Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2015 | Nov. 16, 2015 | |
Document And Entity Information | ||
Entity Registrant Name | MVP REIT, Inc. | |
Entity Central Index Key | 1,546,609 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2015 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Is Entity a Well-known Seasoned Issuer? | No | |
Is Entity a Voluntary Filer? | No | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 10,975,490 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,015 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
ASSETS | ||
Cash | $ 33,565,000 | $ 13,812,000 |
Cash - restricted | 1,248,000 | 388,000 |
Prepaid expenses | 163,000 | 246,000 |
Deferred rental assets | 177,000 | 27,000 |
Investments in real estate and fixed assets | ||
Land and improvements | 37,156,000 | 15,264,000 |
Building and improvements | 33,730,000 | 11,259,000 |
Fixed assets | 88,000 | 88,000 |
[us-gaap:PropertyPlantAndEquipmentGross] | 70,974,000 | 26,611,000 |
Accumulated depreciation | (584,000) | (66,000) |
Total investments in real estate and fixed assets, net | 70,390,000 | 26,545,000 |
Capitalized loan fees | 557,000 | 437,000 |
Deposits | 2,860,000 | 300,000 |
Other assets | 140,000 | 127,000 |
Assets held for sale | 3,205,000 | 8,313,000 |
Total assets | 112,305,000 | 50,195,000 |
Liabilities | ||
Accounts payable and accrued liabilities | 533,000 | 61,000 |
Due to related parties | 6,000 | 16,000 |
Liabilities related to assets held for sale | 1,709,000 | $ 4,439,000 |
Security deposits | 211,000 | |
Notes payable | 28,694,000 | $ 13,407,000 |
Total liabilities | $ 31,153,000 | $ 17,923,000 |
Equity | ||
Preferred stock, $0.001 par value, 1,000,000 shares authorized, none issued and outstanding | ||
Common stock, $0.001 par value, 98,999,000 shares authorized, 10,269,735 and 4,188,956 shares issued and outstanding as of September 30, 2015 and December 31, 2014, respectively | $ 10,000 | $ 4,000 |
Additional paid-in capital | 92,485,000 | 42,114,000 |
Accumulated deficit | (13,169,000) | (11,565,000) |
Total MVP REIT, Inc Shareholders' Equity | 79,326,000 | 30,553,000 |
Non-controlling interest - related party | 1,826,000 | 1,719,000 |
Total equity | 81,152,000 | 32,272,000 |
Total liabilities and equity | $ 112,305,000 | $ 50,195,000 |
Non Voting Non Participating Convertible Stock Value | ||
Equity | ||
Non-voting, non-participating convertible stock, $0.001 par value, 1,000 shares authorized, issued and outstanding as of September 30, 2015 and December 31, 2014 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Sep. 30, 2015 | Dec. 31, 2014 |
Preferred stock par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 98,999,000 | 98,999,000 |
Common stock, shares issued | 10,269,735 | 4,188,956 |
Common stock, shares outstanding | 10,269,735 | 4,188,956 |
Non Voting Non Participating Convertible Stock Value | ||
Common stock par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 1,000 | 1,000 |
Common stock, shares issued | 1,000 | 1,000 |
Common stock, shares outstanding | 1,000 | 1,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Revenues | ||||
Rental revenue | $ 1,353,000 | $ 212,000 | $ 3,101,000 | $ 349,000 |
Total revenues | 1,353,000 | 212,000 | 3,101,000 | 349,000 |
Operating expenses | ||||
General and administrative | 198,000 | 267,000 | 651,000 | 684,000 |
Acquisition expenses | 153,000 | 21,000 | 481,000 | 82,000 |
Acquisition expenses - related party | 75,000 | 54,000 | 1,856,000 | 1,856,000 |
Operation and maintenance | 271,000 | 85,000 | 606,000 | 345,000 |
Depreciation | 221,000 | 18,000 | 517,000 | 34,000 |
Total operating expenses | 918,000 | 445,000 | 4,111,000 | 2,598,000 |
Loss from operations | 435,000 | (233,000) | (1,010,000) | (2,249,000) |
Other income and expense | ||||
Interest expense | $ (365,000) | $ (53,000) | $ (935,000) | (90,000) |
Income from investment in equity method investee | 6,000 | |||
Loan fees | $ (136,000) | (136,000) | ||
Total other expense | $ (365,000) | 83,000 | $ (935,000) | 52,000 |
Loss from continuing operations | 70,000 | (150,000) | (1,945,000) | (2,197,000) |
Discontinued operations, net of income taxes | ||||
Income from assets held for sale, net of income taxes | $ 34,000 | $ 225,000 | 189,000 | $ 731,000 |
Gain on sale of investment in real estate held for sale | 288,000 | |||
Total income from discontinued operations | $ 34,000 | $ 225,000 | $ 477,000 | $ 731,000 |
Provision for income taxes | ||||
Net loss | $ 104,000 | $ 75,000 | $ (1,468,000) | $ (1,466,000) |
Net income attributable to non-controlling interest - related party | 48,000 | 21,000 | 136,000 | 86,000 |
Net loss attributable to common stockholders | $ 56,000 | $ 54,000 | $ (1,604,000) | $ (1,552,000) |
Basic and diluted income (loss) per weighted average common share | ||||
Income (loss) from continuing operations attributable to MVP REIT common stockholders | $ 0.01 | $ (0.05) | $ (0.33) | $ (0.66) |
Income from discontinued operations | 0.01 | 0.06 | 0.08 | 0.21 |
Total basic and diluted income per weighted average common share attributable to MVP REIT common stockholders. | $ 0.01 | $ 0.02 | $ (0.26) | $ (0.45) |
Weighted average common shares outstanding, basic and diluted | 8,140,809 | 3,773,519 | 6,381,719 | 3,472,915 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements Of Stockholders Equity (Unaudited) - 9 months ended Sep. 30, 2015 - USD ($) | Convertible Preferred Stock | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Non-controlling Interest Related Party | Total |
Beginning Balance at Dec. 31, 2014 | $ 4,000 | $ 42,114,000 | $ (11,565,000) | $ 1,719,000 | $ 32,272,000 | |
Balance (Shares) at Dec. 31, 2014 | 1,000 | 4,188,956 | 4,188,956 | |||
Issuance of common stock - purchase, net of commissions of $1,472,000 | $ 6,000 | $ 52,414,000 | $ 52,420,000 | |||
Issuance of common stock - purchase, net of commissions of $1,472,000 (Shares) | 6,004,350 | |||||
Distributions - DRIP (Shares) | 91,735 | |||||
Distributions - cash | $ (1,909,000) | $ (1,909,000) | ||||
Distributions to noncontrolling interest | $ (29,000) | (29,000) | ||||
Redeemed shares | $ (134,000) | (134,000) | ||||
Redeemed shares (Shares) | (15,306) | |||||
Net income (loss) | $ (1,604,000) | $ 136,000 | (1,468,000) | |||
Balance at Sep. 30, 2015 | $ 10,000 | $ 92,485,000 | $ (13,169,000) | $ 1,826,000 | $ 81,152,000 | |
Balance (Shares) at Sep. 30, 2015 | 1,000 | 10,269,735 | 10,269,735 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements Of Stockholders Equity (Parenthetical) | 9 Months Ended |
Sep. 30, 2015USD ($) | |
Statement of Stockholders' Equity [Abstract] | |
Commissions | $ 1,472,000 |
Condensed Consolidated Stateme7
Condensed Consolidated Statements Of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Cash flows from operating activities: | ||
Net loss | $ (1,468,000) | $ (1,470,000) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Depreciation and amortization expense | $ 518,000 | 156,000 |
Acquisition expense related to asset transfer | 1,336,000 | |
Gain on sale of investment in real estate | (70,000) | |
Income from investment in cost method investee | $ 6,000 | |
Change in operating assets and liabilities: | ||
Restricted cash | $ (860,000) | |
Accounts receivable | $ 12,000 | |
Prepaid expenses | $ 83,000 | (2,000) |
Deferred rental assets | (150,000) | (17,000) |
Other assets | (13,000) | 186,000 |
Capitalized loan fees | (120,000) | $ 3,000 |
Security deposits | 211,000 | |
Assets held for sale, net | (405,000) | $ (255,000) |
Due to related parties | (10,000) | (1,611,000) |
Accounts payable and accrued liabilities | 473,000 | 1,000 |
Net cash used in operating activities | (1,741,000) | $ (1,725,000) |
Cash flows from investing activities: | ||
Investment in real estate | $ (32,024,000) | |
Proceeds from sale of investment in real estate and fixed assets | $ 10,358,000 | |
Payment of deposits | $ (2,560,000) | $ (1,140,000) |
Building improvements | $ (159,000) | |
Proceeds from loan to equity method investee | $ 474,000 | |
Proceeds received through asset transfer transaction | 1,291,000 | |
Proceeds from loan to cost method invest | $ 209,000 | |
Proceeds from sale of Red Mountain | $ 5,426,000 | |
Building improvements on assets held for sale | $ (328,000) | |
Net cash provided by (used in) investing activities | $ (29,317,000) | 10,864,000 |
Cash flows from financing activities: | ||
Proceeds from issuance of common stock, net commissions | 52,420,000 | 6,000,000 |
Proceeds from promissory note | $ 3,656,000 | 86,000 |
Proceeds from promissory note on assets held for sale | 16,968,000 | |
Capital contribution from noncontrolling interest - related party on asset held for sale | 3,000,000 | |
Distribution to non - controlling interest | $ 413,000 | 185,000 |
Payments on notes payable | (550,000) | (248,000) |
Payments on notes payable held for sale | (2,643,000) | (21,118,000) |
Redeemed shares | $ (134,000) | (10,000) |
Payments on notes payable - related party | (900,000) | |
Stockholders' distributions | $ (1,909,000) | (1,265,000) |
Net cash provided by financing activities | 50,811,000 | 2,513,000 |
NET CHANGE IN CASH | 19,753,000 | 11,652,000 |
Cash and cash equivalents, beginning of period | 13,812,000 | 1,545,000 |
Cash and cash equivalents, end of period | 33,565,000 | 13,197,000 |
Supplemental disclosures of cash flows information: | ||
Interest paid | 935,000 | 237,000 |
Non-cash investing and financing activities: | ||
Distributions - DRIP | 413,000 | $ 185,000 |
Capitalized loan fees related to promissory note | $ 16,000 | |
Reduction of debt by Advisor and related party recognized as a contribution | $ 595,000 | |
Shares issued for contingent acquisition liability | $ 100,000 | |
Debt assumed in acquisitions | $ 12,180,000 |
Organization, Proposed Business
Organization, Proposed Business Operations and Capitalization | 9 Months Ended |
Sep. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization, Proposed Business Operations and Capitalization | Note A — Organization, Proposed Business Operations and Capitalization Organization and Business MVP REIT, Inc. (the “Company” or “MVP”) was incorporated on April 3, 2012 as a Maryland corporation, and has elected to be taxed, and operates in a manner that will allow the Company to qualify as a real estate investment trust (“REIT”) for U.S. federal income tax purposes beginning with the taxable year ended December 31, 2013. Pursuant to its initial public offering, which closed in September 2015, the Company received net consideration of approximately $92.5 million for the issuance and sale of its common stock. Of this amount, approximately $19.5 million of shares were issued in consideration of the contribution of commercial properties to the Company. The Company has also registered up to $50 million for the issuance of common stock pursuant to a distribution reinvestment plan (the “DRIP”) under which common stockholders may elect to have their distributions reinvested in additional shares of common stock. The Company operates as a real estate investment trust (“REIT”). The Company is not a mutual fund or an investment company within the meaning of the Investment Company Act of 1940, nor is the Company subject to any regulation thereunder. As a REIT, the Company is required to have a December 31 fiscal year end. Among other requirements, REITs are required to satisfy certain gross income and asset tests, which may affect the composition of assets the Company acquires with the proceeds from its public offering. In addition, REITs are required to distribute to stockholders at least 90% of their annual REIT taxable income (computed without regard to the dividends paid deduction and excluding net capital gain). The Company’s investment strategy was originally to invest available net proceeds from its Offering in direct investments in real property and real estate secured loans (including first and second mortgage loans, mezzanine loans, bridge loans, convertible mortgages, variable interest rate real estate secured loans where a portion of the return is dependent upon performance-based metrics and other loans related to real estate) that meet the Company’s investment objectives and strategies. In March 2014, the Company’s board of directors approved a plan to increase the focus of the Company’s investment strategy on parking and self-storage facilities located throughout the United States as the Company’s core assets. As part of this strategy, the Company exchanged office properties with affiliated entities to exchange all of its ownership interests in certain non-core assets (consisting of four office buildings) for all of the affiliated entities’ ownership interests in five parking facilities and one self-storage facility. The property exchanges were consummated on April 30, 2014. In June 2014, the Company’s board decided to further focus its efforts primarily on parking facilities. Additionally, during July and August, 2014, the Company sold its membership interest in the two remaining office buildings producing net rental income owned by the Company to Vestin Realty Mortgage I, Inc., a Maryland corporation and Nasdaq-listed company (“VRM I”) and Vestin Realty Mortgage II, Inc., a Maryland corporation and Nasdaq-listed company (“VRM II”). Please see “Note B – Acquisitions” to the financial statements included in this Quarterly Report for more information regarding the property exchanges. The Company may, from time to time, invest in non-core assets, including investments in companies that manage real estate or mortgage investment companies; however, the Company has agreed that no more than 25% of the gross proceeds from the Offering will be used to invest in real properties other than parking facilities. On October 3, 2012, the Company confirmed that its board of directors had approved a plan for payment of initial monthly cash distributions of $0.045 per share. On January 25, 2013, the Company issued a press release announcing that its board of directors had approved an increase in its monthly distribution rate on its common shares to an annualized distribution rate of 6.2 percent, or $0.558 per share annually or $0.0465 monthly, assuming a purchase price of $9.00 per share. The distribution, previously 6 percent, increased beginning with the January 2013 distribution, paid to stockholders of record as of January 24, 2013 on February 10, 2013. On June 4, 2013, the Company issued a press release announcing that its board of directors has approved an increase in its monthly distribution rate on its common shares to an annualized distribution rate of 6.7 percent, assuming a purchase price of $9.00 per share or $0.05025 monthly. The Company anticipates paying future distributions monthly in arrears, with a record date on the 24th of each month and distributions paid on the 10th day of the following month (or the next business day if the 10th is not a business day). As of September 30, 2015, the Company has paid approximately $5.4 million in distributions including approximately $1.2 million in DRIP distributions to the Company’s stockholders, all of which have been paid from offering proceeds and constituted a return of capital. The Company may pay distributions from sources other than cash flow from operations, including proceeds from the Offering, the sale of assets, or borrowings. The Company has no limits on the amounts it may pay from such sources. If the Company continues to pay distributions from sources other than cash flow from operations, the funds available to the Company for investments would be reduced and the share value may be diluted. The Company’s sponsor is MVP Capital Partners, LLC (“MVPCP” or the “Sponsor”), an entity owned and managed by Michael V. Shustek, the Company’s Chairman and Chief Executive Officer. The Company’s advisor is MVP Realty Advisors, LLC (the “Advisor”). VRM II owns 60% of the Advisor, and the remaining 40% is owned by VRM I. Michael Shustek owns a significant majority of Vestin Mortgage, LLC, a Nevada limited liability company, which is the manager of VRM I, VRM II and Vestin Fund III (“VF III”). The Advisor is responsible for managing the Company’s affairs on a day-to-day basis and for identifying and making investments on the Company’s behalf pursuant to an advisory agreement between the Company and the Advisor (the “Advisory Agreement”). The Company is the sole member of its operating limited liability company, MVP Real Estate Holdings, LLC, a Nevada limited liability company (“REH”). Substantially all of the Company’s business is conducted through our wholly owned subsidiary REH. The operating agreement provides that REH is operated in a manner that enables the Company to (1) satisfy the requirements for being classified as a REIT for tax purposes, (2) avoid any federal income or excise tax liability, and (3) ensure that REH is not classified as a “publicly traded partnership” for purposes of Section 7704 of the Internal Revenue Code, which classification could result in REH being taxed as a corporation, rather than as a partnership. Capitalization As of September 30, 2015 the Company had 10,269,735 shares of common stock issued and outstanding and 1,000 shares of non-voting, non-participating convertible stock, $0.001 par value, issued and outstanding (the “Convertible Stock”). Upon formation, the Company sold 22,222 shares of common stock to the Sponsor for $200,000. In addition, upon the commencement of our offering, we issued 1,000 shares of the Convertible Stock to our advisor. After giving effect to the release of waivers and waiver agreements executed in August and September of 2014, all of which were previously disclosed in Form 8-Ks and prospectus supplements, the Convertible Stock will convert into shares of our common stock representing 3.50% of the outstanding shares of our common stock immediately preceding the conversion if and when: (a) the Company has made total distributions on the then outstanding common shares equal to the invested capital attributable to those shares plus a 6.00% cumulative, non-compounded, annual pre-tax return on such invested capital; or (b) (i) the Company lists its common shares for trading on a national securities exchange and (ii) (x) the sum of the aggregate market value of the issued and outstanding common shares plus the aggregate amount of all distributions on the Company’s common shares exceeds (y) the sum of the aggregate capital contributed by investors (less any capital returned in the form of distributions) plus an amount equal to a 6% cumulative, pre-tax non-compounded annual return to investors; or (c) the advisory agreement is terminated or not renewed, but only if at the time of such termination or non-renewal, the requirements for conversion set forth in either of the immediately preceding clause (a) or (b) also shall have been satisfied. For purposes of such calculation, the market value of our outstanding common stock will be calculated based on the average market value of the shares of common stock issued and outstanding at listing over the 30 trading days beginning 180 days after the shares are first listed for trading on a national securities exchange. As of September 30, 2015 the Company has received net consideration of approximately $92.5 million for the issuance of its common stock in connection with the offering. Approximately $19.5 million was a non-cash transaction recorded as part of our acquisitions of properties which are no longer part of our portfolio. Pursuant to the DRIP, stockholders may elect to reinvest distributions by purchasing shares of common stock in lieu of receiving distributions. No dealer manager fees or selling commissions are paid with respect to shares purchased pursuant to the DRIP. Participants purchasing shares pursuant to the DRIP have the same rights and are