly disclose an estimated net asset value per share of our common stock every six months beginning no later than six months following the completion of our offering stage (as defined below). Our estimated net asset value per share will be determined by our advisor and approved by our board of directors based upon periodic valuations of all of our assets by independent third party appraisers and qualified independent valuation experts selected by our advisor. We will consider our offering stage complete on the first date that we are no longer publicly offering equity securities that are not listed on a national securities exchange, whether through this offering or follow-on public equity offerings, provided we have not filed a registration statement for a follow-on public equity offering as of such date (for purposes of this definition, we do not consider “public equity offerings” to include offerings on behalf of selling stockholders or offerings related to a distribution reinvestment plan, employee benefit plan or the redemption of interests in our operating partnership). For more information on how we intend to determine our estimated net asset value per share, see “Description of Capital Stock — Estimated Net Asset Value Per Share.” Our estimated net asset value per share may not be indicative of the price our stockholders would receive if they sold our shares in an arms-length transaction, if our shares were actively traded or if we were liquidated. | |
Q: | How long will this offering last? | |
A: | We expect to sell the shares of our common stock offered in the primary offering over a two year period. If we have not sold all of the shares to be offered in the primary offering within two years from the date of this prospectus, we may continue the primary offering until , 2012 (three years from the date of this prospectus). Under rules promulgated by the SEC, in some circumstances we could continue the primary offering until as late as , 2012. If we decide to continue the primary offering beyond two years from the date of this prospectus, we will provide that information in a prospectus supplement. In many states, we will need to renew the registration statement or file a new registration statement to continue this offering beyond one year from the date of this prospectus. We may terminate this offering at any time. | |
If our board of directors determines that it is in our best interest, we may conduct follow-on offerings upon the termination of this offering. Our charter does not restrict our ability to conduct offerings in the future. | ||
Q: | What happens if you do not raise a minimum of $2,000,000 in this offering? | |
A: | We will not sell any shares of our common stock unless we sell a minimum of $2,000,000 in shares to the public by , 2010 (one year from the date of this prospectus). Purchases by our directors, officers and affiliates will not count toward meeting this minimum threshold. Pending satisfaction of this minimum offering requirement, all subscription payments will be placed in an escrow account held by , as |
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escrow agent, in trust for subscribers’ benefit pending release to us. If we do not sell $2,000,000 in shares to the public by , 2010 (one year from the date of this prospectus), we will terminate this offering and return all subscribers’ funds held in escrow, plus interest. If we raise the minimum offering amount by , 2010, the proceeds held in escrow, plus interest, will be released to us. | ||
Q: | Will I receive a stock certificate? | |
A: | No. You will not receive a stock certificate unless expressly authorized by our board of directors. We anticipate that all shares of our common stock will be issued in book-entry form only. The use of book-entry registration protects against loss, theft or destruction of stock certificates and reduces the offering costs. | |
Q: | Who can buy shares of common stock in this offering? | |
A: | In general, you may buy shares of our common stock pursuant to this prospectus provided that you have either (1) a net worth of at least $70,000 and an annual gross income of at least $70,000 or (2) a net worth of at least $250,000. For this purpose, net worth does not include your home, home furnishings and personal automobiles. Please see the more detailed description under “Suitability Standards” above. | |
Q: | Are there any special restrictions on the ownership of shares? | |
A: | Yes. Our charter prohibits the ownership of more than 9.8% in value of our outstanding capital stock (which includes common stock and preferred stock we may issue) and more than 9.8% in value or number of shares, whichever is more restrictive, of our outstanding common stock, unless exempted by our board of directors. This prohibition may discourage large investors from purchasing our shares and may limit your ability to transfer your shares. To comply with tax rules applicable to REITs, we will require our record holders to provide us with detailed information regarding the beneficial ownership of our shares on an annual basis. These restrictions are designed, among other purposes, to enable us to comply with the ownership restrictions imposed on REITs by the Internal Revenue Code. See “Description of Capital Stock — Restriction on Ownership of Shares of Capital Stock.” | |
Q: | Is there any minimum initial investment required? | |
A: | Yes. To purchase shares of common stock in this offering, you must make an initial purchase of at least $4,000 in shares. Once you have satisfied the minimum initial purchase requirement, any additional purchases of our shares of common stock in this offering must be in amounts of at least $100, except for additional purchases pursuant to our distribution reinvestment plan which are not subject to any minimum investment requirement. | |
Q: | If I buy shares of common stock in this offering, how may I later sell them? | |
A: | At the time you purchase the shares of our common stock, the shares will not be listed for trading on any national securities exchange, and we do not expect that a public market for our shares will develop. As a result, if you wish to sell your shares, you may not be able to do so promptly, or at all, or you may only be able to sell them at a substantial discount from the price you paid. In general, however, you may sell your shares to any buyer that meets the applicable suitability standards unless such sale would cause the buyer to own more than 9.8% of the value of our then outstanding capital stock (which includes common stock and any preferred stock we may issue) or more than 9.8% of the value or number of shares, whichever is more restrictive, of our then outstanding common stock, and if such sale does not violate the federal securities laws. See “Suitability Standards” and “Description of Capital Stock — Restriction on Ownership of Shares of Capital Stock.” In addition, we have adopted a share repurchase plan, as discussed under “Description of Capital Stock — Share Repurchase Plan,” which may provide limited liquidity for some of our stockholders. |
Q: | What information about your portfolio of real estate investments do you intend to provide to stockholders? | |
A: | Our charter requires that we prepare an annual report and deliver it to our stockholders 120 days after the end of each fiscal year. Additionally, we must update this prospectus upon the occurrence of certain events, such as material asset acquisitions, pursuant to the requirements of the Securities Act of 1933, as amended, or the Securities Act. We are also subject to the informational reporting requirements of the Securities Exchange Act |
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of 1934, as amended, or the Exchange Act, and, accordingly, we will file annual reports, quarterly reports, proxy statements and other information with the SEC. We will directly provide to our stockholders our periodic updates, including prospectus supplements and annual and quarterly reports. | ||
In addition to providing information mandated by our charter and the federal securities laws, we intend to post on our website at www.steadfastcompanies.com, and file with the SEC, certain monthly operational data each month with respect to each real property in our portfolio. We believe that posting this additional operational data will benefit stockholders by consistently providing current information and greater transparency with respect to the performance of our investments. | ||
Q: | Will the distributions I receive be taxable? | |
A: | Distributions that you receive, including the market value of our common stock received pursuant to our distribution reinvestment plan, will generally be taxed as ordinary income to the extent they are paid out of our current or accumulated earnings and profits. However, if we recognize a long-term capital gain upon the sale of one of our assets, a portion of our distributions may be designated and treated as a long-term capital gain. In addition, we expect that some portion of your distributions may not be subject to tax in the year received due to the fact that depreciation expenses reduce earnings and profits but do not reduce cash available for distribution. Amounts distributed to you in excess of our earnings and profits will reduce the tax basis of your shares of common stock and will not be taxable to the extent thereof, and distributions in excess of tax basis will be taxable as an amount realized from the sale of your shares of common stock. This, in effect, would defer a portion of your tax until your investment is sold or we are liquidated, at which time you may be taxed at capital gains rates. However, because each investor’s tax considerations are different, we suggest that you consult with your tax advisor. | |
Q: | When will I get my detailed tax information? | |
A: | We intend to mail your Form 1099 tax information, if required, by January 31 of each year. | |
Q: | Will I be notified of how my investment is doing? | |
A: | Yes, we will provide you with periodic updates on the performance of your investment in us, including: | |
• an annual report; | ||
• supplements to the prospectus, provided quarterly during the primary offering; and | ||
• three quarterly financial reports. | ||
We will provide this information to you via one or more of the following methods, in our discretion and with your consent, if necessary: | ||
• U.S. mail or other courier; | ||
• facsimile; | ||
• electronic delivery; or | ||
• posting on our web site at www.steadfastcompanies.com. | ||
Q: | Who can answer my questions? | |
A: | If you have additional questions about this offering or if you would like additional copies of this prospectus, you should contact your registered selling representative or: |
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• | preserve, protect and return invested capital; | |
• | pay attractive and stable cash distributions to stockholders; and | |
• | realize capital appreciation in the value of our investments over the long term. |
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(1) | As we accept subscriptions for shares of our common stock, we will transfer substantially all of the net offering proceeds to our operating partnership in exchange for limited partnership interests and our percentage ownership in our operating partnership will increase proportionately. | |
(2) | Certain officers and employees of our sponsor and its affiliates own profit interests in each of the managing dealer and advisor that entitles them to a portion of the net profits earned by each such entity after all invested capital and a preferred return on invested capital are distributed to Steadfast REIT Holdings, LLC and Steadfast REIT Investments, LLC, respectively. |
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• | We have no prior operating history and there is no assurance that we will be able to successfully achieve our investment objectives. | |
• | Because there is no public trading market for our shares and we are not required to effectuate a liquidity event by a certain date, or at all, it will be difficult for you to sell your shares. If you are able to sell your shares, you will likely sell them at a substantial discount. |
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• | There are restrictions and limitations on your ability to have all or any portion of your shares of our common stock repurchased under our share repurchase plan, and, if you are able to have your shares repurchased, it may be at a price that is less than the price you paid for the shares and the then-current value of the shares. | |
• | The amount of distributions we may make is uncertain. Our distributions may be paid from sources such as borrowings, offering proceeds or the deferral of fees and expense reimbursements by our advisor, in its sole discretion. Payment of distributions from sources other than our cash flow from operations would reduce the funds available to us for investments in real properties and real estate-related assets, which could reduce your overall return. | |
• | The initial offering price of our shares of common stock was not established based upon any appraisals of assets we own or may own and we do not intend to adjust the offering price based on any such appraisals during the first two years of this offering; therefore, the offering price may not accurately reflect the value of our assets when you invest. | |
• | Because this is a “blind pool” offering, you will not have the opportunity to evaluate our investments prior to purchasing shares of our common stock. |
• | We depend upon our advisor to select our investments and to conduct our operations. Our advisor is a newly formed entity and its management does not have significant experience operating a public company. |
• | All of our executive officers and some of our directors are also officers, managers, directors and/or holders of a controlling interest in our advisor, the dealer manager and other entities affiliated with us. As a result, they will face conflicts of interest as a result of compensation arrangements, time constraints and competition for investments. | |
• | This is the first public offering sold by the dealer manager. Our ability to raise money and achieve our investment objectives depends on the ability of the dealer manager to successfully market our offering. If we raise substantially less than the maximum offering amount, we may not be able to invest in a diverse portfolio of assets and the value of your investment may vary more widely with the performance of specific investments. |
• | We will pay substantial fees and expenses to our advisor, its affiliates and broker-dealers which will increase your risk of loss. These fees were not negotiated at arm’s length and therefore may be higher than fees payable to unaffiliated third parties. |
• | We may incur substantial debt which may exceed 300% of our net assets, or approximately 75% of the aggregate cost of our assets, in certain circumstances. Our use of leverage increases the risk of your investment. Loans we obtain may be collateralized by some or all of our investments, which will put those investments at risk of forfeiture if we are unable to pay our debts. Principal and interest payments on these loans reduce the amount of money that would otherwise be available for other purposes. | |
• | We are subject to risks associated with the liquidity problems occurring in the United States credit markets. Volatility in the debt markets could affect our ability to obtain financing for investments or other activities related to real estate assets and the diversification or value of our portfolio, potentially reducing cash available for distribution to our stockholders or our ability to make investments. | |
• | If we fail to qualify as a REIT, it would adversely affect our operations and our ability to make distributions to our stockholders because we will be subject to U.S. federal income tax at regular corporate rates with no ability to deduct distributions made to our stockholders. |
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Estimated Amount if | ||||
Type of Compensation and Recipient | Determination of Amount | Minimum/Maximum Sold | ||
Organizational and Offering Stage | ||||
Sales Commission — Dealer Manager | 6.5% of gross offering proceeds from the sale of shares in the primary offering (all of which will be reallowed to participating broker-dealers), subject to reductions based on volume and for certain categories of purchasers. No sales commissions will be paid for sales pursuant to the distribution reinvestment plan. | $130,000/$97,500,000 | ||
Dealer Manager Fee — Dealer Manager | 3.5% of gross offering proceeds from the sale of shares (a portion of which will be reallowed to participating broker-dealers). No dealer manager fee will be paid for sales pursuant to the distribution reinvestment plan. | $70,000/$52,500,000 | ||
Organization and Offering Expenses — Advisor and Affiliates | To date, our advisor has paid organization and offering expenses on our behalf. We will reimburse our advisor for these costs and future organization and offering costs it may incur on our behalf, but only to the extent that the reimbursement would not cause the sales commissions, the dealer manager fee and the other organization and offering expenses borne by us to exceed 15% of the gross proceeds from the primary offering as of the date of the reimbursement. If we raise the minimum or the maximum offering amount, we expect organization and offering expenses (other than sales commissions and the dealer manager fee) to be approximately 1.25% of the gross proceeds from the primary offering. | $25,000/$18,750,000 |
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Estimated Amount if | ||||
Type of Compensation and Recipient | Determination of Amount | Minimum/Maximum Sold | ||
Operational Stage | ||||
Acquisition Fees — Advisor | 2.0% of (1) the purchase price in connection with the acquisition or origination of any type of real property or real estate-related asset acquired directly or (2) our allocable portion of the purchase price in connection with the acquisition or origination of any type of real property or real estate-related asset acquired through a joint venture, including any acquisition and origination expenses and any debt attributable to such investments. Total acquisition fees and expenses relating to the purchase of an investment may not exceed 6% of the contract purchase price unless such excess is approved by our board of directors, including a majority of our independent directors. | $35,500/$26,625,000 (assuming no leverage) $101,429/$76,071,429 (assuming leverage of 65% of the cost of our investments) $142,000/$106,500,000 (assuming leverage of 75% of the cost of our investments) | ||
Acquisition Expenses — Advisor | In addition to the acquisition fee payable to our advisor, we will reimburse our advisor for amounts it pays to third parties in connection with the selection, acquisition or development of a property or acquisition of real estate-related assets (including expenses relating to potential investments that we do not close). | Actual amounts are dependent upon the services provided, and therefore cannot be determined at this time. | ||
Investment Management Fees — Advisor | A monthly amount equal to one-twelfth of 0.80% of (1) the cost of real properties and real estate-related assets acquired directly or (2) our allocable cost of each real property or real estate-related asset acquired through a joint venture. Such fee will be calculated by including acquisition fees, acquisition expenses and any debt attributable to such investments, or our proportionate share thereof in the case of investments made through joint ventures. | Actual amounts depend upon the aggregate cost of our real estate investments, and therefore cannot be determined at this time. |
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Estimated Amount if | ||||
Type of Compensation and Recipient | Determination of Amount | Minimum/Maximum Sold | ||
Other Operating Expenses — Advisor | Reimbursement of expenses incurred in providing services to us, including our allocable share of our advisor’s overhead, such as rent, employee costs, utilities and IT costs. We will not reimburse for employee costs in connection with services for which our advisor or its affiliates receive acquisition fees, investment management fees or disposition fees or for the employee costs our advisor pays to our executive officers. | Actual amounts are dependent upon the services provided, and therefore cannot be determined at this time. | ||
Property Management Fees — Affiliated Property Managers | A percentage of the annual gross revenues of each property owned by us for property management services. The property management fee payable with respect to each property will be equal to the percentage of annual gross revenues of the property that is usual and customary for comparable property management services rendered to similar properties in the geographic market of the property, as determined by our advisor and approved by a majority of our board of directors, including a majority of our independent directors. See “Management — Affiliated Property Managers.” Our property managers may subcontract with third party property managers and will be responsible for supervising and compensating those third party property managers. | Actual amounts depend upon the gross revenue of the properties and customary property management and leasing fees in the region in which properties are located and the property types acquired, and therefore cannot be determined at this time. |
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Estimated Amount if | ||||
Type of Compensation and Recipient | Determination of Amount | Minimum/Maximum Sold | ||
Leasing Fees — Affiliated Property Managers | In addition to property management fees, we may pay our property managers a separate fee for services rendered, whether directly or indirectly, in leasing our real properties to a third party lessee. Such leasing fee will be in an amount that is usual and customary for comparable services rendered to similar real properties in the geographic market of the property leased; provided, however, that such leasing fee shall only be paid if a majority of our board of directors, including a majority of our independent directors, determines that such leasing fee is fair and reasonable in relation to the services being performed. | |||
Liquidity Stage | ||||
Disposition Fees — Advisor or its Affiliate | If our advisor or its affiliates provides a substantial amount of services, as determined by our independent directors, in connection with the sale of a real property or real estate-related asset, 1.5% of the sales price of each real property or real estate-related asset sold. | Actual amounts depend upon the sale price of investments, and therefore cannot be determined at this time. |
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Estimated Amount if | ||||
Type of Compensation and Recipient | Determination of Amount | Minimum/Maximum Sold | ||
Convertible Stock — Advisor | We have issued 1,000 shares of our convertible stock to our advisor, for which our advisor contributed $1,000. Our convertible stock will convert to shares of common stock if and when: (A) we have made total distributions on the then outstanding shares of our common stock equal to the original issue price of those shares plus an 8.0% cumulative, non-compounded, annual return on the original issue price of those shares, (B) we list our common stock for trading on a national securities exchange or (C) our advisory agreement is terminated or not renewed (other than for “cause” as defined in our advisory agreement). In the event of a termination or non-renewal of our advisory agreement for cause, the convertible stock will be redeemed by us for $1.00. In general, each share of our convertible stock will convert into a number of shares of common stock equal to 1/1000 of the quotient of (A) 10% of the excess of (1) our “enterprise value” plus the aggregate value of distributions paid to date on the then outstanding shares of our common stock over (2) the aggregate purchase price paid by stockholders for those outstanding shares of common stock plus an 8.0% cumulative, non-compounded, annual return on the original issue price of those outstanding shares, divided by (B) our enterprise value divided by the number of outstanding shares of common stock on an as-converted basis, in each case calculated as of the date of the conversion. For a description of how our “enterprise value” is determined pursuant to our charter and an example illustrating how the conversion formula with respect to our convertible stock set forth above will operate, see “Description of Capital Stock — Convertible Stock.” | Actual amounts depend upon future liquidity events, and therefore cannot be determined at this time. |
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• | the directors, officers and key personnel of our advisor must allocate their time between advising us and managing our sponsor’s and our other affiliates’ businesses and the other real estate projects and business activities in which they may be involved; | |
