Document and Entity Information
Document and Entity Information Document - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Mar. 06, 2017 | Jun. 30, 2016 | |
Document and Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2016 | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY | ||
Entity Registrant Name | KBS Legacy Partners Apartment REIT, Inc. | ||
Entity Central Index Key | 1,469,822 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Common Stock, Shares Outstanding | 20,860,094 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 0 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Real estate: | ||
Land | $ 46,828 | $ 46,828 |
Buildings and improvements | 367,023 | 365,219 |
Total real estate, cost | 413,851 | 412,047 |
Less accumulated depreciation and amortization | (47,591) | (35,713) |
Total real estate, net | 366,260 | 376,334 |
Cash and cash equivalents | 15,998 | 20,193 |
Restricted cash | 5,099 | 4,676 |
Prepaid expenses and other assets | 4,580 | 4,976 |
Total assets | 391,937 | 406,179 |
Liabilities and stockholders’ equity | ||
Notes payable, net | 279,146 | 284,488 |
Accounts payable and accrued liabilities | 5,566 | 5,236 |
Due to affiliates | 157 | 4,894 |
Distributions payable | 1,154 | 1,133 |
Other liabilities | 2,778 | 2,163 |
Total liabilities | 288,801 | 297,914 |
Commitments and contingencies (Note 8) | ||
Redeemable common stock | 350 | 894 |
Stockholders’ equity: | ||
Preferred stock, $.01 par value; 10,000,000 shares authorized, no shares issued and outstanding | 0 | 0 |
Common stock, $.01 par value; 1,000,000,000 shares authorized, 20,896,268 and 20,508,397 shares issued and outstanding as of December 31, 2016 and December 31, 2015, respectively | 209 | 205 |
Additional paid-in capital | 180,196 | 176,476 |
Cumulative distributions and net losses | (77,619) | (69,310) |
Total stockholders’ equity | 102,786 | 107,371 |
Total liabilities and stockholders’ equity | $ 391,937 | $ 406,179 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued (in shares) | 20,896,268 | 20,508,397 |
Common stock, shares outstanding (in shares) | 20,896,268 | 20,508,397 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Revenues: | |||
Rental income | $ 45,301 | $ 44,613 | $ 42,200 |
Total revenues | 45,301 | 44,613 | 42,200 |
Expenses: | |||
Operating, maintenance, and management | 6,389 | 8,674 | 10,977 |
Real estate taxes and insurance | 7,088 | 6,144 | 5,804 |
Asset management fees to affiliate | 399 | 729 | 2,598 |
Property management fees and expenses to affiliate | 5,811 | 3,523 | 281 |
Real estate acquisition fees to affiliate | 0 | 0 | 701 |
Real estate acquisition fees and expenses | 0 | 0 | 264 |
General and administrative expenses | 2,663 | 2,176 | 2,374 |
Depreciation and amortization | 12,302 | 12,090 | 12,577 |
Interest expense | 10,332 | 10,501 | 10,261 |
Total expenses | 44,984 | 43,837 | 45,837 |
Other income: | |||
Interest income | 52 | 15 | 77 |
Other income | 4,752 | 0 | 0 |
Total other income | 4,804 | 15 | 77 |
Net income (loss) | $ 5,121 | $ 791 | $ (3,560) |
Net income (loss) per common share, basic and diluted (in dollars per share) | $ 0.25 | $ 0.04 | $ (0.18) |
Weighted-average number of common shares outstanding, basic and diluted (in shares) | 20,663,506 | 20,272,697 | 19,853,904 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Cumulative Distributions and Net Income (Loss) |
Balance, shares at Dec. 31, 2013 | 19,196,501 | |||
Balance, value at Dec. 31, 2013 | $ 121,060 | $ 192 | $ 161,328 | $ (40,460) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Issuance of common stock (in shares) | 1,081,474 | |||
Issuance of common stock, value | 11,250 | $ 11 | 11,239 | |
Redemptions of common stock (in shares) | (193,145) | |||
Redemptions of common stock, value | (1,853) | $ (2) | (1,851) | |
Transfers from redeemable common stock | 2,888 | 2,888 | ||
Distributions declared | (12,905) | (12,905) | ||
Commissions on stock sales and related dealer manager fees to affiliates | (536) | (536) | ||
Other offering costs | (620) | (620) | ||
Net income (loss) | (3,560) | (3,560) | ||
Balance, shares at Dec. 31, 2014 | 20,084,830 | |||
Balance, value at Dec. 31, 2014 | 115,724 | $ 201 | 172,448 | (56,925) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Issuance of common stock (in shares) | 595,095 | |||
Issuance of common stock, value | 5,736 | $ 6 | 5,730 | |
Redemptions of common stock (in shares) | (171,528) | |||
Redemptions of common stock, value | (1,697) | $ (2) | (1,695) | |
Distributions declared | (13,176) | (13,176) | ||
Other offering costs | (7) | (7) | ||
Net income (loss) | $ 791 | 791 | ||
Balance, shares at Dec. 31, 2015 | 20,508,397 | 20,508,397 | ||
Balance, value at Dec. 31, 2015 | $ 107,371 | $ 205 | 176,476 | (69,310) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Issuance of common stock (in shares) | 586,585 | |||
Issuance of common stock, value | 5,737 | $ 6 | 5,731 | |
Redemptions of common stock (in shares) | (198,714) | |||
Redemptions of common stock, value | (2,019) | $ (2) | (2,017) | |
Distributions declared | (13,430) | (13,430) | ||
Other offering costs | 6 | 6 | ||
Net income (loss) | $ 5,121 | 5,121 | ||
Balance, shares at Dec. 31, 2016 | 20,896,268 | 20,896,268 | ||
Balance, value at Dec. 31, 2016 | $ 102,786 | $ 209 | $ 180,196 | $ (77,619) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Cash Flows from Operating Activities: | |||
Net income (loss) | $ 5,121 | $ 791 | $ (3,560) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||
Depreciation and amortization | 12,302 | 12,090 | 12,577 |
Bad debt expense | 522 | 501 | 403 |
Loss due to property damages | 145 | 211 | 685 |
Amortization of discount on notes payable | 87 | 86 | 78 |
Amortization of deferred financing costs | 415 | 415 | 415 |
Changes in operating assets and liabilities: | |||
Prepaid expenses and other assets | (523) | (862) | (828) |
Accounts payable and accrued liabilities | 536 | (269) | 568 |
Due to affiliates | (4,737) | 97 | 2,280 |
Other liabilities | 71 | (52) | 384 |
Net cash provided by operating activities | 13,939 | 13,008 | 13,002 |
Cash Flows from Investing Activities: | |||
Acquisitions of real estate | 0 | 0 | (13,141) |
Improvements to real estate | (2,315) | (2,282) | (5,031) |
Insurance proceeds received for property damage | 133 | 397 | 0 |
Net cash used in investing activities | (2,182) | (1,885) | (18,172) |
Cash Flows from Financing Activities: | |||
Principal payments on mortgage notes payable | (5,844) | (5,582) | (3,988) |
Payments of deferred financing costs | 0 | 0 | (91) |
Proceeds from issuance of common stock | 0 | 0 | 5,786 |
Payments to redeem common stock | (2,019) | (1,697) | (1,853) |
Payments of commissions on stock sales and related dealer manager fees | 0 | 0 | (536) |
Payments of other offering costs | 6 | (7) | (338) |
Reimbursements of other offering costs from affiliates | 0 | 0 | 745 |
Distributions paid | (7,672) | (7,416) | (7,259) |
Net cash used in financing activities | (15,529) | (14,702) | (7,534) |
Net decrease in cash, cash equivalents and restricted cash | (3,772) | (3,579) | (12,704) |
Cash, cash equivalents and restricted cash, beginning of period | 24,869 | 28,448 | 41,152 |
Cash, cash equivalents and restricted cash, end of period | 21,097 | 24,869 | 28,448 |
Supplemental Disclosure of Cash Flow Information: | |||
Interest paid | 9,846 | 10,015 | 9,610 |
Supplemental Disclosure of Noncash Transactions: | |||
Distributions paid to common stockholders through common stock issuances pursuant to the dividend reinvestment plan | 5,737 | 5,736 | 5,591 |
Mortgage debt assumed in connection with real estate acquisitions at fair value | 0 | 0 | 52,268 |
Application of escrow deposits to purchase real estate | 0 | 0 | 1,500 |
Increase in redeemable common stock payable | 544 | 645 | 461 |
Increase in accrued improvements to real estate | $ 0 | $ 224 | $ 0 |
ORGANIZATION
ORGANIZATION | 12 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION | ORGANIZATION KBS Legacy Partners Apartment REIT, Inc. (the “Company”) was formed on July 31, 2009 as a Maryland corporation that elected to be taxed as a real estate investment trust (“REIT”) beginning with the taxable year ended December 31, 2010. Substantially all of the Company’s business is conducted through KBS Legacy Partners Limited Partnership (the “Operating Partnership”), a Delaware limited partnership formed on August 4, 2009. The Company is the sole general partner of and owns a 0.1% partnership interest in the Operating Partnership. KBS Legacy Partners Holdings LLC (“REIT Holdings”), a Delaware limited liability company formed on August 4, 2009, owns the remaining 99.9% interest in the Operating Partnership and is its sole limited partner. The Company is the sole member and manager of REIT Holdings. Subject to certain restrictions and limitations, the business of the Company is externally managed by KBS Capital Advisors LLC (the “Advisor”), an affiliate of the Company, pursuant to an advisory agreement the Company renewed with the Advisor on January 25, 2017 (the “Advisory Agreement”). On August 7, 2009, the Company issued 20,000 shares of its common stock to KBS-Legacy Apartment Community REIT Venture, LLC (the “Sub-Advisor”), an affiliate of the Company, at a purchase price of $10.00 per share. As of December 31, 2016 , the Sub-Advisor owned 20,000 shares of common stock of the Company. The Company invested in and manages a portfolio of high quality apartment communities located throughout the United States. The Company’s portfolio consists of “core” apartment buildings that were already well-positioned and producing rental income at acquisition. As of December 31, 2016 , the Company owned 11 apartment complexes. On August 19, 2009, the Company filed a registration statement on Form S-11 with the Securities and Exchange Commission (the “SEC”) to offer a minimum of 250,000 shares and a maximum of 280,000,000 shares of common stock for sale to the public (the “Initial Offering”), of which 80,000,000 shares would be offered pursuant to the Company’s dividend reinvestment plan. The SEC declared the Company’s registration statement for the Initial Offering effective on March 12, 2010, and the Company retained KBS Capital Markets Group LLC (the “Dealer Manager”), an affiliate of the Company, to serve as the dealer manager for the Initial Offering pursuant to a dealer manager agreement dated March 12, 2010 (the “Initial Dealer Manager Agreement”). Under the Initial Dealer Manager Agreement, the Dealer Manager was responsible for marketing the Company’s shares being offered pursuant to the Initial Offering. On May 31, 2012, the Company filed a registration statement on Form S-11 with the SEC to register a follow-on public offering (the “Follow-on Offering” and together with the Initial Offering, the “Offerings”). Pursuant to the registration statement, as amended, the Company registered up to an additional $ 2,000,000,000 of shares of common stock for sale to the public and up to an additional $ 760,000,000 of shares of common stock pursuant to the dividend reinvestment plan. The SEC declared the Company’s registration statement for the Follow-on Offering effective on March 8, 2013. The Company retained the Dealer Manager to serve as the dealer manager for the Follow-on Offering pursuant to a dealer manager agreement dated March 8, 2013 (the “Follow-on Dealer Manager Agreement” and together with the Initial Dealer Manager Agreement, the “Dealer Manager Agreements”). On March 12, 2013, the Company ceased offering shares pursuant to the Initial Offering and on March 13, 2013, the Company commenced offering shares to the public pursuant to the Follow-on Offering. In the Initial Offering, the Company sold 18,088,084 shares of common stock for gross offering proceeds of $179.2 million , including 368,872 shares of common stock under the dividend reinvestment plan for gross offering proceeds of $3.5 million . The Company ceased offering shares in the primary Follow-on Offering on March 31, 2014 and completed subscription processing procedures on April 30, 2014. The Company sold 1,496,198 shares of common stock in the primary Follow-on Offering for gross offering proceeds of $15.9 million . As of December 31, 2016 , the Company had sold an aggregate of 21,683,960 shares of common stock in the Offerings for gross offering proceeds of $215.9 million , including an aggregate of 2,468,550 shares of common stock under the dividend reinvestment plan for gross offering proceeds of $24.4 million . Also, as of December 31, 2016 , the Company had redeemed 807,692 shares sold in the Offerings for $7.9 million . The Company continues to offer shares of common stock under the dividend reinvestment plan. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation and Basis of Presentation The consolidated financial statements include the accounts of the Company, REIT Holdings, the Operating Partnership and their direct and indirect wholly owned subsidiaries. All significant intercompany balances and transactions are eliminated in consolidation. The consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) as contained within the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) and the rules and regulations of the SEC. Use of Estimates The preparation of the consolidated financial statements and accompanying notes thereto in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could materially differ from those estimates. Reclassifications Certain amounts in the Company’s prior period consolidated financial statements have been reclassified to conform to the current period presentation. These reclassifications have not changed the results of operations of prior periods. During the year ended December 31, 2016, the Company elected to early adopt ASU No. 2016-18 (as defined below). As a result, the Company no longer presents the changes within restricted cash in the consolidated statements of cash flows. Instead, restricted cash is included with cash and cash equivalents when reconciling the beginning of period and end of period total amounts shown on the consolidated statements of cash flows. Revenue Recognition The Company leases apartment units under operating leases with terms generally of one year or less. Generally, credit investigations will be performed for prospective residents and security deposits will be obtained. The Company recognizes rental revenue, net of concessions, on a straight-line basis over the term of the lease, when collectibility is reasonably assured. The Company will recognize gains on sales of real estate either in total or deferred for a period of time, depending on whether a sale has been consummated, the extent of the buyer’s investment in the property being sold, whether the receivable of the Company is subject to future subordination, and the degree of the Company’s continuing involvement with the property after the sale. If the criteria for profit recognition under the full-accrual method are not met, the Company will defer gain recognition and account for the continued operations of the property by applying the percentage-of-completion, reduced profit, deposit, installment or cost recovery method, as appropriate, until the appropriate criteria are met. Other income, including interest earned on the Company’s cash, is recognized as it is earned. Real Estate Depreciation and Amortization Real estate properties are carried at cost and depreciated using the straight-line method over the estimated useful lives of 40 years for buildings, 10 – 20 years for building improvements, 10 – 20 years for land improvements and five to 12 years for computer, furniture, fixtures and equipment. Costs directly associated with the development of land and those incurred during construction are capitalized as part of the investment basis. Acquisition costs are expensed as incurred. Operating expenses incurred that are not related to the development and construction of the real estate investments are expensed as incurred. Repair, maintenance and tenant turnover costs are expensed as incurred and significant replacements and improvements are capitalized. Repair, maintenance and tenant turnover costs include all costs that do not extend the useful life of the real estate property. The Company considers the period of future benefit of an asset to determine its appropriate useful life. Intangible assets related to in-place leases are amortized to expense over the average remaining non-cancelable terms of the respective in-place leases. Real Estate Acquisition Valuation The Company records the acquisition of income-producing real estate or real estate that will be used for the production of income as a business combination. All assets acquired and liabilities assumed in a business combination are measured at their acquisition-date fair values. Acquisition costs are expensed as incurred and restructuring costs that do not meet the definition of a liability at the acquisition date are expensed in periods subsequent to the acquisition date. Intangible assets include the value of in-place leases, which represents the estimated value of the net cash flows of the in-place leases to be realized, as compared to the net cash flows that would have occurred had the property been vacant at the time of acquisition and subject to lease-up. Acquired in-place lease values are amortized to expense over the average remaining non-cancelable terms of the respective in-place leases. The Company assesses the acquisition-date fair values of all tangible assets, identifiable intangibles and assumed liabilities using methods similar to those used by independent appraisers, generally utilizing a discounted cash flow analysis that applies appropriate discount and/or capitalization rates and available market information. Estimates of future cash flows are based on a number of factors, including historical operating results, known and anticipated trends, and market and economic conditions. The fair value of tangible assets of an acquired property considers the value of the property as if it were vacant. The Company records above-market and below-market in-place lease values for acquired properties based on the present value (using a discount rate that reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to the in-place leases and (ii) management’s estimate of fair market lease rates for the corresponding in-place leases, measured over a period equal to the remaining non-cancelable term of above-market in-place leases and for the initial term plus any extended term for any leases with below-market renewal options. The Company amortizes any recorded above-market or below-market lease values as a reduction or increase, respectively, to rental income over the remaining non-cancelable terms of the respective lease, including any below-market renewal periods. The Company estimates the value of tenant origination and absorption costs by considering the estimated carrying costs during hypothetical expected lease-up periods, considering current market conditions. In estimating carrying costs, management includes real estate taxes, insurance and other operating expenses and estimates of lost rentals at market rates during the expected lease-up periods. The Company amortizes the value of tenant origination and absorption costs to depreciation and amortization expense over the remaining non-cancelable term of the leases. Estimates of the fair values of the tangible assets, identifiable intangibles and assumed liabilities require the Company to make significant assumptions to estimate market lease rates, property-operating expenses, carrying costs during lease-up periods, discount rates, market absorption periods, and the number of years the property will be held for investment. The use of inappropriate assumptions would result in an incorrect valuation of the Company’s acquired tangible assets, identifiable intangibles and assumed liabilities, which would impact the amount of the Company’s net income. Impairment of Real Estate and Related Intangible Assets and Liabilities The Company continually monitors events and changes in circumstances that could indicate that the carrying amounts of its real estate and related intangible assets and liabilities may not be recoverable or realized. When indicators of potential impairment suggest that the carrying value of real estate and related intangible assets and liabilities may not be recoverable, the Company will assess the recoverability by estimating whether the Company will recover the carrying value of the real estate and related intangible assets and liabilities through its undiscounted future cash flows and its eventual disposition. If, based on this analysis, the Company does not believe that it will be able to recover the carrying value of the real estate and related intangible assets and liabilities, the Company would record an impairment loss to the extent that the carrying value exceeds the estimated fair value of the real estate and related intangible assets and liabilities. The Company did not record any impairment loss on its real estate and related intangible assets and liabilities during the years ended December 31, 2016 , 2015 and 2014 . Insurance Proceeds for Property Damage The Company maintains an insurance policy that provides coverage for property damage and business interruption. Losses due to physical damage are recognized during the accounting period in which they occur while the amount of monetary assets to be received from the insurance policy is recognized when receipt of insurance recoveries is probable. Losses, which are reduced by the related probable insurance recoveries, are recorded as operating, maintenance and management expenses on the accompanying consolidated statements of operations. Anticipated proceeds in excess of recognized losses would be considered a gain contingency and recognized when the contingency related to the insurance claim has been resolved. Anticipated recoveries for lost rental revenue due to property damage are also considered to be a gain contingency and recognized when the contingency related to the insurance claim has been resolved. Cash and Cash Equivalents The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Cash equivalents may include cash and short term investments. Cash and cash equivalents are stated at cost, which approximates fair value. There are no restrictions on the use of the Company’s cash and cash equivalents as of December 31, 2016 . The Company’s cash and cash equivalents balance exceeds federally insurable limits as of December 31, 2016 . The Company monitors the cash balances in its operating accounts and adjusts the cash balances as appropriate; however, these cash balances could be impacted if the underlying financial institutions fail or are subject to other adverse conditions in the financial markets. To date, the Company has experienced no loss or lack of access to cash in its operating accounts. Restricted Cash Restricted cash is comprised of lender impound reserve accounts for property taxes and insurance proceeds for property damages. Deferred Financing Costs Deferred financing costs represent commitment fees, loan fees, legal fees and other third-party costs associated with obtaining financing and are presented on the balance sheet as a direct deduction from the carrying value of the associated debt liability. These costs are amortized over the terms of the respective financing agreements using the interest method. Unamortized deferred financing costs are generally expensed when the associated debt is refinanced or repaid before maturity unless specific rules are met that would allow for the carryover of such costs to the refinanced debt. Deferred financing costs incurred before an associated debt liability is recognized are included in prepaid and other assets on the balance sheet. Costs incurred in seeking financing transactions that do not close are expensed in the period in which it is determined that the financing will not close. Fair Value Measurements Under GAAP, the Company is required to measure certain financial instruments at fair value on a recurring basis. In addition, the Company is required to measure other non-financial and financial assets at fair value on a non-recurring basis (e.g., carrying value of impaired real estate loans receivable and long-lived