treated in the same manner as if such shares were issued pursuant to the Offering. The board of directors may designate that certain cash or other distributions be excluded from the DRIP. The Company has the right to amend any aspect of the DRIP or terminate the DRIP with ten days’ notice to participants. Shares issued under the DRIP are recorded to equity in the accompanying balance sheets in the period distributions are declared. An investor’s participation in the DRIP will terminate automatically if the Company dishonors, or partially dishonors, any requests by such investor to redeem shares of its common stock in accordance with the Company’s share repurchase program. As of September 30, 2015, 132,245 common shares have been issued under the DRIP. In addition, the Company has a Share Repurchase Program (“SRP”) that may provide stockholders who generally have held their shares for at least one year an opportunity to sell their shares to the Company, subject to certain restrictions and limitations. Prior to the date that the Company establishes an estimated value per share of common stock, the purchase price will be 97.5% of the purchase price paid for the shares, if redeemed at any time between the first and third anniversaries of the purchase date, and 100% of the purchase price paid if redeemed after the third anniversary. After the Company establishes an estimated value per share of common stock, the Company will repurchase shares at 100% of the estimated value per share, as determined by its board of directors and disclosed in the annual report publicly filed with the SEC. The number of shares to be repurchased during a calendar quarter is limited to the lesser of: (i) 2.0% of the number of shares of common stock outstanding on December 31 of the prior calendar year, and (ii) those repurchases that can be funded from the net proceeds of the sale of shares under the DRIP in the prior calendar year. The board of directors may also limit the amounts available for repurchase at any time at its sole discretion. The SRP will terminate if the shares of common stock are listed on a national securities exchange. Effective as of December 14, 2014, the Company has amended the SRP to provide that it will agree to satisfy all repurchase requests made in connection with the death or disability (as defined in the Code) of a stockholder in accordance with the terms of the SRP within 15 days following the Company’s receipt of such repurchase request or as soon as practicable thereafter. Redemption requests other than those made in connection with the death or disability (as defined in the Code) of a stockholder will continue to be repurchased as of March 31, June 30, September 30 and December 31 of each year in accordance with the terms of the SRP. As of the date of this filing, the Company has received additional requests for repurchase of 16,469 which exceed the amount allowable for 2015 repurchase by $147,144. April 2016 will be the next date shares are available for repurchase. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2015 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note B — Summary of Significant Accounting Policies Basis of Accounting The accompanying unaudited condensed consolidated financial statements of the Company are prepared by management on the accrual basis of accounting and in accordance with principles generally accepted in the United States of America (“GAAP”) for interim financial information as contained in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”), and in conjunction with rules and regulations of the SEC. Certain information and footnote disclosures required for annual financial statements have been condensed or excluded pursuant to SEC rules and regulations. Accordingly, the unaudited condensed consolidated financial statements do not include all of the information and footnotes required by GAAP for complete financial statements. The unaudited condensed consolidated financial statements include accounts and related adjustments, which are, in the opinion of management, of a normal recurring nature and necessary for a fair presentation of the Company’s financial position, results of operations and cash flows for the interim period. Operating results for the three and nine months ended September 30, 2015 are not necessarily indicative of the results that may be expected for the year ending December 31, 2015. These unaudited condensed consolidated financial statements should be read in conjunction with the condensed consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014. The condensed consolidated balance sheet as of December 31, 2014 contained herein has been derived from the audited consolidated financial statements as of December 31, 2014, but do not include all disclosures required by GAAP. Consolidation The Company’s condensed consolidated financial statements include its accounts and the accounts of its subsidiaries, REH and all of the subsidiaries of REH: MVP MS Cedar Park 2012, LLC; MVP PF Ft. Lauderdale, LLC; MVP PF Memphis Court, LLC; MVP PF Memphis Poplar, LLC; MVP PF St. Louis, LLC; MVP PF Kansas City, LLC; MVP MS Red Mountain 2013, LLC; Mabley Place Garage; LLC, MVP Denver Sherman; LLC, MVP Fort Worth Taylor, LLC; MVP Milwaukee Old World, LLC; MVP St. Louis Convention Plaza, LLC; MVP Houston Saks Garage, LLC; MVP St. Louis Lucas, LLC, MVP Milwaukee Wells, LLC and MVP Wildwood NJ Lot, LLC, as well as the Company’s assets that were sold during 2014. All intercompany profits, balances and transactions are eliminated in consolidation. Under accounting principles generally accepted in the United States of America (“GAAP”), the Company’s condensed consolidated financial statements will also include the accounts of its consolidated subsidiaries and joint ventures in which the Company is the primary beneficiary, or in which the Company has a controlling interest. In determining whether the Company has a controlling interest in a joint venture and the requirement to consolidate the accounts of that entity, the Company’s management considers factors such as an entity’s purpose and design and the Company’s ability to direct the activities of the entity that most significantly impacts the entity’s economic performance, ownership interest, board representation, management representation, authority to make decisions, and contractual and substantive participating rights of the partners/members as well as whether the entity is a variable interest entity in which it will absorb the majority of the entity’s expected losses, if they occur, or receive the majority of the expected residual returns, if they occur, or both. Equity investments in which the Company exercises significant influence but does not control and is not the primary beneficiary are accounted for using the equity method. The Company's share of its equity method investees' earnings or losses is included in other income in the accompanying Consolidated Statements of Operations. Investments in which the Company is not able to exercise significant influence over the investee are accounted for under the cost method. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Management makes significant estimates regarding revenue recognition, purchase price allocations to record investments in real estate, and derivative financial instruments and hedging activities, as applicable. Concentration The company has approximately six tenants. One tenant, Standard Parking + (“SP+”), consists of more than 10% of the Company’s rental revenue. This tenant represents a concentration for the three and nine months ended September 30, 2015 and 2014. Acquisitions The Company records the acquired tangible and intangible assets and assumed liabilities of acquisitions of all operating properties and those development and redevelopment opportunities that meet the accounting criteria to be accounted for as business combinations at fair value at the acquisition date. The Company assesses and considers fair value based on estimated cash flow projections that utilize available market information and discount and/or capitalization rates that the Company deems appropriate. 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 acquired assets and assumed liabilities for an operating property acquisition generally include but are not limited to: land, buildings and improvements, construction in progress and identified tangible and intangible assets and liabilities associated with in-place leases, including tenant improvements, leasing costs, value of above-market and below-market operating leases and ground leases, acquired in-place lease values and tenant relationships, if any. The fair value of land is derived from comparable sales of land within the same submarket and/or region. The fair value of buildings and improvements, tenant improvements, and leasing costs are based upon current market replacement costs and other relevant market rate information. The fair value of the above-market or below-market component of an acquired in-place operating lease is based upon the present value (calculated using a market discount rate) of the difference between (i) the contractual rents to be paid pursuant to the lease over its remaining non-cancellable lease term and (ii) management's estimate of the rents that would be paid using fair market rental rates and rent escalations at the date of acquisition measured over the remaining non-cancellable term of the lease for above-market operating leases and the initial non-cancellable term plus the term of any below-market fixed rate renewal options, if applicable, for below-market operating leases. The amounts recorded for above-market operating leases are included in deferred leasing costs and acquisition-related intangibles, net on the balance sheet and are amortized on a straight-line basis as a reduction of rental income over the remaining term of the applicable leases. The amounts recorded for below-market operating leases are included in deferred revenue and acquisition-related liabilities, net on the balance sheet and are amortized on a straight-line basis as an increase to rental income over the remaining term of the applicable leases plus the term of any below-market fixed rate renewal options, if applicable. Our below-market operating leases generally do not include fixed rate or below-market renewal options. The fair value of acquired in-place leases is derived based on management's assessment of lost revenue and costs incurred for the period required to lease the “assumed vacant” property to the occupancy level when purchased. This fair value is based on a variety of considerations including, but not necessarily limited to: (1) the value associated with avoiding the cost of originating the acquired in-place leases; (2) the value associated with lost revenue related to tenant reimbursable operating costs estimated to be incurred during the assumed lease-up period; and (3) the value associated with lost rental revenue from existing leases during the assumed lease-up period. Factors considered by us in performing these analyses include an estimate of the carrying costs during the expected lease-up periods, current market conditions, and costs to execute similar leases. In estimating carrying costs, the Company includes real estate taxes, insurance and other operating expenses, and estimates of lost rental revenue during the expected lease-up periods based on current market demand at market rates. In estimating costs to execute similar leases, the Company considers leasing commissions, legal and other related expenses. The amount recorded for acquired in-place leases is included in deferred leasing costs and acquisition-related intangibles, net on the balance sheet and amortized as an increase to depreciation and amortization expense over the remaining term of the applicable leases. If a lease were to be terminated or if termination were determined to be likely prior to its contractual expiration (for example resulting from bankruptcy), amortization of the related unamortized in-place lease intangible would be accelerated. The determination of the fair value of any debt assumed in connection with a property acquisition is estimated by discounting the future cash flows using interest rates available for the issuance of debt with similar terms and remaining maturities. The determination of the fair value of the acquired tangible and intangible assets and assumed liabilities of operating property acquisitions requires us to make significant judgments and assumptions about the numerous inputs discussed above. The use of different assumptions in these fair value calculations could significantly affect the reported amounts of the allocation of our acquisition related assets and liabilities and the related amortization and depreciation expense recorded for such assets and liabilities. In addition, because the value of above and below market leases are amortized as either a reduction or increase to rental income, respectively, our judgments for these intangibles could have a significant impact on our reported rental revenues and results of operations. Costs directly associated with all operating property acquisitions and those development and redevelopment acquisitions that meet the accounting criteria to be accounted for as business combinations are expensed as incurred. During the three months ended September 30, 2015, the Company expensed approximately $75,000 of related party and $153,000 non-related party acquisition costs. During the nine months ended September 30, 2015, the Company expensed approximately $1,856,000 of related party and $481,000 non-related party acquisition costs based on the level of our acquisition activity. Our acquisition expenses are directly related to our acquisition activity and if our acquisition activity was to increase or decrease, so would our acquisition costs. Costs directly associated with development acquisitions accounted for as asset acquisitions are capitalized as part of the cost of the acquisition. During the three and nine months ended September 30, 2015, the Company did not capitalize any such acquisition costs. Impairment of Long Lived Assets When circumstances indicate the carrying value of a property may not be recoverable, the Company reviews the asset for impairment. This review is based on an estimate of the future undiscounted cash flows, excluding interest charges, expected to result from the property’s use and eventual disposition. These estimates consider factors such as expected future operating income, market and other applicable trends and residual value, as well as the effects of leasing demand, competition and other factors. If impairment exists, due to the inability to recover the carrying value of a property, an impairment loss is recorded to the extent that the carrying value exceeds the estimated fair value of the property for properties to be held and used. For properties held for sale, the impairment loss is the adjustment to fair value less estimated cost to dispose of the asset. These assessments have a direct impact on net income because recording an impairment loss results in an immediate negative adjustment to net income. Derivative Instruments The Company may use derivative financial instruments to hedge all or a portion of the interest rate risk associated with its borrowings. Certain of the techniques used to hedge exposure to interest rate fluctuations may also be used to protect against declines in the market value of assets that result from general trends in debt markets. The principal objective of such agreements is to minimize the risks and/or costs associated with the Company’s operating and financial structure as well as to hedge specific anticipated transactions. The Company records all derivatives on the balance sheet at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Derivatives may also be designated as hedges of the foreign currency exposure of a net investment in a foreign operation. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk in a fair value hedge or the earnings effect of the hedged forecasted transactions in a cash flow hedge. The Company may enter into derivative contracts that are intended to economically hedge certain of its risk, even though hedge accounting does not apply or the Company elects not to apply hedge accounting. The accounting for subsequent changes in the fair value of these derivatives depends on whether each has been designed and qualifies for hedge accounting treatment. If the Company elects not to apply hedge accounting treatment, any changes in the fair value of these derivative instruments is recognized immediately in gains (losses) on derivative instruments in the consolidated statement of operations. If the derivative is designated and qualifies for hedge accounting treatment, the change in the estimated fair value of the derivative is recorded in other comprehensive income (loss) to the extent that it is effective. Any ineffective portion of a derivative’s change in fair value will be immediately recognized in earnings. Cash The Company maintains the majority of its cash balances in a national financial institution located in Las Vegas, Nevada. The balances are insured by the Federal Deposit Insurance Corporation under the same ownership category up to at least $250,000. As of September 30, 2015 and December 31, 2014, the Company had approximately $32.4 million and approximately $13.3 million in excess of the federally-insured limits, respectively. Restricted Cash Restricted cash primarily consists of escrowed tenant improvement funds, real estate taxes, capital improvement funds, insurance premiums, and other amounts required to be escrowed pursuant to loan agreements. Revenue Recognition The Company’s revenues, which will be derived primarily from rental income, include rents that each tenant pays in accordance with the terms of each lease reported on a straight-line basis over the initial term of the lease. Since some of the Company’s leases will provide for rental increases at specified intervals, straight-line basis accounting requires the Company to record a receivable, and include in revenues, unbilled rent receivables that the Company will only receive if the tenant makes all rent payments required through the expiration of the initial term of the lease. The Company may recognize interest income from loans on an accrual basis over the expected terms of the loans using the effective interest method. The Company may recognize fees, discounts, premiums, anticipated exit fees and direct cost over the terms of the loans as an adjustment to the yield. The Company may recognize fees on commitments that expire unused at expiration. The Company may recognize interest income from available-for-sale securities on an accrual basis over the life of the investment on a yield-to-maturity basis. The Company will continually review receivables related to rent and unbilled rent receivables and determine collectability by taking into consideration the tenant’s payment history, the financial condition of the tenant, business conditions in the industry in which the tenant operates and economic conditions in the area in which the property is located. In the event that the collectability of a receivable is in doubt, the Company will record an increase in the Company’s allowance for uncollectible accounts or record a direct write-off of the receivable in the Company’s consolidated statements of operations. Advertising Costs Advertising costs incurred in the normal course of operations are expensed as incurred. During the three and nine months ended September 30, 2015 and 2014, the Company had no advertising costs. Investments in Real Estate and Fixed Assets Investments in real estate and fixed assets are stated at cost less