Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Nov. 14, 2017 | |
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, 2017 | |
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 | 11,103,647 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,017 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Investments in real estate and fixed assets: | ||
Land and improvements | $ 63,684,000 | $ 66,484,000 |
Building and improvements | 50,468,000 | 49,973,000 |
Construction in progress | 255,000 | |
Fixed assets | 88,000 | 88,000 |
[us-gaap:PropertyPlantAndEquipmentGross] | 114,495,000 | 116,545,000 |
Accumulated depreciation | (3,138,000) | (2,128,000) |
Total investments in real estate and fixed assets, net | 111,357,000 | 114,417,000 |
Investment in equity method investee | 8,853,000 | 4,123,000 |
Assets held for sale | 6,100,000 | 6,100,000 |
Cash | 1,286,000 | 4,112,000 |
Cash - restricted | 2,463,000 | 1,712,000 |
Accounts receivable | 303,000 | 117,000 |
Prepaid expenses | 53,000 | 444,000 |
Deferred rental assets | 113,000 | 93,000 |
Due from related party | 462,000 | |
Deposits | 1,519,000 | |
Other assets | 121,000 | |
Total assets | 130,528,000 | 133,220,000 |
Liabilities | ||
Notes payable, net of unamortized loan issuance cost of $1,084,000 and $1,106,000 at September 30, 2017 and December 31, 2016, respectively | 53,080,000 | 49,417,000 |
Line of credit, net of unamortized loan issuance costs of $107,000 and $164,000 as of September 30, 2017 and December 31, 2016, respectively | 1,893,000 | 4,646,000 |
Accounts payable and accrued liabilities | 1,503,000 | 959,000 |
Deferred revenue | 49,000 | 55,000 |
Due to related parties | 2,735,000 | |
Liabilities related to assets held for sale | 67,000 | |
Security deposits | 72,000 | 248,000 |
Total liabilities [Default Label] | 59,399,000 | 55,325,000 |
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, 10,971,231 and 10,952,325 shares issued and outstanding as of September 30, 2017 and December 31, 2016, respectively AND Non-voting, non-participating convertible stock, $0.001 par value, 1,000 shares authorized, issued and outstanding as of September 30, 2017 and December 31, 2016 | 11,000 | 11,000 |
Additional paid-in capital | 87,449,000 | 90,156,000 |
Accumulated deficit | (19,553,000) | (16,191,000) |
Total MVP REIT, Inc. Shareholders' Equity | 67,907,000 | 73,976,000 |
Non-controlling interest - related party | 3,222,000 | 3,919,000 |
Total equity | 71,129,000 | 77,895,000 |
Total liabilities and equity | 130,528,000 | 133,220,000 |
Non Voting Non Participating Convertible Stock | ||
Equity | ||
Common stock, $0.001 par value, 98,999,000 shares authorized, 10,971,231 and 10,952,325 shares issued and outstanding as of September 30, 2017 and December 31, 2016, respectively AND Non-voting, non-participating convertible stock, $0.001 par value, 1,000 shares authorized, issued and outstanding as of September 30, 2017 and December 31, 2016 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
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 | 10,971,231 | 10,952,325 |
Common stock, shares outstanding | 10,971,231 | 10,952,325 |
Notes Payable [Member] | ||
Unamortized Loan Issuance Cost | $ 1,084,000 | $ 1,106,000 |
Line of Credit [Member] | ||
Unamortized Loan Issuance Cost | $ 107,000 | $ 164,000 |
Non Voting Non Participating Convertible Stock | ||
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, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Revenues | ||||
Base rent income | $ 2,110,000 | $ 2,059,000 | $ 6,375,000 | $ 5,975,000 |
Percentage rent income | 348,000 | 277,000 | 413,000 | 310,000 |
Total Revenues | 2,458,000 | 2,336,000 | 6,788,000 | 6,285,000 |
Operating expenses | ||||
Property taxes | 518,000 | 544,000 | 1,454,000 | 1,380,000 |
Property operating expense | 38,000 | 24,000 | 254,000 | 297,000 |
Asset and debt management expense - related party | 365,000 | 242,000 | 1,050,000 | 774,000 |
General and administrative | 308,000 | 190,000 | 1,162,000 | 1,208,000 |
Merger costs | 321,000 | 1,428,000 | ||
Acquisition expenses | 17,000 | 337,000 | 284,000 | 765,000 |
Acquisition expenses - related party | 330,000 | 1,326,000 | ||
Disposition expense | 1,000 | 6,000 | ||
Loss from impairment | 100,000 | 100,000 | ||
Depreciation and amortization expenses | 337,000 | 326,000 | 1,010,000 | 934,000 |
Total operating expenses | 1,905,000 | 1,763,000 | 6,978,000 | 6,784,000 |
Income (loss) from operations | 553,000 | 573,000 | (190,000) | (499,000) |
Other income (expense) | ||||
Interest expense | (729,000) | (621,000) | (2,136,000) | (1,682,000) |
Income from investment in equity method investee | 61,000 | 58,000 | 269,000 | 61,000 |
Loss on acquisition of investment in real estate | (2,000) | |||
Interest income | 1,000 | |||
Total other expense | (668,000) | (563,000) | (1,867,000) | (1,622,000) |
Net loss | (115,000) | 10,000 | (2,057,000) | (2,121,000) |
Net gain (loss) attributable to non-controlling interest - related party | 41,000 | 55,000 | 71,000 | 36,000 |
Net loss attributable to common stockholders | $ (156,000) | $ (45,000) | $ (2,128,000) | $ (2,157,000) |
Basic and diluted loss per weighted average common share | ||||
Net loss attributable to MVP REIT common stockholders - basic and diluted | $ (0.02) | $ 0 | $ (0.20) | $ (0.2) |
Weighted average common shares outstanding, basic and diluted | 10,976,990 | 11,009,139 | 10,981,541 | 11,018,552 |
Condensed Consolidated Stateme5
Condensed Consolidated Statement of Equity (Unaudited) - 9 months ended Sep. 30, 2017 - USD ($) | Convertible Preferred Stock | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Non-controlling Interest Related Party | Total |
Beginning Balance at Dec. 31, 2016 | $ 11,000 | $ 90,156,000 | $ (16,191,000) | $ 3,919,000 | $ 77,895,000 | |
Balance (Shares) at Dec. 31, 2016 | 1,000 | 10,952,325 | 10,952,325 | |||
Distributions to non-controlling interest | (268,000) | $ (268,000) | ||||
Contributions from non-controlling interest | 59,000 | 59,000 | ||||
Issuance of common stock - DRIP | 514,000 | 514,000 | ||||
Issuance of common stock - DRIP (Shares) | 82,524 | |||||
Deconsolidation of Houston Preston | $ (559,000) | $ (559,000) | ||||
Stock Dividends paid | $ 1,234,000 | $ (1,234,000) | ||||
Redeemed shares | $ (592,000) | $ (592,000) | ||||
Redeemed shares (Shares) | (63,618) | |||||
Distributions | (3,863,000) | (3,863,000) | ||||
Stock Dividend | 247,000 | (247,000) | ||||
Stock Dividend (Shares) | 26,547 | |||||
Net income (loss) | (2,128,000) | 71,000 | (2,057,000) | |||
Balance at Sep. 30, 2017 | $ 11,000 | $ 87,449,000 | $ (19,553,000) | $ 3,222,000 | $ 71,129,000 | |
Balance (Shares) at Sep. 30, 2017 | 1,000 | 10,971,231 | 10,971,231 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements Of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Cash flows from operating activities: | ||
Net loss | $ (2,057,000) | $ (2,121,000) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Depreciation | 1,010,000 | 934,000 |
Amortization of loan costs | 256,000 | 113,000 |
Income from investment in equity method investee | (269,000) | (61,000) |
Loss from impairment | 100,000 | |
Change in operating assets and liabilities: | ||
Restricted cash | (751,000) | 249,000 |
Prepaid expenses | 391,000 | 133,000 |
Deferred rental assets | (134,000) | (196,000) |
Accounts receivable | (72,000) | 79,000 |
Other assets | 121,000 | 20,000 |
Capitalized loan fees | (159,000) | (498,000) |
Security deposits | (138,000) | (3,000) |
Assets held for sale | (62,000) | |
Due to related parties | 3,197,000 | 132,000 |
Deferred revenue | (6,000) | 40,000 |
Accounts payable and accrued liabilities | 556,000 | 352,000 |
Net cash provided by (used in) operating activities | 1,945,000 | (789,000) |
Cash flows from investing activities: | ||
Purchase of investment in real estate | (9,957,000) | |
Purchase of asset held for sale | (6,100,000) | |
Payments of deposits, net of deposits returned | (347,000) | |
Proceeds for 20% ownership in Houston Preston, net of cash | 1,016,000 | |
Investment in equity method investee | (5,107,000) | (6,584,000) |
Deposits applied to purchase of investment in equity method investee | 1,500,000 | |
Assets held for sale | 67,000 | |
Construction in Process | (275,000) | |
Building improvements | (496,000) | (80,000) |
Net cash used in investing activities | (3,295,000) | (23,068,000) |
Cash flows from financing activities: | ||
Proceeds from notes payable | 6,058,000 | 21,340,000 |
Payments on notes payable | (985,000) | (784,000) |
Proceeds from line of credit | 3,612,000 | |
Payments on line of credit | (6,422,000) | |
Capital contribution from noncontrolling interest - related party | 59,000 | 3,431,000 |
Redeemed shares | (592,000) | (1,163,000) |
Purchase of non-controlling interest | (750,000) | |
Proceeds from issuance of common stock-DRIP | 514,000 | 868,000 |
Stockholders' distributions | (3,863,000) | (4,987,000) |
Distribution received from investment in equity method investee | 411,000 | 17,000 |
Distribution to non-controlling interest | (268,000) | (1,137,000) |
Net cash provided by (used in) financing activities | (1,476,000) | 16,836,000 |
NET CHANGE IN CASH | (2,826,000) | (7,021,000) |
Cash and cash equivalents, beginning of period | 4,112,000 | 10,511,000 |
Cash and cash equivalents, end of period | 1,286,000 | 3,490,000 |
Supplemental disclosures of cash flows information: | ||
Interest paid | 1,880,000 | 1,569,000 |
Non-cash investing and financing activities: | ||
Distributions - DRIP | 514,000 | 868,000 |
Stock Dividends | 1,234,000 | |
Deposits applied to purchase of investment in real estate | 15,951,000 | |
Deposits applied to purchase of investment in equity method investee | 1,500,000 | |
Capitalized loan fees related to promissory note | $ 498,000 |
Organization, Proposed Business
Organization, Proposed Business Operations and Capitalization | 9 Months Ended |
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization, Business Operations and Capitalization | Note A — Organization, Business Operations and Capitalization Organization and Business MVP REIT, Inc. (the “Company,” “MVP,” “we,” “us” or “our”) 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. 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 st 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”). Vestin Realty Mortgage II, Inc. (“VRM II”) owns 60% of the Advisor, and the remaining 40% is owned by Vestin Realty Mortgage I, Inc. (“VRM I”). Michael Shustek owns 100% of Vestin Mortgage, LLC, a Nevada limited liability company, which is the manager of VRM I and VRM II. 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. In October 2016 the Board of Directors appointed a special committee to evaluate liquidity options. After consideration, in January 2017 the special committee of the Company’s board of directors decided to explore a merger with MVP REIT II, Inc. (“MVP REIT II”). On May 26, 2017, the Company, MVP REIT II, MVP Merger Sub, LLC, a Delaware limited liability company and a wholly-owned subsidiary of MVP REIT II (“Merger Sub”), and MVP Realty Advisors, LLC, the Company’s and MVP REIT II’s external advisor (the “Advisor”), entered into an agreement and plan of merger (the “Merger Agreement”). Subject to the terms and conditions of the Merger Agreement, the Company will merge with and into Merger Sub (the “Merger”), with Merger Sub surviving the Merger (the “Surviving Entity”), such that following the Merger, the Surviving Entity will continue as a wholly owned subsidiary of MVP REIT II. On September 27, 2017 the stockholders of MVP REIT approved the Merger Agreement and the parties are currently in the process of satisfying the remaining conditions to completion of the Merger. Estimated Value Per Share As previously reported on a Form 8-K filed on April 11, 2017, the Company’s board of directors determined that the Company's estimated net asset value ("NAV") was approximately $102.3 million or $9.32 per common share as of March 30, 2017. Shares in the initial public offering were sold at $9.00 per share. Starting April 11, 2017, the NAV of $9.32 per common share has been used for purposes of effectuating permitted redemptions of our common stock and issuing shares pursuant to our distribution reinvestment plan. Last year, the board of directors determined that the NAV was $9.14 per common as of March 30, 2016, which value had been used since April 7, 2016 through April 10, 2017 for purposes of effectuating permitted redemptions of the Company's common stock and issuing shares pursuant to the Company's distribution reinvestment plan. In determining an estimated value per share of the Company's common stock, the Company's board of directors relied upon information provided by MVP Realty Advisors, LLC, the Company's advisor and the board's experience with, and knowledge of, the Company's real property and other assets. The Company is providing the estimated value per share to assist broker-dealers and stockholders pursuant to certain rules of the Financial Industry Regulatory Authority, Inc., or FINRA. The objective of the board of directors in determining the estimated value per share was to arrive at a value, based on recent available data, that it believed was reasonable based on methods that it deemed appropriate after consultation with the Advisor. Accordingly, the Company's Advisor performed the valuation of the Company's common stock using as a guide Practice Guideline 2013-01, Valuations of Publicly Registered Non-Listed REITs Distributions 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). Starting April 11, 2017, the NAV of $9.32 per common share has been used for purposes of effectuating permitted redemptions of the Company’s common stock and issuing shares pursuant to the Company’s distribution reinvestment plan. Currently the DRIP program has been suspended in connection with the pending Merger. From inception through September 30, 2017, the Company has paid approximately $17.5 million in distributions including approximately $3.4 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 continue to pay distributions from sources other than cash flow from operations, including proceeds from its initial public 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 also announced, in connection with the pending Merger, that the monthly distribution for record holders as of May 24, 2017 was paid on June 10, 2017 will consist of a $0.0225 cash distribution per share (3% per annum based upon the initial $9.00 offering price), a stock dividend equal to .002414 shares of stock for each share owned (3% per annum based upon the initial $9.00 offering price), and a special one-time distribution of $0.0105 in additional cash distributions per share (0.7% per annum for the remaining two months left in the quarter based upon the initial $9.00 offering price). Thereafter, the Company anticipates paying monthly cash distributions of $0.0225 per share and stock dividends of .0024 shares for each share of stock owned. Capitalization As of September 30, 2017, the Company had 10,971,231 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 initial public offering, we issued 1,000 shares of the Convertible Stock to our advisor. At the effective time of the Merger, all 1,000 shares of the Convertible Stock held by the Advisor will automatically be retired and will cease to exist, and no consideration will be paid, nor will any other payment or right inure or be made with respect to such shares in connection with or as a consequence of the Merger. In the event that the Merger is not consummated, the Convertible Stock will remain outstanding and subject to conversion under its current terms as follows: 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 the Company’s 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. In connection with the proposed Merger, the Company has suspended its distribution reinvestment plan and share repurchase plan pending the consummation of the proposed Merger. In accordance with the distribution reinvestment plan and share repurchase plan, the suspension of the distribution reinvestment plan and share repurchase plan took effect on May 11, 2017 and June 1, 2017, or 10 days and 30 days, respectively, after the May 1, 2017 press release providing notice of suspension. The Company may consider re-instating the distribution reinvestment plan and share repurchase plan only if the Merger is not consummated. 