Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Mar. 31, 2014 | 9-May-14 | |
Document and Entity Information | ' | ' |
Entity Registrant Name | 'Steadfast Apartment REIT, Inc. | ' |
Entity Central Index Key | '0001585219 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 31-Mar-14 | ' |
Amendment Flag | 'false | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Current Reporting Status | 'Yes | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
Entity Common Stock, Shares Outstanding | ' | 572,468 |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q1 | ' |
CONSOLIDATED_BALANCE_SHEET
CONSOLIDATED BALANCE SHEET (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
Assets: | ' | ' |
Cash and cash equivalents | $4,622,221 | $203,500 |
Other receivables | 94,500 | ' |
Total assets | 4,716,721 | 203,500 |
Liabilities: | ' | ' |
Accounts payable and accrued liabilities | 21,113 | 74,771 |
Due to affiliates | 625,547 | 11,873 |
Total liabilities | 646,660 | 86,644 |
Stockholders' Equity: | ' | ' |
Additional paid-in capital | 4,431,961 | 203,355 |
Accumulated deficit | -365,576 | -86,644 |
Total stockholders' equity | 4,070,061 | 116,856 |
Total liabilities and equity | 4,716,721 | 203,500 |
Common Stock | ' | ' |
Stockholders' Equity: | ' | ' |
Common stock, $0.01 par value per share | 3,666 | 135 |
Convertible Stock | ' | ' |
Stockholders' Equity: | ' | ' |
Common stock, $0.01 par value per share | $10 | $10 |
CONSOLIDATED_BALANCE_SHEET_Par
CONSOLIDATED BALANCE SHEET (Parenthetical) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
Preferred stock, par value (in dollars per share) | $0.01 | $0.01 |
Preferred stock, shares authorized | 100,000,000 | 100,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common Stock | ' | ' |
Common stock, par value (in dollars per share) | $0.01 | $0.01 |
Common stock, shares authorized | 999,999,000 | 999,999,000 |
Common stock, shares issued | 366,609 | 13,500 |
Common stock, shares outstanding | 366,609 | 13,500 |
Convertible Stock | ' | ' |
Common stock, par value (in dollars per share) | $0.01 | $0.01 |
Common stock, shares authorized | 1,000 | 1,000 |
Common stock, shares issued | 1,000 | 1,000 |
Common stock, shares outstanding | 1,000 | 1,000 |
CONSOLIDATED_STATEMENT_OF_OPER
CONSOLIDATED STATEMENT OF OPERATIONS (USD $) | 3 Months Ended |
Mar. 31, 2014 | |
Expenses: | ' |
General and administrative expenses | $275,523 |
Acquisition costs | 3,409 |
Net loss | ($278,932) |
Loss per common share - basic and diluted (in dollars per share) | ($3.33) |
Weighted average number of common shares outstanding - basic and diluted | 83,853 |
CONSOLIDATED_STATEMENT_OF_STOC
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (USD $) | Common | Common | Additional Paid-in Capital | Retained Earnings | Total |
Common Stock | Convertible Stock | ||||
BALANCE, beginning of period at Aug. 21, 2013 | ' | ' | ' | ' | ' |
Increase (decrease) in Stockholders' Equity | ' | ' | ' | ' | ' |
Issuance of common stock | $135 | ' | $202,365 | ' | $202,500 |
Issuance of common stock (in shares) | 13,500 | ' | ' | ' | ' |
Issuance of convertible stock | ' | 10 | 990 | ' | 1,000 |
Issuance of convertible stock (in shares) | ' | 1,000 | ' | ' | ' |
Net loss | ' | ' | ' | -86,644 | -86,644 |
BALANCE, end of period at Dec. 31, 2013 | 135 | 10 | 203,355 | -86,644 | 116,856 |
BALANCE, end of period (in shares) at Dec. 31, 2013 | 13,500 | 1,000 | ' | ' | ' |
Increase (decrease) in Stockholders' Equity | ' | ' | ' | ' | ' |
Issuance of common stock | 3,531 | ' | 4,880,649 | ' | 4,884,180 |
Issuance of common stock (in shares) | 353,109 | ' | ' | ' | ' |
Commissions On Sales Of Common Stock And Related Dealer Manager Fees | ' | ' | -251,975 | ' | -251,975 |
Other offering costs | ' | ' | -437,770 | ' | -437,770 |
Amortization of stock-based compensation | ' | ' | 37,702 | ' | 37,702 |
Net loss | ' | ' | ' | -278,932 | -278,932 |
BALANCE, end of period at Mar. 31, 2014 | $3,666 | $10 | $4,431,961 | ($365,576) | $4,070,061 |
BALANCE, end of period (in shares) at Mar. 31, 2014 | 366,609 | 1,000 | ' | ' | ' |
CONSOLIDATED_STATEMENT_OF_CASH
CONSOLIDATED STATEMENT OF CASH FLOWS (USD $) | 3 Months Ended |
Mar. 31, 2014 | |
Cash Flows from Operating Activities: | ' |
Net loss | ($278,932) |
Adjustments to reconcile net loss to net cash used in operating activities: | ' |
Amortization of stock-based compensation | 37,702 |
Changes in operating assets and liabilities: | ' |
Accounts payable and accrued liabilities | -53,658 |
Due to affiliates | 175,904 |
Net cash used in operating activities | -118,984 |
Cash Flows from Financing Activities: | ' |
Proceeds from issuance of common stock | 4,789,680 |
Payments of commissions on sale of common stock and related dealer manager fees | -251,975 |
Net cash provided by financing activities | 4,537,705 |
Net increase in cash and cash equivalents | 4,418,721 |
Cash and cash equivalents, beginning of period | 203,500 |
Cash and cash equivalents, end of period | 4,622,221 |
Supplemental Disclosures of Noncash Transactions: | ' |
Increase in amounts receivable from transfer agent | -94,500 |
Increase (decrease) in amounts payable to affiliates for other offering costs | $437,770 |
Organization_and_Business
Organization and Business | 3 Months Ended |
Mar. 31, 2014 | |
Organization and Business | ' |
Organization and Business | ' |
1. Organization and Business | |
Steadfast Apartment REIT, Inc. (the “Company”) was formed on August 22, 2013, as a Maryland corporation that intends to qualify as a real estate investment trust (“REIT”). On September 3, 2013, the Company was initially capitalized with the sale of 13,500 shares of common stock to Steadfast REIT Investments, LLC (the “Sponsor”) at a purchase price of $15.00 per share for an aggregate purchase price of $202,500. Steadfast Apartment Advisor, LLC (the “Advisor”), a Delaware limited liability company formed on August 22, 2013, invested $1,000 in the Company in exchange for 1,000 shares of convertible stock (the “Convertible Stock”) as described in Note 3. | |
Substantially all of the Company’s business will be conducted through Steadfast Apartment REIT Operating Partnership, L.P. (the “Operating Partnership”), a Delaware limited partnership formed on August 27, 2013. The Company is the sole general partner of the Operating Partnership. The Company and Steadfast Apartment REIT Limited Partner, LLC, a Delaware limited liability company and a wholly-owned subsidiary of the Company, executed a Limited Partnership Agreement (the “Partnership Agreement”) on September 3, 2013. As the Company accepts subscriptions for shares of its common stock, the Company transfers substantially all of the net offering proceeds from its Public Offering (defined below) to the Operating Partnership as a capital contribution in exchange for partnership interests and the Company’s percentage ownership in the Operating Partnership increases proportionately. | |
As of March 31, 2014, the Company did not own any real estate properties and had not commenced real estate operations. | |
Public Offering | |
On December 30, 2013, the Securities and Exchange Commission (the “SEC”) declared effective the Company’s registration statement on Form S-11 to offer a maximum of 66,666,667 shares of common stock for sale to the public at an initial price of $15.00 per share (with discounts available for certain categories of purchasers) (the “Primary Offering”). The Company also registered up to 7,017,544 shares of common stock for sale pursuant to the Company’s distribution reinvestment plan (the “DRP,” and together with the Primary Offering, the “Public Offering “) at an initial price of $14.25 per share. The Company commenced its Public Offering on December 30, 2013. The Company may, from time to time, in its sole discretion, change the price at which the Company offers shares to the public in the Primary Offering or pursuant to the DRP to reflect changes in the Company’s estimated value per share and other factors that the Company’s board of directors deems relevant. The Company may reallocate shares of common stock registered in the Public Offering between the Primary Offering and the DRP. | |
Pursuant to the terms of the Public Offering, offering proceeds were held in an escrow account until the Company raised the minimum offering amount of $2,000,000. On February 27, 2014, the Company raised the minimum offering amount and the offering proceeds held in escrow were released to the Company. As of May 9, 2014, the Company had sold 548,969 shares of common stock in the Public Offering for gross proceeds of $7,954,632. The Company will continue to offer shares of the Company’s common stock on a continuous basis until the Public Offering terminates on or before December 30, 2015, unless extended. However, in certain states the Public Offering may continue for only one year unless the Company renews the offering period for an additional year. The Company reserves the right to terminate the Public Offering at any time. | |
The Company intends to use substantially all of the net proceeds from the Public Offering to invest in and manage a diverse portfolio of multifamily properties located in targeted markets throughout the United States. In addition to the Company’s focus on multifamily properties, the Company may also make selective strategic acquisitions of other types of commercial properties. The Company may also acquire or originate mortgage, mezzanine, bridge and other real estate loans and equity securities of other real estate companies. | |
The business of the Company is externally managed by the Advisor, pursuant to the Advisory Agreement dated December 13, 2013, by and among the Company, the Operating Partnership and the Advisor (the “Advisory Agreement”). The Advisory Agreement is subject to annual renewal by the Company’s board of directors. The current term of the Advisory Agreement expires on December 13, 2014. Subject to certain restrictions and limitations, the Advisor manages the Company’s day-to-day operations, manages the Company’s portfolio of properties and real estate-related assets, sources and presents investment opportunities to the Company’s board of directors and provides investment management services on the Company’s behalf. The Advisor has also entered into an Advisory Services Agreement with Crossroads Capital Advisors, LLC (“Crossroads Capital Advisors”), whereby Crossroads Capital Advisors provides advisory services to the Company on behalf of the Advisor. The Company has retained Steadfast Capital Markets Group, LLC (the “Dealer Manager”), an affiliate of the Company, to serve as the dealer manager for the Public Offering. The Dealer Manager is responsible for marketing the Company’s shares of common stock being offered pursuant to the Public Offering. The Advisor, along with the Dealer Manager, also provides offering services, marketing, investor relations and other administrative services on the Company’s behalf. | |
The Partnership Agreement provides that the Operating Partnership is operated in a manner that will enable 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 the Operating Partnership will not be classified as a “publicly traded partnership” for purposes of Section 7704 of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), which classification could result in the Operating Partnership being taxed as a corporation. In addition to the administrative and operating costs and expenses incurred by the Operating Partnership in acquiring and operating real properties, the Operating Partnership will pay all of the Company’s administrative costs and expenses, and such expenses will be treated as expenses of the Operating Partnership. | |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 3 Months Ended | |||
Mar. 31, 2014 | ||||
Summary of Significant Accounting Policies | ' | |||
Summary of Significant Accounting Policies | ' | |||
2. Summary of Significant Accounting Policies | ||||
Principles of Consolidation and Basis of Presentation | ||||
The consolidated financial statements include the accounts of the Company, the Operating Partnership and its subsidiaries. All significant intercompany balances and transactions are eliminated in consolidation. The financial statements of the Company’s subsidiaries are prepared using accounting policies consistent with those of the Company. | ||||
The accompanying unaudited consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information as contained within the Financial Accounting Standards Board (“FASB”), Accounting Standards Codification (“ASC”) and the rules and regulations of the SEC, including the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, the unaudited consolidated financial statements do not include all of the information and footnotes required by GAAP for audited financial statements. In the opinion of management, the financial statements for the unaudited interim periods presented include all adjustments that are of a normal and recurring nature and necessary for a fair and consistent presentation of the results of such periods. Operating results for the three months ended March 31, 2014 are not necessarily indicative of the results that may be expected for the year ending December 31, 2014. The unaudited consolidated financial statements herein should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013. | ||||