accumulated depreciation. Depreciation is provided principally on the straight-line method over the estimated useful lives of the assets, which are primarily 3 to 40 years. The cost of repairs and maintenance is charged to expense as incurred. Expenditures for property betterments and renewals are capitalized. Upon sale or other disposition of a depreciable asset, cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in other income (expense). The Company periodically evaluates whether events and circumstances have occurred that may warrant revision of the estimated useful lives of fixed assets or whether the remaining balance of fixed assets should be evaluated for possible impairment. The Company uses an estimate of the related undiscounted cash flows over the remaining life of the fixed assets in measuring their recoverability. Investments in Real Estate Loans Subject to the restrictions on related-party transactions set forth in the Company’s charter, the Company may, from time to time, acquire or sell investments in real estate loans from or to the advisor or other related parties without a premium. The primary purpose is to either free up capital to provide liquidity for various reasons, such as loan diversification, or place excess capital in investments to maximize the use of our capital. Selling or buying loans allows us to diversify our loan portfolio within these parameters. Due to the short-term nature of the loans the Company makes and the similarity of interest rates in loans the Company normally would invest in, the fair value of a loan typically approximates its carrying value. Accordingly, discounts or premiums typically do not apply upon sales of loans and therefore, generally no gain or loss is recorded on these transactions, regardless of whether to a related or unrelated party. Investments in real estate loans are secured by deeds of trust or mortgages. Generally, our real estate loans require interest only payments with a balloon payment of the principal at maturity. The Company has both the intent and ability to hold real estate loans until maturity and therefore, real estate loans are classified and accounted for as held for investment and are carried at amortized cost. Loans sold to or purchased from affiliates are accounted for at the principal balance and no gain or loss is recognized by us or any affiliate. Loan-to-value ratios are initially based on appraisals obtained at the time of loan origination and are updated, when new appraisals are received or when management’s assessment of the value has changed, to reflect subsequent changes in value estimates. Such appraisals are generally dated within 12 months of the date of loan origination and may be commissioned by the borrower. The Company considers a loan to be impaired when, based upon current information and events, it believes it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement. The Company’s impaired loans include troubled debt restructuring, and performing and non-performing loans in which full payment of principal or interest is not expected. The Company calculates an allowance required for impaired loans based on the present value of expected future cash flows discounted at the loan’s effective interest rate, or at the loan’s observable market price or the fair value of its collateral. Loans that have been modified from their original terms are evaluated to determine if the loan meets the definition of a Troubled Debt Restructuring (“TDR”) as defined by ASC 310-40. When the Company modifies the terms of an existing loan that is considered a TDR, it is considered performing as long as it is in compliance with the modified terms of the loan agreement. If the modification calls for deferred interest, it is recorded as interest income as cash is collected. Allowance for Loan Losses The Company maintains an allowance for loan losses to the extent it makes investments in real estate loans for estimated credit impairment. The Company’s estimate of losses is based on a number of factors including the types and dollar amounts of loans in the portfolio, adverse situations that may affect the borrower’s ability to repay, prevailing economic conditions and the underlying collateral securing the loan. Additions to the allowance are provided through a charge to earnings and are based on an assessment of certain factors, which may indicate estimated losses on the loans. Actual losses on loans are recorded first as a reduction to the allowance for loan losses. Generally, subsequent recoveries of amounts previously charged off are recognized as income. Estimating allowances for loan losses requires significant judgment about the underlying collateral, including liquidation value, condition of the collateral, competency and cooperation of the related borrower and specific legal issues that affect loan collections or taking possession of the property. As a commercial real estate lender willing to invest in loans to borrowers who may not meet the credit standards of other financial institutional lenders, the default rate on our loans could be higher than those generally experienced in the real estate lending industry. The Company and the Advisor generally approve loans more quickly than other real estate lenders and, due to our expedited underwriting process; there is a risk that the credit inquiry performed will not reveal all material facts pertaining to a borrower and the security. Additional facts and circumstances may be discovered as the Company continues efforts in the collection and foreclosure processes. This additional information often causes management to reassess its estimates. Circumstances that may cause significant changes in our estimated allowance include, but are not limited to: · Declines in real estate market conditions, which can cause a decrease in expected market value; · Discovery of undisclosed liens for community improvement bonds, easements and delinquent property taxes; · Lack of progress on real estate developments after the Company advances funds. The Company customarily utilizes disbursement agents to monitor the progress of real estate developments and approve loan advances. After further inspection of the related property, progress on construction occasionally does not substantiate an increase in value to support the related loan advances; · Unanticipated legal or business issues that may arise subsequent to loan origination or upon the sale of foreclosed property; and · Appraisals, which are only opinions of value at the time of the appraisal, may not accurately reflect the value of the property. Organization, Offering and Related Costs Certain organization, offering and related costs, including legal, accounting, printing, marketing expenses and the salaries and direct expenses of the employees of the Advisor and its affiliates, will be incurred by the Advisor on behalf of the Company. After the Company has reimbursed $100,000 of such costs, which has been paid to the Advisor, no additional reimbursements will be made unless the aggregate amount of such reimbursements does not exceed 0.75% of the gross offering proceeds as of the date of reimbursement. Prior to the commencement of our operations, such offering costs had been deferred and such deferred offering costs have been amortized to expense as offering costs over the 12 month period commencing January 1, 2013 through December 31, 2013, on a straight-line basis. Stock-Based Compensation The Company has a stock-based incentive award plan, which is accounted for under the guidance for share based payments. The expense for such awards will be included in general and administrative expenses and is recognized over the vesting period or when the requirements for exercise of the award have been met (See Note F — Stock-Based Compensation). Income Taxes The Company has elected, and operates in a manner that will allow the Company, to qualify to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended, commencing with the taxable year ended December 31, 2013. If the Company qualifies for taxation as a REIT, it generally will not be subject to federal corporate income tax to the extent it distributes all of its REIT taxable income to its stockholders, and so long as it distributes at least 90% of its REIT taxable income. REITs are subject to a number of other organizational and operational requirements. Even if the Company qualifies to be taxed as a REIT, it may be subject to certain state and local taxes on its income and property, and federal income and excise taxes on its undistributed income. Per Share Data The Company calculates basic earnings per share by dividing net income for the period by weighted-average shares of its common stock outstanding for a respective period. Diluted earnings per share takes into account the effect of dilutive instruments, such as stock options and convertible stock, but uses the average share price for the period in determining the number of incremental shares that are to be added to the weighted-average number of shares outstanding. The Company had no outstanding common share equivalents during the nine months ended September 30, 2015. In September 2012, upon the commencement of our offering, we issued 1,000 shares of convertible stock to our advisor. After giving effect to the release of waivers and waiver agreements executed in August and September of 2014, all of which were previously disclosed in Form 8-Ks and prospectus supplements, the convertible stock will convert into shares of our common stock representing 3.50% of the outstanding shares of our common stock immediately preceding the conversion if and when: (a) the Company has made total distributions on the then outstanding common shares equal to the invested capital attributable to those shares plus a 6.00% cumulative, non-compounded, annual pre-tax return on such invested capital; or (b) (i) the Company lists its common shares for trading on a national securities exchange and (ii) (x) the sum of the aggregate market value of the issued and outstanding common shares plus the aggregate amount of all distributions on the Company’s common shares exceeds (y) the sum of the aggregate capital contributed by investors (less any capital returned in the form of distributions) plus an amount equal to a 6% cumulative, pre-tax non-compounded annual return to investors; or (c) the advisory agreement is terminated or not renewed, but only if at the time of such termination or non-renewal, the requirements for conversion set forth in either of the immediately preceding clause (a) or (b) also shall have been satisfied. For purposes of such calculation, the market value of our outstanding common stock will be calculated based on the average market value of the shares of common stock issued and outstanding at listing over the 30 trading days beginning 180 days after the shares are first listed for trading on a national securities exchange. Reportable Segments The Company is currently authorized to operate two reportable segments, investments in real estate loans and investments in real property. As of September 30, 2015, the Company only operates in the investment in real property segment. Reclassifications Amounts listed in connection with assets held for sale (including liabilities related to assets held for sale), restricted cash and deposits in the 2014 condensed consolidated financial statements have been reclassified to conform to the September 30, 2015 presentation. Accounting and Auditing Standards Applicable to “Emerging Growth Companies” The Company is an “emerging growth company” under the recently enacted JOBS Act. For as long as the Company remains an “emerging growth company,” which may be up to five fiscal years, the Company is not required to (1) comply with any new or revised financial accounting standards that have different effective dates for public and private companies until those standards would otherwise apply to private companies, (2) provide an auditor’s attestation report on management’s assessment of the effectiveness of internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act, (3) comply with any new requirements adopted by the Public Company Accounting Oversight Board, or the PCAOB, requiring mandatory audit firm rotation or a supplement to the auditor’s report in which the auditor would be required to provide additional information about the audit and the financial statements of the issuer or (4) comply with any new audit rules adopted by the PCAOB after April 5, 2012, unless the SEC determines otherwise. The Company intends to take advantage of such extended transition period. Since the Company will not be required to comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for other public companies, the Company’s financial statements may not be comparable to the financial statements of companies that comply with public company effective dates. If the Company were to subsequently elect to instead comply with these public company effective dates, such election would be irrevocable pursuant to Section 107 of the JOBS Act. Non-controlling Interests The FASB issued authoritative guidance for non-controlling interests in December 2007, which establishes accounting and reporting standards for the non-controlling interest in a subsidiary and for the deconsolidation of a subsidiary. The guidance clarifies that a non-controlling interest in a subsidiary, which is sometimes referred to as an unconsolidated investment, is an ownership interest in the consolidated entity that should be reported as a component of equity in the consolidated financial statements. Among other requirements, the guidance requires consolidated net income to be reported at amounts attributable to both the parent and the non-controlling interest. It also requires disclosure, on the face of the consolidated income statement, of the amounts of consolidated net income attributable to the parent and to the non-controlling interest. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note C — Commitments and Contingencies Litigation In the ordinary course of business, the Company may become subject to litigation or claims. There are no material legal proceedings pending or known to be contemplated against the Company. Environmental Matters In connection with the ownership and operation of real estate, the Company may potentially be liable for costs and damages related to environmental matters. During the Company’s due diligence of a property located in Milwaukee it was discovered that the soil and ground water at the subject property had been impacted by the site’s historical use as a printing press as well as neighboring property uses. As a result, the company has retained a local environmental engineer to seek a closure letter or similar certificate of no further action from the State of Wisconsin due to the Company’s use of the property as a parking lot. As of September 30, 2015 management does not anticipate a material adverse effect related to this environmental matter. Please see Note I Acquisitions |
Investments in Real Estate
Investments in Real Estate | 9 Months Ended |
Sep. 30, 2015 | |
Banking and Thrift [Abstract] | |
Investments in Real Estate | Note C — Commitments and Contingencies Litigation In the ordinary course of business, the Company may become subject to litigation or claims. There are no material legal proceedings pending or known to be contemplated against the Company. Environmental Matters In connection with the ownership and operation of real estate, the Company may potentially be liable for costs and damages related to environmental matters. During the Company’s due diligence of a property located in Milwaukee it was discovered that the soil and ground water at the subject property had been impacted by the site’s historical use as a printing press as well as neighboring property uses. As a result, the company has retained a local environmental engineer to seek a closure letter or similar certificate of no further action from the State of Wisconsin due to the Company’s use of the property as a parking lot. As of September 30, 2015 management does not anticipate a material adverse effect related to this environmental matter. Please see Note I Acquisitions Note D – Investments in Real Estate As of September 30, 2015, the company has the following Investments in Real Estate: Property Location Date Acquired Property Type Investment Amount Size / Acreage # Spaces / Units Retail /Office Square Ft. % of Portfolio ** Ft. Lauderdale 208 SE 6th St, Ft Lauderdale, FL 7/31/2013 Parking Lot / Office Bldg. $3,400,000 .75 acre 66 4,061 4.94% Memphis Court 216 Court St, Memphis, TN 8/28/2013 Parking Lot $190,000 .41 acre 37 N/A 0.28% Memphis Poplar 212 Poplar Ave, Memphis, TN 8/28/2013 Parking Lot $2,685,000 .86 acre 125 N/A 3.87% Kansas City 1130 Holmes St, Kansas City, MO 8/28/2013 Parking Lot $1,550,000 1.18 acres 164 N/A 2.25% St. Louis 1300 Spruce St, St. Louis, MO 9/4/2013 Parking Lot $4,125,000 1.22 acres 179 N/A 2.33% Mabley Place * 400 Race Street, Cincinnati, OH 12/9/2014 Parking Facility $15,000,000 .91 acre 775 8,400 21.81% Denver Sherman 1963 Sherman Street, Denver, CO 1/26/2015 Parking Lot $585,000 .14 acre 28 N/A 0.85% Ft. Worth 814 Taylor Street, Fort Worth, Texas 3/16/2015 Parking Facility $23,336,000 1.18 acres 1,013 11,828 34.17% Milwaukee Old World 822 N. Old World Third Street, Milwaukee, WI 3/31/2015 Parking Lot $1,000,000 .27 acre 54 N/A 1.45% St. Louis Convention 1010 Convention Plaza , St. Louis, MO 5/31/2015 Parking Lot $2,575,000 1.26 acres 221 N/A 3.74% Houston Saks Garage 611 Fannin Street, Houston, Tx 5/28/2015 Parking Facility $8,375,000 .36 acre 265 5,000 12.18% St. Louis Lucas Lucas Ave, St. Louis, MO 6/29/2015 Parking Lot $3,463,000 1.07 acres 217 N/A 5.04% Milwaukee Wells 215 W. Wells Street, Milwaukee, WI 6/30/2015 Parking Lot $3,900,000 .95 acre 100 N/A 5.67% Wildwood NJ Lot 400 East Magnolia Ave, Wildwood, NJ 7/10/2015 Parking Lot $970,000 .29 acre 29 N/A 1.41% *MVP REIT owns 70%, MVP REIT Owns 100% in all other properties. ** Based on investment amount. Property Location Zoning Height Restriction Parking Tenant Lease Commencement Date Lease Term Ft. Lauderdale 208 SE 6th St, Ft Lauderdale, FL RAC-CC 150 Feet SP+ 02/01/14 5 yr. w/2 5 yr. ext. Memphis Court 216 Court St, Memphis, TN CBD Unlimited SP+ 03/14/12 2 Years remaining Memphis Poplar 212 Poplar Ave, Memphis, TN CBD Unlimited Best Park 03/01/14 5 yr. w/2 5 yr. ext. Kansas City 1130 Holmes St, Kansas City, MO B4-5 Unlimited SP+ 03/14/12 15 Years St. Louis 1300 Spruce St, St. Louis, MO I (CBD) 200 Feet SP+ 12/01/13 5 yr. w/2 5 yr. ext. Mabley Place 400 Race Street, Cincinnati, OH DD-A 510 Feet SP+ 12/09/14 10 Years Denver Sherman 1963 Sherman Street, Denver, CO CMX-16 200 Feet Denver SD 07/01/14 10 Years w/1 5 yr. ext. Ft. Worth 814 Taylor Street, Fort Worth, Texas CBD-H Unlimited SP+ 03/16/15 10 Years Milwaukee Old World 822 N. Old World Third Street, Milwaukee, WI C9-E 40 Feet SP+ 03/31/15 5 yr. w/1 5 yr. ext. St. Louis Convention 1010 Convention Plaza, St. Louis, MO I (CBD) 200 Feet SP+ 05/13/15 5 yr. w/1 5 yr. ext. Houston Saks Garage 611 Fannin Street, Houston, Tx N/A Unlimited iPark 05/28/15 10 yr. w/1 5 yr. ext. St. Louis Lucas Lucas Ave, St. Louis, MO I (CBD) 200 Feet SP+ 06/29/15 5 yr. w/1 5 yr. ext. Milwaukee Wells 215 W. Wells Street, Milwaukee, WI C9-E 40 Feet SP+ 06/30/15 10 Years Wildwood NJ Lot* 400 East Magnolia Ave, Wildwood, NJ T/E 35 feet N/A N/A N/A *Operated pursuant to management agreement with SP+ |
Related Party Transactions and
Related Party Transactions and Arrangements | 9 Months Ended |
Sep. 30, 2015 | |
Related Party Transactions [Abstract] | |