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 Company’s initial public 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, 2017, a total of 382,965 common shares have been issued under the DRIP. Currently the DRIP program is not available. 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. On April 11, 2017, the Company established an estimated value per share of common stock of $9.32. The Company will repurchase shares at 100% of the estimated value per share. 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 st st th th st there are no outstanding repurchase requests due to the suspension of the share repurchase program in connection with the pending Merger. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2017 | |
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 nine months ended September 30, 2017 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017. 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, 2016. The condensed consolidated balance sheet as of December 31, 2016 contained herein has been derived from the audited consolidated financial statements as of December 31, 2016, but do not include all disclosures required by GAAP. Consolidation The Company’s consolidated financial statements include its accounts and the accounts of its subsidiaries, REH and all of the following subsidiaries. All intercompany profits and losses, balances and transactions are eliminated in consolidation. MVP PF Ft. Lauderdale 2013, LLC MVP Wildwood NJ Lot, LLC MVP PF Memphis Court 2013, LLC MVP Indianapolis City Park Garage, LLC MVP PF Memphis Poplar 2013, LLC MVP KC Cherry Lot, LLC MVP PF St. Louis 2013, LLC MVP Indianapolis Washington Street Lot, LLC MVP PF Kansas City 2013, LLC Minneapolis Venture, LLC Mabley Place Garage, LLC MVP Indianapolis Meridian, LLC MVP Denver Sherman, LLC MVP Milwaukee Clybourn, LLC MVP Fort Worth Taylor, LLC MVP Milwaukee Arena, LLC MVP Milwaukee Old World, LLC MVP Clarksburg Lot, LLC MVP St. Louis Convention Plaza, LLC MVP Denver 1935 Sherman, LLC MVP Houston Saks Garage, LLC MVP Bridgeport Fairfield, LLC MVP St. Louis Lucas, LLC Minneapolis City Parking MVP Milwaukee Wells, LLC MVP Houston Preston Lot, LLC* *Ownership through 4/30/2017- See Note I – Investment in equity method investee Under GAAP, the Company’s 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 During the last week of August 2017, Houston Texas experienced major flooding due to Hurricane Harvey. This resulted in limited access to the Houston area and a shutdown of most business and government operations. Our parking garage and parking lots located in Houston, TX experienced minimal damage during this time; however, the company is still assessing the long-term impact. As of September 30, 2017, we have not seen a reduction in the base rent from our operator, who will continue to operate these locations under the terms of the current leases. The Company had eight parking tenants as of September 30, 2017 and 2016, respectively. One tenant, Standard Parking Plus (“SP+”), represented a concentration for the nine months ended September 30, 2017 and 2016, in regards to parking rental revenue. During the nine months ended September 30, 2017 and 2016, SP+ accounted for approximately 69.3% of the parking rental revenue. Below is a table that summarizes parking rent by tenant: Parking Tenant Percentage of Total Rental Revenue As of September 30, 2017 2016 SP + 69.3% 69.1% ABM 9.3% 10.5% iPark Services 8.1% 7.5% Denison 6.3% 5.6% PCAM, LLC 3.2% 3.4% BEST PARK 3.2% 3.3% Denver School 0.4% 0.4% Secure 0.2% 0.2% Grand Total 100.0% 100.0% In addition, the Company had concentrations in various cities based on parking rental revenue for the nine months ended September 30, 2017 and 2016, as well as concentrations in various cities based on the real estate we owned as of September 30, 2017 and December 31, 2016. The below tables summarize this information by city. City Concentration for Parking Rent For the Nine months Ended 9/30/2017 9/30/2016 Cincinnati 19.4% 19.2% Fort Worth 18.2% 17.7% Indianapolis 15.5% 15.0% Minneapolis 9.6% 9.2% St. Louis 9.1% 8.5% Milwaukee 7.7% 7.7% Houston 7.5% 8.1% Memphis 3.5% 3.4% Bridgeport 3.3% 4.6% Kansas City 2.2% 2.0% Denver 1.6% 1.8% Ft. Lauderdale 1.4% 1.3% Clarksburg 0.6% 0.6% Wildwood 0.4% 0.9% 100.0% 100.0% Real Estate Concentration by City Based on the Company's Ownership % As of 9/30/2017 12/31/2016 Fort Worth 17.6% 19.2% Indianapolis 12.9% 14.1% Minneapolis 10.2% 11.1% Cincinnati 9.2% 10.0% Detroit 8.3% 0.0% St. Louis 7.7% 8.4% Houston 7.2% 7.8% Milwaukee 6.8% 7.4% Bridgeport 5.3% 5.8% Cleveland 3.2% 3.5% Ft. Lauderdale 2.6% 2.8% Memphis 2.2% 2.5% Denver 1.8% 2.0% Nashville 1.7% 1.9% Kansas City 1.6% 1.7% Wildwood 1.2% 1.3% Clarksburg 0.5% 0.5% 100.0% 100.0% 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 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 on parking tenants, legal and other related expenses. 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. 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, 2017 and 2016, 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. During the three and nine months ended September 30, 2017, the Company did not have any asset impairments. 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 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. As of September 30, 2017 and December 31, 2016, the Company did not have any derivative financial instruments. 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 at KeyBank. The balances are insured by the Federal Deposit Insurance Corporation under the same ownership category of $250,000. As of September 30, 2017 the Company had no amount in excess of the federally-insured limits. As of December 31, 2016, the Company had approximately $1.8 million in excess of the federally-insured limits. As of September 30, 2017, the Company has not experienced any losses on cash deposits. 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 are 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. Percentage rents will be recorded when earned and certain thresholds have been met. 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 after exhaustive efforts at collection. Advertising Costs Advertising costs incurred in the normal course of operations and are expensed as incurred. During the three and nine months ended September 30, 2017 and 2016, 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 will maintain 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. 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 G — 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, 2017 and 2016. In September 2012, upon the commencement of our initial public offering, the Company issued 1,000 shares of convertible stock to our advisor. If the Merger is successful, upon completion of the Merger, the 1,000 shares of convertible stock to the Advisor will be cancelled without payment of any consideration. If the Merger is not consummated, the convertible stock, 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 the Company’s 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, 2017, the Company only operates in the investment in real property segment. Reclassifications Upon re-evaluation of ASU 2014-08, the Company has determined that the amounts listed in connection with discontinued operations in the 2016 condensed consolidated financial statements need to be reclassified to conform to ASU 2014-08 and September 30, 2017 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 including 404(b) reporting subject to further management evaluation. 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 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2017 | |
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 as of the filing date of this report. 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, purchased on June 30, 2015 and 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 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, 2017, management does not anticipate a material adverse effect related to this environmental matter. As of September 30, 2017, the Company has not been notified by any governmental authority of any non-compliance, liability or other claim, and is not aware of any other environmental condition that it believes will have a material adverse effect on the results of operations. The Company, however, cannot predict the impact of any unforeseen environmental contingencies or new or changed laws or regulations on properties in which the Company holds an interest, or on properties that may be acquired directly or indirectly in the future. |
Investments in Real Estate
Investments in Real Estate | 9 Months Ended |
Sep. 30, 2017 | |
Banking and Thrift [Abstract] | |
Investments in Real Estate | Note D – Investments in Real Estate As of September 30, 2017, the Company had the following investments in real estate entities that were consolidated on the Balance Sheet: Property Location Date Acquired Investments in Real Estate Parking Tenant Lease Commencement Date Lease Term Ft. Lauderdale Ft. Lauderdale, FL 7/31/2013 $3,408,000 SP+ 2/1/2014 5 yr. w/2 5 yr. ext. Memphis Court Memphis, TN 8/28/2013 $194,000 SP+ 8/28/2013 5 yr. w/2 5 yr. ext. Memphis Poplar Memphis, TN 8/28/2013 $2,693,000 Best Park 8/28/2013 5 yr. w/2 5 yr. ext. Kansas City Kansas City, MO 8/28/2013 $1,550,000 SP+ 8/28/2013 15 Years St. Louis St Louis, MO 9/4/2013 $4,137,000 SP+ 12/1/2013 5 yr. w/2 5 yr. ext. Mabley Place Cincinnati, OH 12/9/2014 $14,995,000 SP+ 10/1/2014 10 Years Denver Sherman Denver, CO 1/26/2015 $585,000 Denver School District 7/1/2014 10 Years w/1 5 yr. ext. Ft. Worth Fort Worth, TX 3/16/2015 $23,336,000 SP+ 3/16/2015 10 Years Milwaukee Old World Milwaukee, WI 3/31/2015 $1,000,000 SP+ 3/31/2015 5 yr. w/1 5 yr. ext. St. Louis Convention St. Louis, MO 5/31/2015 $2,575,000 SP+ 5/13/2015 5 yr. w/1 5 yr. ext. Houston Saks Garage Houston, TX 5/28/2015 $8,381,000 iPark 5/28/2015 10 yr. w/1 5 yr. ext. St. Louis Lucas St. Louis, MO 6/29/2015 $3,463,000 SP+ 7/1/2015 5 yr. w/1 5 yr. ext. Milwaukee Wells Milwaukee, WI 6/30/2015 $3,900,000 SP+ 6/30/2015 10 Years Wildwood NJ Lot I Wildwood, NJ 7/10/2015 $994,000 SP+ 6/10/2016 5 yr. w/1 5 yr. ext. Indy City Parking Garage Indianapolis, IN 10/5/2015 $10,707,000 SP+ 10/5/2015 5 yr. w/1 5 yr. ext. KC Cherry Lot Kansas City, MO 10/9/2015 $515,000 SP+ 10/9/2015 5 yr. w/1 5 yr. ext. Indy WA Street Indianapolis, IN 10/29/2015 $4,995,000 Denison 12/1/2015 10 Years Wildwood NJ Lot II Wildwood, NJ 12/16/2015 $615,000 SP+ 6/10/2016 10 Years Minneapolis City Parking Minneapolis, MN 1/6/2016 $9,500,000 SP+ 1/6/2016 5 yr. w/1 5 yr. ext. Indianapolis Meridian Indianapolis, IN 1/15/2016 $1,498,000 Denison Parking 1/15/2016 10 Years Milwaukee Clybourn Milwaukee, WI 1/20/2016 $205,000 Secure Parking USA 1/20/2016 5 Years Milwaukee Arena Milwaukee, WI 2/1/2016 $3,900,000 SP+ 2/1/2016 5 yr. w/1 5 yr. ext. Clarksburg Lot Clarksburg, WV 2/9/2016 $628,000 ABM 2/9/2016 5 Years Denver 1935 Sherman Denver, CO 2/12/2016 $2,438,000 SP+ 2/12/2016 10 Years Bridgeport Fairfield Bridgeport, CT 3/30/2016 $7,940,000 SP+ 3/30/2016 10 Years Construction in progress 255,000 Fixed Assets $88,000 $114,495,000 During April 2017, the Company reduced their ownership interest in the MVP Houston Preston Lot from 80% to 40%, by selling a portion of their ownership to MVP REIT II for $1.12 million. This transaction was completed at par value with no gain or loss recorded by the Company. MVP REIT II’s ownership interest increased from 20% to 60% and will now be considered the controlling party. |
Related Party Transactions and
Related Party Transactions and Arrangements | 9 Months Ended |
Sep. 30, 2017 | |
