Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2017 | May 01, 2017 | |
Document And Entity Information [Line Items] | ||
Entity Registrant Name | Inland Residential Properties Trust, Inc. | |
Entity Central Index Key | 1,595,627 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2,017 | |
Class A Common Stock [Member] | ||
Document And Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 1,272,194 | |
Class T Common Stock [Member] | ||
Document And Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 361,849 | |
Class T-3 Common Stock [Member] | ||
Document And Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 10,784 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 |
Real estate: | ||
Land | $ 6,301,838 | $ 6,301,838 |
Building and other improvements | 38,891,395 | 38,889,177 |
Total real estate | 45,193,233 | 45,191,015 |
Less: accumulated depreciation | (2,189,758) | (1,822,971) |
Net real estate | 43,003,475 | 43,368,044 |
Cash and cash equivalents | 12,784,076 | 9,038,642 |
Accounts and rent receivable | 36,291 | 17,961 |
Other assets | 376,435 | 458,316 |
Total assets | 56,200,277 | 52,882,963 |
Liabilities: | ||
Mortgages payable, net | 27,447,557 | 27,447,459 |
Accounts payable and accrued expenses | 379,517 | 232,736 |
Distributions payable | 157,510 | 137,207 |
Due to related parties | 5,893,494 | 5,684,753 |
Other liabilities | 51,253 | 67,287 |
Total liabilities | 33,929,331 | 33,569,442 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Preferred stock, $.001 par value, 50,000,000 shares authorized, none outstanding | ||
Additional paid in capital (net of offering costs of $9,058,854 and $8,268,768 as of March 31, 2017 and December 31, 2016, respectively) | 29,387,550 | 25,539,970 |
Distributions and accumulated losses | (7,118,177) | (6,227,832) |
Total stockholders’ equity | 22,270,946 | 19,313,521 |
Total liabilities and stockholders’ equity | 56,200,277 | 52,882,963 |
Class A Common Stock [Member] | ||
Stockholders’ equity: | ||
Common stock | 1,232 | 1,099 |
Class T Common Stock [Member] | ||
Stockholders’ equity: | ||
Common stock | 336 | $ 284 |
Class T-3 Common Stock [Member] | ||
Stockholders’ equity: | ||
Common stock | $ 5 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 50,000,000 | 50,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Offering costs included as reduction to additional paid in capital | $ 9,058,854 | $ 8,268,768 |
Class A Common Stock [Member] | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 320,000,000 | 320,000,000 |
Common stock, shares issued | 1,232,058 | 1,098,858 |
Common stock, shares outstanding | 1,232,058 | 1,098,858 |
Class T Common Stock [Member] | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 40,000,000 | 40,000,000 |
Common stock, shares issued | 336,235 | 284,283 |
Common stock, shares outstanding | 336,235 | 284,283 |
Class T-3 Common Stock [Member] | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 40,000,000 | 40,000,000 |
Common stock, shares issued | 4,971 | 0 |
Common stock, shares outstanding | 4,971 | 0 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Income: | ||
Rental income | $ 903,512 | $ 843,236 |
Other property income | 116,243 | 88,011 |
Total income | 1,019,755 | 931,247 |
Expenses: | ||
Property operating expenses | 263,910 | 287,733 |
Real estate tax expense | 89,943 | 87,025 |
General and administrative expenses | 303,854 | 280,511 |
Business management fee | 68,692 | 68,591 |
Acquisition related costs | 41,213 | |
Depreciation and amortization | 369,396 | 622,359 |
Total expenses | 1,137,008 | 1,346,219 |
Operating loss | (117,253) | (414,972) |
Interest expense | (252,251) | (427,027) |
Interest and other income | 10,398 | |
Net loss | $ (359,106) | $ (841,999) |
Net loss per common share, basic and diluted | $ (0.24) | $ (1.98) |
Weighted average number of common shares outstanding, basic and diluted | 1,492,485 | 425,942 |
CONSOLIDATED STATEMENT OF EQUIT
CONSOLIDATED STATEMENT OF EQUITY - 3 months ended Mar. 31, 2017 - USD ($) | Total | Common Stock [Member]Class A Common Stock [Member] | Common Stock [Member]Class T Common Stock [Member] | Common Stock [Member]Class T-3 Common Stock [Member] | Additional Paid In Capital [Member] | Distributions and Accumulated Losses [Member] |
Balance at Dec. 31, 2016 | $ 19,313,521 | $ 1,099 | $ 284 | $ 25,539,970 | $ (6,227,832) | |
Balance, shares at Dec. 31, 2016 | 1,098,858 | 284,283 | ||||
Proceeds from the offering | 4,302,638 | $ 123 | $ 49 | $ 5 | 4,302,461 | |
Proceeds from the offering, shares | 122,948 | 49,209 | 4,971 | |||
Offering costs | (790,086) | (790,086) | ||||
Discount on shares to related parties | 23,556 | 23,556 | ||||
Issuance of shares from distribution reinvestment plan | 219,275 | $ 7 | $ 2 | 219,266 | ||
Issuance of shares from distribution reinvestment plan, shares | 7,348 | 1,961 | ||||
Distributions declared | $ (441,213) | (441,213) | ||||
Stock dividends issued | $ 3 | $ 1 | 90,022 | (90,026) | ||
Stock dividends issued, shares | 3,649 | 2,867 | 782 | |||
Net loss | $ (359,106) | (359,106) | ||||
Equity based compensation | 2,361 | 2,361 | ||||
Equity based compensation, shares | 37 | |||||