Related Party Transactions and Arrangements | Note E — Related Party Transactions and Arrangements The transactions described in this Note were approved by a majority of the Company’s board of directors (including a majority of the independent directors) not otherwise interested in such transaction as fair and reasonable to the Company and on terms and conditions no less favorable to the Company than those available from unaffiliated third parties. Accounting services During the three months ended September 30, 2015, and 2014, Accounting Solutions, an entity owned by Ms. Gress, the Company’s Chief Financial Officer (“CFO”), received fees of approximately $5,000 for accounting services. During the nine months ended September 30, 2015, and 2014, Accounting Solutions, an entity owned by Ms. Gress, the Company’s Chief Financial Officer (“CFO”), received fees of approximately $15,000 and $12,000, respectively, for accounting services. The Company has an accounting services agreement with Strategix Solutions, LLC (“Strategix Solutions”), a Nevada limited liability company owned by Ms. Gress, the Company’s CFO, for the provision of accounting and financial reporting services. Strategix Solutions also provides accounting and financial reporting services to VRM I, VRM II and Fund III. Our CFO and other members of our accounting staff are employees of Strategix Solutions. As used herein, “management” means our manager, its executive officers and the individuals at Strategix Solutions who perform accounting and financial reporting services on our behalf. During the three and nine months ended September 30, 2015 Strategix Solutions received fees of approximately $56,000 and $96,000, respectively. There were no such fees in 2014. Commissions Paid During the three and nine months ended September 30, 2015, JNL Parking, a brokerage and consulting company specializing in the parking industry and co-founded by the Company’s Chief Investment Officer and Chief Technology Officer, earned fees of approximately $0.2 million and $0.4 million, respectively, for 1% commission on purchases. Ownership of Company Stock As of September 30, 2015, the Sponsor owned 22,222 shares of the Company’s outstanding common stock, VRM I owned 69,898 shares of the Company’s outstanding common stock, VF III owned 34,297 shares of the Company’s outstanding common stock, JNL Parking owned 40,498 shares of the Company’s outstanding common stock and the Advisor owned 1,000 shares of the Convertible Stock. See “Capitalization” under Note A Organization, Proposed Business Operations and Capitalization” Ownership of Interests of Advisor During April 2012, VRM II contributed $1,000 for a 40% interest in the Advisor. Mr. Shustek, through a wholly owned company named MVP Capital Partners, LLC (the “Sponsor”), and contributed $1,500 for a 60% interest in the Advisor. As of June 30, 2013, VRM II and the Sponsor had loaned approximately $3.6 million and approximately $1.2 million, respectively, to the Advisor for purposes of funding the Company’s operations. On June 30, 2013, the Sponsor decided to forgive the full amount of its $1.2 million loan. VRM II has not forgiven the balance due from the Advisor. However the decision by the Sponsor to forgive the full amount of its loans created uncertainty as to when VRM II will be repaid the amounts loaned to the Advisor. Based on this uncertainty, VRM II determined to treat as fully impaired the balance of this note receivable. In December 2013, VRM II and the Sponsor entered into a membership interest transfer agreement, dated as of December 19, 2013, pursuant to which VRM II has acquired from the Seller an additional 20% of the membership interests of the Advisor. Concurrently therewith, the Sponsor and VRM I entered into a separate membership interest transfer agreement pursuant to which VRM I acquired the remaining 40% interest in the Advisor from the Sponsor. As a result, VRM II and VRM I now own 60% and 40%, respectively, of the aggregate membership interests of the Advisor. As of September 30, 2015, VRM I and VRM II had notes receivable from the Advisor of approximately $4.2 million and $12.3 million, respectively, which amount has been fully impaired. The Advisor’s ability to repay the sums due VRM I and VRM II will likely depend upon the success of the Company’s public offering and its ability to successfully deploy the offering proceeds. Pursuant to the transfer agreements entered into in December 2013, neither VRM I nor VRM II paid any up-front consideration for the acquired interests, but each will be responsible for its proportionate share of future expenses of the Advisor. In recognition of the Sponsor’s substantial investment in the Advisor for which the Sponsor received no up-front consideration, the transfer agreements and the amended operating agreement of the Advisor further provide that once VRM I and VRM II have been repaid in full for any capital contributions to the Advisor or for any expenses advanced on the Advisor’s behalf (“Capital Investment”), and once they have received an annualized return on their Capital Investment of 7.5%, then the Sponsor will receive one-third of the net profits of the Advisor. Fees and Expenses Paid in Connection with the Offering Broker Dealers received 3.00% of the gross offering proceeds sold in the Offering, subject to reductions based on volume and for certain categories of purchasers. No selling commissions are payable on shares sold under the distribution reinvestment plan. Additionally, the Sponsor or its affiliates (other than MVP REIT, Inc.) paid up to an additional 5.25% of the gross offering proceeds for third party broker dealer commissions and due diligence expenses. On July 16, 2012 the Company signed a selling agreement which appointed MVP American Securities (“MVP AS”), formerly known as Ashton Garnett Securities, LLC , an entity indirectly owned by our CEO, to act as one of the selling agents for the Offering. For the nine months ended September 30, 2015 and 2014 the Company paid no selling commissions to MVP AS. Certain organizational, offering and related costs will be incurred by the Advisor on behalf of the Company. After the Company has reimbursed $100,000 of such costs, which amount has been paid to the Advisor, no additional reimbursements will be made unless the aggregate amount of such reimbursements does not exceed 0.75% of the gross offering proceeds as of the date of reimbursement. Such reimbursable costs may include legal, accounting, printing and other offering expenses, including marketing, salaries and direct expenses of the Advisor’s employees and employees of the Advisor’s affiliates and others. Such reimbursable costs do not include any broker-dealer commissions paid by the Advisor in excess of the 3.00% paid by the Company, including any sponsor commissions or sponsor due diligence fees. Any reimbursement of the Advisor will not exceed actual expenses incurred by the Advisor. On November 1, 2013, the advisor forgave the reimbursement of the full amount of offering costs incurred. Fees and Expenses Paid in Connection With the Operations of the Company The Company has no paid employees. The Company has retained the Advisor to manage its affairs on a day-to-day basis. Pursuant to an amendment of the advisory agreement effective November 21, 2013, the Company will reimburse, no less than monthly, the Advisor for audit, accounting and legal fees, and other fees for professional services provided by third parties relating to the operations of the Company and all such fees incurred at the request, or on behalf of, the Board or any committee of the Board; provided, however, that the Advisor shall not be entitled to reimbursement by the Company for any personnel or related employment costs incurred by the Advisor or its affiliates in performing the services, including but not limited to salary and benefits of employees and overhead, until the first anniversary of (i) the listing of the Company’s shares on a national securities exchange or (ii) a merger, a sale of all or substantially all of the Company’s assets or another liquidity event transaction approved by the Company’s board. As of September 30, 2015, the aggregate amount of expense reimbursements waived by the Advisor was approximately $6.9 million. The Advisor must reimburse the Company at least quarterly for reimbursements paid to the Advisor in any four consecutive fiscal quarters to the extent that such reimbursements to the Advisor cause the Company’s total operating expenses to exceed the greater of (1) 2% of our average invested assets, which generally consists of the average book value of the Company’s real properties before deducting depreciation, bad debts or other non-cash reserves and the average book value of securities, or (2) 25% of the Company’s net income, which is defined as the Company’s total revenues less total expenses for any given period excluding reserves for depreciation, bad debts or other similar non-cash reserves, unless the independent directors have determined that such excess expenses were justified based on unusual and non-recurring factors. The Advisor does not currently owe any amounts to the Company under this provision. As the Company commences the reimbursement of the expenses to the Advisor, the Company will verify that such reimbursements do not exceed the limits identified above or, in the event of any excessive payments, will obtain reimbursements from the Advisor. The Advisor or its affiliates will receive an acquisition fee of 3.0% of the purchase price of any real estate or loan acquired at a discount, provided, however, the Company will not pay any fees when acquiring loans from its affiliates. During the three and nine months ended September 30, 2015 MVP REIT paid approximately $0.4 million and $1.8 million, respectively, in acquisition fees to the Advisor. During the nine months ended September 30, 2014 no acquisition fees were earned. As of September 30, 2015, the Company had a balance of approximately $1,000 payable to the Advisor for fees earned by the Advisor. During the three and nine months ended September 30, 2015, JNL Parking earned fees of approximately $0.2 million and $0.4 million, respectively, for 1% commission on purchases. The Advisor or its affiliates will be reimbursed for actual expenses paid or incurred in connection with the selection or acquisition of an investment, whether or not the Company ultimately acquires the investment. The Company may recoup all or a portion of these expenses from the borrower in connection with each investment. The Advisor or its affiliates is entitled to receive a monthly asset management fee at an annual rate equal to 0.85% of the fair market value of (i) all assets then held by the Company or (ii) the Company’s proportionate share thereof in the case of an investment made through a joint venture or other co-ownership arrangement, excluding (only for clause (ii)) debt financing obtained by the Company or made available to the Company. The fair market value of real property shall be based on annual “AS-IS”, “WHERE-IS” appraisals, and the fair market value of real estate-related secured loans shall be equal to the face value of the such loan, unless it is non-performing, in which case the fair market value shall be equal to the book value of such loan. The asset management fee will be reduced to 0.75% if the Company is listed on a national securities exchange. Asset management fees for the three months ended September 30, 2015 and 2014 were approximately $146,000 and $68,000, respectively. Asset management fees for the nine months ended September 30, 2015 and 2014 were approximately $324,000 and $304,000, respectively. Notwithstanding the foregoing, no asset management fee will be paid or payable with respect to any mortgage assets held by us at this time. We will not pay any asset management fee on any of our mortgage assets unless we restructure our mortgage program in a manner consistent with the NASAA Mortgage Program Guidelines that would permit us to pay an asset management fee on our mortgage assets, including making available 84% of our capital contribution to invest in mortgages assets. We have no present intention to revise our investment strategy in a manner that would permit such payment under the NASAA Mortgage Program Guidelines, but may elect to do so in the future. If we do make such an election to restructure our mortgage program, then, subject to satisfaction of the requirements of the NASAA Mortgage Program Guidelines, we may pay our advisor or its affiliates an annual asset-based fee equal to 0.75% of the “Base Amount” (as defined in the NASAA Mortgage Program Guidelines) of the capital contributions, if any, committed to investments in mortgages and 0.5% of the capital contributions temporarily held while awaiting investments in mortgages, in addition to any other fees and compensation that is allowed under the NASAA Mortgage Program Guidelines. The advisory agreement currently provides for payment to our advisor of a monthly market-based fee for property management services of up to 6.00% of the gross revenues generated by our properties. The Advisor has irrevocably waived its rights to receive a property management fee with respect to any real property owned that are subject to triple net leases. As a result of this waiver, no property management fee will be paid on any real property owned that are subject to triple net leases pursuant to which the tenants pay all or a majority of all real estate taxes, building insurance, and maintenance expenses. The Advisor or its affiliates is entitled to receive a monthly debt financing fee at an annual rate equal to 0.25% of the aggregate debt financing obtained by the Company or made available to the Company, such as mortgage debt, lines of credit, and other term indebtedness, including refinancings. In the case of a joint venture, the Company pays this fee only on the Company’s pro rata share. Debt financing fees for the three months ended September 30, 2015 and 2014 were approximately $18,000, and $10,000, respectively. Debt financing fees for the nine months ended September 30, 2015 and 2014 were approximately $48,000, and $22,000, respectively. Disposition Fee For substantial assistance in connection with the sale of real property, as determined by the independent directors, the Company will pay the Advisor or its affiliate the lesser of (i) 3.00% of the contract sale price of the real property sold or (ii) 50% of the customary commission which would be paid to a third-party broker for the sale of a comparable property. The amount paid, when added to the sums paid to unaffiliated parties, may not exceed either the customary commission or an amount equal to 6.00% of the contract sales price. The disposition fee will be paid concurrently with the closing of any such disposition of all or any portion of any real property. The Company will not pay a disposition fee upon the maturity, prepayment, workout, modification or extension of a loan or other debt-related investment; provided, however, that the Advisor or its affiliates may receive an exit fee or a prepayment penalty paid by the borrower. If the Company takes ownership of a property as a result of a workout or foreclosure of a loan, the Company will pay a disposition fee upon the sale of such real property equal to 3.00% of the sales price. With respect to real property held in a joint venture, the foregoing commission will be reduced to a percentage reflecting the Company’s economic interest in the joint venture. There were no disposition fees earned by the Advisor for the nine months ended September 30, 2015 and 2014. Fees and Expense Reimbursements Payable by Borrowers and Other Third Parties The Company or its affiliates may be entitled to late fees, loan servicing fees, loan extension and loan modification fees and other fees and expense reimbursement payable by borrowers and other third parties. |
Dependency
Dependency | 9 Months Ended |
Sep. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Dependency | Note F —Dependency The Company has no employees and is dependent on the Advisor and the Selling Agents for certain services that are essential to the Company, including the sale of the Company’s shares of common stock in the Offering, asset management services, supervision of the management and leasing of properties owned by the Company, asset acquisition and disposition decisions, as well as other administrative responsibilities for the Company including accounting services and investor relations. In the event that these companies are unable to provide the Company with the respective services, the Company will be required to find alternative providers of these services. In this regard, the Company notes that the Advisor has agreed to waive certain fees and expenses it otherwise would be entitled to under the Advisory Agreement as further described under “ Note E – Related Party Transactions and Arrangement |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2015 | |
Equity [Abstract] | |