Use of Estimates | ||||
The preparation of the consolidated financial statements in conformity with GAAP requires the Company to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could materially differ from those estimates. | ||||
Fair Value Measurements | ||||
Under GAAP, the Company is required to measure certain financial instruments at fair value on a recurring basis. In addition, the Company is required to measure other assets and liabilities at fair value on a non-recurring basis (e.g., carrying value of impaired real estate loans receivable and long-lived assets). Fair value is defined as the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The GAAP fair value framework uses a three-tiered approach. Fair value measurements are classified and disclosed in one of the following three categories: | ||||
· | Level 1: unadjusted quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities; | |||
· | Level 2: quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations in which significant inputs and significant value drivers are observable in active markets; and | |||
· | Level 3: prices or valuation techniques where little or no market data is available that requires inputs that are both significant to the fair value measurement and unobservable. | |||
When available, the Company utilizes quoted market prices from an independent third-party source to determine fair value and will classify such items in Level 1 or Level 2. In instances where the market is not active, regardless of the availability of a nonbinding quoted market price, observable inputs might not be relevant and could require the Company to make a significant adjustment to derive a fair value measurement. Additionally, in an inactive market, a market price quoted from an independent third party may rely more on models with inputs based on information available only to that independent third party. When the Company determines the market for a financial instrument owned by the Company to be illiquid or when market transactions for similar instruments do not appear orderly, the Company uses several valuation sources (including internal valuations, discounted cash flow analysis and quoted market prices) and will establish a fair value by assigning weights to the various valuation sources. | ||||
Fair Value of Financial Instruments | ||||
The accompanying consolidated balance sheets include the following financial instruments: cash and cash equivalents, accounts payable and accrued liabilities and due to affiliates. The Company considers the carrying value of cash and cash equivalents and accounts payable and accrued liabilities to approximate the fair value of these financial instruments based on the short duration between origination of the instruments and their expected realization. The fair value of amounts due to affiliates is not determinable due to the related party nature of such amounts. | ||||
Distribution Policy | ||||
The Company intends to elect to be taxed as a REIT and to operate as a REIT for federal income tax purposes commencing with the Company’s taxable year ending December 31, 2014. To maintain its qualification as a REIT, the Company intends to make distributions each taxable year equal to at least 90% of its REIT taxable income (which is determined without regard to the dividends paid deduction or net capital gain and which does not necessarily equal net income as calculated in accordance with GAAP). | ||||
Distributions to stockholders are determined by the board of directors of the Company and are dependent upon a number of factors relating to the Company, including funds available for the payment of distributions, financial condition, the timing of property acquisitions, capital expenditure requirements and annual distribution requirements in order for the Company to qualify as a REIT under the Internal Revenue Code. | ||||
Per Share Data | ||||
Basic loss per share attributable to the period presented is computed by dividing net loss by the weighted average number of shares of the Company’s common stock outstanding during the period. Diluted loss per share is computed based on the weighted average number of shares of the Company’s common stock and all potentially dilutive securities, if any. Distributions declared per common share assumes each share was issued and outstanding each day during the period. | ||||
Segment Disclosure | ||||
The Company intends to operate in one reportable segment with activities related to investing in multifamily properties. | ||||
Recently Issued Accounting Standards Updates | ||||
In April 2014, the FASB issued ASU No. 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360: Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity (“ASU No. 2014-08”). ASU No. 2014-08 limits discontinued operations reporting to disposals of components of an entity that represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results when any of the following occurs: (a) the component of an entity or group of components of an entity meets the criteria to be classified as held for sale; (b) the component of an entity or group of components of an entity is disposed of by sale; and (c) the component of an entity or group of components of an entity is disposed of other than by sale. ASU No. 2014-08 also requires additional disclosures about discontinued operations. ASU No. 2014-08 is effective for reporting periods beginning after December 15, 2014. Early adoption is permitted, but only for disposals (or classifications as held for sale) that have not been reported in financial statements previously issued or available for issuance. The Company early adopted ASU No. 2014-08 for the reporting period beginning January 1, 2014. As a result of the adoption of ASU No. 2014-08, properties that are classified as held for sale in the ordinary course of business on or subsequent to January 1, 2014 would generally be included in continuing operations on the Company’s consolidated statements of operations. As there are no properties currently classified as held for sale, the adoption of ASU No. 2014-08 did not have an impact on the presentation of the Company’s consolidated financial statements. | ||||
Stockholders_Equity
Stockholders' Equity | 3 Months Ended | |||
Mar. 31, 2014 | ||||
Stockholders' Equity | ' | |||
Stockholders' Equity | ' | |||
3. Stockholders’ Equity | ||||
General | ||||
Under the Company’s Articles of Amendment and Restatement (the “Charter”), the total number of shares of capital stock authorized for issuance is 1,100,000,000 shares, consisting of 999,999,000 shares of common stock with a par value of $0.01 per share, 1,000 shares of convertible stock with a par value of $0.01 per share and 100,000,000 shares designated as preferred stock with a par value of $0.01 per share. | ||||
Common Stock | ||||
The Company’s common stock entitles the holders to one vote per share on all matters upon which stockholders are entitled to vote, to receive dividends and other distributions as authorized by the Company’s board of directors in accordance with the Maryland General Corporation Law and to all rights of a stockholder pursuant to the Maryland General Corporation Law. The Company’s common stock has no preferences or preemptive, conversion or exchange rights. | ||||
On September 3, 2013, the Company issued 13,500 shares of common stock to the Sponsor for $202,500. From inception through March 31, 2014, the Company had issued 343,110 shares of common stock in its Public Offering for offering proceeds of $4,194,435, net of offering costs of $689,745. The offering costs primarily consist of selling commissions and dealer manager fees. Offering proceeds include $94,500 and $0 of amounts receivable from the Company’s transfer agent as of March 31, 2014 and December 31, 2013, respectively, which are included in other receivables in the accompanying consolidated balance sheets. | ||||
On February 27, 2014, the Company granted 3,333 shares of restricted common stock to each of its three independent directors pursuant to the Company’s independent directors’ compensation plan at a fair value of $15.00 per share in connection with the Company raising $2,000,000 in the Public Offering. The shares of restricted common stock vest and become non-forfeitable in four equal annual installments beginning on the date of grant and ending on the third anniversary of the date of grant and will become fully vested and become non-forfeitable on the earlier to occur of (1) the termination of the independent director’s service as a director due to his or her death or disability, or (2) a change in control of the Company. | ||||
Included in general and administrative expenses is $37,702 for the three months ended March 31, 2014, for compensation expense related to the issuance of restricted common stock. The weighted average remaining term of the restricted common stock is 2.92 years as of March 31, 2014. | ||||
Convertible Stock | ||||
The Company issued 1,000 shares of non-participating, non-voting Convertible Stock to the Advisor for $1,000. The Convertible Stock will convert into shares of common stock if and when: (A) the Company has made total distributions on the then-outstanding shares of its common stock equal to the original issue price of those shares plus an aggregate 6.0% cumulative, non-compounded, annual return on the original issue price of those shares, (B) the Company lists its common stock for trading on a national securities exchange, or (C) the Advisory Agreement is terminated or not renewed (other than for “cause” as defined in the Advisory Agreement). In the event of a termination or non-renewal of the Advisory Agreement for cause, all of the shares of the Convertible Stock will be redeemed for $1.00. In general, each share of Convertible Stock will convert into a number of shares of common stock equal to 1/1000 of the quotient of (A) 15% of the excess of (1) the Company’s “enterprise value” plus the aggregate value of distributions paid to date on the then outstanding shares of the Company’s common stock over (2) the aggregate purchase price paid by stockholders for those outstanding shares of common stock plus an aggregated 6.0% cumulative, non-compounded, annual return on the original issue price of those outstanding shares, divided by (B) the Company’s enterprise value divided by the number of outstanding shares of common stock on an as-converted basis, in each case calculated as of the date of the conversion. | ||||
Preferred Stock | ||||
The Charter also provides the Company’s board of directors with the authority to issue one or more classes or series of preferred stock, and prior to the issuance of such shares of preferred stock, the board of directors shall have the power from time to time to classify or reclassify, into one or more classes or series, any unissued shares and designate the preferences, rights and privileges of such shares of preferred stock. The Company’s board of directors is authorized to amend the Charter, without the approval of the stockholders, to increase the aggregate number of authorized shares of capital stock or the number of shares of any class or series that the Company has authority to issue. As of March 31, 2014, no shares of the Company’s preferred stock were issued and outstanding. | ||||
Distribution Reinvestment Plan | ||||
The Company’s board of directors has approved the DRP through which common stockholders may elect to reinvest an amount equal to the distributions declared on their shares of common stock in additional shares of the Company’s common stock in lieu of receiving cash distributions. The purchase price per share under the DRP is $14.25. The Company’s board of directors may, in its sole discretion, from time to time, change this price based upon changes in the Company’s estimated value per share, the then current price of shares of the Company’s common stock in the Public Offering and other factors that the Company’s board of directors deems relevant. | ||||
No sales commissions or dealer manager fees are payable on shares sold through the DRP. The Company’s board of directors may, in its sole discretion, amend, suspend, or terminate the DRP at any time upon ten days’ notice to the Company’s stockholders. Following any termination of the DRP, all subsequent distributions to stockholders will be made in cash. | ||||
Share Repurchase Plan and Redeemable Common Stock | ||||