Balance at Mar. 31, 2017 | $ 22,270,946 | $ 1,232 | $ 336 | $ 5 | $ 29,387,550 | $ (7,118,177) |
Balance, shares at Mar. 31, 2017 | 1,232,058 | 336,235 | 4,971 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Cash flows from operating activities: | ||
Net loss | $ (359,106) | $ (841,999) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 369,396 | 622,359 |
Amortization of debt issuance costs | 98 | 34,233 |
Amortization of equity based compensation | 2,361 | 2,760 |
Discount on shares issued to related parties | 23,556 | 14,530 |
Changes in assets and liabilities: | ||
Accounts payable and accrued expenses | 14,726 | (41,009) |
Accounts and rents receivable | (18,330) | 10,339 |
Due to related parties | 131,053 | 129,619 |
Other liabilities | (16,034) | (24,385) |
Other assets | 81,881 | 107,524 |
Net cash flows provided by operating activities | 229,601 | 13,971 |
Cash flows from investing activities: | ||
Capital expenditures | (4,828) | |
Net cash flows used in investing activities | (4,828) | |
Cash flows from financing activities: | ||
Payment of mortgage payable | (10,363,817) | |
Proceeds from offering | 4,302,638 | 6,341,248 |
Payment of debt issuance costs | (329) | |
Distributions paid | (201,635) | (70,304) |
Payment of offering costs | (580,342) | (845,895) |
Net cash flows provided (used in) by financing activities | 3,520,661 | (4,939,097) |
Net increase (decrease) in cash and cash equivalents | 3,745,434 | (4,925,126) |
Cash and cash equivalents, at beginning of the period | 9,038,642 | 5,281,172 |
Cash and cash equivalents, at end of period | 12,784,076 | 356,046 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 249,796 | 398,732 |
Distributions payable | 157,510 | 54,282 |
Accrued offering costs payable | 751,467 | 309,304 |
Stock dividends issued | 90,026 | 23,600 |
Common stock issued through distribution reinvestment plan | $ 219,275 | $ 30,427 |
ORGANIZATION
ORGANIZATION | 3 Months Ended |
Mar. 31, 2017 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
ORGANIZATION | NOTE 1 - ORGANIZATION The Company was formed on December 19, 2013 to acquire and manage a portfolio of multi-family properties located primarily in the top 100 United States metropolitan statistical areas, which generally contain populations greater than 500,000 people. The Company entered into a business management agreement (as amended, the “Business Management Agreement”) with Inland Residential Business Manager & Advisor, Inc. (the “Business Manager”), an indirect wholly owned subsidiary of Inland Real Estate Investment Corporation (the “Sponsor”), to be the Business Manager to the Company. Substantially all of the Company’s business is conducted through Inland Residential Operating Partnership, L.P. (the “operating partnership”), of which the Company is the sole general partner. The Company elected to be taxed as a real estate investment trust for U.S. federal income tax purposes (“REIT”) under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended, beginning with the tax year ended December 31, 2015. At March 31, 2017, the Company owned one 194,732 square foot 206 unit multi-family community. During the three months ended March 31, 2017, the property’s daily average occupancy was 96.1% and at March 31, 2017, 200, or 97.1% residential units were leased. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2017 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Disclosures discussing all significant accounting policies are set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016, as filed with the Securities and Exchange Commission on March 17, 2017, under the heading “Note 2 - Summary of Significant Accounting Policies.” There has been no change to the Company’s significant accounting policies during the three months ended March 31, 2017. General The accompanying consolidated financial statements have been prepared in accordance with U.S. GAAP and require management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Recent Accounting Pronouncements In November 2016, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers |
EQUITY
EQUITY | 3 Months Ended |
Mar. 31, 2017 | |
Equity [Abstract] | |
EQUITY | NOTE 3 – EQUITY The Company is authorized to sell up to $1,000,000,000 of shares of common stock consisting of Class A common stock, $.001 par value per share (“Class A Shares”), at a price of $25.00 per share, Class T common stock, $.001 par value per share (“Class T Shares”), at a price of $23.95 per share, and Class T-3 common stock, $.001 par value per share (“Class T-3 Shares” and, together with the Class A Shares and the Class T Shares, the “Shares”), at a price of $24.14 per share, in any combination, in an initial “reasonable best efforts” offering (the “Offering”). The Company is also authorized to issue up to $190,000,000 of Class A, Class T and Class T-3 Shares at a per share price of $23.75, $22.81 and $22.81, respectively, pursuant to the Company’s distribution reinvestment plan (as amended, the “DRP”). The Company commenced its Offering of Class A Shares and Class T Shares on February 17, 2015 and, effective February 2, 2017, the Company reallocated certain of the remaining shares offered in the Offering to