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. Ownership of Company Stock As of September 30, 2017, the Sponsor owned 29,566 shares of the Company’s outstanding common stock, VRM I owned 77,174 shares of the Company’s outstanding common stock, Dan Huberty owned 9,692 shares of the Company’s outstanding common stock, MVP REIT II owned 355,005 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, Business Operations and Capitalization” Ownership 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”) 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 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, 2017, VRM I and VRM II had notes receivable from the Advisor of approximately $6.3 million and $14.0 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 investments in real estate. 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 agreed to 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. Ownership by MVP REIT II On November 5, 2016, MVP REIT II purchased 338,409 shares of the Company’s common stock from an unrelated third party for $3.0 million or $8.865 per share. During the three and nine months ended September 30, 2017, the Company paid MVP REIT II approximately $24,000 and $123,000, respectively, in distributions related to MVP REIT II’s ownership of the Company’s common stock, of which $24,000 was paid in cash and $123,000 was paid in the form of additional shares of the Company’s common stock. Fees and Expenses Paid in Connection with the Offering The Company completed its initial public offering in September 2015. The Company appointed MVP American Securities (“MVP AS”), formerly known as Ashton Garnett Securities, LLC, an entity indirectly owned by our CEO and third-party selling agents to act as the selling agents for 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. Since the offering has terminated, the Company does not anticipate incurring any additional fees or expenses in connection with the offering. 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. Commencing in August of 2017 the sponsor and its affiliates began to pay trailing commissions to non-affiliated selling agents in connection with the sale of the Company’s common stock and will continue until a listing event occurs. The trailing commissions are equal to 0.5% of the selling price payable on each of the 4th and 5th anniversaries of the sale of the shares and 0.25% of the selling price payable on the 6th anniversary of the sale of the shares except that no trailing commissions will be paid if, prior to any such anniversary, the shares have been listed for trading on a national securities exchange or the shares upon which such trailing commissions are payable have been sold, redeemed or transferred. The Company will not pay any portion of the trailing commissions and has no obligation of any kind to pay such trailing commissions. The selling agents have agreed not to seek payment of the trailing commissions from the Company. Therefore, payment of the trailing commissions will not reduce the net proceeds available to the Company from the sale of the shares. 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, 2017, 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 months ended September 30, 2017 and 2016, the Company did not incur any acquisition fees due to the Advisor. During the nine months ended September 30, 2016, the Company approximately $1.1 million, in acquisition fees to the Advisor. No such fees were incurred during the same period in 2017. 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. 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 refinancing. 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, 2017 and 2016 were approximately $34,000, and $32,000, respectively. Debt financing fees for the nine months ended September 30, 2017 and 2016 were approximately $106,000, and $81,000, 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. During November 2016, the Company and MVP REIT II closed on the purchase of a parking lot in Houston, TX (“MVP Houston Preston Lot”) for approximately $2.8 million in cash plus closing costs, 80% owned by the Company and 20% owned by MVP REIT II. At closing the Company funded the full purchase price and recorded a receivable from MVP REIT II totaling $560,000. This balance was paid in full during January 2017. During April 2017, the company reduced their ownership interest in the MVP Houston Preston Lot from 80% to 40%, by selling a portion of their ownership to MVP REIT II for $1.12 million. This transaction was completed at par value with no gain or loss be recorded by the Company. MVP REIT II’s ownership interest increased from 20% to 60% and will now be considered the controlling party. In connection with various operations and joint acquisitions, the Company owed MVP REIT II $ 1.5 million as of September 30, 2017 and MVP REIT II owed the Company $ 0.6 million as of December 31, 2016. 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 three and nine months ended September 30, 2017 and 2016. 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. Termination of Advisory Agreement upon Consummation of the Merger In connection with the Merger, pursuant to the Termination Agreement, at the effective time of the Merger, the Advisory Agreement, dated September 25, 2012, as amended, among MVP REIT and the Advisor will be terminated and the Company will pay the Advisor an Advisor Acquisition Payment (as such term is defined in the Termination Agreement) of approximately $3.6 million, subject to adjustment in the event that additional properties are acquired by MVP REIT prior to closing, which shall be the only fee payable to the Advisor in connection with the Merger. In connection with the Merger, the Advisory Agreement with MVP Realty Advisor for the combined company will be amended effective at the closing of the Merger to eliminate all fees except a 1.1% asset management fee. The asset management fee will not exceed $2 million per year until the earlier of such time, if ever, that (i) the combined company holds assets with an appraised value equal to or in excess of $500,000,000 or (ii) the combined company reports AFFO (as defined in the MVP II Amended and Restated Advisory Agreement) equal to or greater than $0.3125 per share of MVP II common stock for two consecutive quarters on a fully diluted basis. All subordinated asset management fees in excess of $2 million per year will be paid, with interest rate of 3.5% per annum, to the advisor at such time, if ever, that either of clause (i) or (ii) of the preceding sentence is satisfied. See Note N – Merger for more information. |
Dependency
Dependency | 9 Months Ended |
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Dependency | Note F —Dependency The Company has no employees and is dependent on the Advisor for services that are essential to the Company, including 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, 2017 | |
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 common 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, 2017 | |
Accounting Changes and Error Corrections [Abstract] | |
Recent Accounting Pronouncements | Note H – Recent Accounting Pronouncements In May 2014, Financial Accounting Standards Board ("FASB") issued ASU 2014-09, Revenue from Contracts with Customers Revenue from Contracts with Customers, Deferral of Effective Date Revenue from Contracts with Customers, Principal versus Agent Considerations (Reporting Revenue Gross versus Net) In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. The Company have on consolidated financial statements . In February 2016, the FASB issued ASU 2016-02, Leases – (Topic 842) In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230) Restricted Cash In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805) Clarifying the Definition of a Business In May 2017, the FASB issued Accounting Standards Update ASU 2017-09, Compensation-Stock Compensation: Scope of Stock Compensation Modification Accounting In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities |
Investment in Equity Method Inv
Investment in Equity Method Investee | 9 Months Ended |
Sep. 30, 2017 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Investment in Equity Method Investee | Note I – Investment in Equity Method Investee West 9 th On May 11, 2016, the Company through a wholly owned entity it owns, along with MVP REIT II, closed on the purchase of all of the membership interests of an entity that owns a surface parking lot, for approximately $5.7 million in cash. The Company's share of the purchase was approximately $2.8 million in cash plus closing costs and the Company owns a 49% interest in the entity. The surface parking lot is located at 1200-1240 W. 9th Street and W. 10th Street, Cleveland, Ohio (the "Cleveland West 9th"). Cleveland West 9th consists of approximately 87,052 square feet with approximately 260 parking spaces. The parking lot is leased by SP Plus Corporation, a national parking operator, under a net lease agreement where Cleveland West 9th will be responsible for property taxes above a $120,000 threshold, and SP Plus Corporation will pay insurance and maintenance costs. SP Plus Corporation will pay annual rent of $330,000. In addition, the lease provides percentage rent with MVP receiving 70% of gross receipts over $650,000 per lease year. The term of the lease will be for 5 years. Crown Colony On May 17, 2016, the Company through a wholly owned entity it owns, along with MVP REIT II, closed on the purchase of all of the membership interests of an entity that owns a surface parking lot, for approximately $3.0 million in cash. The Company's share of the purchase was approximately $1.5 million and the Company owns a 49% interest in the entity. The surface parking lot is located at 1239 W. 9th Street, Cleveland, Ohio (the "Crown Colony parking lot"). The Crown Colony parking lot consists of approximately 23,000 square feet with approximately 82 parking spaces. The Crown Colony parking lot is leased by SP Plus Corporation, a national parking operator, under a net lease agreement where MVP will be responsible for property taxes above a $40,000 threshold, and SP Plus Corporation will pay insurance and maintenance costs. SP Plus Corporation will pay annual rent of $185,000. In addition, the lease provides percentage rent with MVP receiving 70% of gross receipts over $325,000 per lease year. The term of the lease will be for 5 years. White Front Garage On September 30, 2016, the Company through a wholly owned entity it owns, along with MVP REIT II, closed on the purchase of all of the membership interests of an entity that owns parking garage, for approximately $11.5 million in cash. The Company's share of the purchase was approximately $2.3 million and the Company owns a 20% interest in the entity. The parking garage is located at 205 2 nd Detroit As previously disclosed in a Form 8-K filed by the Company on December 7, 2016 the Company and MVP REIT II, MVP Detroit Center Garage, LLC, an entity owned by the Company and MVP REIT II During May 2017, MVP Detroit Center Garage, LLC amended their lease with SP+ to set the percentage rent trigger amount and periods from 80% of $5,000,000 over the first 12 months to the following: a. 80% over $833,333 from February 2017 to March 2017 b. 80% over $1,250,000 from April 2017 to June 2017 c. 80% over $2,916,667 from July 2017 to January 2018 As a result of this amendment, MVP Detroit Center Garage, LLC earned approximately $498,000 in percentage rent from February 2017 to September 2017. Houston Preston During April 2017, the company reduced their ownership interest in the MVP Houston Preston Lot from 80% to 40%, by selling a portion of their ownership to MVP REIT II for $1.12 million. This transaction was completed at par value with no gain or loss be recorded by the Company. MVP REIT II’s ownership interest increased from 20% to 60% and will now be considered the controlling party. Summarized Combined Balance Sheets—Unconsolidated Real Estate Affiliates—Equity Method Investments September 30, 2017 December 31, 2016 (Unaudited) (Unaudited) ASSETS Investments in real estate and fixed assets: Land and improvements $ 18,898,000 $ 11,821,000 Building and improvements 56,556,000 8,380,000 Construction in progress 139,000 -- 75,593,000 20,201,000 Accumulated depreciation (1,091,000) (45,000) Total investments in real estate and fixed assets, net 74,502,000 20,156,000 Cash 256,000 176,000 Cash – restricted 1,416,000 100,000 Accounts receivable 16,000 22,000 Prepaid expenses 137,000 24,000 Due from related party 140,000 -- Total assets $ 76,467,000 $ 20,478,000 LIABILITIES AND EQUITY Liabilities Notes payable, net of unamortized loan issuance cost $ 42,465,000 $ 5,205,000 Accounts payable and accrued liabilities 33,000 72,000 Deferred revenue 253,000 -- Security deposits -- -- Total liabilities 42,751,000 5,277,000 Equity Shareholders’ Equity Additional paid-in capital 24,549,000 10,929,000 Accumulated deficit 1,262,000 264,000 Total Shareholders’ Equity 25,811,000 11,193,000 Non-controlling interest 7,905,000 4,008,000 Total equity 33,716,000 15,201,000 Total liabilities and equity $ 76,467,000 $ 20,478,000 Summarized Combined Statements of Operations—Unconsolidated Real Estate Affiliates—Equity Method Investments For the Three Months Ended September 30 For the Nine Months Ended September 30 2017 2016 2017 2016 Rental revenue $ 1,173,000 $ 129,000 $ 4,080,000 $ 197,000 Expenses (968,000) (80,000) (3,081,000) (143,000) Net income $ 205,000 $ 49,000 $ 999,000 $ 54,000 |
Line of Credit