• | the compensation payable by us to our advisor and other affiliates may not be on terms that would result from arm’s-length negotiations between unaffiliated parties, and fees such as the acquisition fees and investment management fees payable to our advisor are based upon the cost of assets we acquire and will generally be payable regardless of the performance of the investments we make, and thus may create an incentive for the advisor to accept a higher purchase price for assets or to purchase assets that may not otherwise be in our best interest; | |
• | the property management fees payable to our property managers will generally be payable regardless of the quality of services provided to us; | |
• | the real estate professionals acting on behalf of our advisor must determine which investment opportunities to recommend to us and other Steadfast affiliates; and | |
• | the dealer manager is affiliated with our advisor and sponsor and, as a result, you will not have the benefit of an independent due diligence review and investigation of the type normally performed by an unaffiliated, independent underwriter in connection with a securities offering. |
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Repurchase Price as a | ||
Percentage of Offering Price | ||
Share Purchase Anniversary | on Repurchase Date | |
Less than 1 year | No Repurchase Allowed | |
1 year | 92.5% | |
2 years | 95.0% | |
3 years | 97.5% | |
4 years | 100.0% |
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• | public offerings of equity by us, which allow the dealer manager to earn additional dealer manager fees and allows our advisor to earn increased acquisition fees and investment management fees; | |
• | real property sales, since the investment management fees and property management fees payable to our advisor and its affiliates will decrease; and | |
• | the purchase of assets from our sponsor and its affiliates, which may allow our advisor or its affiliates to earn additional acquisition fees, investment management fees and property management fees. |
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• | changes in global, national, regional or local economic, demographic or real estate market conditions; | |
• | changes in supply of or demand for similar properties in an area; | |
• | increased competition for real property investments targeted by our investment strategy; | |
• | bankruptcies, financial difficulties or lease defaults by our tenants; | |
• | changes in interest rates and availability of financing; | |
• | changes in the terms of available financing, including more conservative loan-to-value requirements and shorter debt maturities; | |
• | changes in government rules, regulations and fiscal policies, including changes in tax, real estate, environmental and zoning laws; and |
• | the severe curtailment of liquidity for certain real estate-related assets. |
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• | make it more difficult for us to find tenants to lease units in our apartment communities; | |
• | force us to lower our rental prices in order to lease units in our apartment communities; and/or | |
• | substantially reduce our revenues and cash available for distribution to our stockholders. |
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• | the possibility that our venture partner or co-tenant in an investment might become bankrupt; | |
• | that the venture partner or co-tenant may at any time have economic or business interests or goals which are, or which become, inconsistent with our business interests or goals; | |
• | that such venture partner or co-tenant may be in a position to take action contrary to our instructions or requests or contrary to our policies or objectives; | |
• | the possibility that we may incur liabilities as a result of an action taken by such venture partner; | |
• | that disputes between us and a venture partner may result in litigation or arbitration that would increase our expenses and prevent our officers and directors from focusing their time and effort on our business; | |
• | the possibility that if we have a right of first refusal or buy/sell right to buy out a co-venturer, co-owner or partner, we may be unable to finance such a buy-out if it becomes exercisable or we may be required to purchase such interest at a time when it would not otherwise be in our best interest to do so; or | |
• | the possibility that we may not be able to sell our interest in the joint venture if we desire to exit the joint venture. |
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• | In order to qualify as a REIT, we must distribute annually at least 90% of our REIT taxable income (which is determined without regard to the dividends paid deduction or net capital gain for this purpose) to our stockholders. To the extent that we satisfy the distribution requirement but distribute less than 100% of our REIT taxable income, we will be subject to federal corporate income tax on the undistributed income. | |
• | We will be subject to a 4% nondeductible excise tax on the amount, if any, by which distributions we pay in any calendar year are less than the sum of 85% of our ordinary income, 95% of our capital gain net income and 100% of our undistributed income from prior years. | |
• | If we have net income from the sale of foreclosure property that we hold primarily for sale to customers in the ordinary course of business or other non-qualifying income from foreclosure property, we must pay a tax on that income at the highest corporate income tax rate. | |
• | If we sell an asset, other than foreclosure property, that we hold primarily for sale to customers in the ordinary course of business, our gain would be subject to the 100% “prohibited transaction” tax unless such sale were made by one of our taxable REIT subsidiaries. |
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• | your investment is consistent with your fiduciary obligations under ERISA and the Internal Revenue Code; | |
• | your investment is made in accordance with the documents and instruments governing your plan or IRA, including your plan or account’s investment policy; | |
• | your investment satisfies the prudence and diversification requirements of Section 404(a)(1)(B) and 404(a)(1)(C) of ERISA and other applicable provisions of ERISA and/or the Internal Revenue Code; | |
• | your investment will not impair the liquidity of the plan or IRA; | |
• | your investment will not produce unrelated business taxable income, referred to as UBTI, for the plan or IRA; | |
• | you will be able to value the assets of the plan annually in accordance with ERISA requirements and applicable provisions of the plan or IRA; and | |
• | your investment will not constitute a prohibited transaction under Section 406 of ERISA or Section 4975 of the Internal Revenue Code. |
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• | our ability to effectively deploy the proceeds raised in this offering; | |
• | changes in economic conditions generally and the real estate and debt markets specifically; | |
• | legislative or regulatory changes (including changes to the laws governing the taxation of REITs); | |
• | the availability of capital; | |
• | interest rates; and | |
• | changes to generally accepted accounting principles. |
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Maximum Primary | ||||||||||||||||||||||||
Minimum Primary | Maximum Primary | Offering and Distribution | ||||||||||||||||||||||
Offering | Offering | Reinvestment Plan | ||||||||||||||||||||||
Amount | % | Amount | % | Amount | % | |||||||||||||||||||
Gross Offering Proceeds | $ | 2,000,000 | 100.0 | % | $ | 1,500,000,000 | 100.0 | % | $ | 1,650,000,000 | 100.0 | % | ||||||||||||
Less Offering Expenses: | ||||||||||||||||||||||||
Sales Commissions | 130,000 | 6.5 | 97,500,000 | 6.5 | 97,500,000 | 5.9 | ||||||||||||||||||
Dealer Manager Fee | 70,000 | 3.5 | 52,500,000 | 3.5 | 52,500,000 | 3.2 | ||||||||||||||||||
Organization and Offering Expenses(1) | 25,000 | 1.25 | 18,750,000 | 1.25 | 18,750,000 | 1.1 | ||||||||||||||||||
Net Proceeds(2) | $ | 1,775,000 | 88.75 | % | $ | 1,331,250,000 | 88.75 | % | $ | 1,481,250,000 | 89.8 | % | ||||||||||||
Less: | ||||||||||||||||||||||||
Acquisition Fees(2)(3) | 35,500 | 1.8 | 26,625,000 | 1.8 | 29,625,000 | 1.8 | ||||||||||||||||||
Acquisition Expenses(3) | 13,313 | 0.67 | 9,984,375 | 0.67 | 11,131,875 | 0.68 | ||||||||||||||||||
Estimated Amount Available for Investments(3)(4) | $ | 1,726,187 | 86.3 | % | $ | 1,294,640,625 | 86.3 | % | $ | 1,440,493,125 | 87.3 | % | ||||||||||||
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(1) | Includes all expenses (other than sales commissions and the dealer manager fee) to be paid by us in connection with the offering, including our legal, accounting, printing, mailing and filing fees, charges of our escrow agent and transfer agent, expenses of organizing the company, data processing fees, advertising and sales literature costs, transfer agent costs and bona fide out-of-pocket due diligence costs. Our advisor has agreed to reimburse us to the extent sales commissions, the dealer manager fee and other organization and offering expenses incurred by us exceed 15% of the gross proceeds from the primary offering. | |
(2) | This table excludes debt proceeds. To the extent we fund investments with debt, as we expect, the total amount of funds used for investment and the amount of acquisition fees will be proportionately greater. | |
(3) | Amounts available for investments will include customary third party acquisition expenses, such as legal, accounting, consulting, appraisals, engineering, due diligence, title insurance, closing costs and other expenses related to potential investments regardless of whether the asset is actually acquired. Acquisition expenses as a percentage of a real property’s contract price vary. However, in no event will total acquisition fees and acquisition expenses on a real property exceed 6% of the contract price of the real property. Furthermore, in no event will the total of all acquisition fees and acquisition expenses paid by us, including acquisition expenses on real properties which are not acquired, exceed 6% of the aggregate contract price of all real properties acquired by us. We expect acquisition expenses will constitute 0.75% of net proceeds of our primary offering if we raise the maximum amount offered. Until required in connection with the acquisition of our investments, substantially all of the net offering proceeds may be invested in short-term, highly liquid investments, including, but not limited to, government obligations, bank certificates of deposit, short-term debt obligations, interest-bearing accounts and other authorized investments as determined by our board of directors. | |
(4) | We do not anticipate establishing a general working capital reserve out of the proceeds of this offering during the initial stages of the offering; however, we may establish capital reserves from offering proceeds with respect to particular investments as required by our lenders. We also may, but are not required to, establish annual cash reserves out of cash flow generated by our investments or out of net cash proceeds from the sale of our investments. |
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• | preserve, protect and return invested capital; | |
• | pay attractive, stable cash distributions to stockholders; and | |
• | realize capital appreciation in the value of our investments over the long term. |
• | positioning our overall portfolio to achieve diversity by property type, geography, lease expirations and tenant industry; |
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• | macroeconomic and microeconomic employment and demographic data and trends of the submarket where the investment is located; | |
• | regional, market and property specific supply and demand dynamics; | |
• | transaction size and projected property-level leverage; | |
• | physical condition of the property and the need for capital expenditures; | |
• | property location and positioning within its market; | |
• | design characteristics of the property; | |
• | types and duration of leases related to the property; | |
• | adequacy of parking and access to public transportation; | |
• | credit quality of in-place tenants and the potential for future rent increases; | |
• | income-producing capacity of the property; | |
• | opportunities for capital appreciation based on property repositioning, operating expense reductions and other factors; | |
• | potential to otherwise add value to the property; | |
• | risk characteristics of the investment compared to the potential returns and availability of alternative investments; | |
• | REIT qualification requirements; | |
• | liquidity and tax considerations; and | |
• | other factors considered important to meet our investment objectives. |
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• | target location selection; | |
• | individual property review; | |
• | income/expense analysis; | |
• | capital improvement planning; and | |
• | green initiatives. |
• | metropolitan statistical areas, or MSAs, with a population of 500,000 or more, with a preference for MSAs in the Western United States; | |
• | MSAs with a strong commitment to municipal infrastructure such as roads, airports and economic development initiatives; | |
• | markets where we can benefit from the services and experience of our advisor and its affiliates; | |
• | proximity to employment centers, retail shopping, vehicular and public transit, and various public and private amenities; | |
• | stabilized employment rates with strong anticipated job growth; | |
• | markets with high barriers to entry limiting the development of additional supply of the type of property; | |
• | markets with low historical and current vacancy rates; | |
• | markets with a limited “shadow market” of both unsold condominium and single family homes competing in the rental market; | |
• | markets with a significant difference between the cost to rent and the cost to own an entry level home; |
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• | limited multifamily inventory or new product based upon historical norms and market occupancy; | |
• | strong underlying land values as a percentage of acquisition costs; and | |
• | positive demographic trends; |
• | title and legal review; | |
• | property condition assessments; | |
• | environmental site assessments; and | |
• | appraisal and market studies. |
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• | use of paint with low volatile organic compound (VOC) levels; | |
• | flooring that is recyclable or made from recycled fibers; | |
• | high efficiency and/or compact fluorescent lighting in common areas; | |
• | lighting timers and sensors installed in property offices and common areas; | |
• | toilets, faucets and shower heads fitted with water saving devices; | |
• | where possible, water usage will be individually metered or allocated; | |
• | apartment appliances, HVAC systems, water heating or boiler systems and windows and doors upgraded as necessary with systems and materials meeting current energy efficiency requirements; | |
• | using voice over IP phone systems to minimize the number of phone lines and eliminate most long distance charges; and | |
• | green product guidelines are used for sourcing cleaning and maintenance supplies. |
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• | target location selection; | |
• | individual property review; | |
• | tenant review; and | |
• | income and expense analysis. |
• | MSAs located in the Western United States that are major and secondary distribution hubs or desirable industrial markets based on strong tenant demand; | |
• | markets in which affiliates of our advisor own and/or manage property; | |
• | proximity to distribution and manufacturing employment sectors; | |
• | proximity and access to and major transportation (freeway, highway, rail, port), vehicular and public transit; |
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• | markets with high barriers to entry limiting the development of additional industrial supply; and | |
• | markets with low historical and current vacancy rates, with favorable projected occupancy trends. |
• | title and legal review; | |
• | property condition assessments; | |
• | environmental site assessments; and | |
• | appraisal and market studies. |
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• | positioning the overall portfolio to achieve an optimal mix of real estate investments; | |
• | the diversification benefits of the real estate-related assets relative to the rest of the portfolio; | |
• | the potential for the investment to deliver high current income and attractive risk-adjusted total returns; and | |
• | other factors considered important to meeting our investment objectives. |
• | the fundamentals of the underlying property and other collateral by which it is secured, including the factors discussed above under “— Investments in Real Properties — Investment Characteristics;” | |
• | the ratio of the amount of the investment to the value of the underlying property and other collateral by which the underlying property is secured; |
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• | the degree of liquidity of the investment; | |
• | the quality, experience and creditworthiness of the borrower and/or guarantor; and | |
• | general economic conditions. |
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• | a list of the current tenants at the property and the terms of their respective leases; | |
• | audited financial statements covering recent operations of properties with operating histories to the extent such statements are required to be filed with the SEC; | |
• | historical net operating income data; | |
• | historical occupancy rates; | |
• | a schedule of historical, current year and projected future tenant improvements, leasing commissions and capital expenditures; | |
• | historical and projected operating expenses along with that of the comparable properties; | |
• | current and historical data on real estate taxes and potential increases in real estate taxes over the projected term of the investment; | |
• | competitive rents in the same geographical area for similar properties; | |
• | historical, current year and projected future utility expenses; | |
• | service and vendor contracts, parking management agreement, ground lease, and property management agreements; | |
• | existing property leases; |
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• | all appropriate environmental due diligence assessments and reports, including, but not limited to, a preliminary investigation comprised of record reviews, interviews and physical property inspections intended to identify areas of potential hazardous substance contamination on the property, commonly referred to as a “Phase I environmental site assessment,” and, if deemed necessary based upon the findings of the Phase I environmental site assessment, a second more thorough investigation involving the collection of original samples of soil, groundwater or building materials to test for various environmental contaminants, commonly referred to as a “Phase II environmental site assessment;” | |
• | an independent engineering report of the property’s mechanical, electrical and structural integrity; | |
• | an independent roofing report; | |
• | title and liability insurance policies; | |
• | evidence that the owner of the property has good and marketable title to the property and can transfer such title to us free and clear of claims on the property from third parties, with the exception of such liens and encumbrances on the property as are acceptable to our advisor; | |
• | surveys of the property; | |
• | a certification from each tenant verifying, among other things, the material terms and status of the tenant’s existing lease; | |
• | current and potential alternative uses of the property; and | |
• | other documents and materials determined to be material and/or relevant to evaluation of the property. |
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• | the management of the joint venture, such as obtaining certain approval rights in joint ventures we do not control or providing for procedures to address decisions in the event of an impasse if we share control of the joint venture; | |
• | our ability to exit a joint venture, such as requiring buy/sell rights, redemption rights or forced liquidation under certain circumstances; and | |
• | our ability to control transfers of interests held by other parties in the joint venture, such as requiring consent, rights of first refusal or forced redemption rights in connection with transfers. |
• | the prevailing economic, real estate and securities market conditions; | |
• | the extent to which the investment has realized its expected total return; | |
• | benefits associated with disposing of the investment and diversifying and rebalancing our investment portfolio; | |
• | the opportunity to pursue a more attractive investment; | |
• | compliance with REIT qualification requirements; | |
• | the involuntarily liquidation or lease default of a major tenant at a property; | |
• | the opportunity to enhance overall investment returns through sale of the investment; | |
• | the fact that the investment was acquired as part of a portfolio acquisition and does not meet our general acquisition criteria; | |
• | our advisor’s judgment that the value of the investment might decline; | |
• | liquidity benefits with respect to the availability of sufficient funds for the share repurchase plan; and | |
• | other factors that, in the judgment of our advisor, determine that the sale of the investment is in our stockholders’ best interests. |
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• | invest in commodities or commodity futures contracts, except for futures contracts when used solely for the purpose of hedging in connection with our ordinary business of investing in real property and real estate-related loans; | |
• | invest in real estate contracts of sale, otherwise known as land sale contracts, unless the contract is in recordable form and is appropriately recorded in the chain of title; | |
• | make or invest in individual mortgage loans unless an appraisal is obtained concerning the underlying property, except for those mortgage loans insured or guaranteed by a government or government agency; | |
• | make or invest in mortgage loans that are subordinate to any lien or other indebtedness of any of our directors, our advisor or its affiliates; | |
• | acquire equity securities unless a majority of our directors (including a majority of our independent directors) not otherwise interested in the transaction approves such investment as being fair, competitive |
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and commercially reasonable, provided that investments in equity securities in “publicly traded entities” that are otherwise approved by a majority of our directors (including a majority of our independent directors) shall be deemed fair, competitive and commercially reasonable if we acquire the equity securities through a trade that is effected in a recognized securities market (a “publicly traded entity” shall mean any entity having securities listed on a national securities exchange or included for quotation on an inter-dealer quotation system) and provided further that this limitation does not apply to (1) acquisitions effected through the purchase of all of the equity securities of an existing entity, (2) the investment in wholly owned subsidiaries of ours or (3) investments in securities, which we refer to as asset-backed securities, that are collateralized by a pool of assets, including loans and receivables, that provide for a specific cash flow stream to the holder; |
• | make or invest in mortgage loans, including construction loans, on any one real property if the aggregate amount of all mortgage loans on such real property would exceed an amount equal to 85% of the appraised value of such real property as determined by appraisal, unless substantial justification exists because of the presence of other underwriting criteria; | |
• | make investments in unimproved real property or mortgage loans on unimproved real property in excess of 10% of our total assets; | |
• | issue (1) equity securities redeemable solely at the option of the holder (this limitation, however, does not limit or prohibit the operation of our share repurchase plan), (2) debt securities in the absence of adequate cash flow to cover debt service, (3) options or warrants to purchase shares to our advisor, any of our directors or any of their respective affiliates except on the same terms as the options or warrants are sold to the general public, if at all, and unless the amount of the options or warrants does not exceed an amount equal to 10% of our outstanding shares on the date of grant of the warrants and options, or (4) equity securities on a deferred payment basis or under similar arrangement; | |