offer Class T-3 Shares. Excluding DRP proceeds, the Company generated gross proceeds of $3,004,088, $1,178,550 and $120,000 from sales of its Class A Shares, Class T Shares and Class T-3 Shares, respectively, during the three months ended March 31, 2017. As of March 31, 2017, the Company had 1,232,058, 336,235 and 4,971 Class A Shares, Class T Shares and Class T-3 Shares outstanding, respectively. For the three months ended March 31, 2017, the Company declared cash distributions of $441,213, paid cash distributions of $420,910 and issued stock dividends of 3,649 shares to stockholders. The Company provides the following programs to facilitate additional investment in the Company’s shares and to provide limited liquidity for stockholders. Distribution Reinvestment Plan The Company provides stockholders with the option to purchase additional shares from the Company by automatically reinvesting cash distributions through the DRP, subject to certain share ownership restrictions. For participants in the DRP, cash distributions paid on Class A Shares, Class T Shares and Class T-3 Shares, as applicable, are used to purchase Class A Shares, Class T Shares and Class T-3 Shares, respectively. Such purchases under the DRP are not subject to selling commissions, dealer manager fees, distribution and stockholder servicing fees or reimbursement of issuer costs in connection with shares of common stock issued through the DRP and are made initially at a price of $23.75, $22.81 and $22.81 per Class A Share, Class T Share and Class T-3 Distributions reinvested through the DRP were $219,275 and $30,427 for the three months ended March 31, 2017 and 2016, respectively. Share Repurchase Program Under the share repurchase program (as amended, the “SRP”), the Company is authorized, in its discretion, to purchase shares from stockholders who purchased their shares from the Company or received their shares through a non-cash transfer and who have held their shares for at least one year, if requested. Subject to funds being available, the Company limits the number of shares repurchased during any calendar year to no more than 5% of the number of shares of common stock outstanding on December 31st of the previous calendar year. Funding for the SRP is limited to the proceeds that the Company receives from the DRP during the same period. In the case of repurchases made upon the death of a stockholder or qualifying disability, as defined in the SRP, neither the one year holding period, the limit regarding funds available from the DRP nor the 5% limit applies. The SRP will immediately terminate if the Company’s shares become listed for trading on a national securities exchange. In addition, the Company’s board of directors, in its sole direction, may, at any time, amend, suspend or terminate the SRP. There were no repurchases through the SRP for the three months ended March 31, 2017 and 2016. |
ACQUISITIONS
ACQUISITIONS | 3 Months Ended |
Mar. 31, 2017 | |
Business Combinations [Abstract] | |
ACQUISITIONS | NOTE 4 - ACQUISITIONS 2017 Acquisitions During the three months ended March 31, 2017, the Company did not acquire any real estate properties. |
MORTGAGES PAYABLE
MORTGAGES PAYABLE | 3 Months Ended |
Mar. 31, 2017 | |
Debt Disclosure [Abstract] | |
MORTGAGES PAYABLE | NOTE 5 – MORTGAGES PAYABLE As of March 31, 2017, the Company’s mortgage loan is secured by a first mortgage on the property. Effective September 30, 2016, the Company exercised its option to extend the maturity date for an additional seven year period to September 30, 2023. The loan requires monthly payments of interest only for five years and thereafter, requires monthly payments of principal and interest based upon a 30-year amortization until maturity. The interest rate on the loan was modified which lowered the fixed interest rate from 3.95% to 3.64% per annum effective September 30, 2016. The loan modification released the Sponsor, and substituted the Company as the guarantor. As the substitute guarantor, the Company agreed to guarantee the payment of (a) all real estate taxes on the property which accrue or become due during the term of the loan, (b) all costs and expenses (as defined in the guaranty agreement) and (c) any and all losses, damages, costs or expenses of the lender, which arise in consequence of certain events specified in the guaranty agreement. The Company is in compliance with all financial covenants related to its mortgage payable. As of March 31, 2017 and December 31, 2016, the Company had the following mortgage payable: March 31, 2017 December 31, 2016 Mortgages Principal Amount Interest Rate Principal Amount Interest Rate Mortgage payable $ 27,450,000 3.64 % $ 27,450,000 3.64 % Unamortized debt issuance costs (2,443 ) (2,541 ) Total debt $ 27,447,557 $ 27,447,459 |
EARNINGS (LOSS) PER SHARE
EARNINGS (LOSS) PER SHARE | 3 Months Ended |
Mar. 31, 2017 | |
Earnings Per Share [Abstract] | |