Line of Credit | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Line of Credit | Note J — Line of Credit On October 5, 2016, the Company and MVP REIT II, (the “REITs”), each through a wholly owned subsidiary, MVP Real Estate Holdings, LLC and MVP REIT II Operating Partnership, LP, (the "Borrowers"), entered into a credit agreement (the "Unsecured Credit Agreement") with KeyBank, National Association ('KeyBank") as the administrative agent and KeyBanc Capital Markets ("KeyBanc Capital Markets") as the lead arranger. Pursuant to the Unsecured Credit Agreement, the Borrowers were provided with a $30 million unsecured credit facility (the "Unsecured Credit Facility"), which may be increased up to $100 million, in minimum increments of $10 million. The Unsecured Credit Facility has an initial term of two years, maturing on October 5, 2018, and may be extended for a one-year period if certain conditions are met and upon payment of an extension fee. The Unsecured Credit Facility has an interest rate calculated based on LIBOR Rate plus 2.25% or Base Rate plus 1.25%, both as provided in the Unsecured Credit Agreement. The Base Rate is calculated as the greater of (i) the KeyBank Prime rate or (ii) the Federal Funds rate plus ½ of 1%. Payments under the Unsecured Credit Facility are interest only and are due on the first day of each quarter. The obligations of the Borrowers of the Unsecured Credit Agreement are joint and several. The Borrowers have entered into cross-indemnification provisions with respect to their joint and several obligations under the Unsecured Credit Agreement. As of September 30, 2017, the interest rate was 3.49%. As of September 30, 2017, the Borrowers had one property listed on the line of credit, which provided an available draw of approximately $2.1 million, and had drawn approximately $2.0 million, of which our portion of the current draw was approximately $2.0 million, based on our pro-rata ownership of the properties listed on the line of credit. Based on the four properties on the line of credit as of September 30, 2017, the REITs had an additional available draw of approximately $0.1 million. For the three and nine months ended September 30, 2017, we had accrued approximately $16,000 and $102,000, respectively, in interest expense. For the three and nine months ended September 30, 2017, we had accrued approximately $9,000 and $19,000, respectively, in unused line fees associated with our draw. Total loan amortization cost for the three and nine months ended September 30, 2017 were $34,000 and $94,000, respectively. On June 26, 2017, the Borrowers entered into a credit agreement (the "Working Capital Credit Agreement") with KeyBank, National Association ('KeyBank") as the administrative agent and KeyBanc Capital Markets ("KeyBanc Capital Markets") as the lead arranger. Pursuant to the Working Capital Credit Agreement, the Borrowers were provided with a $6.0 million credit facility (the "Total Commitment"), which may be increased up to $10 million, in minimum increments of $1 million. The Total Commitment has an initial term of six months, maturing on December 26, 2017. The Working Capital Credit Agreement has an interest rate calculated based on LIBOR Rate plus 4.5% or Base Rate plus 3.5%, both as provided in the Working Capital Credit Agreement. The Base Rate is calculated as the greater of (i) the KeyBank Prime rate or (ii) the Federal Funds rate plus ½ of 1%. Payments under the Working Capital Credit Facility require 100% of the net proceeds of all capital events and equity issuances by the REIT’s within 5 business days of receipt. The obligations of the Borrowers of the Unsecured Credit Agreement are joint and several. The REITs have entered into cross-indemnification provisions with respect to their joint and several obligations under the Unsecured Credit Agreement. As of September 30, 2017, the interest rate was 5.73%. As of September 30, 2017, the balance on the Working Capital Credit Facility was approximately $1.5 million, of which all was attributable to MVP REIT II. As of September 30, 2017, the REITS had an additional available draw of approximately $4.5 million. MVP REIT II used net proceeds from the private placement of the Series 1 Convertible Redeemable Preferred Stock to pay down the $1.5 million in October 2017. For the three and nine months ended September 30, 2017, we expensed no interest expense. For the three and nine months ended September 30, 2017, we expensed approximately $1,600 in unused line fees associated with our draw. Total loan amortization cost for the three and nine months ended September 30, 2017 were $7,000 and $10,000, respectively. |
Fair Value
Fair Value | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value | Note K — Fair Value A fair value measurement is based on the assumptions that market participants would use in pricing an asset or liability in an orderly transaction. The hierarchy for inputs used in measuring fair value are as follows: 1. 2. 3. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level within which the fair value measurement is based on the lowest level input that is significant to the fair value measurement. The Company's financial instruments include cash and cash equivalents, restricted cash, accounts payable and accrued expenses. Due to their short maturities, the carrying amounts of these assets and liabilities approximate fair value. Assets and liabilities measured at fair value on a non-recurring basis may include Assets Held for Sale. |
Notes Payable
Notes Payable | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Notes Payable | Note L — Notes Payable Notes are collateralized by real property which holds the promissory note. As of September 30, 2017, the principal balances on notes payable are as follows: Property Original Debt Amount Monthly Payment (approx.) Loan Balance as of September 30, 2017 Lender Term Interest Rate Loan Maturity Ft. Lauderdale loan pool (1) $4,300,000 $25,000 3,960,000 KeyBank 5 Year 4.94% 2/1/2019 Mabley Place $9,000,000 $44,000 8,569,000 Barclays 10 year 4.25% 12/6/2024 Denver Sherman (2) $3,190,000 Interest Only 3,190,000 KeyBank 10 year * 4.90% 5/01/2027 Ft. Worth $13,150,000 $73,000 12,908,000 American National Insurance, of NY 10 year 4.50% 12/01/2026 Houston Saks Garage $3,650,000 $20,000 3,469,000 Barclays Bank PLC 10 year 4.25% 8/6/2025 St. Louis Lucas (3) $3,490,000 $20,000 3,364,000 Key Bank 10 year 4.59% 2/1/2026 MVP Wildwood NJ $500,000 Interest Only 500,000 Tigges Trust 6 Month 9.00% 2/28/2018 Indianapolis Garage (4) $8,200,000 $46,000 7,905,000 Key Bank 10 year 4.59% 2/1/2026 Indianapolis Meridian (5) $937,000 Interest Only 937,000 Cantor Commercial Real Estate Lending 10 year ** 5.03% 5/06/2027 Minneapolis City Parking $5,250,000 $29,000 5,084,000 American National Insurance, of NY 10 year 4.50% 5/01/2026 Bridgeport Fairfield $4,400,000 $23,000 4,278,000 FBL Financial Group, Inc. 10 year 4.00% 8/1/2026 Less unamortized loan issuance costs (1,084,000) $53,080,000 (1) Secured by four properties facilities (MVP PF Ft. Lauderdale 2013, LLC, MVP PF Memphis Court 2013, LLC, MVP PF Memphis Poplar 2013, LLC and MVP PF St. Louis 2013, LLC) (2) The Company and MVP REIT II issued a promissory note to KeyBank for $12.7 million secured by a pool of properties, including: a. Consolidated entities: MVP Denver Sherman, LLC, MVP Denver Sherman 1935, LLC and MVP Milwaukee Arena, LLC b. Nonconsolidated entities: MVP St. Louis Washington, LLC, MVP Louisville Station Broadway, LLC, and Cleveland Lincoln Garage Owners, LLC. (3) Secured by three properties (MVP St. Louis Convention, MVP St. Louis Lucas and MVP KC Cherry) (4) Secured by two properties (MVP Indy City Park and MVP Indy WA Street) (5) The Company and MVP REIT II issued a promissory note to Cantor Commercial Real Estate Lending, L.P. (“CCRE”) for $16.25 million secured by a pool of properties, including: a. Consolidated entity: MVP Indianapolis Meridian Lot, LLC b. Nonconsolidated entities: MVP Louisville Station Broadway, LLC, White Front Garage Partners, LLC, MVP Houston Preston Lot, LLC, MVP Houston San Jacinto Lot, LLC, St. Louis Broadway Group, LLC, and St. Louis Seventh & Cerre, LLC * 2 year Interest Only ** 10 Year Interest Only Total interest expense incurred for the three months ended September 30, 2017 and 2016 was approximately $0.7 million and $0.6 million, respectively. Total loan amortization cost for the three months ended September 30, 2017 and 2016 was approximately $85,000 and $39,000, respectively. Total interest expense incurred for the nine months ended September 30, 2017 and 2016 was $2.1 million and $1.7 million, respectively. Total loan amortization cost for the nine months ended September 30, 2017 and 2016 were $0.2 million and $0.1 million, respectively. As of September 30, 2017, future principal payments on the notes payable are as follows: 2017 $ 220,000 2018 1,690,000 2019 4,993,000 2020 1,246,000 2021 1,304,000 Thereafter 44,711,000 Unamortized loan issuance cost (1,084,000) Total $ 53,080,000 Except as described below, the carrying value of the Company’s financial instruments approximates fair value due to the short-term nature of these financial instruments. Debt The Company estimates the fair value of its debt by discounting the future cash flows of each instrument at estimated market rates consistent with the maturity of a debt obligation with similar credit terms and credit characteristics, which are Level 3 inputs under the fair value hierarchy. Market rates take into consideration general market conditions and maturity. As of September 30, 2017 and December 31, 2016, the carrying value of the Company's debt was approximately $53.1 million and $76.1 million, respectively. As of September 30, 2017 and December 31, 2016, the estimated fair value of the Company's debt was approximately $50.4 million and $25.4 million, respectively. Both the carrying value and estimated fair value of the Company's debt (as discussed above) is net of unamortized debt issuance costs related to term loans and mortgage debt for each specific year. |
Assets held for sale
Assets held for sale | 9 Months Ended |
Sep. 30, 2017 | |
Property, Plant and Equipment [Abstract] | |
Assets held for sale | Note M — Assets held for sale As of December 31, 2016, the Company had an 87.09% ownership interest in one property that was listed as held for sale, with a carrying value of approximately $6.1 million. This property was acquired on January 6, 2016, along with MVP REIT II, with the purchase of two parking lots located in Minneapolis, Minnesota. This property is accounted for at the fair value based on an appraisal. During June 2016, Minneapolis Venture entered into a PSA to sell the 10th Street lot “as is” to a third party for approximately $6.1 million. During October 2016, the PSA was cancelled. During February 2017, the Company entered into a letter of intent to sell a portion of the property (approximately 2.2 acres) to an unrelated third party for $3.0 million. The remaining portion of the property will continued to be reported as held for sale. The Company will continue look for an Operator if the entire property is not sold. 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, 2017: For The Three Months Ended September 30, 2017 For The Nine Months Ended September 30, 2017 For The Three Months Ended September 30, 2016 For The Nine Months Ended September 30, 2016 Revenue $ -- $ -- $ 4,000 $ 11,000 Expenses (67,000) (214,000) (63,000) (192,000) Loss from assets held for sale, net of income taxes $ (67,000) $ (214,000) $ (59,000) $ (181,000) |
Merger
Merger | 9 Months Ended |
Sep. 30, 2017 | |
Business Combinations [Abstract] | |
Merger | Note N – Merger On May 26, 2017, the Company, MVP REIT II, MVP Merger Sub, LLC, a Delaware limited liability company and a wholly-owned subsidiary of MVP REIT II (“Merger Sub”), and the Advisor, entered into an agreement and plan of merger (the “Merger Agreement”). Subject to the terms and conditions of the Merger Agreement, the Company will merge with and into Merger Sub (the “Merger”), with Merger Sub surviving the Merger (the “Surviving Entity”), such that following the Merger, the Surviving Entity will continue as a wholly owned subsidiary of MVP REIT II. The Merger is intended to qualify as a “reorganization” under, and within the meaning of, Section 368(a) of the Internal Revenue Code of 1986, as amended (the “Code”). The combined company will be renamed The Parking REIT, Inc. upon consummation of the Merger. Subject to the terms and conditions of the Merger Agreement, at the effective time of the Merger, each outstanding share of the Company’s common stock, $0.001 par value per share (the “Company Common Stock”), will be automatically cancelled and retired, and converted into the right to receive 0.365 shares of common stock, $0.0001 par value per share, of MVP REIT II (“MVP REIT II Common Stock”) (such ratio, as it may be adjusted pursuant to the Merger Agreement, the “Exchange Ratio”). Holders of shares of Company Common Stock will receive cash in lieu of fractional shares. At the effective time of the Merger each share of Company Common Stock, if any, then held by any wholly owned subsidiary of the Company or by MVP REIT II or any of its wholly owned subsidiaries will no longer be outstanding and will automatically be retired and will cease to exist, and no consideration will be paid, nor will any other payment or right inure or be made with respect to such shares of Company Common Stock in connection with or as a consequence of the Merger. In addition, each share of the Company’s Non-Participating, Non-Voting Convertible Stock, $0.001 par value per share (“Company Convertible Stock”), all 1,000 of which are held by the Advisor, will automatically be retired and will cease to exist, and no consideration will be paid, nor will any other payment or right inure or be made with respect to such shares of Company Convertible Stock in connection with or as a consequence of the Merger. The Merger Agreement contains customary covenants, including covenants prohibiting the Company and its subsidiaries and representatives from soliciting, providing information or entering into discussions concerning proposals relating to alternative business combination transactions, subject to certain limited exceptions. However, under the terms of the Merger Agreement, during the period beginning on the date of the Merger Agreement and continuing until 11:59 p.m. New York City time on July 10, 2017 (the “Go Shop Period End Time”), the Company (through the Company special committee and its representatives). From May 30, 2017, through July 10, 2017, in connection with the ‘‘go shop’’ process provided for under the Merger Agreement, Robert A. Stanger & Co., Inc., (“Stanger”) contacted approximately 78 parties, which the Company Special Committee and Stanger believed had the financial ability and potential strategic interest in reviewing the opportunity, to solicit their interest in a possible alternative transaction with the Company. Stanger and Venable negotiated with 12 parties with regard to signing a confidentiality agreement of which 8 confidentiality agreements were executed. No bids were received prior to the July 10, 2017 Go Shop Period End Time. Pursuant to the Merger Agreement, the board of directors of MVP REIT II (the “MVP II Board”) will, effective as of the effective time of the Merger, increase the number of directors comprising the MVP II Board to eight and Nicholas Nilsen, Robert J. Aalberts and Shawn Nelson will be elected to the MVP II Board. The obligation of each party to consummate the Merger is subject to a number of conditions, including receipt of the Stockholder Approvals, which were received on September 27, 2017, receipt of regulatory approvals, delivery of certain documents and consents, the truth and correctness of the representations and warranties of the parties, subject to the materiality standards contained in the Merger Agreement, the effectiveness of the registration statement on Form S-4 