Stock-Based Compensation | Note G — Stock-Based Compensation Equity Incentive Plan The Company has adopted an equity incentive plan. The equity incentive plan offers certain individuals an opportunity to participate in the Company’s growth through awards in the form of, or based on, the Company’s common stock. The Company has no current intention to issue any awards under the equity incentive plan but may do so in the future in order to attract and retain qualified directors, officers, employees, and consultants. The equity incentive plan authorizes the granting of restricted stock, stock options, stock appreciation rights, restricted or deferred stock units, performance awards, dividend equivalents, other stock-based awards and cash-based awards to directors, employees and consultants of the Company selected by the board of directors for participation in the equity incentive plan. Stock options granted under the equity incentive plan will not exceed an amount equal to 10% of the outstanding shares of the Company’s common stock on the date of grant of any such stock options. Any stock options and stock appreciation rights granted under the equity incentive plan will have an exercise price or base price that is not less than the fair market value of the Company’s common stock on the date of grant. The board of directors, or the compensation committee of the board of directors, will administer the equity incentive plan, with sole authority to determine all of the terms and conditions of the awards, including whether the grant, vesting or settlement of awards may be subject to the attainment of one or more performance goals. No awards will be granted if the grant or vesting of the awards would jeopardize the Company’s status as a REIT under the Code or otherwise violate the ownership and transfer restrictions imposed under the Company’s charter. Unless otherwise determined by the board of directors, no award granted under the equity incentive plan will be transferable except through the laws of descent and distribution. The Company has authorized and reserved an aggregate maximum of 300,000 shares for issuance under the equity incentive plan. In the event of a transaction between the Company and its stockholders that causes the per-share value of common stock to change (including, without limitation, any stock dividend, stock split, spin-off, rights offering or large nonrecurring cash dividend), the share authorization limits under the equity incentive plan will be adjusted proportionately, and the board of directors must make such adjustments to the equity incentive plan and awards as it deems necessary, in its sole discretion, to prevent dilution or enlargement of rights immediately resulting from such transaction. In the event of a stock split, a stock dividend or a combination or consolidation of the outstanding shares of common stock into a lesser number of shares, the authorization limits under the equity incentive plan will automatically be adjusted proportionately and the shares then subject to each award will automatically be adjusted proportionately without any change in the aggregate purchase price. Unless otherwise provided in an award certificate or any special plan document governing an award, in the event of a corporate transaction (as defined in the Company’s equity incentive plan), if any award issued under the Company’s equity incentive plan is not assumed or replaced as part of the corporate transaction, then such portion of the award shall automatically become fully vested and exercisable and be released from any repurchase or forfeiture rights (other than repurchase rights exercisable at fair market value) immediately prior to the effective date of such corporation transaction, so long as the grantee’s continuous service has not terminated prior to such date. Unless otherwise provided in an award certificate or any special plan document governing an award, in the event of a change in control, each outstanding award issued automatically shall become fully vested and exercisable and be released from any repurchase or forfeiture rights (other than repurchase rights exercisable at fair market value), immediately prior to the effective date of such change in control, provided that the grantee’s continuous service has not terminated prior to such date. Under the equity incentive plan, a “corporate transaction” is defined to include (i) a merger or consolidation in which the Company is not the surviving entity; (ii) the sale of all or substantially all of the Company’s assets; (iii) the Company’s complete liquidation or dissolution; and (iv) acquisitions by any person of beneficial ownership of securities possessing more than 50% of the total combined voting power of the Company’s outstanding securities (but excluding any transactions determined by our administrator not to constitute a “corporate transaction”). Under the equity incentive plan, a “change in control” is defined generally as a change in ownership or control of the Company effected either through (i) acquisitions of securities by any person (or related group of persons) of securities possessing more than 50% of the total combined voting power of the Company’s outstanding securities pursuant to a tender offer or exchange offer that the Company’s directors do not recommend the Company’s stockholders accept; or (ii) a change in the composition of the board over a period of 12 months or less such that a majority of the Company’s board members will no longer serve as directors, by reason of one or more contested elections for board membership. The equity incentive plan will automatically expire on the tenth anniversary of the date on which it is approved by the board of directors and stockholders, unless extended or earlier terminated by the board of directors. The board of directors may terminate the equity incentive plan at any time. The expiration or other termination of the equity incentive plan will have no adverse impact on any award previously granted under the equity incentive plan. The board of directors may amend the equity incentive plan at any time, but no amendment will adversely affect any award previously granted, and no amendment to the equity incentive plan will be effective without the approval of the Company’s stockholders if such approval is required by any law, regulation or rule applicable to the equity incentive plan. In addition, no option, warrant or any other equity award will be issued under our equity incentive plan or otherwise to our advisor, our sponsor or any of their affiliates, if the issuance of any such award would result in a violation of any applicable NASAA REIT Guidelines, including the limitations imposed under the NASAA REIT Guidelines on our total operating expenses (after giving effect to the expense associated with such equity award). Please see “ Note E — Related Party Transactions and Arrangements |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2015 | |
Accounting Changes and Error Corrections [Abstract] | |
Recent Accounting Pronouncements | Note H – Recent Accounting Pronouncements The FASB issued ASU 2015-03, Interest—Imputation of Interest (Subtopic 853-30)—Simplifying the Presentation of Debt Issuance Costs |
Acquisitions
Acquisitions | 9 Months Ended |
Sep. 30, 2015 | |
Business Combinations [Abstract] | |
Acquisitions | Note I - Acquisitions Denver Sherman On January 26, 2015 the Company closed on the purchase of a 0.14 acre parking lot located at 1963 Sherman Street, Denver, Colorado, consisting of approximately 28 parking spaces, for a purchase price of $585,000, plus certain closing costs. The parking lot is leased to the City of Denver School District Number 1. Fort Worth Taylor On March 16, 2015, the Company closed on its $23.3 million purchase of a multi-level parking garage. The parking garage consists of 1,013 parking spaces and approximately 11,828 square feet of office space. The parking garage is located in Fort Worth, Texas. The $23.3 million purchase price included assumption of the existing financing on the parking garage. The existing financing has a maturity date of August 2021, has a balance of approximately $12.2 million, and an interest rate of 5.59% per annum. The Company paid customary closing costs in connection with the transaction. The parking garage is leased to SP Plus Corporation. Milwaukee Old World On March 31, 2015, the Company closed on the purchase of St. Louis Convention Plaza On May 13, 2015, the Company closed on the purchase of Houston Saks Garage On May 28, 2015, the Company closed on the purchase of St. Louis Lucas On June 29, 2015, the Company closed on the purchase of Milwaukee Wells On June 30, 2015, the Company closed on the purchase of Wildwood NJ Lot On July 10, 2015, the Company, through its wholly owned entity, MVP Wildwood NJ Lot, LLC, a Nevada limited liability company, announced that it has closed on the purchase of a parking lot for approximately $1.0 million in cash. The parking lot is located at 400 East Magnolia Ave, Wildwood, NJ. The parking lot consists of 11,250 square feet and has 29 parking spaces. The parking lot is zoned T/E, and allows for a maximum building height of 250 feet. The parking lot will be managed by SP Plus Corporation, a nationwide parking operator. The term of the management agreement is for 5 years. The following table is a summary of the acquisitions for the nine months ended September 30, 2015: Assets Liabilities Land and Improvements Building and improvements Total assets acquired Notes Payable Assumed Net assets and liabilities acquired Denver Sherman $ 585,000 $ -- $ 585,000 $ -- $ 585,000 Ft. Worth Taylor 5,834,000 17,502,000 23,336,000 12,180,000 11,156,000 Milwaukee Old World 1,000,000 -- 1,000,000 -- 1,000,000 St. Louis Convention Plaza 2,575,000 -- 2,575,000 -- 2,575,000 Houston Saks Garage 3,565,000 4,810,000 8,375,000 -- 8,375,000 St. Louis Lucas 3,463,000 -- 3,463,000 -- 3,463,000 Milwaukee Wells 3,900,000 -- 3,900,000 -- 3,900,000 Wildwood NJ Lot 970,000 -- 970,000 -- 970,000 $ 21,892,000 $ 22,312,000 $ 44,204,000 $ 12,180,000 $ 32,024,000 Pro forma results of the Company The following table of pro forma consolidated results of operations of the Company for the three and nine months ended September 30, 2015 and 2014, and assumes that the acquisition was completed as of January 1, 2014. For the three months ended September 30, 2015 For the three months ended September 30, 2014 For the nine months ended September 30, 2015 For the nine months ended September 30, 2014 Revenues from continuing operations $ 1,353,000 $ 957,000 $ 4,010,000 $ 1,839,000 Net income (loss) available to common stockholders $ 56,000 $ 467,000 $ (1,004,000 ) (733,000 ) Net income (loss) available to common stockholders per share – basic $ 0.01 $ 0.12 $ (0.17 ) $ (0.21 ) Net income (loss) available to common stockholders per share – diluted $ 0.01 $ 0.12 $ (0.17 ) $ (0.21 ) Revenue and expenses of acquisitions since acquisition dates included in condensed consolidated statement of operations The following is a summary of the results of operations related to the net assets and liabilities acquired for the period from acquisition dates through September 30, 2015: Revenue $ 1,318,000 Expenses (2,180,000) Net loss $ (862,000) |
Assets held for sale
Assets held for sale | 9 Months Ended |
Sep. 30, 2015 | |
Property, Plant and Equipment [Abstract] | |
Assets held for sale | Note J — Assets held for sale During February 2015, management has entered into a plan to sell the storage unit assets which results in the financial reporting of these assets, liabilities and results of operations related to the assets held for sale, which are classified as discontinued operations. On May 6, 2015, the Company sold the storage unit asset located in Nevada to a non-related third party for approximately $5.4 million. Proceeds of approximately $2.6 million from this sale paid the promissory note for this property in full. The following is summary of net assets held for sale as of September 30, 2015: September 30, 2015 Assets: Current assets $ 4,000 Property and equipment, net 3,154,000 Other assets 47,000 Total assets $ 3,205,000 Liabilities: Accounts payable and accrued liabilities $ 51,000 Notes payable 1,658,000 Total liabilities 1,709,000 Net assets held for sale $ 1,496,000 The following is a summary of the results of operations related to the assets held for sale for the three and nine months ended September 30, 2015and 2014: For the Three Months Ended September 30, For the Nine Months Ended September 30, 2015 2014 2015 2014 Revenue $ 133,000 $ 142,000 383,000 $ 393,000 Expenses (102,000) 108,000 (281,000) 316,000 Net Income $ 31,000 $ 34,000 102,000 $ 77,000 |
Notes Payable
Notes Payable | 9 Months Ended |
Sep. 30, 2015 | |
Debt Disclosure [Abstract] | |
Notes Payable | Note K — Notes Payable During March 2013, Cedar Park issued a promissory note for approximately $1.8 million. The note is collateralized by real property located in Cedar Park, Texas, bears an annual interest rate of 4.66%, and is payable in monthly installment payments of principal and interest totaling approximately $10,000, with a lump sum payment of approximately $1.3 million due at maturity in April 2023. During September 2013, through the acquisition of Red Mountain, the Company financed a 7-year term loan with a balance of approximately $2.7 million, collateralized by real property located in Las Vegas, Nevada, matures in October 2020, bears an annual interest rate of 4.35%, and is payable in monthly installment payments of principal and interest totaling approximately $15,000. This loan was paid in full in May 2015 through the sale of the property. During January 2014, the entities holding the four parking facilities issued a promissory note to Key Bank National Association for $4.3 million. This note bears an annual interest rate of 4.94%, is secured by four parking facilities, matures in February 2019 and is payable in monthly principal and interest payments of approximately $25,000. During December 2014, through the acquisition of Mabley Place, the Company issued a promissory note to Wells Fargo Bank for $9.0 million. This note bears an annual interest rate of 4.25%, is secured by the property, matures in December 2024 and is payable in monthly principal and interest payments of approximately $44,000. During March 2015, through the acquisition of Ft. Worth Taylor, the Company assumed a 10-year term loan with a balance of approximately $12.2 million, collateralized by real property located in Ft. Worth, Texas, matures in August 2021, bears an annual interest rate of 5.59%, and is payable in monthly installment payments of principal and interest totaling approximately $78,000. During August 2015, Houston Saks Garage issued a promissory note for approximately $3.7 million. The note is collateralized by real property located in Houston, Texas, bears an annual interest rate of 4.25%, and is payable in monthly installment payments of principal and interest totaling approximately $30,000, maturing in August 2025. Total interest expense incurred for the three months ended September 30, 2015 and 2014 is $365,000 and $53,000, respectively. Interest expense incurred for the nine months ended September 30, 2015 and 2014 is $935,000 and $90,000, respectively As of September 30, 2015, future principal payments on the notes payable are as follows: 2015 $ 139,000 2016 614,000 2017 645,000 2018 678,000 2019 4,423,000 Thereafter 22,195,000 Total $ 28,694,000 Property Location Current Loan Balance Interest Rate Loan Maturity Ft. Lauderdale 208 SE 6th St, Ft Lauderdale, FL $1,495,000 4.94% 2/1/2019 Memphis Court 216 Court St, Memphis, TN $140,000 4.94% 2/1/2019 Memphis Poplar 212 Poplar Ave, Memphis, TN $1,259,000 4.94% 2/1/2019 Kansas City 1130 Holmes St, Kansas City, MO N/A N/A N/A St. Louis 1300 Spruce St, St. Louis, MO $1,254,000 4.94% 2/1/2019 Mabley Place 400 Race Street, Cincinnati, OH $8,878,000 4.25% 12/26/2024 Denver Sherman 1963 Sherman Street, Denver, CO N/A N/A N/A Ft. Worth 814 Taylor Street, Fort Worth, Texas $12,031,000 5.59% 8/1/2021 Milwaukee Old World 822 N. Old World Third Street, Milwaukee, WI N/A N/A N/A St. Louis Convention 1010 Convention Plaza , St. Louis, MO N/A N/A N/A Houston Saks Garage 611 Fannin Street, Houston, Tx $3,636,000 N/A N/A St. Louis Lucas Lucas Ave, St. Louis, MO N/A N/A N/A Milwaukee Wells 215 W. Wells Street, Milwaukee, WI N/A N/A N/A Wildwood NJ Lot 400 East Magnolia Ave, Wildwood, NJ N/A N/A N/A Total $28,694,000 Note L — Subsequent Events |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note L — Subsequent Events The following subsequent events have been evaluated through the date of this filing with the SEC. As of the date of this filing, the Company has received additional requests for repurchase of 16,469 which exceed the amount allowable for 2015 repurchase by $147,144. April 2016 will be the next date shares are available for repurchase. Since October 1, 2015 through the date of this filing, the Company issued 680,610 additional shares and received approximately $6.1 in additional proceeds from its initial public offering of its common stock form. On October 5, 2015, the Company announced through its wholly owned entity MVP Indianapolis City Park Garage, LLC, a Nevada limited liability company, that it has closed on the purchase of a parking garage for approximately $10.5 million. The parking garage is located at 120 East Washington Street, Indianapolis, Indiana. The parking garage consists of approximately 52,650 square feet and has approximately 370 parking spaces. The parking garage is zoned CBD-1 and allows for a maximum building height of five stories. The parking garage will be leased by ABM Onsite Services - Midwest, Inc. (“ABM Services”), a subsidiary of ABM Industries, Inc., which trades on the New York Stock Exchange as ticker symbol “ABM”. ABM Services will pay an annual lease payment of $750,000 and will pay all regular occurring maintenance expenses associated with the parking garage other than property taxes. In addition, the lease provides revenue participation with MVP receiving 75% of the gross receipts over $980,000. The term of the lease will be for 5 years. On October 9, 2015, the Company announced that through its wholly owned entity MVP KC Cherry Lot, LLC, a Nevada limited liability company, it has closed on the purchase of a parking lot for approximately $515,000 in cash. The parking lot is located at 1109 Cherry Street, Kansas City, Missouri. The parking lot consists of approximately 26,304 square feet and has approximately 84 parking spaces. The parking lot is zoned UR. The parking lot will be leased by SP Plus Corporation (“SP Plus”), a national parking operator. SP Plus will pay an annual lease payment of $66,000 and will pay all regular occurring maintenance expenses associated with the parking garage other than property taxes. In addition, the lease provides revenue participation with MVP receiving 60% of gross receipts over $125,000. The term of the lease is 5 years. On October 29, 2015, the Company through its wholly owned entity MVP Indianapolis Washington Street Lot, LLC, an Indiana limited liability company, closed on the purchase of a parking lot for approximately $5 million in cash. The parking lot is located at 301 E. Washington Street, Indianapolis, IN 46204. The parking lot consists of approximately 46,403 square feet and has approximately 149 parking spaces. The parking lot will be leased by Denison Parking Inc., an Indianapolis parking operator. Denison Parking, Inc. will pay annual rent of $375,000 and will pay all regular occurring maintenance expenses associated with the parking garage other than property taxes. In addition, the lease provides revenue participation with the Company receiving 70% of gross receipts over $512,500. The term of the lease is 10 years. On October 29, 2015, the Company also sold a 376-unit self-storage facility located in Cedar Park, TX owned by its wholly owned subsidiary, MVP MS Cedar Park 2012, LLC to Calico Industries-CP, LLC, a Texas limited liability company. The sale price was $4.3 million which sale price was paid at the closing, less customary closing costs. The anticipated gain on sale is approximately $1.0 million. |
Summary of Significant Accoun20
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2015 | |
Accounting Policies [Abstract] | |
Basis of Accounting | Basis of Accounting The accompanying unaudited condensed consolidated financial statements of the Company are prepared by management on the accrual basis of accounting and in accordance with principles generally accepted in the United States of America (“GAAP”) for interim financial information as contained in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”), and in conjunction with rules and regulations of the SEC. Certain information and footnote disclosures required for annual financial statements have been condensed or excluded pursuant to SEC rules and regulations. Accordingly, the unaudited condensed consolidated financial statements do not include all of the information and footnotes required by GAAP for complete financial statements. The unaudited condensed consolidated financial statements include accounts and related adjustments, which are, in the opinion of management, of a normal recurring nature and necessary for a fair presentation of the Company’s financial position, results of operations and cash flows for the interim period. Operating results for the three and nine months ended September 30, 2015 are not necessarily indicative of the results that may be expected for the year ending December 31, 2015. These unaudited condensed consolidated financial statements should be read in conjunction with the condensed consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014. The condensed consolidated balance sheet as of December 31, 2014 contained herein has been derived from the audited consolidated financial statements as of December 31, 2014, but do not include all disclosures required by GAAP. |