• | invest in junior debt secured by a mortgage on real property which is subordinate to the lien of other senior debt except where the amount of such junior debt plus any senior debt does not exceed 90% of the appraised value of such property if, after giving effect thereto, the value of all such mortgage loans would not then exceed 25% of our tangible assets; | |
• | engage in trading, except for the purpose of short-term investments; | |
• | engage in underwriting or the agency distribution of securities issued by others; | |
• | invest in the securities of any entity holding investments or engaging in activities prohibited by our charter; or | |
• | make any investment that our board of directors believes will be inconsistent with our objectives of qualifying and remaining qualified as a REIT unless and until our board of directors determines, in its sole discretion, that REIT qualification is not in our best interests. |
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• | it neither is, nor holds itself out as being, engaged primarily, nor proposes to engage primarily, in the business of investing, reinvesting or trading in securities; and | |
• | it neither is engaged nor proposes to engage in the business of investing, reinvesting, owning, holding or trading in securities and does not own or propose to acquire “investment securities” having a value exceeding 40% of the value of its total assets on an unconsolidated basis, or the 40% test. “Investment securities” excludes U.S. government securities and securities of majority-owned subsidiaries that are not themselves investment companies and are not relying on the exception from the definition of investment company under Section 3(c)(1) or Section 3(c)(7) of the Investment Company Act. |
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• | approving and overseeing our overall investment strategy, which will consist of elements such as investment selection criteria, diversification strategies and asset disposition strategies; | |
• | approving our investments in real properties and real-estate related assets; | |
• | approving and overseeing our debt financing strategies; | |
• | approving and monitoring the relationship between our operating partnership and our advisor; | |
• | approving joint ventures, limited partnerships and other such relationships with third parties; | |
• | approving a potential liquidity event; | |
• | determining our distribution policy and authorizing distributions from time to time; and |
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• | approving amounts available for the repurchase of shares of our common stock. |
• | the quality and extent of the services and advice furnished by our advisor; | |
• | the amount of fees paid to our advisor in relation to the size, composition and performance of our investments; | |
• | the success of our advisor in generating investment opportunities that meet our investment objectives; | |
• | the rates charged to other externally advised REITs and similar investors by advisors performing similar services; | |
• | the additional revenues realized by our advisor and its affiliates through their relationships with us, whether we pay them or they are paid by others with whom we do business; | |
• | the performance of our investments, including income, conservation or appreciation of capital, frequency of problem investments and competence in dealing with distress situations; and | |
• | the quality of our investments relative to the investments generated by our advisor for its own account. |
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Name | Age | Position | ||||
Rodney F. Emery | 59 | Chairman of the Board and Chief Executive Officer | ||||
J. Grayson Sanders | 69 | President and Director | ||||
Dinesh K. Davar | 59 | Treasurer and Chief Financial Officer | ||||
Ana Marie del Rio | 55 | Secretary | ||||
Scot B. Barker | 60 | Independent Director | ||||
Larry H. Dale | 63 | Independent Director | ||||
Jeffrey J. Brown | 48 | Independent Director |
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• | an act or omission of the director or officer was material to the cause of action adjudicated in the proceeding and was committed in bad faith or was the result of active and deliberate dishonesty; | |
• | the director or officer actually received an improper personal benefit in money, property or services; or | |
• | with respect to any criminal proceeding, the director or officer had reasonable cause to believe his act or omission was unlawful. |
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• | our directors and our advisor or its affiliates have determined, in good faith, that the course of conduct that caused the loss or liability was in our best interests; | |
• | our directors and our advisor or its affiliates were acting on our behalf or performing services for us; | |
• | in the case of affiliated directors and our advisor or its affiliates, the liability or loss was not the result of negligence or misconduct; | |
• | in the case of our independent directors, the liability or loss was not the result of gross negligence or willful misconduct; and | |
• | the indemnification or agreement to hold harmless is recoverable only out of our net assets and not from our stockholders. |
• | there has been a successful adjudication on the merits of each count involving alleged securities law violations; | |
• | such claims have been dismissed with prejudice on the merits by a court of competent jurisdiction; or | |
• | a court of competent jurisdiction approves a settlement of the claims against the indemnitee and finds that indemnification of the settlement and the related costs should be made and the court considering the request for indemnification has been advised of the position of the SEC and of the published position of any state securities regulatory authority in which the securities were offered as to indemnification for violations of securities laws. |
• | the legal action relates to acts or omissions with respect to the performance of duties or services on behalf of us; | |
• | the party seeking indemnification has provided us with written affirmation of his good faith belief that he has met the standard of conduct necessary for indemnification; | |
• | the legal action is initiated by a third party who is not a stockholder or the legal action is initiated by a stockholder acting in his capacity as such and a court of competent jurisdiction specifically approves such advancement; and |
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• | the party seeking indemnification undertakes to repay the advanced funds to us, together with the applicable legal rate of interest thereon, in cases in which he is found not to be entitled to indemnification. |
Name | Age | Position | ||||||
Rodney F. Emery | 59 | Chief Executive Officer | ||||||
J. Grayson Sanders | 69 | President | ||||||
Dinesh K. Davar | 59 | Chief Financial Officer | ||||||
George P. Doyle | 40 | Vice President of Finance | ||||||
Ana Marie del Rio | 55 | Secretary |
• | finding, presenting and recommending investment opportunities to us consistent with our investment policies and objectives; | |
• | making investment decisions for us, subject to the limitations in our charter and the direction and oversight of our board of directors; | |
• | structuring the terms and conditions of our investments, sales and joint ventures; |
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• | acquiring investments on our behalf in compliance with our investment objectives and policies; | |
• | sourcing and structuring our loan originations; | |
• | arranging for financing and refinancing of investments; | |
• | entering into service agreements for our loans; | |
• | supervising and evaluating each loan servicer’s and property manager’s performance; | |
• | reviewing and analyzing the operating and capital budgets of the properties underlying our investments and the properties we may acquire; | |
• | entering into leases and service contracts for our properties; | |
• | assisting us in obtaining insurance; | |
• | generating our annual budget; | |
• | reviewing and analyzing financial information for each of our assets and our overall investment portfolio; | |
• | formulating and overseeing the implementation of strategies for the administration, promotion, management, financing and refinancing, marketing, servicing and disposition of our investments; | |
• | performing investor relations services; | |
• | maintaining our accounting and other records and assisting us in filing all reports required to be filed with the SEC, the Internal Revenue Service and other regulatory agencies; | |
• | engaging and supervising the performance of our agents, including our registrar and transfer agent; and | |
• | performing any other services reasonably requested by us. |
• | immediately by us for “cause” or upon the bankruptcy of our advisor; | |
• | without cause by a majority of our independent directors upon 60 days’ written notice; or | |
• | with “good reason” by our advisor upon 60 days’ written notice. |
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Estimated Amount if | ||||
Type of Compensation and Recipient | Determination of Amount | Minimum/Maximum Sold | ||
Organizational and Offering Stage | ||||
Sales Commission(1) — Dealer Manager | 6.5% of gross offering proceeds from the sale of shares in the primary offering (all of which will be reallowed to participating broker-dealers), subject to reductions based on volume and for certain categories of purchasers. No sales commissions will be paid for sales pursuant to the distribution reinvestment plan. | $130,000/$97,500,000 | ||
Dealer Manager Fee(1) — Dealer Manager | 3.5% of gross offering proceeds from the sale of shares (a portion of which will be reallowed to participating broker-dealers). No dealer manager fee will be paid for sales pursuant to the distribution reinvestment plan. | $70,000/$52,500,000 | ||
Organization and Offering Expenses(2) — Advisor and Affiliates | To date, our advisor has paid organization and offering expenses on our behalf. We will reimburse our advisor for these costs and future organization and offering costs it may incur on our behalf, but only to the extent that the reimbursement would not cause the sales commissions, the dealer manager fee and the other organization and offering expenses borne by us to exceed 15% of the gross proceeds from the primary offering as of the date of the reimbursement. If we raise the minimum or the maximum offering amount, we expect organization and offering expenses (other than sales commissions and the dealer manager fee) to be approximately 1.25% of the gross proceeds from the primary offering. | $25,000/$18,750,000 |
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Estimated Amount if | ||||
Type of Compensation and Recipient | Determination of Amount | Minimum/Maximum Sold | ||
Operational Stage | ||||
Acquisition Fees(3) — Advisor | 2.0% of (1) the purchase price in connection with the acquisition or origination of any type of real property or real estate-related asset acquired directly or (2) our allocable portion of the purchase price in connection with the acquisition or origination of any type of real property or real estate-related asset acquired through a joint venture, including any acquisition and origination expenses and any debt attributable to such investments. | $35,500/$26,625,000 (assuming no leverage) $101,429/$76,071,429 (assuming leverage of 65% of the cost of our investments) $142,000/$106,500,000 (assuming leverage of 75% of the cost of our investments) | ||
Acquisition Expenses — Advisor | In addition to the acquisition fee payable to our advisor, we will reimburse our advisor for amounts it pays to third parties in connection with the selection, acquisition or development of a property or acquisition of real estate-related assets (including expenses relating to potential investments that we do not close). | Actual amounts are dependent upon the services provided, and therefore cannot be determined at this time. | ||
Investment Management Fees(4) — Advisor | A monthly amount equal to one-twelfth of 0.80% of (1) the cost of real properties and real estate-related assets acquired directly or (2) our allocable cost of each real property or real estate-related asset acquired through a joint venture. Such fee will be calculated including acquisition fees, acquisition expenses and any debt attributable to such investments, or our proportionate share thereof in the case of investments made through joint ventures. | Actual amounts depend upon the aggregate cost of our real estate investments, and therefore cannot be determined at this time. | ||
Other Operating Expenses(5) — Advisor | Reimbursement of expenses incurred in providing services to us, including our allocable share of our advisor’s overhead, such as rent, employee costs, utilities and IT costs. We will not reimburse for employee costs in connection with services for which our advisor or its affiliates receive acquisition fees, investment management fees or disposition fees or for the employee costs our advisor pays to our executive officers. | Actual amounts are dependent upon the services provided, and therefore cannot be determined at this time. |
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Estimated Amount if | ||||
Type of Compensation and Recipient | Determination of Amount | Minimum/Maximum Sold | ||
Property Management Fees — Affiliated Property Managers | A percentage of the annual gross revenues of each property owned by us for property management services. The property management fee payable with respect to each property will be equal to the percentage of annual gross revenues of the property that is usual and customary for comparable property management services rendered to similar properties in the geographic market of the property, as determined by our advisor and approved by a majority of our board of directors, including a majority of our independent directors. See “Management — Affiliated Property Managers.” Our property managers may subcontract with third party property managers and will be responsible for supervising and compensating those third party property managers. | Actual amounts depend upon the gross revenue of the properties and customary property management and leasing fees in the region in which properties are located and the property types acquired and therefore cannot be determined at this time. | ||
Leasing Fees — Affiliated Property Managers | In addition to property management fees, we may pay our property managers a separate fee for services rendered, whether directly or indirectly, in leasing our real properties to a third party lessee. Such leasing fee will be in an amount that is usual and customary for comparable services rendered to similar real properties in the geographic market of the real property leased; provided, however, that such leasing fee shall only be paid if a majority of our board, including a majority of our independent directors, determines that such leasing fee is fair and reasonable in relation to the services being performed. | |||
Liquidity Stage | ||||
Disposition Fees(6) — Advisor or its Affiliate | If our advisor or its affiliates provides a substantial amount of services, as determined by our independent directors, in connection with the sale of a property or real estate-related asset, 1.5% of the sales price of each property or real estate-related asset sold. | Actual amounts depend upon the sale price of investments, and therefore cannot be determined at this time. |
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Estimated Amount if | ||||
Type of Compensation and Recipient | Determination of Amount | Minimum/Maximum Sold | ||
Convertible Stock — Advisor | We have issued 1,000 shares of our convertible stock to our advisor, for which our advisor contributed $1,000. Our convertible stock will convert to shares of common stock if and when: (A) we have made total distributions on the then outstanding shares of our common stock equal to the original issue price of those shares plus an 8.0% cumulative, non-compounded, annual return on the original issue price of those shares; (B) we list our common stock for trading on a national securities exchange; or (C) our advisory agreement is terminated or not renewed (other than for “cause” as defined in our advisory agreement). In the event of a termination or non-renewal of our advisory agreement for cause, the convertible stock will be redeemed by us for $1.00. In general, each share of our convertible stock will convert into a number of shares of common stock equal to 1/1000 of the quotient of (A) 10% of the excess of (1) our “enterprise value” plus the aggregate value of distributions paid to date on the then outstanding shares of our common stock over (2) the aggregate purchase price paid by stockholders for those outstanding shares of common stock plus an 8.0% cumulative, non-compounded, annual return on the original issue price of those outstanding shares, divided by (B) our enterprise value divided by the number of outstanding shares of common stock on an as-converted basis, in each case calculated as of the date of the conversion. For a description of how our “enterprise value” is determined pursuant to our charter and an example illustrating how the conversion formula with respect to our convertible stock set forth above will operate, see “Description of Capital Stock — Convertible Stock.” | Actual amounts depend upon future liquidity events, and therefore cannot be determined at this time. |
(1) | The sales commissions and dealer manager fee may be reduced or waived in connection with certain categories of sales, such as sales for which a volume discount applies, sales through investment advisors |
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or banks acting as trustees or fiduciaries, sales to our affiliates and sales under our distribution reinvestment plan. | ||
(2) | Organization and offering expenses include all expenses (other than sales commissions and the dealer manager fee) to be paid by us in connection with the offering, including our legal, accounting, printing, mailing and filing fees, charges of our escrow holder and transfer agent, expenses of organizing the company, data processing fees, advertising and sales literature costs, transfer agent costs, information technology costs, bona fide out-of-pocket due diligence costs and amounts to reimburse our advisor or its affiliates for the salaries of its employees and other costs in connection with preparing supplemental sales materials and providing other administrative services in connection with our offering. Any such reimbursement will not exceed actual expenses incurred by our advisor. After the termination of the primary offering, our advisor has agreed to reimburse us to the extent total organization and offering expenses borne by us exceed 15% of the gross proceeds raised in the primary offering. In addition, to the extent we do not pay the full sales commissions or dealer manager fee for shares sold in the primary offering, we may also reimburse costs of bona fide training and education meetings held by us (primarily the travel, meal and lodging costs of registered representatives of broker-dealers), attendance and sponsorship fees and cost reimbursement of employees of our affiliates to attend seminars conducted by broker-dealers and, in special, cases, reimbursement to participating broker-dealers for technology costs associated with the offering, costs and expenses related to such technology costs, and costs and expenses associated with the facilitation of the marketing of our shares and the ownership of our shares by such broker-dealers’ customers; provided, however, that we will not pay any of the foregoing costs to the extent that such payment would cause total underwriting compensation to exceed 10% of the gross proceeds of the primary offering, as required by the rules of FINRA. The estimated organization and offering expenses are based upon the prior experience of the management of our advisor and a review of public filings of other non-listed REITs. | |
(3) | Our charter limits our ability to pay acquisition fees if the total of all acquisition fees and expenses relating to the purchase would exceed 6.0% of the contract purchase price. Under our charter, a majority of our board of directors, including a majority of the independent directors, would have to approve any acquisition fees (or portion thereof) which would cause the total of all acquisition fees and expenses relating to an acquisition to exceed 6.0% of the contract purchase price. In connection with the purchase of securities, the acquisition fee may be paid to an affiliate of our advisor that is registered as a FINRA member broker-dealer if applicable FINRA rules would prohibit the payment of the acquisition fee to a firm that is not a registered broker-dealer. |
(4) | We will pay our advisor an investment management fee to compensate our advisor for the overall management of our portfolio, which services shall include, but not be limited to, the following: (i) serving as our investment and financial advisor and obtaining certain market research and economic and statistical data in connection with our investments and investment objectives and policies; (ii) monitoring applicable markets and obtaining reports, where appropriate, concerning the value of our investments; (iii) monitoring and evaluating the performance of our investments, providing daily investment management services and performing and supervising the various investment management and operational functions related to our investments; (iv) formulating and overseeing the implementation of strategies for the administration, promotion, management, operation, maintenance, improvement, financing and refinancing, marketing, leasing and disposition of our investments on an overall portfolio basis; (v) overseeing the performance by the property managers of their duties and conducting periodic on-site property visits to some or all of our real properties; (vi) coordinating and managing relationships between us and any joint venture partners; and (vii) providing financial and operational planning services and investment portfolio management functions, including, without limitation, the planning and implementation of policies and procedures for establishing our net asset value and obtaining appraisals and valuations with respect to our investments. |
(5) | Our advisor must reimburse us at least annually for reimbursements paid to our advisor in any year to the extent that such reimbursements to our advisor cause our total operating expenses to exceed the greater of 2% of our average invested assets, or 25% of our net income, unless the independent directors have determined that such excess expenses were justified based on unusual and non-recurring factors. “Average invested assets” means the average monthly book value of our assets invested directly or indirectly in equity interests and loans secured by real estate during the 12-month period before deducting depreciation, bad debts or other non-cash reserves. “Total operating expenses” means all expenses paid or incurred by us, as determined under generally accepted accounting principles in the United States, or GAAP, that are in any way related to our operation, including investment management fees, but excluding (a) the expenses of raising capital such as organization and offering expenses, legal, audit, accounting, underwriting, |
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brokerage, listing, registration and other fees, printing and other such expenses and taxes incurred in connection with the issuance, distribution, transfer, listing and registration of shares of our common stock; (b) interest payments; (c) taxes; (d) non-cash expenditures such as depreciation, amortization and bad debt reserves; (e) reasonable incentive fees based on the gain in the sale of our assets; (f) acquisition fees and acquisition expenses (including expenses relating to potential acquisitions that we do not close); (g) real estate commissions on the resale of investments; and (h) other expenses connected with the acquisition, disposition, management and ownership of investments (including the costs of foreclosure, insurance premiums, legal services, maintenance, repair and improvement of real property). | ||
(6) | No disposition fee will be paid for securities traded on a national securities exchange. To the extent the disposition fee is paid upon the sale of any assets other than real property, it will count against the limit on “total operating expenses” described in note 5 above. |
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• | the investment objectives and criteria of our sponsor and other affiliates; | |
• | the cash requirements of our sponsor and its affiliates; | |
• | the portfolio of our sponsor and its affiliates by type of investment and risk of investment; | |
• | the policies of our sponsor and its affiliates relating to leverage; | |