filed by MVP REIT II to register the shares of MVP REIT II Common Stock to be issued as consideration in the Merger which went effective on August 11, 2017 and the absence of a material adverse effect with respect to either the Company or MVP REIT II. In connection with the Merger, at the special stockholders’ meeting on September 27, 2017, the Company also obtained the approval of its stockholders of an amendment to the Company's charter to remove certain provisions regarding roll-up transactions (such amendment, the "Charter Amendment"). Pursuant to the Merger Agreement, approval by the Company's stockholders of the Charter Amendment is a condition to completing the Merger. The completion of the pending Merger remains subject to receipt of consents with respect to mortgage loans that are part of a CMBS pool of mortgages. The Company expects to receive these consents in the near future, but cannot provide assurance as to exact timing. Amended and Restated Advisory Agreement Concurrently with the entry into the Merger Agreement, the Company, MVP REIT II Operating Partnership, LP and the Advisor entered into the Second Amended and Restated Advisory Agreement (the “Second Amended and Restated Advisory Agreement”), which will become effective at the effective time of the Merger. The Second Amended and Restated Advisory Agreement will amend the Company’s existing advisory agreement, dated October 5, 2015 (the “Original Agreement”), to provide for, among other amendments, (i) elimination of acquisition fees, disposition fees and subordinated performance fees and (ii) the payment of an asset management fee by the Company to the Advisor calculated and paid monthly in an amount equal to one-twelfth of 1.1% of the (a) cost of each asset then held by the Company, without deduction for depreciation, bad debts or other non-cash reserves, or (b) 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 (b)) debt financing on the investment. Pursuant to the Second Amended and Restated Advisory Agreement, the asset management fee may not exceed $2,000,000 per annum (the “Asset Management Fee Cap”) until the earlier of such time, if ever, that (i) the Company holds assets with an Appraised Value (as defined Second Amended and Restated Advisory Agreement) equal to or in excess of $500,000,000 or (ii) the Company reports AFFO (as defined in the Second Amended and Restated Advisory Agreement) equal to or greater than $0.3125 per share of Company Common Stock (an amount intended to reflect a 5% or greater annualized return on $25.00 per share of the Company Common Stock) (the “Per Share Amount”) for two consecutive quarters, on a fully diluted basis. All amounts of the asset management fee in excess of the Asset Management Fee Cap, plus interest thereon at a rate of 3.5% per annum, will be due and payable by the Company no later than ninety (90) days after the earlier of the date that (i) the Company holds assets with an Appraised Value equal to or in excess of $500,000,000 or (ii) the Company reports AFFO per share of Company Common Stock equal to or greater than the Per Share Amount for two consecutive quarters, on a fully diluted basis. In the event that the Merger Agreement is terminated prior to the consummation of the Merger, the Second Amended and Restated Advisory Agreement will automatically terminate and be of no further effect and the Company, MVP REIT II Operating Partnership, LP and the Advisor will have the rights and obligations set forth in the Original Agreement. Termination Agreement Concurrently with the entry into the Merger Agreement, the Company, MVP REIT, the Advisor and MVP REIT II Operating Partnership, LP entered into a termination and fee agreement (the “Termination Agreement”). Pursuant to the Termination Agreement, at the effective time of the Merger, the Advisory Agreement, dated September 25, 2012, as amended, among MVP REIT and the Advisor will be terminated and the Company will pay the Advisor an Advisor Acquisition Payment (as such term is defined in the Termination Agreement) of approximately $3.6 million, subject to adjustment in the event that additional properties are acquired by MVP REIT prior to closing, which shall be the only fee payable to the Advisor in connection with the Merger. In the event that the Merger Agreement is terminated prior to the consummation of the Merger, the Termination Agreement will automatically terminate and be of no further effect and no Advisor Acquisition Payment will be owed and payable. The foregoing description of the Merger Agreement, the Amended and Restated Advisory Agreement and the Termination Agreement is only a summary, does not purport to be complete and is qualified in its entirety by reference to the full text of the applicable agreements, each of which is filed with as a Form 8-K exhibit with the SEC on May 31, 2017. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note O — Subsequent Events The following subsequent events have been evaluated through the date of this filing with the SEC. On October 18, 2017, VRM I and VRM II acquired 290,197.6 shares and 746,222.4 shares, respectively, of MVP REIT’s common stock. The shares were received from Par 3 Nevada, LLC, a Nevada limited liability company (“Par 3”), as partial consideration for the membership interests held by VRM I and VRM II in a Delaware limited liability company that has an indirect, beneficial ownership interest in five office buildings located in Las Vegas, Nevada. [Par 3 had acquired the MVP REIT shares from Sere Holdings, LLC.] As a result of this transaction, VRM II currently owns approximately 6.77% of MVP REIT’s issued and outstanding shares of common stock, and VRM I currently owns approximately 3.32% of MVP REIT’s issued and outstanding shares of common stock. VRM II and VRM I also own 60% and 40%, respectively, of the aggregate membership interests in the Advisor. The Company drew down $1.5 million from the Working Capital LOC to mainly pay acquisition fees and merger costs. Included in those payments was the balance due to MVP RA as of September 30, 2017. During November 2017, MVP REIT II acquired approximately 118,932 shares of the Company’s stock at $8.56 per share from an unrelated third party. During November 2017, VRM II, acquired approximately 118,932 shares of the Company’s stock at $8.56 per share from an unrelated third party. |
Summary of Significant Accoun22
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
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 nine months ended September 30, 2017 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017. 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, 2016. The condensed consolidated balance sheet as of December 31, 2016 contained herein has been derived from the audited consolidated financial statements as of December 31, 2016, but do not include all disclosures required by GAAP. |
Consolidation | Consolidation The Company’s consolidated financial statements include its accounts and the accounts of its subsidiaries, REH and all of the following subsidiaries. All intercompany profits and losses, balances and transactions are eliminated in consolidation. MVP PF Ft. Lauderdale 2013, LLC MVP Wildwood NJ Lot, LLC MVP PF Memphis Court 2013, LLC MVP Indianapolis City Park Garage, LLC MVP PF Memphis Poplar 2013, LLC MVP KC Cherry Lot, LLC MVP PF St. Louis 2013, LLC MVP Indianapolis Washington Street Lot, LLC MVP PF Kansas City 2013, LLC Minneapolis Venture, LLC Mabley Place Garage, LLC MVP Indianapolis Meridian, LLC MVP Denver Sherman, LLC MVP Milwaukee Clybourn, LLC MVP Fort Worth Taylor, LLC MVP Milwaukee Arena, LLC MVP Milwaukee Old World, LLC MVP Clarksburg Lot, LLC MVP St. Louis Convention Plaza, LLC MVP Denver 1935 Sherman, LLC MVP Houston Saks Garage, LLC MVP Bridgeport Fairfield, LLC MVP St. Louis Lucas, LLC Minneapolis City Parking MVP Milwaukee Wells, LLC MVP Houston Preston Lot, LLC* *Ownership through 4/30/2017- See Note I – Investment in equity method investee Under GAAP, the Company’s 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 During the last week of August 2017, Houston Texas experienced major flooding due to Hurricane Harvey. This resulted in limited access to the Houston area and a shutdown of most business and government operations. Our parking garage and parking lots located in Houston, TX experienced minimal damage during this time; however, the company is still assessing the long-term impact. As of September 30, 2017, we have not seen a reduction in the base rent from our operator, who will continue to operate these locations under the terms of the current leases. The Company had eight parking tenants as of September 30, 2017 and 2016, respectively. One tenant, Standard Parking Plus (“SP+”), represented a concentration for the nine months ended September 30, 2017 and 2016, in regards to parking rental revenue. During the nine months ended September 30, 2017 and 2016, SP+ accounted for approximately 69.3% of the parking rental revenue. Below is a table that summarizes parking rent by tenant: Parking Tenant Percentage of Total Rental Revenue As of September 30, 2017 2016 SP + 69.3% 69.1% ABM 9.3% 10.5% iPark Services 8.1% 7.5% Denison 6.3% 5.6% PCAM, LLC 3.2% 3.4% BEST PARK 3.2% 3.3% Denver School 0.4% 0.4% Secure 0.2% 0.2% Grand Total 100.0% 100.0% In addition, the Company had concentrations in various cities based on parking rental revenue for the nine months ended September 30, 2017 and 2016, as well as concentrations in various cities based on the real estate we owned as of September 30, 2017 and December 31, 2016. The below tables summarize this information by city. City Concentration for Parking Rent For the Nine months Ended 9/30/2017 9/30/2016 Cincinnati 19.4% 19.2% Fort Worth 18.2% 17.7% Indianapolis 15.5% 15.0% Minneapolis 9.6% 9.2% St. Louis 9.1% 8.5% Milwaukee 7.7% 7.7% Houston 7.5% 8.1% Memphis 3.5% 3.4% Bridgeport 3.3% 4.6% Kansas City 2.2% 2.0% Denver 1.6% 1.8% Ft. Lauderdale 1.4% 1.3% Clarksburg 0.6% 0.6% Wildwood 0.4% 0.9% 100.0% 100.0% Real Estate Concentration by City Based on the Company's Ownership % As of 9/30/2017 12/31/2016 Fort Worth 17.6% 19.2% Indianapolis 12.9% 14.1% Minneapolis 10.2% 11.1% Cincinnati 9.2% 10.0% Detroit 8.3% 0.0% St. Louis 7.7% 8.4% Houston 7.2% 7.8% Milwaukee 6.8% 7.4% Bridgeport 5.3% 5.8% Cleveland 3.2% 3.5% Ft. Lauderdale 2.6% 2.8% Memphis 2.2% 2.5% Denver 1.8% 2.0% Nashville 1.7% 1.9% Kansas City 1.6% 1.7% Wildwood 1.2% 1.3% Clarksburg 0.5% 0.5% 100.0% 100.0% |
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 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 on parking tenants, legal and other related expenses. 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. 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, 2017 and 2016, 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 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. During the three and nine months ended September 30, 2017, the Company did not have any asset impairments. |
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 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. As of September 30, 2017 and December 31, 2016, the Company did not have any derivative financial instruments. 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 | Cash The Company maintains the majority of its cash at KeyBank. The balances are insured by the Federal Deposit Insurance Corporation under the same ownership category of $250,000. As of September 30, 2017 the Company had no amount in excess of the federally-insured limits. As of December 31, 2016, the Company had approximately $1.8 million in excess of the federally-insured limits. As of September 30, 2017, the Company has not experienced any losses on cash deposits. |
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 Company’s revenues, which are 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. Percentage rents will be recorded when earned and certain thresholds have been met. 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 after exhaustive efforts at collection. |
Advertising Costs | Advertising Costs Advertising costs incurred in the normal course of operations and are expensed as incurred. During the three and nine months ended September 30, 2017 and 2016, 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 will maintain 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. |
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 G — 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, 2017 and 2016. In September 2012, upon the commencement of our initial public offering, the Company issued 1,000 shares of convertible stock to our advisor. If the Merger is successful, upon completion of the Merger, the 1,000 shares of convertible stock to the Advisor will be cancelled without payment of any consideration. If the Merger is not consummated, the convertible stock, 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 the Company’s 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, 2017, the Company only operates in the investment in real property segment. |
Reclassifications | Reclassifications Upon re-evaluation of ASU 2014-08, the Company has determined that the amounts listed in connection with discontinued operations in the 2016 condensed consolidated financial statements need to be reclassified to conform to ASU 2014-08 and September 30, 2017 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 including 404(b) reporting subject to further management evaluation. 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. |
Summary of Significant Accoun23
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Revenue Concentration Tenants | Parking Tenant Percentage of Total Rental Revenue As of September 30, 2017 2016 SP + 69.3% 69.1% ABM 9.3% 10.5% iPark Services 8.1% 7.5% Denison 6.3% 5.6% PCAM, LLC 3.2% 3.4% BEST PARK 3.2% 3.3% Denver School 0.4% 0.4% Secure 0.2% 0.2% Grand Total 100.0% 100.0% City Concentration for Parking Rent For the Nine months Ended 9/30/2017 9/30/2016 Cincinnati 19.4% 19.2% Fort Worth 18.2% 17.7% Indianapolis 15.5% 15.0% Minneapolis 9.6% 9.2% St. Louis 9.1% 8.5% Milwaukee 7.7% 7.7% Houston 7.5% 8.1% Memphis 3.5% 3.4% Bridgeport 3.3% 4.6% Kansas City 2.2% 2.0% Denver 1.6% 1.8% Ft. Lauderdale 1.4% 1.3% Clarksburg 0.6% 0.6% Wildwood 0.4% 0.9% 100.0% 100.0% Real Estate Concentration by City Based on the Company's Ownership % As of 9/30/2017 12/31/2016 Fort Worth 17.6% 19.2% Indianapolis 12.9% 14.1% Minneapolis 10.2% 11.1% Cincinnati 9.2% 10.0% Detroit 8.3% 0.0% St. Louis 7.7% 8.4% Houston 7.2% 7.8% Milwaukee 6.8% 7.4% Bridgeport 5.3% 5.8% Cleveland 3.2% 3.5% Ft. Lauderdale 2.6% 2.8% Memphis 2.2% 2.5% Denver 1.8% 2.0% Nashville 1.7% 1.9% Kansas City 1.6% 1.7% Wildwood 1.2% 1.3% Clarksburg 0.5% 0.5% 100.0% 100.0% |