Consolidation | Consolidation The Company’s condensed consolidated financial statements include its accounts and the accounts of its subsidiaries, REH and all of the subsidiaries of REH: MVP MS Cedar Park 2012, LLC; MVP PF Ft. Lauderdale, LLC; MVP PF Memphis Court, LLC; MVP PF Memphis Poplar, LLC; MVP PF St. Louis, LLC; MVP PF Kansas City, LLC; MVP MS Red Mountain 2013; Mabley Place Garage; LLC, MVP Denver Sherman; LLC, MVP Fort Worth Taylor, LLC; MVP Milwaukee Old World, LLC; MVP St. Louis Convention Plaza, LLC; MVP Houston Saks Garage, LLC; MVP St. Louis Lucas, LLC, MVP Milwaukee Wells, LLC and MVP Wildwood NJ Lot, LLC, as well as the Company’s assets that sold during 2014. All intercompany profits, balances and transactions are eliminated in consolidation. Under accounting principles generally accepted in the United States of America (“GAAP”), the Company’s condensed consolidated financial statements will also include the accounts of its consolidated subsidiaries and joint ventures in which the Company is the primary beneficiary, or in which the Company has a controlling interest. In determining whether the Company has a controlling interest in a joint venture and the requirement to consolidate the accounts of that entity, the Company’s management considers factors such as an entity’s purpose and design and the Company’s ability to direct the activities of the entity that most significantly impacts the entity’s economic performance, ownership interest, board representation, management representation, authority to make decisions, and contractual and substantive participating rights of the partners/members as well as whether the entity is a variable interest entity in which it will absorb the majority of the entity’s expected losses, if they occur, or receive the majority of the expected residual returns, if they occur, or both. Equity investments in which the Company exercises significant influence but does not control and is not the primary beneficiary are accounted for using the equity method. The Company's share of its equity method investees' earnings or losses is included in other income in the accompanying Consolidated Statements of Operations. Investments in which the Company is not able to exercise significant influence over the investee are accounted for under the cost method. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Management makes significant estimates regarding revenue recognition, purchase price allocations to record investments in real estate, and derivative financial instruments and hedging activities, as applicable. |
Concentration | Concentration The company has approximately six tenants. One tenant, Standard Parking + (“SP+”), consists of more than 10% of the Company’s rental revenue. This tenant represents a concentration for the three and nine months ended September 30, 2015 and 2014. |
Acquisitions | Acquisitions The Company records the acquired tangible and intangible assets and assumed liabilities of acquisitions of all operating properties and those development and redevelopment opportunities that meet the accounting criteria to be accounted for as business combinations at fair value at the acquisition date. The Company assesses and considers fair value based on estimated cash flow projections that utilize available market information and discount and/or capitalization rates that the Company deems appropriate. 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 acquired assets and assumed liabilities for an operating property acquisition generally include but are not limited to: land, buildings and improvements, construction in progress and identified tangible and intangible assets and liabilities associated with in-place leases, including tenant improvements, leasing costs, value of above-market and below-market operating leases and ground leases, acquired in-place lease values and tenant relationships, if any. The fair value of land is derived from comparable sales of land within the same submarket and/or region. The fair value of buildings and improvements, tenant improvements, and leasing costs are based upon current market replacement costs and other relevant market rate information. The fair value of the above-market or below-market component of an acquired in-place operating lease is based upon the present value (calculated using a market discount rate) of the difference between (i) the contractual rents to be paid pursuant to the lease over its remaining non-cancellable lease term and (ii) management's estimate of the rents that would be paid using fair market rental rates and rent escalations at the date of acquisition measured over the remaining non-cancellable term of the lease for above-market operating leases and the initial non-cancellable term plus the term of any below-market fixed rate renewal options, if applicable, for below-market operating leases. The amounts recorded for above-market operating leases are included in deferred leasing costs and acquisition-related intangibles, net on the balance sheet and are amortized on a straight-line basis as a reduction of rental income over the remaining term of the applicable leases. The amounts recorded for below-market operating leases are included in deferred revenue and acquisition-related liabilities, net on the balance sheet and are amortized on a straight-line basis as an increase to rental income over the remaining term of the applicable leases plus the term of any below-market fixed rate renewal options, if applicable. Our below-market operating leases generally do not include fixed rate or below-market renewal options. The fair value of acquired in-place leases is derived based on management's assessment of lost revenue and costs incurred for the period required to lease the “assumed vacant” property to the occupancy level when purchased. This fair value is based on a variety of considerations including, but not necessarily limited to: (1) the value associated with avoiding the cost of originating the acquired in-place leases; (2) the value associated with lost revenue related to tenant reimbursable operating costs estimated to be incurred during the assumed lease-up period; and (3) the value associated with lost rental revenue from existing leases during the assumed lease-up period. Factors considered by us in performing these analyses include an estimate of the carrying costs during the expected lease-up periods, current market conditions, and costs to execute similar leases. In estimating carrying costs, the Company includes real estate taxes, insurance and other operating expenses, and estimates of lost rental revenue during the expected lease-up periods based on current market demand at market rates. In estimating costs to execute similar leases, the Company considers leasing commissions, legal and other related expenses. The amount recorded for acquired in-place leases is included in deferred leasing costs and acquisition-related intangibles, net on the balance sheet and amortized as an increase to depreciation and amortization expense over the remaining term of the applicable leases. If a lease were to be terminated or if termination were determined to be likely prior to its contractual expiration (for example resulting from bankruptcy), amortization of the related unamortized in-place lease intangible would be accelerated. The determination of the fair value of any debt assumed in connection with a property acquisition is estimated by discounting the future cash flows using interest rates available for the issuance of debt with similar terms and remaining maturities. The determination of the fair value of the acquired tangible and intangible assets and assumed liabilities of operating property acquisitions requires us to make significant judgments and assumptions about the numerous inputs discussed above. The use of different assumptions in these fair value calculations could significantly affect the reported amounts of the allocation of our acquisition related assets and liabilities and the related amortization and depreciation expense recorded for such assets and liabilities. In addition, because the value of above and below market leases are amortized as either a reduction or increase to rental income, respectively, our judgments for these intangibles could have a significant impact on our reported rental revenues and results of operations. Costs directly associated with all operating property acquisitions and those development and redevelopment acquisitions that meet the accounting criteria to be accounted for as business combinations are expensed as incurred. During the three months ended September 30, 2015, the Company expensed approximately $75,000 of related party and $153,000 non-related party acquisition costs. During the nine months ended September 30, 2015, the Company expensed approximately $1,856,000 of related party and $481,000 non-related party acquisition costs based on the level of our acquisition activity. Our acquisition expenses are directly related to our acquisition activity and if our acquisition activity was to increase or decrease, so would our acquisition costs. Costs directly associated with development acquisitions accounted for as asset acquisitions are capitalized as part of the cost of the acquisition. During the three and nine months ended September 30, 2015, the Company did not capitalize any such acquisition costs. |
Impairment of Long Lived Assets | Impairment of Long Lived Assets When circumstances indicate the carrying value of a property may not be recoverable, the Company reviews the asset for impairment. This review is based on an estimate of the future undiscounted cash flows, excluding interest charges, expected to result from the propertyÂ’s use and eventual disposition. These estimates consider factors such as expected future operating income, market and other applicable trends and residual value, as well as the effects of leasing demand, competition and other factors. If impairment exists, due to the inability to recover the carrying value of a property, an impairment loss is recorded to the extent that the carrying value exceeds the estimated fair value of the property for properties to be held and used. For properties held for sale, the impairment loss is the adjustment to fair value less estimated cost to dispose of the asset. These assessments have a direct impact on net income because recording an impairment loss results in an immediate negative adjustment to net income. |
Derivative Instruments | Derivative Instruments The Company may use derivative financial instruments to hedge all or a portion of the interest rate risk associated with its borrowings. Certain of the techniques used to hedge exposure to interest rate fluctuations may also be used to protect against declines in the market value of assets that result from general trends in debt markets. The principal objective of such agreements is to minimize the risks and/or costs associated with the CompanyÂ’s operating and financial structure as well as to hedge specific anticipated transactions. The Company records all derivatives on the balance sheet at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Derivatives may also be designated as hedges of the foreign currency exposure of a net investment in a foreign operation. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk in a fair value hedge or the earnings effect of the hedged forecasted transactions in a cash flow hedge. The Company may enter into derivative contracts that are intended to economically hedge certain of its risk, even though hedge accounting does not apply or the Company elects not to apply hedge accounting. The accounting for subsequent changes in the fair value of these derivatives depends on whether each has been designed and qualifies for hedge accounting treatment. If the Company elects not to apply hedge accounting treatment, any changes in the fair value of these derivative instruments is recognized immediately in gains (losses) on derivative instruments in the consolidated statement of operations. If the derivative is designated and qualifies for hedge accounting treatment, the change in the estimated fair value of the derivative is recorded in other comprehensive income (loss) to the extent that it is effective. Any ineffective portion of a derivativeÂ’s change in fair value will be immediately recognized in earnings. |
Cash | Cash The Company maintains the majority of its cash balances in a national financial institution located in Las Vegas, Nevada. The balances are insured by the Federal Deposit Insurance Corporation under the same ownership category up to at least $250,000. As of September 30, 2015 and December 31, 2014, the Company had approximately $32.4 million and approximately $13.3 million in excess of the federally-insured limits, respectively. |
Restricted Cash | Restricted Cash Restricted cash primarily consists of escrowed tenant improvement funds, real estate taxes, capital improvement funds, insurance premiums, and other amounts required to be escrowed pursuant to loan agreements. |
Revenue Recognition | Revenue Recognition The CompanyÂ’s revenues, which will be derived primarily from rental income, include rents that each tenant pays in accordance with the terms of each lease reported on a straight-line basis over the initial term of the lease. Since some of the CompanyÂ’s leases will provide for rental increases at specified intervals, straight-line basis accounting requires the Company to record a receivable, and include in revenues, unbilled rent receivables that the Company will only receive if the tenant makes all rent payments required through the expiration of the initial term of the lease. The Company may recognize interest income from loans on an accrual basis over the expected terms of the loans using the effective interest method. The Company may recognize fees, discounts, premiums, anticipated exit fees and direct cost over the terms of the loans as an adjustment to the yield. The Company may recognize fees on commitments that expire unused at expiration. The Company may recognize interest income from available-for-sale securities on an accrual basis over the life of the investment on a yield-to-maturity basis. The Company will continually review receivables related to rent and unbilled rent receivables and determine collectability by taking into consideration the tenantÂ’s payment history, the financial condition of the tenant, business conditions in the industry in which the tenant operates and economic conditions in the area in which the property is located. In the event that the collectability of a receivable is in doubt, the Company will record an increase in the CompanyÂ’s allowance for uncollectible accounts or record a direct write-off of the receivable in the CompanyÂ’s consolidated statements of operations. |
Advertising Costs | Advertising Costs Advertising costs incurred in the normal course of operations are expensed as incurred. During the three and nine months ended September 30, 2015 and 2014, the Company had no advertising costs. |
Investments in Real Estate and Fixed Assets | Investments in Real Estate and Fixed Assets Investments in real estate and fixed assets are stated at cost less accumulated depreciation. Depreciation is provided principally on the straight-line method over the estimated useful lives of the assets, which are primarily 3 to 40 years. The cost of repairs and maintenance is charged to expense as incurred. Expenditures for property betterments and renewals are capitalized. Upon sale or other disposition of a depreciable asset, cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in other income (expense). The Company periodically evaluates whether events and circumstances have occurred that may warrant revision of the estimated useful lives of fixed assets or whether the remaining balance of fixed assets should be evaluated for possible impairment. The Company uses an estimate of the related undiscounted cash flows over the remaining life of the fixed assets in measuring their recoverability. |
Investments in Real Estate Loans | Investments in Real Estate Loans Subject to the restrictions on related-party transactions set forth in the Company’s charter, the Company may, from time to time, acquire or sell investments in real estate loans from or to the advisor or other related parties without a premium. The primary purpose is to either free up capital to provide liquidity for various reasons, such as loan diversification, or place excess capital in investments to maximize the use of our capital. Selling or buying loans allows us to diversify our loan portfolio within these parameters. Due to the short-term nature of the loans the Company makes and the similarity of interest rates in loans the Company normally would invest in, the fair value of a loan typically approximates its carrying value. Accordingly, discounts or premiums typically do not apply upon sales of loans and therefore, generally no gain or loss is recorded on these transactions, regardless of whether to a related or unrelated party. Investments in real estate loans are secured by deeds of trust or mortgages. Generally, our real estate loans require interest only payments with a balloon payment of the principal at maturity. The Company has both the intent and ability to hold real estate loans until maturity and therefore, real estate loans are classified and accounted for as held for investment and are carried at amortized cost. Loans sold to or purchased from affiliates are accounted for at the principal balance and no gain or loss is recognized by us or any affiliate. Loan-to-value ratios are initially based on appraisals obtained at the time of loan origination and are updated, when new appraisals are received or when management’s assessment of the value has changed, to reflect subsequent changes in value estimates. Such appraisals are generally dated within 12 months of the date of loan origination and may be commissioned by the borrower. The Company considers a loan to be impaired when, based upon current information and events, it believes it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement. The Company’s impaired loans include troubled debt restructuring, and performing and non-performing loans in which full payment of principal or interest is not expected. The Company calculates an allowance required for impaired loans based on the present value of expected future cash flows discounted at the loan’s effective interest rate, or at the loan’s observable market price or the fair value of its collateral. Loans that have been modified from their original terms are evaluated to determine if the loan meets the definition of a Troubled Debt Restructuring (“TDR”) as defined by ASC 310-40. When the Company modifies the terms of an existing loan that is considered a TDR, it is considered performing as long as it is in compliance with the modified terms of the loan agreement. If the modification calls for deferred interest, it is recorded as interest income as cash is collected. |