EARNINGS (LOSS) PER SHARE | NOTE 6 – EARNINGS (LOSS) PER SHARE Basic earnings (loss) per share (“EPS”) are computed by dividing net income (loss) by the weighted average number of common shares outstanding for the period (the “common shares”). Diluted EPS is computed by dividing net income (loss) by the common shares plus common share equivalents. The Company excludes antidilutive restricted shares from the calculation of weighted-average shares for diluted EPS. As a result of a net loss for the three months ended March 31, 2017 and 2016, 371 and 207 shares, respectively, were excluded from the computation of diluted EPS, because they would have been antidilutive. |
EQUITY-BASED COMPENSATION
EQUITY-BASED COMPENSATION | 3 Months Ended |
Mar. 31, 2017 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
EQUITY-BASED COMPENSATION | NOTE 7 – EQUITY-BASED COMPENSATION In accordance with the Company’s Employee and Director Incentive Restricted Share Plan (the “RSP”), restricted shares are issued to non-employee directors as compensation. Under the RSP, restricted shares generally vest over a one to three year vesting period from the date of the grant based on the specific terms of the grant. The grant-date value of the restricted shares is amortized over the vesting period representing the requisite service period. At vesting, any restrictions on the shares lapse. The number of shares that may be issued under the RSP are limited to 5% of outstanding shares. Compensation expense associated with the director restricted shares was $2,361 and $2,760 for the three months ended March 31, 2017 and 2016, respectively, and is included in general and administrative expenses in the accompanying consolidated financial statements. As of March 31, 2017, the Company had $7,894 of unrecognized compensation cost related to the unvested restricted share awards. The weighted average remaining period that compensation expense related to unvested restricted shares will be recognized is 1.41 years. A summary of the status of the restricted shares is presented below: Shares Weighted Average Grant Date Fair Value Aggregate Intrinsic Value Outstanding at December 31, 2016 804 $ 18,334 $ 18,334 Granted — — — Vested (37 ) (833 ) (833 ) Forfeited — — — Outstanding at March 31, 2017 767 $ 17,501 $ 17,501 |
SEGMENT REPORTING
SEGMENT REPORTING | 3 Months Ended |
Mar. 31, 2017 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | NOTE 8 – SEGMENT REPORTING The Company has one reportable segment, multi-family real estate, as defined by U.S. GAAP for the three months ended March 31, 2017 and 2016. |
TRANSACTIONS WITH RELATED PARTI
TRANSACTIONS WITH RELATED PARTIES | 3 Months Ended |
Mar. 31, 2017 | |
Related Party Transactions [Abstract] | |
TRANSACTIONS WITH RELATED PARTIES | NOTE 9 – TRANSACTIONS WITH RELATED PARTIES The following table summarizes the Company’s related party transactions for the three months ended March 31, 2017 and 2016. Three Months Ended March 31, Amount Unpaid as of 2017 2016 March 31, 2017 December 31, 2016 General and administrative reimbursements (a) $ 90,307 $ 91,463 $ 109,373 $ 80,386 Affiliate share purchase discounts (b) 23,556 14,530 — — Total general and administrative costs $ 113,863 $ 105,993 $ 109,373 $ 80,386 Acquisition related costs (c) $ 34,858 $ — $ 712,821 $ 686,250 Offering costs (d) $ 398,029 $ 549,807 $ 1,554,433 $ 1,476,746 Business management fee (e) $ 68,692 $ 68,591 $ 434,687 $ 365,995 Mortgage financing fee (f) $ — $ — $ 114,375 $ 114,375 Sponsor non-interest bearing advances (g) $ — $ — $ 2,950,000 $ 2,950,000 Property management fee $ 39,145 $ 37,131 $ — $ — Property operating expenses 93,420 72,706 17,805 11,001 Total property operating expenses (h) $ 132,565 $ 109,837 $ 17,805 $ 11,001 (a) The Business Manager and its affiliates are entitled to reimbursement for certain general and administrative expenses incurred relating to the Company’s administration. Such costs are included in general and administrative expenses in the accompanying consolidated statements of operations. Unpaid amounts are included in due to related parties in the accompanying consolidated balance sheets. (b) The Company established a discount stock purchase policy for affiliates and affiliates of the Business Manager that enable them to purchase shares of common stock at $22.81 per share. The Company sold 10,756 shares and 6,635 shares to affiliates during the three months ended March 31, 2017 and 2016, respectively. (c) Prior to August 8, 2016 under the Business Management Agreement, the Company was required to pay the Business Manager or its affiliates an acquisition fee equal to 1.5% of the “contract purchase price,” as defined in that agreement, of each property and real estate-related asset acquired. The Business Management Agreement was amended to, among other things, delete the obligation to pay acquisition fees, real estate sales commissions and mortgage financing fees payable to the Business Manager by the Company with respect to transactions occurring on or after August 8, 2016 . (d) The Company reimburses the Sponsor and its affiliates for costs and other expenses of the Offering. Offering costs are offset against the stockholders’ equity accounts. Unpaid amounts are included in due to related parties in the accompanying consolidated balance sheets. An affiliate of the Business Manager also receives selling commissions equal to 6.0% of the sale price for each Class A Share