The Company’s share repurchase plan may provide an opportunity for stockholders to have their shares of common stock repurchased by the Company, subject to certain restrictions and limitations. No shares can be repurchased under the Company’s share repurchase plan until after the first anniversary of the date of purchase of such shares; provided, however, that this holding period shall not apply to repurchases requested within two years after the death or disability of a stockholder. | ||||
Prior to the date the Company publishes an estimated value per share of its common stock, the purchase price for shares repurchased under the Company’s share repurchase plan will be as follows: | ||||
Repurchase Price | ||||
Share Purchase Anniversary | on Repurchase Date(1) | |||
Less than 1 year | No Repurchase Allowed | |||
1 year | 92.5% of Purchase Price | |||
2 years | 95.0% of Purchase Price | |||
3 years | 97.5% of Purchase Price | |||
4 years | 100.0% of Purchase Price | |||
In the event of a stockholder’s death or disability(2) | Average Issue Price for Shares(3) | |||
Following the date the Company publishes an estimated value per share of its common stock, the purchase price for shares repurchased under the Company’s share repurchase plan will be as follows: | ||||
Repurchase Price | ||||
Share Purchase Anniversary | on Repurchase Date(1) | |||
Less than 1 year | No Repurchase Allowed | |||
1 year | 92.5% of Estimated Value per Share(4) | |||
2 years | 95.0% of Estimated Value per Share(4) | |||
3 years | 97.5% of Estimated Value per Share(4) | |||
4 years | 100.0% of Estimated Value per Share(4) | |||
In the event of a stockholder’s death or disability(2) | Average Issue Price for Shares(3) | |||
-1 | As adjusted for any stock dividends, combinations, splits, recapitalizations or any similar transaction with respect to the shares of common stock. Repurchase price includes the full amount paid for each share, including all sales commissions and dealer manager fees. | |||
-2 | The required one year holding period to be eligible to redeem shares under the Company’s share repurchase plan does not apply in the event of death or disability of a stockholder. For purposes of the Company’s share repurchase plan a “disability” means (a) the stockholder has received a determination of disability based upon a physical or mental condition or impairment arising after the date the stockholder acquired the shares to be repurchased, and (b) the determination of such disability was made by the governmental agency responsible for reviewing and awarding the disability retirement benefits that the stockholder could be eligible to receive, which is referred to as the “applicable governmental agency.” The applicable governmental agencies are limited to the following: (i) the Social Security Administration; (ii) the U.S. Office of Personnel Management with respect to disability benefits under the Civil Service Retirement System (“CSRS”); or (iii) the Veteran’s Administration; and in each case, the agency charged with administering disability benefits at that time on behalf of one of the applicable governmental agencies. Disability determinations by governmental agencies other than those listed above, including, but not limited to, worker’s compensation insurance or the administration or enforcement of the Rehabilitation Act of 1973, as amended, or the Americans with Disabilities Act will not entitle a stockholder to the terms available for the repurchase of shares. Repurchase requests following an award by the applicable governmental agency of disability, such as the Social Security Administration Notice of Award, a U.S. Office of Personnel Management determination of disability under CSRS, a Veteran’s Administration record of disability‑related discharge, as the case may be, or such other documentation issued by the applicable governmental agency that the Company deems acceptable and demonstrates an award of the disability benefits. As the following disabilities generally do not entitle a worker to Social Security or related disability benefits, they will not qualify as a “disability” for purposes of the Company’s share repurchase plan: (a) disabilities occurring after the legal retirement age; (b) temporary disabilities; and (c) disabilities that do not render a worker incapable of performing substantial gainful activity. However, where a stockholder requests the repurchase of shares due to a disability and the stockholder does not have a disability that meets the definition described above, but is subject to similar circumstances, the Company’s board of directors may repurchase the stockholder’s shares, in its sole discretion. | |||
-3 | The purchase price per share for shares repurchased upon the death or disability of a stockholder will be equal to the average issue price per share for all of the stockholder’s shares. | |||
-4 | For purposes of the share repurchase plan, the “Estimated Value per Share” will equal the purchase price until the day the Company publicly discloses, subsequent to completion of the Company’s offering stage, a new Estimated Value per Share. The Company’s board of directors will determine an estimated value per share of the Company’s common stock based on valuations by independent third-party appraisers and qualified valuation experts no later than 18 months following the end of the Company’s offering stage, or such earlier time as required by any regulatory requirement regarding the timing of a valuation. | |||
The purchase price per share for shares repurchased pursuant to the Company’s share repurchase plan will be further reduced by the aggregate amount of net proceeds per share, if any, distributed to the Company’s stockholders prior to the repurchase date as a result of the sale of one or more of the Company’s assets that constitutes a return of capital distribution as a result of such sales. | ||||
Repurchases of shares of the Company’s common stock will be made quarterly upon written request to the Company at least 15 days prior to the end of the applicable quarter. Repurchase requests will be honored approximately 30 days following the end of the applicable quarter (the “Repurchase Date”). Stockholders may withdraw their repurchase request at any time up to three business days prior to the Repurchase Date. To date, the Company has not received any redemption requests. | ||||
The Company cannot guarantee that the funds set aside for the share repurchase plan will be sufficient to accommodate all repurchase requests made in any quarter. In the event that the Company does not have sufficient funds available to repurchase all of the shares of the Company’s common stock for which repurchase requests have been submitted in any quarter, priority will be given to redemption requests in the case of the death or disability of a stockholder. If the Company repurchases less than all of the shares subject to a repurchase request in any quarter, with respect to any shares which have not been repurchased, a stockholder can (1) withdraw the stockholder’s request for repurchase or (2) ask that the Company honor the stockholder’s request in a future quarter, if any, when such repurchases can be made pursuant to the limitations of the share repurchase plan and when sufficient funds are available. Such pending requests will be honored among all requests for redemptions in any given repurchase period as follows: first, pro rata as to repurchases sought upon a stockholder’s death or disability; and, next, pro rata as to other repurchase requests. | ||||
The Company is not obligated to repurchase shares of its common stock under the share repurchase plan. The share repurchase plan limits the number of shares to be repurchased in any calendar year to (1) 5% of the weighted average number of shares of the Company’s common stock outstanding during the prior calendar year and (2) those that could be funded from the net proceeds from the sale of shares under the DRP in the prior calendar year, plus such additional funds as may be reserved for that purpose by the Company’s board of directors. Such sources of funds could include cash on hand, cash available from borrowings and cash from liquidations of securities investments as of the end of the applicable month, to the extent that such funds are not otherwise dedicated to a particular use, such as working capital, cash distributions to stockholders or purchases of real estate assets. There is no fee in connection with a repurchase of shares of the Company’s common stock. | ||||
The Company’s board of directors may, in its sole discretion, amend, suspend, or terminate the share repurchase plan at any time upon 30 days’ notice to the Company’s stockholders if it determines that the funds available to fund the share repurchase plan are needed for other business or operational purposes or that amendment, suspension or termination of the share repurchase plan is in the best interest of the Company’s stockholders. Therefore, a stockholder may not have the opportunity to make a repurchase request prior to any potential termination of the Company’s share repurchase plan. The share repurchase plan will terminate in the event that a secondary market develops for the Company’s shares of common stock. As of March 31, 2014, no amounts were available for repurchase as the Company had no DRP proceeds. | ||||
Distributions | ||||
The Company expects to authorize and declare daily distributions that will be aggregated and paid on a monthly basis. The Company intends to accrue distributions on a daily basis and make distributions on a monthly basis beginning no later than the first calendar month after the month in which the Company makes its first real estate investment. Once the Company commences paying distributions, the Company expects to continue paying monthly distributions unless the Company’s results of operations, its general financial condition, general economic conditions or other factors prohibit the Company from doing so. The timing and amount of distributions will be determined by the Company’s board of directors in its discretion and may vary from time to time. In connection with a distribution to the Company’s stockholders, the Company’s board of directors will authorize a monthly distribution of a certain dollar amount per share of the Company’s common stock. The Company will then calculate each stockholder’s specific distribution amount for the month using daily record and declaration dates. Once daily distributions have been authorized and declared, stockholders’ distributions will begin to accrue on the Company’s acceptance of stockholders’ subscription. | ||||
The Company’s long-term policy will be to pay distributions solely from cash flow from operations. However, the Company expects to have insufficient cash flow from operations available for distribution until the Company makes substantial investments. Further, because the Company may receive income from interest or rents at various times during the Company’s fiscal year and because the Company may need cash flow from operations during a particular period to fund capital expenditures and other expenses, the Company expects that at least during the early stages of the Company’s development and from time to time during the Company’s operational stage, the Company will declare distributions in anticipation of cash flow that the Company expects to receive during a later period, and the Company expects to pay these distributions in advance of its actual receipt of these funds. In these instances, the Company’s board of directors has the authority under its organizational documents, to the extent permitted by Maryland law, to fund distributions from sources such as borrowings, offering proceeds or advances and the deferral of fees and expense reimbursements by the Advisor, in its sole discretion. The Company has not established a limit on the amount of proceeds it may use from the Public Offering to fund distributions. If the Company pays distributions from sources other than cash flow from operations, the Company will have fewer funds available for investments and stockholders’ overall return on their investment in the Company may be reduced. | ||||
To maintain the Company’s qualification as a REIT, the Company must make aggregate annual distributions to its stockholders of at least 90% of its REIT taxable income (which is computed without regard to the dividends paid deduction or net capital gain and which does not necessarily equal net income as calculated in accordance with GAAP). If the Company meets the REIT qualification requirements, the Company generally will not be subject to federal income tax on the income that the Company distributes to its stockholders each year. | ||||
As of March 31, 2014, the Company had not established a minimum distribution level. On April 4, 2014, the Company’s board of directors declared a distribution (see Note 7). | ||||
Related_Party_Arrangements
Related Party Arrangements | 3 Months Ended | ||||||||||||
Mar. 31, 2014 | |||||||||||||
Related Party Arrangements | ' | ||||||||||||
Related Party Arrangements | ' | ||||||||||||
4. Related Party Arrangements | |||||||||||||