• | the anticipated cash flow of the asset to be acquired; | |
• | the income tax effects of the purchase; | |
• | the size of the investment; and | |
• | the amount of funds available to our sponsor and its affiliates and the length of time such funds have been available for investment. |
• | the continuation, renewal or enforcement of our agreements with our advisor and its affiliates, including the advisory agreement and the property management agreement, and the agreement with the dealer manager; | |
• | transactions with affiliates, including our directors and officers; | |
• | awards under our long-term incentive plan; and | |
• | pursuit of a potential liquidity event. |
• | the quality and extent of the services and advice furnished by our advisor; | |
• | the amount of fees paid to our advisor in relation to the size, composition and performance of our investments; | |
• | the success of our advisor in generating investment opportunities that meet our investment objectives; |
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• | rates charged to other externally advised REITs and similar investors by advisors performing similar services; and | |
• | additional revenues realized by our advisor and its affiliates through their relationship with us, whether we pay them or they are paid by others with whom we do business. |
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Approximate Percentage of | ||||||||
Location | Property Count | Property Count | ||||||
United States: | ||||||||
Arizona | 3 | 2 | % | |||||
California | 52 | 34 | ||||||
Colorado | 4 | 3 | ||||||
Florida | 4 | 3 | ||||||
Hawaii | 1 | 1 | ||||||
Idaho | 17 | 11 | ||||||
Illinois | 4 | 3 | ||||||
Michigan | 1 | 1 | ||||||
Montana | 7 | 5 | ||||||
New Mexico | 5 | 3 | ||||||
Nevada | 11 | 7 | ||||||
Oregon | 11 | 7 | ||||||
Pennsylvania | 4 | 3 | ||||||
South Carolina | 2 | 1 | ||||||
Texas | 2 | 1 | ||||||
Utah | 2 | 1 | ||||||
Virginia | 2 | 1 | ||||||
Washington | 18 | 12 | ||||||
Wisconsin | 2 | 1 | ||||||
Sub Totals | 152 | 100 | ||||||
Mexico: | ||||||||
Cabo San Lucas | 2 | 32 | ||||||
Ixtapa | 1 | 17 | ||||||
La Paz | 1 | 17 | ||||||
Manzanillo | 1 | 17 | ||||||
San Luis R.C. | 1 | 17 | ||||||
Sub Totals | 6 | 100 | ||||||
United States | 152 | 96 | ||||||
Mexico | 6 | 4 | ||||||
Grand Totals | 158 | 100 | % | |||||
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As an Approximate | ||||||||
Percentage of the | ||||||||
Property Type | Number | Aggregate Cost | ||||||
Commercial: | ||||||||
Office | 10 | 16 | % | |||||
Industrial | 2 | 3 | ||||||
Retail | 10 | 31 | ||||||
Hotels/Casinos | 5 | 3 | ||||||
Raw Land | 7 | 4 | ||||||
Multifamily | 124 | 43 | ||||||
Total: | 158 | 100 | % | |||||
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Project Name | City | State | Acquisition Date | Type | Cost | |||||||||||
1 | Atherton I | Butte | MT | 9/1/06 | Multifamily | |||||||||||
2 | Atherton II | Butte | MT | 9/1/06 | Multifamily | |||||||||||
3 | Balmoral I | Hailey | ID | 9/1/06 | Multifamily | |||||||||||
4 | Balmoral II | Hailey | ID | 9/1/06 | Multifamily | |||||||||||
5 | Banbridge | Sparks | NV | 9/1/06 | Multifamily | |||||||||||
6 | Carnoustie I | Shelley | ID | 9/1/06 | Multifamily | |||||||||||
7 | Carnoustie II | Shelley | ID | 9/1/06 | Multifamily | |||||||||||
8 | Castlebar I | Bozeman | MT | 9/1/06 | Multifamily | |||||||||||
9 | Castlebar II | Bozeman | MT | 9/1/06 | Multifamily | |||||||||||
10 | Devon | Twin Falls | ID | 9/1/06 | Multifamily | |||||||||||
11 | Gleneagles | Twin Falls | ID | 9/1/06 | Multifamily | |||||||||||
12 | Hanbury Manor | Logan | UT | 9/1/06 | Multifamily | |||||||||||
13 | Mallard Cove | Caldwell | ID | 9/1/06 | Multifamily | |||||||||||
14 | Maryland Village I | Nampa | ID | 9/1/06 | Multifamily | |||||||||||
15 | Maryland Village II | Nampa | ID | 9/1/06 | Multifamily | |||||||||||
16 | Parkwood | Nampa | ID | 9/1/06 | Multifamily | |||||||||||
17 | Portstewart | Caldwell | ID | 9/1/06 | Multifamily | |||||||||||
18 | Roscrea | Price | UT | 9/1/06 | Multifamily | |||||||||||
19 | Tramore | Meridian | ID | 9/1/06 | Multifamily | |||||||||||
20 | Troon | Lewiston | ID | 9/1/06 | Multifamily | |||||||||||
21 | Turnberry | Lewiston | ID | 9/1/06 | Multifamily | |||||||||||
22 | Westport | American Falls | ID | 9/1/06 | Multifamily | |||||||||||
Sub Total — Portfolio Acquisitions | $ | 3,888,750 | ||||||||||||||
Individual Property Acquisitions: | ||||||||||||||||
23 | Everett Plaza (Greenfield) | Everett | WA | 4/17/06 | Land | 3,086,080 | ||||||||||
24 | Stone Point I | Roseville | CA | 12/8/06 | Land | 8,576,939 | ||||||||||
25 | Stone Point II | Roseville | CA | 12/8/06 | Land | 6,048,338 | ||||||||||
26 | Lexington Green | El Cajon | CA | 4/19/07 | Multifamily | 23,737,024 | ||||||||||
27 | Woodranch | Simi Valley | CA | 4/25/07 | Office | 28,885,223 | ||||||||||
28 | Villa Nueva | San Ysidro | CA | 9/14/07 | Multifamily | 72,814,367 | ||||||||||
29 | Sunrise Mall | Sacramento | CA | 1/29/08 | Retail | 109,468,479 | ||||||||||
30 | La Paz | La Paz | Mexico | 2/6/08 | Land | 11,921,064 | ||||||||||
31 | AMX Sonora Holdings | San Luis R.C. | Mexico | 7/28/08 | Casino | 451,100 | ||||||||||
32 | Foxview Apartments | Carpentersville | IL | 12/23/08 | Multifamily | 23,050,000 | ||||||||||
Sub Total — Individual Property Acquisitions | 288,038,615 | |||||||||||||||
Grand Total | $ | 291,927,365 | ||||||||||||||
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FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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Buildings | 25-40 years | |
Building improvements | 10-25 years | |
Tenant improvements | Shorter of lease term or expected useful life | |
Tenant origination and absorption costs | Remaining term of related lease | |
Furniture, fixtures, and equipment | 7-10 years |
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• | current cash balances; | |
• | public offerings; | |
• | various forms of secured financing; | |
• | borrowings under master repurchase agreements; | |
• | equity capital from joint venture partners; | |
• | proceeds from our operating partnership’s private placements, if any; | |
• | proceeds from our distribution reinvestment plan; and | |
• | cash from operations. |
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• | we have made total distributions on the then outstanding shares of our common stock equal to the price paid for those shares plus an 8.0% cumulative, non-compounded, annual return on the price paid for those outstanding shares of common stock; | |
• | we list our common stock for trading on a national securities exchange; or | |
• | our advisory agreement is terminated or not renewed (other than for “cause” as defined in our advisory agreement). |
A. | We have sold shares in this offering and our private offering with an aggregate gross offering price of $1 billion. |
B. | An 8.0% cumulative, non-compounded, annual return on the $1 billion we raise is equal to $80 million. | |
C. | Our enterprise value is equal to $1.2 billion. |
D. | We have paid an aggregate of $60 million in distributions to investors. |
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E. | We have 101.5 million shares of common stock outstanding on an as-converted basis. |
Step 3: | Take the numerator calculated in Step 1 and divide it by the denominator calculated in Step 2, as follows: |
• | reclassify or otherwise recapitalize our outstanding common stock (except to change the par value, or to change from no par value to par value, or to subdivide or otherwise split or combine shares); or | |
• | consolidate or merge with another entity in a transaction in which we are either (1) not the surviving entity or (2) the surviving entity but that results in a reclassification or recapitalization of our common stock (except to change the par value, or to change from no par value to par value, or to subdivide or otherwise split or combine shares), |
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Repurchase Price as a | ||
Percentage of | ||
Offering Price | ||
Share Purchase Anniversary | on Repurchase Date | |
Less than 1 year | No Repurchase Allowed | |
1 year | 92.5% | |
2 years | 95.0% | |
3 years | 97.5% | |
4 years | 100.0% |
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• | the special committee receives an opinion from a qualified investment banking firm, concluding that the consideration to be paid to acquire our advisor is fair to our stockholders from a financial point of view; | |
• | our board of directors determines that such business combination is advisable and in our best interests and in the best interests of our stockholders; and | |
• | such business combination is approved by our stockholders entitled to vote thereon in accordance with our charter and bylaws. |
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• | one-tenth or more but less than one-third; | |
• | one-third or more but less than a majority; or | |
• | a majority or more of all voting power. |
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• | a classified board of directors; | |
• | a two-thirds vote requirement for removing a director; | |
• | a requirement that the number of directors be fixed only by vote of the directors; | |
• | a requirement that vacancies on the board of directors be filled only by the remaining directors and for the remainder of the full term of the class of directors in which the vacancy occurred; and | |
• | a majority requirement for the calling of a special meeting of stockholders. |
• | accepting the securities of the entity that would be created or would survive after the successful completion of the roll-up transaction offered in the proposed roll-up transaction; or | |
• | one of the following: |
• | remaining stockholders and preserving their interests in us on the same terms and conditions as existed previously; or | |
• | receiving cash in an amount equal to their pro rata share of the appraised value of our net assets. |
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• | which would result in common stockholders having voting rights in the entity that would be created or would survive after the successful completion of the roll-up transaction that are less than those provided in our charter, including rights with respect to the election and removal of directors, annual and special meetings, amendment of the charter and our dissolution; | |
• | which includes provisions that would operate as a material impediment to, or frustration of, the accumulation of shares by any purchaser of the securities of the entity that would be created or would survive after the successful completion of the roll-up transaction, except to the minimum extent necessary to preserve the tax status of such entity, or which would limit the ability of an investor to exercise the voting rights of its securities of the entity that would be created or would survive after the successful completion of the roll-up transaction on the basis of the number of shares held by that investor; | |
• | in which our common stockholders’ rights to access of records of the entity that would be created or would survive after the successful completion of the roll-up transaction will be less than those provided in our charter and described in “— Meetings, Special Voting Requirements and Access To Records” above; or | |
• | in which we would bear any of the costs of the roll-up transaction if our common stockholders reject the roll-up transaction. |
• | financial statements that are prepared in accordance with GAAP and are audited by our independent registered public accounting firm; | |
• | the ratio of the costs of raising capital during the year to the capital raised; | |
• | the aggregate amount of investment management fees and the aggregate amount of other fees paid to our advisor and any affiliate of our advisor by us or third parties doing business with us during the year; | |
• | our total operating expenses for the year, stated as a percentage of our average invested assets and as a percentage of our net income; | |
• | a report from the independent directors that our policies are in the best interests of our stockholders and the basis for such determination; and | |
• | separately stated, full disclosure of all material terms, factors and circumstances surrounding any and all transactions involving us and our advisor, a director or any affiliate thereof during the year. Our independent directors are specifically charged with a duty to examine and comment in the report on the fairness of any such transactions. |
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• | expenses relating to the formation and continuity of our existence; | |
• | expenses relating to our public offering and registration of securities; | |
• | expenses associated with the preparation and filing of any periodic reports by us under federal, state or local laws or regulations; | |
• | expenses associated with compliance by us with applicable laws, rules and regulations; and | |
• | other operating or administrative costs incurred in the ordinary course of our business on behalf of our operating partnership. |
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• | result in any person owning shares in excess of the ownership limit in our charter (unless exempted by our board of directors); | |
• | result in our shares being owned by fewer than 100 persons; | |
• | result in our shares being “closely held” within the meaning of Section 856(h) of the Internal Revenue Code; or | |
• | cause us to own 9.8% or more of the ownership interests in a tenant of our real property or the real property of our operating partnership or any direct or indirect subsidiary of our operating partnership within the meaning of Section 856(d)(2)(B) of the Internal Revenue Code. |
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Number of | ||||||||
Shares | ||||||||
Beneficially | Percent of | |||||||
Name of Beneficial Owner(1) | Owned | All Shares | ||||||
Steadfast REIT Investments, LLC(2) | 22,223 | 100 | % | |||||
Rodney F. Emery(2) | 22,223 | 100 | % | |||||
J. Grayson Sanders | — | — | ||||||
Dinesh Davar | — | — | ||||||
Ana Marie del Rio | — | — | ||||||
Scot B. Barker | — | — | ||||||
Larry H. Dale | — | — | ||||||
Jeffrey J. Brown | — | — | ||||||
All Directors and Executive Officers as a Group | 22,223 | 100 | % |
(1) | Under SEC rules, a person is deemed to be a “beneficial owner” of a security if that person has or shares “voting power,” which includes the power to dispose of or to direct the disposition of such security. A person also is deemed to be a beneficial owner of any securities which that person has a right to acquire within 60 days. Under these rules, more than one person may be deemed to be a beneficial owner of the same securities and a person may be deemed to be a beneficial owner of securities as to which he or she has no economic or pecuniary interest. | |
(2) | As of the date of this prospectus, Steadfast REIT Investments, LLC, our sponsor, owns all of our issued and outstanding stock. Steadfast REIT Investments, LLC is indirectly owned and controlled by Mr. Emery. |
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• | a broker-dealer or a dealer in securities or currencies; | |
• | an S corporation; | |
• | a partnership or other pass-through entity; | |
• | a bank, thrift or other financial institution; | |
• | a regulated investment company or a REIT; | |
• | an insurance company; | |
• | a tax-exempt organization; | |
• | subject to the alternative minimum tax provisions of the Internal Revenue Code; | |
• | holding our common stock as part of a hedge, straddle, conversion, integrated or other risk reduction or constructive sale transaction; | |
• | holding our common stock through a partnership or other pass-through entity; | |
• | a non-U.S. corporation or partnership, and a person who is not a resident or citizen of the United States; | |
• | a U.S. person whose “functional currency” is not the U.S. dollar; or | |
• | a U.S. expatriate. |
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• | We will be taxed at regular corporate rates on any taxable income, including undistributed net capital gains, that we do not distribute to stockholders during, or within a specified time period after, the calendar year in which the income is earned; | |
• | We may be subject to the “alternative minimum tax” on our items of tax preference, including any deductions of net operating losses; | |
• | If we have net income from prohibited transactions, which are, in general, sales or other dispositions of property held primarily for sale to customers in the ordinary course of business, other than foreclosure property, such income will be subject to a 100% tax. See “— Prohibited Transactions” and “— Foreclosure Property” below; | |
• | If we elect to treat property that we acquire in connection with a foreclosure of a mortgage loan or certain leasehold terminations as “foreclosure property,” we may thereby avoid the 100% tax on gain from a resale of that property (if the sale would otherwise constitute a prohibited transaction), but the income from the sale or operation of the property may be subject to corporate income tax at the highest applicable rate (currently 35%); | |
• | If we fail to satisfy the 75% gross income test or the 95% gross income test, as discussed below, but nonetheless maintain our intended qualification as a REIT because other requirements are met, we will be subject to a 100% tax on an amount based upon the magnitude of the failure, adjusted to reflect the profitability of such gross income; | |
• | In the event of a failure of the asset tests (other than certain de minimis failures), as described below under “— Asset Tests,” as long as the failure was due to reasonable cause and not to willful neglect, we dispose of the assets or otherwise comply with such asset tests within six months after the last day of the quarter in which we identify such failure and we file a schedule with the IRS describing the assets that caused such failure, we will pay a tax equal to the greater of $50,000 or 35% of the net income from the nonqualifying assets during the period in which we failed to satisfy such asset tests; | |
• | In the event of a failure to satisfy one or more requirements for REIT qualification, other than the gross income tests and the asset tests, we will be required to pay a penalty of $50,000 for each such failure; | |
• | If we fail to distribute during each calendar year at least the sum of (a) 85% of our REIT ordinary income for such year, (b) 95% of our REIT capital gain net income for such year and (c) any undistributed taxable income from prior periods, we will be subject to a 4% excise tax on the excess of the required distribution over the sum of (1) the amounts actually distributed, plus (2) retained amounts on which income tax is paid at the corporate level; | |
• | We may be required to pay monetary penalties to the IRS in certain circumstances, including if we fail to meet record-keeping requirements intended to monitor our compliance with rules relating to the |
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composition of a REIT’s stockholders, as described below in “— Requirements for Qualification-General”; |
• | A 100% tax may be imposed on certain items of income and expense that are directly or constructively paid between a REIT and a taxable REIT subsidiary (as described below) if and to the extent that the IRS successfully adjusts the reported amounts of these items to conform to an arm’s length pricing standard; | |
• | If we acquire appreciated assets from a corporation that is not a REIT (i.e., a corporation taxable under subchapter C of the Internal Revenue Code) in a transaction in which the adjusted tax basis of the assets in its hands is determined by reference to the adjusted tax basis of the assets in the hands of the subchapter C corporation, we will be subject to tax at the highest corporate income tax rate then applicable if we subsequently recognize the built-in gain on a disposition of any such assets during the 10-year period following the acquisition from the subchapter C corporation, unless the subchapter C corporation elects to treat the transfer of the assets to the REIT as a deemed sale; | |
• | The earnings of our lower-tier entities that are subchapter C corporations, if any, including domestic taxable REIT subsidiaries, are subject to federal corporate income tax; or | |
• | If we own a residual interest in a real estate mortgage investment conduit, or REMIC, we will be taxable at the highest corporate rate on the portion of any excess inclusion income that we derive from the REMIC residual interests equal to the percentage of our stock that is held in record name by “disqualified organizations.” Although the law is unclear, recently issued IRS guidance indicates that similar rules may apply to a REIT that owns an equity interest in a taxable mortgage pool. To the extent that we own a REMIC residual interest or a taxable mortgage pool through a taxable REIT subsidiary, we will not be subject to this tax. For a discussion of “excess inclusion income,” see “— Taxable Mortgage Pools.” A “disqualified organization” includes: |
• | the United States; | |
• | any state or political subdivision of the United States; | |
• | any foreign government; | |
• | any international organization; | |
• | any agency or instrumentality of any of the foregoing; | |
• | any other tax-exempt organization, other than a farmer’s cooperative described in section 521 of the Internal Revenue Code, that is exempt both from income taxation and from taxation under the unrelated business taxable income provisions of the Internal Revenue Code; and | |
• | any rural electrical or telephone cooperative. |
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• | a citizen or resident of the United States; | |
• | a corporation (including an entity treated as a corporation for federal income tax purposes) created or organized in or under the laws of the United States, any of its states or the District of Columbia; | |
• | an estate whose income is subject to federal income taxation regardless of its source; or | |
• | a trust if: (1) a U.S. court is able to exercise primary supervision over the administration of such trust and one or more U.S. persons have the authority to control all substantial decisions of the trust; or (2) it has a valid election in place to be treated as a U.S. person. |
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• | is a corporation or comes within certain other exempt categories and, when required, demonstrates this fact; or | |
• | provides a taxpayer identification number, certifies as to no loss of exemption from backup withholding, and otherwise complies with the applicable requirements of the backup withholding rules. |
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• | the percentage of our dividends that the tax-exempt trust would be required to treat as unrelated business taxable income is at least 5%; | |
• | We qualify as a REIT by reason of the modification of the rule requiring that no more than 50% of our stock be owned by five or fewer individuals that allows the beneficiaries of the pension trust to be treated as holding our stock in proportion to their actuarial interests in the pension trust (see “Taxation of Steadfast Secure Income REIT, Inc.. — Requirements for Qualification-General”); and | |
• | either: (1) one pension trust owns more than 25% of the value of our stock; or (2) a group of pension trusts individually holding more than 10% of the value of our stock collectively owns more than 50% of the value of our stock. |
• | a lower treaty rate applies and the non-U.S. shareholder furnishes to us an IRS Form W-8BEN evidencing eligibility for that reduced rate; or | |
• | the non-U.S. shareholder furnishes to us an IRS Form W-8ECI claiming that the distribution is effectively connected income. |
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• | the investment will be in accordance with the documents and instruments covering the investments by such Benefit Plan or Other Plan; | |
• | in the case of an ERISA Plan, the plan fiduciary will be able to satisfy his responsibility to the plan whether the investment will provide sufficient liquidity; | |
• | the investment will produce UBTI to the Benefit Plan; and | |
• | the plan fiduciary will be able to value the assets in accordance with ERISA or other applicable law. |
• | to act solely in the interest of plan participants and beneficiaries and for the exclusive purpose of providing benefits to them, as well as defraying reasonable expenses of plan administration; | |
• | to invest plan assets prudently; | |
• | to diversify the investments of the plan, unless it is clearly prudent not to do so; | |
• | to ensure sufficient liquidity for the plan; | |
• | to ensure that plan investments are made in accordance with plan documents; and | |
• | to consider whether an investment would constitute or give rise to a prohibited transaction under ERISA or the Internal Revenue Code. |
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• | “widely-held;” | |