sold, 2.0% of the sale price for each Class T Share sold and 3.0% of the sale price for each Class T-3 Share sold and a dealer manager fee equal to 2.75% of the sale price for each Class A and Class T Share sold and 2.5% of the sale price for each Class T-3 Share sold, the majority of which is re-allowed (paid) to third party soliciting dealers. The Company does not pay selling commissions or the dealer manager fee in connection with shares issued through the DRP and pays no or reduced selling commissions and dealer manager fees in connection with certain special sales. Unpaid amounts are included in due to related parties in the accompanying consolidated balance sheets. The Company pays a distribution and stockholder servicing fee equal to 1.0% per annum of the purchase price per share (or, once reported, the amount of the Company’s estimated value per share) for each Class T Share and Class T-3 Share sold in the Offering. The fee is not paid at the time of purchase. The Company accounts for the total fee as a charge to equity at the time each Class T Share or Class T-3 Share is sold in the Offering and records a corresponding payable in due to related parties. The distribution and stockholder servicing fee is payable monthly in arrears as it becomes contractually due. At March 31, 2017 and December 31, 2016, the unpaid fee equal to $384,233 and $335,327, respectively, was recorded in due to related parties in the accompanying consolidated balance sheets. (e) The Company pays the Business Manager an annual business management fee equal to 0.6% of its “average invested assets,” payable quarterly in an amount equal to 0.15% of the Company’s average invested assets as of the last day of the immediately preceding quarter. “Average invested assets” means, for any period, the average of the aggregate book value of the Company’s assets, including all intangibles and goodwill, invested, directly or indirectly, in equity interests in, and loans secured by, properties, as well as amounts invested in securities or consolidated and unconsolidated joint ventures or other partnerships, before reserves for amortization and depreciation or bad debts, impairments or other similar non-cash reserves, computed by taking the average of these values at the end of each month during the relevant calendar quarter. Unpaid amounts are included in due to related parties in the accompanying consolidated balance sheets. (f) Prior to August 8, 2016 under the Business Management Agreement, the Company was required to pay the Business Manager or its affiliates a mortgage financing fee equal to 0.25% of the amount available or borrowed under the financing or the assumed debt if the Business Manager or its affiliates provided services in connection with the origination or refinancing of any debt that the Company obtained and used to finance properties or other assets, or that was assumed, directly or indirectly, in connection with the acquisition of properties or other assets. Pursuant to the amended Business Management Agreement, (g) This amount represents non-interest bearing advances made by the Sponsor which the Company intends to repay. Unpaid amounts are included in due to related parties in the accompanying consolidated balance sheets. (h) The Company pays Inland Residential Real Estate Services, LLC (the “Real Estate Manager”) a monthly property management fee of up to 4% of the gross income from any property managed directly by the Real Estate Manager or its affiliates. The Real Estate Manager may reduce, in its sole discretion, the amount of the management fee payable in connection with a particular property, subject to these limits. The Company also reimburses the Real Estate Manager and its affiliates for property-level expenses that they pay or incur on the Company’s behalf, including the salaries, bonuses, benefits and severance payments for persons performing services, including without limitation acquisition due diligence services, for the Real Estate Manager and its affiliates (excluding the executive officers of the Real Estate Manager and the Company’s executive officers). |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2017 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 10 – SUBSEQUENT EVENTS Cash distributions The Company’s board of directors declared cash distributions payable to stockholders of record of Class A, Class T and Class T-3 Shares each day beginning on the close of business April 1, 2017 through the close of business September 30, 2017. Through that date distributions were declared in a daily amount equal to $0.003424658 per day per Class A Share, $0.002768493 per day per Class T Share and $0.003306849 per day per Class T-3 Share, based on a 365-day period. Distributions were paid monthly in arrears as follows. Distribution Month Month Distribution Paid Gross Amount of Distribution Paid Distribution Reinvested through DRP Shares Issued Net Cash Distribution March 2017 April 2017 $ 157,648 $ 83,025 3,526 $ 74,623 April 2017 May 2017 $ 158,091 $ 84,132 3,574 $ 73,959 Stock dividends The Company’s board of directors declared a monthly stock dividend of 0.000833333 Class A Shares and 0.000833333 Class T