The Company has entered into the Advisory Agreement with the Advisor and a Dealer Manager Agreement with the Dealer Manager with respect to the Public Offering. Pursuant to the Advisory Agreement and Dealer Manager Agreement, the Company is obligated to pay the Advisor and the Dealer Manager specified fees upon the provision of certain services related to the Public Offering, the investment of funds in real estate and real estate-related investments and the management of the Company’s investments and for other services (including, but not limited to, the disposition of investments). Subject to the limitations described below, the Company is also obligated to reimburse the Advisor and its affiliates for organization and offering costs incurred by the Advisor and its affiliates on behalf of the Company, as well as acquisition and origination expenses and certain operating expenses incurred on behalf of the Company or incurred in connection with providing services to the Company. | |||||||||||||
Amounts attributable to the Advisor and its affiliates incurred and paid for the three months ended March 31, 2014 are as follows: | |||||||||||||
For the Three Months Ended March 31, 2014 | Payable as of | ||||||||||||
Incurred | Paid | 31-Mar-14 | 31-Dec-13 | ||||||||||
Consolidated Statement of Operations: | |||||||||||||
Expensed | |||||||||||||
Organizational cost reimbursement(1) | $ | 42,882 | $ | — | $ | 42,882 | $ | — | |||||
Acquisition expenses(2) | 3,409 | — | 3,409 | — | |||||||||
Other operating expenses(1) | 129,613 | — | 141,486 | 11,873 | |||||||||
Consolidated Balance Sheets: | |||||||||||||
Additional paid-in capital | |||||||||||||
Other offering costs reimbursement | 437,770 | — | 437,770 | — | |||||||||
Selling commissions | 196,302 | 196,302 | — | — | |||||||||
Dealer manager fees | 55,673 | 55,673 | — | — | |||||||||
$ | 865,649 | $ | 251,975 | $ | 625,547 | $ | 11,873 | ||||||
-1 | Included in general and administrative expenses in the accompanying consolidated statements of operations for the three months ended March 31, 2014 and due to affiliates, in the accompanying balance sheet as of March 31, 2014. | ||||||||||||
-2 | Included in acquisition costs in the accompanying consolidated statements of operations for the three months ended March 31, 2014 and due to affiliates, net in the accompanying balance sheet as of March 31, 2014. | ||||||||||||
Organization and Offering Costs | |||||||||||||
Organization and offering expenses include all expenses (other than sales commissions and the dealer manager fee) to be paid by the Company in connection with the Public Offering, including legal, accounting, printing, mailing and filing fees, charges of the Company’s transfer agent, expenses of organizing the Company, data processing fees, advertising and sales literature costs, bona fide out-of-pocket due diligence costs and amounts to reimburse the Advisor or its affiliates for the salaries of its employees and other costs in connection with preparing supplemental sales materials and providing other administrative services in connection with the Public Offering. Any such reimbursement will not exceed actual expenses incurred by the Advisor. After the termination of the Public Offering, the Advisor will reimburse the Company to the extent total organization and offering expenses borne by the Company exceed 15% of the gross proceeds raised in the Public Offering. In addition, to the extent the Company does not pay the full sales commissions or dealer manager fee for shares sold in the Public Offering, the Company may also reimburse costs of bona fide training and education meetings held by the Company (primarily the travel, meal and lodging costs of registered representatives of broker-dealers), attendance and sponsorship fees and cost reimbursement of employees of the Company’s affiliates to attend seminars conducted by broker-dealers and, in certain cases, reimbursement to participating broker-dealers for technology costs associated with the offering, costs and expenses related to such technology costs, and costs and expenses associated with the facilitation of the marketing of the Company’s shares and the ownership of the Company’s shares by such broker-dealers’ customers; provided, however, that the Company will not pay any of the foregoing costs to the extent that such payment would cause total underwriting compensation to exceed 10% of the gross offering proceeds of the Offering, as required by the rules of the Financial Industry Regulatory Authority (“FINRA”). | |||||||||||||
Organization and offering costs include payments made to Crossroads Capital Advisors , an affiliate of the Sponsor, for certain specified services provided to the Company on behalf of the Advisor, including, without limitation, establishing operational and administrative processes; engaging and negotiating with vendors; providing recommendations and advice for the development of marketing materials and ongoing communications with investors; and assisting in public relations activities and the administration of the DRP and share redemption plan. As of March 31, 2014, the Advisor had incurred $250,002 of amounts payable to Crossroads Capital Advisors for the services described above. | |||||||||||||
The amount of reimbursable organization and offering (“O&O”) costs that have been paid or recognized from inception through March 31, 2014 is as follows: | |||||||||||||
Amount | Percentage of Gross Offering Proceeds | ||||||||||||
Gross offering proceeds: | $ | 4,884,180 | 100.00 | % | |||||||||
O&O limitation | 15 | % | |||||||||||
Total O&O costs available to be paid/reimbursed | $ | 732,627 | 15.00 | % | |||||||||
O&O expenses recorded | |||||||||||||
Sales commissions paid | $ | 196,302 | 4.02 | % | |||||||||
Broker dealer fees paid | 55,673 | 1.14 | % | ||||||||||
Offering cost reimbursements accrual | 437,770 | 8.96 | % | ||||||||||
Organizational costs reimbursements | 42,882 | 0.88 | % | ||||||||||
Total O&O cost reimbursements recorded by the Company | $ | 732,627 | 15.00 | % | |||||||||
When recognized, organization costs are expensed as incurred. From inception through March 31, 2014, the Advisor incurred $42,882 of organizational costs on the Company’s behalf, all of which was recognized by the Company during the three months ended March 31, 2014 and remains payable to the Advisor as of March 31, 2014. | |||||||||||||
Offering costs, including selling commissions and dealer manager fees, are deferred and charged to stockholders’ equity as such amounts are reimbursed to the Advisor, the Dealer Manager or their affiliates from gross offering proceeds. For the three months ended March 31, 2014, the Advisor incurred $1,523,489 of offering costs related to the Public Offering. The Advisor has incurred total offering costs related to the Public Offering of $2,744,882 from inception through March 31, 2014, of which $2,307,112 is deferred and may be reimbursable, subject to the limitations described above and the approval of the independent directors. | |||||||||||||
The Company accrued $437,770 for the reimbursement of offering costs in the accompanying balance sheet as of March 31, 2014. The deferred offering costs of $2,307,112 were not included in the financial statements of the Company because such costs were not a liability of the Company as they exceed the 15% limitation described above. | |||||||||||||
Investment Management Fee | |||||||||||||
The Company will pay the Advisor a monthly investment management fee equal to one-twelfth of 0.50% of (1) the cost of the Company’s real properties and real estate-related assets until the aggregate cost of the Company’s investments in real properties and real estate related assets equals $300,000,000. Thereafter, the Company will pay the Advisor a monthly investment management fee equal to one-twelfth of 1.0% of the cost of investments in properties and real estate-related assets. Such fee will be calculated including acquisition fees, acquisition expenses and any debt attributable to such investments, or the Company’s proportionate share thereof in the case of investments made through joint ventures. | |||||||||||||
For the three months ended March 31, 2014, the Company did not incur any investment management fees. | |||||||||||||
Acquisition Fees and Expenses | |||||||||||||
The Company will pay the Advisor an acquisition fee equal to 1.0% of the cost of investment, which includes the amount actually paid or budgeted to fund the acquisition, origination, development, construction or improvement (i.e. value-enhancement) of any real property or real estate-related asset acquired. For the three months ended March 31, 2014, the Company did not incur any acquisition fees. | |||||||||||||
In addition to acquisition fees, the Company reimburses the Advisor for amounts directly incurred by the Advisor and amounts the Advisor pays to third parties in connection with the selection, evaluation, acquisition and development of a property or acquisition of real estate-related assets, whether or not the Company ultimately acquires the property or the real estate-related assets. For the three months ended March 31, 2014, the Advisor incurred $3,409 of direct acquisition costs on behalf of the Company, all of which remained payable as of March 31, 2014. | |||||||||||||
The Charter limits the Company’s ability to pay acquisition fees if the total of all acquisition fees and expenses relating to the purchase would exceed 4.5% of the contract purchase price. Under the Charter, a majority of the Company’s board of directors, including a majority of the independent directors, is required to approve any acquisition fees (or portion thereof) that would cause the total of all acquisition fees and expenses relating to an acquisition to exceed 4.5% of the contract purchase price. In connection with the purchase of securities, the acquisition fee may be paid to an affiliate of the Advisor that is registered as a FINRA member broker-dealer if applicable FINRA rules would prohibit the payment of the acquisition fee to a firm that is not a registered broker-dealer. | |||||||||||||
Loan Coordination Fee | |||||||||||||
The Company will pay the Advisor or its affiliate a loan coordination fee equal to 1.0% of the initial amount of the new debt financed or outstanding debt assumed in connection with the acquisition, development, construction, improvement or origination of a property or a real estate-related asset. In addition, in connection with any financing or the refinancing of any debt (in each case, other than at the time of the acquisition of a property or a real estate-related asset), the Company will pay the Advisor or its affiliate a loan coordination fee equal to 0.75% of the amount of debt refinanced. | |||||||||||||
For the three months ended March 31, 2014, the company did not incur any loan coordination fees. | |||||||||||||
Property Management Fees and Expenses | |||||||||||||
The Company intends to enter into Property Management Agreements with Steadfast Management Company, Inc., an affiliate of the Sponsor (the “Property Manager”), in connection with the management of each of the assets that the Company acquires. The property management fee payable with respect to each property under the Property Management Agreements (each a “Property Management Agreement”) will be a certain percentage of the annual gross revenue collected which is usual and customary for comparable property management services rendered to similar properties in similar geographic markets, as determined by the Advisor and approved by a majority of the Company’s board of directors, including a majority of the independent directors. | |||||||||||||
In addition to the property management fee, the Property Management Agreements will also specify certain other fees payable to the Property Manager for benefit administration and training services. The Company will also reimburse the Property Manager for the salaries and related benefits of on-site property management employees. | |||||||||||||
For the three months ended March 31, 2014, the Company did not incur any property management fees or expenses. | |||||||||||||
Construction Management Fee | |||||||||||||
The Company intends to enter into Construction Management Agreements with Pacific Coast Land and Construction, Inc., an affiliate of the Sponsor (the “Construction Manager”), in connection with capital improvements and renovation or value-enhancement projects for certain properties the Company acquires. The Construction Management Fee payable with respect to each property under the Construction Management Agreements (each a “Construction Management Agreement”) will be in amounts that are usual and customary for comparable services rendered to similar properties in similar geographic markets, as determined by the Advisor and approved by a majority of the Company’s board of directors, including a majority of the independent directors. | |||||||||||||
For the three months ended March 31, 2014, the Company did not incur any construction management fees. | |||||||||||||