• | “freely transferable;” and |
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• | either part of a class of securities registered under Section 12(b) or 12(g) of the Securities Exchange Act of 1934, or sold in connection with an effective registration statement under the Securities Act of 1933, provided the securities are registered under the Securities Exchange Act of 1934 within 120 days after the end of the fiscal year of the issuer during which the offering occurred. |
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• | a value included in the annual statement may not be realized by us or by our stockholders upon liquidation (in part because the estimated values do not necessarily indicate the price at which assets could be sold and because the estimated may not take into account the expenses of selling our assets); | |
• | you may not realize these values if you were to attempt to sell your stock; and | |
• | an annual statement of value (or the method used to establish value) may not comply with the requirements of ERISA or the Internal Revenue Code. |
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Expense | Amount | |||
Sales commissions | $ | 97,500,000 | ||
Dealer manager fee | 52,500,000 | |||
Total | $ | 150,000,000 | ||
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Purchase | ||||||
Sales | Price per | |||||
Dollar Volume | Commission | Share to | ||||
of Shares Purchased | Percentage | Investor | ||||
$500,000 or less | 6.5% | $ | 10.00 | |||
$500,001 — $1,000,000 | 5.5% | $ | 9.90 | |||
$1,000,001 — $2,000,000 | 4.5% | $ | 9.80 | |||
$2,000,001 — $3,000,000 | 3.5% | $ | 9.70 | |||
$3,000,001 — $5,000,000 | 2.5% | $ | 9.60 | |||
$5,000,001 and above | 1.5% | $ | 9.50 |
• | an individual, his or her spouse, their children under the age of 21 and all pension or trust funds established by each such individual; | |
• | a corporation, partnership, association, joint-stock company, trust fund or any organized group of persons, whether incorporated or not; | |
• | an employees’ trust, pension, profit-sharing or other employee benefit plan qualified under Section 401(a) of the Internal Revenue Code; and | |
• | all commingled trust funds maintained by a given bank. |
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• | pays a broker a single fee, e.g., a percentage of assets under management, for investment advisory and broker services, which is frequently referred to as a “wrap fee;” | |
• | has engaged the services of a registered investment advisor with whom the investor has agreed to pay compensation for investment advisory services or other financial or investment advice (other than a registered investment advisor that is also registered as a broker-dealer who does not have a fixed or “wrap fee” feature or other asset fee arrangement with the investor); or | |
• | is investing through a bank acting as trustee or fiduciary. |
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• | meets the minimum income and net worth standards set forth under “Suitability Standards” immediately following the cover page of this prospectus; | |
• | can reasonably benefit from an investment in our shares of common stock based on the investor’s overall investment objectives and portfolio structure; | |
• | is able to bear the economic risk of the investment based on the investor’s overall financial situation; | |
• | is in a financial position appropriate to enable the investor to realize the benefits of an investment in our shares of common stock, as described in this prospectus; and | |
• | has an apparent understanding of: |
• | the fundamental risks of an investment in shares of our common stock; | |
• | the risk that an investor may lose its entire investment in shares of our common stock; | |
• | the lack of liquidity of shares of our common stock; |
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• | the restrictions on transferability of shares of our common stock; | |
• | the background and qualifications of our sponsors and its affiliates; and | |
• | the tax consequences of an investment in shares of our common stock. |
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F-2 | ||||
F-3 | ||||
F-4 |
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September 30, | July 10, | |||||||
2009 | 2009 | |||||||
(Unaudited) | ||||||||
ASSETS | ||||||||
Cash | $ | 163,872 | $ | 202,007 | ||||
Due from Advisor | 38,135 | — | ||||||
Total assets | $ | 202,007 | $ | 202,007 | ||||
LIABILITIES AND EQUITY | ||||||||
Liabilities | ||||||||
Total liabilities | $ | — | $ | — | ||||
Commitments and Contingencies | ||||||||
Equity | ||||||||
Stockholders’ equity: | ||||||||
Preferred Stock, $0.01 par value per share; 100,000 shares authorized, no shares issued and outstanding | — | — | ||||||
Common stock, $0.01 par value per share; 999,999,000 shares authorized, 22,223 shares issued and outstanding | 222 | 222 | ||||||
Convertible stock, $0.01 par value per share; 1,000 shares authorized, 1,000 shares issued and outstanding | 10 | 10 | ||||||
Additional paid-in capital | 200,775 | 200,775 | ||||||
Total stockholders’ equity | 201,007 | 201,007 | ||||||
Non-controlling interest | 1,000 | 1,000 | ||||||
Total equity | 202,007 | 202,007 | ||||||
Total liabilities and equity | $ | 202,007 | $ | 202,007 | ||||
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NOTES TO CONSOLIDATED BALANCE SHEETS
As of September 30, 2009
(Unaudited)
1. | Organization |
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2. | Summary of Significant Accounting Policies |
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Buildings | 25-40 years | |
Building improvements | 10-25 years | |
Tenant improvements | Shorter of lease term or expected useful life | |
Tenant origination and absorption costs | Remaining term of related lease | |
Furniture, fixtures, and equipment | 7-10 years |
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3. | Stockholders’ Equity |
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Repurchase Price | ||
as a | ||
Percentage of | ||
Share Purchase Anniversary | Current Offering Price | |
Less than 1 year | No Repurchase Allowed | |
1 year | 92.5% | |
2 years | 95.0% | |
3 years | 97.5% | |
4 years | 100.0% |
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4. | Related Party Arrangements |
Type of Compensation and Recipient | Determination of Amount | |
Organizational and Offering Stage | ||
Sales Commission(1) — Dealer Manager | 6.5% of gross offering proceeds from the sale of shares (100% of which will be reallowed to participating broker-dealers), subject to reductions based on volume and for certain categories of purchasers. No sales commissions will be paid for sales pursuant to the DRP. | |
Assuming all shares in the Public Offering are sold at the highest possible selling commissions (with no discounts to any categories of purchasers), estimated selling commissions are approximately $130,000 if the Company sells the minimum of 200,000 shares and approximately $97,500,000 if the Company sells the maximum of 150,000,000 shares. | ||
Dealer Manager Fee(1) — Dealer Manager | 3.5% of gross offering proceeds from the sale of shares (a portion of which will be reallowed to participating broker-dealers). No dealer manager fee will be paid for sales pursuant to the DRP. | |
The estimated dealer manager fee is approximately $70,000 if the Company sells the minimum of 200,000 shares and approximately $52,500,000 if the Company sells the maximum of 150,000,000 shares. | ||
Organization and Offering Expenses(2) — Advisor and Affiliates | The Company will reimburse the Advisor or its affiliates for organization and offering expenses (as discussed in Note 2) incurred by the Advisor or its affiliates on behalf of the Company to the extent that reimbursement would not cause selling commissions, the dealer manager fee and the other organization and offering expenses borne by the Company to exceed 15% of gross offering proceeds as of the date of reimbursement. | |
The Company estimates organization and offering costs of approximately $25,000 if the Company sells the minimum of 200,000 shares and approximately $18,750,000 if the Company sells the maximum of 150,000,000 shares. |
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Type of Compensation and Recipient | Determination of Amount | |
Operational Stage | ||
Acquisition Fees(3) — Advisor | 2.0% of (1) the purchase price in connection with the acquisition or origination of any type of real property or real estate-related asset acquired directly by the Company or (2) the Company’s allocable portion of the purchase price in connection with the acquisition or origination of any type of real property or real estate-related asset acquired through a joint venture, including any acquisition and origination expenses and any debt attributable to such investments. | |
Investment Management Fees(4) — Advisor | A monthly amount equal to one-twelfth of 0.75% of (1) the cost of real properties and real estate-related assets acquired directly by the Company or (2) the Company’s allocable cost of each real property or real estate-related asset acquired through a joint venture. Such fee will be calculated including acquisition fees, acquisition expenses and any debt attributable to such investments, or the Company’s proportionate share thereof in the case of investments made through joint ventures. | |
Other Operating Expenses(4) — Advisor | Reimbursement of expenses incurred in providing services to the Company, including the Company’s allocable share the Advisor’s overhead, such as rent, employee costs, utilities and IT costs. The Company will not reimburse for employee costs in connection with services for which the Advisor or its affiliates receive acquisition fees or disposition fees or for the salaries the Advisor pays to its executive officers. | |
Property Management and Leasing Fees — Affiliated Property Managers | A market based percentage of the annual gross revenues of each property owned by the Company for property management services. Property managers affiliated with the Advisor or Sponsor (“Affiliated Property Managers”) may subcontract with third party property managers and will be responsible for supervising and compensating those third party property managers. In addition, the Company may pay Affiliated Property Managers a separate fee for services rendered, whether directly or indirectly, in leasing real properties to a third party lessee. Such leasing fee will be in an amount that is usual and customary for comparable services rendered to similar real properties in the geographic market of the real property leased; provided, however, that such leasing fee shall only be paid if a majority of the Company’s board, including a majority of the Company’s independent directors, determines that such leasing fee is fair and reasonable in relation to the services being performed. | |
Liquidity Stage | ||
Disposition Fees(5) — Advisor or its Affiliate | If the Advisor or its affiliates provides a substantial amount of services, as determined by the Company’s independent directors, in connection with the sale of a property or real estate-related asset, 1.5% of the sales price of each property or real estate-related asset sold. |
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Type of Compensation and Recipient | Determination of Amount | |
Common Stock Issuable Upon Conversion of Convertible Stock- Advisor | The Company’s convertible stock will convert to shares of common stock if and when: (A) the Company has made total distributions on the then outstanding shares of the Company’s common stock equal to the original issue price of those shares plus an 8.0% cumulative, non-compounded, annual return on the original issue price of those shares; (B) the Company lists its common stock for trading on a national securities exchange; or (C) the Company terminates or does not review its advisory agreement (other than for “cause” as defined in the advisory agreement). In the event of a termination or non-renewal of the Company’s advisory agreement, the convertible stock will be redeemed for $1.00. In general, each share of the Company’s convertible stock will convert into a number of shares of common stock equal to 1/1000 of the quotient of (A) 10% of the excess of (1) the Company’s “enterprise value”(as defined in the Company’s charter) plus the aggregate value of distributions paid to date on the then outstanding shares of the Company’s common stock over (2) the aggregate purchase price paid by stockholders for those outstanding shares of common stock plus an 8.0% cumulative, non-compounded, annual return on the original issue price of those outstanding shares, divided by (B) the Company’s enterprise value divided by the number of outstanding shares of common stock, in each case calculated as of the date of the conversion. |
(1) | The sales commissions and dealer manager fee may be reduced or waived in connection with certain categories of sales, such as sales for which a volume discount applies, sales through investment advisors or banks acting as trustees or fiduciaries, sales to affiliates of the Company and sales under the DRP. |
(2) | Organization and offering expenses include all expenses (other than sales commissions and the dealer manager fee) to be paid by the Company in connection with the Public Offering and the Private Offering, including legal, accounting, printing, mailing and filing fees, charges of the Company’s escrow holder and transfer agent, expenses of organizing the Company, data processing fees, advertising and sales literature costs, transfer agent costs, bona fide out-of-pocket due diligence costs and amounts to reimburse the Advisor or its affiliates for the salaries of its employees and other costs in connection with preparing supplemental sales materials and providing other administrative services in connection with the Public Offering and the Private Offering. Any such reimbursement will not exceed actual expenses incurred by the Advisor. After the termination of the Public Offering, the Advisor will reimburse the Company to the extent total organization and offering expenses borne by the Company exceed 15% of the gross proceeds raised in the Public Offering. In addition, to the extent the Company does pay the full sales commissions or dealer manager fee for shares sold in the Public Offering, the Company may also reimburse costs of bona fide training and education meetings held by the Company (primarily the travel, meal and lodging costs of registered representatives of broker-dealers), attendance and sponsorship fees and cost reimbursement of employees of the Company’s affiliates to attend seminars conducted by broker-dealers and, in special, cases, reimbursement to participating broker-dealers for technology costs associated with the Public Offering, costs and expenses related to such technology costs, and costs and expenses associated with the facilitation of the marketing of the Company’s shares and the ownership of the Company’s shares by such broker-dealers’ customers; provided, however, that the Company will not pay any of the foregoing costs to the extent that such payment would cause total underwriting compensation to exceed 10% of the gross proceeds of the Public Offering, as required by the rules of FINRA. |
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(3) | In addition to acquisition fees, the Company reimburse the Advisor for amounts it pays to third parties in connection with the selection, acquisition or development of a property or acquisition of real estate-related assets, whether or not the Company ultimately acquires the property or the real estate-related assets. The Company’s charter limits its ability to pay acquisition fees if the total of all acquisition fees and expenses relating to the purchase would exceed 6.0% of the contract purchase price. Under the Company’s charter, a majority of the Company’s board of directors, including a majority of the independent directors, would have to approve any acquisition fees (or portion thereof) which would cause the total of all acquisition fees and expenses relating to an acquisition to exceed 6.0% of the contract purchase price. In connection with the purchase of securities, the acquisition fee may be paid to an affiliate of the Advisor that is registered as a FINRA member broker-dealer if applicable FINRA rules would prohibit the payment of the acquisition fee to a firm that is not a registered broker-dealer. | |
(4) | Commencing four fiscal quarters after the acquisition of the Company’s first real estate asset and at least annually thereafter, the Advisory must reimburse the Company for the amount by which the Company’s operating expenses for the preceding four fiscal quarters then ended exceed the greater of 2% of the Company’s average invested assets, or 25% of the Company’s net income, unless the independent directors have determined that such excess expenses were justified based on unusual and non-recurring factors. “Average invested assets” means the average monthly book value of the Company’s assets invested directly or indirectly in equity interests and loans secured by real estate during the 12-month period before deducting depreciation, bad debts or other non-cash reserves. “Total operating expenses” means all expenses paid or incurred by the Company, as determined under generally accepted accounting principles in the United States, or GAAP, that are in any way related to the Company’s operation, including investment management fees, but excluding (a) the expenses of raising capital such as organization and offering expenses, legal, audit, accounting, underwriting, brokerage, listing, registration and other fees, printing and other such expenses and taxes incurred in connection with the issuance, distribution, transfer, listing and registration of shares of the Company’s common stock; (b) interest payments; (c) taxes; (d) non-cash expenditures such as depreciation, amortization and bad debt reserves; (e) reasonable incentive fees based on the gain in the sale of the Company’s assets; (f) acquisition fees and acquisition expenses (including expenses relating to potential acquisitions that the Company does not close); (g) real estate commissions on the resale of investments; and (h) other expenses connected with the acquisition, disposition, management and ownership of investments (including the costs of foreclosure, insurance premiums, legal services, maintenance, repair and improvement of real property). | |
(5) | No disposition fee will be paid for securities traded on a national securities exchange. To the extent the disposition fee is paid upon the sale of any assets other than real property, it will count against the limit on “total operating expenses” described in note 4 above. | |
In connection with the sale of securities, the disposition fee may be paid to an affiliate of the Advisor that is registered as a FINRA member broker-dealer if applicable FINRA rules would prohibit the payment of the disposition fee to a firm that is not a registered broker-dealer. | ||
The Company’s charter limits the maximum amount of the disposition fees payable to the Advisor for the sale of any real property to the lesser of one-half of the brokerage commission paid or 3.0% of the contract sales price. |
At September 30, 2009, the Company had a receivable from the Advisor for the reimbursement of certain expenditures for $38,135 that is due on demand. |
5. | Incentive Award Plan and Independent Director Compensation |
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6. | Conflicts of Interest |
7. | Economic Dependency |
8. | Subsequent Events |
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Steadfast Everett Plaza, LLC | Steadfast-BLK, LLC | |||||||||||||||
Dollar Amount | Percentage | Dollar Amount | Percentage | |||||||||||||
Dollar Amount Offered(1) | $ | 607,438 | (6) | — | % | $ | 26,929,557 | — | % | |||||||
Percentage Amount Raised | — | 100 | — | 100 | ||||||||||||
Less Offering Expenses: | ||||||||||||||||
Selling commissions and discounts retained by affiliates | — | — | — | — | ||||||||||||
Organizational expenses | — | — | — | — | ||||||||||||
Other | — | — | — | — | ||||||||||||
Reserves(2) | — | — | 743,729 | — | ||||||||||||
Percent available for investment | — | 100 | — | 97 | ||||||||||||
Acquisition Costs: | ||||||||||||||||
Prepaid items and fees related to purchase of property(3) | 4,633 | 0.8 | 452,292 | 1.7 | ||||||||||||
Cash Down Payment | 600,000 | 98.7 | 22,843,000 | 84.8 | ||||||||||||
Acquisition Fees | — | — | 1,068,430 | 4.0 | ||||||||||||
Other | — | — | — | — | ||||||||||||
Total Acquisition Cost | $ | 604,633 | 99.5 | % | $ | 24,363,722 | 90.5 | % | ||||||||
Leverage: (financing divided by total purchase price) | ||||||||||||||||
Mortgage Loan | $ | 1,900,000 | 72.3 | % | $ | 84,000,000 | 77.5 | % | ||||||||
Other Financing | 125,000 | 4.7 | — | — | ||||||||||||
Total Leverage | $ | 2,025,000 | 77.0 | % | $ | 84,000,000 | 77.5 | % | ||||||||
Date Offering Began(4) | 2/1/2006 | — | 10/1/2007 | — | ||||||||||||
Length of Offering (In Days)(5) | 76 | — | 121 | — | ||||||||||||
Months to invest 90 percent of amount available for investment (measured from the beginning of offering) | 2.5 | — | 4.0 | — |
(1) | The amount represents the initial amount offered and raised to purchase a specific property. | |
(2) | Reserves represent funds set aside at time of purchase for future use by the property. | |
(3) | Includes costs of all prepaid items as well as items paid during escrow for the purchase of the property. | |
(4) | This date was determined based on an executed letter of intent date for pursuing the property to be included in the specific program. | |
(5) | Program represents an investment to purchase a single property; funds are raised only as an asset is identified and pursued through an executed letter of intent or purchase agreement. The length of offering represents the time period from the date the property to be purchased was identified to the acquisition date. | |
(6) | Asset was acquired through a recourse loan made by investors rather than traditional equity. |
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Stone Point I, LLC | Steadfast Roseville II, LLC | |||||||||||||||
Dollar Amount | Percentage | Dollar Amount | Percentage | |||||||||||||
Dollar Amount Offered(1) | $ | 1,609,139 | — | % | $ | 1,948,912 | (6) | — | % | |||||||
Percentage Amount Raised | — | 100 | — | 100 | ||||||||||||
Less Offering Expenses: | ||||||||||||||||
Selling commissions and discounts retained by affiliates | — | — | — | — | ||||||||||||
Organizational expenses | — | — | — | — | ||||||||||||
Other | — | — | — | — | ||||||||||||
Reserves(2) | — | — | — | — | ||||||||||||
Percent available for investment | — | 100 | — | 100 | ||||||||||||
Acquisition Costs: | ||||||||||||||||
Prepaid items and fees related to purchase of property(3) | 107,796 | 6.7 | 121,096 | 6.2 | ||||||||||||
Cash Down Payment | 1,435,336 | 89.2 | 1,827,816 | 93.8 | ||||||||||||
Acquisition Fees | — | — | — | — | ||||||||||||
Other | — | — | — | — | ||||||||||||
Total Acquisition Cost | $ | 1,543,132 | 95.9 | % | $ | 1,948,912 | 100 | % | ||||||||
Leverage: (financing divided by total purchase price) | ||||||||||||||||
Mortgage Loan | $ | 3,452,500 | 69.1 | % | $ | 2,973,000 | 53.0 | % | ||||||||
Other Financing | — | — | 692,813 | 12.3 | ||||||||||||
Total Leverage | $ | 3,452,500 | 69.1 | % | $ | 3,665,813 | 65.3 | % | ||||||||
Date Offering Began(4) | 10/18/2006 | — | 10/18/2006 | — | ||||||||||||
Length of Offering (In Days)(5) | 52 | — | 351 | — | ||||||||||||
Months to invest 90 percent of amount available for investment (measured from the beginning of offering) | 1.7 | — | 11.7 | — |
(1) | The amount represents the initial amount offered and raised to purchase a specific property. | |
(2) | Reserves represent funds set aside at time of purchase for future use by the property. | |
(3) | Includes costs of all prepaid items as well as items paid during escrow for the purchase of the property. | |
(4) | This date was determined based on an executed letter of intent date for pursuing the property to be included in the specific program. | |
(5) | Program represents an investment to purchase a single property; funds are raised only as an asset is identified and pursued through an executed letter of intent or purchase agreement. The length of offering represents the time period from the date the property to be purchased was identified to the acquisition date. | |
(6) | The asset was originally acquired on December 8, 2006 with 100% debt; equity raised at the time of refinancing. The length of offering is based on the original purchase date to the date the equity funds were raised. |
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Steadfast Woodranch, LLC | ||||||||
Dollar Amount | Percentage | |||||||
Dollar Amount Offered(1) | $ | 757,860 | — | % | ||||
Percentage Amount Raised | — | 100 | ||||||
Less Offering Expenses: | ||||||||
Selling commissions and discounts retained by affiliates | — | — | ||||||
Organizational expenses | — | — | ||||||
Other | — | — | ||||||
Reserves(2) | — | — | ||||||
Percent available for investment | — | 100 | ||||||