Shares per Class A Share and Class T Share owned, respectively, payable to stockholders of record at the close of business on March 31, 2017. The Company’s board of directors also declared a special stock dividend of 0.01 Class A Shares, 0.01 Class T Shares and 0.01 Class T-3 Shares per Class A Share, Class T Share and Class T-3 Share owned, respectively, payable to stockholders of record at the close of business on May 31, 2017. Stock dividends were issued as follows: Dividend Month Month Dividend Shares Issued March 2017 April 2017 1,308 Acquisitions The company purchased the following property from an unaffiliated third party subsequent to March 31, 2017: Date Acquired Property Name Location Square Footage Purchase Price 5/3/2017 Commons at Town Center Vernon Hills, IL 116,051 $ 23,000,000 Financing Date Property Interest Rate (stated) Principal Amount Maturity Date 5/3/2017 Commons at Town Center 3.69% years 1-5 4.00% years 6-7 $ 13,800,000 5/3/2024 5/3/2017 Commons at Town Center 5.40% $ 9,200,000 1/3/2018 |
SUMMARY OF SIGNIFICANT ACCOUN17
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2017 | |
Accounting Policies [Abstract] | |
General | General The accompanying consolidated financial statements have been prepared in accordance with U.S. GAAP and require management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In November 2016, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers |
MORTGAGES PAYABLE (Tables)
MORTGAGES PAYABLE (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Mortgages Payable | As of March 31, 2017 and December 31, 2016, the Company had the following mortgage payable: March 31, 2017 December 31, 2016 Mortgages Principal Amount Interest Rate Principal Amount Interest Rate Mortgage payable $ 27,450,000 3.64 % $ 27,450,000 3.64 % Unamortized debt issuance costs (2,443 ) (2,541 ) Total debt $ 27,447,557 $ 27,447,459 |
EQUITY-BASED COMPENSATION (Tabl
EQUITY-BASED COMPENSATION (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Summary of the Restricted Shares | A summary of the status of the restricted shares is presented below: Shares Weighted Average Grant Date Fair Value Aggregate Intrinsic Value Outstanding at December 31, 2016 804 $ 18,334 $ 18,334 Granted — — — Vested (37 ) (833 ) (833 ) Forfeited — — — Outstanding at March 31, 2017 767 $ 17,501 $ 17,501 |
TRANSACTIONS WITH RELATED PAR20
TRANSACTIONS WITH RELATED PARTIES (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Related Party Transactions [Abstract] | |
Schedule of Transactions with Related Parties | The following table summarizes the Company’s related party transactions for the three months ended March 31, 2017 and 2016. Three Months Ended March 31, Amount Unpaid as of 2017 2016 March 31, 2017 December 31, 2016 General and administrative reimbursements (a) $ 90,307 $ 91,463 $ 109,373 $ 80,386 Affiliate share purchase discounts (b) 23,556 14,530 — — Total general and administrative costs $ 113,863 $ 105,993 $ 109,373 $ 80,386 Acquisition related costs (c) $ 34,858 $ — $ 712,821 $ 686,250 Offering costs (d) $ 398,029 $ 549,807 $ 1,554,433 $ 1,476,746 Business management fee (e) $ 68,692 $ 68,591 $ 434,687 $ 365,995 Mortgage financing fee (f) $ — $ — $ 114,375 $ 114,375 Sponsor non-interest bearing advances (g) $ — $ — $ 2,950,000 $ 2,950,000 Property management fee $ 39,145 $ 37,131 $ — $ — Property operating expenses 93,420 72,706 17,805 11,001 Total property operating expenses (h) $ 132,565 $ 109,837 $ 17,805 $ 11,001 (a) The Business Manager and its affiliates are entitled to reimbursement for certain general and administrative expenses incurred relating to the Company’s administration. Such costs are included in general and administrative expenses in the accompanying consolidated statements of operations. Unpaid amounts are included in due to related parties in the accompanying consolidated balance sheets. (b) The Company established a discount stock purchase policy for affiliates and affiliates of the Business Manager that enable them to purchase shares of common stock at $22.81 per share. The Company sold 10,756 shares and 6,635 shares to affiliates during the three months ended March 31, 2017 and 2016, respectively. (c) Prior to August 8, 2016 under the Business Management Agreement, the Company was required to pay the Business Manager or its affiliates an acquisition fee equal to 1.5% of the “contract purchase price,” as defined in that agreement, of each property and real estate-related asset acquired. The Business Management Agreement was amended to, among other things, delete the obligation to pay acquisition fees, real estate sales commissions and mortgage financing fees payable to the Business Manager by the Company with respect to transactions occurring on or after August 8, 2016 . (d) The Company reimburses the Sponsor and its affiliates for costs and other expenses of the Offering. Offering costs are offset against the stockholders’ equity accounts. Unpaid amounts are included in due to related parties in the accompanying consolidated balance sheets. An affiliate of the Business Manager also receives selling commissions equal to 6.0% of the sale price for each Class A Share sold, 2.0% of