assets). Fair value, as defined under GAAP, is the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The GAAP fair value framework uses a three-tiered approach. Fair value measurements are classified and disclosed in one of the following three categories: • Level 1: unadjusted quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities; • Level 2: quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations in which significant inputs and significant value drivers are observable in active markets; and • Level 3: prices or valuation techniques where little or no market data is available that requires inputs that are both significant to the fair value measurement and unobservable. When available, the Company utilizes quoted market prices from independent third-party sources to determine fair value and classifies such items in Level 1 or Level 2. In instances where the market for a financial instrument is not active, regardless of the availability of a nonbinding quoted market price, observable inputs might not be relevant and could require the Company to make a significant adjustment to derive a fair value measurement. Additionally, in an inactive market, a market price quoted from an independent third party may rely more on models with inputs based on information available only to that independent third party. When the Company determines the market for a financial instrument owned by the Company to be illiquid or when market transactions for similar instruments do not appear orderly, the Company will use several valuation sources (including internal valuations, discounted cash flow analysis and quoted market prices) and will establish a fair value by assigning weights to the various valuation sources. Changes in assumptions or estimation methodologies can have a material effect on these estimated fair values. In this regard, the derived fair value estimates cannot be substantiated by comparison to independent markets and, in many cases, may not be realized in an immediate settlement of the instrument. The Company considers the following factors to be indicators of an inactive market: (i) there are few recent transactions, (ii) price quotations are not based on current information, (iii) price quotations vary substantially either over time or among market makers (for example, some brokered markets), (iv) indexes that previously were highly correlated with the fair values of the asset or liability are demonstrably uncorrelated with recent indications of fair value for that asset or liability, (v) there is a significant increase in implied liquidity risk premiums, yields, or performance indicators (such as delinquency rates or loss severities) for observed transactions or quoted prices when compared with the Company’s estimate of expected cash flows, considering all available market data about credit and other nonperformance risk for the asset or liability, (vi) there is a wide bid-ask spread or significant increase in the bid-ask spread, (vii) there is a significant decline or absence of a market for new issuances (that is, a primary market) for the asset or liability or similar assets or liabilities, and (viii) little information is released publicly (for example, a principal-to-principal market). The Company considers the following factors to be indicators of non-orderly transactions: (i) there was not adequate exposure to the market for a period before the measurement date to allow for marketing activities that are usual and customary for transactions involving such assets or liabilities under current market conditions, (ii) there was a usual and customary marketing period, but the seller marketed the asset or liability to a single market participant, (iii) the seller is in or near bankruptcy or receivership (that is, distressed), or the seller was required to sell to meet regulatory or legal requirements (that is, forced), and (iv) the transaction price is an outlier when compared with other recent transactions for the same or similar assets or liabilities. Dividend Reinvestment Plan The Company has adopted a dividend reinvestment plan through which common stockholders may elect to reinvest an amount equal to the distributions declared on their shares in additional shares of the Company’s common stock in lieu of receiving cash distributions. Pursuant to the dividend reinvestment plan, the purchase price of shares of the Company’s common stock issued under the dividend reinvestment plan was equal to 95% of the price to acquire a share of common stock in one of the Company’s primary Offerings. At such time as the Company announces an estimated value per share of its common stock for a purpose other than to set the price to acquire a share in one of the primary Offerings, participants in the dividend reinvestment plan will acquire shares of common stock under the dividend reinvestment plan at a price equal to 95% of the estimated value per share of the Company’s common stock. On March 6, 2014, the Company’s board of directors approved an updated primary offering price for the Company’s common stock in the Follow-on Offering of $10.96 (unaudited) based on the estimated value of the Company’s assets less the estimated value of the Company’s liabilities, divided by the number of shares outstanding, all as of December 31, 2013 and increased for certain offering and other costs. Pursuant to the terms of the dividend reinvestment plan, effective on the next purchase date under the plan, which occurred on April 1, 2014, the purchase price per share under the dividend reinvestment plan was $10.42 , which is equal to 95% of $10.96 . On December 9, 2014, the Company’s board of directors approved an estimated value per share of the Company’s common stock of $10.14 (unaudited) based on the estimated value of the Company’s assets less the estimated value of the Company’s liabilities, divided by the number of shares outstanding, all as of September 30, 2014. Pursuant to the terms of the dividend reinvestment plan, effective on the next purchase date under the plan, which occurred on January 2, 2015, the purchase price per share under the dividend reinvestment plan was $9.64 , which is equal to 95% of $10.14 . On December 8, 2015, the Company’s board of directors approved an estimated value per share of the Company’s common stock of $10.29 (unaudited) based on the estimated value of the Company’s assets less the estimated value of the Company’s liabilities, divided by the number of shares outstanding, all as of September 30, 2015. Pursuant to the terms of the dividend reinvestment plan, effective on the next purchase date under the plan, which occurred on January 4, 2016, the purchase price per share under the dividend reinvestment plan was $9.78 , which is equal to 95% of $10.29 . On December 9, 2016, the Company’s board of directors approved an estimated value per share of the Company’s common stock of $9.35 (unaudited) based on the estimated value of the Company’s assets less the estimated value of the Company’s liabilities, divided by the number of shares outstanding, all as of September 30, 2016. Pursuant to the terms of the dividend reinvestment plan, effective on the next purchase date under the plan, which occurred on January 3, 2017, the purchase price per share under the dividend reinvestment plan is $8.89 , which is equal to 95% of $9.35 . The Company currently expects to utilize an independent valuation firm to update the estimated value per share in December 2017. The board of directors of the Company may amend or terminate the dividend reinvestment plan for any reason upon 10 days’ notice to participants. As provided under the dividend reinvestment plan, for a participant to terminate participation effective for a particular distribution, the Company must have received notice of termination from the participant at least four business days prior to the last business day of the month to which the distribution relates. Also as provided under the dividend reinvestment plan, and in addition to the standard termination procedures, a dividend reinvestment plan participant shall have no less than two business days after the date the Company publicly announces an updated estimated value per share in a filing with the SEC to terminate participation. Redeemable Common Stock Pursuant to the Company’s share redemption program, there are several limitations on the Company's ability to redeem shares: • Unless the shares are being redeemed in connection with a stockholder’s death, “qualifying disability,” or “determination of incompetence” (both as defined in the share redemption program and together with redemptions in connection with a stockholder’s death, “Special Redemptions”), the Company may not redeem shares until the stockholder has held his or her shares for one year. • During any calendar year, the Company may redeem no more than 5% of the weighted-average number of shares outstanding during the prior calendar year. • The Company has no obligation to redeem shares if the redemption would violate the restrictions on distributions under Maryland law, which prohibits distributions that would cause a corporation to fail to meet statutory tests of solvency. • The Company may redeem only the number of shares that it could purchase with the amount of the net proceeds from the sale of shares under its dividend reinvestment plan during the prior calendar year; provided that it may not redeem more than $2.0 million of shares in the aggregate during any calendar year. Furthermore, during any calendar year, once the Company has redeemed $1.5 million of shares under its share redemption program, including in connection with Special Redemptions, the remaining $0.5 million of the $2.0 million annual limit shall be reserved exclusively for shares being redeemed in connection with Special Redemptions. Notwithstanding anything contained in this paragraph to the contrary, Company’s board of directors may amend, suspend or terminate the share redemption program without stockholder approval upon 30 days’ notice, provided the Company may increase or decrease the funding available for the redemption of shares pursuant to the program upon ten business days’ notice to its stockholders. The Company may provide this notice by including such information (a) in a Current Report on Form 8-K or in the Company’s annual or quarterly reports, all publicly filed with the SEC or (b) in a separate mailing to its stockholders. In January 2016, the Company exhausted the $1.5 million of funds available for all redemptions for 2016 and in August 2016, the Company exhausted the remaining $0.5 million of funds available for Special Redemptions for 2016. As of December 31, 2016 , the Company had $1.4 million of outstanding and unfulfilled ordinary redemption requests and $0.3 million of outstanding and unfulfilled Special Redemption requests. The annual limitation was reset on January 1, 2017, and the Company had an aggregate of $2.0 million of funds available for all redemptions, subject to the limitations in the share redemption program, including the requirement that the first $1.5 million of funds is available for all redemptions and the last $0.5 million is available solely for Special Redemptions. The Company exhausted the $1.5 million of funds available for all redemptions for 2017 in January 2017 and an aggregate of $0.3 million of funds available for Special Redemptions for 2017 in January and February 2017. As such, the Company will only be able to process $0.2 million of redemption requests related to Special Redemptions for the remainder of 2017. Pursuant to the Company’s share redemption program, redemptions made in connection with a Special Redemption are made at a price per share equal to the most recent estimated value per share of the Company’s common stock as of the applicable redemption date. The price at which the Company redeems all other shares eligible for redemption is as follows: • For those shares held by the redeeming stockholder for at least one year, 92.5% of the Company’s most recent estimated value per share as of the applicable redemption date; • For those shares held by the redeeming stockholder for at least two years, 95.0% of the Company’s most recent estimated value per share as of the applicable redemption date; • For those shares held by the redeeming stockholder for at least three years, 97.5% of the Company’s most recent estimated value per share as of the applicable redemption date; and • For those shares held by the redeeming stockholder for at least four years, 100% of the Company’s most recent estimated value per share as of the applicable redemption date. If the Company cannot redeem all shares presented for redemption in any month because of the limitations on redemptions set forth in its share redemption program, then the Company will honor redemption requests on a pro rata basis, except that if a pro rata redemption would result in a stockholder owning less than the minimum purchase requirement described in the Company’s currently effective, or the most recently effective, registration statement as such registration statement has been amended or supplemented, then the Company would redeem all of such stockholder’s shares. On December 8, 2015, the Company’s board of directors approved an estimated value per share of its common stock of $10.29 (unaudited) based on the estimated value of the Company’s assets less the estimated value of its liabilities, divided by the number of shares outstanding, all as of September 30, 2015. For a full description of the assumptions and methodologies used to value the Company's assets and liabilities in connection with the calculation of the December 2015 estimated value per share, see the Company's Annual Report on Form 10-K for the year ended December 31, 2015 at Part II, Item 5, “Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities — Market Information.” On December 9, 2016, the Company’s board of directors approved an estimated value per share of the Company's common stock of $9.35 (unaudited) based on the estimated value of the Company’s assets less the estimated value of its liabilities, divided by the number of shares outstanding, all as of September 30, 2016. This estimated value per share became effective for the December 2016 redemption date, which was December 30, 2016. For a full description of the methodologies used to value the Company's assets and liabilities in connection with the calculation of the December 2016 estimated value per share, see Part II, Item 5, “Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities — Market Information” herein. The Company will record amounts that are redeemable under the share redemption program as redeemable common stock in its consolidated balance sheets because the shares will be mandatorily redeemable at the option of the holder and therefore their redemption will be outside the control of the Company. The maximum amount redeemable under the Company’s share redemption program is limited to the number of shares the Company could redeem with the amount of the net proceeds from the sale of shares under the dividend reinvestment plan during the prior calendar year; provided, that the Company may not redeem more than $2.0 million of shares in the aggregate during any calendar year. Furthermore, during any calendar year, once the Company has redeemed $1.5 million of shares under the share redemption program, including redemptions in connection with Special Redemptions, the remaining $0.5 million of the $2.0 million annual limit shall be reserved exclusively for shares being redeemed in connection with a Special Redemption. However, because the amounts that can be redeemed will be determinable and only contingent on an event that is likely to occur (e.g., the passage of time), the Company will present the net proceeds from the current year dividend reinvestment plan as redeemable common stock in its accompanying consolidated balance sheets. The Company will classify as liabilities financial instruments that represent a mandatory obligation of the Company to redeem shares. The Company’s redeemable common shares will be contingently redeemable at the option of the holder. When the Company determines it has a mandatory obligation to repurchase shares under the share redemption program, it will reclassify such obligations from temporary equity to a liability based upon their respective settlement values. During the year ended December 31, 2016 , the Company redeemed $2.0 million of common stock, which represented all redemption requests received in good order and eligible for redemption through the December 31, 2016 redemption date, except for 176,510 shares due to the limitations described above, of which 154,109 shares were redeemed in January 2017 and February 2017. The Company recorded $1.7 million of other liabilities on the Company’s consolidated balance sheets as of December 31, 2016 related to these unfulfilled redemption requests. Related Party Transactions The Company has entered into the Advisory Agreement with the Advisor and the Follow-on Dealer Manager Agreement with the Dealer Manager. These agreements entitled the Advisor and/or the Dealer Manager to specified fees upon the provision of certain services with regard to the now-terminated Follow-on Offering and entitle the Advisor to specified fees upon the provision of certain services with regard to the management of the Company’s real estate properties, among other services (including, but not limited to, the disposition of investments), as well as reimbursement of organization and offering costs incurred by the Advisor and the Dealer Manager on behalf of the Company, such as expenses related to the dividend reinvestment plan, and certain costs incurred by the Advisor in providing services to the Company, such as acquisition expenses and certain operating expenses. In addition, the Advisor is entitled to certain other fees, including an incentive fee upon achieving certain performance goals, as detailed in the Advisory Agreement. On March 15, 2016, the Company and the Advisor entered into an amendment to the prior advisory agreement (the “Amended Advisory Agreement”) to amend certain terms related to the disposition fee payable to the Advisor by the Company. Prior to the amendment made in the Amended Advisory Agreement, the advisory agreement provided that if the Advisor or any of its affiliates provided a substantial amount of services (as determined by the conflicts committee) in connection with the sales of single assets, the Company would pay the Advisor or its affiliates a disposition fee of 1% of the contract sales price of the asset sold. The Amended Advisory Agreement provided that the 1% disposition fee may be payable upon the sale of a single asset or the sale of all or a portion of the Company’s assets through a portfolio sale, merger or other business combination transaction, if the conflicts committee determines that the Advisor or its affiliates has provided a substantial amount of services related to such sale. This change was included in the advisory agreement between the Company and the Advisor that was renewed on January 25, 2017. The Company has entered into a fee reimbursement agreement (the “AIP Reimbursement Agreement”) with the Dealer Manager pursuant to which the Company agreed to reimburse the Dealer Manager for certain fees and expenses it incurs for administering the Company’s participation in the DTCC Alternative Investment Product Platform (“AIP Platform”) with respect to certain accounts of the Company’s investors serviced through the platform. The Advisor and Dealer Manager also serve as the advisor and dealer manager, respectively, for KBS Real Estate Investment Trust, Inc., KBS Real Estate Investment Trust II, Inc., KBS Real Estate Investment Trust III, Inc., KBS Strategic Opportunity REIT, Inc., KBS Strategic Opportunity REIT II, Inc. and KBS Growth & Income REIT, Inc. The Company records all related party fees as incurred, subject to any limitations described in the Advisory Agreement. The Company did not incurred any disposition fees, subordinated participations in net cash flows, or subordinated incentive listing fees |
REAL ESTATE
REAL ESTATE | 12 Months Ended |
Dec. 31, 2016 | |
Real Estate [Abstract] | |
REAL ESTATE | REAL ESTATE As of December 31, 2016 , the Company owned 11 apartment complexes, containing 3,039 units and encompassing 3.1 million rentable square feet, which were 93% occupied. The following table provides summary information regarding the properties owned by the Company as of December 31, 2016 (dollars in thousands): Property Name Date Acquired Location Total Real Estate, Cost Accumulated Depreciation and Amortization Total Real Estate, Net Legacy at Valley Ranch 10/26/2010 Irving, TX $ 36,524 $ (5,200 ) $ 31,324 Poplar Creek 02/09/2012 Schaumburg, IL 27,321 (2,982 ) 24,339 The Residence at Waterstone 04/06/2012 Pikesville, MD 65,336 (7,818 ) 57,518 Legacy Crescent Park 05/03/2012 Greer, SC 20,740 (2,930 ) 17,810 Legacy at Martin’s Point 05/31/2012 Lombard, IL 37,600 (5,539 ) 32,061 Wesley Village 11/06/2012 Charlotte, NC 44,461 (4,969 ) 39,492 Watertower Apartments 01/15/2013 Eden Prairie, MN 38,776 (4,309 ) 34,467 Crystal Park at Waterford 05/08/2013 Frederick, MD 46,075 (5,130 ) 40,945 Millennium Apartment Homes 06/07/2013 Greenville, SC 33,298 (3,638 ) 29,660 Legacy Grand at Concord 02/18/2014 Concord, NC 27,876 (2,352 ) 25,524 Lofts at the Highlands 02/25/2014 St. Louis, MO 35,844 (2,724 ) 33,120 $ 413,851 $ (47,591 ) $ 366,260 Additionally, as of December 31, 2016 and 2015 , the Company had recorded unamortized tax abatement intangible assets, which are included in prepaid expenses and other assets in the accompanying balance sheets, of $2.9 million and $3.2 million , respectively. During the years ended December 31, 2016 , 2015 and 2014 , the Company recorded amortization expense of $0.3 million , $0.3 million and $0.2 million , respectively, related to tax abatement intangible assets. Property Damage During the year ended December 31, 2016 , one of the Company’s apartment complexes suffered physical damage due to frozen water pipes. The Company’s insurance policies provide coverage for property damage and business interruption subject to a deductible of up to $12,500 per incident. The Company recognized a loss due to damage of $145,000 during the year ended December 31, 2016 , which was reduced by a $132,500 insurance recovery related to such damage. The net loss due to damage of $12,500 during the year ended December 31, 2016 was classified as operating, maintenance and management expenses on the accompanying consolidated statements of operations and relates to the Company’s insurance deductible. Wesley Village Agreement On November 6, 2012, the Company, through an indirect wholly owned subsidiary, KBS Legacy Partners Wesley LP, formerly known as KBS Legacy Partners Wesley LLC, purchased a 301 -unit apartment complex on approximately 11.0 acres of land and, through a second indirect wholly owned subsidiary, KBS Legacy Partners Wesley Land LLC (and, together with KBS Legacy Partners Wesley LP, the “Owner”), purchased the adjacent 3.8 -acre parcel of undeveloped land located in Charlotte, North Carolina (“Wesley Village”). On December 29, 2016, after the completion of the initial marketing of the Company’s portfolio and individual properties by Holliday Fenoglio Fowler, L.P., a leading provider of commercial real estate and capital markets services and an unaffiliated independent third party, in connection with the Company’s implementation of its strategic alternatives, the Owner entered into an agreement for purchase and sale (the “Wesley Village Agreement”) for the sale of Wesley Village to Bluerock Real Estate, LLC (the “Purchaser”). Pursuant to the Wesley Village Agreement, the purchase price for Wesley Village was $58.0 million . The Wesley Village Agreement was subsequently terminated, reinstated and amended and the purchase price was reduced to $57.2 million a nd on March 9, 2017, the Company completed the sale of Wesley Village. For information relating to the termination and reinstatement of, and the amendments to, the Wesley Village Agreement, and the subsequent sale of Wesley Village, see Note 9, “Subsequent Events - Termination and Reinstatement of, and Amendments to, the Wesley Village Agreement; Disposition of Wesley Village.” |