Other Operating Expense Reimbursement | |||||||||||||
In addition to the various fees paid to the Advisor, the Company is obligated to pay directly or reimburse all expenses incurred by the Advisor in providing services to the Company, including the Company’s allocable share of the Advisor’s overhead, such as rent, employee costs, utilities and information technology costs. The Company will not reimburse the Advisor for employee costs in connection with services for which the Advisor or its affiliates receive acquisition fees or disposition fees or for the employee costs the Advisor pays to the Company’s executive officers. | |||||||||||||
The Charter limits the Company’s total operating expenses during any four fiscal quarters to the greater of 2% of the Company’s average invested assets or 25% of the Company’s net income for the same period (the “2% 25% Limitation”). The Company may reimburse the Advisor, at the end of each fiscal quarter, for operating expenses incurred by the Advisor; provided, however, that the Company shall not reimburse the Advisor at the end of any fiscal quarter for operating expenses that exceed the 2%/25% Limitation unless the independent directors have determined that such excess expenses were justified based on unusual and non-recurring factors. The Advisor must reimburse the Company for the amount by which the Company’s operating expenses for the preceding four fiscal quarters then ended exceed the 2%/25% Limitation. For purposes of determining the 2%/25% Limitation amount, “Average invested assets” means the average monthly book value of the Company’s assets invested directly or indirectly in equity interests and loans secured by real estate during the 12-month period before deducting depreciation, bad debts or other non-cash reserves. “Total operating expenses” means all expenses paid or incurred by the Company that are in any way related to the Company’s operation, including the Company’s allocable share of Advisor overhead and investment management fees, but excluding (a) the expenses of raising capital such as organization and offering expenses, legal, audit, accounting, underwriting, brokerage, listing, registration and other fees, printing and other such expenses and taxes incurred in connection with the issuance, distribution, transfer, listing and registration of shares of the Company’s common stock; (b) interest payments; (c) taxes; (d) non-cash expenditures such as depreciation, amortization and bad debt reserves; (e) reasonable incentive fees based on the gain in the sale of the Company’s assets; (f) acquisition fees and acquisition expenses (including expenses relating to potential acquisitions that the Company does not close); (g) real estate commissions on the resale of investments; and (h) other expenses connected with the acquisition, disposition, management and ownership of investments (including the costs of foreclosure, insurance premiums, legal services, maintenance, repair and improvement of real property). | |||||||||||||
For the three months ended March 31, 2014, the Advisor and its affiliates incurred $129,613 of the Company’s operating expenses, including the allocable share of Advisor’s overhead expenses of $79,367, all of which is included in the $275,523 of general and administrative expenses recognized by the Company. The Company will first test the 2%/25% Limitation for the four fiscal quarters ended September 30, 2014. | |||||||||||||
Disposition Fee | |||||||||||||
If the Advisor or its affiliates provides a substantial amount of services in connection with the sale of a property or real estate-related asset as determined by a majority of the Company’s independent directors, the Company will pay the Advisor or its affiliates one-half of the brokerage commissions paid, but in no event to exceed 1% of the sales price of each property or real estate-related asset sold. To the extent the disposition fee is paid upon the sale of any assets other than real property, it will be included as an operating expense for purposes of the 2%/25% Limitation. In connection with the sale of securities, the disposition fee may be paid to an affiliate of the Advisor that is registered as a FINRA member broker-dealer if applicable FINRA rules would prohibit the payment of the disposition fee to a firm that is not a registered broker-dealer. As of March 31, 2014, the Company had not sold or otherwise disposed of property or any real estate-related assets. Accordingly, the Company had not incurred any disposition fees as of March 31, 2014. | |||||||||||||
Selling Commissions and Dealer Manager Fees | |||||||||||||
The Company will pay the Dealer Manager up to 7% and 3% of the gross offering proceeds from the Primary Offering as selling commissions and dealer manager fees, respectively. A reduced sales commission and dealer manager fee is paid in connection with volume discounts and certain other categories of sales. No sales commission or dealer manager fee is paid with respect to shares of common stock issued pursuant to the DRP. The Dealer Manager reallows 100% of sales commissions earned to participating broker-dealers. The Dealer Manager may also reallow to any participating broker-dealer a portion of the dealer manager fee that is attributable to that participating broker-dealer for certain marketing costs of that participating broker-dealer. The Dealer Manager will negotiate the reallowance of the dealer manager fee on a case-by-case basis with each participating broker-dealer subject to various factors associated with the cost of the marketing program. For the three months ended March 31, 2014, the Company paid selling commissions of $196,302 and dealer manager fees of $55,673. | |||||||||||||
Incentive_Award_Plan_and_Indep
Incentive Award Plan and Independent Director Compensation | 3 Months Ended |
Mar. 31, 2014 | |
Incentive Award Plan and Independent Director Compensation | ' |
Incentive Award Plan and Independent Director Compensation | ' |
5. Incentive Award Plan and Independent Director Compensation | |
The Company has adopted an incentive plan (the “Incentive Award Plan”) that provides for the grant of equity awards to its employees, directors and consultants and those of the Company’s affiliates. The Incentive Award Plan authorizes the grant of non-qualified and incentive stock options, restricted stock awards, restricted stock units, stock appreciation rights, dividend equivalents and other stock-based awards or cash-based awards. | |
Under the Company’s independent directors’ compensation plan, which is a sub-plan of the Incentive Award Plan, each of the Company’s independent directors is entitled to receive 3,333 shares of restricted common stock once the Company raises $2,000,000 in gross offering proceeds in the Public Offering. On February 27, 2014, the Company raised over $2,000,000 in gross offering proceeds in the Public Offering and granted each of the three independent directors 3,333 shares of restricted common stock. In addition, on the date following an independent director’s re-election to the Company’s board of directors, he or she receives 1,666 shares of restricted common stock. One-fourth of the shares of restricted common stock generally vest and become non-forfeitable upon issuance and the remaining portion will vest in three equal annual installments beginning on the date of grant and ending on the third anniversary of the date of grant; provided, however, that the restricted stock will become fully vested and become non-forfeitable on the earlier to occur of (1) the termination of the independent director’s service as a director due to his or her death or disability, or (2) a change in control of the Company. | |
In addition to the stock awards, the Company will pay each of its independent directors an annual retainer of $55,000, prorated for any partial term (except the audit committee chairperson will receive an additional $10,000 annual retainer, prorated for any partial term). In addition, the independent directors will be paid for attending meetings as follows: (i) $2,500 for each board meeting attended in person, (ii) $1,500 for each committee meeting attended in person in such director’s capacity as a committee member, (iii) $1,000 for each board meeting attended via teleconference. All directors also receive reimbursement of reasonable out of pocket expenses incurred in connection with attendance at meetings of the board of directors. Director compensation is an operating expense of the Company that is subject to the operating expense reimbursement obligation of the Advisor discussed in Note 4. | |
Commitments_and_Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2014 | |
Commitments and Contingencies | ' |
Commitments and Contingencies | ' |
6. Commitments and Contingencies | |
Economic Dependency | |
The Company is dependent on the Advisor and the Dealer Manager for certain services that are essential to the Company, including the sale of the Company’s shares of common and preferred stock available for issue; the identification, evaluation, negotiation, purchase, and disposition of real estate and real estate-related investments; management of the daily operations of the Company’s real estate and real estate-related investment portfolio; and other general and administrative responsibilities. In the event that these companies are unable to provide the respective services, the Company will be required to obtain such services from other sources. | |
Legal Matters | |
From time to time, the Company is subject, or party, to legal proceedings that arise in the ordinary course of its business. Management is not aware of any legal proceedings of which the outcome is reasonably likely to have a material adverse effect on the Company’s results of operations or financial condition nor is the Company aware of any such legal proceedings contemplated by government agencies. | |
Subsequent_Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2014 | |
Subsequent Events | ' |
Subsequent Events | ' |
7. Subsequent Events | |
Status of Our Offering | |
The Company commenced its Public Offering on December 30, 2013. As of May 9, 2014, the Company had sold 548,969 shares of common stock in the Public Offering for gross proceeds of $7,954,632. | |
Distributions Declared | |
On April 4, 2014, the Company’s board of directors declared a distribution. Distributions (1) accrue daily to stockholders of record as of the close of business on each day, during the period commencing on April 7, 2014 and ending on the date that the Company acquires its first asset (the “Acquisition Date”); (2) are payable in cumulative amounts on or before the fifteenth day of the calendar month following the month in which the Acquisition Date occurs; and (3) are calculated at a rate of $0.002466 per share per day, which, if paid each day over a 365-day period, is equivalent to a 6.0% annualized distribution rate based on a purchase price of $15.00 per share of the Company’s common stock. | |
Following the Acquisition Date, distributions (1) accrue daily to stockholders of record as of the close of business each day during the period commencing on the day following the Acquisition Date and ending on June 30, 2014, (2) are payable in cumulative amounts on or before the fifteenth day of the calendar month with respect to the prior month; and (3) are calculated at a rate of $0.002466 per share per day, which, if paid each day over a 365-day period, is equivalent to a 6.0% annualized distribution rate based on a purchase price of $15.00 per share of the Company’s common stock. | |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 3 Months Ended | |||
Mar. 31, 2014 | ||||
Summary of Significant Accounting Policies | ' | |||
Principles of Consolidation | ' | |||
The consolidated financial statements include the accounts of the Company, the Operating Partnership and its subsidiaries. All significant intercompany balances and transactions are eliminated in consolidation. The financial statements of the Company’s subsidiaries are prepared using accounting policies consistent with those of the Company. | ||||
Basis of Presentation | ' | |||
The accompanying unaudited consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information as contained within the Financial Accounting Standards Board (“FASB”), Accounting Standards Codification (“ASC”) and the rules and regulations of the SEC, including the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, the unaudited consolidated financial statements do not include all of the information and footnotes required by GAAP for audited financial statements. In the opinion of management, the financial statements for the unaudited interim periods presented include all adjustments that are of a normal and recurring nature and necessary for a fair and consistent presentation of the results of such periods. Operating results for the three months ended March 31, 2014 are not necessarily indicative of the results that may be expected for the year ending December 31, 2014. The unaudited consolidated financial statements herein should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013. | ||||