Allowance for Loan Losses | Allowance for Loan Losses The Company maintains an allowance for loan losses on our investments in real estate loans for estimated credit impairment. The Company’s estimate of losses is based on a number of factors including the types and dollar amounts of loans in the portfolio, adverse situations that may affect the borrower’s ability to repay, prevailing economic conditions and the underlying collateral securing the loan. Additions to the allowance are provided through a charge to earnings and are based on an assessment of certain factors, which may indicate estimated losses on the loans. Actual losses on loans are recorded first as a reduction to the allowance for loan losses. Generally, subsequent recoveries of amounts previously charged off are recognized as income. Estimating allowances for loan losses requires significant judgment about the underlying collateral, including liquidation value, condition of the collateral, competency and cooperation of the related borrower and specific legal issues that affect loan collections or taking possession of the property. As a commercial real estate lender willing to invest in loans to borrowers who may not meet the credit standards of other financial institutional lenders, the default rate on our loans could be higher than those generally experienced in the real estate lending industry. The Company and the Advisor generally approve loans more quickly than other real estate lenders and, due to our expedited underwriting process; there is a risk that the credit inquiry performed will not reveal all material facts pertaining to a borrower and the security. Additional facts and circumstances may be discovered as the Company continues efforts in the collection and foreclosure processes. This additional information often causes management to reassess its estimates. Circumstances that may cause significant changes in our estimated allowance include, but are not limited to: · Declines in real estate market conditions, which can cause a decrease in expected market value; · Discovery of undisclosed liens for community improvement bonds, easements and delinquent property taxes; · Lack of progress on real estate developments after the Company advances funds. The Company customarily utilizes disbursement agents to monitor the progress of real estate developments and approve loan advances. After further inspection of the related property, progress on construction occasionally does not substantiate an increase in value to support the related loan advances; · Unanticipated legal or business issues that may arise subsequent to loan origination or upon the sale of foreclosed property; and · Appraisals, which are only opinions of value at the time of the appraisal, may not accurately reflect the value of the property. |
Organization, Offering and Related Costs | Organization, Offering and Related Costs Certain organization, offering and related costs, including legal, accounting, printing, marketing expenses and the salaries and direct expenses of the employees of the Advisor and its affiliates, will be incurred by the Advisor on behalf of the Company. After the Company has reimbursed $100,000 of such costs, which has been paid to the Advisor, no additional reimbursements will be made unless the aggregate amount of such reimbursements does not exceed 0.75% of the gross offering proceeds as of the date of reimbursement. Prior to the commencement of our operations, such offering costs had been deferred and such deferred offering costs have been amortized to expense as offering costs over the 12 month period commencing January 1, 2013 through December 31, 2013, on a straight-line basis. |
Stock-Based Compensation | Stock-Based Compensation The Company has a stock-based incentive award plan, which is accounted for under the guidance for share based payments. The expense for such awards will be included in general and administrative expenses and is recognized over the vesting period or when the requirements for exercise of the award have been met (See Note F — Stock-Based Compensation). |
Income Taxes | Income Taxes The Company has elected, and operates in a manner that will allow the Company, to qualify to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended, commencing with the taxable year ended December 31, 2013. If the Company qualifies for taxation as a REIT, it generally will not be subject to federal corporate income tax to the extent it distributes all of its REIT taxable income to its stockholders, and so long as it distributes at least 90% of its REIT taxable income. REITs are subject to a number of other organizational and operational requirements. Even if the Company qualifies to be taxed as a REIT, it may be subject to certain state and local taxes on its income and property, and federal income and excise taxes on its undistributed income. |
Per Share Data | Per Share Data The Company calculates basic earnings per share by dividing net income for the period by weighted-average shares of its common stock outstanding for a respective period. Diluted earnings per share takes into account the effect of dilutive instruments, such as stock options and convertible stock, but uses the average share price for the period in determining the number of incremental shares that are to be added to the weighted-average number of shares outstanding. The Company had no outstanding common share equivalents during the nine months ended September 30, 2015. In September 2012, upon the commencement of our offering, we issued 1,000 shares of convertible stock to our advisor. After giving effect to the release of waivers and waiver agreements executed in August and September of 2014, all of which were previously disclosed in Form 8-Ks and prospectus supplements, the convertible stock will convert into shares of our common stock representing 3.50% of the outstanding shares of our common stock immediately preceding the conversion if and when: (a) the Company has made total distributions on the then outstanding common shares equal to the invested capital attributable to those shares plus a 6.00% cumulative, non-compounded, annual pre-tax return on such invested capital; or (b) (i) the Company lists its common shares for trading on a national securities exchange and (ii) (x) the sum of the aggregate market value of the issued and outstanding common shares plus the aggregate amount of all distributions on the CompanyÂ’s common shares exceeds (y) the sum of the aggregate capital contributed by investors (less any capital returned in the form of distributions) plus an amount equal to a 6% cumulative, pre-tax non-compounded annual return to investors; or (c) the advisory agreement is terminated or not renewed, but only if at the time of such termination or non-renewal, the requirements for conversion set forth in either of the immediately preceding clause (a) or (b) also shall have been satisfied. For purposes of such calculation, the market value of our outstanding common stock will be calculated based on the average market value of the shares of common stock issued and outstanding at listing over the 30 trading days beginning 180 days after the shares are first listed for trading on a national securities exchange. |
Reportable Segments | Reportable Segments The Company is currently authorized to operate two reportable segments, investments in real estate loans and investments in real property. As of September 30, 2015, the Company only operates in the investment in real property segment. |
Reclassifications | Reclassifications Amounts listed in connection with assets held for sale (including liabilities related to assets held for sale), restricted cash and deposits in the 2014 condensed consolidated financial statements have been reclassified to conform to the September 30, 2015 presentation. |
Accounting and Auditing Standards Applicable to "Emerging Growth Companies" | Accounting and Auditing Standards Applicable to “Emerging Growth Companies” The Company is an “emerging growth company” under the recently enacted JOBS Act. For as long as the Company remains an “emerging growth company,” which may be up to five fiscal years, the Company is not required to (1) comply with any new or revised financial accounting standards that have different effective dates for public and private companies until those standards would otherwise apply to private companies, (2) provide an auditor’s attestation report on management’s assessment of the effectiveness of internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act, (3) comply with any new requirements adopted by the Public Company Accounting Oversight Board, or the PCAOB, requiring mandatory audit firm rotation or a supplement to the auditor’s report in which the auditor would be required to provide additional information about the audit and the financial statements of the issuer or (4) comply with any new audit rules adopted by the PCAOB after April 5, 2012, unless the SEC determines otherwise. The Company intends to take advantage of such extended transition period. Since the Company will not be required to comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for other public companies, the Company’s financial statements may not be comparable to the financial statements of companies that comply with public company effective dates. If the Company were to subsequently elect to instead comply with these public company effective dates, such election would be irrevocable pursuant to Section 107 of the JOBS Act. |
Non-controlling Interests | Non-controlling Interests The FASB issued authoritative guidance for non-controlling interests in December 2007, which establishes accounting and reporting standards for the non-controlling interest in a subsidiary and for the deconsolidation of a subsidiary. The guidance clarifies that a non-controlling interest in a subsidiary, which is sometimes referred to as an unconsolidated investment, is an ownership interest in the consolidated entity that should be reported as a component of equity in the consolidated financial statements. Among other requirements, the guidance requires consolidated net income to be reported at amounts attributable to both the parent and the non-controlling interest. It also requires disclosure, on the face of the consolidated income statement, of the amounts of consolidated net income attributable to the parent and to the non-controlling interest. |
Investments in Real Estate (Tab
Investments in Real Estate (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Banking and Thrift [Abstract] | |
Schedule Of Real Estate Properties | Property Location Date Acquired Property Type Investment Amount Size / Acreage # Spaces / Units Retail /Office Square Ft. % of Portfolio ** Ft. Lauderdale 208 SE 6th St, Ft Lauderdale, FL 7/31/2013 Parking Lot / Office Bldg. $3,400,000 .75 acre 66 4,061 4.94% Memphis Court 216 Court St, Memphis, TN 8/28/2013 Parking Lot $190,000 .41 acre 37 N/A 0.28% Memphis Poplar 212 Poplar Ave, Memphis, TN 8/28/2013 Parking Lot $2,685,000 .86 acre 125 N/A 3.87% Kansas City 1130 Holmes St, Kansas City, MO 8/28/2013 Parking Lot $1,550,000 1.18 acres 164 N/A 2.25% St. Louis 1300 Spruce St, St. Louis, MO 9/4/2013 Parking Lot $4,125,000 1.22 acres 179 N/A 2.33% Mabley Place * 400 Race Street, Cincinnati, OH 12/9/2014 Parking Facility $15,000,000 .91 acre 775 8,400 21.81% Denver Sherman 1963 Sherman Street, Denver, CO 1/26/2015 Parking Lot $585,000 .14 acre 28 N/A 0.85% Ft. Worth 814 Taylor Street, Fort Worth, Texas 3/16/2015 Parking Facility $23,336,000 1.18 acres 1,013 11,828 34.17% Milwaukee Old World 822 N. Old World Third Street, Milwaukee, WI 3/31/2015 Parking Lot $1,000,000 .27 acre 54 N/A 1.45% St. Louis Convention 1010 Convention Plaza , St. Louis, MO 5/31/2015 Parking Lot $2,575,000 1.26 acres 221 N/A 3.74% Houston Saks Garage 611 Fannin Street, Houston, Tx 5/28/2015 Parking Facility $8,375,000 .36 acre 265 5,000 12.18% St. Louis Lucas Lucas Ave, St. Louis, MO 6/29/2015 Parking Lot $3,463,000 1.07 acres 217 N/A 5.04% Milwaukee Wells 215 W. Wells Street, Milwaukee, WI 6/30/2015 Parking Lot $3,900,000 .95 acre 100 N/A 5.67% Wildwood NJ Lot 400 East Magnolia Ave, Wildwood, NJ 7/10/2015 Parking Lot $970,000 .29 acre 29 N/A 1.41% *MVP REIT owns 70%, MVP REIT Owns 100% in all other properties. ** Based on investment amount. Property Location Zoning Height Restriction Parking Tenant Lease Commencement Date Lease Term Ft. Lauderdale 208 SE 6th St, Ft Lauderdale, FL RAC-CC 150 Feet SP+ 02/01/14 5 yr. w/2 5 yr. ext. Memphis Court 216 Court St, Memphis, TN CBD Unlimited SP+ 03/14/12 2 Years remaining Memphis Poplar 212 Poplar Ave, Memphis, TN CBD Unlimited Best Park 03/01/14 5 yr. w/2 5 yr. ext. Kansas City 1130 Holmes St, Kansas City, MO B4-5 Unlimited SP+ 03/14/12 15 Years St. Louis 1300 Spruce St, St. Louis, MO I (CBD) 200 Feet SP+ 12/01/13 5 yr. w/2 5 yr. ext. Mabley Place 400 Race Street, Cincinnati, OH DD-A 510 Feet SP+ 12/09/14 10 Years Denver Sherman 1963 Sherman Street, Denver, CO CMX-16 200 Feet Denver SD 07/01/14 10 Years w/1 5 yr. ext. Ft. Worth 814 Taylor Street, Fort Worth, Texas CBD-H Unlimited SP+ 03/16/15 10 Years Milwaukee Old World 822 N. Old World Third Street, Milwaukee, WI C9-E 40 Feet SP+ 03/31/15 5 yr. w/1 5 yr. ext. St. Louis Convention 1010 Convention Plaza, St. Louis, MO I (CBD) 200 Feet SP+ 05/13/15 5 yr. w/1 5 yr. ext. Houston Saks Garage 611 Fannin Street, Houston, Tx N/A Unlimited iPark 05/28/15 10 yr. w/1 5 yr. ext. St. Louis Lucas Lucas Ave, St. Louis, MO I (CBD) 200 Feet SP+ 06/29/15 5 yr. w/1 5 yr. ext. Milwaukee Wells 215 W. Wells Street, Milwaukee, WI C9-E 40 Feet SP+ 06/30/15 10 Years Wildwood NJ Lot* 400 East Magnolia Ave, Wildwood, NJ T/E 35 feet N/A N/A N/A |
Acquisitions (Tables)
Acquisitions (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Business Combinations [Abstract] | |
Assets Acquired And Liabilities Assumed | Assets Liabilities Land and Improvements Building and improvements Total assets acquired Notes Payable Assumed Net assets and liabilities acquired Denver Sherman $ 585,000 $ -- $ 585,000 $ -- $ 585,000 Ft. Worth Taylor 5,834,000 17,502,000 23,336,000 12,180,000 11,156,000 Milwaukee Old World 1,000,000 -- 1,000,000 -- 1,000,000 St. Louis Convention Plaza 2,575,000 -- 2,575,000 -- 2,575,000 Houston Saks Garage 3,565,000 4,810,000 8,375,000 -- 8,375,000 St. Louis Lucas 3,463,000 -- 3,463,000 -- 3,463,000 Milwaukee Wells 3,900,000 -- 3,900,000 -- 3,900,000 Wildwood NJ Lot 970,000 -- 970,000 -- 970,000 $ 21,892,000 $ 22,312,000 $ 44,204,000 $ 12,180,000 $ 32,024,000 |
Pro Forma Consolidated Results Of Operations | For the three months ended September 30, 2015 For the three months ended September 30, 2014 For the nine months ended September 30, 2015 For the nine months ended September 30, 2014 Revenues from continuing operations $ 1,353,000 $ 957,000 $ 4,010,000 $ 1,839,000 Net income (loss) available to common stockholders $ 56,000 $ 467,000 $ (1,004,000 ) (733,000 ) Net income (loss) available to common stockholders per share – basic $ 0.01 $ 0.12 $ (0.17 ) $ (0.21 ) Net income (loss) available to common stockholders per share – diluted $ 0.01 $ 0.12 $ (0.17 ) $ (0.21 ) |
Revenue And Expenses Of Acquisitions Included In Consolidated Statement Of Operations | Revenue $ 1,318,000 Expenses (2,180,000) Net loss $ (862,000) |
Assets Held For Sale (Tables)
Assets Held For Sale (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Property, Plant and Equipment [Abstract] | |
Summary Of Net Assets Held For Sale | September 30, 2015 Assets: Current assets $ 4,000 Property and equipment, net 3,154,000 Other assets 47,000 Total assets $ 3,205,000 Liabilities: Accounts payable and accrued liabilities $ 51,000 Notes payable 1,658,000 Total liabilities 1,709,000 Net assets held for sale $ 1,496,000 |
Summary Of Results Of Operations Related To Assets Held For Sale | For the Three Months Ended September 30, For the Nine Months Ended September 30, 2015 2014 2015 2014 Revenue $ 133,000 $ 142,000 383,000 $ 393,000 Expenses (102,000 ) 108,000 (281,000 ) 316,000 Net Income $ 31,000 $ 34,000 102,000 $ 77,000 |
Notes Payable (Tables)
Notes Payable (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Debt Disclosure [Abstract] | |
Future Principal Payments On The Notes Payable | 2015 $ 83,000 2016 612,000 2017 643,000 2018 676,000 2019 4,420,000 Thereafter 22,237,000 Total $ 28,671,000 |
Schedule Of Debt | Property Location Current Loan Balance Interest Rate Loan Maturity Ft. Lauderdale 208 SE 6th St, Ft Lauderdale, FL $1,495,000 4.94% 2/1/2019 Memphis Court 216 Court St, Memphis, TN $140,000 4.94% 2/1/2019 Memphis Poplar 212 Poplar Ave, Memphis, TN $1,259,000 4.94% 2/1/2019 Kansas City 1130 Holmes St, Kansas City, MO N/A N/A N/A St. Louis 1300 Spruce St, St. Louis, MO $1,254,000 4.94% 2/1/2019 Mabley Place 400 Race Street, Cincinnati, OH $8,856,000 4.25% 12/26/2024 Denver Sherman 1963 Sherman Street, Denver, CO N/A N/A N/A Ft. Worth 814 Taylor Street, Fort Worth, Texas $12,031,000 5.59% 8/1/2021 Milwaukee Old World 822 N. Old World Third Street, Milwaukee, WI N/A N/A N/A St. Louis Convention 1010 Convention Plaza , St. Louis, MO N/A N/A N/A Houston Saks Garage 611 Fannin Street, Houston, Tx $3,636,000 N/A N/A St. Louis Lucas Lucas Ave, St. Louis, MO N/A N/A N/A Milwaukee Wells 215 W. Wells Street, Milwaukee, WI N/A N/A N/A Wildwood NJ Lot 400 East Magnolia Ave, Wildwood, NJ N/A N/A N/A Indy Garage 120 E. Washington Street, Indianapolis, IN N/A N/A N/A KC Cherry Lot 1109 Cherry Street, Kansas City, MO N/A N/A N/A Total 28,671,000 |
Investments in Real Estate (Det
Investments in Real Estate (Detail) - Schedule of Real Estate Properties | 9 Months Ended |
Sep. 30, 2015USD ($)aft² | |
Ft. Lauderdale [Member] | |
Location | 208 SE 6th St, Ft Lauderdale, FL |
Date Acquired | Jul. 31, 2013 |
Property Type | Parking Lot / Office Bldg. |
Investment Amount | $ 3,400,000 |
Size / Acreage (ac) | a | 0.75 |
# Spaces / Units | 66 |
Retail /Office (sq ft) | ft² | 4,061 |
Percentage of Portfolio (%) | 4.94% |
Zoning | RAC-CC |
Height Restriction | 150 |
Parking Tenant | SP+ |
Lease Commencement Date | 2/1/2014 |
Lease Term | 5 yr. w/2 5 yr. ext. |
Memphis Court [Member] | |
Location | 216 Court St, Memphis, TN |
Date Acquired | Aug. 28, 2013 |
Property Type | Parking Lot |
Investment Amount | $ 190,000 |
Size / Acreage (ac) | a | 0.41 |
# Spaces / Units | 37 |
Percentage of Portfolio (%) | 0.28% |
Zoning | CBD |
Height Restriction | Unlimited |
Parking Tenant | SP+ |
Lease Commencement Date | 3/14/2012 |
Lease Term | 2 Years remaining |
Memphis Poplar [Member] | |
Location | 212 Poplar Ave, Memphis, TN |
Date Acquired | Aug. 28, 2013 |
Property Type | Parking Lot |
Investment Amount | $ 2,685,000 |
Size / Acreage (ac) | a | 0.86 |
# Spaces / Units | 125 |
Percentage of Portfolio (%) | 3.87% |
Zoning | CBD |
Height Restriction | Unlimited |
Parking Tenant | Best Park |
Lease Commencement Date | 3/1/2014 |
Lease Term | 5 yr. w/2 5 yr. ext. |
Kansas City [Member] | |
Location | 1130 Holmes St, Kansas City, MO |
Date Acquired | Aug. 28, 2013 |
Property Type | Parking Lot |
Investment Amount | $ 1,550,000 |
Size / Acreage (ac) | a | 1.18 |
# Spaces / Units | 164 |
Percentage of Portfolio (%) | 2.25% |
Zoning | B4-5 |
Height Restriction | Unlimited |
Parking Tenant | SP+ |
Lease Commencement Date | 3/14/2012 |
Lease Term | 15 Years |
St. Louis [Member] | |
Location | 1300 Spruce St, St. Louis, MO |
Date Acquired | Sep. 4, 2013 |
Property Type | Parking Lot |
Investment Amount | $ 4,125,000 |
Size / Acreage (ac) | a | 1.22 |
# Spaces / Units | 179 |
Percentage of Portfolio (%) | 2.33% |
Zoning | I (CBD) |
Height Restriction | 200 |
Parking Tenant | SP+ |
Lease Commencement Date | 12/1/2013 |
Lease Term | 5 yr. w/2 5 yr. ext. |
Mabley Place [Member] | |
Location | 400 Race Street, Cincinnati, OH |
Date Acquired | Dec. 9, 2014 |
Property Type | Parking Facility |
Investment Amount | $ 15,000,000 |
Size / Acreage (ac) | a | 0.91 |
# Spaces / Units | 775 |
Retail /Office (sq ft) | ft² | 8,400 |
Percentage of Portfolio (%) | 21.81% |
Zoning | DD-A |
Height Restriction | 510 |
Parking Tenant | SP+ |
Lease Commencement Date | 12/9/2014 |
Lease Term | 10 Years |
Denver Sherman [Member] | |
Location | 1963 Sherman Street, Denver, CO |
Date Acquired | Jan. 26, 2015 |
Property Type | Parking Lot |
Investment Amount | $ 585,000 |
Size / Acreage (ac) | a | 0.14 |
# Spaces / Units | 28 |
Percentage of Portfolio (%) | 0.85% |
Zoning | CMX16 |
Height Restriction | 200 |
Parking Tenant | Denver SD |
Lease Commencement Date | 7/1/2014 |
Lease Term | 10 Years w/1 5 yr. ext. |
Ft. Worth Taylor [Member] | |
Location | 814 Taylor Street, Fort Worth, Texas |
Date Acquired | Mar. 16, 2015 |
Property Type | Parking Facility |
Investment Amount | $ 23,336,000 |
Size / Acreage (ac) | a | 1.18 |
# Spaces / Units | 1,013 |
Retail /Office (sq ft) | ft² | 11,828 |
Percentage of Portfolio (%) | 34.17% |
Zoning | CBD-H |
Height Restriction | Unlimited |
Parking Tenant | SP+ |
Lease Commencement Date | 3/16/2015 |
Lease Term | 10 Years |
Milwaukee Old World [Member] | |
Location | 822 N. Old World Third Street, Milwaukee, WI |
Date Acquired | Mar. 31, 2015 |
Property Type | Parking Lot |