the sale price for each Class T Share sold and 3.0% of the sale price for each Class T-3 Share sold and a dealer manager fee equal to 2.75% of the sale price for each Class A and Class T Share sold and 2.5% of the sale price for each Class T-3 Share sold, the majority of which is re-allowed (paid) to third party soliciting dealers. The Company does not pay selling commissions or the dealer manager fee in connection with shares issued through the DRP and pays no or reduced selling commissions and dealer manager fees in connection with certain special sales. Unpaid amounts are included in due to related parties in the accompanying consolidated balance sheets. The Company pays a distribution and stockholder servicing fee equal to 1.0% per annum of the purchase price per share (or, once reported, the amount of the Company’s estimated value per share) for each Class T Share and Class T-3 Share sold in the Offering. The fee is not paid at the time of purchase. The Company accounts for the total fee as a charge to equity at the time each Class T Share or Class T-3 Share is sold in the Offering and records a corresponding payable in due to related parties. The distribution and stockholder servicing fee is payable monthly in arrears as it becomes contractually due. At March 31, 2017 and December 31, 2016, the unpaid fee equal to $384,233 and $335,327, respectively, was recorded in due to related parties in the accompanying consolidated balance sheets. (e) The Company pays the Business Manager an annual business management fee equal to 0.6% of its “average invested assets,” payable quarterly in an amount equal to 0.15% of the Company’s average invested assets as of the last day of the immediately preceding quarter. “Average invested assets” means, for any period, the average of the aggregate book value of the Company’s assets, including all intangibles and goodwill, invested, directly or indirectly, in equity interests in, and loans secured by, properties, as well as amounts invested in securities or consolidated and unconsolidated joint ventures or other partnerships, before reserves for amortization and depreciation or bad debts, impairments or other similar non-cash reserves, computed by taking the average of these values at the end of each month during the relevant calendar quarter. Unpaid amounts are included in due to related parties in the accompanying consolidated balance sheets. (f) Prior to August 8, 2016 under the Business Management Agreement, the Company was required to pay the Business Manager or its affiliates a mortgage financing fee equal to 0.25% of the amount available or borrowed under the financing or the assumed debt if the Business Manager or its affiliates provided services in connection with the origination or refinancing of any debt that the Company obtained and used to finance properties or other assets, or that was assumed, directly or indirectly, in connection with the acquisition of properties or other assets. Pursuant to the amended Business Management Agreement, (g) This amount represents non-interest bearing advances made by the Sponsor which the Company intends to repay. Unpaid amounts are included in due to related parties in the accompanying consolidated balance sheets. (h) The Company pays Inland Residential Real Estate Services, LLC (the “Real Estate Manager”) a monthly property management fee of up to 4% of the gross income from any property managed directly by the Real Estate Manager or its affiliates. The Real Estate Manager may reduce, in its sole discretion, the amount of the management fee payable in connection with a particular property, subject to these limits. The Company also reimburses the Real Estate Manager and its affiliates for property-level expenses that they pay or incur on the Company’s behalf, including the salaries, bonuses, benefits and severance payments for persons performing services, including without limitation acquisition due diligence services, for the Real Estate Manager and its affiliates (excluding the executive officers of the Real Estate Manager and the Company’s executive officers). |
SUBSEQUENT EVENTS (Tables)
SUBSEQUENT EVENTS (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Schedule of Mortgages Payable | As of March 31, 2017 and December 31, 2016, the Company had the following mortgage payable: March 31, 2017 December 31, 2016 Mortgages Principal Amount Interest Rate Principal Amount Interest Rate Mortgage payable $ 27,450,000 3.64 % $ 27,450,000 3.64 % Unamortized debt issuance costs (2,443 ) (2,541 ) Total debt $ 27,447,557 $ 27,447,459 |
Unaffiliated Third Party [Member] | |
Schedule of Acquisitions | The company purchased the following property from an unaffiliated third party subsequent to March 31, 2017: Date Acquired Property Name Location Square Footage Purchase Price 5/3/2017 Commons at Town Center Vernon Hills, IL 116,051 $ 23,000,000 |
Schedule of Mortgages Payable | Date Property Interest Rate (stated) Principal Amount Maturity Date 5/3/2017 Commons at Town Center 3.69% years 1-5 4.00% years 6-7 $ 13,800,000 5/3/2024 5/3/2017 Commons at Town Center 5.40% $ 9,200,000 1/3/2018 |
Stock Dividend [Member] | |