Acquisition Costs: | ||||||||
Prepaid items and fees related to purchase of property(3) | — | — | ||||||
Cash Down Payment | 757,860 | 100 | ||||||
Acquisition Fees | — | — | ||||||
Other | — | — | ||||||
Total Acquisition Cost | $ | 757,860 | 100 | % | ||||
Leverage: (financing divided by total purchase price) | ||||||||
Mortgage Loan | $ | 9,464,323 | 82.6 | % | ||||
Other Financing | 1,233,097 | 10.8 | ||||||
Total Leverage | $ | 10,697,420 | 93.4 | % | ||||
Date Offering Began(4) | 9/25/2006 | — | ||||||
Length of Offering (In Days)(5) | 213 | — | ||||||
Months to invest 90 percent of amount available for investment (measured from the beginning of offering) | 7.1 | — |
(1) | The amount represents the initial amount offered and raised to purchase a specific property. | |
(2) | Reserves represent funds set aside at time of purchase for future use by the property. | |
(3) | Includes costs of all prepaid items as well as items paid during escrow for the purchase of the property. | |
(4) | This date was determined based on an executed letter of intent date for pursuing the property to be included in the specific program. | |
(5) | Program represents an investment to purchase a single property; funds are raised only as an asset is identified and pursued through an executed letter of intent or purchase agreement. The length of offering represents the time period from the date the property to be purchased was identified to the acquisition date. |
A-4
Table of Contents
Steadfast Everett | Steadfast- | |||||||||||
Plaza, LLC | BLK, LLC | Stone Point I, LLC | ||||||||||
Date Offering Commenced | 2/1/2006 | 10/1/2007 | 10/18/2006 | |||||||||
Dollar Amount Raised | $ | 607,438 | $ | 26,929,557 | $ | 1,609,139 | ||||||
Amount Paid to Sponsor from Proceeds of Offering: | ||||||||||||
Underwriting Fees | — | — | — | |||||||||
Acquisition Fees | — | — | — | |||||||||
Real Estate Commissions | — | — | — | |||||||||
Advisory Fees | — | 1,068,430 | — | |||||||||
Financing Fee | — | 420,000 | — | |||||||||
Dollar Amount of Cash Generated from Operations Before Deducting Payments to Sponsor: | 9,873 | 2,535,119 | (247,201 | ) | ||||||||
Amount Paid to Sponsor from Operations: | ||||||||||||
Property Management Fees | — | 292,940 | — | |||||||||
Partnership Management Fees | — | 97,677 | — | |||||||||
Reimbursements | — | 660,946 | — | |||||||||
Leasing Commissions | — | 78,598 | — | |||||||||
Acquisition Fees | — | — | — | |||||||||
Developer Fee | — | 99,000 | 150,000 | |||||||||
Construction Fee | — | 6,098 | — | |||||||||
Disposition Fee | — | — | — | |||||||||
Dollar amount of Property Sales and Refinancing Before Deducting Payments to Sponsor: | ||||||||||||
Cash | 2,937,077 | — | — | |||||||||
Notes | — | — | — | |||||||||
Amount Paid to Sponsor from Property Sales and Refinancing: | ||||||||||||
Real Estate Commissions | — | — | — | |||||||||
Incentive Fees | — | — | — | |||||||||
Acquisition Fees | 125,000 | — | — | |||||||||
Developer Fee | 60,000 | — | — | |||||||||
Construction Fee | — | — | — | |||||||||
Disposition Fee | 67,230 | — | — |
A-5
Table of Contents
Steadfast | Steadfast | |||||||
Roseville II, LLC | Woodranch, LLC | |||||||
Date Offering Commenced | 10/18/2006 | 9/25/2006 | ||||||
Dollar Amount Raised | $ | 1,948,912 | $ | 757,860 | ||||
Amount Paid to Sponsor from Proceeds of Offering: | ||||||||
Underwriting Fees | — | — | ||||||
Acquisition Fees | — | — | ||||||
Real Estate Commissions | — | — | ||||||
Advisory Fees | — | — | ||||||
Financing Fee | — | — | ||||||
Dollar Amount of Cash Generated from Operations before Deducting Payments to Sponsor: | 26,784 | (49,924 | ) | |||||
Amount Paid to Sponsor from Operations: | ||||||||
Property Management Fees | — | — | ||||||
Partnership Management Fees | — | — | ||||||
Reimbursements | 57,141 | — | ||||||
Leasing Commissions | — | — | ||||||
Acquisition Fees | — | 100,000 | ||||||
Developer Fee | — | 965,222 | ||||||
Construction Fee | — | — | ||||||
Disposition Fee | — | — | ||||||
Dollar amount of Property Sales and Refinancing Before Deducting Payments to Sponsor: | ||||||||
Cash | — | — | ||||||
Notes | — | — | ||||||
Amount Paid to Sponsor from Property Sales and Refinancing: | ||||||||
Real Estate Commissions | — | — | ||||||
Incentive Fees | — | — | ||||||
Acquisition Fees | — | — | ||||||
Developer Fee | — | — | ||||||
Construction Fee | — | — | ||||||
Disposition Fee | — | — |
A-6
Table of Contents
Steadfast Everett Plaza, LLC | ||||||||||||||||||||
2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||||||||
Gross Revenues | $ | — | $ | 19,555 | $ | — | $ | — | $ | — | ||||||||||
Profit on Sale of Properties | — | 1,888,020 | — | — | — | |||||||||||||||
Less: Operation Expenses | — | (102 | ) | — | — | |||||||||||||||
Interest Expense | — | (9,682 | ) | (112,287 | ) | — | — | |||||||||||||
Depreciation | — | — | — | — | — | |||||||||||||||
Net Income (Loss) — (Tax Basis) | $ | — | $ | 1,897,893 | $ | (112,389 | ) | $ | — | $ | — | |||||||||
Taxable Income (Loss): | ||||||||||||||||||||
From Operations | $ | — | $ | 9,873 | $ | (112,389 | ) | $ | — | $ | — | |||||||||
From Gain on Sale | — | 1,888,020 | — | — | — | |||||||||||||||
Other | — | — | — | — | — | |||||||||||||||
Cash Generated From Operations | — | 9,873 | — | — | — | |||||||||||||||
Cash Generated from Sales | — | 2,937,077 | — | — | — | |||||||||||||||
Cash Generated from Refinancing | — | — | — | — | — | |||||||||||||||
Total Cash Generated | — | 2,946,950 | — | — | — | |||||||||||||||
Less Cash Distributions to Investors: | ||||||||||||||||||||
From Operating Cash Flow | — | — | — | — | — | |||||||||||||||
From Sales and Refinancing | — | (1,785,504 | ) | — | — | — | ||||||||||||||
From Other | — | — | — | — | — | |||||||||||||||
Cash Generated (Deficiency) After Cash Distributions | — | 1,161,446 | — | — | — | |||||||||||||||
Less: Special Items (not including sales and refinancing) | — | — | — | — | — | |||||||||||||||
Cash Generated (Deficiency) After Cash Distributions and Special Items | $ | — | $ | 1,161,446 | $ | — | $ | — | $ | — | ||||||||||
Tax and Distribution Data Per $1,000 Invested | ||||||||||||||||||||
Federal Income Tax Results: | ||||||||||||||||||||
Ordinary Income (Loss): | ||||||||||||||||||||
From Operations | $ | — | $ | 16 | $ | (185 | ) | $ | — | $ | — | |||||||||
From Recapture | — | — | — | — | — | |||||||||||||||
Capital Gain (loss) | — | 3,108 | — | — | — | |||||||||||||||
Cash Distributions to Investors: | ||||||||||||||||||||
Source (on Tax Basis) | ||||||||||||||||||||
Investment Income | — | 1,939 | — | — | — | |||||||||||||||
Return of Capital | — | 1,000 | — | — | — | |||||||||||||||
Source (on Cash Basis) | ||||||||||||||||||||
Sales | — | 2,939 | — | — | — | |||||||||||||||
Refinancing | — | — | — | — | — | |||||||||||||||
Operations | — | — | — | — | — | |||||||||||||||
Other | — | — | — | — | — | |||||||||||||||
Amount (in percentage terms) remaining invested in program properties at the end of the last year reported in the Table (original total acquisition cost of properties retained divided by original acquisition costs of all properties in program) | — | % |
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Table of Contents
Steadfast-BLK, LLC | ||||||||||||||||||||
2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||||||||
Gross Revenues | $ | 10,956,729 | $ | — | $ | — | $ | — | $ | — | ||||||||||
Profit on Sale of Properties | — | — | — | — | ||||||||||||||||
Less: Operation Expenses | (5,254,745 | ) | — | — | — | — | ||||||||||||||
Interest Expense | (4,643,286 | ) | — | — | — | — | ||||||||||||||
Depreciation | (1,882,564 | ) | — | — | — | — | ||||||||||||||
Net Income (Loss) — Tax Basis | $ | (823,866 | ) | $ | — | $ | — | $ | — | $ | — | |||||||||
Taxable Income (Loss) | ||||||||||||||||||||
From Operations | $ | (823,866 | ) | $ | — | $ | — | $ | — | $ | — | |||||||||
From Gain on Sale | — | — | — | — | — | |||||||||||||||
Other | — | — | — | — | — | |||||||||||||||
Cash Generated From Operations | 1,483,556 | — | — | — | — | |||||||||||||||
Cash Generated from Sales | — | — | — | — | — | |||||||||||||||
Cash Generated from Refinancing | — | — | — | — | — | |||||||||||||||
Total Cash Generated | 1,483,556 | — | — | — | — | |||||||||||||||
Less Cash Distributions to Investors: | ||||||||||||||||||||
From Operating Cash Flow | — | — | — | — | — | |||||||||||||||
From Sales and Refinancing | — | — | — | — | — | |||||||||||||||
From Other | — | — | — | — | — | |||||||||||||||
Cash Generated (Deficiency) After Cash Distributions | 1,483,556 | — | — | — | — | |||||||||||||||
Less: Special Items (not including sales and refinancing) | — | — | — | — | — | |||||||||||||||
Cash Generated (Deficiency) After Cash Distributions and Special Items | $ | 1,483,556 | $ | — | $ | — | $ | — | $ | — | ||||||||||
Tax and Distribution Data Per $1,000 Invested | ||||||||||||||||||||
Federal Income Tax Results: | ||||||||||||||||||||
Ordinary Income (Loss): | ||||||||||||||||||||
From Operations | $ | (31 | ) | $ | — | $ | — | $ | — | $ | — | |||||||||
From Recapture | — | — | — | — | — | |||||||||||||||
Capital Gain (loss) | — | — | — | — | — | |||||||||||||||
Cash Distributions to Investors: | ||||||||||||||||||||
Source (on Tax Basis) | ||||||||||||||||||||
Investment Income | — | — | — | — | — | |||||||||||||||
Return of Capital | — | — | — | — | — | |||||||||||||||
Source (on Cash Basis) | ||||||||||||||||||||
Sales | — | — | — | — | — | |||||||||||||||
Refinancing | — | — | — | — | — | |||||||||||||||
Operations | — | — | — | — | — | |||||||||||||||
Other | — | — | — | — | — | |||||||||||||||
Amount (in percentage terms) remaining invested in program properties at the end of the last year reported in the Table (original total acquisition cost of properties retained divided by original acquisition costs of all properties in program) | 100 | % |
A-8
Table of Contents
Steadfast Everett Mall, LLC | ||||||||||||||||||||
2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||||||||
Gross Revenues | $ | 10,316,985 | $ | 9,122,702 | $ | 8,336,880 | $ | 7,660,084 | $ | 5,329,517 | ||||||||||
Profit on Sale of Properties | — | — | — | — | — | |||||||||||||||
Less: Operation Expenses | (4,952,586 | ) | (6,512,132 | ) | (5,112,436 | ) | (4,316,753 | ) | (2,999,699 | ) | ||||||||||
Interest Expense | (5,459,907 | ) | (5,743,205 | ) | (5,705,221 | ) | (4,269,898 | ) | (1,940,074 | ) | ||||||||||
Depreciation | (3,569,437 | ) | (3,041,385 | ) | (3,771,185 | ) | (2,471,562 | ) | (601,169 | ) | ||||||||||
Net Income (Loss) — (Tax Basis) | $ | (3,664,945 | ) | $ | (6,174,020 | ) | $ | (6,251,962 | ) | $ | (3,398,129 | ) | $ | (211,425 | ) | |||||
Taxable Income (Loss): | ||||||||||||||||||||
From Operations | $ | (3,664,945 | ) | $ | (6,174,020 | ) | $ | (6,251,962 | ) | $ | (3,398,129 | ) | $ | (211,425 | ) | |||||
From Gain on Sale | — | — | — | — | — | |||||||||||||||
Other | — | — | — | — | — | |||||||||||||||
Cash Generated From Operations | 2,678,192 | 3,778,099 | (2,918,122 | ) | 2,122,809 | 1,667,941 | ||||||||||||||
Cash Generated from Sales | — | — | — | — | — | |||||||||||||||
Cash Generated from Refinancing | 3,061,592 | 13,823,429 | — | — | — | |||||||||||||||
Total Cash Generated | 5,739,784 | 17,601,528 | (2,918,122 | ) | 2,122,809 | 1,667,941 | ||||||||||||||
Less Cash Distributions to Investors: | ||||||||||||||||||||
From Operating Cash Flow | — | — | — | — | — | |||||||||||||||
From Sales and Refinancing | — | — | (21,163 | ) | — | — | ||||||||||||||
From Other | — | — | — | — | — | |||||||||||||||
Cash Generated (Deficiency) After Cash Distributions | 5,739,784 | 17,601,528 | (2,939,285 | ) | 2,122,809 | 1,667,941 | ||||||||||||||
Less: Special Items (not including sales and refinancing) | — | — | — | — | — | |||||||||||||||
Cash Generated (Deficiency) After Cash Distributions and Special Items | $ | 5,739,784 | $ | (17,601,528 | ) | $ | 2,939,285 | $ | 2,122,809 | $ | 1,667,941 | |||||||||
Tax and Distribution Data Per $1,000 Invested | ||||||||||||||||||||
Federal Income Tax Results: | ||||||||||||||||||||
Ordinary Income (Loss): | ||||||||||||||||||||
From Operations | $ | (280 | ) | $ | (471 | ) | $ | (477 | ) | $ | (259 | ) | $ | (16 | ) | |||||
From Recapture | — | — | — | — | — | |||||||||||||||
Capital Gain (loss) | — | — | — | — | — | |||||||||||||||
Cash Distributions to Investors: | ||||||||||||||||||||
Source (on Tax Basis) | ||||||||||||||||||||
Investment Income | 455 | — | — | — | — | |||||||||||||||
Return of Capital | 491 | — | — | — | — | |||||||||||||||
Source (on Cash Basis) | ||||||||||||||||||||
Sales | — | — | — | — | — | |||||||||||||||
Refinancing | 946 | — | (2 | ) | — | — | ||||||||||||||
Operations | — | — | — | — | — | |||||||||||||||
Other | — | — | — | — | — | |||||||||||||||
Amount (in percentage terms) remaining invested in program properties at the end of the last year reported in the Table (original total acquisition cost of properties retained divided by original acquisition costs of all properties in program) | 100 | % |
A-9
Table of Contents
Steadfast Heritage, LLC | ||||||||||||||||||||
2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||||||||
Gross Revenues | $ | 4,423,572 | $ | 4,141,119 | $ | 4,131,713 | $ | 1,543,102 | $ | — | ||||||||||
Profit on Sale of Properties | — | — | — | — | — | |||||||||||||||
Less: Operation Expenses | (2,210,724 | ) | (2,202,301 | ) | (2,023,896 | ) | (767,880 | ) | — | |||||||||||
Interest Expense | (1,857,203 | ) | (2,629,152 | ) | (2,658,880 | ) | (955,203 | ) | — | |||||||||||
Depreciation | (785,453 | ) | (1,510,416 | ) | (1,313,536 | ) | (569,057 | ) | — | |||||||||||
Net Income (Loss) — Tax Basis | $ | (429,808 | ) | $ | (2,200,750 | ) | $ | (1,864,599 | ) | $ | (749,037 | ) | $ | — | ||||||
Net Income — (Tax Basis) | ||||||||||||||||||||
Taxable Income (Loss): | $ | (429,808 | ) | $ | (2,200,750 | ) | $ | (1,864,599 | ) | $ | (749,775 | ) | $ | — | ||||||
From Operations | — | — | — | — | — | |||||||||||||||
From Gain on Sale | — | — | — | — | — | |||||||||||||||
Cash Generated From Operations | 207,635 | (797,908 | ) | (643,946 | ) | 127,773 | — | |||||||||||||
Cash Generated from Sales | — | — | — | — | — | |||||||||||||||
Cash Generated from Refinancing | — | 4,652,829 | — | — | — | |||||||||||||||
Total Cash Generated | 207,635 | 3,854,921 | (643,946 | ) | 127,773 | — | ||||||||||||||
Less Cash Distributions to Investors: | ||||||||||||||||||||
From Operating Cash Flow | — | — | — | — | — | |||||||||||||||
From Sales and Refinancing | — | (2,815,093 | ) | — | — | — | ||||||||||||||
From Other | — | — | — | — | — | |||||||||||||||
Cash Generated (Deficiency) After Cash Distributions | 207,635 | 1,039,828 | (643,946 | ) | 127,773 | — | ||||||||||||||
Less: Special Items (not including sales and refinancing) | — | — | — | — | — | |||||||||||||||
Cash Generated (Deficiency) After Cash Distributions and Special Items | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
Tax and Distribution Data Per $1,000 Invested | ||||||||||||||||||||
Federal Income Tax Results: | ||||||||||||||||||||
Ordinary Income (Loss): | ||||||||||||||||||||
From Operations | $ | (78 | ) | $ | (398 | ) | $ | (337 | ) | $ | (136 | ) | $ | — | ||||||
From Recapture | — | — | — | — | — | |||||||||||||||
Capital Gain (loss) | — | — | — | — | — | |||||||||||||||
Cash Distributions to Investors: | ||||||||||||||||||||
Source (on Tax Basis) | ||||||||||||||||||||
Investment Income | — | 181 | — | — | — | |||||||||||||||
Return of Capital | — | 328 | — | — | — | |||||||||||||||
Source (on Cash Basis) | ||||||||||||||||||||
Sales | — | — | — | — | — | |||||||||||||||
Refinancing | — | 509 | — | — | — | |||||||||||||||
Operations | — | — | — | — | — | |||||||||||||||
Other | — | — | — | — | — | |||||||||||||||
Amount (in percentage terms) remaining invested in program properties at the end of the last year reported in the Table (original total acquisition cost of properties retained divided by original acquisition costs of all properties in program) | 100 | % |
A-10
Table of Contents
Steadfast Yuba City I-II, LLC | ||||||||||||||||||||
2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||||||||
Gross Revenues | $ | 5,895,771 | $ | 5,794,484 | $ | 5,539,172 | $ | 5,460,369 | $ | 1,347,800 | ||||||||||
Profit on Sale of Properties | — | — | — | — | — | |||||||||||||||
Less: Operation Expenses | (3,308,043 | ) | (2,688,938 | ) | (2,818,291 | ) | (2,645,917 | ) | (712,989 | ) | ||||||||||
Interest Expense | (2,204,091 | ) | (2,174,884 | ) | (2,240,754 | ) | (2,693,224 | ) | (796,441 | ) | ||||||||||
Depreciation | (845,140 | ) | (751,905 | ) | (740,598 | ) | (760,572 | ) | (310,903 | ) | ||||||||||
Net Income (Loss) — (Tax Basis) | $ | (461,503 | ) | $ | 178,757 | $ | (260,471 | ) | $ | (639,344 | ) | $ | (472,533 | ) | ||||||
Taxable Income (Loss): | ||||||||||||||||||||
From Operations | $ | (461,503 | ) | $ | 178,757 | $ | (260,471 | ) | $ | (639,344 | ) | $ | (472,533 | ) | ||||||
From Gain on Sale | — | — | — | — | — | |||||||||||||||
Other | — | — | — | — | — | |||||||||||||||
Cash Generated From Operations | 234,116 | 759,288 | 754,190 | (405,365 | ) | 508,568 | ||||||||||||||
Cash Generated from Sales | — | — | — | — | — | |||||||||||||||
Cash Generated from Refinancing | — | — | — | — | — | |||||||||||||||
Total Cash Generated | 234,116 | 759,288 | 754,190 | (405,365 | ) | 508,568 | ||||||||||||||
Less Cash Distributions to Investors: | ||||||||||||||||||||
From Operating Cash Flow | — | — | — | — | — | |||||||||||||||
From Sales and Refinancing | — | — | — | — | — | |||||||||||||||
From Other | — | — | — | — | — | |||||||||||||||
Cash Generated (Deficiency) After Cash Distributions | 234,116 | 759,288 | 754,190 | (405,365 | ) | 508,568 | ||||||||||||||
Less: Special Items (not including sales and refinancing) | — | — | — | — | — | |||||||||||||||
Cash Generated (Deficiency) After Cash Distributions and Special Items | $ | 234,116 | $ | 759,288 | $ | 754,190 | $ | (405,365 | ) | $ | 508,568 | |||||||||
Tax and Distribution Data Per $1,000 Invested | ||||||||||||||||||||
Federal Income Tax Results: | ||||||||||||||||||||
Ordinary Income (Loss): | ||||||||||||||||||||
From Operations | $ | (146 | ) | $ | 56 | $ | (82 | ) | $ | (202 | ) | $ | (149 | ) | ||||||
From Recapture | — | — | — | — | — | |||||||||||||||
Capital Gain (loss) | — | — | — | — | — | |||||||||||||||
Cash Distributions to Investors: | ||||||||||||||||||||
Source (on Tax Basis) | ||||||||||||||||||||
Investment Income | — | — | — | — | — | |||||||||||||||
Return of Capital | — | — | — | — | — | |||||||||||||||
Source (on Cash Basis) | ||||||||||||||||||||
Sales | — | — | — | — | — | |||||||||||||||
Refinancing | — | — | — | — | — | |||||||||||||||
Operations | — | — | — | — | — | |||||||||||||||
Other | — | — | — | — | — | |||||||||||||||
Amount (in percentage terms) remaining invested in program properties at the end of the last year reported in the Table (original total acquisition cost of properties retained divided by original acquisition costs of all properties in program) | 100 | % |
A-11
Table of Contents
Steadfast Foothill Plaza, LLC | ||||||||||||||||||||
2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||||||||
Gross Revenues | $ | — | $ | — | $ | 1,638,395 | $ | 4,710,689 | $ | — | ||||||||||
Profit on Sale of Properties | — | — | 33,395,965 | — | — | |||||||||||||||
Less: Operation Expenses | — | — | (794,787 | ) | (1,458,468 | ) | — | |||||||||||||
Interest Expense | — | — | (652,220 | ) | (1,754,896 | ) | — | |||||||||||||
Depreciation | — | — | (689,392 | ) | (1,173,929 | ) | — | |||||||||||||
Net Income — (Tax Basis) | $ | — | $ | — | $ | 32,897,961 | $ | 323,396 | $ | — | ||||||||||
Taxable Income (Loss): | ||||||||||||||||||||
From Operations | $ | — | $ | — | $ | (498,004 | ) | $ | 323,396 | $ | — | |||||||||
From Gain on Sale | — | — | 33,395,965 | — | — | |||||||||||||||
Other | — | — | — | — | — | |||||||||||||||
Cash Generated From Operations | — | — | 9,618 | 1,679,095 | — | |||||||||||||||
Cash Generated from Sales | — | — | 29,838,670 | — | — | |||||||||||||||
Cash Generated from Refinancing | — | — | — | — | — | |||||||||||||||
Total Cash Generated | — | — | 31,265,934 | 1,679,095 | — | |||||||||||||||
Less Cash Distributions to Investors: | — | — | — | — | — | |||||||||||||||
From Operating Cash Flow | — | — | (986,243 | ) | (702,470 | ) | — | |||||||||||||
From Sales and Refinancing | — | — | (29,838,670 | ) | — | — | ||||||||||||||
From Other | — | — | (441,021 | ) | — | — | ||||||||||||||
Cash Generated (Deficiency) After Cash Distributions | — | — | — | 976,625 | — | |||||||||||||||
Less: Special Items (not including sales and refinancing) | — | — | — | — | — | |||||||||||||||
Cash Generated (Deficiency) After Cash Distributions and Special Items | $ | — | $ | — | $ | — | $ | 976,625 | $ | — | ||||||||||
Tax and Distribution Data Per $1,000 Invested | ||||||||||||||||||||
Federal Income Tax Results: | ||||||||||||||||||||
Ordinary Income (Loss): | ||||||||||||||||||||
From Operations | $ | — | $ | — | $ | (66 | ) | $ | 43 | $ | — | |||||||||
From Recapture | — | — | — | — | — | |||||||||||||||
Capital Gain (loss) | — | — | 4,423 | — | — | |||||||||||||||
Cash Distributions to Investors: | ||||||||||||||||||||
Source (on Tax Basis) | ||||||||||||||||||||
Investment Income | — | — | 3,141 | $ | 93 | — | ||||||||||||||
Return of Capital | — | — | 1,000 | — | — | |||||||||||||||
Source (on Cash Basis) | ||||||||||||||||||||
Sales | — | — | 3,952 | — | — | |||||||||||||||
Refinancing | — | — | — | — | — | |||||||||||||||
Operations | — | — | 224 | $ | 93 | — | ||||||||||||||
Other | — | — | 58 | — | — | |||||||||||||||
Amount (in percentage terms) remaining invested in program properties at the end of the last year reported in the Table (original total acquisition cost of properties retained divided by original acquisition costs of all properties in program) | — | % |
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Steadfast Koll I & II, LLC | ||||||||||||||||||||
2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||||||||
Gross Revenues | $ | 187,897 | $ | 1,492,223 | $ | 1,486,433 | $ | 893,006 | $ | — | ||||||||||
Profit on Sale of Properties | 9,573,462 | — | — | — | — | |||||||||||||||
Less: Operation Expenses | (77,774 | ) | (196,931 | ) | (195,128 | ) | (131,900 | ) | — | |||||||||||
Interest Expense | (474,745 | ) | (1,011,450 | ) | (1,012,148 | ) | (710,523 | ) | — | |||||||||||
Depreciation | (366,167 | ) | (299,799 | ) | (326,012 | ) | (169,171 | ) | — | |||||||||||
Net Income (Loss) — (Tax Basis) | $ | 8,842,673 | $ | (15,957 | ) | $ | (46,855 | ) | $ | (118,588 | ) | $ | — | |||||||
Taxable Income (Loss): | ||||||||||||||||||||
From Operations | $ | (730,789 | ) | $ | (15,957 | ) | $ | (46,855 | ) | $ | (118,588 | ) | $ | — | ||||||
From Gain on Sale | 9,573,462 | — | — | — | — | |||||||||||||||
Other | — | — | — | — | — | |||||||||||||||
Cash Generated From Operations | (474,081 | ) | 308,886 | 268,069 | 146,086 | — | ||||||||||||||
Cash Generated from Sales | 9,198,027 | — | — | — | — | |||||||||||||||
Cash Generated from Refinancing | — | — | — | 1,496,234 | — | |||||||||||||||
Cash Generated from Other | — | — | — | — | — | |||||||||||||||
Total Cash Generated | 8,723,946 | 308,886 | 268,069 | 1,642,320 | — | |||||||||||||||
Less Cash Distributions to Investors: | ||||||||||||||||||||
From Operating Cash Flow | — | — | — | — | — | |||||||||||||||
From Sales and Refinancing | (8,580,062 | ) | — | — | — | — | ||||||||||||||
From Other | — | — | — | — | — | |||||||||||||||
Cash Generated (Deficiency) After Cash Distributions | 143,884 | 308,886 | 268,069 | 1,642,320 | — | |||||||||||||||
Less: Special Items (not including sales and refinancing) | — | — | — | — | — | |||||||||||||||
Cash Generated (Deficiency) After Cash Distributions and Special Items | $ | 143,884 | $ | 308,886 | $ | 268,069 | $ | 1,642,320 | $ | — | ||||||||||
Tax and Distribution Data Per $1,000 Invested | ||||||||||||||||||||
Federal Income Tax Results: | ||||||||||||||||||||
Ordinary Income (Loss): | ||||||||||||||||||||
From Operations | $ | (196 | ) | $ | (4 | ) | $ | (13 | ) | $ | (32 | ) | $ | — | ||||||
From Recapture | — | — | — | — | — | |||||||||||||||
Capital Gain (loss) | 2,565 | — | — | — | — | |||||||||||||||
Cash Distributions to Investors: | ||||||||||||||||||||
Source (on Tax Basis) | ||||||||||||||||||||
Investment Income | 1,299 | — | — | — | — | |||||||||||||||
Return of Capital | 1,000 | — | — | — | — | |||||||||||||||
Source (on Cash Basis) | ||||||||||||||||||||
Sales | 2,299 | — | — | — | — | |||||||||||||||
Refinancing | — | — | — | — | — | |||||||||||||||
Operations | — | — | — | — | — | |||||||||||||||
Other | — | — | — | — | — | |||||||||||||||
Amount (in percentage terms) remaining invested in program properties at the end of the last year reported in the Table (original total acquisition cost of properties retained divided by original acquisition costs of all properties in program) | — | % |
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Steadfast Village Center, LLC | ||||||||||||||||||||
2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||||||||
Gross Revenues | $ | — | $ | 652,078 | $ | 1,628,097 | $ | — | $ | — | ||||||||||