Use of Estimates | ' | |||
The preparation of the consolidated financial statements in conformity with GAAP requires the Company to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could materially differ from those estimates | ||||
Fair Value Measurements | ' | |||
Under GAAP, the Company is required to measure certain financial instruments at fair value on a recurring basis. In addition, the Company is required to measure other assets and liabilities at fair value on a non-recurring basis (e.g., carrying value of impaired real estate loans receivable and long-lived assets). Fair value is defined as the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The GAAP fair value framework uses a three-tiered approach. Fair value measurements are classified and disclosed in one of the following three categories: | ||||
· | Level 1: unadjusted quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities; | |||
· | Level 2: quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations in which significant inputs and significant value drivers are observable in active markets; and | |||
· | Level 3: prices or valuation techniques where little or no market data is available that requires inputs that are both significant to the fair value measurement and unobservable. | |||
When available, the Company utilizes quoted market prices from an independent third-party source to determine fair value and will classify such items in Level 1 or Level 2. In instances where the market is not active, regardless of the availability of a nonbinding quoted market price, observable inputs might not be relevant and could require the Company to make a significant adjustment to derive a fair value measurement. Additionally, in an inactive market, a market price quoted from an independent third party may rely more on models with inputs based on information available only to that independent third party. When the Company determines the market for a financial instrument owned by the Company to be illiquid or when market transactions for similar instruments do not appear orderly, the Company uses several valuation sources (including internal valuations, discounted cash flow analysis and quoted market prices) and will establish a fair value by assigning weights to the various valuation sources. | ||||
Fair Value of Financial Instruments | ' | |||
The accompanying consolidated balance sheets include the following financial instruments: cash and cash equivalents, accounts payable and accrued liabilities and due to affiliates. The Company considers the carrying value of cash and cash equivalents and accounts payable and accrued liabilities to approximate the fair value of these financial instruments based on the short duration between origination of the instruments and their expected realization. The fair value of amounts due to affiliates is not determinable due to the related party nature of such amounts. | ||||
Distribution Policy | ' | |||
The Company intends to elect to be taxed as a REIT and to operate as a REIT for federal income tax purposes commencing with the Company’s taxable year ending December 31, 2014. To maintain its qualification as a REIT, the Company intends to make distributions each taxable year equal to at least 90% of its REIT taxable income (which is determined without regard to the dividends paid deduction or net capital gain and which does not necessarily equal net income as calculated in accordance with GAAP). | ||||
Distributions to stockholders are determined by the board of directors of the Company and are dependent upon a number of factors relating to the Company, including funds available for the payment of distributions, financial condition, the timing of property acquisitions, capital expenditure requirements and annual distribution requirements in order for the Company to qualify as a REIT under the Internal Revenue Code. | ||||
Per Share Data | ' | |||
Basic loss per share attributable to the period presented is computed by dividing net loss by the weighted average number of shares of the Company’s common stock outstanding during the period. Diluted loss per share is computed based on the weighted average number of shares of the Company’s common stock and all potentially dilutive securities, if any. Distributions declared per common share assumes each share was issued and outstanding each day during the period. | ||||
Segment Disclosure | ' | |||
The Company intends to operate in one reportable segment with activities related to investing in multifamily properties. | ||||
Recently Issued Accounting Standards Updates | ' | |||
In April 2014, the FASB issued ASU No. 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360: Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity (“ASU No. 2014-08”). ASU No. 2014-08 limits discontinued operations reporting to disposals of components of an entity that represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results when any of the following occurs: (a) the component of an entity or group of components of an entity meets the criteria to be classified as held for sale; (b) the component of an entity or group of components of an entity is disposed of by sale; and (c) the component of an entity or group of components of an entity is disposed of other than by sale. ASU No. 2014-08 also requires additional disclosures about discontinued operations. ASU No. 2014-08 is effective for reporting periods beginning after December 15, 2014. Early adoption is permitted, but only for disposals (or classifications as held for sale) that have not been reported in financial statements previously issued or available for issuance. The Company early adopted ASU No. 2014-08 for the reporting period beginning January 1, 2014. As a result of the adoption of ASU No. 2014-08, properties that are classified as held for sale in the ordinary course of business on or subsequent to January 1, 2014 would generally be included in continuing operations on the Company’s consolidated statements of operations. As there are no properties currently classified as held for sale, the adoption of ASU No. 2014-08 did not have an impact on the presentation of the Company’s consolidated financial statements. | ||||
Stockholders_Equity_Tables
Stockholders' Equity (Tables) | 3 Months Ended | |||
Mar. 31, 2014 | ||||
Stockholders' Equity | ' | |||
Schedule of share repurchase plan before estimated value per share of common stock is published | ' | |||
Prior to the date the Company publishes an estimated value per share of its common stock, the purchase price for shares repurchased under the Company’s share repurchase plan will be as follows: | ||||
Repurchase Price | ||||
Share Purchase Anniversary | on Repurchase Date(1) | |||
Less than 1 year | No Repurchase Allowed | |||
1 year | 92.5% of Purchase Price | |||
2 years | 95.0% of Purchase Price | |||
3 years | 97.5% of Purchase Price | |||
4 years | 100.0% of Purchase Price | |||
In the event of a stockholder’s death or disability(2) | Average Issue Price for Shares(3) | |||
-1 | As adjusted for any stock dividends, combinations, splits, recapitalizations or any similar transaction with respect to the shares of common stock. Repurchase price includes the full amount paid for each share, including all sales commissions and dealer manager fees. | |||
-2 | The required one year holding period to be eligible to redeem shares under the Company’s share repurchase plan does not apply in the event of death or disability of a stockholder. For purposes of the Company’s share repurchase plan a “disability” means (a) the stockholder has received a determination of disability based upon a physical or mental condition or impairment arising after the date the stockholder acquired the shares to be repurchased, and (b) the determination of such disability was made by the governmental agency responsible for reviewing and awarding the disability retirement benefits that the stockholder could be eligible to receive, which is referred to as the “applicable governmental agency.” The applicable governmental agencies are limited to the following: (i) the Social Security Administration; (ii) the U.S. Office of Personnel Management with respect to disability benefits under the Civil Service Retirement System (“CSRS”); or (iii) the Veteran’s Administration; and in each case, the agency charged with administering disability benefits at that time on behalf of one of the applicable governmental agencies. Disability determinations by governmental agencies other than those listed above, including, but not limited to, worker’s compensation insurance or the administration or enforcement of the Rehabilitation Act of 1973, as amended, or the Americans with Disabilities Act will not entitle a stockholder to the terms available for the repurchase of shares. Repurchase requests following an award by the applicable governmental agency of disability, such as the Social Security Administration Notice of Award, a U.S. Office of Personnel Management determination of disability under CSRS, a Veteran’s Administration record of disability‑related discharge, as the case may be, or such other documentation issued by the applicable governmental agency that the Company deems acceptable and demonstrates an award of the disability benefits. As the following disabilities generally do not entitle a worker to Social Security or related disability benefits, they will not qualify as a “disability” for purposes of the Company’s share repurchase plan: (a) disabilities occurring after the legal retirement age; (b) temporary disabilities; and (c) disabilities that do not render a worker incapable of performing substantial gainful activity. However, where a stockholder requests the repurchase of shares due to a disability and the stockholder does not have a disability that meets the definition described above, but is subject to similar circumstances, the Company’s board of directors may repurchase the stockholder’s shares, in its sole discretion. | |||
-3 | The purchase price per share for shares repurchased upon the death or disability of a stockholder will be equal to the average issue price per share for all of the stockholder’s shares. | |||
Schedule of share repurchase plan after estimated value per share of common stock is published | ' | |||
Following the date the Company publishes an estimated value per share of its common stock, the purchase price for shares repurchased under the Company’s share repurchase plan will be as follows: | ||||
Repurchase Price | ||||
Share Purchase Anniversary | on Repurchase Date(1) | |||
Less than 1 year | No Repurchase Allowed | |||
1 year | 92.5% of Estimated Value per Share(4) | |||
2 years | 95.0% of Estimated Value per Share(4) | |||
3 years | 97.5% of Estimated Value per Share(4) | |||
4 years | 100.0% of Estimated Value per Share(4) | |||
In the event of a stockholder’s death or disability(2) | Average Issue Price for Shares(3) | |||
-1 | As adjusted for any stock dividends, combinations, splits, recapitalizations or any similar transaction with respect to the shares of common stock. Repurchase price includes the full amount paid for each share, including all sales commissions and dealer manager fees. | |||
-2 | The required one year holding period to be eligible to redeem shares under the Company’s share repurchase plan does not apply in the event of death or disability of a stockholder. For purposes of the Company’s share repurchase plan a “disability” means (a) the stockholder has received a determination of disability based upon a physical or mental condition or impairment arising after the date the stockholder acquired the shares to be repurchased, and (b) the determination of such disability was made by the governmental agency responsible for reviewing and awarding the disability retirement benefits that the stockholder could be eligible to receive, which is referred to as the “applicable governmental agency.” The applicable governmental agencies are limited to the following: (i) the Social Security Administration; (ii) the U.S. Office of Personnel Management with respect to disability benefits under the Civil Service Retirement System (“CSRS”); or (iii) the Veteran’s Administration; and in each case, the agency charged with administering disability benefits at that time on behalf of one of the applicable governmental agencies. Disability determinations by governmental agencies other than those listed above, including, but not limited to, worker’s compensation insurance or the administration or enforcement of the Rehabilitation Act of 1973, as amended, or the Americans with Disabilities Act will not entitle a stockholder to the terms available for the repurchase of shares. Repurchase requests following an award by the applicable governmental agency of disability, such as the Social Security Administration Notice of Award, a U.S. Office of Personnel Management determination of disability under CSRS, a Veteran’s Administration record of disability‑related discharge, as the case may be, or such other documentation issued by the applicable governmental agency that the Company deems acceptable and demonstrates an award of the disability benefits. As the following disabilities generally do not entitle a worker to Social Security or related disability benefits, they will not qualify as a “disability” for purposes of the Company’s share repurchase plan: (a) disabilities occurring after the legal retirement age; (b) temporary disabilities; and (c) disabilities that do not render a worker incapable of performing substantial gainful activity. However, where a stockholder requests the repurchase of shares due to a disability and the stockholder does not have a disability that meets the definition described above, but is subject to similar circumstances, the Company’s board of directors may repurchase the stockholder’s shares, in its sole discretion. | |||