NOTES PAYABLE
NOTES PAYABLE | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
NOTES PAYABLE | NOTES PAYABLE As of December 31, 2016 and 2015 , the Company’s notes payable consisted of the following (dollars in thousands): Book Value as of December 31, 2016 Book Value as of December 31, 2015 Contractual Interest Rate as of December 31, 2016 Payment Type Maturity Date Legacy at Valley Ranch Mortgage Loan $ 30,958 $ 31,554 3.9% Principal & Interest 04/01/2019 Poplar Creek Mortgage Loan 19,414 19,785 4.0% Principal & Interest 03/01/2019 The Residence at Waterstone Mortgage Loan 45,653 46,550 3.8% Principal & Interest 05/01/2019 Legacy Crescent Park Mortgage Loan 13,560 13,858 3.5% Principal & Interest 06/01/2019 Legacy at Martin’s Point Mortgage Loan 21,866 22,330 3.3% Principal & Interest 06/01/2019 Wesley Village Mortgage Loan (1) 26,862 27,566 2.6% Principal & Interest 12/01/2017 Watertower Mortgage Loan 23,943 24,525 2.5% Principal & Interest 02/10/2018 Crystal Park Mortgage Loan 27,013 27,709 2.5% Principal & Interest 06/01/2018 Millennium Mortgage Loan 20,190 20,689 2.7% Principal & Interest 07/01/2018 Legacy Grand at Concord Mortgage Loan 22,392 22,693 4.1% Principal & Interest 12/01/2050 Lofts at the Highlands Mortgage Loan 30,754 31,190 3.4% Principal & Interest 08/01/2052 Total notes payable principal outstanding $ 282,605 $ 288,449 Discount on note payable, net (2,644 ) (2,731 ) Deferred financing costs, net (815 ) (1,230 ) Total notes payable, net $ 279,146 $ 284,488 ____________________ (1) On March 9, 2017, in connection with the disposition of Wesley Village, the Company paid off the Wesley Village Mortgage Loan. For information relating to the disposition of Wesley Village and repayment of the related note payable secured by Wesley Village, see Note 9, “Subsequent Events - Termination and Reinstatement of, and Amendments to, the Wesley Village Agreement; Disposition of Wesley Village.” During the years ended December 31, 2016 , 2015 and 2014 , the Company incurred $10.3 million , $10.5 million and $10.3 million of interest expense, respectively. Included in interest expense for the years ended December 31, 2016 , 2015 and 2014 were $0.4 million , $0.4 million and $0.4 million of amortization of deferred financing costs, respectively. Included in interest expense for the years ended December 31, 2016 , 2015 and 2014 were $0.1 million , $0.1 million and $0.1 million of amortization of discount on a note payable, respectively. As of December 31, 2016 and 2015 , the Company recorded interest payable of $0.8 million and $0.8 million , respectively. The following is a schedule of maturities, including principal payments, for the Company’s notes payable outstanding as of December 31, 2016 (in thousands): 2017 $ 32,196 2018 72,958 2019 126,682 2020 852 2021 884 Thereafter 49,033 $ 282,605 |
FAIR VALUE DISCLOSURES
FAIR VALUE DISCLOSURES | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE DISCLOSURES | FAIR VALUE DISCLOSURES Under GAAP, the Company is required to measure certain financial instruments at fair value on a recurring basis. In addition, the Company is required to measure other non-financial and financial assets at fair value on a non-recurring basis (e.g., carrying value of impaired long-lived assets). Fair value, as defined under GAAP, is the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The GAAP fair value framework uses a three-tiered approach. Fair value measurements are classified and disclosed in one of the following three categories: • Level 1: unadjusted quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities; • Level 2: quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations in which significant inputs and significant value drivers are observable in active markets; and • Level 3: prices or valuation techniques where little or no market data is available that requires inputs that are both significant to the fair value measurement and unobservable. The fair value for certain financial instruments is derived using valuation techniques that involve significant management judgment. The price transparency of financial instruments is a key determinant of the degree of judgment involved in determining the fair value of the Company’s financial instruments. Financial instruments for which actively quoted prices or pricing parameters are available and for which markets contain orderly transactions will generally have a higher degree of price transparency than financial instruments for which markets are inactive or consist of non-orderly trades. The Company evaluates several factors when determining if a market is inactive or when market transactions are not orderly. The following is a summary of the methods and assumptions used by management in estimating the fair value of each class of financial instrument for which it is practicable to estimate the fair value: Cash and cash equivalents, restricted cash, and accounts payable and accrued liabilities: These balances approximate their fair values due to the short maturities of these items. Notes payable: The fair value of the Company’s notes payable is estimated using a discounted cash flow analysis based on management’s estimates of current market interest rates for instruments with similar characteristics, including remaining loan term, loan-to-value ratio, type of collateral and other credit enhancements. Additionally, when determining the fair value of liabilities in circumstances in which a quoted price in an active market for an identical liability is not available, the Company measures fair value using (i) a valuation technique that uses the quoted price of the identical liability when traded as an asset or quoted prices for similar liabilities or similar liabilities when traded as assets or (ii) another valuation technique that is consistent with the principles of fair value measurement, such as the income approach or the market approach. The Company classifies these inputs as Level 3 inputs. The following were the face value, carrying amount and fair value of the Company’s notes payable as of December 31, 2016 and 2015 (dollars in thousands): December 31, 2016 December 31, 2015 Face Value Carrying Amount Fair Value Face Value Carrying Amount Fair Value Financial liabilities: Notes payable $ 282,605 $ 279,146 $ 279,258 $ 288,449 $ 284,488 $ 284,160 Disclosure of the fair values of financial instruments is based on pertinent information available to the Company as of the period end and requires a significant amount of judgment. Low levels of transaction volume for certain financial instruments have made the estimation of fair values difficult and, therefore, both the actual results and the Company’s estimate of value at a future date could be materially different. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2016 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS The Company has entered into the Advisory Agreement with the Advisor and the Follow-on Dealer Manager Agreement with the Dealer Manager. These agreements entitled the Advisor and/or the Dealer Manager to specified fees upon the provision of certain services with regard to the Follow-on Offering and entitle the Advisor to specified fees upon the provision of certain services with regard to the management of the Company’s real estate properties, among other services, as well as reimbursement of organization and offering costs incurred by the Advisor and the Dealer Manager on behalf of the Company, such as expenses related to the dividend reinvestment plan, and certain costs incurred by the Advisor in providing services to the Company, such as certain operating costs. The Company has also entered into a fee reimbursement agreement with the Dealer Manager pursuant to which the Company agreed to reimburse the Dealer Manager for certain fees and expenses it incurs for administering the Company’s participation in the DTCC Alternative Investment Product Platform with respect to certain accounts of the Company’s investors serviced through the platform. The Advisor and Dealer Manager also serve as the advisor and dealer manager, respectively, for KBS Real Estate Investment Trust, Inc., KBS Real Estate Investment Trust II, Inc., KBS Real Estate Investment Trust III, Inc., KBS Strategic Opportunity REIT, Inc., KBS Strategic Opportunity REIT II, Inc. and KBS Growth & Income REIT, Inc. On January 6, 2014, the Company, together with KBS Real Estate Investment Trust, Inc., KBS Real Estate Investment Trust II, Inc., KBS Real Estate Investment Trust III, Inc., KBS Strategic Opportunity REIT, Inc., KBS Strategic Opportunity REIT II, Inc., the Dealer Manager, the Advisor and other KBS-affiliated entities, entered into an errors and omissions and directors and officers liability insurance program where the lower tiers of such insurance coverage are shared. The cost of these lower tiers is allocated by the Advisor and its insurance broker among each of the various entities covered by the program, and is billed directly to each entity. The allocation of these shared coverage costs is proportionate to the pricing by the insurance marketplace for the first tiers of directors and officers liability coverage purchased individually by each REIT. The Advisor’s and the Dealer Manager’s portion of the shared lower tiers’ cost is proportionate to the respective entities’ prior cost for the errors and omissions insurance. In June 2015, KBS Growth & Income REIT, Inc. was added to the insurance program at terms similar to those described above. The Company has renewed its participation in the program, and the program is effective through June 30, 2017. During the years ended December 31, 2016 , 2015 and 2014 , no other business transactions occurred between the Company and KBS Real Estate Investment Trust, Inc., KBS Real Estate Investment Trust II, Inc., KBS Real Estate Investment Trust III, Inc., KBS Strategic Opportunity REIT, Inc., KBS Strategic Opportunity REIT II, Inc. and KBS Growth & Income REIT, Inc. Pursuant to the terms of these agreements and the property management agreements discussed below, summarized below are the related-party costs incurred by the Company for the years ended December 31, 2016 , 2015 and 2014 , respectively, and any related amounts payable as of December 31, 2016 and 2015 (in thousands): Incurred Payable as of Years Ended December 31, December 31, 2016 2015 2014 2016 2015 Expensed Asset management fees (1) $ 399 $ 729 $ 2,598 $ — $ 4,752 Reimbursable operating expenses (2) 225 356 392 15 25 Acquisition fees on real properties — — 701 — — Property management fees and expenses (3) 5,811 3,523 281 142 117 Additional Paid-in Capital Selling commissions — — 363 — — Dealer manager fees — — 173 — — Reimbursable other offering costs (4) — — 59 — — $ 6,435 $ 4,608 $ 4,567 $ 157 $ 4,894 ____________________ (1) See “Advisory Agreement — Asset Management Fee” below. (2) Reimbursable operating expenses primarily consist of marketing research costs and property site visit expenses incurred by the Sub-Advisor and internal audit personnel costs, accounting software and cybersecurity related expenses incurred by the Advisor under the Advisory Agreement. Beginning July 1, 2010, the Company has reimbursed the Advisor for the Company’s allocable portion of the salaries, benefits and overhead of internal audit department personnel providing services to the Company. These amounts totaled $161,000 , $141,000 and $108,000 for the years ended December 31, 2016 , 2015 and 2014 , respectively, and were the only type of employee costs reimbursed under the Advisory Agreement through December 31, 2016 . The Company does not reimburse for employee costs in connection with services for which the Advisor earns acquisition or disposition fees (other than reimbursement of travel and communication expenses) or for the salaries or benefits the Advisor or its affiliates may pay to the Company’s executive officers. In addition to the amounts above, the Company reimburses the Advisor and Sub-Advisor for certain of the Company’s direct property operating costs incurred from third parties that were initially paid by the Advisor and Sub-Advisor on behalf of the Company. (3) Property management fees and expenses consist of property management fees paid to LPI, an affiliate of the Sub-Advisor, as well as reimbursable on-site personnel salary and related benefits expenses at the properties and through March 31, 2015, fees for account maintenance and bookkeeping services paid to Legacy Partners Residential L.P., an affiliate of the Sub-Advisor (“LPR”), under the now-terminated account services agreements. See “— Property Management Agreements.” (4) See “— Other Offering Costs Related to Follow-on Offering and Dividend Reinvestment Plan.” During the year ended December 31, 2016 , the Advisor reimbursed the Company $28,000 for a property insurance rebate and the Advisor and/or the Dealer Manager reimbursed the Company for $0.1 million for legal and professional fees and travel expenses. In connection with the Follow-on Offering, the Company’s sponsors agreed to provide additional indemnification to one of the participating broker-dealers. The Company agreed to add supplemental coverage to its directors’ and officers’ insurance coverage to insure the sponsors’ obligations under this indemnification agreement in exchange for reimbursement by the sponsors to the Company for all costs, expenses and premiums related to this supplemental coverage. During the years ended December 31, 2016 , 2015 and 2014 the Advisor incurred $61,000 , $61,000 and $87,000 , respectively, for the costs of the supplemental coverage obtained by the Company. Other Offering Costs Related to Follow-on Offering and Dividend Reinvestment Plan The offering costs related to the Follow-on Offering (other than selling commissions and dealer manager fees) were either paid directly by the Company or in some instances paid by the Advisor, the Dealer Manager or their affiliates on the Company’s behalf. Offering costs include all expenses in connection with the Follow-on Offering and are charged as incurred as a reduction to stockholders’ equity. Pursuant to the Advisory Agreement and the Follow-on Dealer Manager Agreement, the Company is obligated to reimburse the Advisor, the Dealer Manager or their affiliates, as applicable, for offering costs paid by them on the Company’s behalf. However, at the termination of the primary Follow-on Offering and at the termination of the offering under the Company’s dividend reinvestment plan, the Advisor agreed to reimburse the Company to the extent that selling commissions, dealer manager fees and other offering costs incurred by the Company exceed 15% of the gross offering proceeds. Further, the Company is only liable to reimburse offering costs incurred by the Advisor up to an amount that, when combined with selling commissions, dealer manager fees and all other amounts spent by the Company on offering expenses, does not exceed 15% of the gross proceeds of the primary Follow-on Offering and the offering under the Company’s dividend reinvestment plan as of the date of reimbursement. Within 30 days after the end of the month in which the Company’s primary Follow-on Offering terminated, the Dealer Manager was obligated to reimburse the Company to the extent that the Company’s reimbursements to the Dealer Manager and payment of selling commissions and dealer manager fees caused total underwriting compensation for the Company’s primary Follow-on Offering to exceed 10% of the gross offering proceeds from the primary Follow-on Offering. The Company ceased offering shares in the primary Follow-on Offering on March 31, 2014 and completed subscription processing procedures on April 30, 2014. Through April 30, 2014, the Company sold an aggregate of 2,051,925 shares of common stock in the Follow-on Offering for gross offering proceeds of $21.5 million , including 555,727 shares under the dividend reinvestment plan for proceeds of $5.7 million . Total offering expenses in the Follow-on Offering were $4.2 million , including $1.8 million in underwriting compensation (which includes selling commissions, dealer manager fees and any other items viewed as underwriting compensation by the Financial Industry Regulatory Authority). After reimbursements from the Advisor and the Dealer Manager, the Company incurred offering expenses of $3.2 million in the Follow-on Offering (representing 15.0% of gross offering proceeds), which includes underwriting compensation of $1.6 million (representing 9.9% of primary Follow-on Offering proceeds). Including the reimbursements to the Company, the Dealer Manager incurred underwriting expenses of $0.2 million in the Follow-on Offering. In addition, because of the aggregate underwriting compensation incurred in the Follow-on Offering, on August 20, 2014, the Dealer Manager made a payment to the Company of $55,000 . Advisory Agreement - Asset Management Fee Pursuant to the Advisory Agreement, the asset management fee payable by the Company to the Advisor with respect to investments in real estate is a monthly fee equal to the lesser of one-twelfth of (i) 1.0% of the amount paid or allocated to fund the acquisition, development, construction or improvement of the property (whether at or subsequent to acquisition), including acquisition expenses and budgeted capital improvement costs (regardless of the level of debt used to finance the investment), and (ii) 2.0% of the amount paid or allocated to fund the acquisition, development, construction or improvement of the property (whether at or subsequent to acquisition), including acquisition expenses and budgeted capital improvement costs, less any debt used to finance the investment. The Advisory Agreement defers the Company’s obligation to pay asset management fees, without interest, accruing from February 1, 2013 through July 31, 2013. The Company will only be obligated to pay the Advisor such deferred amounts if and to the extent that the Company’s funds from operations, as such term is defined by the National Association of Real Estate Investment Trusts and interpreted by the Company, as adjusted for the effects of straight-line rents and acquisition costs and expenses (“AFFO”) for the immediately preceding month exceeds the amount of distributions declared for record dates of such prior month (an “AFFO Surplus”). The amount of any AFFO Surplus in a given month shall be applied first to pay to the Advisor asset management fees currently due with respect to such month (including any that would otherwise have been deferred for that month in accordance with the Advisory Agreement) and then to pay asset management fees previously deferred by the Advisor in accordance with the Advisory Agreement that remain unpaid. The Company had accrued and deferred payment of $1.5 million of asset management fees for February 2013 through July 2013 under the Advisory Agreement, as the Company believed the payment of this amount to the Advisor was probable at the time it was recorded. During the year ended December 31, 2016 , the Company reversed, as an increase to other income, the liabilities due to affiliates related to the $1.5 million of asset management fees for the period from February 2013 through July 2013 as the Company believed that the chance of payment of this amount to the Advisor is remote. In addition, the Advisory Agreement defers without interest under certain circumstances, the Company’s obligation to pay asset management fees accruing from August 1, 2013. Specifically, the Advisory Agreement defers the Company’s obligation to pay an asset management fee for any month in which the Company’s modified funds from operations (“MFFO”) for such month, as such term is defined in the practice guideline issued by the Investment Program Association (“IPA”) in November 2010 and interpreted by the Company, excluding asset management fees, does not exceed the amount of distributions declared by the Company for record dates of that month. The Company remains obligated to pay the Advisor an asset management fee in any month in which the Company’s MFFO, excluding asset management fees, for such month exceeds the amount of distributions declared for the record dates of that month (such excess amount, an “MFFO Surplus”); however, any amount of such asset management fee in excess of the MFFO Surplus is also deferred under the Advisory Agreement. If the MFFO Surplus for any month exceeds the amount of the asset management fee payable for such month, any remaining MFFO Surplus will not be applied to pay asset management fee amounts previously deferred by the Advisor in accordance with the Advisory Agreement. The Company had accrued and deferred payment of $3.3 million of asset management fees for August 2013 through December 2014 under the Advisory Agreement, as the Company believed the payment of this amount to the Advisor was probable at the time it was recorded. During the year ended December 31, 2016 , the Company reversed, as an increase to other income, the liabilities due to affiliates related to the $3.3 million of asset management fees for the period from August 2013 through December 2014 as the Company believed that the chance of payment of this amount to the Advisor is remote. During the year ended December 31, 2016 , the Company incurred $3.0 million of asset management fees. However, the Company only recorded $0.4 million pursuant to the limitations in the Advisory Agreement as noted above. The Company did not accrue the remaining $2.6 million of these deferred asset management fees as it is uncertain whether any of these amounts will be paid in the future. During the year ended December 31, 2015 , the Company incurred $2.8 million of asset management fees. However, the Company only recorded $0.7 million pursuant to the limitations in the Advisory Agreement as noted above. The Company did not accrue the remaining $2.1 million of these deferred asset management fees as it is uncertain whether any of these amounts will be paid in the future. However, notwithstanding any of the foregoing, any and all deferred asset management fees shall be immediately due and payable at such time as the Company’s stockholders have received, together as a collective group, aggregate distributions (including distributions that may constitute a return of capital for federal income tax purposes) sufficient to provide (i) a return of their net invested capital, or the amount calculated by multiplying the total number of shares purchased by stockholders by the issue price, reduced by any amounts to repurchase shares pursuant to the Company’s share redemption plan, and (ii) an 8.0% per year cumulative, non-compounded return on such net invested capital (the “Stockholders’ 8% Return”). The Stockholders’ 8% Return is not based on the return provided to any individual stockholder. Accordingly, it is not necessary for each of the Company’s stockholders to have received any minimum return in order for the Advisor to receive deferred asset management fees. Property Management Agreements In connection with certain of its property acquisitions, the Company, through separate indirect wholly owned subsidiaries, entered into separate Property Management — Account Services Agreements (each, a “Services Agreement”) with Legacy Partners Residential L.P. (“LPR”), an affiliate of the Sub-Advisor, pursuant to which LPR provided certain account maintenance and bookkeeping services related to these properties. Under each Services Agreement, the Company paid LPR a monthly fee in an amount equal to 1% of each property’s gross monthly collections. Unless otherwise provided for in an approved operating budget for a property, LPR was responsible for all expenses that it incurred in rendering services pursuant to each Services Agreement. Each Services Agreement had an initial term of one year and continued thereafter on a month-to-month basis unless either party gave 30 days’ prior written notice of its desire to terminate the Services Agreement. Notwithstanding the foregoing, the Company had the right to terminate each Services Agreement at any time without cause upon 30 days’ prior written notice to LPR. As described below, as of June 9, 2015, each of the Services Agreements had been terminated. The properties were previously managed by third-party