Profit on Sale of Properties | — | 5,726,009 | — | — | — | |||||||||||||||
Less: Operation Expenses | — | (819,285 | ) | (326,568 | ) | — | — | |||||||||||||
Interest Expense | — | (270,255 | ) | (856,731 | ) | — | — | |||||||||||||
Depreciation | — | (245,469 | ) | (860,556 | ) | — | — | |||||||||||||
Net Income (Loss) — (Tax Basis) | $ | — | $ | 5,043,078 | $ | (415,758 | ) | $ | — | $ | — | |||||||||
Taxable Income (Loss): | ||||||||||||||||||||
From Operations | $ | — | $ | (682,931 | ) | $ | (415,758 | ) | $ | — | $ | — | ||||||||
From Gain on Sale | — | 5,726,009 | — | — | — | |||||||||||||||
Other | — | — | — | — | — | |||||||||||||||
Cash Generated From Operations | — | (430,097 | ) | 512,490 | — | — | ||||||||||||||
Cash Generated from Sales | — | 6,017,285 | — | — | — | |||||||||||||||
Cash Generated from Refinancing | — | — | — | — | — | |||||||||||||||
Total Cash Generated | — | 5,587,188 | 512,490 | — | — | |||||||||||||||
Less Cash Distributions to Investors: | ||||||||||||||||||||
From Operating Cash Flow | — | — | — | — | — | |||||||||||||||
From Sales and Refinancing | — | (5,580,060 | ) | — | — | — | ||||||||||||||
From Other | — | — | — | — | — | |||||||||||||||
Cash Generated (Deficiency) After Cash Distributions | — | 7,128 | 512,490 | — | — | |||||||||||||||
Less: Special Items (not including sales and refinancing) | — | — | — | — | — | |||||||||||||||
Cash Generated (Deficiency) After Cash Distributions and Special Items | $ | — | $ | 7,128 | $ | 512,490 | $ | — | $ | — | ||||||||||
Tax and Distribution Data Per $1,000 Invested | ||||||||||||||||||||
Federal Income Tax Results: | ||||||||||||||||||||
Ordinary Income (Loss): | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
From Operations | — | (271 | ) | (165 | ) | — | — | |||||||||||||
From Recapture | — | — | — | — | — | |||||||||||||||
Capital Gain (loss) | — | 2,272 | — | — | — | |||||||||||||||
Cash Distributions to Investors: | ||||||||||||||||||||
Source (on Tax Basis) | ||||||||||||||||||||
Investment Income | — | 1,214 | — | — | — | |||||||||||||||
Return of Capital | — | 1,000 | — | — | — | |||||||||||||||
Source (on Cash Basis) | ||||||||||||||||||||
Sales | — | 2,214 | — | — | — | |||||||||||||||
Refinancing | — | — | — | — | — | |||||||||||||||
Operations | — | — | — | — | — | |||||||||||||||
Other | — | — | — | — | — | |||||||||||||||
Amount (in percentage terms) remaining invested in program properties at the end of the last year reported in the Table (original total acquisition cost of properties retained divided by original acquisition costs of all properties in program) | — | % |
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Stone Point I. LLC | ||||||||||||||||||||
2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||||||||
Gross Revenues | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
Profit on Sale of Properties | — | — | — | — | — | |||||||||||||||
Less: Operation Expenses | (150,278 | ) | (90,887 | ) | — | — | — | |||||||||||||
Interest Expense | (193,859 | ) | — | (17,263 | ) | — | — | |||||||||||||
Depreciation | (4,400 | ) | (4,400 | ) | (367 | ) | — | — | ||||||||||||
Net Income (Loss) — (Tax Basis) | $ | (348,537 | ) | $ | (95,287 | ) | $ | (17,630 | ) | $ | — | $ | — | |||||||
Taxable Income (Loss): | ||||||||||||||||||||
From Operations | $ | (348,537 | ) | $ | (95,287 | ) | $ | (17,630 | ) | $ | — | $ | — | |||||||
From Gain on Sale | — | — | — | — | — | |||||||||||||||
Other | — | — | — | — | — | |||||||||||||||
Cash Generated From Operations | (139,051 | ) | (108,150 | ) | — | — | — | |||||||||||||
Cash Generated from Sales | — | — | — | — | — | |||||||||||||||
Cash Generated from Refinancing | — | — | — | — | — | |||||||||||||||
Total Cash Generated | (139,051 | ) | (108,150 | ) | — | — | — | |||||||||||||
Less Cash Distributions to Investors: | ||||||||||||||||||||
From Operating Cash Flow | — | — | — | — | — | |||||||||||||||
From Sales and Refinancing | — | — | — | — | — | |||||||||||||||
From Other | — | — | — | — | — | |||||||||||||||
Cash Generated (Deficiency) After Cash Distributions | (139,051 | ) | (108,150 | ) | — | — | — | |||||||||||||
Less: Special Items (not including sales and refinancing) | — | — | — | — | — | |||||||||||||||
Cash Generated (Deficiency) After Cash Distributions and Special Items | $ | (139,051 | ) | $ | (108,150 | ) | $ | — | $ | — | $ | — | ||||||||
Tax and Distribution Data Per $1,000 Invested | ||||||||||||||||||||
Federal Income Tax Results: | ||||||||||||||||||||
Ordinary Income (Loss): | ||||||||||||||||||||
From Operations | $ | (217 | ) | $ | (67 | ) | $ | (11 | ) | $ | — | $ | — | |||||||
From Recapture | — | — | — | — | — | |||||||||||||||
Capital Gain (loss) | — | — | — | — | — | |||||||||||||||
Cash Distributions to Investors: | ||||||||||||||||||||
Source (on Tax Basis) | ||||||||||||||||||||
Investment Income | — | — | — | — | — | |||||||||||||||
Return of Capital | 3,201 | — | — | — | — | |||||||||||||||
Source (on Cash Basis) | ||||||||||||||||||||
Sales | — | — | — | — | — | |||||||||||||||
Refinancing | 3,201 | — | — | — | — | |||||||||||||||
Operations | — | — | — | — | — | |||||||||||||||
Other | — | — | — | — | — | |||||||||||||||
Amount (in percentage terms) remaining invested in program properties at the end of the last year reported in the Table (original total acquisition cost of properties retained divided by original acquisition costs of all properties in program) | 100 | % |
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Steadfast Roseville II, LLC | ||||||||||||||||||||
2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||||||||
Gross Revenues | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
Profit on Sale of Properties | — | — | — | — | — | |||||||||||||||
Less: Operation Expenses | — | — | — | — | — | |||||||||||||||
Interest Expense | (11,385 | ) | (3,678 | ) | (11,606 | ) | — | — | ||||||||||||
Depreciation | (263,844 | ) | (34,637 | ) | — | — | ||||||||||||||
Net Income (Loss) — (Tax Basis) | — | (85,477 | ) | (3,688 | ) | — | — | |||||||||||||
Less: Operation Expenses | $ | (275,229 | ) | $ | (89,155 | ) | $ | (49,931 | ) | $ | — | $ | — | |||||||
Taxable Income (Loss): | ||||||||||||||||||||
From Operations | $ | (275,229 | ) | $ | (89,155 | ) | $ | (49,931 | ) | $ | — | $ | — | |||||||
From Gain on Sale | — | — | — | — | — | |||||||||||||||
Other | — | — | — | — | — | |||||||||||||||
Cash Generated From Operations | (19,882 | ) | 4,819 | (15,294 | ) | — | — | |||||||||||||
Cash Generated from Sales | — | — | — | — | — | |||||||||||||||
Cash Generated from Refinancing | — | — | — | — | — | |||||||||||||||
Total Cash Generated | (19,882 | ) | 4,819 | (15,294 | ) | — | — | |||||||||||||
Less Cash Distributions to Investors: | ||||||||||||||||||||
From Operating Cash Flow | — | — | — | — | — | |||||||||||||||
From Sales and Refinancing | — | — | — | — | — | |||||||||||||||
From Other | — | — | — | — | — | |||||||||||||||
Cash Generated (Deficiency) After Cash Distributions | (19,882 | ) | 4,819 | (15,294 | ) | — | — | |||||||||||||
Less: Special Items (not including sales and refinancing) | — | — | — | — | — | |||||||||||||||
Cash Generated (Deficiency) After Cash Distributions and Special Items | $ | (19,882 | ) | $ | 4,819 | $ | (15,294 | ) | $ | — | $ | — | ||||||||
Tax and Distribution Data Per $1,000 Invested | ||||||||||||||||||||
Federal Income Tax Results: | ||||||||||||||||||||
Ordinary Income (Loss): | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
From Operations | (10 | ) | 2 | (8 | ) | — | — | |||||||||||||
From Recapture | — | — | — | — | — | |||||||||||||||
Capital Gain (loss) | ||||||||||||||||||||
Cash Distributions to Investors: | ||||||||||||||||||||
Source (on Tax Basis) | — | — | — | — | — | |||||||||||||||
Investment Income | — | — | — | — | — | |||||||||||||||
Return of Capital | ||||||||||||||||||||
Source (on Cash Basis) | — | — | — | — | — | |||||||||||||||
Sales | — | — | — | — | — | |||||||||||||||
Refinancing | — | — | — | — | — | |||||||||||||||
Operations | — | — | — | — | — | |||||||||||||||
Other | — | — | — | — | — | |||||||||||||||
Amount (in percentage terms) remaining invested in program properties at the end of the last year reported in the Table (original total acquisition cost of properties retained divided by original acquisition costs of all properties in program) | 100 | % |
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Steadfast Woodranch, LLC | ||||||||||||||||||||
2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||||||||
Gross Revenues | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
Profit on Sale of Properties | — | — | — | — | — | |||||||||||||||
Less: Operation Expenses | (18,016 | ) | (31,908 | ) | — | — | — | |||||||||||||
Interest Expense | — | (216,320 | ) | — | — | — | ||||||||||||||
Depreciation | — | — | — | — | — | |||||||||||||||
Net Income (Loss) — (Tax Basis) | $ | (18,016 | ) | $ | (248,228 | ) | $ | — | $ | — | $ | — | ||||||||
Taxable Income (Loss): | ||||||||||||||||||||
From Operations | $ | (18,016 | ) | $ | (248,228 | ) | $ | — | $ | — | $ | — | ||||||||
From Gain on Sale | — | — | — | — | — | |||||||||||||||
Other | — | — | — | — | — | |||||||||||||||
Cash Generated From Operations | (18,016 | ) | (31,908 | ) | — | — | — | |||||||||||||
Cash Generated from Sales | — | — | — | — | — | |||||||||||||||
Cash Generated from Refinancing | — | — | — | — | — | |||||||||||||||
Total Cash Generated | (18,016 | ) | (31,908 | ) | — | — | — | |||||||||||||
Less Cash Distributions to Investors: | ||||||||||||||||||||
From Operating Cash Flow | — | — | — | — | — | |||||||||||||||
From Sales and Refinancing | — | — | — | — | — | |||||||||||||||
From Other | — | — | — | — | — | |||||||||||||||
Cash Generated (Deficiency) After Cash Distributions | (18,016 | ) | (31,908 | ) | — | — | — | |||||||||||||
Less: Special Items (not including sales and refinancing) | — | — | — | — | — | |||||||||||||||
Cash Generated (Deficiency) After Cash Distributions and Special Items | $ | (18,016 | ) | $ | (31,908 | ) | $ | — | $ | — | $ | — | ||||||||
Tax and Distribution Data Per $1,000 Invested | ||||||||||||||||||||
Federal Income Tax Results: | ||||||||||||||||||||
Ordinary Income (Loss): | ||||||||||||||||||||
From Operations | $ | (24 | ) | $ | (42 | ) | $ | — | $ | — | $ | — | ||||||||
From Recapture | — | — | — | — | — | |||||||||||||||
Capital Gain (loss) | — | — | — | — | — | |||||||||||||||
Cash Distributions to Investors: | ||||||||||||||||||||
Source (on Tax Basis) | ||||||||||||||||||||
Investment Income | — | — | — | — | — | |||||||||||||||
Return of Capital | — | — | — | — | — | |||||||||||||||
Source (on Cash Basis) | ||||||||||||||||||||
Sales | — | — | — | — | — | |||||||||||||||
Refinancing | — | — | — | — | — | |||||||||||||||
Operations | — | — | — | — | — | |||||||||||||||
Other | — | — | — | — | — | |||||||||||||||
Amount (in percentage terms) remaining invested in program properties at the end of the last year reported in the Table (original total acquisition cost of properties retained divided by original acquisition costs of all properties in program) | 100 | % |
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Westlake Plaza Center East, LLC | ||||||||||||||||||||
2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||||||||
Gross Revenues | $ | 545,906 | $ | — | $ | 30,052 | $ | — | $ | — | ||||||||||
Profit on Sale of Properties | ||||||||||||||||||||
Less: Operation Expenses | (856,397 | ) | (3,658 | ) | (81,194 | ) | (30,052 | ) | — | |||||||||||
Interest Expense | (371,867 | ) | — | (828,040 | ) | (169,981 | ) | — | ||||||||||||
Depreciation | (650,316 | ) | — | — | — | — | ||||||||||||||
Net Income (Loss) — (Tax Basis) | $ | (1,332,674 | ) | $ | (3,658 | ) | $ | (879,182 | ) | $ | (200,033 | ) | $ | — | ||||||
Taxable Income (Loss): | ||||||||||||||||||||
From Operations | $ | (1,332,674 | ) | $ | (3,658 | ) | $ | (879,182 | ) | $ | (200,033 | ) | $ | — | ||||||
From Gain on Sale | — | — | — | — | — | |||||||||||||||
Other | — | — | — | — | — | |||||||||||||||
Cash Generated From Operations | (326,936 | ) | (3,658 | ) | 211,422 | 169,981 | — | |||||||||||||
Cash Generated from Sales | — | — | — | — | — | |||||||||||||||
Cash Generated from Refinancing | — | — | — | — | — | |||||||||||||||
Total Cash Generated | (326,936 | ) | (3,658 | ) | 211,422 | 169,981 | — | |||||||||||||
Less Cash Distributions to Investors: | ||||||||||||||||||||
From Operating Cash Flow | — | — | — | — | — | |||||||||||||||
From Sales and Refinancing | — | — | — | — | — | |||||||||||||||
From Other | — | — | — | — | — | |||||||||||||||
Cash Generated (Deficiency) After Cash Distributions | (326,936 | ) | (3,658 | ) | 211,422 | 169,981 | — | |||||||||||||
Less: Special Items (not including sales and refinancing) | — | — | — | — | — | |||||||||||||||
Cash Generated (Deficiency) After Cash Distributions and Special Items | $ | (326,936 | ) | $ | (3,658 | ) | $ | 211,422 | $ | 169,981 | $ | — | ||||||||
Tax and Distribution Data Per $1,000 Invested | ||||||||||||||||||||
Federal Income Tax Results: | ||||||||||||||||||||
Ordinary Income (Loss): | ||||||||||||||||||||
From Operations | $ | (12 | ) | $ | — | $ | (33 | ) | $ | 6 | $ | — | ||||||||
From Recapture | — | — | — | — | — | |||||||||||||||
Capital Gain (loss) | — | — | — | — | — | |||||||||||||||
Cash Distributions to Investors: | ||||||||||||||||||||
Source (on Tax Basis) | ||||||||||||||||||||
Investment Income | — | — | — | — | — | |||||||||||||||
Return of Capital | — | — | — | 625 | — | |||||||||||||||
Source (on Cash Basis) | ||||||||||||||||||||
Sales | — | — | — | — | — | |||||||||||||||
Refinancing | — | — | — | 625 | — | |||||||||||||||
Operations | — | — | — | — | — | |||||||||||||||
Other | — | — | — | — | — | |||||||||||||||
Amount (in percentage terms) remaining invested in program properties at the end of the last year reported in the Table (original total acquisition cost of properties retained divided by original acquisition costs of all properties in program) | 100 | % |
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Table of Contents
Steadfast Mexico, LLC | ||||||||||||||||||||
2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||||||||
Gross Revenues | $ | 31,473,810 | $ | 26,816,025 | $ | 25,833,060 | $ | 13,772,667 | $ | 4,846 | ||||||||||
Profit on Sale of Properties | ||||||||||||||||||||
Less: Operation Expenses | (20,426,047 | ) | (22,188,085 | ) | (24,587,878 | ) | (16,264,158 | ) | (8,931,172 | ) | ||||||||||
Interest Expense | (5,157,917 | ) | (4,827,546 | ) | (4,267,277 | ) | (5,207,362 | ) | (112,878 | ) | ||||||||||
Depreciation | (1,215,967 | ) | (1,077,163 | ) | (853,661 | ) | (586,076 | ) | (295,058 | ) | ||||||||||
Net Income (Loss) — (Tax Basis) | $ | 4,673,879 | $ | (1,276,769 | ) | $ | (3,875,756 | ) | $ | (8,284,929 | ) | $ | (9,334,262 | ) | ||||||
Taxable Income (Loss): | ||||||||||||||||||||
From Operations | $ | 4,673,879 | $ | (1,276,769 | ) | $ | (3,875,756 | ) | $ | (8,284,929 | ) | $ | (9,334,262 | ) | ||||||
From Gain on Sale | — | — | — | — | — | |||||||||||||||
Other | — | — | — | — | — | |||||||||||||||
Cash Generated From Operations | (2,487,651 | ) | (874,276 | ) | (2,870,629 | ) | (4,401,440 | ) | (2,252,956 | ) | ||||||||||
Cash Generated from Sales | — | — | — | — | — | |||||||||||||||
Cash Generated from Refinancing | — | 3,474,000 | 25,026,000 | — | — | |||||||||||||||
Total Cash Generated | (2,487,651 | ) | 2,599,724 | 22,155,371 | (4,401,440 | ) | (2,252,956 | ) | ||||||||||||
Less Cash Distributions to Investors: | ||||||||||||||||||||
From Operating Cash Flow | — | — | — | — | — | |||||||||||||||
From Sales and Refinancing | — | — | — | — | — | |||||||||||||||
From Other | — | — | — | — | — | |||||||||||||||
Cash Generated (Deficiency) After Cash Distributions | (2,487,651 | ) | 2,599,724 | 22,155,371 | (4,401,440 | ) | (2,252,956 | ) | ||||||||||||
Less: Special Items (not including sales and refinancing) | — | — | — | — | — | |||||||||||||||
Cash Generated (Deficiency) After Cash Distributions and Special Items | $ | (2,487,651 | ) | $ | 2,599,724 | $ | 22,155,371 | $ | (4,401,440 | ) | $ | (2,252,956 | ) | |||||||
Tax and Distribution Data Per $1,000 Invested | ||||||||||||||||||||
Federal Income Tax Results: | ||||||||||||||||||||
Ordinary Income (Loss): | ||||||||||||||||||||
From Operations | $ | 315 | $ | (86 | ) | $ | (261 | ) | $ | (558 | ) | $ | (629 | ) | ||||||
From Recapture | — | — | — | — | — | |||||||||||||||
Capital Gain (loss) | — | — | — | — | — | |||||||||||||||
Cash Distributions to Investors: | ||||||||||||||||||||
Source (on Tax Basis) | ||||||||||||||||||||
Investment Income | — | — | — | — | — | |||||||||||||||
Return of Capital | — | — | — | — | — | |||||||||||||||
Source (on Cash Basis) | ||||||||||||||||||||
Sales | — | — | — | — | — | |||||||||||||||
Refinancing | — | — | — | — | — | |||||||||||||||
Operations | — | — | — | — | — | |||||||||||||||
Other | — | — | — | — | — | |||||||||||||||
Amount (in percentage terms) remaining invested in program properties at the end of the last year reported in the Table (original total acquisition cost of properties retained divided by original acquisition costs of all properties in program) | 100 | % |
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Steadfast Marlay, LP | ||||||||||||||||||||
2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||||||||
Gross Revenues | $ | — | $ | — | $ | — | $ | — | $ | 190,956 | ||||||||||
Profit on Sale of Properties | — | — | — | — | 1,584,250 | |||||||||||||||
Less: Operation Expenses | — | — | — | — | (193,025 | ) | ||||||||||||||
Interest Expense | — | — | — | — | (607,314 | ) | ||||||||||||||
Depreciation | — | — | — | — | — | |||||||||||||||
Net Income — (Tax Basis) | $ | — | $ | — | $ | — | $ | — | $ | 974,867 | ||||||||||
Taxable Income (Loss): | ||||||||||||||||||||
From Operations | $ | — | $ | — | $ | — | $ | — | $ | (609,383 | ) | |||||||||
From Gain on Sale | — | — | — | — | 1,584,250 | |||||||||||||||
Other | — | — | — | — | — | |||||||||||||||
Cash Generated From Operations | — | — | — | — | (609,383 | ) | ||||||||||||||
Cash Generated from Sales | — | — | — | — | 2,080,320 | |||||||||||||||
Cash Generated from Refinancing | — | — | — | — | — | |||||||||||||||
Total Cash Generated | — | — | — | — | 1,470,937 | |||||||||||||||
Less Cash Distributions to Investors: | — | |||||||||||||||||||
From Operating Cash Flow | — | — | — | — | — | |||||||||||||||
From Sales and Refinancing | — | — | — | — | 1,729,867 | |||||||||||||||
From Other | — | — | — | — | — | |||||||||||||||
Cash Generated (Deficiency) After Cash Distributions | — | — | — | — | (258,930 | ) | ||||||||||||||
Less: Special Items (not including sales and refinancing) | — | — | — | — | — | |||||||||||||||
Cash Generated (Deficiency) After Cash Distributions and Special Items | $ | — | $ | — | $ | — | $ | — | $ | (258,930 | ) | |||||||||
Tax and Distribution Data Per $1,000 Invested | ||||||||||||||||||||
Federal Income Tax Results: | ||||||||||||||||||||
Ordinary Income (Loss): | ||||||||||||||||||||
From Operations | $ | — | $ | — | $ | — | $ | — | $ | (807 | ) | |||||||||
From Recapture | — | — | — | — | — | |||||||||||||||
Capital Gain (loss) | — | — | — | — | 2,098 | |||||||||||||||
Cash Distributions to Investors: | ||||||||||||||||||||
Source (on Tax Basis) | ||||||||||||||||||||
Investment Income | — | — | — | — | 1,291 | |||||||||||||||
Return of Capital | — | — | — | — | 1,000 | |||||||||||||||
Source (on Cash Basis) | ||||||||||||||||||||
Sales | — | — | — | — | 2,291 | |||||||||||||||
Refinancing | — | — | — | — | — | |||||||||||||||
Operations | — | — | — | — | — | |||||||||||||||
Other | — | — | — | — | — | |||||||||||||||
Amount (in percentage terms) remaining invested in program properties at the end of the last year reported in the Table (original total acquisition cost of properties retained divided by original acquisition costs of all properties in program) | — | % |
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Steadfast Mission Viejo, LP | ||||||||||||||||||||
2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||||||||
Gross Revenues | $ | — | $ | — | $ | — | $ | 15,949 | $ | 3,194 | ||||||||||
Profit on Sale of Properties | — | — | — | 3,522,137 | — | |||||||||||||||
Less: Operation Expenses | — | — | — | (800 | ) | (800 | ) | |||||||||||||
Interest Expense | — | — | — | — | (906,977 | ) | ||||||||||||||
Depreciation | — | — | — | — | — | |||||||||||||||
Net Income (Loss) — (Tax Basis) | $ | — | $ | — | $ | — | $ | 3,537,286 | $ | (904,583 | ) | |||||||||
Taxable Income (Loss): | ||||||||||||||||||||
From Operations | $ | — | $ | — | $ | — | $ | 15,149 | $ | (904,583 | ) | |||||||||
From Gain on Sale | — | — | — | 3,522,137 | — | |||||||||||||||
Other | — | — | — | — | — | |||||||||||||||
Cash Generated From Operations | — | — | — | — | — | |||||||||||||||
Cash Generated from Sales | — | — | — | 11,765,471 | — | |||||||||||||||
Cash Generated from Refinancing | — | — | — | — | — | |||||||||||||||
Total Cash Generated | — | — | — | 11,765,471 | — | |||||||||||||||
Less Cash Distributions to Investors: | ||||||||||||||||||||
From Operating Cash Flow | — | — | — | — | — | |||||||||||||||
From Sales and Refinancing | — | — | — | (7,815,000 | ) | — | ||||||||||||||
From Other | — | — | — | — | — | |||||||||||||||
Cash Generated (Deficiency) After Cash Distributions | — | — | — | 3,950,471 | — | |||||||||||||||
Less: Special Items (not including sales and refinancing) | — | — | — | — | — | |||||||||||||||
Cash Generated (Deficiency) After Cash Distributions and Special Items | $ | — | $ | — | $ | — | $ | 3,950,471 | $ | — | ||||||||||
Tax and Distribution Data Per $1,000 Invested | ||||||||||||||||||||
Federal Income Tax Results: | ||||||||||||||||||||
Ordinary Income (Loss): | ||||||||||||||||||||
From Operations | $ | — | $ | — | $ | — | $ | 2 | $ | (116 | ) | |||||||||
From Recapture | — | — | — | — | — | |||||||||||||||
Capital Gain (loss) | — | — | — | 451 | — | |||||||||||||||
Cash Distributions to Investors: | ||||||||||||||||||||
Source (on Tax Basis) | ||||||||||||||||||||
Investment Income | — | — | — | — | — | |||||||||||||||
Return of Capital | — | — | — | 1,000 | — | |||||||||||||||
Source (on Cash Basis) | — | — | — | — | — | |||||||||||||||
Sales | — | — | — | 1,000 | — | |||||||||||||||
Refinancing | — | — | — | — | — | |||||||||||||||
Operations | — | — | — | — | — | |||||||||||||||
Other | — | — | — | — | — | |||||||||||||||
Amount (in percentage terms) remaining invested in program properties at the end of the last year reported in the Table (original total acquisition cost of properties retained divided by original acquisition costs of all properties in program) | — | % |
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Steadfast Main Street, LP | ||||||||||||||||||||
2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||||||||
Gross Revenues | $ | 79,901 | $ | — | $ | 815 | $ | 110,384 | $ | 80,812 | ||||||||||
Profit on Sale of Properties | — | — | (898,238 | ) | — | — | ||||||||||||||
Less: Operation Expenses | (21,504 | ) | (2,058,089 | ) | (63,025 | ) | (163,210 | ) | (208,419 | ) | ||||||||||
Interest Expense | (1,119,656 | ) | (1,276,000 | ) | (1,061,494 | ) | (237,466 | ) | (121,031 | ) | ||||||||||
Depreciation | (85,902 | ) | (79,083 | ) | (94,599 | ) | (48,231 | ) | (26,125 | ) | ||||||||||
Net Income (Loss) — (Tax Basis) | $ | (1,147,161 | ) | $ | (3,413,172 | ) | $ | (2,116,541 | ) | $ | (338,523 | ) | $ | (274,763 | ) | |||||
Taxable Income (Loss): | ||||||||||||||||||||
From Operations | $ | (1,147,161 | ) | $ | (3,413,172 | ) | $ | (1,218,303 | ) | $ | (338,523 | ) | $ | (274,763 | ) | |||||
From Gain on Sale | — | — | (898,238 | ) | — | — | ||||||||||||||
Other | — | — | — | — | — | |||||||||||||||
Cash Generated From Operations | (1,133,982 | ) | (3,359,337 | ) | (1,140,327 | ) | (243,125 | ) | (174,016 | ) | ||||||||||
Cash Generated from Sales | — | — | — | — | — | |||||||||||||||
Cash Generated from Refinancing | — | — | — | — | — | |||||||||||||||
Total Cash Generated | (1,133,982 | ) | (3,359,337 | ) | (1,140,327 | ) | (243,125 | ) | (174,016 | ) | ||||||||||
Less Cash Distributions to Investors: | ||||||||||||||||||||
From Operating Cash Flow | — | — | — | — | — | |||||||||||||||
From Sales and Refinancing | — | — | — | — | — | |||||||||||||||
From Other | — | — | — | — | — | |||||||||||||||
Cash Generated (Deficiency) After Cash Distributions | (1,133,982 | ) | (3,359,337 | ) | (1,140,327 | ) | (243,125 | ) | (174,016 | ) | ||||||||||
Less: Special Items (not including sales and refinancing) | — | — | — | — | — | |||||||||||||||
Cash Generated (Deficiency) After Cash Distributions and Special Items | $ | 1,133,982 | $ | 3,359,337 | $ | 1,140,327 | $ | 243,125 | $ | (174,016 | ) | |||||||||
Tax and Distribution Data Per $1,000 Invested | ||||||||||||||||||||
Federal Income Tax Results: | ||||||||||||||||||||
Ordinary Income (Loss): | ||||||||||||||||||||
From Operations | $ | (962 | ) | $ | (2,863 | ) | $ | (1,022 | ) | $ | (284 | ) | $ | (230 | ) | |||||
From Recapture | — | — | — | — | — | |||||||||||||||
Capital Gain (loss) | — | — | — | — | — | |||||||||||||||
Cash Distributions to Investors: | ||||||||||||||||||||