Investments in Real Estate (Tab
Investments in Real Estate (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Banking and Thrift [Abstract] | |
Schedule Of Real Estate Properties | Property Location Date Acquired Investments in Real Estate Parking Tenant Lease Commencement Date Lease Term Ft. Lauderdale Ft. Lauderdale, FL 7/31/2013 $3,408,000 SP+ 2/1/2014 5 yr. w/2 5 yr. ext. Memphis Court Memphis, TN 8/28/2013 $194,000 SP+ 8/28/2013 5 yr. w/2 5 yr. ext. Memphis Poplar Memphis, TN 8/28/2013 $2,693,000 Best Park 8/28/2013 5 yr. w/2 5 yr. ext. Kansas City Kansas City, MO 8/28/2013 $1,550,000 SP+ 8/28/2013 15 Years St. Louis St Louis, MO 9/4/2013 $4,137,000 SP+ 12/1/2013 5 yr. w/2 5 yr. ext. Mabley Place Cincinnati, OH 12/9/2014 $14,995,000 SP+ 10/1/2014 10 Years Denver Sherman Denver, CO 1/26/2015 $585,000 Denver School District 7/1/2014 10 Years w/1 5 yr. ext. Ft. Worth Fort Worth, TX 3/16/2015 $23,336,000 SP+ 3/16/2015 10 Years Milwaukee Old World Milwaukee, WI 3/31/2015 $1,000,000 SP+ 3/31/2015 5 yr. w/1 5 yr. ext. St. Louis Convention St. Louis, MO 5/31/2015 $2,575,000 SP+ 5/13/2015 5 yr. w/1 5 yr. ext. Houston Saks Garage Houston, TX 5/28/2015 $8,381,000 iPark 5/28/2015 10 yr. w/1 5 yr. ext. St. Louis Lucas St. Louis, MO 6/29/2015 $3,463,000 SP+ 7/1/2015 5 yr. w/1 5 yr. ext. Milwaukee Wells Milwaukee, WI 6/30/2015 $3,900,000 SP+ 6/30/2015 10 Years Wildwood NJ Lot I Wildwood, NJ 7/10/2015 $994,000 SP+ 6/10/2016 5 yr. w/1 5 yr. ext. Indy City Parking Garage Indianapolis, IN 10/5/2015 $10,707,000 SP+ 10/5/2015 5 yr. w/1 5 yr. ext. KC Cherry Lot Kansas City, MO 10/9/2015 $515,000 SP+ 10/9/2015 5 yr. w/1 5 yr. ext. Indy WA Street Indianapolis, IN 10/29/2015 $4,995,000 Denison 12/1/2015 10 Years Wildwood NJ Lot II Wildwood, NJ 12/16/2015 $615,000 SP+ 6/10/2016 10 Years Minneapolis City Parking Minneapolis, MN 1/6/2016 $9,500,000 SP+ 1/6/2016 5 yr. w/1 5 yr. ext. Indianapolis Meridian Indianapolis, IN 1/15/2016 $1,498,000 Denison Parking 1/15/2016 10 Years Milwaukee Clybourn Milwaukee, WI 1/20/2016 $205,000 Secure Parking USA 1/20/2016 5 Years Milwaukee Arena Milwaukee, WI 2/1/2016 $3,900,000 SP+ 2/1/2016 5 yr. w/1 5 yr. ext. Clarksburg Lot Clarksburg, WV 2/9/2016 $628,000 ABM 2/9/2016 5 Years Denver 1935 Sherman Denver, CO 2/12/2016 $2,438,000 SP+ 2/12/2016 10 Years Bridgeport Fairfield Bridgeport, CT 3/30/2016 $7,940,000 SP+ 3/30/2016 10 Years Construction in progress 255,000 Fixed Assets $88,000 $114,495,000 |
Investment in Equity Method I25
Investment in Equity Method Investee (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Summarized Combined Balance Sheets | September 30, 2017 December 31, 2016 (Unaudited) (Unaudited) ASSETS Investments in real estate and fixed assets: Land and improvements $ 18,898,000 $ 11,821,000 Building and improvements 56,556,000 8,380,000 Construction in progress 139,000 -- 75,593,000 20,201,000 Accumulated depreciation (1,091,000) (45,000) Total investments in real estate and fixed assets, net 74,502,000 20,156,000 Cash 256,000 176,000 Cash – restricted 1,416,000 100,000 Accounts receivable 16,000 22,000 Prepaid expenses 137,000 24,000 Due from related party 140,000 -- Total assets $ 76,467,000 $ 20,478,000 LIABILITIES AND EQUITY Liabilities Notes payable, net of unamortized loan issuance cost $ 42,465,000 $ 5,205,000 Accounts payable and accrued liabilities 33,000 72,000 Deferred revenue 253,000 -- Security deposits -- -- Total liabilities 42,751,000 5,277,000 Equity Shareholders’ Equity Additional paid-in capital 24,549,000 10,929,000 Accumulated deficit 1,262,000 264,000 Total Shareholders’ Equity 25,811,000 11,193,000 Non-controlling interest 7,905,000 4,008,000 Total equity 33,716,000 15,201,000 Total liabilities and equity $ 76,467,000 $ 20,478,000 |
Summarized Combined Statements of Operations | For the Three Months Ended September 30 For the Nine Months Ended September 30 2017 2016 2017 2016 Rental revenue $ 1,173,000 $ 129,000 $ 4,080,000 $ 197,000 Expenses (968,000) (80,000) (3,081,000) (143,000) Net income $ 205,000 $ 49,000 $ 999,000 $ 54,000 |
Notes Payable (Tables)
Notes Payable (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Schedule Of Debt | Property Original Debt Amount Monthly Payment (approx.) Loan Balance as of September 30, 2017 Lender Term Interest Rate Loan Maturity Ft. Lauderdale loan pool (1) $4,300,000 $25,000 3,960,000 KeyBank 5 Year 4.94% 2/1/2019 Mabley Place $9,000,000 $44,000 8,569,000 Barclays 10 year 4.25% 12/6/2024 Denver Sherman (2) $3,190,000 Interest Only 3,190,000 KeyBank 10 year * 4.90% 5/01/2027 Ft. Worth $13,150,000 $73,000 12,908,000 American National Insurance, of NY 10 year 4.50% 12/01/2026 Houston Saks Garage $3,650,000 $20,000 3,469,000 Barclays Bank PLC 10 year 4.25% 8/6/2025 St. Louis Lucas (3) $3,490,000 $20,000 3,364,000 Key Bank 10 year 4.59% 2/1/2026 MVP Wildwood NJ $500,000 Interest Only 500,000 Tigges Trust 6 Month 9.00% 2/28/2018 Indianapolis Garage (4) $8,200,000 $46,000 7,905,000 Key Bank 10 year 4.59% 2/1/2026 Indianapolis Meridian (5) $937,000 Interest Only 937,000 Cantor Commercial Real Estate Lending 10 year ** 5.03% 5/06/2027 Minneapolis City Parking $5,250,000 $29,000 5,084,000 American National Insurance, of NY 10 year 4.50% 5/01/2026 Bridgeport Fairfield $4,400,000 $23,000 4,278,000 FBL Financial Group, Inc. 10 year 4.00% 8/1/2026 Less unamortized loan issuance costs (1,084,000) $53,080,000 |
Future Principal Payments On The Notes Payable | 2017 $ 220,000 2018 1,690,000 2019 4,993,000 2020 1,246,000 2021 1,304,000 Thereafter 44,711,000 Unamortized loan issuance cost (1,084,000) Total $ 53,080,000 |
Assets Held For Sale (Tables)
Assets Held For Sale (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Property, Plant and Equipment [Abstract] | |
Summary Of Results Of Operations Related To Assets Held For Sale | For The Three Months Ended September 30, 2017 For The Nine Months Ended September 30, 2017 For The Three Months Ended September 30, 2016 For The Nine Months Ended September 30, 2016 Revenue $ -- $ -- $ 4,000 $ 11,000 Expenses (67,000) (214,000) (63,000) (192,000) Loss from assets held for sale, net of income taxes $ (67,000) $ (214,000) $ (59,000) $ (181,000) |
Summary of Significant Accoun28
Summary of Significant Accounting Policies (Details) - Revenue Concentration | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Percentage of Total Base Rental Revenue [Member] | SP + [Member] | ||
Concentration, Percentage of Total Base Rental Revenue | 69.30% | 69.10% |
Percentage of Total Base Rental Revenue [Member] | ABM [Member] | ||
Concentration, Percentage of Total Base Rental Revenue | 9.30% | 10.50% |
Percentage of Total Base Rental Revenue [Member] | iPark Services [Member] | ||
Concentration, Percentage of Total Base Rental Revenue | 8.10% | 7.50% |
Percentage of Total Base Rental Revenue [Member] | Denison [Member] | ||
Concentration, Percentage of Total Base Rental Revenue | 6.30% | 5.60% |
Percentage of Total Base Rental Revenue [Member] | PCAM, LLC [Member] | ||
Concentration, Percentage of Total Base Rental Revenue | 3.20% | 3.40% |
Percentage of Total Base Rental Revenue [Member] | BEST PARK [Member] | ||
Concentration, Percentage of Total Base Rental Revenue | 3.20% | 3.30% |
Percentage of Total Base Rental Revenue [Member] | Denver School [Member] | ||
Concentration, Percentage of Total Base Rental Revenue | 0.40% | 0.40% |
Percentage of Total Base Rental Revenue [Member] | Secure [Member] | ||
Concentration, Percentage of Total Base Rental Revenue | 0.20% | 0.20% |
Percentage of Total Base Rental Revenue [Member] | Total [Member] | ||
Concentration, Percentage of Total Base Rental Revenue | 100.00% | 100.00% |
City Concentration for Parking Base Rent [Member] | Total [Member] | ||
Concentration, Percentage of Total Base Rental Revenue | 100.00% | 100.00% |
City Concentration for Parking Base Rent [Member] | Cincinnati [Member] | ||
Concentration, Percentage of Total Base Rental Revenue | 19.40% | 19.20% |
City Concentration for Parking Base Rent [Member] | Fort Worth [Member] | ||
Concentration, Percentage of Total Base Rental Revenue | 18.20% | 17.70% |
City Concentration for Parking Base Rent [Member] | Indianapolis [Member] | ||
Concentration, Percentage of Total Base Rental Revenue | 15.50% | 15.00% |
City Concentration for Parking Base Rent [Member] | Minneapolis [Member] | ||
Concentration, Percentage of Total Base Rental Revenue | 9.60% | 9.20% |
City Concentration for Parking Base Rent [Member] | St. Louis [Member] | ||
Concentration, Percentage of Total Base Rental Revenue | 9.10% | 8.50% |
City Concentration for Parking Base Rent [Member] | Milwaukee [Member] | ||
Concentration, Percentage of Total Base Rental Revenue | 7.70% | 7.70% |
City Concentration for Parking Base Rent [Member] | Houston [Member] | ||
Concentration, Percentage of Total Base Rental Revenue | 7.50% | 8.10% |
City Concentration for Parking Base Rent [Member] | Memphis [Member] | ||
Concentration, Percentage of Total Base Rental Revenue | 3.50% | 3.40% |
City Concentration for Parking Base Rent [Member] | Bridgeport [Member] | ||
Concentration, Percentage of Total Base Rental Revenue | 3.30% | 4.60% |
City Concentration for Parking Base Rent [Member] | Kansas City [Member] | ||
Concentration, Percentage of Total Base Rental Revenue | 2.20% | 2.00% |
City Concentration for Parking Base Rent [Member] | Denver [Member] | ||
Concentration, Percentage of Total Base Rental Revenue | 1.60% | 1.80% |
City Concentration for Parking Base Rent [Member] | Ft. Lauderdale [Member] | ||
Concentration, Percentage of Total Base Rental Revenue | 1.40% | 1.30% |
City Concentration for Parking Base Rent [Member] | Clarksburg [Member] | ||
Concentration, Percentage of Total Base Rental Revenue | 0.60% | 0.60% |
City Concentration for Parking Base Rent [Member] | Wildwood [Member] | ||
Concentration, Percentage of Total Base Rental Revenue | 0.40% | 0.90% |
Real Estate Concentration by City [Member] | Total [Member] | ||
Concentration, Percentage of Total Base Rental Revenue | 100.00% | 100.00% |
Real Estate Concentration by City [Member] | Cincinnati [Member] | ||
Concentration, Percentage of Total Base Rental Revenue | 9.20% | 10.00% |
Real Estate Concentration by City [Member] | Fort Worth [Member] | ||
Concentration, Percentage of Total Base Rental Revenue | 17.60% | 19.20% |
Real Estate Concentration by City [Member] | Indianapolis [Member] | ||
Concentration, Percentage of Total Base Rental Revenue | 12.90% | 14.10% |
Real Estate Concentration by City [Member] | Minneapolis [Member] | ||
Concentration, Percentage of Total Base Rental Revenue | 10.20% | 11.10% |
Real Estate Concentration by City [Member] | St. Louis [Member] | ||
Concentration, Percentage of Total Base Rental Revenue | 7.70% | 8.40% |
Real Estate Concentration by City [Member] | Milwaukee [Member] | ||
Concentration, Percentage of Total Base Rental Revenue | 6.80% | 7.40% |
Real Estate Concentration by City [Member] | Houston [Member] | ||
Concentration, Percentage of Total Base Rental Revenue | 7.20% | 7.80% |
Real Estate Concentration by City [Member] | Memphis [Member] | ||
Concentration, Percentage of Total Base Rental Revenue | 2.20% | 2.50% |
Real Estate Concentration by City [Member] | Bridgeport [Member] | ||
Concentration, Percentage of Total Base Rental Revenue | 5.30% | 5.80% |
Real Estate Concentration by City [Member] | Kansas City [Member] | ||
Concentration, Percentage of Total Base Rental Revenue | 1.60% | 1.70% |
Real Estate Concentration by City [Member] | Denver [Member] | ||
Concentration, Percentage of Total Base Rental Revenue | 1.80% | 2.00% |
Real Estate Concentration by City [Member] | Ft. Lauderdale [Member] | ||
Concentration, Percentage of Total Base Rental Revenue | 2.60% | 2.80% |
Real Estate Concentration by City [Member] | Clarksburg [Member] | ||
Concentration, Percentage of Total Base Rental Revenue | 0.50% | 0.50% |
Real Estate Concentration by City [Member] | Wildwood [Member] | ||
Concentration, Percentage of Total Base Rental Revenue | 1.20% | 1.30% |
Real Estate Concentration by City [Member] | Detroit [Member] | ||
Concentration, Percentage of Total Base Rental Revenue | 8.30% | 0.00% |
Real Estate Concentration by City [Member] | Cleveland [Member] | ||
Concentration, Percentage of Total Base Rental Revenue | 3.20% | 3.50% |
Real Estate Concentration by City [Member] | Nashville [Member] | ||
Concentration, Percentage of Total Base Rental Revenue | 1.70% | 1.90% |
Investments in Real Estate (Det
Investments in Real Estate (Detail) - Schedule of Real Estate Properties | 9 Months Ended |
Sep. 30, 2017USD ($) | |
Ft. Lauderdale [Member] | |
Location | Ft. Lauderdale, FL |
Date Acquired | 2/1/2014 |
Investment Amount | $ 3,408,000 |
Percentage of Portfolio (%) | 2.95% |
Parking Tenant | SP+ |
Lease Commencement Date | 2/1/2014 |
Lease Term | 5 yr. w/2 5 yr. ext. |
Memphis Court [Member] | |
Location | Memphis, TN |
Date Acquired | 8/28/2013 |
Investment Amount | $ 194,000 |
Percentage of Portfolio (%) | 0.17% |
Parking Tenant | SP+ |
Lease Commencement Date | 3/14/2012 |
Lease Term | 5 yr. w/2 5 yr. ext. |
Memphis Poplar [Member] | |
Location | Memphis, TN |
Date Acquired | 8/28/2013 |
Investment Amount | $ 2,693,000 |
Percentage of Portfolio (%) | 2.33% |
Parking Tenant | Best Park |
Lease Commencement Date | 3/1/2014 |
Lease Term | 5 yr. w/2 5 yr. ext. |
Kansas City [Member] | |
Location | Kansas City, MO |
Date Acquired | 8/28/2013 |
Investment Amount | $ 1,550,000 |
Percentage of Portfolio (%) | 1.34% |
Parking Tenant | SP+ |
Lease Commencement Date | 3/14/2012 |
Lease Term | 15 Years |
St. Louis [Member] | |
Location | St Louis, MO |
Date Acquired | 12/1/2013 |
Investment Amount | $ 4,137,000 |
Percentage of Portfolio (%) | 3.59% |
Parking Tenant | SP+ |
Lease Commencement Date | 12/1/2013 |
Lease Term | 5 yr. w/2 5 yr. ext. |
Mabley Place [Member] | |
Location | Cincinnati, OH |
Date Acquired | 10/1/2014 |
Investment Amount | $ 14,995,000 |
Percentage of Portfolio (%) | 12.99% |
Parking Tenant | SP+ |
Lease Commencement Date | 12/9/2014 |
Lease Term | 10 Years |
Denver Sherman [Member] | |
Location | Denver, CO |
Date Acquired | 7/1/2014 |