property management companies pursuant to the terms of individual property management agreements (together, the “Prior Management Agreements”). The termination of services under the Prior Management Agreements and the Services Agreements (with respect to The Residence at Waterstone, Lofts at the Highlands, Legacy at Martin’s Point, Poplar Creek, Wesley Village, Legacy Grand at Concord, Millennium Apartment Homes and Legacy Crescent Park) were negotiated to coincide with the Effective Date of the respective Property Management Agreements. The Management Fee Percentage and any other fees and reimbursements payable to LPI by the Property Owner under each Property Management Agreement are approximately equal to the applicable percentage and other fees and reimbursements payable to the prior third party management companies and LPR by the Property Owner under the now-terminated Services Agreements and Prior Management Agreements. During the year ended December 31, 2015 , the Company, through the Property Owners, entered into the Property Management Agreements, pursuant to which LPI provides, among other services, general property management services, including bookkeeping and accounting services, construction management services and budgeting and business plans for the Company’s properties, as follows: Property Name Effective Date Management Fee Percentage Watertower Apartments 04/07/2015 2.75% Crystal Park at Waterford 04/14/2015 3.00% The Residence at Waterstone 04/28/2015 3.00% Lofts at the Highlands 05/05/2015 3.00% Legacy at Martin’s Point 05/12/2015 3.00% Poplar Creek 05/14/2015 3.00% Wesley Village 05/19/2015 3.00% Legacy Grand at Concord 05/21/2015 3.00% Millennium Apartment Homes (1) 05/27/2015 3.00% Legacy Crescent Park (1) 05/29/2015 3.00% Legacy at Valley Ranch 06/09/2015 3.00% ____________________ (1) Under the Property Management Agreement, the Property Owner will pay LPI the Management Fee Percentage in an amount equal to the greater of (a) 3% of the Gross Monthly Collections (as defined in the Property Management Agreement) or (b) $4,000 per month. Under the Property Management Agreements, each Property Owner pays LPI: (i) a monthly fee based on a percentage (as described in the table above, the “Management Fee Percentage”) of the Gross Monthly Collections (as defined in each Property Management Agreement), (ii) a construction supervision fee equal to a percentage of construction costs to the extent overseen by LPI and as further detailed in each Property Management Agreement, (iii) a leasing commission at a rate to be agreed upon between the Property Owner and LPI for executed retail leases that were procured or obtained by LPI, (iv) certain reimbursements if included in an approved capital budget and (v) certain reimbursements if included in the approved operating budget, including the reimbursement of the salaries and benefits for on-site personnel. Unless otherwise provided for in an approved operating budget, LPI is responsible for all expenses that it incurs in rendering services pursuant to each Property Management Agreement. Each Property Management Agreement had an initial term of one year and each has continued on a month-to-month basis pursuant to its terms. Either party may terminate a Property Management Agreement provided it gives 30 days’ prior written notice of its desire to terminate such agreement. Notwithstanding the foregoing, the Property Owner may terminate each Property Management Agreement at any time without cause upon 30 days’ prior written notice to LPI. The Property Owner may also terminate the Property Management Agreement with cause immediately upon notice to LPI and the expiration of any applicable cure period. LPI may terminate each Property Management Agreement at any time without cause upon prior written notice to the Property Owner which, depending upon the terms of the particular Property Management Agreement, requires either 30 , 60 or 90 days prior written notice. LPI may terminate the Property Management Agreement for cause if a Property Owner commits any material default under the Property Management Agreement and the default continues for a period of 30 days after notice from LPI to a Property Owner for a default or, in the case of Watertower Apartments, Lofts at the Highlands, Wesley Village, Legacy Grand at Concord, Millennium Apartment Homes and Legacy Crescent Park, if a monetary default continues for a period of 10 days after notice of such monetary default. The properties were previously managed by third-party property management companies pursuant to the terms of individual property management agreements (together, the “Prior Management Agreements”). The termination of services under the Prior Management Agreements and the Services Agreements (with respect to The Residence at Waterstone, Lofts at the Highlands, Legacy at Martin’s Point, Poplar Creek, Wesley Village, Legacy Grand at Concord, Millennium Apartment Homes and Legacy Crescent Park) were negotiated to coincide with the Effective Date of the respective Property Management Agreements. The Management Fee Percentage and any other fees and reimbursements payable to LPI by the Property Owner under each Property Management Agreement are approximately equal to the applicable percentage and other fees and reimbursements payable to the prior third party management companies and LPR by the Property Owner under the now-terminated Services Agreements and Prior Management Agreements. On December 29, 2016, the Owner entered into the Wesley Village Agreement for the sale of Wesley Village to the Purchaser. For information relating to the Wesley Village Agreement, see Note 3, “Real Estate - Wesley Village Agreement.” The Wesley Village Agreement was subsequently terminated, reinstated and amended and on March 9, 2017, the Company completed the sale of Wesley Village. For information relating to the termination and reinstatement of, and the amendments to, the Wesley Village Agreement, and the subsequent sale of Wesley Village, see Note 9, “Subsequent Events - Termination and Reinstatement of, and Amendments to, the Wesley Village Agreement; Disposition of Wesley Village.” Gary T. Kachadurian, one of the Company’s independent directors, is also a director of a real estate investment trust sponsored by the Purchaser (the “Purchaser REIT”) and is Vice Chairman of the manager of the Purchaser REIT and as such, Mr. Kachadurian (i) recused himself from all of the Company’s deliberations relating to the disposition of Wesley Village, and (ii) informed the Company and its board of directors that he recused himself from all of the Purchaser REIT’s and its manager’s deliberations relating to the acquisition of Wesley Village. |
SELECTED QUARTERLY FINANCIAL DA
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) | SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) Presented below is a summary of the unaudited quarterly financial information for the years ended December 31, 2016 and 2015 (in thousands, except per share amounts): 2016 First Quarter Second Quarter Third Quarter Fourth Quarter Revenues $ 11,154 $ 11,367 $ 11,498 $ 11,282 Net income (loss) 86 (24 ) 5,040 19 Net income (loss) per common share, basic and diluted — — 0.24 0.01 Distributions declared per common share (1) 0.160 0.162 0.164 0.164 2015 First Quarter Second Quarter Third Quarter Fourth Quarter Revenues $ 11,056 $ 11,184 $ 11,330 $ 11,043 Net income 205 237 263 86 Net income per common share, basic and diluted 0.01 0.01 0.01 0.01 Distributions declared per common share (1) 0.160 0.162 0.164 0.164 _____________________ (1) Distributions declared per common shares assumes each share was issued and outstanding each day during the period from January 1, 2015 through December 31, 2016 . Each day during the periods from January 1, 2015 through February 28, 2016 and March 1, 2016 through December 31, 2016 was a record date for distributions. Distributions were calculated at a rate of $0.00178082 per share per day. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Economic Dependency The Company is dependent on the Advisor and the Sub-Advisor for certain services that are essential to the Company, including the management of the daily operations of the Company’s investment portfolio; the disposition of investments; and other general and administrative responsibilities. The Company is also dependent on LPI to provide the property management services under the Property Management Agreements. In the event that these companies are unable to provide any of the respective services, the Company will be required to obtain such services from other sources. Environmental As an owner of real estate, the Company is subject to various environmental laws of federal, state and local governments. Although there can be no assurance, the Company is not aware of any environmental liability that could have a material adverse effect on its financial condition or results of operations. However, changes in applicable environmental laws and regulations, the uses and conditions of properties in the vicinity of the Company’s property, the activities of its tenants and other environmental conditions of which the Company is unaware with respect to the property could result in future environmental liabilities. Legal Matters From time to time, the Company may become party to legal proceedings that arise in the ordinary course of its business. Management is not aware of any legal proceedings of which the outcome is probable or reasonably possible to have a material adverse effect on the Company’s results of operations or financial condition, which would require accrual or disclosure of the contingency and possible range of loss. Additionally, the Company has not recorded any loss contingencies related to legal proceedings in which the potential loss is deemed to be remote. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2016 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS The Company evaluates subsequent events up until the date the consolidated financial statements are issued. Distributions Paid On January 3, 2017 , the Company paid distributions of $1.2 million , which related to distributions declared for daily record dates for each day in the period from December 1, 2016 through December 31, 2016 . On February 1, 2017 , the Company paid distributions of $1.2 million , which related to distributions declared for daily record dates for each day in the period from January 1, 2017 through January 31, 2017 . On March 1, 2017 , the Company paid distributions of $1.0 million , which related to distributions declared for daily record dates for each day in the period from February 1, 2017 through February 28, 2017 . Distributions Declared On January 23, 2017 , the Company’s board of directors declared distributions based on daily record dates for the period from March 1, 2017 through March 31, 2017 , which the Company expects to pay in April 2017 . On March 9, 2017 , the Company’s board of directors declared a March 2017 distribution in the amount of $0.05520548 per share of common stock to stockholders of record as of the close of business on March 20, 2017, which the Company expects to pay in April 2017 . Investors may choose to receive cash distributions or purchase additional shares through the Company’s dividend reinvestment plan. Termination and Reinstatement of, and Amendments to, the Wesley Village Agreement; Disposition of Wesley Village On December 29, 2016, the Company, through the Owner, entered into the Wesley Village Agreement for the sale of Wesley Village to the Purchaser. On January 27, 2017, the Purchaser provided notice of its election to terminate the Agreement as a result of certain issues related to the survey of Wesley Village upon the expiration of its title review period. The Purchaser also demanded the return of its earnest money deposit pursuant to the Wesley Village Agreement. On January 30, 2017, the Owner and the Purchaser entered into a reinstatement of and first amendment to the Agreement (the “First Amendment”). Pursuant to the First Amendment, the Purchaser rescinded its demand for the return of its earnest money deposit, the purchase price of Wesley Village was reduced to $57.7 million from $58.0 million and the due diligence period was extended by 11 days to February 8, 2017. Subsequently, on February 8, 2017, February 10, 2017, February 15, 2017 and February 17, 2017, the Owner and Purchaser entered into the second, third, fourth and fifth amendments to the Wesley Village Agreement, respectively (together, the “Wesley Village Amendments”). Pursuant to the Wesley Village Amendments, the purchase price for Wesley Village was reduced to $57.2 million from $57.7 million and the closing date was extended to March 9, 2017. On March 9, 2017, the Company completed the sale of Wesley Village, which had a net book value of $39.9 million as of December 31, 2016, to the Purchaser for $57.2 million . In connection with the disposition of Wesley Village, the Company repaid the entire $26.7 million principal balance and all other sums due under a mortgage loan secured by Wesley Village, including a prepayment penalty of $0.3 million . Gary T. Kachadurian, one of the Company’s independent directors, is also a director of a real estate investment trust sponsored by the Purchaser (the “Purchaser REIT”) and is Vice Chairman of the manager of the Purchaser REIT and as such, Mr. Kachadurian (i) recused himself from all of the Company’s deliberations relating to the disposition of Wesley Village, and (ii) informed the Company and the board of directors that he recused himself from all of the Purchaser REIT’s and its manager’s deliberations relating to the acquisition of Wesley Village. Amended Dividend Reinvestment Plan On March 9, 2017, the Company’s board of directors adopted a fourth amended and restated dividend reinvestment plan (the “Amended Dividend Reinvestment Plan”). Pursuant to the Amended Dividend Reinvestment Plan, the board of directors may designate certain distributions as ineligible for reinvestment through the plan. In addition, certain other corresponding and ministerial changes were made. There were no other changes to the Amended Dividend Reinvestment Plan. The Amended Dividend Reinvestment Plan will be effective March 20, 2017. Renewal of Advisory Agreement On January 25, 2017, the Company renewed its Advisory Agreement with the Advisor. The renewed Advisory Agreement is effective through January 25, 2018; however, either party may terminate the renewed Advisory Agreement without cause or penalty upon providing 60 days’ written notice. The terms of the renewed Advisory Agreement are identical to those of the Amended Advisory Agreement that was previously in effect. |
SCHEDULE III REAL ESTATE ASSETS
SCHEDULE III REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION AND AMORTIZATION | 12 Months Ended |
Dec. 31, 2016 | |
SEC Schedule III, Real Estate and Accumulated Depreciation Disclosure [Abstract] | |
SCHEDULE III REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION AND AMORTIZATION | Initial Cost to Company Gross Amount at which Carried at Close of Period Description Location Ownership Percent Encumbrances Land Building and Improvements (1) Total Cost Capitalized Subsequent to Acquisition (2) Land Building and Improvements (1) Total (3) Accumulated Depreciation and Amortization Original Date of Construction Date Acquired Legacy at Valley Ranch Irving, TX 100% $ 30,958 $ 4,838 $ 31,750 $ 36,588 $ (64 ) $ 4,838 $ 31,686 $ 36,524 $ (5,200 ) 1999 10/26/2010 Poplar Creek Schaumburg, IL 100% 19,414 7,020 20,180 27,200 121 7,020 20,301 27,321 (2,982 ) 1986/2007 02/09/2012 The Residence at Waterstone Pikesville, MD 100% 45,653 7,700 57,000 64,700 636 7,700 57,636 65,336 (7,818 ) 2002 04/06/2012 Legacy Crescent Park Greer, SC 100% 13,560 1,710 19,090 20,800 (60 ) 1,710 19,030 20,740 (2,930 ) 2008 05/03/2012 Legacy at Martin’s Point Lombard, IL 100% 21,866 3,500 31,950 35,450 2,150 3,500 34,100 37,600 (5,539 ) 1989/2009 05/31/2012 Wesley Village Charlotte, NC 100% 26,862 5,000 39,915 44,915 (453 ) 5,057 39,405 44,462 (4,969 ) 2009 11/06/2012 Watertower Apartments Eden Prairie, MN 100% 23,943 4,100 34,275 38,375 401 4,100 34,676 38,776 (4,309 ) 2004 01/15/2013 Crystal Park at Waterford Frederick, MD 100% 27,013 5,666 39,234 44,900 1,174 5,666 40,408 46,074 (5,130 ) 1990 05/08/2013 Millennium Apartment Homes Greenville, SC 100% 20,190 2,772 30,828 33,600 (302 ) 2,772 30,526 33,298 (3,638 ) 2009 06/07/2013 Legacy Grand at Concord Concord, NC 100% 22,392 1,465 26,502 27,967 (90 ) 1,465 26,412 27,877 (2,352 ) 2010 02/18/2014 Lofts at the Highlands St. Louis, MO 100% 30,754 3,000 32,996 35,996 (153 ) 3,000 32,843 35,843 (2,724 ) 2006 02/25/2014 TOTAL $ 282,605 $ 46,771 $ 363,720 $ 410,491 $ 3,360 $ 46,828 $ 367,023 $ 413,851 $ (47,591 ) _____________________ (1) Building and improvements include tenant origination and absorption costs. (2) Costs capitalized subsequent to acquisition is net of write-offs of fully depreciated/amortized assets. (3) The aggregate cost of real estate for federal income tax purposes was $438.2 million (unaudited) as of December 31, 2016 . 2016 2015 2014 Real Estate: Balance at the beginning of the year $ 412,047 $ 410,207 $ 343,634 Acquisitions — — 63,963 Improvements 2,109 2,506 4,596 Write-off of fully depreciated and fully amortized assets (160 ) (455 ) (1,301 ) Loss due to property damages (145 ) (211 ) (685 ) Balance at the end of the year $ 413,851 $ 412,047 $ 410,207 Accumulated depreciation and amortization: Balance at the beginning of the year $ 35,713 $ 24,344 $ 13,317 Depreciation and amortization expense 12,038 11,824 12,328 Write-off of fully depreciated and fully amortized assets (160 ) (455 ) (1,301 ) Balance at the end of the year $ 47,591 $ 35,713 $ 24,344 |
SUMMARY OF SIGNIFICANT ACCOUN17
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Principles of Consolidation and Basis of Presentation | The consolidated financial statements include the accounts of the Company, REIT Holdings, the Operating Partnership and their direct and indirect wholly owned subsidiaries. All significant intercompany balances and transactions are eliminated in consolidation. The consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) as contained within the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) and the rules and regulations of the SEC. |
Use of Estimates | The preparation of the consolidated financial statements and accompanying notes thereto in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could materially differ from those estimates. |
Reclassifications | Certain amounts in the Company’s prior period consolidated financial statements have been reclassified to conform to the current period presentation. These reclassifications have not changed the results of operations of prior periods. During the year ended December 31, 2016, the Company elected to early adopt ASU No. 2016-18 (as defined below). As a result, the Company no longer presents the changes within restricted cash in the consolidated statements of cash flows. Instead, restricted cash is included with cash and cash equivalents when reconciling the beginning of period and end of period total amounts shown on the consolidated statements of cash flows. |
Revenue Recognition | The Company leases apartment units under operating leases with terms generally of one year or less. Generally, credit investigations will be performed for prospective residents and security deposits will be obtained. The Company recognizes rental revenue, net of concessions, on a straight-line basis over the term of the lease, when collectibility is reasonably assured. The Company will recognize gains on sales of real estate either in total or deferred for a period of time, depending on whether a sale has been consummated, the extent of the buyer’s investment in the property being sold, whether the receivable of the Company is subject to future subordination, and the degree of the Company’s continuing involvement with the property after the sale. If the criteria for profit recognition under the full-accrual method are not met, the Company will defer gain recognition and account for the continued operations of the property by applying the percentage-of-completion, reduced profit, deposit, installment or cost recovery method, as appropriate, until the appropriate criteria are met. Other income, including interest earned on the Company’s cash, is recognized as it is earned. |
Real Estate, Depreciation and Amortization | Real estate properties are carried at cost and depreciated using the straight-line method over the estimated useful lives of 40 years for buildings, 10 – 20 years for building improvements, 10 – 20 years for land improvements and five to 12 years for computer, furniture, fixtures and equipment. Costs directly associated with the development of land and those incurred during construction are capitalized as part of the investment basis. Acquisition costs are expensed as incurred. Operating expenses incurred that are not related to the development and construction of the real estate investments are expensed as incurred. Repair, maintenance and tenant turnover costs are expensed as incurred and significant replacements and improvements are capitalized. Repair, maintenance and tenant turnover costs include all costs that do not extend the useful life of the real estate property. The Company considers the period of future benefit of an asset to determine its appropriate useful life. Intangible assets related to in-place leases are amortized to expense over the average remaining non-cancelable terms of the respective in-place leases. |
Real Estate, Real Estate Acquisition Valuation | The Company records the acquisition of income-producing real estate or real estate that will be used for the production of income as a business combination. All assets acquired and liabilities assumed in a business combination are measured at their acquisition-date fair values. Acquisition costs are expensed as incurred and restructuring costs that do not meet the definition of a liability at the acquisition date are expensed in periods subsequent to the acquisition date. Intangible assets include the value of in-place leases, which represents the estimated value of the net cash flows of the in-place leases to be realized, as compared to the net cash flows that would have occurred had the property been vacant at the time of acquisition and subject to lease-up. Acquired in-place lease values are amortized to expense over the average remaining non-cancelable terms of the respective in-place leases. The Company assesses the acquisition-date fair values of all tangible assets, identifiable intangibles and assumed liabilities using methods similar to those used by independent appraisers, generally utilizing a discounted cash flow analysis that applies appropriate discount and/or capitalization rates and available market information. Estimates of future cash flows are based on a number of factors, including historical operating results, known and anticipated trends, and market and economic conditions. The fair value of tangible assets of an acquired property considers the value of the property as if it were vacant. The Company records above-market and below-market in-place lease values for acquired properties based on the present value (using a discount rate that reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to the in-place leases and (ii) management’s estimate of fair market lease rates for the corresponding in-place leases, measured over a period equal to the remaining non-cancelable term of above-market in-place leases and for the initial term plus any extended term for any leases with below-market renewal options. The Company amortizes any recorded above-market or below-market lease values as a reduction or increase, respectively, to rental income over the remaining non-cancelable terms of the respective lease, including any below-market renewal periods. The Company estimates the value of tenant origination and absorption costs by considering the estimated carrying costs during hypothetical expected lease-up periods, considering current market conditions. In estimating carrying costs, management includes real estate taxes, insurance and other operating expenses and estimates of lost rentals at market rates during the expected lease-up periods. The Company amortizes the value of tenant origination and absorption costs to depreciation and amortization expense over the remaining non-cancelable term of the leases. Estimates of the fair values of the tangible assets, identifiable intangibles and assumed liabilities require the Company to make significant assumptions to estimate market lease rates, property-operating expenses, carrying costs during lease-up periods, discount rates, market absorption periods, and the number of years the property will be held for investment. The use of inappropriate assumptions would result in an incorrect valuation of the Company’s acquired tangible assets, identifiable intangibles and assumed liabilities, which would impact the amount of the Company’s net income. |