Investment Amount | $ 1,000,000 |
Size / Acreage (ac) | a | 0.27 |
# Spaces / Units | 54 |
Percentage of Portfolio (%) | 1.45% |
Zoning | C9-E |
Height Restriction | 40 |
Parking Tenant | SP+ |
Lease Commencement Date | 3/31/2015 |
Lease Term | 5 yr. w/1 5 yr. ext. |
St. Louis Convention Plaza [Member] | |
Location | 1010 Convention Plaza , St. Louis, MO |
Date Acquired | May 31, 2015 |
Property Type | Parking Lot |
Investment Amount | $ 2,575,000 |
Size / Acreage (ac) | a | 1.26 |
# Spaces / Units | 221 |
Percentage of Portfolio (%) | 3.74% |
Zoning | I (CBD) |
Height Restriction | 200 |
Parking Tenant | SP+ |
Lease Commencement Date | 5/13/2015 |
Lease Term | 5 yr. w/1 5 yr. ext. |
Houston Saks Garage [Member] | |
Location | 611 Fannin Street, Houston, Tx |
Date Acquired | May 28, 2015 |
Property Type | Parking Facility |
Investment Amount | $ 8,375,000 |
Size / Acreage (ac) | a | 0.36 |
# Spaces / Units | 265 |
Retail /Office (sq ft) | ft² | 5,000 |
Percentage of Portfolio (%) | 12.18% |
Zoning | N/A |
Height Restriction | Unlimited |
Parking Tenant | iPark |
Lease Commencement Date | 5/28/2015 |
Lease Term | 10 yr. w/1 5 yr. ext. |
St. Louis Lucas [Member] | |
Location | Lucas Ave, St. Louis, MO |
Date Acquired | Jun. 29, 2015 |
Property Type | Parking Lot |
Investment Amount | $ 3,463,000 |
Size / Acreage (ac) | a | 1.07 |
# Spaces / Units | 217 |
Percentage of Portfolio (%) | 5.04% |
Zoning | I (CBD) |
Height Restriction | 200 |
Parking Tenant | SP+ |
Lease Commencement Date | 6/29/2015 |
Lease Term | 5 yr. w/1 5 yr. ext. |
Milwaukee Wells [Member] | |
Location | 215 W. Wells Street, Milwaukee, WI |
Date Acquired | Jun. 30, 2015 |
Property Type | Parking Lot |
Investment Amount | $ 3,900,000 |
Size / Acreage (ac) | a | 0.95 |
# Spaces / Units | 100 |
Percentage of Portfolio (%) | 5.67% |
Zoning | C9-E |
Height Restriction | 40 |
Parking Tenant | SP+ |
Lease Commencement Date | 6/30/2015 |
Lease Term | 10 Years |
Wildwood NJ Lot [Member] | |
Location | 400 East Magnolia Ave, Wildwood, NJ |
Date Acquired | Jul. 10, 2015 |
Property Type | Parking Lot |
Investment Amount | $ 970,000 |
Size / Acreage (ac) | a | 0.29 |
# Spaces / Units | 29 |
Percentage of Portfolio (%) | 1.41% |
Zoning | T/E |
Height Restriction | 35 |
Parking Tenant | N/A |
Lease Commencement Date | N/A |
Lease Term | N/A |
Acquisitions (Detail) - Assets
Acquisitions (Detail) - Assets Acquired And Liabilities Assumed | Sep. 30, 2015USD ($) |
Assets | |
Land and improvements | $ 21,892,000 |
Building and improvements | 22,312,000 |
Total assets acquired | 44,204,000 |
Liabilities | |
Notes Payable Assumed | 12,180,000 |
Net assets and liabilities acquired | 32,024,000 |
Denver Sherman [Member] | |
Assets | |
Land and improvements | $ 585,000 |
Building and improvements | |
Total assets acquired | $ 585,000 |
Liabilities | |
Notes Payable Assumed | |
Net assets and liabilities acquired | $ 585,000 |
Ft. Worth Taylor [Member] | |
Assets | |
Land and improvements | 5,834,000 |
Building and improvements | 17,502,000 |
Total assets acquired | 23,336,000 |
Liabilities | |
Notes Payable Assumed | 12,180,000 |
Net assets and liabilities acquired | 11,156,000 |
Milwaukee Old World [Member] | |
Assets | |
Land and improvements | $ 1,000,000 |
Building and improvements | |
Total assets acquired | $ 1,000,000 |
Liabilities | |
Notes Payable Assumed | |
Net assets and liabilities acquired | $ 1,000,000 |
St. Louis Convention Plaza [Member] | |
Assets | |
Land and improvements | $ 2,575,000 |
Building and improvements | |
Total assets acquired | $ 2,575,000 |
Liabilities | |
Notes Payable Assumed | |
Net assets and liabilities acquired | $ 2,575,000 |
Houston Saks Garage [Member] | |
Assets | |
Land and improvements | 3,565,000 |
Building and improvements | 4,810,000 |
Total assets acquired | $ 8,375,000 |
Liabilities | |
Notes Payable Assumed | |
Net assets and liabilities acquired | $ 8,375,000 |
St. Louis Lucas [Member] | |
Assets | |
Land and improvements | $ 3,463,000 |
Building and improvements | |
Total assets acquired | $ 3,463,000 |
Liabilities | |
Notes Payable Assumed | |
Net assets and liabilities acquired | $ 3,463,000 |
Milwaukee Wells [Member] | |
Assets | |
Land and improvements | $ 3,900,000 |
Building and improvements | |
Total assets acquired | $ 3,900,000 |
Liabilities | |
Notes Payable Assumed | |
Net assets and liabilities acquired | $ 3,900,000 |
Wildwood NJ Lot [Member] | |
Assets | |
Land and improvements | $ 970,000 |
Building and improvements | |
Total assets acquired | $ 970,000 |
Liabilities | |
Notes Payable Assumed | |
Net assets and liabilities acquired | $ 970,000 |
Acquisitions (Detail) - Pro For
Acquisitions (Detail) - Pro Forma Consolidated Results Of Operations - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Business Combinations [Abstract] | ||||
Revenues from continuing operations | $ 1,353,000 | $ 957,000 | $ 4,010,000 | $ 1,839,000 |
Net income (loss) available to common stockholders | $ 56,000 | $ 467,000 | $ (1,004,000) | $ (733,000) |
Net income (loss) available to common stockholders per share - basic | $ 0.01 | $ 0.12 | $ (0.17) | $ (0.21) |
Net income (loss) available to common stockholders per share - diluted | $ 0.01 | $ 0.12 | $ (0.17) | $ (0.21) |
Acquisitions (Detail) - Revenue
Acquisitions (Detail) - Revenue And Expenses Of Acquisitions Included In Consolidated Statement Of Operations | 9 Months Ended |
Sep. 30, 2015USD ($) | |
Business Combinations [Abstract] | |
Revenue | $ 1,318,000 |
Expenses | (2,180,000) |
Net Income | $ (862,000) |
Assets Held For Sale (Detail) -
Assets Held For Sale (Detail) - Summary Of Net Assets Held For Sale | Sep. 30, 2015USD ($) |
Assets: | |
Current assets | $ 4,000 |
Property and equipment, net | 3,154,000 |
Other assets | 47,000 |
Total assets | 3,205,000 |
Liabilities: | |
Accounts payable and accrued liabilities | 51,000 |
Notes payable | 1,658,000 |
Total liabilities | 1,709,000 |
Net assets held for sale | $ 1,496,000 |
Assets Held For Sale (Detail)30
Assets Held For Sale (Detail) - Summary Of Results Of Operations Related To Assets Held For Sale - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Property, Plant and Equipment [Abstract] | ||||
Revenue | $ 133,000 | $ 142,000 | $ 383,000 | $ 393,000 |
Expenses | (102,000) | 108,000 | (281,000) | 316,000 |
Net Income | $ 31,000 | $ 34,000 | $ 102,000 | $ 77,000 |
Notes Payable (Detail) - Future
Notes Payable (Detail) - Future Principal Payments On The Notes Payable | Sep. 30, 2015USD ($) |
2015 [Member] | |
Principal Payments | $ 139,000 |
2016 [Member] | |
Principal Payments | 614,000 |
2017 [Member] | |
Principal Payments | 645,000 |
2018 [Member] | |
Principal Payments | 678,000 |
2019 [Member] | |
Principal Payments | 4,423,000 |
Thereafter [Member] | |
Principal Payments | 22,195,000 |
Total [Member] | |
Principal Payments | $ 28,694,000 |
Notes Payable (Detail) - Schedu
Notes Payable (Detail) - Schedule of Debt - USD ($) | 1 Months Ended | 9 Months Ended | |||||
Aug. 31, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Jan. 31, 2014 | Sep. 30, 2013 | Mar. 31, 2013 | Sep. 30, 2015 | |
Loan Maturity | Aug. 31, 2025 | Aug. 31, 2021 | Dec. 31, 2024 | Feb. 28, 2019 | Oct. 31, 2020 | Apr. 30, 2023 | |
Ft. Lauderdale [Member] | |||||||
Location | 208 SE 6th St, Ft Lauderdale, FL | ||||||
Current Loan Balance | $ 1,495,000 | ||||||
Interest Rate | 4.94% | ||||||
Loan Maturity | Feb. 1, 2019 | ||||||
Memphis Court [Member] | |||||||
Location | 216 Court St, Memphis, TN | ||||||
Current Loan Balance | $ 140,000 | ||||||
Interest Rate | 4.94% | ||||||
Loan Maturity | Feb. 1, 2019 | ||||||
Memphis Poplar [Member] | |||||||
Location | 212 Poplar Ave, Memphis, TN | ||||||
Current Loan Balance | $ 1,259,000 | ||||||
Interest Rate | 4.94% | ||||||
Loan Maturity | Feb. 1, 2019 | ||||||
Kansas City [Member] | |||||||
Location | 1130 Holmes St, Kansas City, MO | ||||||
St. Louis [Member] | |||||||
Location | 1300 Spruce St, St. Louis, MO | ||||||
Current Loan Balance | $ 1,254,000 | ||||||
Interest Rate | 4.94% | ||||||
Loan Maturity | Feb. 1, 2019 | ||||||
Mabley Place [Member] | |||||||
Location | 400 Race Street, Cincinnati, OH | ||||||
Current Loan Balance | $ 8,878,000 | ||||||
Interest Rate | 4.25% | ||||||
Loan Maturity | Dec. 26, 2024 | ||||||
Denver Sherman [Member] | |||||||
Location | 1963 Sherman Street, Denver, CO | ||||||
Ft. Worth Taylor [Member] | |||||||
Location | 814 Taylor Street, Fort Worth, Texas | ||||||
Current Loan Balance | $ 12,031,000 | ||||||
Interest Rate | 5.59% | ||||||
Loan Maturity | Aug. 1, 2021 | ||||||
Milwaukee Old World [Member] | |||||||
Location | 822 N. Old World Third Street, Milwaukee, WI | ||||||
St. Louis Convention Plaza [Member] | |||||||
Location | 1010 Convention Plaza , St. Louis, MO | ||||||
Houston Saks Garage [Member] | |||||||
Location | 611 Fannin Street, Houston, Tx | ||||||
Current Loan Balance | $ 3,636,000 | ||||||
St. Louis Lucas [Member] | |||||||
Location | Lucas Ave, St. Louis, MO | ||||||
Milwaukee Wells [Member] | |||||||
Location | 215 W. Wells Street, Milwaukee, WI | ||||||
Wildwood NJ Lot [Member] | |||||||
Location | 400 East Magnolia Ave, Wildwood, NJ | ||||||
Total [Member] | |||||||
Current Loan Balance | $ 28,694,000 |
Organization, Proposed Busine33
Organization, Proposed Business Operations and Capitalization (Details Narrative) - USD ($) | 9 Months Ended | |
Sep. 30, 2015 | Dec. 31, 2014 | |
Date of Incorporation | Apr. 3, 2012 | |
Incorporation State | Maryland | |
Year End | taxable year ended December 31, 2013 | |
Initial Offering Period | On September 25, 2012, the Company commenced its initial public offering | |
Intial Public Offerring Amount | $ 500,000,000 | |
Common Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 |
Distribution Reinvestment Plan ("DRIP"), share value | $ 50,000,000 | |
Minimum Offering Needed to Break Escrow And Commence Operations | $ 3,000,000 | |
Date Commenced Operations, after Minimum Offering Met | Dec. 11, 2012 | |
Proceeds from Issuance of Common Stock | $ 92,500,000 | |
Share Value Used to Buy Property | $ 19,500,000 | |
Shares Outstanding | 10,269,735 | |
Preferred stock, shares outstanding | 0 | 0 |
Non Voting Non Participating Convertible Stock Value | ||
Common Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 |
Summary of Significant Accoun34
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Accounting Policies [Abstract] | |||||
Acquisition expenses - related party | $ 75,000 | $ 54,000 | $ 1,856,000 | $ 1,856,000 | |
Acquisition expenses | 153,000 | $ 21,000 | 481,000 | $ 82,000 | |
Federally Insured Amount Limit | 250,000 | 250,000 | $ 250,000 | ||
Cash In Excess Of The Federally Insured Limits | $ 32,400,000 | $ 32,400,000 | $ 13,300,000 | ||
Advertising Costs |
Related Party Transactions an35
Related Party Transactions and Arrangements (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Commissions | $ 153,000 | $ 21,000 | $ 481,000 | $ 82,000 | |
Common stock, shares outstanding | 10,269,735 | 10,269,735 | 4,188,956 | ||
Preferred stock, shares outstanding | 0 | 0 | 0 | ||
JNL Parking [Member] | |||||
Commissions | $ 200,000 | $ 400,000 | |||
Common stock, shares outstanding | 40,498 | 40,498 | |||
Sponsor [Member] | |||||
Common stock, shares outstanding | 22,222 | 22,222 | |||
VRM I [Member] | |||||
Common stock, shares outstanding | 69,898 | 69,898 | |||
VF III [Member] | |||||
Common stock, shares outstanding | 34,297 | 34,297 | |||
Advisor [Member] | |||||
Preferred stock, shares outstanding | 1,000 | 1,000 | |||
Chief Financial Officer [Member] | Accounting Solutions [Member] | |||||
Accounting Services | $ 5,000 | $ 5,000 | $ 15,000 | $ 12,000 | |
Chief Financial Officer [Member] | Strategix Solutions [Member] | |||||
Accounting Services | $ 56,000 | $ 96,000 |
Dependency (Details Narrative)
Dependency (Details Narrative) | 9 Months Ended |
Sep. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Collaborative Arrangement Nature And Purpose | The Company has no employees and is dependent on the Advisor and the Selling Agents for certain services that are essential to the Company, including the sale of the Company's shares of common stock in the Offering, asset management services, supervision of the management and leasing of properties owned by the Company, asset acquisition and disposition decisions, as well as other administrative responsibilities for the Company including accounting services and investor relations. |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details Narrative) | 9 Months Ended |
Sep. 30, 2015shares | |
Equity [Abstract] | |
Stock Options Granted Percentage Limit | 10.00% |
Aggregate Maximum Number of Shares Under Incentive Plan | 300,000 |
Acquisitions (Details Narrative
Acquisitions (Details Narrative) - USD ($) | 1 Months Ended | 9 Months Ended | |||||
Aug. 31, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Jan. 31, 2014 | Sep. 30, 2013 | Mar. 31, 2013 | Sep. 30, 2015 | |
Note Payable, maturity date | Aug. 31, 2025 | Aug. 31, 2021 | Dec. 31, 2024 | Feb. 28, 2019 | Oct. 31, 2020 | Apr. 30, 2023 | |
Denver Sherman [Member] | |||||||
Acquisition Date | Jan. 26, 2015 | ||||||
Acquisitions | $ 585,000 | ||||||
Ft. Worth Taylor [Member] | |||||||
Acquisition Date | Mar. 16, 2015 | ||||||
Acquisitions | $ 23,500,000 | ||||||
Note Payable | $ 12,200,000 | ||||||
Note Payable, maturity date | Aug. 31, 2021 | ||||||
Interest Rate | 5.59% | ||||||
Milwaukee Old World [Member] | |||||||
Acquisition Date | Mar. 31, 2015 | ||||||
Acquisitions | $ 1,000,000 | ||||||
St. Louis Convention Plaza [Member] | |||||||
Acquisition Date | May 13, 2015 | ||||||
Acquisitions | $ 2,600,000 | ||||||
Houston Saks Garage [Member] | |||||||
Acquisition Date | May 28, 2015 | ||||||
Acquisitions | $ 8,400,000 | ||||||
St. Louis Lucas [Member] | |||||||
Acquisition Date | Jun. 29, 2015 | ||||||
Acquisitions | $ 3,500,000 | ||||||
Milwaukee Wells [Member] | |||||||
Acquisition Date | Jun. 30, 2015 | ||||||
Acquisitions | $ 3,900,000 | ||||||
Wildwood NJ Lot [Member] | |||||||
Acquisitions | $ 1,000,000 |
Assets held for sale (Details N
Assets held for sale (Details Narrative) | May. 06, 2015USD ($) |
Property, Plant and Equipment [Abstract] | |
Property Sold | $ 5,400,000 |
Proceeds Property Sold | $ 2,600,000 |
Notes Payable (Details Narrativ
Notes Payable (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||||||
Aug. 31, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Jan. 31, 2014 | Sep. 30, 2013 | Mar. 31, 2013 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Notes Payable | ||||||||||
Amount | $ 3,700,000 | $ 12,200,000 | $ 9,000,000 | $ 4,300,000 | $ 2,700,000 | $ 1,800,000 | ||||
Term | 10 years | 7 years | ||||||||
Interest | 4.25% | 5.59% | 4.25% | 4.94% | 4.35% | 4.66% | ||||
Collateral | collateralized by real property located in Houston, Texas | collateralized by real property located in Ft. Worth, Texas | secured by the property | secured by four parking facilities | collateralized by real property located in Las Vegas, Nevada | collateralized by real property located in Cedar Park, Texas | ||||
Periodic Payment | $ 78,000 | $ 44,000 | $ 25,000 | $ 15,000 | $ 10,000 | |||||
Frequency of Periodic Payment | monthly | monthly | monthly | monthly | monthly | monthly | ||||
Maturity Date | Aug. 31, 2025 | Aug. 31, 2021 | Dec. 31, 2024 | Feb. 28, 2019 | Oct. 31, 2020 | Apr. 30, 2023 | ||||
Lump Sum Payment | $ 30,000 | $ 1,300,000 | ||||||||
Loan Settlement | This loan was paid in full in May 2015 through the sale of the property. | |||||||||
Interest expense | $ 365,000 | $ 53,000 | $ 935,000 | $ 90,000 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) | Oct. 09, 2015 | Oct. 05, 2015 | Nov. 15, 2015 | Oct. 29, 2015 | Nov. 16, 2015 |
Repurchase of Shares [Member] | |||||
Date of Event | Nov. 14, 2015 | ||||
Description | As of the date of this filing, the Company has received additional requests for repurchase of 16,469 which exceed the amount allowable for 2015 repurchase by $147,144. April 2016 will be the next date shares are available for repurchase. | ||||
Shares Issued [Member] | |||||
Date of Event | Oct. 1, 2015 | ||||
Description | Since October 1, 2015 through the date of this filing, the Company issued 680,610 additional shares and received approximately $6.1 in additional proceeds from its initial public offering of its common stock form. | ||||
MVP Indianapolis City Park Garage, LLC [Member] | |||||
Date of Event | Oct. 5, 2015 | ||||
Description | On October 5, 2015, the Company announced through its wholly owned entity MVP Indianapolis City Park Garage, LLC, a Nevada limited liability company, that it has closed on the purchase of a parking garage for approximately $10.5 million. The parking garage is located at 120 East Washington Street, Indianapolis, Indiana. The parking garage consists of approximately 52,650 square feet and has approximately 370 parking spaces. The parking garage is zoned CBD-1 and allows for a maximum building height of five stories. The parking garage will be leased by ABM Onsite Services - Midwest, Inc. ("ABM Services"), a subsidiary of ABM Industries, Inc., which trades on the New York Stock Exchange as ticker symbol "ABM". ABM Services will pay an annual lease payment of $750,000 and will pay all regular occurring maintenance expenses associated with the parking garage other than property taxes. In addition, the lease provides revenue participation with MVP receiving 75% of the gross receipts over $980,000. The term of the lease will be for 5 years. | ||||
MVP KC Cherry Lot, LLC [Member] | |||||
Date of Event | Oct. 9, 2015 | ||||
Description | On October 9, 2015, the Company announced that through its wholly owned entity MVP KC Cherry Lot, LLC, a Nevada limited liability company, it has closed on the purchase of a parking lot for approximately $515,000 in cash. The parking lot is located at 1109 Cherry Street, Kansas City, Missouri. The parking lot consists of approximately 26,304 square feet and has approximately 84 parking spaces. The parking lot is zoned UR. The parking lot will be leased by SP Plus Corporation ("SP Plus"), a national parking operator. SP Plus will pay an annual lease payment of $66,000 and will pay all regular occurring maintenance expenses associated with the parking garage other than property taxes. In addition, the lease provides revenue participation with MVP receiving 60% of gross receipts over $125,000. The term of the lease is 5 years. | ||||
MVP Indianapolis Washington Street Lot, LLC [Member] | |||||
Date of Event | Oct. 29, 2015 | ||||
Description | On October 29, 2015, the Company through its wholly owned entity MVP Indianapolis Washington Street Lot, LLC, an Indiana limited liability company, closed on the purchase of a parking lot for approximately $5 million in cash. The parking lot is located at 301 E. Washington Street, Indianapolis, IN 46204. The parking lot consists of approximately 46,403 square feet and has approximately 149 parking spaces. The parking lot will be leased by Denison Parking Inc., an Indianapolis parking operator. Denison Parking, Inc. will pay annual rent of $375,000 and will pay all regular occurring maintenance expenses associated with the parking garage other than property taxes. In addition, the lease provides revenue participation with the Company receiving 70% of gross receipts over $512,500. The term of the lease is 10 years. | ||||
MVP MS Cedar Park 2012, LLC [Member] | |||||
Description | On October 29, 2015, the Company also sold a 376-unit self-storage facility located in Cedar Park, TX owned by its wholly owned subsidiary, MVP MS Cedar Park 2012, LLC to Calico Industries-CP, LLC, a Texas limited liability company. The sale price was $4.3 million which sale price was paid at the closing, less customary closing costs. The anticipated gain on sale is approximately $1.0 million. |