Investment Amount | $ 585,000 |
Percentage of Portfolio (%) | 0.51% |
Parking Tenant | Denver School District |
Lease Commencement Date | 7/1/2014 |
Lease Term | 10 Years w/1 5 yr. ext. |
Ft. Worth [Member] | |
Location | Fort Worth, TX |
Date Acquired | 3/16/2015 |
Investment Amount | $ 23,336,000 |
Percentage of Portfolio (%) | 20.22% |
Parking Tenant | SP+ |
Lease Commencement Date | 3/16/2015 |
Lease Term | 10 Years |
Milwaukee Old World [Member] | |
Location | Milwaukee, WI |
Date Acquired | 3/31/2015 |
Investment Amount | $ 1,000,000 |
Percentage of Portfolio (%) | 0.87% |
Parking Tenant | SP+ |
Lease Commencement Date | 3/31/2015 |
Lease Term | 5 yr. w/1 5 yr. ext. |
St. Louis Convention [Member] | |
Location | St. Louis, MO |
Date Acquired | 5/13/2015 |
Investment Amount | $ 2,575,000 |
Percentage of Portfolio (%) | 2.23% |
Parking Tenant | SP+ |
Lease Commencement Date | 5/13/2015 |
Lease Term | 5 yr. w/1 5 yr. ext. |
Houston Saks Garage [Member] | |
Location | Houston, TX |
Date Acquired | 5/28/2015 |
Investment Amount | $ 8,381,000 |
Percentage of Portfolio (%) | 7.26% |
Parking Tenant | iPark |
Lease Commencement Date | 5/28/2015 |
Lease Term | 10 yr. w/1 5 yr. ext. |
St. Louis Lucas [Member] | |
Location | St. Louis, MO |
Date Acquired | 7/1/2015 |
Investment Amount | $ 3,463,000 |
Percentage of Portfolio (%) | 3.00% |
Parking Tenant | SP+ |
Lease Commencement Date | 6/29/2015 |
Lease Term | 5 yr. w/1 5 yr. ext. |
Milwaukee Wells [Member] | |
Location | Milwaukee, WI |
Date Acquired | 6/30/2015 |
Investment Amount | $ 3,900,000 |
Percentage of Portfolio (%) | 3.38% |
Parking Tenant | SP+ |
Lease Commencement Date | 6/30/2015 |
Lease Term | 10 Years |
Wildwood NJ Lot [Member] | |
Location | Wildwood, NJ |
Date Acquired | 6/10/2016 |
Investment Amount | $ 994,000 |
Parking Tenant | SP+ |
Lease Commencement Date | 1/1/2016 |
Lease Term | 5 yr. w/1 5 yr. ext. |
Indy City Parking Garage [Member] | |
Location | Indianapolis, IN |
Date Acquired | 10/5/2015 |
Investment Amount | $ 10,707,000 |
Percentage of Portfolio (%) | 9.25% |
Parking Tenant | SP+ |
Lease Commencement Date | 1/15/2016 |
Lease Term | 5 yr. w/1 5 yr. ext. |
KC Cherry Lot [Member] | |
Location | Kansas City, MO |
Date Acquired | 10/9/2015 |
Investment Amount | $ 515,000 |
Percentage of Portfolio (%) | 0.45% |
Parking Tenant | SP+ |
Lease Commencement Date | 10/5/2015 |
Lease Term | 5 yr. w/1 5 yr. ext. |
Indy WA Street [Member] | |
Location | Indianapolis, IN |
Date Acquired | 12/1/2015 |
Investment Amount | $ 4,995,000 |
Percentage of Portfolio (%) | 4.33% |
Parking Tenant | Denison |
Lease Commencement Date | 10/9/2015 |
Lease Term | 10 Years |
Wildwood NJ Lot II [Member] | |
Location | Wildwood, NJ |
Date Acquired | 6/10/2016 |
Investment Amount | $ 615,000 |
Parking Tenant | SP+ |
Lease Commencement Date | 10/30/2015 |
Lease Term | 10 Years |
Minneapolis City Parking [Member] | |
Location | Minneapolis, MN |
Date Acquired | 1/6/2016 |
Investment Amount | $ 9,500,000 |
Percentage of Portfolio (%) | 8.23% |
Parking Tenant | SP+ |
Lease Commencement Date | 1/1/2016 |
Lease Term | 5 yr. w/1 5 yr. ext. |
Indianapolis Meridian [Member] | |
Location | Indianapolis, IN |
Date Acquired | 1/15/2016 |
Investment Amount | $ 1,498,000 |
Percentage of Portfolio (%) | 1.30% |
Parking Tenant | Denison Parking |
Lease Commencement Date | 1/20/2016 |
Lease Term | 10 Years |
Milwaukee Clybourn [Member] | |
Location | Milwaukee, WI |
Date Acquired | 1/20/2016 |
Investment Amount | $ 205,000 |
Percentage of Portfolio (%) | 0.18% |
Parking Tenant | Secure Parking USA |
Lease Commencement Date | 2/1/2016 |
Lease Term | 5 Years |
Milwaukee Arena [Member] | |
Location | Milwaukee, WI |
Date Acquired | 2/1/2016 |
Investment Amount | $ 3,900,000 |
Percentage of Portfolio (%) | 3.38% |
Parking Tenant | SP+ |
Lease Commencement Date | 2/9/2016 |
Lease Term | 5 yr. w/1 5 yr. ext. |
Clarksburg Lot [Member] | |
Location | Clarksburg, WV |
Date Acquired | 2/9/2016 |
Investment Amount | $ 628,000 |
Percentage of Portfolio (%) | 0.54% |
Parking Tenant | ABM |
Lease Commencement Date | 2/12/2016 |
Lease Term | 5 Years |
Denver 1935 Sherman [Member] | |
Location | Denver, CO |
Date Acquired | 2/12/2016 |
Investment Amount | $ 2,438,000 |
Percentage of Portfolio (%) | 2.11% |
Parking Tenant | SP+ |
Lease Commencement Date | 3/30/2016 |
Lease Term | 10 Years |
Bridgeport Fairfield [Member] | |
Location | Bridgeport, CT |
Date Acquired | 3/30/2016 |
Investment Amount | $ 7,940,000 |
Percentage of Portfolio (%) | 6.88% |
Parking Tenant | SP+ |
Lease Commencement Date | 1/15/2016 |
Lease Term | 10 Years |
Construction in progress [Member] | |
Investment Amount | $ 255,000 |
Fixed Assets [Member] | |
Investment Amount | 88,000 |
Total [Member] | |
Investment Amount | $ 114,495,000 |
Investment in Equity Method I30
Investment in Equity Method Investee (Detail) - Summarized Combined Balance Sheets - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Dec. 31, 2015 |
Investments in real estate and fixed assets: | ||||
Land and improvements | $ 63,684,000 | $ 66,484,000 | ||
Building and improvements | 50,468,000 | 49,973,000 | ||
Construction in progress | 255,000 | |||
[us-gaap:PropertyPlantAndEquipmentGross] | 114,495,000 | 116,545,000 | ||
Accumulated depreciation | (3,138,000) | (2,128,000) | ||
Total investments in real estate and fixed assets, net | 111,357,000 | 114,417,000 | ||
Cash | 1,286,000 | 4,112,000 | $ 3,490,000 | $ 10,511,000 |
Cash - restricted | 2,463,000 | 1,712,000 | ||
Accounts receivable | 303,000 | 117,000 | ||
Prepaid expenses | 53,000 | 444,000 | ||
Due from related party | 462,000 | |||
Total assets | 130,528,000 | 133,220,000 | ||
Liabilities | ||||
Notes payable, net of unamortized loan issuance cost | 53,080,000 | 49,417,000 | ||
Accounts payable and accrued liabilities | 1,503,000 | 959,000 | ||
Deferred revenue | 49,000 | 55,000 | ||
Security deposits | 72,000 | 248,000 | ||
Total liabilities [Default Label] | 59,399,000 | 55,325,000 | ||
Equity | ||||
Additional paid-in capital | 87,449,000 | 90,156,000 | ||
Accumulated deficit | (19,553,000) | (16,191,000) | ||
Total Shareholders' Equity | 67,907,000 | 73,976,000 | ||
Non-controlling interest - related party | 3,222,000 | 3,919,000 | ||
Total equity | 71,129,000 | 77,895,000 | ||
Total liabilities and equity | 130,528,000 | 133,220,000 | ||
Unconsolidated Real Estate Affiliates [Member] | ||||
Investments in real estate and fixed assets: | ||||
Land and improvements | 18,898,000 | 11,821,000 | ||
Building and improvements | 56,556,000 | 8,380,000 | ||
Construction in progress | 139,000 | |||
[us-gaap:PropertyPlantAndEquipmentGross] | 75,593,000 | 20,201,000 | ||
Accumulated depreciation | (1,091,000) | (45,000) | ||
Total investments in real estate and fixed assets, net | 74,502,000 | 20,156,000 | ||
Cash | 256,000 | 176,000 | ||
Cash - restricted | 1,416,000 | 100,000 | ||
Accounts receivable | 16,000 | 22,000 | ||
Prepaid expenses | 137,000 | 24,000 | ||
Due from related party | 140,000 | |||
Total assets | 76,467,000 | 20,478,000 | ||
Liabilities | ||||
Notes payable, net of unamortized loan issuance cost | 42,465,000 | 5,205,000 | ||
Accounts payable and accrued liabilities | 33,000 | 72,000 | ||
Deferred revenue | 253,000 | |||
Security deposits | ||||
Total liabilities [Default Label] | 42,751,000 | 5,277,000 | ||
Equity | ||||
Additional paid-in capital | 24,549,000 | 10,929,000 | ||
Accumulated deficit | 1,262,000 | 264,000 | ||
Total Shareholders' Equity | 25,811,000 | 11,193,000 | ||
Non-controlling interest - related party | 7,905,000 | 4,008,000 | ||
Total equity | 33,716,000 | 15,201,000 | ||
Total liabilities and equity | $ 76,467,000 | $ 20,478,000 |
Investment in Equity Method I31
Investment in Equity Method Investee (Detail) - Summarized Combined Statements of Operations - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Expenses | $ 1,905,000 | $ 1,763,000 | $ 6,978,000 | $ 6,784,000 |
Net income (loss) | (115,000) | 10,000 | (2,057,000) | (2,121,000) |
Unconsolidated Real Estate Affiliates [Member] | ||||
Rental revenue | 1,173,000 | 129,000 | 4,080,000 | 197,000 |
Expenses | (968,000) | (80,000) | (3,081,000) | (143,000) |
Net income (loss) | $ 205,000 | $ 49,000 | $ 999,000 | $ 54,000 |
Notes Payable (Detail) - Schedu
Notes Payable (Detail) - Schedule of Debt | 9 Months Ended |
Sep. 30, 2017USD ($) | |
Ft. Lauderdale loan pool [Member] | |
Original Debt Amount | $ 4,300,000 |
Monthly Payment (approx.) | 25,000 |
Current Loan Balance | $ 3,960,000 |
Lender | KeyBank |
Term | 5 years |
Interest Rate | 4.94% |
Loan Maturity | Feb. 1, 2019 |
Mabley Place [Member] | |
Original Debt Amount | $ 9,000,000 |
Monthly Payment (approx.) | 44,000 |
Current Loan Balance | $ 8,569,000 |
Lender | Barclays |
Term | 10 years |
Interest Rate | 4.25% |
Loan Maturity | Dec. 6, 2024 |
Denver Sherman [Member] | |
Original Debt Amount | $ 3,190,000 |
Current Loan Balance | $ 3,190,000 |
Lender | KeyBank |
Term | 10 years |
Interest Rate | 4.90% |
Loan Maturity | May 1, 2027 |
Ft. Worth [Member] | |
Original Debt Amount | $ 13,150,000 |
Monthly Payment (approx.) | 73,000 |
Current Loan Balance | $ 12,908,000 |
Lender | American National Insurance, of NY |
Term | 10 years |
Interest Rate | 4.50% |
Loan Maturity | Dec. 1, 2026 |
Houston Saks Garage [Member] | |
Original Debt Amount | $ 3,650,000 |
Monthly Payment (approx.) | 20,000 |
Current Loan Balance | $ 3,469,000 |
Lender | Barclays Bank PLC |
Term | 10 years |
Interest Rate | 4.25% |
Loan Maturity | Aug. 6, 2025 |
St. Louis Lucas [Member] | |
Original Debt Amount | $ 3,490,000 |
Monthly Payment (approx.) | 20,000 |
Current Loan Balance | $ 3,364,000 |
Lender | Key Bank |
Term | 10 years |
Interest Rate | 4.59% |
Loan Maturity | Feb. 1, 2026 |
MVP Wildwood NJ [Member] | |
Original Debt Amount | $ 500,000 |
Current Loan Balance | $ 500,000 |
Lender | Tigges Trust |
Term | 6 months |
Interest Rate | 9.00% |
Loan Maturity | Feb. 28, 2018 |
Indianapolis Garage [Member] | |
Original Debt Amount | $ 8,200,000 |
Monthly Payment (approx.) | 46,000 |
Current Loan Balance | $ 7,905,000 |
Lender | Key Bank |
Term | 10 years |
Interest Rate | 4.59% |
Loan Maturity | Feb. 1, 2026 |
Indianapolis Meridian [Member] | |
Original Debt Amount | $ 937,000 |
Current Loan Balance | $ 937,000 |
Lender | Cantor Commercial Real Estate Lending |
Term | 10 years |
Interest Rate | 5.03% |
Loan Maturity | May 6, 2027 |
Minneapolis City Parking [Member] | |
Original Debt Amount | $ 5,250,000 |
Monthly Payment (approx.) | 29,000 |
Current Loan Balance | $ 5,084,000 |
Lender | American National Insurance, of NY |
Term | 10 years |
Interest Rate | 4.50% |
Loan Maturity | May 1, 2026 |
Bridgeport Fairfield [Member] | |
Original Debt Amount | $ 4,400,000 |
Monthly Payment (approx.) | 23,000 |
Current Loan Balance | $ 4,278,000 |
Lender | FBL Financial Group, Inc. |
Term | 10 years |
Interest Rate | 4.00% |
Loan Maturity | Aug. 1, 2026 |
Less loan issuance costs [Member] | |
Current Loan Balance | $ (1,084,000) |
Total [Member] | |
Current Loan Balance | $ 53,080,000 |
Notes Payable (Detail) - Future
Notes Payable (Detail) - Future Principal Payments On The Notes Payable | Sep. 30, 2017USD ($) |
2017 [Member] | |
Principal Payments | $ 220,000 |
2018 [Member] | |
Principal Payments | 1,690,000 |
2019 [Member] | |
Principal Payments | 4,993,000 |
2020 [Member] | |
Principal Payments | 1,246,000 |
2021 [Member] | |
Principal Payments | 1,304,000 |
Thereafter [Member] | |
Principal Payments | 44,711,000 |
Unamortized Loan Issuance Cost [Member] | |
Principal Payments | (1,084,000) |
Total [Member] | |
Principal Payments | $ 53,080,000 |
Assets Held For Sale (Detail) -
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, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Property, Plant and Equipment [Abstract] | ||||
Revenue | $ 4,000 | $ 11,000 | ||
Expenses | (67,000) | (63,000) | (214,000) | (192,000) |
Loss from assets held for sale, net of income taxes | $ (67,000) | $ (59,000) | $ (214,000) | $ (181,000) |
Organization, Proposed Busine35
Organization, Proposed Business Operations and Capitalization (Details Narrative) - USD ($) | 9 Months Ended | ||||
Sep. 30, 2017 | Apr. 11, 2017 | Dec. 31, 2016 | Mar. 31, 2016 | Sep. 30, 2012 | |
Date of Incorporation | Apr. 3, 2012 | ||||
Incorporation State | Maryland | ||||
Company Net Asset Value (estimated) | $ 102,300,000 | ||||
Net Asset Value, per common share | $ 9.32 | $ 9.14 | |||
Initial Public Offering, per share | $ 9 | ||||
Distributions | 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). Starting April 11, 2017, the NAV of $9.32 per common share has been used for purposes of effectuating permitted redemptions of the Company's common stock and issuing shares pursuant to the Company's distribution reinvestment plan. | ||||
Shares Outstanding | 10,971,231 | ||||
Common Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 | |||
Shares Issued | 10,971,231 | 10,952,325 | |||
Sponsor [Member] | |||||
Shares Issued | 22,222 | ||||
Stock Issued Value | $ 200,000 | ||||
Advisor [Member] | |||||
Shares Issued | 1,000 | ||||
Non Voting Non Participating Convertible Stock | |||||
Shares Outstanding | 1,000 | ||||
Common Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 | |||
Shares Issued | 1,000 | 1,000 | |||
Non Voting Non Participating Convertible Stock | Advisor [Member] | |||||
Shares Issued | 1,000 | ||||
Total [Member] | |||||
Total Distributions Paid | $ 17,500,000 | ||||
DRIP [Member] | |||||
Total Distributions Paid | $ 3,400,000 | ||||
Shares Issued | 382,965 |
Summary of Significant Accoun36
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2017 | Sep. 30, 2016 | Jun. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Sep. 30, 2012 | |
Capitalized Acquisition Costs | |||||||
Asset Impairments | |||||||
Derivative Financial Instruments | |||||||
Federally Insured Amount Limit | 250,000 | 250,000 | 250,000 | ||||
Cash In Excess Of The Federally Insured Limits | $ 1,800,000 | ||||||
Advertising Costs | |||||||
Common Share Equivalents Outstanding | |||||||
Shares Issued | 10,971,231 | 10,971,231 | 10,952,325 | ||||
Segments | only operates in the investment in real property segment | ||||||
Non Voting Non Participating Convertible Stock | |||||||
Shares Issued | 1,000 | 1,000 | 1,000 | ||||
Advisor [Member] | |||||||
Capitalized Acquisition Costs | $ 1,100,000 | ||||||
Shares Issued | 1,000 | 1,000 | |||||