-3 | The purchase price per share for shares repurchased upon the death or disability of a stockholder will be equal to the average issue price per share for all of the stockholder’s shares. | |||
-4 | For purposes of the share repurchase plan, the “Estimated Value per Share” will equal the purchase price until the day the Company publicly discloses, subsequent to completion of the Company’s offering stage, a new Estimated Value per Share. The Company’s board of directors will determine an estimated value per share of the Company’s common stock based on valuations by independent third-party appraisers and qualified valuation experts no later than 18 months following the end of the Company’s offering stage, or such earlier time as required by any regulatory requirement regarding the timing of a valuation. | |||
Related_Party_Arrangements_Tab
Related Party Arrangements (Tables) | 3 Months Ended | ||||||||||||
Mar. 31, 2014 | |||||||||||||
Related Party Arrangements | ' | ||||||||||||
Schedule of amounts attributable to the Advisor and its affiliates | ' | ||||||||||||
Amounts attributable to the Advisor and its affiliates incurred and paid for the three months ended March 31, 2014 are as follows: | |||||||||||||
For the Three Months Ended March 31, 2014 | Payable as of | ||||||||||||
Incurred | Paid | 31-Mar-14 | 31-Dec-13 | ||||||||||
Consolidated Statement of Operations: | |||||||||||||
Expensed | |||||||||||||
Organizational cost reimbursement(1) | $ | 42,882 | $ | — | $ | 42,882 | $ | — | |||||
Acquisition expenses(2) | 3,409 | — | 3,409 | — | |||||||||
Other operating expenses(1) | 129,613 | — | 141,486 | 11,873 | |||||||||
Consolidated Balance Sheets: | |||||||||||||
Additional paid-in capital | |||||||||||||
Other offering costs reimbursement | 437,770 | — | 437,770 | — | |||||||||
Selling commissions | 196,302 | 196,302 | — | — | |||||||||
Dealer manager fees | 55,673 | 55,673 | — | — | |||||||||
$ | 865,649 | $ | 251,975 | $ | 625,547 | $ | 11,873 | ||||||
-1 | Included in general and administrative expenses in the accompanying consolidated statements of operations for the three months ended March 31, 2014 and due to affiliates, in the accompanying balance sheet as of March 31, 2014. | ||||||||||||
-2 | Included in acquisition costs in the accompanying consolidated statements of operations for the three months ended March 31, 2014 and due to affiliates, net in the accompanying balance sheet as of March 31, 2014. | ||||||||||||
Schedule of reimbursable organization and offering costs | ' | ||||||||||||
The amount of reimbursable organization and offering (“O&O”) costs that have been paid or recognized from inception through March 31, 2014 is as follows: | |||||||||||||
Amount | Percentage of Gross Offering Proceeds | ||||||||||||
Gross offering proceeds: | $ | 4,884,180 | 100.00 | % | |||||||||
O&O limitation | 15 | % | |||||||||||
Total O&O costs available to be paid/reimbursed | $ | 732,627 | 15.00 | % | |||||||||
O&O expenses recorded | |||||||||||||
Sales commissions paid | $ | 196,302 | 4.02 | % | |||||||||
Broker dealer fees paid | 55,673 | 1.14 | % | ||||||||||
Offering cost reimbursements accrual | 437,770 | 8.96 | % | ||||||||||
Organizational costs reimbursements | 42,882 | 0.88 | % | ||||||||||
Total O&O cost reimbursements recorded by the Company | $ | 732,627 | 15.00 | % | |||||||||
Organization_and_Business_Deta
Organization and Business (Details) (USD $) | 7 Months Ended | 0 Months Ended | |
Mar. 31, 2014 | Sep. 03, 2013 | Aug. 23, 2013 | |
Common Stock | Convertible Stock | ||
Sponsor | Advisor | ||
Initial capitalization | ' | ' | ' |
Issuance of common stock (in shares) | ' | 13,500 | 1,000 |
Share Price | ' | $15 | ' |
Issuance of common stock | $4,884,180 | $202,500 | $1,000 |
Organization_and_Business_Publ
Organization and Business - Public Offering Information (Details) (USD $) | 3 Months Ended | 4 Months Ended | 7 Months Ended | 0 Months Ended | |||
Mar. 31, 2014 | Mar. 31, 2014 | 9-May-14 | Mar. 31, 2014 | Dec. 30, 2013 | Dec. 30, 2013 | Mar. 31, 2014 | |
IPO | Common Stock | Common Stock | Common Stock | Common Stock | Common Stock | ||
IPO | IPO | Primary Offering | Distribution Reinvestment Plan | Distribution Reinvestment Plan | |||
Public Offering Information | ' | ' | ' | ' | ' | ' | ' |
Maximum number of shares authorized for sale under registration statement | ' | ' | ' | ' | 66,666,667 | 7,017,544 | ' |
Registration statement, price per share | ' | ' | ' | ' | $15 | $14.25 | $14.25 |
Escrow account release threshold, minimum offering amount | ' | $2,000,000 | ' | ' | ' | ' | ' |
Issuance of common stock (in shares) | ' | ' | 548,969 | 343,110 | ' | ' | ' |
Initial public offering, gross proceeds | $4,789,680 | ' | $7,954,632 | ' | ' | ' | ' |
Offering period | ' | '1 year | ' | ' | ' | ' | ' |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies - Income Tax and Segments (Details) | 3 Months Ended |
Mar. 31, 2014 | |
segment | |
Income Taxes | ' |
REIT qualifying ordinary taxable income distribution percentage, minimum | 90.00% |
Segment Reporting | ' |
Number of reportable segments | 1 |
Stockholders_Equity_Class_of_S
Stockholders' Equity - Class of Stock Information (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Aug. 31, 2013 |
Common Stock | Common Stock | Convertible Stock | Convertible Stock | Convertible Stock | Convertible Stock | |||
item | ||||||||
Information by class of stock | ' | ' | ' | ' | ' | ' | ' | ' |
Common and preferred shares authorized | 1,100,000,000 | ' | ' | ' | ' | ' | ' | ' |
Common stock, shares authorized | ' | ' | 999,999,000 | 999,999,000 | 1,000 | 1,000 | 1,000 | 1,000 |
Common stock, par value (in dollars per share) | ' | ' | $0.01 | $0.01 | $0.01 | $0.01 | ' | ' |
Preferred stock, shares authorized | 100,000,000 | 100,000,000 | ' | ' | ' | ' | ' | ' |
Preferred stock, par value (in dollars per share) | $0.01 | $0.01 | ' | ' | ' | ' | ' | ' |
Number of votes per share | ' | ' | 1 | ' | ' | ' | ' | ' |
Stockholders_Equity_ShareBased
Stockholders' Equity - Share-Based Compensation (Details) (USD $) | 3 Months Ended | 7 Months Ended | 0 Months Ended | 3 Months Ended | 0 Months Ended | 3 Months Ended | 7 Months Ended | 4 Months Ended | 7 Months Ended | 0 Months Ended | |||||
Mar. 31, 2014 | Mar. 31, 2014 | Feb. 27, 2014 | Mar. 31, 2014 | Feb. 27, 2014 | Feb. 27, 2014 | Feb. 27, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | 9-May-14 | Mar. 31, 2014 | Feb. 27, 2014 | Sep. 03, 2013 | Sep. 03, 2013 | |
Independent Directors Compensation Plan | Independent Directors Compensation Plan | Independent Directors Compensation Plan | Independent Directors Compensation Plan | Independent Directors Compensation Plan | IPO | IPO | IPO | IPO | IPO | IPO | Sponsor | Sponsor | |||
Common Stock | Common Stock | Common Stock | Common Stock | Common Stock | Common Stock | Common Stock | Independent Directors Compensation Plan | Common Stock | Private Placement | ||||||
Restricted Stock | Restricted Stock | Restricted Stock | Restricted Stock | Restricted Stock | Common Stock | Common Stock | |||||||||
director | Director One | Director Two | Director Three | Restricted Stock | |||||||||||
installment | |||||||||||||||
Equity issuance | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Issuance of common stock (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 548,969 | 343,110 | ' | 13,500 | 13,500 |
Issuance of common stock | ' | $4,884,180 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $202,500 | $202,500 |
Proceeds from issuance of stock, net of offering costs | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4,194,435 | ' | ' | ' |
Offering costs | 251,975 | ' | ' | ' | ' | ' | ' | ' | 689,745 | ' | ' | ' | ' | ' | ' |
Receivable from transfer agent | 94,500 | 94,500 | ' | ' | ' | ' | ' | 94,500 | 94,500 | 0 | ' | ' | ' | ' | ' |
Shares granted | ' | ' | ' | ' | 3,333 | 3,333 | 3,333 | ' | ' | ' | ' | ' | ' | ' | ' |
Number of directors | ' | ' | 3 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares granted, grant date fair value (in dollars per share) | ' | ' | $15 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Public offering proceeds, threshold for reimbursement | ' | ' | ' | ' | ' | ' | ' | 2,000,000 | ' | ' | ' | ' | 2,000,000 | ' | ' |
Number of equal annual vesting installments | ' | ' | 4 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Share-based compensation | $37,702 | ' | ' | $37,702 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Weighted-average remaining term | ' | ' | ' | '2 years 11 months 1 day | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stockholders_Equity_Convertibl
Stockholders' Equity - Convertible Stock (Details) (USD $) | 7 Months Ended | 0 Months Ended | 3 Months Ended | 0 Months Ended |
Mar. 31, 2014 | Aug. 23, 2013 | Mar. 31, 2014 | Sep. 03, 2013 | |
Advisor | Advisor | Advisor | ||
Convertible Stock | Convertible Stock | Convertible Stock | ||
Private Placement | ||||
Information by class of stock | ' | ' | ' | ' |
Issuance of common stock (in shares) | ' | 1,000 | ' | 1,000 |
Issuance of common stock | $4,884,180 | $1,000 | ' | $1,000 |
Aggregate percentage of cumulative, non-compounded, annual return on the original issue price added to total distributions qualifying for conversion of stock | ' | ' | 6.00% | ' |
Stock redemption price | ' | ' | $1 | ' |
Convertible stock, conversion ratio | ' | ' | 0.10% | ' |
Convertible stock, percentage applied to the excess of "enterprise value", including distributions to date | ' | ' | 15.00% | ' |
Stockholders_Equity_Preferred_
Stockholders' Equity - Preferred Stock (Details) | 3 Months Ended | |
Mar. 31, 2014 | Dec. 31, 2013 | |
item | ||
Stockholders' Equity | ' | ' |
Preferred stock, number of classes or series the Board of Directors is authorized to issue | 1 | ' |
Preferred stock, number of classes or series the Board of Directors is authorized to classify or reclassify | 1 | ' |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Stockholders_Equity_Distributi
Stockholders' Equity - Distribution Reinvestment Plan (Details) (Distribution Reinvestment Plan, USD $) | 3 Months Ended | ||
Mar. 31, 2014 | Mar. 31, 2014 | Dec. 30, 2013 | |
Common Stock | Common Stock | ||
Information by class of stock | ' | ' | ' |
Price per share | ' | $14.25 | $14.25 |
Sales commissions or dealer manager fees payable on shares sold under the plan | $0 | ' | ' |
Notice period for termination of plan | '10 days | ' | ' |
Stockholders_Equity_Share_Repu
Stockholders' Equity - Share Repurchase Plan (Details) (USD $) | 3 Months Ended |
Mar. 31, 2014 | |
REIT Taxable Income Qualification Information | ' |
Minimum Percentage of Ordinary Taxable Income Distribution Requirement | 90.00% |
Share Repurchase Plan | ' |
Share Repurchase Plan | ' |
Number of Company assets sold that constitute a return of capital as a result of such sale. | 1 |
Written request period for repurchase of shares | '15 days |
Payment period following the Repurchase Date for honoring repurchase requests | '30 days |
Minimum number of days prior to repurchase date a repurchase request may be withdrawn | '3 days |
Notice period for amendment, suspension, or termination of share repurchase plan. | '30 days |
Common Stock | Share Repurchase Plan | ' |
Share Repurchase Plan | ' |
Share repurchase plan, maximum period of time allowed from date of death or disability of shareholder to request holding period exemption for shares to be repurchased | '2 years |
Share repurchase plan, maximum period of time allowed to complete valuation of entity's common stock | '18 months |
Holding period | '1 year |
Maximum percentage of weighted average shares outstanding in prior calendar period that may be repurchased in current calendar period | 5.00% |
Fee charged to repurchase shares | 0 |
Common Stock | Share Repurchase Plan Pre Published Valuation | ' |
Share Repurchase Plan | ' |
Less than 1 year | 0.00% |
1 year | 92.50% |
2 years | 95.00% |