Real Estate, Impairments of Real Estate and Related Intangible Assets and Liabilities | The Company continually monitors events and changes in circumstances that could indicate that the carrying amounts of its real estate and related intangible assets and liabilities may not be recoverable or realized. When indicators of potential impairment suggest that the carrying value of real estate and related intangible assets and liabilities may not be recoverable, the Company will assess the recoverability by estimating whether the Company will recover the carrying value of the real estate and related intangible assets and liabilities through its undiscounted future cash flows and its eventual disposition. If, based on this analysis, the Company does not believe that it will be able to recover the carrying value of the real estate and related intangible assets and liabilities, the Company would record an impairment loss to the extent that the carrying value exceeds the estimated fair value of the real estate and related intangible assets and liabilities. The Company did not record any impairment loss on its real estate and related intangible assets and liabilities during the years ended December 31, 2016 , 2015 and 2014 . |
Real Estate, Insurance Proceeds for Property Damage | The Company maintains an insurance policy that provides coverage for property damage and business interruption. Losses due to physical damage are recognized during the accounting period in which they occur while the amount of monetary assets to be received from the insurance policy is recognized when receipt of insurance recoveries is probable. Losses, which are reduced by the related probable insurance recoveries, are recorded as operating, maintenance and management expenses on the accompanying consolidated statements of operations. Anticipated proceeds in excess of recognized losses would be considered a gain contingency and recognized when the contingency related to the insurance claim has been resolved. Anticipated recoveries for lost rental revenue due to property damage are also considered to be a gain contingency and recognized when the contingency related to the insurance claim has been resolved. |
Cash and Cash Equivalents | The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Cash equivalents may include cash and short term investments. Cash and cash equivalents are stated at cost, which approximates fair value. There are no restrictions on the use of the Company’s cash and cash equivalents as of December 31, 2016 . The Company’s cash and cash equivalents balance exceeds federally insurable limits as of December 31, 2016 . The Company monitors the cash balances in its operating accounts and adjusts the cash balances as appropriate; however, these cash balances could be impacted if the underlying financial institutions fail or are subject to other adverse conditions in the financial markets. To date, the Company has experienced no loss or lack of access to cash in its operating accounts. |
Restricted Cash | Restricted cash is comprised of lender impound reserve accounts for property taxes and insurance proceeds for property damages. |
Deferred Financing Costs | Deferred financing costs represent commitment fees, loan fees, legal fees and other third-party costs associated with obtaining financing and are presented on the balance sheet as a direct deduction from the carrying value of the associated debt liability. These costs are amortized over the terms of the respective financing agreements using the interest method. Unamortized deferred financing costs are generally expensed when the associated debt is refinanced or repaid before maturity unless specific rules are met that would allow for the carryover of such costs to the refinanced debt. Deferred financing costs incurred before an associated debt liability is recognized are included in prepaid and other assets on the balance sheet. Costs incurred in seeking financing transactions that do not close are expensed in the period in which it is determined that the financing will not close. |
Fair Value Measurements | Under GAAP, the Company is required to measure certain financial instruments at fair value on a recurring basis. In addition, the Company is required to measure other non-financial and financial assets at fair value on a non-recurring basis (e.g., carrying value of impaired real estate loans receivable and long-lived assets). Fair value, as defined under GAAP, is the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The GAAP fair value framework uses a three-tiered approach. Fair value measurements are classified and disclosed in one of the following three categories: • Level 1: unadjusted quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities; • Level 2: quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations in which significant inputs and significant value drivers are observable in active markets; and • Level 3: prices or valuation techniques where little or no market data is available that requires inputs that are both significant to the fair value measurement and unobservable. When available, the Company utilizes quoted market prices from independent third-party sources to determine fair value and classifies such items in Level 1 or Level 2. In instances where the market for a financial instrument is not active, regardless of the availability of a nonbinding quoted market price, observable inputs might not be relevant and could require the Company to make a significant adjustment to derive a fair value measurement. Additionally, in an inactive market, a market price quoted from an independent third party may rely more on models with inputs based on information available only to that independent third party. When the Company determines the market for a financial instrument owned by the Company to be illiquid or when market transactions for similar instruments do not appear orderly, the Company will use several valuation sources (including internal valuations, discounted cash flow analysis and quoted market prices) and will establish a fair value by assigning weights to the various valuation sources. Changes in assumptions or estimation methodologies can have a material effect on these estimated fair values. In this regard, the derived fair value estimates cannot be substantiated by comparison to independent markets and, in many cases, may not be realized in an immediate settlement of the instrument. The Company considers the following factors to be indicators of an inactive market: (i) there are few recent transactions, (ii) price quotations are not based on current information, (iii) price quotations vary substantially either over time or among market makers (for example, some brokered markets), (iv) indexes that previously were highly correlated with the fair values of the asset or liability are demonstrably uncorrelated with recent indications of fair value for that asset or liability, (v) there is a significant increase in implied liquidity risk premiums, yields, or performance indicators (such as delinquency rates or loss severities) for observed transactions or quoted prices when compared with the Company’s estimate of expected cash flows, considering all available market data about credit and other nonperformance risk for the asset or liability, (vi) there is a wide bid-ask spread or significant increase in the bid-ask spread, (vii) there is a significant decline or absence of a market for new issuances (that is, a primary market) for the asset or liability or similar assets or liabilities, and (viii) little information is released publicly (for example, a principal-to-principal market). The Company considers the following factors to be indicators of non-orderly transactions: (i) there was not adequate exposure to the market for a period before the measurement date to allow for marketing activities that are usual and customary for transactions involving such assets or liabilities under current market conditions, (ii) there was a usual and customary marketing period, but the seller marketed the asset or liability to a single market participant, (iii) the seller is in or near bankruptcy or receivership (that is, distressed), or the seller was required to sell to meet regulatory or legal requirements (that is, forced), and (iv) the transaction price is an outlier when compared with other recent transactions for the same or similar assets or liabilities. |
Dividend Reinvestment Plan | The Company has adopted a dividend reinvestment plan through which common stockholders may elect to reinvest an amount equal to the distributions declared on their shares in additional shares of the Company’s common stock in lieu of receiving cash distributions. Pursuant to the dividend reinvestment plan, the purchase price of shares of the Company’s common stock issued under the dividend reinvestment plan was equal to 95% of the price to acquire a share of common stock in one of the Company’s primary Offerings. At such time as the Company announces an estimated value per share of its common stock for a purpose other than to set the price to acquire a share in one of the primary Offerings, participants in the dividend reinvestment plan will acquire shares of common stock under the dividend reinvestment plan at a price equal to 95% of the estimated value per share of the Company’s common stock. On March 6, 2014, the Company’s board of directors approved an updated primary offering price for the Company’s common stock in the Follow-on Offering of $10.96 (unaudited) based on the estimated value of the Company’s assets less the estimated value of the Company’s liabilities, divided by the number of shares outstanding, all as of December 31, 2013 and increased for certain offering and other costs. Pursuant to the terms of the dividend reinvestment plan, effective on the next purchase date under the plan, which occurred on April 1, 2014, the purchase price per share under the dividend reinvestment plan was $10.42 , which is equal to 95% of $10.96 . On December 9, 2014, the Company’s board of directors approved an estimated value per share of the Company’s common stock of $10.14 (unaudited) based on the estimated value of the Company’s assets less the estimated value of the Company’s liabilities, divided by the number of shares outstanding, all as of September 30, 2014. Pursuant to the terms of the dividend reinvestment plan, effective on the next purchase date under the plan, which occurred on January 2, 2015, the purchase price per share under the dividend reinvestment plan was $9.64 , which is equal to 95% of $10.14 . On December 8, 2015, the Company’s board of directors approved an estimated value per share of the Company’s common stock of $10.29 (unaudited) based on the estimated value of the Company’s assets less the estimated value of the Company’s liabilities, divided by the number of shares outstanding, all as of September 30, 2015. Pursuant to the terms of the dividend reinvestment plan, effective on the next purchase date under the plan, which occurred on January 4, 2016, the purchase price per share under the dividend reinvestment plan was $9.78 , which is equal to 95% of $10.29 . On December 9, 2016, the Company’s board of directors approved an estimated value per share of the Company’s common stock of $9.35 (unaudited) based on the estimated value of the Company’s assets less the estimated value of the Company’s liabilities, divided by the number of shares outstanding, all as of September 30, 2016. Pursuant to the terms of the dividend reinvestment plan, effective on the next purchase date under the plan, which occurred on January 3, 2017, the purchase price per share under the dividend reinvestment plan is $8.89 , which is equal to 95% of $9.35 . The Company currently expects to utilize an independent valuation firm to update the estimated value per share in December 2017. The board of directors of the Company may amend or terminate the dividend reinvestment plan for any reason upon 10 days’ notice to participants. As provided under the dividend reinvestment plan, for a participant to terminate participation effective for a particular distribution, the Company must have received notice of termination from the participant at least four business days prior to the last business day of the month to which the distribution relates. Also as provided under the dividend reinvestment plan, and in addition to the standard termination procedures, a dividend reinvestment plan participant shall have no less than two business days after the date the Company publicly announces an updated estimated value per share in a filing with the SEC to terminate participation. |
Redeemable Common Stock | Pursuant to the Company’s share redemption program, there are several limitations on the Company's ability to redeem shares: • Unless the shares are being redeemed in connection with a stockholder’s death, “qualifying disability,” or “determination of incompetence” (both as defined in the share redemption program and together with redemptions in connection with a stockholder’s death, “Special Redemptions”), the Company may not redeem shares until the stockholder has held his or her shares for one year. • During any calendar year, the Company may redeem no more than 5% of the weighted-average number of shares outstanding during the prior calendar year. • The Company has no obligation to redeem shares if the redemption would violate the restrictions on distributions under Maryland law, which prohibits distributions that would cause a corporation to fail to meet statutory tests of solvency. • The Company may redeem only the number of shares that it could purchase with the amount of the net proceeds from the sale of shares under its dividend reinvestment plan during the prior calendar year; provided that it may not redeem more than $2.0 million of shares in the aggregate during any calendar year. Furthermore, during any calendar year, once the Company has redeemed $1.5 million of shares under its share redemption program, including in connection with Special Redemptions, the remaining $0.5 million of the $2.0 million annual limit shall be reserved exclusively for shares being redeemed in connection with Special Redemptions. Notwithstanding anything contained in this paragraph to the contrary, Company’s board of directors may amend, suspend or terminate the share redemption program without stockholder approval upon 30 days’ notice, provided the Company may increase or decrease the funding available for the redemption of shares pursuant to the program upon ten business days’ notice to its stockholders. The Company may provide this notice by including such information (a) in a Current Report on Form 8-K or in the Company’s annual or quarterly reports, all publicly filed with the SEC or (b) in a separate mailing to its stockholders. In January 2016, the Company exhausted the $1.5 million of funds available for all redemptions for 2016 and in August 2016, the Company exhausted the remaining $0.5 million of funds available for Special Redemptions for 2016. As of December 31, 2016 , the Company had $1.4 million of outstanding and unfulfilled ordinary redemption requests and $0.3 million of outstanding and unfulfilled Special Redemption requests. The annual limitation was reset on January 1, 2017, and the Company had an aggregate of $2.0 million of funds available for all redemptions, subject to the limitations in the share redemption program, including the requirement that the first $1.5 million of funds is available for all redemptions and the last $0.5 million is available solely for Special Redemptions. The Company exhausted the $1.5 million of funds available for all redemptions for 2017 in January 2017 and an aggregate of $0.3 million of funds available for Special Redemptions for 2017 in January and February 2017. As such, the Company will only be able to process $0.2 million of redemption requests related to Special Redemptions for the remainder of 2017. Pursuant to the Company’s share redemption program, redemptions made in connection with a Special Redemption are made at a price per share equal to the most recent estimated value per share of the Company’s common stock as of the applicable redemption date. The price at which the Company redeems all other shares eligible for redemption is as follows: • For those shares held by the redeeming stockholder for at least one year, 92.5% of the Company’s most recent estimated value per share as of the applicable redemption date; • For those shares held by the redeeming stockholder for at least two years, 95.0% of the Company’s most recent estimated value per share as of the applicable redemption date; • For those shares held by the redeeming stockholder for at least three years, 97.5% of the Company’s most recent estimated value per share as of the applicable redemption date; and • For those shares held by the redeeming stockholder for at least four years, 100% of the Company’s most recent estimated value per share as of the applicable redemption date. If the Company cannot redeem all shares presented for redemption in any month because of the limitations on redemptions set forth in its share redemption program, then the Company will honor redemption requests on a pro rata basis, except that if a pro rata redemption would result in a stockholder owning less than the minimum purchase requirement described in the Company’s currently effective, or the most recently effective, registration statement as such registration statement has been amended or supplemented, then the Company would redeem all of such stockholder’s shares. On December 8, 2015, the Company’s board of directors approved an estimated value per share of its common stock of $10.29 (unaudited) based on the estimated value of the Company’s assets less the estimated value of its liabilities, divided by the number of shares outstanding, all as of September 30, 2015. For a full description of the assumptions and methodologies used to value the Company's assets and liabilities in connection with the calculation of the December 2015 estimated value per share, see the Company's Annual Report on Form 10-K for the year ended December 31, 2015 at Part II, Item 5, “Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities — Market Information.” On December 9, 2016, the Company’s board of directors approved an estimated value per share of the Company's common stock of $9.35 (unaudited) based on the estimated value of the Company’s assets less the estimated value of its liabilities, divided by the number of shares outstanding, all as of September 30, 2016. This estimated value per share became effective for the December 2016 redemption date, which was December 30, 2016. For a full description of the methodologies used to value the Company's assets and liabilities in connection with the calculation of the December 2016 estimated value per share, see Part II, Item 5, “Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities — Market Information” herein. The Company will record amounts that are redeemable under the share redemption program as redeemable common stock in its consolidated balance sheets because the shares will be mandatorily redeemable at the option of the holder and therefore their redemption will be outside the control of the Company. The maximum amount redeemable under the Company’s share redemption program is limited to the number of shares the Company could redeem with the amount of the net proceeds from the sale of shares under the dividend reinvestment plan during the prior calendar year; provided, that the Company may not redeem more than $2.0 million of shares in the aggregate during any calendar year. Furthermore, during any calendar year, once the Company has redeemed $1.5 million of shares under the share redemption program, including redemptions in connection with Special Redemptions, the remaining $0.5 million of the $2.0 million annual limit shall be reserved exclusively for shares being redeemed in connection with a Special Redemption. However, because the amounts that can be redeemed will be determinable and only contingent on an event that is likely to occur (e.g., the passage of time), the Company will present the net proceeds from the current year dividend reinvestment plan as redeemable common stock in its accompanying consolidated balance sheets. The Company will classify as liabilities financial instruments that represent a mandatory obligation of the Company to redeem shares. The Company’s redeemable common shares will be contingently redeemable at the option of the holder. When the Company determines it has a mandatory obligation to repurchase shares under the share redemption program, it will reclassify such obligations from temporary equity to a liability based upon their respective settlement values. During the year ended December 31, 2016 , the Company redeemed $2.0 million of common stock, which represented all redemption requests received in good order and eligible for redemption through the December 31, 2016 redemption date, except for 176,510 shares due to the limitations described above, of which 154,109 shares were redeemed in January 2017 and February 2017. The Company recorded $1.7 million of other liabilities on the Company’s consolidated balance sheets as of December 31, 2016 related to these unfulfilled redemption requests. |
Related Party Transactions | The Company has entered into the Advisory Agreement with the Advisor and the Follow-on Dealer Manager Agreement with the Dealer Manager. These agreements entitled the Advisor and/or the Dealer Manager to specified fees upon the provision of certain services with regard to the now-terminated Follow-on Offering and entitle the Advisor to specified fees upon the provision of certain services with regard to the management of the Company’s real estate properties, among other services (including, but not limited to, the disposition of investments), as well as reimbursement of organization and offering costs incurred by the Advisor and the Dealer Manager on behalf of the Company, such as expenses related to the dividend reinvestment plan, and certain costs incurred by the Advisor in providing services to the Company, such as acquisition expenses and certain operating expenses. In addition, the Advisor is entitled to certain other fees, including an incentive fee upon achieving certain performance goals, as detailed in the Advisory Agreement. On March 15, 2016, the Company and the Advisor entered into an amendment to the prior advisory agreement (the “Amended Advisory Agreement”) to amend certain terms related to the disposition fee payable to the Advisor by the Company. Prior to the amendment made in the Amended Advisory Agreement, the advisory agreement provided that if the Advisor or any of its affiliates provided a substantial amount of services (as determined by the conflicts committee) in connection with the sales of single assets, the Company would pay the Advisor or its affiliates a disposition fee of 1% of the contract sales price of the asset sold. The Amended Advisory Agreement provided that the 1% disposition fee may be payable upon the sale of a single asset or the sale of all or a portion of the Company’s assets through a portfolio sale, merger or other business combination transaction, if the conflicts committee determines that the Advisor or its affiliates has provided a substantial amount of services related to such sale. This change was included in the advisory agreement between the Company and the Advisor that was renewed on January 25, 2017. The Company has entered into a fee reimbursement agreement (the “AIP Reimbursement Agreement”) with the Dealer Manager pursuant to which the Company agreed to reimburse the Dealer Manager for certain fees and expenses it incurs for administering the Company’s participation in the DTCC Alternative Investment Product Platform (“AIP Platform”) with respect to certain accounts of the Company’s investors serviced through the platform. The Advisor and Dealer Manager also serve as the advisor and dealer manager, respectively, for KBS Real Estate Investment Trust, Inc., KBS Real Estate Investment Trust II, Inc., KBS Real Estate Investment Trust III, Inc., KBS Strategic Opportunity REIT, Inc., KBS Strategic Opportunity REIT II, Inc. and KBS Growth & Income REIT, Inc. The Company records all related party fees as incurred, subject to any limitations described in the Advisory Agreement. The Company did not incurred any disposition fees, subordinated participations in net cash flows, or subordinated incentive listing fees during the year ended December 31, 2016 . |