Advisor [Member] | Non Voting Non Participating Convertible Stock | |||||||
Shares Issued | 1,000 | ||||||
Standard Parking + [Member] | |||||||
Concentration | 69.30% | 69.30% |
Related Party Transactions an37
Related Party Transactions and Arrangements (Details Narrative) - USD ($) | Nov. 05, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Jun. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 |
Commissions | $ 17,000 | $ 337,000 | $ 284,000 | $ 765,000 | |||
Common stock, shares outstanding | 10,971,231 | 10,971,231 | 10,952,325 | ||||
Common stock, value | $ 11,000 | $ 11,000 | $ 11,000 | ||||
Sale of Stock, per share | $ 9 | $ 9 | |||||
Distributions, cash | $ (3,863,000) | ||||||
Acquisition Fees Paid | |||||||
Non Voting Non Participating Convertible Stock | |||||||
Common stock, shares outstanding | 1,000 | 1,000 | 1,000 | ||||
Common stock, value | |||||||
Sponsor [Member] | |||||||
Common stock, shares outstanding | 29,566 | 29,566 | |||||
VRM I [Member] | |||||||
Common stock, shares outstanding | 77,174 | 77,174 | |||||
Dan Huberty [Member] | |||||||
Common stock, shares outstanding | 9,692 | 9,692 | |||||
MVP REIT II [Member] | |||||||
Common stock, shares outstanding | 355,005 | 355,005 | |||||
Sale of Stock, Description | On November 5, 2016, MVP REIT II purchased 338,409 shares of the Companys common stock from an unrelated third party for $3.0 million or $8.865 per share. | ||||||
Sale of Stock, shares | 338,409 | ||||||
Sale of Stock, per share | $ 8.865 | ||||||
Distributions | $ 24,000 | $ 123,000 | |||||
Distributions, cash | 24,000 | ||||||
Due to Related Parties | 1,500,000 | 1,500,000 | |||||
Due From Related Parties | 600,000 | 600,000 | |||||
Advisor [Member] | |||||||
Acquisition Fees Paid | 1,100,000 | ||||||
Asset Management Fees | 300,000 | 200,000 | 1,000,000 | 700,000 | |||
Debt Financing Fees | 34,000 | 32,000 | 106,000 | 81,000 | |||
Disposition Fees | |||||||
Advisor [Member] | Financial Support, Waived Fees [Member] | |||||||
Aggregate Amount Of Expense Reimbursements Waived | $ 6,900,000 | $ 6,900,000 | |||||
Advisor [Member] | Non Voting Non Participating Convertible Stock | |||||||
Common stock, shares outstanding | 1,000 | 1,000 |
Dependency (Details Narrative)
Dependency (Details Narrative) | 9 Months Ended |
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Collaborative Arrangement Nature And Purpose | The Company has no employees and is dependent on the Advisor for services that are essential to the Company, including 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, 2017shares | |
Equity [Abstract] | |
Stock Options Granted Percentage Limit | 10.00% |
Aggregate Maximum Number of Shares Under Incentive Plan | 300,000 |
Investment in Equity Method I40
Investment in Equity Method Investee (Details Narrative) | 9 Months Ended |
Sep. 30, 2017USD ($) | |
West 9th Street Properties [Member] | |
Description of Investment Activities | On May 11, 2016, the Company through a wholly owned entity it owns, along with MVP REIT II, closed on the purchase of all of the membership interests of an entity that owns a surface parking lot, for approximately $5.7 million in cash. The Company's share of the purchase was approximately $2.8 million in cash plus closing costs and the Company owns a 49% interest in the entity. |
Aggregate Cost | $ 5,700,000 |
Ownership Percentage | 49.00% |
Additional Information | The parking lot is leased by SP Plus Corporation, a national parking operator, under a net lease agreement where Cleveland West 9th will be responsible for property taxes above a $120,000 threshold, and SP Plus Corporation will pay insurance and maintenance costs. SP Plus Corporation will pay annual rent of $330,000. In addition, the lease provides percentage rent with MVP receiving 70% of gross receipts over $650,000 per lease year. The term of the lease will be for 5 years. |
Crown Colony [Member] | |
Description of Investment Activities | On May 17, 2016, the Company through a wholly owned entity it owns, along with MVP REIT II, closed on the purchase of all of the membership interests of an entity that owns a surface parking lot, for approximately $3.0 million in cash. The Company's share of the purchase was approximately $1.5 million and the Company owns a 49% interest in the entity. |
Aggregate Cost | $ 3,000,000 |
Ownership Percentage | 49.00% |
Additional Information | The Crown Colony parking lot is leased by SP Plus Corporation, a national parking operator, under a net lease agreement where MVP will be responsible for property taxes above a $40,000 threshold, and SP Plus Corporation will pay insurance and maintenance costs. SP Plus Corporation will pay annual rent of $185,000. In addition, the lease provides percentage rent with MVP receiving 70% of gross receipts over $325,000 per lease year. The term of the lease will be for 5 years. |
White Front Garage [Member] | |
Description of Investment Activities | On September 30, 2016, the Company through a wholly owned entity it owns, along with MVP REIT II, closed on the purchase of all of the membership interests of an entity that owns parking garage, for approximately $11.5 million in cash. The Company's share of the purchase was approximately $2.3 million and the Company owns a 20% interest in the entity. |
Aggregate Cost | $ 11,500,000 |
Ownership Percentage | 20.00% |
Additional Information | The White Front Garage is leased by Premier Parking of Tennessee, LLC ("Premier Parking"), a parking operator with over 300 locations in nine different states, under a NNN lease agreement. Premier Parking will pay annual rent of $700,000. In addition, the lease provides percentage rent with MVP receiving 70% of gross receipts over $850,000 per lease year. The term of the lease will be for 10 years. |
Detroit [Member] | |
Description of Investment Activities | As previously disclosed in a Form 8-K filed by the Company on December 7, 2016 the Company and MVP REIT II, through MVP Detroit Center Garage, LLC, an entity owned by the Company and MVP REIT II (referred to herein as the Purchaser), entered into a purchase and sale agreement to purchase from Center Parking Associates Limited Partnership a multi-level parking garage consisting of approximately 1,275 parking space, located in Detroit, Michigan, for a purchase price of $55.0 million, plus acquisition and financing-related transaction costs. |
Aggregate Cost | $ 55,000,000 |
Ownership Percentage | 20.00% |
Additional Information | During May 2017, MVP Detroit Center Garage, LLC amended their lease with SP+ to set the percentage rent trigger amount and periods from 80% of $5,000,000 over the first 12 months to the following: a. 80% over $833,333 from February 2017 to March 2017 b. 80% over $1,250,000 from April 2017 to June 2017 c. 80% over $2,916,667 from July 2017 to January 2018As a result of this amendment, MVP Detroit Center Garage, LLC earned approximately $498,000 in percentage rent from February 2017 to September 2017. |
Houston Preston [Member] | |
Description of Investment Activities | During April 2017, the company reduced their ownership interest in the MVP Houston Preston Lot from 80% to 40%, by selling a portion of their ownership to MVP REIT II for $1.12 million. This transaction was completed at par value with no gain or loss be recorded by the Company. MVP REIT IIs ownership interest increased from 20% to 60% and will now be considered the controlling party. |
Line of Credit (Details Narrati
Line of Credit (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Interest expense | $ (729,000) | $ (621,000) | $ (2,136,000) | $ (1,682,000) |
Loan Amortization Cost | ||||
Subsidiary (the "Borrowers") [Member] | Unsecured Credit Agreement [Member] | ||||
Initiation Date | Oct. 5, 2016 | |||
Line of Credit, Description | On October 5, 2016, the Company and MVP REIT II, (the REITs), each through a wholly owned subsidiary, MVP Real Estate Holdings, LLC and MVP REIT II Operating Partnership, LP, (the "Borrowers"), entered into a credit agreement (the "Unsecured Credit Agreement") with KeyBank, National Association ('KeyBank") as the administrative agent and KeyBanc Capital Markets ("KeyBanc Capital Markets") as the lead arranger. Pursuant to the Unsecured Credit Agreement, the Borrowers were provided with a $30 million unsecured credit facility (the "Unsecured Credit Facility"), which may be increased up to $100 million, in minimum increments of $10 million. The Unsecured Credit Facility has an initial term of two years, maturing on October 5, 2018, and may be extended for a one-year period if certain conditions are met and upon payment of an extension fee. | |||
Interest Rate, Description | The Unsecured Credit Facility has an interest rate calculated based on LIBOR Rate plus 2.25% or Base Rate plus 1.25%, both as provided in the Unsecured Credit Agreement. The Base Rate is calculated as the greater of (i) the KeyBank Prime rate or (ii) the Federal Funds rate plus ½ of 1%. Payments under the Unsecured Credit Facility are interest only and are due on the first day of each quarter. | |||
Interest Rate | 3.49% | |||
Maximum Borrowing Capacity | 100,000,000 | $ 100,000,000 | ||
Maximum Amount Outstanding During Period | 2,000,000 | |||
Remaining Borrowing Capacity | 100,000 | 100,000 | ||
Interest expense | 16,000 | 102,000 | ||
Unused Line Fees | 9,000 | 19,000 | ||
Loan Amortization Cost | 34,000 | $ 94,000 | ||
Subsidiary (the "Borrowers") [Member] | Working Capital Credit Agreement [Member] | ||||
Initiation Date | Jun. 26, 2017 | |||
Line of Credit, Description | On June 26, 2017, the Borrowers entered into a credit agreement (the "Working Capital Credit Agreement") with KeyBank, National Association ('KeyBank") as the administrative agent and KeyBanc Capital Markets ("KeyBanc Capital Markets") as the lead arranger. Pursuant to the Working Capital Credit Agreement, the Borrowers were provided with a $6.0 million credit facility (the "Total Commitment"), which may be increased up to $10 million, in minimum increments of $1 million. The Total Commitment has an initial term of six months, maturing on December 26, 2017. | |||
Interest Rate, Description | The Working Capital Credit Agreement has an interest rate calculated based on LIBOR Rate plus 4.5% or Base Rate plus 3.5%, both as provided in the Working Capital Credit Agreement. The Base Rate is calculated as the greater of (i) the KeyBank Prime rate or (ii) the Federal Funds rate plus ½ of 1%. | |||
Interest Rate | 5.73% | |||
Maximum Borrowing Capacity | 10,000,000 | $ 10,000,000 | ||
Maximum Amount Outstanding During Period | 1,500,000 | |||
Remaining Borrowing Capacity | 4,500,000 | $ 4,500,000 | ||
Payment Terms | The Company used net proceeds from the private placement of the Series 1 Convertible Redeemable Preferred Stock to pay down the $1.5 million in October 2017. | |||
Interest expense | 0 | $ 0 | ||
Unused Line Fees | 1,600 | 1,600 | ||
Loan Amortization Cost | $ 7,000 | $ 10,000 |
Notes Payable (Details Narrativ
Notes Payable (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |||||
Interest Expense | $ 700,000 | $ 600,000 | $ 2,100,000 | $ 1,700,000 | |
Loan Amortization Cost | 85,000 | $ 39,000 | 200,000 | $ 100,000 | |
Carrying Value of Debt | 53,100,000 | 53,100,000 | $ 76,100,000 | ||
Estimated Fair Value Of Debt | $ 50,400,000 | $ 50,400,000 | $ 25,400,000 |
Merger (Details Narrative)
Merger (Details Narrative) | 9 Months Ended |
Sep. 30, 2017 | |
Business Combinations [Abstract] | |
Merger Equity Transfer | Subject to the terms and conditions of the Merger Agreement, at the effective time of the Merger, each outstanding share of the Companys common stock, $0.001 par value per share (the Company Common Stock), will be automatically cancelled and retired, and converted into the right to receive 0.365 shares of common stock, $0.0001 par value per share, of MVP REIT II (MVP REIT II Common Stock) (such ratio, as it may be adjusted pursuant to the Merger Agreement, the Exchange Ratio). Holders of shares of Company Common Stock will receive cash in lieu of fractional shares. |
Assets held for sale (Details N
Assets held for sale (Details Narrative) - USD ($) | 1 Months Ended | |
Feb. 28, 2017 | Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | ||
Property Held For Sale, Ownership Percentage | 87.09% | |
Property Held For Sale, Carrying Value | $ 6,100,000 | |
Assets held for sale, letter of intent, portion of property | During October 2016, the PSA was cancelled. During February 2017, the Company entered into a letter of intent to sell a portion of the property (approximately 2.2 acres) to an unrelated third party for $3.0 million. The remaining portion of the property will continued to be reported as held for sale. The Company will continue look for an Operator if the entire property is not sold. |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) | Nov. 13, 2017 | Nov. 13, 2017 | Oct. 31, 2017 |
Shares [Member] | |||
Date of Event | Oct. 18, 2017 | ||
Description | On October 18, 2017, VRM I and VRM II acquired 290,197.6 shares and 746,222.4 shares, respectively, of MVP REITs common stock. The shares were received from Par 3 Nevada, LLC, a Nevada limited liability company (Par 3), as partial consideration for the membership interests held by VRM I and VRM II in a Delaware limited liability company that has an indirect, beneficial ownership interest in five office buildings located in Las Vegas, Nevada. [Par 3 had acquired the MVP REIT shares from Sere Holdings, LLC.] As a result of this transaction, VRM II currently owns approximately 6.77% of MVP REITs issued and outstanding shares of common stock, and VRM I currently owns approximately 3.32% of MVP REITs issued and outstanding shares of common stock. VRM II and VRM I also own 60% and 40%, respectively, of the aggregate membership interests in the Advisor. | ||
Letter of Credit [Member] | |||
Description | The Company drew down $1.5 million from the Working Capital LOC to mainly pay acquisition fees and merger costs. Included in those payments was the balance due to MVP RA as of September 30, 2017. | ||
MVP REIT II Share Acquisition [Member] | |||
Description | During November 2017, MVP REIT II acquired approximately 118,932 shares of the Companys stock at $8.56 per share from an unrelated third party. | ||
VRM II Share Acquisition [Member] | |||
Description | During November 2017, VRM II, acquired approximately 118,932 shares of the Companys stock at $8.56 per share from an unrelated third party. |