3 years | 97.50% |
4 years | 100.00% |
Common Stock | Share Repurchase Plan Post Published Valuation | ' |
Share Repurchase Plan | ' |
Less than 1 year | 0.00% |
1 year | 92.50% |
2 years | 95.00% |
3 years | 97.50% |
4 years | 100.00% |
Related_Party_Arrangements_Amo
Related Party Arrangements - Amounts Incurred, Paid, and Payable (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Mar. 31, 2014 |
Additional Paid-in Capital | Organizational Costs Reimbursements | Other Offering Costs Reimbursement | Sales Commissions Paid | Dealer Management Fees | Advisor | Advisor | Advisor | Advisor | Advisor | Advisor | Advisor | Advisor | Advisor | Advisor | Advisor | Advisor | Advisor | Advisor | Advisor | Advisor | Advisor | Advisor | Advisor | Advisor | Advisor | Advisor | |||
Organizational Costs Reimbursements | Acquisition Expenses | Other Operating Expenses | Other Offering Costs Reimbursement | Other Offering Costs Reimbursement | Other Offering Costs Reimbursement | Sales Commissions Paid | Dealer Management Fees | Due To Affiliates | Due To Affiliates | Due To Affiliates | Due To Affiliates | Due To Affiliates | Due To Affiliates | Due To Affiliates | Due To Affiliates | Due To Affiliates | Due To Affiliates | Due To Affiliates | Due To Affiliates | General And Administrative Expense | |||||||||
Additional Paid-in Capital | Additional Paid-in Capital | Additional Paid-in Capital | Organizational Costs Reimbursements | Organizational Costs Reimbursements | Acquisition Expenses | Acquisition Expenses | Other Operating Expenses | Other Operating Expenses | Other Offering Costs Reimbursement | Other Offering Costs Reimbursement | Sales Commissions Paid | Dealer Management Fees | Other Operating Expenses | ||||||||||||||||
Additional Paid-in Capital | Additional Paid-in Capital | Additional Paid-in Capital | Additional Paid-in Capital | ||||||||||||||||||||||||||
Amounts attributable to the Advisor and its affiliates | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Incurred for the Period | ' | ' | $437,770 | $42,882 | $437,770 | ' | ' | $865,649 | $42,882 | $3,409 | ' | $1,523,489 | $2,744,882 | $437,770 | $196,302 | $55,673 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $129,613 |
Paid During the Period | ' | ' | ' | ' | ' | 196,302 | 55,673 | 251,975 | ' | ' | ' | ' | ' | ' | 196,302 | 55,673 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Payable as of end of period | $625,547 | $11,873 | ' | ' | ' | ' | ' | ' | $42,882 | ' | ' | ' | ' | ' | ' | ' | $625,547 | $11,873 | $42,882 | $0 | $3,409 | $0 | $141,486 | $11,873 | $437,770 | $0 | $0 | $0 | ' |
Related_Party_Arrangements_Org
Related Party Arrangements - Organization and Offering Costs (Details) (USD $) | 7 Months Ended | 7 Months Ended | 3 Months Ended | 7 Months Ended | 3 Months Ended | 3 Months Ended | |||||||||||
Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | |
Organization And Offering Costs | Sales Commissions Paid | Dealer Management Fees | Other Offering Costs Reimbursement | Organizational Costs Reimbursements | Advisor | Advisor | Advisor | Advisor | Advisor | Crossroads Capital Advisors Llc | Additional Paid-in Capital | Additional Paid-in Capital | Additional Paid-in Capital | Additional Paid-in Capital | |||
Organization And Offering Costs | Other Offering Costs Reimbursement | Other Offering Costs Reimbursement | Organizational Costs Reimbursements | Advisor | Advisor | Advisor | Advisor | ||||||||||
Sales Commissions Paid | Dealer Management Fees | Other Offering Costs Reimbursement | |||||||||||||||
Organization and Offering Costs | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Organization and offering costs limitation, expressed as a percentage of offering proceeds | 15.00% | ' | ' | ' | ' | ' | ' | ' | 15.00% | ' | ' | ' | ' | ' | ' | ' | ' |
Underwriting compensation maximum threshold, percentage of gross proceeds of public offering | ' | ' | ' | ' | ' | ' | ' | ' | 10.00% | ' | ' | ' | ' | ' | ' | ' | ' |
Gross offering proceeds | $4,884,180 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of gross offering proceeds | 100.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Reimbursable organization and offering costs expressed as a percentage of gross offering proceeds | ' | ' | 15.00% | 4.02% | 1.14% | 8.96% | 0.88% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total O & O costs available to be paid/reimbursed | ' | ' | 732,627 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Paid During the Period | ' | ' | ' | 196,302 | 55,673 | ' | ' | 251,975 | ' | ' | ' | ' | ' | ' | 196,302 | 55,673 | ' |
Incurred for the Period | ' | ' | 732,627 | ' | ' | 437,770 | 42,882 | 865,649 | ' | 1,523,489 | 2,744,882 | 42,882 | ' | 437,770 | 196,302 | 55,673 | 437,770 |
Deferred offering costs | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,307,112 | 2,307,112 | ' | ' | ' | ' | ' | ' |
Due to affiliates | $625,547 | $11,873 | ' | ' | ' | ' | ' | ' | ' | ' | ' | $42,882 | $250,002 | ' | ' | ' | ' |
Related_Party_Arrangements_Inv
Related Party Arrangements - Investment Management Fee (Details) (Advisor, USD $) | 3 Months Ended |
Mar. 31, 2014 | |
Investment Management Fee | ' |
Incurred for the Period | $865,649 |
Investment Management Fees | ' |
Investment Management Fee | ' |
Incurred for the Period | 0 |
Investment Management Fees | Aggregate Cost Of Investments In Properties And Real Estate Assets Threshold One | ' |
Investment Management Fee | ' |
Monthly investment management fee, percentage | 0.04% |
Aggregate cost of investments in properties and real estate related assets, threshold | 300,000,000 |
Investment Management Fees | Aggregate Cost Of Investments In Properties And Real Estate Assets Threshold Two | ' |
Investment Management Fee | ' |
Monthly investment management fee, percentage | 0.08% |
Aggregate cost of investments in properties and real estate related assets, threshold | $300,000,000 |
Related_Party_Arrangements_Acq
Related Party Arrangements - Acquisition Fees and Expenses (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 |
Advisor | Advisor | |||
Acquisition Fees And Expenses | ||||
Acquisition Fees and Expenses | ' | ' | ' | ' |
Acquisition fee, percent | ' | ' | ' | 1.00% |
Acquisition fee payable without board approval as a percent of total contract price | ' | ' | ' | 4.50% |
Incurred for the Period | ' | ' | $865,649 | $3,409 |
Due to affiliates | $625,547 | $11,873 | ' | $3,409 |
Related_Party_Arrangements_Loa
Related Party Arrangements - Loan Coordination Fee (Details) (Advisor, USD $) | 3 Months Ended |
Mar. 31, 2014 | |
Loan Coordination Fee | ' |
Incurred for the Period | $865,649 |
Loan Coordination Fee | ' |
Loan Coordination Fee | ' |
Loan coordination fee, acquisitions (as a percent) | 1.00% |
Loan coordination fee, other than acquisitions (as a percent) | 0.75% |
Incurred for the Period | $0 |
Related_Party_Arrangements_Pro
Related Party Arrangements - Property Management Fees and Expenses (Details) (Steadfast Management Company, Property Management Fees And Expenses, USD $) | 7 Months Ended |
Mar. 31, 2014 | |
Steadfast Management Company | Property Management Fees And Expenses | ' |
Property Management Fees and Expenses | ' |
Property management fees and expenses | $0 |
Related_Party_Arrangements_Oth
Related Party Arrangements - Other Operating Expense Reimbursements (Details) (USD $) | 3 Months Ended |
Mar. 31, 2014 | |
Operating Expenses | ' |
General and administrative expenses | $275,523 |
Advisor | Other Operating Expenses | ' |
Operating Expenses | ' |
Operating Expense Limitation, Number of Rolling Quarters | 4 |
Operating expenses limitation as a percentage of average invested assets | 2.00% |
Operating expenses limitation as a percentage of net income | 25.00% |
Average invested assets, calculation period | '12 months |
Advisor | Other Operating Expenses | General And Administrative Expense | ' |
Operating Expenses | ' |
Other operating expenses | 129,613 |
Advisor overhead expenses | $79,367 |
Related_Party_Arrangements_Dis
Related Party Arrangements - Disposition Fee (Details) (Advisor, Other Operating Expenses, USD $) | 3 Months Ended |
Mar. 31, 2014 | |
Advisor | Other Operating Expenses | ' |
Disposition Fee | ' |
Property sale disposition fee, percent of total broker commissions | 50.00% |
Property sale disposition fee, maximum percentage of total sale price | 1.00% |
Disposition fees paid | $0 |
Related_Party_Arrangements_Sel
Related Party Arrangements - Selling Commissions and Dealer Manager Fees (Details) (Dealer Manager, USD $) | 3 Months Ended |
Mar. 31, 2014 | |
Sales Commissions And Dealer Manager Fees | Distribution Reinvestment Plan | ' |
Selling Commissions and Dealer Manager Fees | ' |
Sales commissions or dealer manager fees paid | $0 |
Sales Commissions | ' |
Selling Commissions and Dealer Manager Fees | ' |
Sales commissions or dealer manager fees paid | 196,302 |
Sales Commissions | Primary Offering | ' |
Selling Commissions and Dealer Manager Fees | ' |
Sales commission, percentage of gross offering proceeds | 7.00% |
Dealer Management Fees | ' |
Selling Commissions and Dealer Manager Fees | ' |
Sales commissions or dealer manager fees paid | $55,673 |
Dealer Management Fees | Primary Offering | ' |
Selling Commissions and Dealer Manager Fees | ' |
Dealer manager fees, percentage of gross offering proceeds | 3.00% |
Dealer-Manager reallowance of sales commissions earned, percent | 100.00% |
Incentive_Award_Plan_and_Indep1
Incentive Award Plan and Independent Director Compensation (Details) (USD $) | 3 Months Ended | 2 Months Ended | 3 Months Ended | 2 Months Ended | 4 Months Ended | 0 Months Ended | ||||||
Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Feb. 27, 2014 | Mar. 31, 2014 | Feb. 27, 2014 | 9-May-14 | Feb. 27, 2014 | Feb. 27, 2014 | Feb. 27, 2014 | Feb. 27, 2014 | Feb. 27, 2014 | |
IPO | Director | Independent Directors Compensation Plan | Independent Directors Compensation Plan | Common Stock | Common Stock | Common Stock | Common Stock | Common Stock | Common Stock | Common Stock | ||
Director | Director | Minimum | IPO | Independent Directors Compensation Plan | Independent Directors Compensation Plan | Independent Directors Compensation Plan | Independent Directors Compensation Plan | Independent Directors Compensation Plan | ||||
Restricted Stock | Restricted Stock | Restricted Stock | Restricted Stock | Director One | Director Two | Director Three | ||||||
IPO | IPO | installment | IPO | Restricted Stock | Restricted Stock | Restricted Stock | ||||||
installment | director | |||||||||||
Incentive Award Plan and Independent Director Compensation | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares entitled to be received under plan | ' | ' | ' | ' | 3,333 | ' | ' | ' | ' | ' | ' | ' |
Public offering proceeds, threshold for reimbursement | ' | $2,000,000 | ' | $2,000,000 | ' | ' | ' | ' | $2,000,000 | ' | ' | ' |
Proceeds from issuance of common stock | 4,789,680 | ' | ' | ' | ' | 2,000,000 | 7,954,632 | ' | ' | ' | ' | ' |
Number of directors | ' | ' | ' | ' | ' | ' | ' | 3 | ' | ' | ' | ' |
Shares granted | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,333 | 3,333 | 3,333 |
Shares entitled to be received upon re-election to Board of Directors | ' | ' | ' | ' | 1,666 | ' | ' | ' | ' | ' | ' | ' |
Percentage of shares vesting upon issuance | ' | ' | ' | ' | 25.00% | ' | ' | ' | ' | ' | ' | ' |
Number of equal annual vesting installments | ' | ' | ' | ' | 3 | ' | ' | 4 | ' | ' | ' | ' |
Annual retainer | ' | ' | 55,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Annual retainer, additional due audit committee chairperson | ' | ' | 10,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Board Meeting attendance fee | ' | ' | 2,500 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Committee Meeting attendance fee | ' | ' | 1,500 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Teleconference attendance fee | ' | ' | $1,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Subsequent_Events_Offering_Sta
Subsequent Events - Offering Status (Details) (USD $) | 3 Months Ended | 4 Months Ended | 7 Months Ended | 4 Months Ended | ||
Mar. 31, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | 9-May-14 | Mar. 31, 2014 | 9-May-14 | |
Common Stock | Common Stock | IPO | IPO | IPO | ||
Subsequent Event | Subsequent Event | Common Stock | Common Stock | Common Stock | ||
Pre-Acquisition Date | Post-Acquisition Date | Subsequent Event | ||||
Offering status | ' | ' | ' | ' | ' | ' |
Issuance of common stock (in shares) | ' | ' | ' | 548,969 | 343,110 | 548,969 |
Initial public offering, gross proceeds | $4,789,680 | ' | ' | $7,954,632 | ' | $7,954,632 |
Distributions Declared | ' | ' | ' | ' | ' | ' |
Common share, distribution rate per share per day, declared (in dollars per share) | ' | $0.00 | $0.00 | ' | ' | ' |
Distribution period | ' | '365 days | '365 days | ' | ' | ' |
Common stock, annualized distribution rate, percentage | ' | 6.00% | 6.00% | ' | ' | ' |
Price per share | ' | $15 | $15 | ' | ' | ' |