Related Party Transactions, Organization and Offering Costs | A portion of the organization and offering costs (other than selling commissions and dealer manager fees) of the Company are paid by the Advisor, the Dealer Manager or their affiliates on behalf of the Company. These organization and other offering costs include expenses paid by the Company in connection with the Follow-on Offering. Organization costs included all expenses incurred by the Company in connection with the formation of the Company, including but not limited to legal fees and other costs to incorporate the Company. Pursuant to the Advisory Agreement and the Dealer Manager Agreement, the Company is obligated to reimburse the Advisor, the Dealer Manager or their affiliates, as applicable, for organization and offering costs paid by them on behalf of the Company, provided that the Advisor is obligated to reimburse the Company to the extent selling commissions, dealer manager fees and other organization and offering costs incurred by the Company in the Follow-on Offering exceed 15% of gross offering proceeds. As a result, the Company is only liable for these costs up to an amount that, when combined with selling commissions and dealer manager fees, does not exceed 15% of the gross proceeds of the Follow-on Offering. Organization costs were expensed as incurred, and offering costs, which included selling commissions and dealer manager fees, were deferred and charged to stockholders’ equity as such amounts were reimbursed to the Advisor, the Dealer Manager or their affiliates from the gross proceeds of the Follow-on Offering. |
Related Party Transactions, Selling Commissions and Dealer Manager Fees | The Company paid the Dealer Manager up to 6.5% and 3.0% of the gross offering proceeds from the primary Follow-on Offering as selling commissions and dealer manager fees, respectively. A reduced sales commission and dealer manager fee was paid with respect to certain volume discount sales. No sales commission or dealer manager fee is paid with respect to shares issued through the dividend reinvestment plan. The Dealer Manager reallowed 100% of sales commissions earned to participating broker-dealers. The Dealer Manager could reallow to any participating broker-dealer up to 1% of the gross offering proceeds attributable to that participating broker-dealer as a marketing fee and, in special cases, the Dealer Manager could increase the reallowance. |
Related Party Transactions, Acquisition Advisory Fee | The Company paid the Advisor an acquisition advisory fee equal to 1% of the cost of investments acquired, including any acquisition expenses and any debt attributable to such investments. |
Related Party Transactions, Operating Expenses | Under the Advisory Agreement, the Advisor has the right to seek reimbursement from the Company for all costs and expenses it incurs in connection with the provision of services to the Company, including the Company’s allocable share of the Advisor’s overhead, such as rent, employee costs, accounting software and cybersecurity costs. In addition, the Sub-Advisor has the right to seek reimbursement for certain marketing research costs and property pursuit costs it incurs. Commencing July 1, 2010, the Company has reimbursed the Advisor for the Company’s allocable portion of the salaries, benefits and overhead of internal audit department personnel providing services to the Company. In the future, the Advisor may seek reimbursement for additional employee costs. The Company will not reimburse the Advisor for employee costs in connection with services for which the Advisor earns acquisition, origination or disposition fees (other than reimbursement of travel and communication expenses) or for the salaries and benefits the Advisor or its affiliates may pay to the Company’s executive officers. |
Related Party Transactions, Assets Management Fee | Until August 13, 2013, the asset management fee payable to the Advisor with respect to investments in real estate was equal to one twelfth of 1.0% of the amount paid to fund the acquisition, development, construction or improvement of the investment, inclusive of acquisition expenses related thereto (but excluding any acquisition fees related thereto). The amount paid included any portion of the investment that was debt financed. In the case of investments made through joint ventures, the asset management fee was determined based on the Company’s proportionate share of the underlying investment. Effective August 14, 2013, the asset management fee payable by the Company to the Advisor with respect to investments in real estate is a monthly fee equal to the lesser of one-twelfth of (i) 1.0% of the amount paid or allocated to fund the acquisition, development, construction or improvement of the property (whether at or subsequent to acquisition), including acquisition expenses and budgeted capital improvement costs (regardless of the level of debt used to finance the investment), and (ii) 2.0% of the amount paid or allocated to fund the acquisition, development, construction or improvement of the property (whether at or subsequent to acquisition), including acquisition expenses and budgeted capital improvement costs, less any debt used to finance the investment. For more information, see Note 6, “Related Party Transactions - Advisory Agreement - Asset Management Fee.” |
Property Management Fees | During the year ended December 31, 2015, the Company, through indirect wholly owned subsidiaries (each, a “Property Owner”), entered into property management agreements with Legacy Partners, Inc., formerly known as Legacy Partners Residential, Inc. (“LPI”), an affiliate of the Sub-Advisor (each, a “Property Management Agreement”), pursuant to which LPI will provide, among other services, general property management services, including bookkeeping and accounting services for each of the Company’s real estate properties. Under the Property Management Agreements, each Property Owner will pay LPI: (i) a monthly fee based on the Management Fee Percentage (as described below), (ii) a construction supervision fee equal to a percentage of construction costs to the extent overseen by LPI and as further detailed in each Property Management Agreement, (iii) a leasing commission at a rate to be agreed upon between the Property Owner and LPI for retail leases executed that were procured or obtained by LPI, (iv) certain reimbursements if included in an approved capital budget and (v) certain reimbursements if included in the approved operating budget, including the reimbursement of the salaries and benefits for on-site personnel. For more information, see Note 6, “Related Party Transactions - Advisory Agreement - Property Management Agreements.” |
Insurance Program | On January 6, 2014, the Company, together with KBS Real Estate Investment Trust, Inc., KBS Real Estate Investment Trust II, Inc., KBS Real Estate Investment Trust III, Inc., KBS Strategic Opportunity REIT, Inc., KBS Strategic Opportunity REIT II, Inc., the Dealer Manager, the Advisor and other KBS-affiliated entities, entered into an errors and omissions and directors and officers liability insurance program where the lower tiers of such insurance coverage are shared. The cost of these lower tiers is allocated by the Advisor and its insurance broker among each of the various entities covered by the program, and is billed directly to each entity. The allocation of these shared coverage costs is proportionate to the pricing by the insurance marketplace for the first tiers of directors and officers liability coverage purchased individually by each REIT. The Advisor’s and the Dealer Manager’s portion of the shared lower tiers’ cost is proportionate to the respective entities’ prior cost for the errors and omissions insurance. In June 2015, KBS Growth & Income REIT, Inc. was added to the insurance program at terms similar to those described above. The Company has renewed its participation in the program, and the program is effective through June 30, 2017. |
Income Taxes | The Company has elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended. To qualify as a REIT, the Company must meet certain organizational and operational requirements, including a requirement to distribute at least 90% of the Company’s annual REIT taxable income to its stockholders (which is computed without regard to the dividends-paid deduction or net capital gain and which does not necessarily equal net income as calculated in accordance with GAAP). As a REIT, the Company generally will not be subject to federal income tax on income that it distributes as dividends to its stockholders. If the Company fails to qualify as a REIT in any taxable year, it will be subject to federal income tax on its taxable income at regular corporate income tax rates and generally will not be permitted to qualify for treatment as a REIT for federal income tax purposes for the four taxable years following the year during which qualification is lost unless the Internal Revenue Service grants the Company relief under certain statutory provisions. Such an event could materially and adversely affect the Company’s net income and net cash available for distribution to stockholders. However, the Company believes that it is organized and operates in such a manner as to qualify for treatment as a REIT. The Company has concluded that there are no significant uncertain tax positions requiring recognition in its financial statements. Neither the Company nor its subsidiaries have been assessed interest or penalties by any major tax jurisdictions. The Company’s evaluations were performed for all open tax years through December 31, 2016 . As of December 31, 2016 , returns for calendar years 2011 through 2015 remain subject to examination by major tax jurisdictions. |
Segments | The Company had invested in 11 apartment complexes as of December 31, 2016 . Substantially all of the Company’s revenue and net (loss) is from real estate, and therefore, the Company currently operates in one reportable segment. |
Per Share Data | Basic net income (loss) per share of common stock is calculated by dividing net income (loss) by the weighted-average number of shares of common stock issued and outstanding during such period. Diluted net income (loss) per share of common stock equals basic net income (loss) per share of common stock as there were no potentially dilutive securities outstanding during the years ended December 31, 2016 , 2015 and 2014 . Distributions declared per common share were $0.650 for the years ended December 31, 2016 , 2015 and 2014 , respectively. Distributions declared per common share assumes each share was issued and outstanding each day from January 1, 2014 through December 31, 2016 . For each day that was a record date for distributions during the period from January 1, 2014 through December 31, 2016 , distributions were calculated at a rate of $0.00178082 per share per day. Each day during the periods from January 1, 2014 through February 28, 2016 and March 1, 2016 through December 31, 2016 was a record date for distributions. |
Square Footage, Occupancy and Other Measures | Square footage, occupancy and other measures, including annualized base rent and annualized base rent per square foot, used to describe real estate investments included in the Notes to Consolidated Financial Statements are presented on an unaudited basis. |
Recently Issued Accounting Standards Update | In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU No. 2014-09”). ASU No. 2014-09 requires an entity to recognize the revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. ASU No. 2014-09 supersedes the revenue requirements in Revenue Recognition (Topic 605) and most industry-specific guidance throughout the Industry Topics of the Codification. ASU No. 2014-09 does not apply to lease contracts within the scope of Leases (Topic 840). ASU No. 2014-09 was to be effective for fiscal years, and interim periods within those years, beginning after December 15, 2016, and is to be applied retrospectively, with early application not permitted. In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date (“ASU No. 2015-14”), which defers the effective date of ASU No. 2014-09 by one year. Early adoption is permitted but not before the original effective date. As the primary source of revenue for the Company is generated through leasing arrangements, which are scoped out of this standard, the Company does not expect the adoption of ASU No. 2014-09 to have a significant impact on its financial statements. In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements ( Subtopic 205-40 ), Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (“ASU No. 2014-15”). The amendments in ASU No. 2014-15 require management to evaluate, for each annual and interim reporting period, whether there are conditions or events, considered in the aggregate, that raise substantial doubt about an entity’s ability to continue as a going concern within one year after the date that the financial statements are issued (or are available to be issued when applicable) and, if so, provide related disclosures. ASU No. 2014-15 is effective for annual periods ending after December 15, 2016, and interim periods within annual periods beginning after December 15, 2016. The adoption of ASU No. 2014-15 did not have a significant impact on the Company's financial statements, although it could require additional disclosures in future periods if conditions or events exist that raise substantial doubt about the Company’s ability to continue as a going concern. In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU No. 2016-01”). The amendments in ASU No. 2016-01 address certain aspects of recognition, measurement, presentation and disclosure of financial instruments. ASU No. 2016-01 primarily affects accounting for equity investments and financial liabilities where the fair value option has been elected. ASU No. 2016-01 also requires entities to present financial assets and financial liabilities separately, grouped by measurement category and form of financial asset in the balance sheet or in the accompanying notes to the financial statements. ASU No. 2016-01 is effective for annual periods beginning after December 15, 2017, including interim periods within those fiscal years. Early application is permitted for financial statements that have not been previously issued. The Company does not expect the adoption of ASU No. 2016-01 to have a significant impact on its financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU No. 2016-02”). The amendments in ASU No. 2016-02 change the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets and making targeted changes to lessor accounting. ASU No. 2016-02 is effective for annual periods beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption of ASU No. 2016-02 as of its issuance is permitted. The new leases standard requires a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief. The Company is currently evaluating the impact of adopting the new leases standard on its consolidated financial statements. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (“ASU No. 2016-15”). ASU No. 2016-15 is intended to reduce diversity in practice in how certain transactions are classified in the statement of cash flows. The amendments in ASU No. 2016-15 provide guidance on eight specific cash flow issues, including the following that are or may be relevant to the Company: (a) Cash payments for debt prepayment or debt extinguishment costs should be classified as cash outflows for financing activities; (b) Cash payments relating to contingent consideration made soon after an acquisition’s consummation date (i.e., approximately three months or less) should be classified as cash outflows for investing activities. Payments made thereafter should be classified as cash outflows for financing activities up to the amount of the original contingent consideration liability. Payments made in excess of the amount of the original contingent consideration liability should be classified as cash outflows for operating activities; (c) Cash payments received from the settlement of insurance claims should be classified on the basis of the nature of the loss (or each component loss, if an entity receives a lump-sum settlement); (d) In the absence of specific guidance, an entity should classify each separately identifiable cash source and use on the basis of the nature of the underlying cash flows. For cash flows with aspects of more than one class that cannot be separated, the classification should be based on the activity that is likely to be the predominant source or use of cash flow. ASU No. 2016-15 is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. The Company is still evaluating the impact of adopting ASU No. 2016-15 on its financial statements, but does not expect the adoption of ASU No. 2016-15 to have a material impact to its financial statements. In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (“ASU No. 2016-18”). ASU No. 2016-18 requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, restricted cash and restricted cash equivalents. Therefore, amounts generally described as restricted cash should be included with cash and cash equivalents when reconciling the beginning of period and end of period total amounts shown on the statement of cash flows. ASU No. 2016-18 is effective for annual periods beginning after December 15, 2017, including interim periods within those fiscal years. The Company elected to early adopt ASU No. 2016-18 for the reporting period ending December 31, 2016 and was applied retrospectively. As a result of the adoption of ASU No. 2016-18, the Company no longer presents the changes within restricted cash in the consolidated statements of cash flows. In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business (“ASU No. 2017-01”) to add guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. ASU No. 2017-01 provides a screen to determine when an integrated set of assets and activities (collectively referred to as a “set”) is not a business. The screen requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. If the screen is not met, ASU No. 2017-01 (1) requires that to be considered a business, a set must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create output and (2) removes the evaluation of whether a market participant could replace missing elements. ASU No. 2017-01 provides a framework to assist entities in evaluating whether both an input and a substantive process are present. The framework includes two sets of criteria to consider that depend on whether a set has outputs. Although outputs are not required for a set to be a business, outputs generally are a key element of a business; therefore, the FASB has developed more stringent criteria for sets without outputs. ASU No. 2017-01 is effective for annual periods beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption is permitted. The amendments can be applied to transactions occurring before the guidance was issued (January 5, 2017) as long as the applicable financial statements have not been issued. The Company elected to early adopt ASU No. 2017-01 for the reporting period beginning January 1, 2017. As a result of the adoption of ASU No. 2017-01, the Company’s acquisitions of investment properties beginning January 1, 2017 could qualify as an asset acquisition (as opposed to a business combination). Therefore, transaction costs associated with asset acquisitions will be capitalized, while these costs associated with business combinations will continue to be expensed as incurred. |
REAL ESTATE (Tables)
REAL ESTATE (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Real Estate [Abstract] | |
Schedule of Real Estate Investments | The following table provides summary information regarding the properties owned by the Company as of December 31, 2016 (dollars in thousands): Property Name Date Acquired Location Total Real Estate, Cost Accumulated Depreciation and Amortization Total Real Estate, Net Legacy at Valley Ranch 10/26/2010 Irving, TX $ 36,524 $ (5,200 ) $ 31,324 Poplar Creek 02/09/2012 Schaumburg, IL 27,321 (2,982 ) 24,339 The Residence at Waterstone 04/06/2012 Pikesville, MD 65,336 (7,818 ) 57,518 Legacy Crescent Park 05/03/2012 Greer, SC 20,740 (2,930 ) 17,810 Legacy at Martin’s Point 05/31/2012 Lombard, IL 37,600 (5,539 ) 32,061 Wesley Village 11/06/2012 Charlotte, NC 44,461 (4,969 ) 39,492 Watertower Apartments 01/15/2013 Eden Prairie, MN 38,776 (4,309 ) 34,467 Crystal Park at Waterford 05/08/2013 Frederick, MD 46,075 (5,130 ) 40,945 Millennium Apartment Homes 06/07/2013 Greenville, SC 33,298 (3,638 ) 29,660 Legacy Grand at Concord 02/18/2014 Concord, NC 27,876 (2,352 ) 25,524 Lofts at the Highlands 02/25/2014 St. Louis, MO 35,844 (2,724 ) 33,120 $ 413,851 $ (47,591 ) $ 366,260 |
NOTES PAYABLE (Tables)
NOTES PAYABLE (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | As of December 31, 2016 and 2015 , the Company’s notes payable consisted of the following (dollars in thousands): Book Value as of December 31, 2016 Book Value as of December 31, 2015 Contractual Interest Rate as of December 31, 2016 Payment Type Maturity Date Legacy at Valley Ranch Mortgage Loan $ 30,958 $ 31,554 3.9% Principal & Interest 04/01/2019 Poplar Creek Mortgage Loan 19,414 19,785 4.0% Principal & Interest 03/01/2019 The Residence at Waterstone Mortgage Loan 45,653 46,550 3.8% Principal & Interest 05/01/2019 Legacy Crescent Park Mortgage Loan 13,560 13,858 3.5% Principal & Interest 06/01/2019 Legacy at Martin’s Point Mortgage Loan 21,866 22,330 3.3% Principal & Interest 06/01/2019 Wesley Village Mortgage Loan (1) 26,862 27,566 2.6% Principal & Interest 12/01/2017 Watertower Mortgage Loan 23,943 24,525 2.5% Principal & Interest 02/10/2018 Crystal Park Mortgage Loan 27,013 27,709 2.5% Principal & Interest 06/01/2018 Millennium Mortgage Loan 20,190 20,689 2.7% Principal & Interest 07/01/2018 Legacy Grand at Concord Mortgage Loan 22,392 22,693 4.1% Principal & Interest 12/01/2050 Lofts at the Highlands Mortgage Loan 30,754 31,190 3.4% Principal & Interest 08/01/2052 Total notes payable principal outstanding $ 282,605 $ 288,449 Discount on note payable, net (2,644 ) (2,731 ) Deferred financing costs, net (815 ) (1,230 ) Total notes payable, net $ 279,146 $ 284,488 ____________________ (1) On March 9, 2017, in connection with the disposition of Wesley Village, the Company paid off the Wesley Village Mortgage Loan. For information relating to the disposition of Wesley Village and repayment of the related note payable secured by Wesley Village, see Note 9, “Subsequent Events - Termination and Reinstatement of, and Amendments to, the Wesley Village Agreement; Disposition of Wesley Village.” |
Schedule of Maturities of Long-term Debt | The following is a schedule of maturities, including principal payments, for the Company’s notes payable outstanding as of December 31, 2016 (in thousands): 2017 $ 32,196 2018 72,958 2019 126,682 2020 852 2021 884 Thereafter 49,033 $ 282,605 |
FAIR VALUE DISCLOSURES (Tables)