Source (on Tax Basis) | ||||||||||||||||||||
Investment Income | — | — | — | — | — | |||||||||||||||
Return of Capital | — | — | — | — | — | |||||||||||||||
Source (on Cash Basis) | ||||||||||||||||||||
Sales | — | — | — | — | — | |||||||||||||||
Refinancing | — | — | — | — | — | |||||||||||||||
Operations | — | — | — | — | — | |||||||||||||||
Other | — | — | — | — | — | |||||||||||||||
Amount (in percentage terms) remaining invested in program properties at the end of the last year reported in the Table (original total acquisition cost of properties retained divided by original acquisition costs of all properties in program) | 100 | % |
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(UNAUDITED)
Steadfast | Steadfast | |||||||||||||||
Steadfast Bardeen, | Jeronimo I, II, | LaVerne, | Steadfast | |||||||||||||
LLC | II, IV, V, LLC | LLC | Marlay, LP | |||||||||||||
Dollar Amount Raised | $ | 855,000 | $ | 7,483,459 | $ | 3,680,000 | $ | 755,000 | ||||||||
Number of Properties Purchased | 2 | 1 | 1 | 1 | ||||||||||||
Date of Closing of Offering | 8/13/2003 | 11/14/2002 | 5/24/2002 | 7/15/2004 | ||||||||||||
Date of First Sale of Property | 1/20/2005 | 12/10/2004 | 5/28/2004 | 10/21/2004 | ||||||||||||
Date of Final Sale of Property | 11/9/2005 | 12/10/2004 | 5/28/2004 | 10/21/2004 | ||||||||||||
Tax and Distribution Data Per $1,000 Invested Through | ||||||||||||||||
Federal Income Tax Results: | ||||||||||||||||
Ordinary Income (Loss) | ||||||||||||||||
From Operations | $ | (1,726 | ) | $ | 384 | $ | (193 | ) | $ | (807 | ) | |||||
From Recapture | — | — | — | — | ||||||||||||
Capital Gain (Loss) | 2,065 | 510 | 167 | 2,098 | ||||||||||||
Deferred Gain | ||||||||||||||||
Capital | — | 251 | 346 | — | ||||||||||||
Ordinary | — | — | — | — | ||||||||||||
Cash Distributions to Investors | ||||||||||||||||
Source (on Tax Basis): | ||||||||||||||||
Investment Income | — | 958 | 92 | 1,291 | ||||||||||||
Return of Capital | — | 1,000 | 1,000 | 1,000 | ||||||||||||
Source (on Cash Basis): | ||||||||||||||||
Sales | — | 1,578 | 1,092 | 2,291 | ||||||||||||
Refinancing | — | — | — | — | ||||||||||||
Operations | — | 380 | — | — | ||||||||||||
Other | — | — | — | — | ||||||||||||
Receivable on Net Purchase Money Financing | — | — | — | — |
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Steadfast | Steadfast | Steadfast | ||||||||||||||
Crossroads | Birch Bayview | Kelvin, | Foothill | |||||||||||||
Marketplace | Plaza II, LP | LLC | Plaza, LLC | |||||||||||||
Dollar Amount Raised | $ | 4,439,503 | $ | 2,000,000 | $ | 1,129,000 | $ | 7,550,000 | ||||||||
Number of Properties Purchased | 1 | 3 | 1 | 1 | ||||||||||||
Date of Closing of Offering | 7/12/2002 | 3/26/2003 | 8/13/2003 | 1/6/2005 | ||||||||||||
Date of First Sale of Property | 9/17/2004 | 11/23/2004 | 6/15/2004 | 5/12/2006 | ||||||||||||
Date of Final Sale of Property | 9/17/2004 | 12/20/2004 | 6/15/2004 | 5/12/2006 | ||||||||||||
Tax and Distribution Data Per $1,000 Invested Through | ||||||||||||||||
Federal Income Tax Results: | ||||||||||||||||
Ordinary Income (Loss) | ||||||||||||||||
From Operations | $ | (493 | ) | $ | (38 | ) | $ | (773 | ) | $ | (23 | ) | ||||
From Recapture | — | — | — | — | ||||||||||||
Capital Gain (Loss) | 134 | 615 | 1,506 | 4,423 | ||||||||||||
Deferred Gain | ||||||||||||||||
Capital | 4,355 | — | — | — | ||||||||||||
Ordinary | — | — | — | — | ||||||||||||
Cash Distributions to Investors | ||||||||||||||||
Source (on Tax Basis): | ||||||||||||||||
Investment Income | 2,647 | 620 | — | 3,234 | ||||||||||||
Return of Capital | 1,000 | 1,000 | 750 | 1,000 | ||||||||||||
Source (on Cash Basis): | ||||||||||||||||
Sales | 2,463 | 1,620 | 750 | 3,952 | ||||||||||||
Refinancing | 1,184 | — | — | — | ||||||||||||
Operations | — | — | — | 224 | ||||||||||||
Other | — | — | — | 58 | ||||||||||||
Receivable on Net Purchase Money Financing | — | — | — | — |
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Table of Contents
Steadfast | Steadfast | Birch | ||||||||||||||
Everett | Mission | Bayview | ||||||||||||||
Plaza, LLC | Viejo, LP | Plaza, LLC | Lady Luck | |||||||||||||
Dollar Amount Raised | $ | 607,438 | $ | 7,815,000 | $ | 3,300,000 | $ | 4,742,629 | ||||||||
Number of Properties Purchased | 1 | 1 | 2 | 2 | ||||||||||||
Date of Closing of Offering | N/A | 8/30/2004 | 7/28/2000 | 10/30/2002 | ||||||||||||
Date of First Sale of Property | 1/31/2007 | 4/12/2005 | 2/23/2007 | 4/29/2005 | ||||||||||||
Date of Final Sale of Property | 1/31/2007 | 4/12/2005 | 2/23/2007 | 4/29/2005 | ||||||||||||
Tax and Distribution Data Per $1,000 Invested Through | ||||||||||||||||
Federal Income Tax Results: | ||||||||||||||||
Ordinary Income (Loss) | ||||||||||||||||
From Operations | $ | (169 | ) | $ | (114 | ) | $ | (498 | ) | $ | 334 | |||||
From Recapture | — | — | — | — | ||||||||||||
Capital Gain (Loss) | 3,108 | 451 | 4,960 | 1,672 | ||||||||||||
Deferred Gain | ||||||||||||||||
Capital | — | — | — | — | ||||||||||||
Ordinary | — | — | — | — | ||||||||||||
Cash Distributions to Investors | ||||||||||||||||
Source (on Tax Basis): | ||||||||||||||||
Investment Income | 1,939 | — | 4,465 | 918 | ||||||||||||
Return of Capital | 1,000 | 1,000 | 1,000 | 1,000 | ||||||||||||
Source (on Cash Basis): | ||||||||||||||||
Sales | 2,939 | 1,000 | 4,900 | 1,918 | ||||||||||||
Refinancing | — | — | 394 | — | ||||||||||||
Operations | — | — | 171 | — | ||||||||||||
Other | — | — | — | — | ||||||||||||
Receivable on Net Purchase Money Financing | — | — | — | — |
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Table of Contents
Steadfast North | Steadfast | |||||||||||||||
County Square | Steadfast Koll | Village Center, | Steadfast | |||||||||||||
I-III, LLC | I, II, LLC | LLC | Vista, LP | |||||||||||||
Dollar Amount Raised | $ | 4,372,120 | $ | 3,732,843 | $ | 2,520,387 | $ | 482,704 | ||||||||
Number of Properties Purchased | 1 | 1 | 2 | 1 | ||||||||||||
Date of Closing of Offering | 8/30/2002 | 6/3/2005 | 6/8/2004 | 12/18/2003 | ||||||||||||
Date of First Sale of Property | 6/25/2004 | 2/5/2008 | 3/23/2007 | 6/29/2004 | ||||||||||||
Date of Final Sale of Property | 6/25/2004 | 2/5/2008 | 5/24/2007 | 6/29/2004 | ||||||||||||
Tax and Distribution Data Per $1,000 Invested Through | ||||||||||||||||
Federal Income Tax Results: | $ | — | $ | — | $ | — | $ | — | ||||||||
Ordinary Income (Loss) | — | — | — | — | ||||||||||||
From Operations | (75 | ) | (244 | ) | (436 | ) | (91 | ) | ||||||||
From Recapture | — | — | — | — | ||||||||||||
Capital Gain (Loss) | 48 | 2,565 | 2,272 | 552 | ||||||||||||
Deferred Gain | ||||||||||||||||
Capital | 654 | — | — | — | ||||||||||||
Ordinary | — | — | — | — | ||||||||||||
Cash Distributions to Investors | ||||||||||||||||
Source (on Tax Basis): | ||||||||||||||||
Investment Income | — | 1,299 | 1,214 | 460 | ||||||||||||
Return of Capital | 190 | 1,000 | 1,000 | 1,000 | ||||||||||||
Source (on Cash Basis): | ||||||||||||||||
Sales | 190 | 2,299 | 2,214 | 1,460 | ||||||||||||
Refinancing | — | — | — | — | ||||||||||||
Operations | — | — | — | — | ||||||||||||
Other | — | — | — | — | ||||||||||||
Receivable on Net Purchase Money Financing | — | — | — | — |
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Selling Price, Net of Closing Costs and GAAP Adjustments | Cost of Properties Including Closing and Soft Costs | Excess | ||||||||||||||||||||||||||||||||||||||||||
Purchase | (Deficiency) of | |||||||||||||||||||||||||||||||||||||||||||
Money | Property | |||||||||||||||||||||||||||||||||||||||||||
Mortgage | Adjustments | Operating Cash | ||||||||||||||||||||||||||||||||||||||||||
Cash Received | Mortgage | Taken Back | Resulting from | Original | Total Acquisition | Receipts Over | ||||||||||||||||||||||||||||||||||||||
Net of Closing | Balance at Time | by | Application of | Mortgage | Cost, Closing | Cash | ||||||||||||||||||||||||||||||||||||||
Property | Date Acquired | Date of Sale | Costs | of Sale | Program | GAAP | Total | Financing | and Soft Cost | Total Cost | Expenditures | |||||||||||||||||||||||||||||||||
Steadfast Everett Plaza, LLC | 4/17/2006 | 1/31/2007 | $ | 2,937,077 | $ | 1,900,000 | — | — | $ | 4,837,077 | $ | 1,900,000 | $ | 1,049,057 | $ | 2,949,057 | $ | 9,873 | ||||||||||||||||||||||||||
Steadfast Village Center, LLC | 12/3/2004 | 3/23/2007 | 4,873,142 | 15,702,028 | — | — | 20,575,170 | 3,098,595 | 12,582,143 | 15,680,738 | 82,393 | |||||||||||||||||||||||||||||||||
Steadfast Village Annex | 12/3/2004 | 5/24/2007 | 1,235,740 | 4,651,000 | — | — | 5,886,740 | 144,178 | 4,910,984 | 5,055,162 | — | |||||||||||||||||||||||||||||||||
Steadfast Foothill Plaza, LLC | 1/6/2005 | 5/12/2006 | 29,838,670 | 31,250,000 | — | — | 61,088,670 | 31,250,000 | (3,557,295 | ) | 27,692,705 | 1,688,713 | ||||||||||||||||||||||||||||||||
Steadfast Koll I & II, LLC | 6/3/2005 | 2/5/2008 | 9,198,027 | 15,901,388 | — | — | 25,099,415 | 14,648,015 | 877,938 | 15,525,953 | 248,960 | |||||||||||||||||||||||||||||||||
Birch Bayview Plaza, LLC | 2/4/2000 | 2/23/2007 | 16,767,318 | 16,292,091 | — | — | 33,059,408 | 690,500 | 16,000,998 | 16,691,498 | 1,958,082 |
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To: | Steadfast Secure Income REIT, Inc. 4343 Von Karman Avenue Suite 300 Newport Beach, California 92660 Attn: Subscriptions |
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B-2
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4343 Von Karman Avenue
Suite 300
Newport Beach, California 92660
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1. | INVESTMENT — See payment instructions in Section 9 below. |
Minimum investment is $4,000. | ||
Total Dollar Amount Invested | Total Number of Shares Purchased |
State of Sale: | ||
o | Additional Investments. Check this box if you are purchasing additional shares and wish to have this subscription combined with previous purchases of shares for the purpose of qualifying for a volume discount as described in the Prospectus under “Plan of Distribution.” | |
o | Check this box if you are purchasing Shares from a registered investment advisor (RIA), or if you are an investment participant in a wrap account or fee in lieu of commissions account approved by the broker-dealer, RIA, or a bank acting as a trustee or fiduciary, or similar entity. |
2. | FORM OF OWNERSHIP |
o | Individual | |
o | Joint Tenants with Rights of Survivorship | |
o | Tenants in Common | |
o | Corporation — Authorized signature required. Include copies of corporate resolutions designating executive officer as the person authorized to sign on behalf of corporation and authorizing the investment. | |
o | Partnership — Authorized signature required. Include copy of partnership agreement. | |
Identify whether general or limited partnership: | ||
o | Estate — Personal representative signature required. Include a copy of the court appointment dated within 90 days. | |
Name of Executor: | ||
o | Trust — Trustee signature required in Section 10 below. Include a copy of the title and signature pages of the trust. | |
Name of Trust: | ||
Name of Trustee: | ||
Name of Beneficiary: | ||
o | Qualified Pension Plan or Profit Sharing Plan (Non-Custodian) — Trustee signature required in Section 10 below. Include a copy of the title and signature pages of the plan. | |
Name of Trustee: | ||
o | Other Non-Custodial Ownership Account (Specify): | |
Custodial Ownership Accounts | ||
o | Traditional IRA — Custodian signature required in Section 10 below. | |
o | Roth IRA — Custodian signature required in Section 10 below. | |
o | KEOGH Plan — Custodian signature required in Section 10 below. |
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o | Simplified Employee Pension/Trust (SEP) | |
o | Pension or Profit-Sharing Plan — Custodian signature required in Section 10 below. | |
o | Uniform Gift to Minors Act — Custodian signature required in Section 10 below. | |
State of: Custodian for: | ||
o | Other (Specify): | |
Mailing Address |
3. | REGISTRATION INFORMATION AND ADDRESS. |
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4. | INVESTOR INFORMATION. Please complete the following applicable information: |
Driver’s License No./State of Issue | Date of Birth (MM/DD/YYYY) |
Driver’s License No./State of Issue | Date of Birth (MM/DD/YYYY) |
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5. | INVESTOR ACKNOWLEDGEMENT. |
Investor | Co-Investor | |||||
(a) | I (we) received a final prospectus for the Company relating to the Shares, wherein the terms and conditions of the offering are described, five business days in advance of the date hereof. | Initials | Initials | |||
(b) | I (we) accept the terms and conditions of the Company’s charter. | Initials | Initials | |||
(c) | I am (we are) purchasing Shares for my (our) own account and acknowledge that the investment is not liquid. | Initials | Initials |
6. | SUITABILITY ACKNOWLEDGEMENT. |
Investor | Co-Investor | |||
I certify that I have a net worth (exclusive of home, home furnishings and automobiles) of $250,000 or more, or that I meet the higher suitability requirements imposed by my state of primary residence as set forth in the Prospectus under “Suitability Standards.” | Initials | Initials | ||
I certify that I have a net worth (exclusive of home, home furnishings and automobiles) of at least $70,000 and had during the last year or estimate that I will have during the current tax year a minimum of $70,000 annual gross income, or that I meet the higher suitability requirements imposed by my state of primary residence as set forth in the Prospectus under “Suitability Standards.” | Initials | Initials | ||
If I am an Alabama investor, I have a liquid net worth of at least 10 times my investment in the Company and other similar programs and I otherwise meet the Company’s suitability standards. | Initials | Initials |
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Investor | Co-Investor | |||
If I am an Iowa investor, I meet the Company’s suitability standards and my total investment in the Company and its affiliates may not exceed 10% of my net worth. | Initials | Initials | ||
If I am a Kansas investor, I understand that it is recommended by the Office of the Kansas Securities Commissioner that I not invest, in the aggregate, more than 10% of my liquid net worth in this and similar direct participation investments. Liquid net worth is defined as that portion of net worth which consists of cash, cash equivalents and readily marketable securities. | Initials | Initials | ||
If I am a Kentucky investor, my aggregate investment in this offering may not exceed 10% of my liquid net worth. | Initials | Initials | ||
If I am a Maine investor, my maximum investment in the Company and its affiliates may not exceed 10% of my net worth. | Initials | Initials | ||
If I am a Michigan investor, my maximum investment in the Company and its affiliates may not exceed 10% of my liquid net worth. | Initials | Initials | ||
If I am a Nebraska investor, my maximum investment in the Company and its affiliates may not exceed 10% of my net liquid worth. | Initials | Initials | ||
If I am an Oregon investor, my investment in this offering may not exceed 10% of my net worth. | Initials | Initials | ||
If I am a Tennessee investor, my investment may not exceed 10% of my liquid net worth. | Initials | Initials |
7. | DISTRIBUTION REINVESTMENT PLAN |
o | I prefer to participate in the Distribution Reinvestment Plan (DRIP). In the event that the DRIP is not offered for a distribution, your distribution will be sent by check to the address in Section 3 above. | |
o | I prefer that my distribution be paid by check to the address in Section 3 above. | |
o | I prefer that my distribution be deposited directly into the account listed as follows: |
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o | I prefer to participate in the Distribution Reinvestment Plan (DRIP). In the event that the DRIP is not offered for a distribution, your distribution will be sent to your Custodian for deposit into your Custodial account cited in Section 2 above. | |
o | I prefer that my distribution be sent to my Custodian for deposit into my Custodial account identified in Section 2 above. |
8. | BROKER-DEALER — To be completed by the Registered Representative and the Broker-Dealer. |
Signature of Registered Representative* | Date | |
Signature of Broker-Dealer (Authorized Principal)* | Date |
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Company Contact Information: | Steadfast Secure Income REIT, Inc. 4343 Von Karman Avenue, Suite 300 Newport Beach, California 92660 Telephone: (949) 852-0700 Facsimile: Website: E-Mail: |
9. | PAYMENT INSTRUCTIONS |
o | By Mail — Checks should be made payable to “ , as escrow agent for Steadfast Secure Income REIT, Inc.” or, after the Company meets the minimum offering requirement, to “Steadfast Secure Income REIT, Inc.” You should consult with your registered representative if you are unsure how to make your check payable. | |
o | By Wire Transfer — If paying by wire transfer, please request that the wire reference the subscriber’s name in order to assure that the wire is credited to the proper account. Initially, wire transfers should be sent to: | |
, as Escrow Agent for Steadfast Secure Income REIT, Inc. | ||
ABA No.: | ||
Account Name: | ||
Account No.: | ||
FFC:A/C #: | ||
RE: Steadfast Secure Income REIT, Inc. | ||
Attn: | ||
After the Company meets the minimum offering requirement, wire transfers should be made to the Company. You should consult with your registered representative to confirm wiring instructions for your subscription. |
10. | ELECTRONIC DELIVERY OF REPORTS AND UPDATES |
o | In lieu of receiving documents, I authorize Steadfast Secure Income REIT, Inc. to make available on its website at www. .com its quarterly reports, annual reports, proxy statements, prospectus supplements or other reports required to be delivered to me, as well as any property or marketing updates, and to notify me via e-mail when such reports or updates are available. |
11. | SUBSCRIBER SIGNATURES |
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(1) | The number shown in the Investor Social Security Number(s)/Taxpayer Identification Number field in Section 3 of this form is my correct taxpayer identification number (or I am waiting for a number to be issued to me), and | |
(2) | I am not subject to backup withholding because: (a) I am exempt from backup withholding, or (b) I have not been notified by the Internal Revenue Service (IRS) that I am subject to backup withholding as a result of a failure to report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding, and | |
(3) | I am a U.S. person (including a non-resident alien). |
Signature of Individual Owner | Date | |
Print or Type Name |
Signature of Joint Account Owner | Date | |
Print or Type Name |
Signature of Custodian | Date | |
Print or Type Name |
Trustee, Officer, General Partner or other Authorized Person | Date | |
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Print or Type Name | Title | |
Additional Authorized Person (if required) | Date | |
Print or Type Name | Title | |
Additional Authorized Person (if required) | Date | |
Print or Type Name | Title |
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UNCERTIFICATED SHARES OF COMMON STOCK
To: | Stockholder | |
From: | Rodney F. Emery, Chief Executive Officer |
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UP TO $1,650,000,000 IN SHARES OF
COMMON STOCK
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Item 31. | Other Expenses of Issuance and Distribution. |
Amount | ||||
SEC registration fee | $ | 92,070.00 | ||
FINRA filing fee | 75,500.00 | |||
Accounting fees and expenses | * | |||
Legal fees and expenses | * | |||
Sales and advertising expenses | * | |||
Blue Sky fees and expenses | * | |||
Printing expenses | * | |||
Miscellaneous | * | |||
Total | $ | 167,570.00 | ||
* | To be filed by amendment. |
Item 32. | Sales to Special Parties. |
Item 33. | Recent Sales of Unregistered Securities. |
Item 34. | Indemnification of Directors and Officers. |
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Item 35. | Treatment of Proceeds from Securities Being Registered. |
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Item 36. | Financial Statements and Exhibits. |
1 | .1** | Form of Dealer Manager Agreement | ||
1 | .2** | Form of Participating Dealer Agreement (included as Appendix A to Exhibit 1.1) | ||
3 | .1** | Articles of Amendment and Restatement of Steadfast Secure Income REIT, Inc. | ||
3 | .2** | Bylaws of Steadfast Secure Income REIT, Inc. | ||
4 | .1 | Form of Subscription Agreement (included in the Prospectus as Appendix B and incorporated herein by reference) | ||
4 | .2 | Form of Distribution Reinvestment Plan (included in the Prospectus as Appendix C and incorporated herein by reference) | ||
5 | .1** | Form of Opinion of Venable LLP as to the legality of the securities being registered | ||
8 | .1** | Form of Opinion of Alston & Bird LLP regarding certain federal income tax considerations | ||
10 | .1* | Form of Escrow Agreement | ||
10 | .2** | Advisory Agreement | ||
10 | .3** | Limited Partnership Agreement of Steadfast Secure Income REIT Operating Partnership, L.P. | ||
10 | .4** | Steadfast Secure Income REIT, Inc. 2009 Long-Term Incentive Plan | ||
10 | .5** | Steadfast Secure Income REIT, Inc. Independent Directors Compensation Plan | ||
21 | ** | Subsidiaries of the Company | ||
23 | .1 | Consent of Ernst & Young LLP | ||
23 | .2** | Consent of Venable LLP (contained in its opinion filed as Exhibit 5.1) | ||
23 | .4** | Consent of Alston & Bird LLP (contained in its opinion filed as Exhibit 8.1) | ||
23 | .5** | Consent of Lakemont Group | ||
24 | ** | Power of Attorney (included on signature page) |
* | To be filed by amendment. | |
** | Previously filed. |
Item 37. | Undertakings |
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Gross | ||||||||||||||||||||||||||||||
Acres, Leasable | ||||||||||||||||||||||||||||||
Space or | ||||||||||||||||||||||||||||||
Number of | ||||||||||||||||||||||||||||||
Units and | ||||||||||||||||||||||||||||||
Total | Contract | Other | ||||||||||||||||||||||||||||
Square | Mortgage and Other | Cash | Price & | Cash | ||||||||||||||||||||||||||
Type of | Feet | Date of | Financing | Down | Acquisition | Expenditures | Total | |||||||||||||||||||||||
Property | Location | Property | of Units | Purchase | at Purchase(1) | Payment | Fee | Capitalized | Price | |||||||||||||||||||||
Steadfast Everett Plaza, LLC | Everett, WA | Land | 5.97 acres | 4/17/2006 | $ | 2,025,000 | $ | 600,000 | $ | 2,625,000 | $ | 4,633 | $ | 2,629,633 | ||||||||||||||||
Steadfast-BLK, LLC | Citrus Heights, CA | Enclosed Regional Mall | 1,927,746 square feet | 1/29/2008 | 84,000,000 | 22,843,000 | 107,911,430 | 452,292 | 108,363,722 | |||||||||||||||||||||
Stone Point I LLC | Roseville, CA | Vacant Land | 3.43 acres | 12/8/2006 | 3,452,500 | 1,435,336 | 4,887,836 | 107,796 | 4,995,632 | |||||||||||||||||||||
Steadfast Roseville II, LLC | Roseville, CA | Vacant Land | 3.43 acres | 12/8/2006 | 3,665,813 | 1,827,816 | 5,493,629 | 121,096 | 5,614,725 | |||||||||||||||||||||
Steadfast Woodranch, LLC | Simi Valley, CA | Office/Medical Buildings | 26 units/85,103 square feet | 4/25/2007 | 10,697,420 | 757,860 | 10,361,975 | — | 11,455,280 | |||||||||||||||||||||
Las Tiendas de la Paz SRL de CV | La Paz, Mexico | Land | 17.54 acres | 2/6/2008 | — | 1,000,000 | 10,551,820 | 861,322 | 11,413,142 |
(1) | Includes mortgage and other financing. |
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By: | /s/ Rodney F. Emery |
*By: | /s/ Rodney F. Emery |
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Exhibit | ||||
Number | Description | |||
1 | .1** | Form of Dealer Manager Agreement | ||
1 | .2** | Form of Participating Dealer Agreement (included as Appendix A to Exhibit 1.1) | ||
3 | .1** | Articles of Amendment and Restatement of Steadfast Secure Income REIT, Inc. | ||
3 | .2** | Bylaws of Steadfast Secure Income REIT, Inc. | ||
4 | .1 | Form of Subscription Agreement (included in the Prospectus as Appendix B and incorporated herein by reference) | ||
4 | .2 | Form of Distribution Reinvestment Plan (included in the Prospectus as Appendix C and incorporated herein by reference) | ||
5 | .1** | Form of Opinion of Venable LLP as to the legality of the securities being registered | ||
8 | .1** | Form of Opinion of Alston & Bird LLP regarding certain federal income tax considerations | ||
10 | .1* | Form of Escrow Agreement | ||
10 | .2** | Advisory Agreement | ||
10 | .3** | Limited Partnership Agreement of Steadfast Secure Income REIT Operating Partnership, L.P. | ||
10 | .4** | Steadfast Secure Income REIT, Inc. 2009 Long-Term Incentive Plan | ||
10 | .5** | Steadfast Secure Income REIT, Inc. Independent Directors Compensation Plan | ||
21 | ** | Subsidiaries of the Company | ||
23 | .1 | Consent of Ernst & Young LLP | ||
23 | .2** | Consent of Venable LLP (contained in its opinion filed as Exhibit 5.1) | ||
23 | .4** | Consent of Alston & Bird LLP (contained in its opinion filed as Exhibit 8.1) | ||
23 | .5** | Consent of Lakemont Group | ||
24 | ** | Power of Attorney (included on signature page) |
* | To be filed by amendment. |
** | Previously filed. |