FAIR VALUE DISCLOSURES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Schedule of Face Value, Carrying Amounts and Fair Value | The following were the face value, carrying amount and fair value of the Company’s notes payable as of December 31, 2016 and 2015 (dollars in thousands): December 31, 2016 December 31, 2015 Face Value Carrying Amount Fair Value Face Value Carrying Amount Fair Value Financial liabilities: Notes payable $ 282,605 $ 279,146 $ 279,258 $ 288,449 $ 284,488 $ 284,160 |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Costs | Pursuant to the terms of these agreements and the property management agreements discussed below, summarized below are the related-party costs incurred by the Company for the years ended December 31, 2016 , 2015 and 2014 , respectively, and any related amounts payable as of December 31, 2016 and 2015 (in thousands): Incurred Payable as of Years Ended December 31, December 31, 2016 2015 2014 2016 2015 Expensed Asset management fees (1) $ 399 $ 729 $ 2,598 $ — $ 4,752 Reimbursable operating expenses (2) 225 356 392 15 25 Acquisition fees on real properties — — 701 — — Property management fees and expenses (3) 5,811 3,523 281 142 117 Additional Paid-in Capital Selling commissions — — 363 — — Dealer manager fees — — 173 — — Reimbursable other offering costs (4) — — 59 — — $ 6,435 $ 4,608 $ 4,567 $ 157 $ 4,894 ____________________ (1) See “Advisory Agreement — Asset Management Fee” below. (2) Reimbursable operating expenses primarily consist of marketing research costs and property site visit expenses incurred by the Sub-Advisor and internal audit personnel costs, accounting software and cybersecurity related expenses incurred by the Advisor under the Advisory Agreement. Beginning July 1, 2010, the Company has reimbursed the Advisor for the Company’s allocable portion of the salaries, benefits and overhead of internal audit department personnel providing services to the Company. These amounts totaled $161,000 , $141,000 and $108,000 for the years ended December 31, 2016 , 2015 and 2014 , respectively, and were the only type of employee costs reimbursed under the Advisory Agreement through December 31, 2016 . The Company does not reimburse for employee costs in connection with services for which the Advisor earns acquisition or disposition fees (other than reimbursement of travel and communication expenses) or for the salaries or benefits the Advisor or its affiliates may pay to the Company’s executive officers. In addition to the amounts above, the Company reimburses the Advisor and Sub-Advisor for certain of the Company’s direct property operating costs incurred from third parties that were initially paid by the Advisor and Sub-Advisor on behalf of the Company. (3) Property management fees and expenses consist of property management fees paid to LPI, an affiliate of the Sub-Advisor, as well as reimbursable on-site personnel salary and related benefits expenses at the properties and through March 31, 2015, fees for account maintenance and bookkeeping services paid to Legacy Partners Residential L.P., an affiliate of the Sub-Advisor (“LPR”), under the now-terminated account services agreements. See “— Property Management Agreements.” (4) See “— Other Offering Costs Related to Follow-on Offering and Dividend Reinvestment Plan.” |
Schedule of Property Management Agreements | During the year ended December 31, 2015 , the Company, through the Property Owners, entered into the Property Management Agreements, pursuant to which LPI provides, among other services, general property management services, including bookkeeping and accounting services, construction management services and budgeting and business plans for the Company’s properties, as follows: Property Name Effective Date Management Fee Percentage Watertower Apartments 04/07/2015 2.75% Crystal Park at Waterford 04/14/2015 3.00% The Residence at Waterstone 04/28/2015 3.00% Lofts at the Highlands 05/05/2015 3.00% Legacy at Martin’s Point 05/12/2015 3.00% Poplar Creek 05/14/2015 3.00% Wesley Village 05/19/2015 3.00% Legacy Grand at Concord 05/21/2015 3.00% Millennium Apartment Homes (1) 05/27/2015 3.00% Legacy Crescent Park (1) 05/29/2015 3.00% Legacy at Valley Ranch 06/09/2015 3.00% ____________________ (1) Under the Property Management Agreement, the Property Owner will pay LPI the Management Fee Percentage in an amount equal to the greater of (a) 3% of the Gross Monthly Collections (as defined in the Property Management Agreement) or (b) $4,000 per month. |
SELECTED QUARTERLY FINANCIAL 22
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Unaudited Quarterly Financial Information | Presented below is a summary of the unaudited quarterly financial information for the years ended December 31, 2016 and 2015 (in thousands, except per share amounts): 2016 First Quarter Second Quarter Third Quarter Fourth Quarter Revenues $ 11,154 $ 11,367 $ 11,498 $ 11,282 Net income (loss) 86 (24 ) 5,040 19 Net income (loss) per common share, basic and diluted — — 0.24 0.01 Distributions declared per common share (1) 0.160 0.162 0.164 0.164 2015 First Quarter Second Quarter Third Quarter Fourth Quarter Revenues $ 11,056 $ 11,184 $ 11,330 $ 11,043 Net income 205 237 263 86 Net income per common share, basic and diluted 0.01 0.01 0.01 0.01 Distributions declared per common share (1) 0.160 0.162 0.164 0.164 _____________________ (1) Distributions declared per common shares assumes each share was issued and outstanding each day during the period from January 1, 2015 through December 31, 2016 . Each day during the periods from January 1, 2015 through February 28, 2016 and March 1, 2016 through December 31, 2016 was a record date for distributions. Distributions were calculated at a rate of $0.00178082 per share per day. |
ORGANIZATION (Details)
ORGANIZATION (Details) | 12 Months Ended | 14 Months Ended | 36 Months Ended | 46 Months Ended | 82 Months Ended | |||||
Dec. 31, 2016USD ($)propertyshares | Dec. 31, 2015USD ($)shares | Dec. 31, 2014USD ($)shares | Apr. 30, 2014USD ($)shares | Mar. 12, 2013USD ($)shares | Dec. 31, 2016USD ($)propertyshares | Dec. 31, 2016USD ($)propertyshares | May 31, 2012USD ($) | Aug. 19, 2009shares | Aug. 07, 2009$ / sharesshares | |
Organizational Structure [Line Items] | ||||||||||
Partnership interest in Operating Partnership | 0.10% | |||||||||
Partnership interest in the Operating Partnership and is its sole limited partner | 99.90% | |||||||||
Common stock, shares issued (in shares) | 20,896,268 | 20,508,397 | 20,896,268 | 20,896,268 | ||||||
Issuance of common stock, value | $ | $ 5,737,000 | $ 5,736,000 | $ 11,250,000 | $ 21,500,000 | $ 179,200,000 | $ 15,900,000 | ||||
Shares of common stock sold under dividend reinvestment plan, value | $ | $ 5,700,000 | $ 3,500,000 | $ 24,400,000 | |||||||
Redemptions of common stock, value | $ | $ 2,019,000 | $ 1,697,000 | $ 1,853,000 | |||||||
Apartment Complex [Member] | ||||||||||
Organizational Structure [Line Items] | ||||||||||
Number of real estate properties | property | 11 | 11 | 11 | |||||||
Common Stock [Member] | ||||||||||
Organizational Structure [Line Items] | ||||||||||
Shares of common stock authorized under dividend reinvestment plan (in shares) | 80,000,000 | |||||||||
Issuance of common stock (in shares) | 586,585 | 595,095 | 1,081,474 | 2,051,925 | 18,088,084 | 1,496,198 | 21,683,960 | |||
Issuance of common stock, value | $ | $ 6,000 | $ 6,000 | $ 11,000 | $ 215,900,000 | ||||||
Shares of common stock sold under dividend reinvestment plan (in shares) | 555,727 | 368,872 | 2,468,550 | |||||||
Redemptions of common stock (in shares) | 198,714 | 171,528 | 193,145 | 807,692 | ||||||
Redemptions of common stock, value | $ | $ 2,000 | $ 2,000 | $ 2,000 | $ 7,900,000 | ||||||
Common Stock [Member] | Minimum [Member] | ||||||||||
Organizational Structure [Line Items] | ||||||||||
Number of shares authorized to be repurchased (in shares) | 250,000 | |||||||||
Common Stock [Member] | Maximum [Member] | ||||||||||
Organizational Structure [Line Items] | ||||||||||
Number of shares authorized to be repurchased (in shares) | 280,000,000 | |||||||||
Stock offering, shares authorized for issuance, value | $ | $ 2,000,000,000 | |||||||||
Stock offering, shares authorized for dividend reinvestment plan, value | $ | $ 760,000,000 | |||||||||
KBS-Legacy Apartment Community REIT Venture, LLC [Member] | ||||||||||
Organizational Structure [Line Items] | ||||||||||
Common stock, shares issued (in shares) | 20,000 | |||||||||
Common stock, purchase price per share (in dollars per share) | $ / shares | $ 10 | |||||||||
KBS-Legacy Apartment Community REIT Venture, LLC [Member] | Common Stock [Member] | ||||||||||
Organizational Structure [Line Items] | ||||||||||
Shares held by affiliate (in shares) | 20,000 | 20,000 | 20,000 |
SUMMARY OF SIGNIFICANT ACCOUN24
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Useful Life) (Details) | 12 Months Ended |
Dec. 31, 2016 | |
Buildings [Member] | |
Property, Plant and Equipment [Line Items] | |
Useful life | 40 years |
Building Improvements [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Useful life | 10 years |
Building Improvements [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Useful life | 20 years |
Land Improvements [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Useful life | 10 years |
Land Improvements [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Useful life | 20 years |
Computer, Furniture, Fixtures and Equipment [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Useful life | 5 years |
Computer, Furniture, Fixtures and Equipment [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Useful life | 12 years |
SUMMARY OF SIGNIFICANT ACCOUN25
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Share Redemption Program Terms and Amendments) (Details) - USD ($) $ / shares in Units, $ in Thousands | Dec. 08, 2015 | Oct. 14, 2014 | Jan. 31, 2017 | Aug. 31, 2016 | Jan. 31, 2016 | Feb. 28, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 09, 2016 |
Equity, Class of Treasury Stock [Line Items] | |||||||||||
Percent of weighted-average shares outstanding that may be redeemed | 5.00% | ||||||||||
Stock repurchased during period, value | $ 1,500 | ||||||||||
Period of termination notice | 30 days | ||||||||||
Period of increase or decrease of funding available for redemption | 10 days | ||||||||||
Estimated value per share of Company's common stock (in dollars per share) | $ 10.29 | $ 9.35 | |||||||||
Redemptions of common stock, value | $ 2,019 | $ 1,697 | $ 1,853 | ||||||||
Number of shares non-redeemable due to limitation, shares | 176,510 | ||||||||||
Other Liabilities [Member] | |||||||||||
Equity, Class of Treasury Stock [Line Items] | |||||||||||
Unfulfilled redemption requests | $ 1,700 | ||||||||||
Subsequent Event [Member] | |||||||||||
Equity, Class of Treasury Stock [Line Items] | |||||||||||
Stock repurchased during period, value | $ 2,000 | ||||||||||
Redemptions of common stock (in shares) | 154,109 | ||||||||||
Including Shares Redeemed Pursuant to Special Redemptions [Member] | |||||||||||
Equity, Class of Treasury Stock [Line Items] | |||||||||||
Stock repurchased during period, value | $ 1,500 | ||||||||||
Shall be Reserved Exclusively for Special Redemptions [Member] | |||||||||||
Equity, Class of Treasury Stock [Line Items] | |||||||||||
Stock repurchased during period, value | 500 | ||||||||||
Held for One Year [Member] | |||||||||||
Equity, Class of Treasury Stock [Line Items] | |||||||||||
Share holding term | 1 year | ||||||||||
Redemption price percentage of most recent estimated value per share | 92.50% | ||||||||||
Held for Two Years [Member] | |||||||||||
Equity, Class of Treasury Stock [Line Items] | |||||||||||
Share holding term | 2 years | ||||||||||
Redemption price percentage of most recent estimated value per share | 95.00% | ||||||||||
Held for Three Years [Member] | |||||||||||
Equity, Class of Treasury Stock [Line Items] | |||||||||||
Share holding term | 3 years | ||||||||||
Redemption price percentage of most recent estimated value per share | 97.50% | ||||||||||
Held for Four Years [Member] | |||||||||||
Equity, Class of Treasury Stock [Line Items] | |||||||||||
Share holding term | 4 years | ||||||||||
Redemption price percentage of most recent estimated value per share | 100.00% | ||||||||||
Special Redemptions [Member] | |||||||||||
Equity, Class of Treasury Stock [Line Items] | |||||||||||
Stock repurchased during period, value | $ 500 | ||||||||||
Unfulfilled redemption requests | $ 300 | ||||||||||
Special Redemptions [Member] | Subsequent Event [Member] | |||||||||||
Equity, Class of Treasury Stock [Line Items] | |||||||||||
Stock repurchased during period, value | 500 | $ 300 | |||||||||
Special Redemptions [Member] | Scenario, Forecast [Member] | |||||||||||
Equity, Class of Treasury Stock [Line Items] | |||||||||||
Stock repurchased during period, value | $ 200 | ||||||||||
Ordinary Redemption [Member] | |||||||||||
Equity, Class of Treasury Stock [Line Items] | |||||||||||
Unfulfilled redemption requests | $ 1,400 | ||||||||||
Ordinary Redemption [Member] | Subsequent Event [Member] | |||||||||||
Equity, Class of Treasury Stock [Line Items] | |||||||||||
Stock repurchased during period, value | $ 1,500 | ||||||||||
Maximum [Member] | |||||||||||
Equity, Class of Treasury Stock [Line Items] | |||||||||||
Stock repurchased during period, value | $ 2,000 |
SUMMARY OF SIGNIFICANT ACCOUN26
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Related Party Transactions) (Details) | 12 Months Ended | 14 Months Ended | 83 Months Ended | ||
Dec. 31, 2016 | Apr. 30, 2014 | Dec. 31, 2016 | Aug. 14, 2013 | Aug. 13, 2013 | |
Related Party Transaction [Line Items] | |||||
Percent of dealer manager reallows of sales commissions earned to participating broker-dealer | 100.00% | 100.00% | |||
Monthly fees paid of property's gross monthly collections, percentage | 1.00% | 1.00% | |||
Maximum [Member] | |||||
Related Party Transaction [Line Items] | |||||
Costs paid by the company if selling commissions, dealer manager fees and other organization and offering costs exceed gross proceeds of the offering as percent | 15.00% | 15.00% | 15.00% | ||
Selling commissions fees paid, percent of gross offering proceeds | 6.50% | 6.50% | |||
Dealer managers fees paid, percent of gross offering proceeds | 3.00% | 3.00% | |||
Sales commissions, broker dealer, percentage | 1.00% | 1.00% | |||
KBS Capital Advisors LLC [Member] | |||||
Related Party Transaction [Line Items] | |||||
Acquisition advisory fee, as percent | 1.00% | 1.00% | |||
Asset management fee, as percent | 0.08333% | 0.08333% | |||
KBS Capital Advisors LLC [Member] | Minimum [Member] | |||||
Related Party Transaction [Line Items] | |||||
Reimbursable offering costs determination, percentage | 15.00% | 15.00% | |||
Option One [Member] | |||||
Related Party Transaction [Line Items] | |||||
Acquisition advisory fee, as percent | 1.00% | 1.00% | 1.00% | 1.00% | |
Option One [Member] | KBS Capital Advisors LLC [Member] | |||||
Related Party Transaction [Line Items] | |||||
Asset management fee, as percent | 8.33% | ||||
Option Two [Member] | |||||
Related Party Transaction [Line Items] | |||||
Acquisition advisory fee, as percent | 2.00% | 2.00% | 2.00% | ||
Option Two [Member] | KBS Capital Advisors LLC [Member] | |||||
Related Party Transaction [Line Items] | |||||
Asset management fee, as percent | 0.17% |
SUMMARY OF SIGNIFICANT ACCOUN27
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Narrative) (Details) | Dec. 09, 2016$ / shares | Dec. 31, 2016property$ / shares | Sep. 30, 2016$ / shares | Jun. 30, 2016$ / shares | Mar. 31, 2016$ / shares | Dec. 31, 2015$ / shares | Sep. 30, 2015$ / shares | Jun. 30, 2015$ / shares | Mar. 31, 2015$ / shares | Dec. 31, 2016segmentsproperty$ / shares | Dec. 31, 2015$ / shares | Dec. 31, 2014$ / shares | Dec. 31, 2016property$ / shares | Jan. 03, 2017$ / shares | Jan. 04, 2016$ / shares | Dec. 08, 2015$ / shares | Jan. 02, 2015$ / shares | Dec. 09, 2014$ / shares | Apr. 16, 2014$ / shares | Mar. 06, 2014$ / shares | Jan. 17, 2013 |
Real Estate Properties [Line Items] | |||||||||||||||||||||
Number of reportable segments | segments | 1 | ||||||||||||||||||||
Amended Dividend Reinvestment Plan common stock price per share as percent of common stock price per share from the public offering | 95.00% | 95.00% | 95.00% | 95.00% | 95.00% | ||||||||||||||||
Updated primary offering price (in dollars per share) | $ 9.35 | $ 10.29 | $ 10.14 | $ 10.96 | |||||||||||||||||
Dividend reinvestment plan, purchase price per share (in dollars per share) | $ 9.78 | $ 9.64 | $ 10.42 | ||||||||||||||||||
Dividend reinvestment plan, termination period | 10 days | ||||||||||||||||||||
Distributions declared per common share (in dollars per share) | $ 0.164 | $ 0.164 | $ 0.162 | $ 0.160 | $ 0.164 | $ 0.164 | $ 0.162 | $ 0.160 | $ 0.650 | $ 0.650 | $ 0.650 | ||||||||||
Distribution rate per share per day, declared (in dollars per share) | $ 0.00178082 | $ 0.00178082 | $ 0.00178082 | ||||||||||||||||||
Subsequent Event [Member] | |||||||||||||||||||||
Real Estate Properties [Line Items] | |||||||||||||||||||||
Dividend reinvestment plan, purchase price per share (in dollars per share) | $ 8.89 | ||||||||||||||||||||
Apartment Complex [Member] | |||||||||||||||||||||
Real Estate Properties [Line Items] | |||||||||||||||||||||
Number of real estate properties | property | 11 | 11 | 11 |
REAL ESTATE (Narrative) (Detail
REAL ESTATE (Narrative) (Details) ft² in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2016USD ($)ft²propertyunit | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Real Estate Properties [Line Items] | |||
Number of real estate units | unit | 3,039 | ||
Rentable square feet | ft² | 3.1 | ||
Percentage of portfolio occupied | 93.00% | ||
Tax abatement asset | $ 2.9 | $ 3.2 | |
Property Tax Abatement Intangible Asset [Member] | |||
Real Estate Properties [Line Items] | |||
Amortization of intangible assets | $ 0.3 | $ 0.3 | $ 0.2 |
Apartment Complex [Member] | |||
Real Estate Properties [Line Items] | |||
Number of real estate properties | property | 11 |
REAL ESTATE (Schedule of Real E
REAL ESTATE (Schedule of Real Estate Investments) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Real Estate Properties [Line Items] | ||
Total Real Estate, Cost | $ 413,851 | $ 412,047 |
Accumulated Depreciation and Amortization | (47,591) | (35,713) |
Total real estate, net | $ 366,260 | $ 376,334 |
Legacy at Valley Ranch [Member] | ||
Real Estate Properties [Line Items] | ||
Date Acquired | Oct. 26, 2010 | |
Total Real Estate, Cost | $ 36,524 | |
Accumulated Depreciation and Amortization | (5,200) | |
Total real estate, net | $ 31,324 | |
Poplar Creek [Member] | ||
Real Estate Properties [Line Items] | ||
Date Acquired | Feb. 9, 2012 | |
Total Real Estate, Cost | $ 27,321 | |
Accumulated Depreciation and Amortization | (2,982) | |
Total real estate, net | $ 24,339 | |
The Residence at Waterstone [Member] | ||
Real Estate Properties [Line Items] | ||
Date Acquired | Apr. 6, 2012 | |
Total Real Estate, Cost | $ 65,336 | |
Accumulated Depreciation and Amortization | (7,818) | |
Total real estate, net | $ 57,518 | |
Legacy Crescent Park [Member] | ||
Real Estate Properties [Line Items] | ||
Date Acquired | May 3, 2012 | |
Total Real Estate, Cost | $ 20,740 | |
Accumulated Depreciation and Amortization | (2,930) | |
Total real estate, net | $ 17,810 | |
Legacy at Martin’s Point [Member] | ||
Real Estate Properties [Line Items] | ||
Date Acquired | May 31, 2012 | |
Total Real Estate, Cost | $ 37,600 | |
Accumulated Depreciation and Amortization | (5,539) | |
Total real estate, net | $ 32,061 | |
Wesley Village [Member] | ||
Real Estate Properties [Line Items] | ||
Date Acquired | Nov. 6, 2012 | |
Total Real Estate, Cost | $ 44,461 | |
Accumulated Depreciation and Amortization | (4,969) | |
Total real estate, net | $ 39,492 | |
Watertower Apartments [Member] | ||
Real Estate Properties [Line Items] | ||
Date Acquired | Jan. 15, 2013 | |
Total Real Estate, Cost | $ 38,776 | |
Accumulated Depreciation and Amortization | (4,309) | |
Total real estate, net | $ 34,467 | |
Crystal Park at Waterford [Member] | ||
Real Estate Properties [Line Items] | ||
Date Acquired | May 8, 2013 | |
Total Real Estate, Cost | $ 46,075 | |
Accumulated Depreciation and Amortization | (5,130) | |
Total real estate, net | $ 40,945 | |
Millennium Apartment Homes [Member] | ||
Real Estate Properties [Line Items] | ||
Date Acquired | Jun. 7, 2013 | |
Total Real Estate, Cost | $ 33,298 | |
Accumulated Depreciation and Amortization | (3,638) | |
Total real estate, net | $ 29,660 | |
Legacy Grand at Concord [Member] | ||
Real Estate Properties [Line Items] | ||
Date Acquired | Feb. 18, 2014 | |
Total Real Estate, Cost | $ 27,876 | |
Accumulated Depreciation and Amortization | (2,352) | |
Total real estate, net | $ 25,524 | |
Lofts at the Highlands [Member] | ||
Real Estate Properties [Line Items] | ||
Date Acquired | Feb. 25, 2014 | |
Total Real Estate, Cost | $ 35,844 | |
Accumulated Depreciation and Amortization | (2,724) | |
Total real estate, net | $ 33,120 |
REAL ESTATE (Property Damage) (
REAL ESTATE (Property Damage) (Details) | 12 Months Ended | ||
Dec. 31, 2016USD ($)property | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Real Estate Properties [Line Items] | |||
Maximum deductible per incident | $ 12,500 | ||
Loss due to property damages | 145,000 | $ 211,000 | $ 685,000 |
Estimated insurance recoveries | 132,500 | ||
Operating, maintenance, and management | $ 6,389,000 | $ 8,674,000 | $ 10,977,000 |
Apartment Complex [Member] | Physical Damage [Member] | |||
Real Estate Properties [Line Items] | |||
Number of properties suffered from damages | property | 1 | ||
Loss due to property damages | $ 145,000 | ||
Damaged Properties [Member] | |||
Real Estate Properties [Line Items] | |||
Operating, maintenance, and management | $ 12,500 |
REAL ESTATE (Wesley Village Agr
REAL ESTATE (Wesley Village Agreement) (Details) $ in Millions | Feb. 17, 2017USD ($) | Jan. 30, 2017USD ($) | Dec. 29, 2016USD ($) | Nov. 06, 2012aunit |
Wesley Village [Member] | ||||
Real Estate Properties [Line Items] | ||||
Disposal group, consideration | $ | $ 58 | |||
Wesley Village [Member] | Subsequent Event [Member] | ||||
Real Estate Properties [Line Items] | ||||
Disposal group, consideration | $ | $ 57.2 | $ 57.7 | ||
Wesley Village [Member] | ||||
Real Estate Properties [Line Items] | ||||
Area of land | a | 11 | |||
Wesley Village [Member] | Apartment Building [Member] | ||||
Real Estate Properties [Line Items] | ||||
Number of units in real estate property | unit | 301 | |||
Wesley Village [Member] | Undeveloped Land [Member] | ||||
Real Estate Properties [Line Items] | ||||
Area of land | a | 3.8 |
NOTES PAYABLE (Narrative) (Deta
NOTES PAYABLE (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Debt Instrument [Line Items] | |||
Interest expense | $ 10,332 | $ 10,501 | $ 10,261 |
Amortization of deferred financing costs | 415 | 415 | 415 |
Amortization of debt discount | 87 | 86 | 78 |
Interest payable, current | 800 | 800 | |
Notes Payable [Member] | Interest Expense [Member] | |||
Debt Instrument [Line Items] | |||
Amortization of debt discount | $ 100 | $ 100 | $ 100 |
NOTES PAYABLE (Schedule of Long
NOTES PAYABLE (Schedule of Long-term Debt Instruments) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Debt Instrument [Line Items] | ||
Total notes payable principal outstanding | $ 282,605 | $ 288,449 |
Discount on note payable | (2,644) | (2,731) |
Deferred financing costs, net | (815) | (1,230) |
Long term debt | 279,146 | 284,488 |
Mortgages [Member] | Legacy at Valley Ranch [Member] | ||
Debt Instrument [Line Items] | ||
Total notes payable principal outstanding | $ 30,958 | 31,554 |
Contractual Interest Rate | 3.93% | |
Maturity Date | Apr. 1, 2019 | |
Mortgages [Member] | Poplar Creek [Member] | ||
Debt Instrument [Line Items] | ||
Total notes payable principal outstanding | $ 19,414 | 19,785 |
Contractual Interest Rate | 4.00% | |
Maturity Date | Mar. 1, 2019 | |
Mortgages [Member] | The Residence at Waterstone [Member] | ||
Debt Instrument [Line Items] | ||
Total notes payable principal outstanding | $ 45,653 | 46,550 |
Contractual Interest Rate | 3.79% | |
Maturity Date | May 1, 2019 | |
Mortgages [Member] | Legacy Crescent Park [Member] | ||
Debt Instrument [Line Items] | ||
Total notes payable principal outstanding | $ 13,560 | 13,858 |
Contractual Interest Rate | 3.47% | |
Maturity Date | Jun. 1, 2019 | |
Mortgages [Member] | Legacy at Martin’s Point [Member] | ||
Debt Instrument [Line Items] | ||
Total notes payable principal outstanding | $ 21,866 | 22,330 |
Contractual Interest Rate | 3.33% | |
Maturity Date | Jun. 1, 2019 | |
Mortgages [Member] | Wesley Village [Member] | ||
Debt Instrument [Line Items] | ||
Total notes payable principal outstanding | $ 26,862 | 27,566 |
Contractual Interest Rate | 2.57% | |
Maturity Date | Dec. 1, 2017 | |
Mortgages [Member] | Watertower Apartments [Member] | ||
Debt Instrument [Line Items] | ||
Total notes payable principal outstanding | $ 23,943 | 24,525 |
Contractual Interest Rate | 2.46% | |
Maturity Date | Feb. 10, 2018 | |
Mortgages [Member] | Crystal Park Mortgage Loan [Member] | ||
Debt Instrument [Line Items] | ||
Total notes payable principal outstanding | $ 27,013 | 27,709 |
Contractual Interest Rate | 2.50% | |
Maturity Date | Jun. 1, 2018 | |
Mortgages [Member] | Millennium Mortgage Loan [Member] | ||
Debt Instrument [Line Items] | ||
Total notes payable principal outstanding | $ 20,190 | 20,689 |
Contractual Interest Rate | 2.74% | |
Maturity Date | Jul. 1, 2018 | |
Mortgages [Member] | Legacy Grand at Concord Mortgage Loan [Member] | ||
Debt Instrument [Line Items] | ||
Total notes payable principal outstanding | $ 22,392 | 22,693 |
Contractual Interest Rate | 4.10% | |
Maturity Date | Dec. 1, 2050 | |
Mortgages [Member] | Lofts at the Highlands Mortgage Loan [Member] | ||
Debt Instrument [Line Items] | ||
Total notes payable principal outstanding | $ 30,754 | $ 31,190 |
Contractual Interest Rate | 3.40% | |
Maturity Date | Aug. 1, 2052 |
NOTES PAYABLE (Schedule of Matu
NOTES PAYABLE (Schedule of Maturities of Long-Term Debt) (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Debt Disclosure [Abstract] | ||
2,017 | $ 32,196 | |
2,018 | 72,958 | |
2,019 | 126,682 | |
2,020 | 852 | |
2,021 | 884 | |
Thereafter | 49,033 | |
Long term debt | $ 282,605 | $ 288,449 |
FAIR VALUE DISCLOSURES (Details
FAIR VALUE DISCLOSURES (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Face amount | $ 282,605 | $ 288,449 |
Carrying Amount [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Notes payable, Value | 279,146 | 284,488 |
Fair Value [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Notes payable, Value | $ 279,258 | $ 284,160 |
RELATED PARTY TRANSACTIONS (Nar
RELATED PARTY TRANSACTIONS (Narrative) (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | 14 Months Ended | 36 Months Ended | 46 Months Ended | 82 Months Ended | 83 Months Ended | ||||||
Jul. 31, 2013 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Apr. 30, 2014 | Mar. 12, 2013 | Dec. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2016 | Aug. 20, 2014 | Mar. 05, 2014 | Aug. 14, 2013 | Aug. 13, 2013 | |
Related Party Transaction [Line Items] | |||||||||||||
Percentage of selling commissions, dealer manager fees, and organization and other offering costs of gross offering proceeds | 10.00% | ||||||||||||
Issuance of common stock, value | $ 5,737 | $ 5,736 | $ 11,250 | $ 21,500 | $ 179,200 | $ 15,900 | |||||||
Shares of common stock sold under dividend reinvestment plan, value | 5,700 | $ 3,500 | $ 24,400 | ||||||||||
Noninterest expense, offering cost | $ 4,200 | ||||||||||||
Non-compounded return on net invested capital | 9.90% | 8.00% | |||||||||||
Monthly fees paid of property's gross monthly collections, percentage | 1.00% | 1.00% | 1.00% | 1.00% | |||||||||
Asset management fees to affiliate | $ 1,500 | $ 399 | 729 | $ 2,598 | |||||||||
Due to affiliates | $ 157 | $ 4,894 | $ 157 | $ 157 | $ 157 | ||||||||
Initial term of management agreements | 1 year | ||||||||||||
Period of termination notice | 30 days | ||||||||||||
Option One [Member] | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Acquisition advisory fee, as percent | 1.00% | 1.00% | 1.00% | 1.00% | 1.00% | 1.00% | |||||||
Option Two [Member] | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Acquisition advisory fee, as percent | 2.00% | 2.00% | 2.00% | 2.00% | 2.00% | ||||||||
After Reimbursements from the Advisor and the Dealer Manager [Member] | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Noninterest expense, offering cost | $ 3,200 | ||||||||||||
Underwriting Compensation [Member] | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Noninterest expense, offering cost | 1,800 | ||||||||||||
Underwriting Compensation [Member] | After Reimbursements from the Advisor and the Dealer Manager [Member] | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Noninterest expense, offering cost | $ 1,600 | ||||||||||||
Common Stock [Member] | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Issuance of common stock (in shares) | 586,585 | 595,095 | 1,081,474 | 2,051,925 | 18,088,084 | 1,496,198 | 21,683,960 | ||||||
Issuance of common stock, value | $ 6 | $ 6 | $ 11 | $ 215,900 | |||||||||
Shares of common stock sold under dividend reinvestment plan (in shares) | 555,727 | 368,872 | 2,468,550 | ||||||||||
Maximum [Member] | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Costs paid by the company if selling commissions, dealer manager fees and other organization and offering costs exceed gross proceeds of the offering as percent | 15.00% | 15.00% | 15.00% | ||||||||||
LPR Inc. [Member] | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Period of termination notice | 30 days | ||||||||||||
KBS Capital Advisors LLC [Member] | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Payments for supplemental coverage | $ 61 | 61 | 87 | ||||||||||
Asset management fee, as percent | 0.08333% | 0.08333% | 0.08333% | 0.08333% | |||||||||
Acquisition advisory fee, as percent | 1.00% | 1.00% | 1.00% | 1.00% | |||||||||
KBS Capital Advisors LLC [Member] | Option One [Member] | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Asset management fee, as percent | 8.33% | ||||||||||||
KBS Capital Advisors LLC [Member] | Option Two [Member] | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Asset management fee, as percent | 0.17% | ||||||||||||
LPI Inc. [Member] | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Initial term of management agreements | 1 year | ||||||||||||
Period of termination notice | 30 days | ||||||||||||
Period of termination Notice 2 | 60 days | ||||||||||||
Period of termination Notice 3 | 90 days | ||||||||||||
Period of monetary default | 30 days | ||||||||||||
LPI Inc. [Member] | Watertower Apartments [Member] | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Period of monetary default | 10 days | ||||||||||||
LPI Inc. [Member] | Lofts at the Highlands [Member] | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Period of monetary default | 10 days | ||||||||||||
LPI Inc. [Member] | Wesley Village [Member] | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Period of monetary default | 10 days | ||||||||||||
LPI Inc. [Member] | Legacy Grand at Concord [Member] | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Period of monetary default | 10 days | ||||||||||||
LPI Inc. [Member] | Millennium Apartment Homes [Member] | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Period of monetary default | 10 days | ||||||||||||
LPI Inc. [Member] | Legacy Crescent Park [Member] | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Period of monetary default | 10 days | ||||||||||||
Asset Management Fees [Member] | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Due to affiliates | $ 400 | 700 | $ 400 | $ 400 | $ 400 | ||||||||
Incurred expenses | 3,000 | 2,800 | |||||||||||
Deferred fees | 2,600 | $ 2,100 | |||||||||||
Asset Management Fees [Member] | August 2013 through December 2014 [Member] | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Due to affiliates | $ 3,300 | ||||||||||||
KBS Capital Advisors LLC [Member] | Property Insurance Rebate [Member] | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Due from related parties | 28 | 28 | 28 | 28 | |||||||||
KBS Capital Advisors LLC [Member] | Legal and Professional Fees Reimbursement [Member] | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Due from related parties | $ 100 | $ 100 | $ 100 | $ 100 | |||||||||
Dealer Manager [Member] | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Noninterest expense, offering cost | $ 200 | ||||||||||||
Related party transactions, additional payment received | $ 55 |
RELATED PARTY TRANSACTIONS (Sch
RELATED PARTY TRANSACTIONS (Schedule of Related Party Costs) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Related Party Transaction [Line Items] | |||
Payable | $ 157 | $ 4,894 | |
Administrative fees, amount paid | 161 | 141 | $ 108 |
Asset Management Fees [Member] | |||
Related Party Transaction [Line Items] | |||
Expenses | 3,000 | 2,800 | |
Payable | 400 | 700 | |
Advisor and Dealer Manager [Member] | |||
Related Party Transaction [Line Items] | |||
Incurred | 6,435 | 4,608 | 4,567 |
Payable | 157 | 4,894 | |
Advisor and Dealer Manager [Member] | Asset Management Fees [Member] | |||
Related Party Transaction [Line Items] | |||
Expenses | 399 | 729 | 2,598 |
Payable | 0 | 4,752 | |
Advisor and Dealer Manager [Member] | Reimbursement of Operating Expenses [Member] | |||
Related Party Transaction [Line Items] | |||
Expenses | 225 | 356 | 392 |
Payable | 15 | 25 | |
Advisor and Dealer Manager [Member] | Acquisition Fees on Real Estate [Member] | |||
Related Party Transaction [Line Items] | |||
Expenses | 0 | 0 | 701 |
Payable | 0 | 0 | |
Advisor and Dealer Manager [Member] | Property Management Fees [Member] | |||
Related Party Transaction [Line Items] | |||
Expenses | 5,811 | 3,523 | 281 |
Payable | 142 | 117 | |
Advisor and Dealer Manager [Member] | Sales Commissions [Member] | |||
Related Party Transaction [Line Items] | |||
Incurred | 0 | 0 | 363 |
Payable | 0 | 0 | |
Advisor and Dealer Manager [Member] | Dealer Manager Fees [Member] | |||
Related Party Transaction [Line Items] | |||
Incurred | 0 | 0 | 173 |
Payable | 0 | 0 | |
Advisor and Dealer Manager [Member] | Reimbursable Other Offering Costs [Member] | |||
Related Party Transaction [Line Items] | |||
Incurred | 0 | 0 | $ 59 |
Payable | $ 0 | $ 0 |
RELATED PARTY TRANSACTIONS (Pro
RELATED PARTY TRANSACTIONS (Property Management Agreement) (Details) | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Watertower Apartments [Member] | |
Related Party Transaction [Line Items] | |
Management Fee Percentage | 2.75% |
Crystal Park at Waterford [Member] | |
Related Party Transaction [Line Items] | |
Management Fee Percentage | 3.00% |
The Residence at Waterstone [Member] | |
Related Party Transaction [Line Items] | |
Management Fee Percentage | 3.00% |
Lofts at the Highlands [Member] | |
Related Party Transaction [Line Items] | |
Management Fee Percentage | 3.00% |
Legacy at Martin’s Point [Member] | |
Related Party Transaction [Line Items] | |
Management Fee Percentage | 3.00% |
Poplar Creek [Member] | |
Related Party Transaction [Line Items] | |
Management Fee Percentage | 3.00% |
Wesley Village [Member] | |
Related Party Transaction [Line Items] | |
Management Fee Percentage | 3.00% |
Legacy Grand at Concord [Member] | |
Related Party Transaction [Line Items] | |
Management Fee Percentage | 3.00% |
Millennium Apartment Homes [Member] | |
Related Party Transaction [Line Items] | |
Management Fee Percentage | 3.00% |
Property management fee, amount fee | $ 4,000 |
Legacy Crescent Park [Member] | |
Related Party Transaction [Line Items] | |
Management Fee Percentage | 3.00% |
Property management fee, amount fee | $ 4,000 |
Legacy at Valley Ranch [Member] | |
Related Party Transaction [Line Items] | |
Management Fee Percentage | 3.00% |
SELECTED QUARTERLY FINANCIAL 39
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | 36 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | ||||||||||||
Revenues | $ 11,282 | $ 11,498 | $ 11,367 | $ 11,154 | $ 11,043 | $ 11,330 | $ 11,184 | $ 11,056 | $ 45,301 | $ 44,613 | $ 42,200 | |
Net income (loss) | $ 19 | $ 5,040 | $ (24) | $ 86 | $ 86 | $ 263 | $ 237 | $ 205 | $ 5,121 | $ 791 | $ (3,560) | |
Net income (loss) per common share, basic and diluted (in dollars per share) | $ 0.01 | $ 0.24 | $ 0 | $ 0 | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.25 | $ 0.04 | $ (0.18) | |
Distributions declared per common share (in dollars per share) | $ 0.164 | $ 0.164 | $ 0.162 | $ 0.160 | $ 0.164 | $ 0.164 | $ 0.162 | $ 0.160 | $ 0.650 | 0.650 | 0.650 | |
Distribution rate per share per day, declared (in dollars per share) | $ 0.00178082 | $ 0.00178082 | $ 0.00178082 |
SUBSEQUENT EVENTS (Distribution
SUBSEQUENT EVENTS (Distributions) (Details) - USD ($) $ / shares in Units, $ in Millions | Mar. 20, 2017 | Mar. 01, 2017 | Feb. 01, 2017 | Jan. 03, 2017 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2016 |
Subsequent Event [Line Items] | |||||||
Distribution rate per share per day, declared (in dollars per share) | $ 0.00178082 | $ 0.00178082 | $ 0.00178082 | ||||
Subsequent Event [Member] | Dividend Paid [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Distributions paid | $ 1 | $ 1.2 | $ 1.2 | ||||
Subsequent Event [Member] | Dividend Declared [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Distribution rate per share per day, declared (in dollars per share) | $ 0.05520548 |
SUBSEQUENT EVENTS (Narrative) (
SUBSEQUENT EVENTS (Narrative) (Details) - USD ($) $ in Millions | Mar. 09, 2017 | Jan. 30, 2017 | Jan. 25, 2017 | Feb. 17, 2017 | Dec. 31, 2016 | Dec. 29, 2016 |
Wesley Village [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Disposal group, consideration | $ 58 | |||||
Wesley Village [Member] | Disposed of by Sale [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Real estate, book value | $ 39.9 | |||||
Subsequent Event [Member] | KBS Capital Advisors LLC [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Period of termination notice without cause | 60 days | |||||
Subsequent Event [Member] | Wesley Village [Member] | Mortgages [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Extinguishment of debt, amount | $ 26.7 | |||||
Repayment penalty | $ 0.3 | |||||
Subsequent Event [Member] | Wesley Village [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Disposal group, consideration | $ 57.7 | $ 57.2 | ||||
Extension of due diligence period | 11 days | |||||
Subsequent Event [Member] | Wesley Village [Member] | Disposed of by Sale [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Disposal group, consideration | $ 57.2 |
SCHEDULE III REAL ESTATE ASSE42
SCHEDULE III REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION AND AMORTIZATION (Real Estate Assets and Accumulated Depreciation and Amortization) (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Real Estate and Accumulated Depreciation [Line Items] | ||||
Encumbrances | $ 282,605 | |||
Initial Cost to Property, Land | 46,771 | |||
Initial Cost to Property, Buildings and Improvements | 363,720 | |||
Initial Cost to Property, Total | 410,491 | |||
Cost Capitalized Subsequent to Acquisition | 3,360 | |||
Gross Amount at which Carried at Close of Period, Land | 46,828 | |||
Gross Amount at which Carried at Close of Period, Building and Improvements | 367,023 | |||
Gross Amount at which Carried at Close of Period, Total | 413,851 | $ 412,047 | $ 410,207 | $ 343,634 |
Accumulated Depreciation and Amortization | (47,591) | $ (35,713) | $ (24,344) | $ (13,317) |
Aggregate cost of real estate for federal income tax purposes | $ 438,200 | |||
Legacy at Valley Ranch [Member] | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Ownership Percent | 100.00% | |||
Encumbrances | $ 30,958 | |||
Initial Cost to Property, Land | 4,838 | |||
Initial Cost to Property, Buildings and Improvements | 31,750 | |||
Initial Cost to Property, Total | 36,588 | |||
Cost Capitalized Subsequent to Acquisition | (64) | |||
Gross Amount at which Carried at Close of Period, Land | 4,838 | |||
Gross Amount at which Carried at Close of Period, Building and Improvements | 31,686 | |||
Gross Amount at which Carried at Close of Period, Total | 36,524 | |||
Accumulated Depreciation and Amortization | $ (5,200) | |||
Original Date of Construction | 1,999 | |||
Date Acquired | Oct. 26, 2010 | |||
Poplar Creek [Member] | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Ownership Percent | 100.00% | |||
Encumbrances | $ 19,414 | |||
Initial Cost to Property, Land | 7,020 | |||
Initial Cost to Property, Buildings and Improvements | 20,180 | |||
Initial Cost to Property, Total | 27,200 | |||
Cost Capitalized Subsequent to Acquisition | 121 | |||
Gross Amount at which Carried at Close of Period, Land | 7,020 | |||
Gross Amount at which Carried at Close of Period, Building and Improvements | 20,301 | |||
Gross Amount at which Carried at Close of Period, Total | 27,321 | |||
Accumulated Depreciation and Amortization | $ (2,982) | |||
Original Date of Construction | 1986/2007 | |||
Date Acquired | Feb. 9, 2012 | |||
The Residence at Waterstone [Member] | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Ownership Percent | 100.00% | |||
Encumbrances | $ 45,653 | |||
Initial Cost to Property, Land | 7,700 | |||
Initial Cost to Property, Buildings and Improvements | 57,000 | |||
Initial Cost to Property, Total | 64,700 | |||
Cost Capitalized Subsequent to Acquisition | 636 | |||
Gross Amount at which Carried at Close of Period, Land | 7,700 | |||
Gross Amount at which Carried at Close of Period, Building and Improvements | 57,636 | |||
Gross Amount at which Carried at Close of Period, Total | 65,336 | |||
Accumulated Depreciation and Amortization | $ (7,818) | |||
Original Date of Construction | 2,002 | |||
Date Acquired | Apr. 6, 2012 | |||
Legacy Crescent Park [Member] | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Ownership Percent | 100.00% | |||
Encumbrances | $ 13,560 | |||
Initial Cost to Property, Land | 1,710 | |||
Initial Cost to Property, Buildings and Improvements | 19,090 | |||
Initial Cost to Property, Total | 20,800 | |||
Cost Capitalized Subsequent to Acquisition | (60) | |||
Gross Amount at which Carried at Close of Period, Land | 1,710 | |||
Gross Amount at which Carried at Close of Period, Building and Improvements | 19,030 | |||
Gross Amount at which Carried at Close of Period, Total | 20,740 | |||
Accumulated Depreciation and Amortization | $ (2,930) | |||
Original Date of Construction | 2,008 | |||
Date Acquired | May 3, 2012 | |||
Legacy at Martin’s Point [Member] | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Ownership Percent | 100.00% | |||
Encumbrances | $ 21,866 | |||
Initial Cost to Property, Land | 3,500 | |||
Initial Cost to Property, Buildings and Improvements | 31,950 | |||
Initial Cost to Property, Total | 35,450 | |||
Cost Capitalized Subsequent to Acquisition | 2,150 | |||
Gross Amount at which Carried at Close of Period, Land | 3,500 | |||
Gross Amount at which Carried at Close of Period, Building and Improvements | 34,100 | |||
Gross Amount at which Carried at Close of Period, Total | 37,600 | |||
Accumulated Depreciation and Amortization | $ (5,539) | |||
Original Date of Construction | 1989/2009 | |||
Date Acquired | May 31, 2012 | |||
Wesley Village [Member] | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Ownership Percent | 100.00% | |||
Encumbrances | $ 26,862 | |||
Initial Cost to Property, Land | 5,000 | |||
Initial Cost to Property, Buildings and Improvements | 39,915 | |||
Initial Cost to Property, Total | 44,915 | |||
Cost Capitalized Subsequent to Acquisition | (453) | |||
Gross Amount at which Carried at Close of Period, Land | 5,057 | |||
Gross Amount at which Carried at Close of Period, Building and Improvements | 39,405 | |||
Gross Amount at which Carried at Close of Period, Total | 44,462 | |||
Accumulated Depreciation and Amortization | $ (4,969) | |||
Original Date of Construction | 2,009 | |||
Date Acquired | Nov. 6, 2012 | |||
Watertower Apartments [Member] | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Ownership Percent | 100.00% | |||
Encumbrances | $ 23,943 | |||
Initial Cost to Property, Land | 4,100 | |||
Initial Cost to Property, Buildings and Improvements | 34,275 | |||
Initial Cost to Property, Total | 38,375 | |||
Cost Capitalized Subsequent to Acquisition | 401 | |||
Gross Amount at which Carried at Close of Period, Land | 4,100 | |||
Gross Amount at which Carried at Close of Period, Building and Improvements | 34,676 | |||
Gross Amount at which Carried at Close of Period, Total | 38,776 | |||
Accumulated Depreciation and Amortization | $ (4,309) | |||
Original Date of Construction | 2,004 | |||
Date Acquired | Jan. 15, 2013 | |||
Crystal Park at Waterford [Member] | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Ownership Percent | 100.00% | |||
Encumbrances | $ 27,013 | |||
Initial Cost to Property, Land | 5,666 | |||
Initial Cost to Property, Buildings and Improvements | 39,234 | |||
Initial Cost to Property, Total | 44,900 | |||
Cost Capitalized Subsequent to Acquisition | 1,174 | |||
Gross Amount at which Carried at Close of Period, Land | 5,666 | |||
Gross Amount at which Carried at Close of Period, Building and Improvements | 40,408 | |||
Gross Amount at which Carried at Close of Period, Total | 46,074 | |||
Accumulated Depreciation and Amortization | $ (5,130) | |||
Original Date of Construction | 1,990 | |||
Date Acquired | May 8, 2013 | |||
Millennium Apartment Homes [Member] | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Ownership Percent | 100.00% | |||
Encumbrances | $ 20,190 | |||
Initial Cost to Property, Land | 2,772 | |||
Initial Cost to Property, Buildings and Improvements | 30,828 | |||
Initial Cost to Property, Total | 33,600 | |||
Cost Capitalized Subsequent to Acquisition | (302) | |||
Gross Amount at which Carried at Close of Period, Land | 2,772 | |||
Gross Amount at which Carried at Close of Period, Building and Improvements | 30,526 | |||
Gross Amount at which Carried at Close of Period, Total | 33,298 | |||
Accumulated Depreciation and Amortization | $ (3,638) | |||
Original Date of Construction | 2,009 | |||
Date Acquired | Jun. 7, 2013 | |||
Legacy Grand at Concord [Member] | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Ownership Percent | 100.00% | |||
Encumbrances | $ 22,392 | |||
Initial Cost to Property, Land | 1,465 | |||
Initial Cost to Property, Buildings and Improvements | 26,502 | |||
Initial Cost to Property, Total | 27,967 | |||
Cost Capitalized Subsequent to Acquisition | (90) | |||
Gross Amount at which Carried at Close of Period, Land | 1,465 | |||
Gross Amount at which Carried at Close of Period, Building and Improvements | 26,412 | |||
Gross Amount at which Carried at Close of Period, Total | 27,877 | |||
Accumulated Depreciation and Amortization | $ (2,352) | |||
Original Date of Construction | 2,010 | |||
Date Acquired | Feb. 18, 2014 | |||
Lofts at the Highlands [Member] | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Ownership Percent | 100.00% | |||
Encumbrances | $ 30,754 | |||
Initial Cost to Property, Land | 3,000 | |||
Initial Cost to Property, Buildings and Improvements | 32,996 | |||
Initial Cost to Property, Total | 35,996 | |||
Cost Capitalized Subsequent to Acquisition | (153) | |||
Gross Amount at which Carried at Close of Period, Land | 3,000 | |||
Gross Amount at which Carried at Close of Period, Building and Improvements | 32,843 | |||
Gross Amount at which Carried at Close of Period, Total | 35,843 | |||
Accumulated Depreciation and Amortization | $ (2,724) | |||
Original Date of Construction | 2,006 | |||
Date Acquired | Feb. 25, 2014 |
SCHEDULE III REAL ESTATE ASSE43
SCHEDULE III REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION AND AMORTIZATION (Reconciliation) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Real Estate: | |||
Balance at the beginning of the year | $ 412,047 | $ 410,207 | $ 343,634 |
Acquisitions | 0 | 0 | 63,963 |
Improvements | 2,109 | 2,506 | 4,596 |
Write-off of fully depreciated and fully amortized assets | (160) | (455) | (1,301) |
Loss due to property damages | (145) | (211) | (685) |
Balance at the end of the year | 413,851 | 412,047 | 410,207 |
Accumulated depreciation and amortization: | |||
Balance at the beginning of the year | 35,713 | 24,344 | 13,317 |
Depreciation and amortization expense | 12,038 | 11,824 | 12,328 |
Write-off of fully depreciated and fully amortized assets | (160) | (455) | (1,301) |
Balance at the end of the year | $ 47,591 | $ 35,713 | $ 24,344 |