Schedule of Dividends Distributions | Dividend Month Month Dividend Shares Issued March 2017 April 2017 1,308 |
Cash Distributions [Member] | |
Schedule of Dividends Distributions | Distribution Month Month Distribution Paid Gross Amount of Distribution Paid Distribution Reinvested through DRP Shares Issued Net Cash Distribution March 2017 April 2017 $ 157,648 $ 83,025 3,526 $ 74,623 April 2017 May 2017 $ 158,091 $ 84,132 3,574 $ 73,959 |
ORGANIZATION (Narrative) (Detai
ORGANIZATION (Narrative) (Details) | 3 Months Ended |
Mar. 31, 2017ft²PropertyUnit | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Number of retail properties owned | Property | 1 |
Square footage of real estate properties owned | ft² | 194,732 |
Property acquisition, total number of units acquired | 206 |
Residential property’s average occupancy rate | 96.10% |
Number of units leased | 200 |
Real estate property, residential units leased percentage | 97.10% |
EQUITY (Narrative) (Details)
EQUITY (Narrative) (Details) - USD ($) | 1 Months Ended | 3 Months Ended | ||||
Mar. 31, 2017 | Mar. 31, 2017 | Mar. 31, 2016 | Feb. 02, 2017 | Dec. 31, 2016 | Feb. 17, 2015 | |
Class Of Stock [Line Items] | ||||||
Total value of common stock company is authorized to sell through initial 'reasonable best efforts' offering | $ 1,000,000,000 | |||||
Cash distribution, declared | $ 441,213 | |||||
Cash distribution, paid | $ 420,910 | |||||
Stock dividends issued, shares | 3,649 | |||||
Distribution reinvested through distribution reinvestment plan | $ 83,025 | $ 219,275 | ||||
Stock repurchase program, amount | $ 0 | $ 0 | ||||
Maximum [Member] | ||||||
Class Of Stock [Line Items] | ||||||
Limit on number of shares that can be repurchased each calendar year expressed as a percentage of common stock outstanding on December 31st of the previous calendar year | 5.00% | |||||
Distribution Reinvestment Plan [Member] | ||||||
Class Of Stock [Line Items] | ||||||
Distribution reinvested through distribution reinvestment plan | $ 219,275 | $ 30,427 | ||||
Class A Common Stock [Member] | ||||||
Class Of Stock [Line Items] | ||||||
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | |||
Gross proceeds from sale of shares | $ 3,004,088 | |||||
Common stock, shares outstanding | 1,232,058 | 1,232,058 | 1,098,858 | |||
Class A Common Stock [Member] | Reasonable Best Efforts Offering [Member] | ||||||
Class Of Stock [Line Items] | ||||||
Common stock, par value | $ 0.001 | $ 0.001 | ||||
Initial price of each common share authorized pursuant to distribution reinvestment plan | $ 25 | |||||
Class A Common Stock [Member] | Distribution Reinvestment Plan [Member] | ||||||
Class Of Stock [Line Items] | ||||||
Initial price of each common share authorized pursuant to distribution reinvestment plan | 23.75 | 23.75 | ||||
Class T Common Stock [Member] | ||||||
Class Of Stock [Line Items] | ||||||
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | |||
Gross proceeds from sale of shares | $ 1,178,550 | |||||
Common stock, shares outstanding | 336,235 | 336,235 | 284,283 | |||
Class T Common Stock [Member] | Reasonable Best Efforts Offering [Member] | ||||||
Class Of Stock [Line Items] | ||||||
Common stock, par value | $ 0.001 | $ 0.001 | ||||
Initial price of each common share authorized pursuant to distribution reinvestment plan | $ 23.95 | |||||
Class T Common Stock [Member] | Distribution Reinvestment Plan [Member] | ||||||
Class Of Stock [Line Items] | ||||||
Initial price of each common share authorized pursuant to distribution reinvestment plan | 22.81 | 22.81 | ||||
Class T-3 Common Stock [Member] | ||||||
Class Of Stock [Line Items] | ||||||
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | |||
Gross proceeds from sale of shares | $ 120,000 | |||||
Common stock, shares outstanding | 4,971 | 4,971 | 0 | |||
Class T-3 Common Stock [Member] | Reasonable Best Efforts Offering [Member] | ||||||
Class Of Stock [Line Items] | ||||||
Common stock, par value | $ 0.001 | $ 0.001 | ||||
Initial price of each common share authorized pursuant to distribution reinvestment plan | $ 24.14 | |||||
Class T-3 Common Stock [Member] | Distribution Reinvestment Plan [Member] | ||||||
Class Of Stock [Line Items] | ||||||
Initial price of each common share authorized pursuant to distribution reinvestment plan | $ 22.81 | $ 22.81 | ||||
Class A, Class T and Class T-3 Common Stock [Member] | ||||||
Class Of Stock [Line Items] | ||||||
Total value of common stock company is authorized to sell through initial 'reasonable best efforts' offering | $ 190,000,000 | $ 190,000,000 |
ACQUISITIONS (Narrative) (Detai
ACQUISITIONS (Narrative) (Details) | 3 Months Ended |
Mar. 31, 2017Unit | |
Business Combinations [Abstract] | |
Real estate property acquisition, total number of units acquired | 0 |
MORTGAGES PAYABLE (Narrative) (
MORTGAGES PAYABLE (Narrative) (Details) | 3 Months Ended |
Mar. 31, 2017 | |
Debt Disclosure [Abstract] | |
Monthly interest payments for initial number of years | 5 years |
Monthly interest payments for number of years, thereafter | 30 years |
Interest rate on mortgage loan if maturity date is extended | 3.95% |
Interest rate on mortgage loan if maturity date is extended, reduced to | 3.64% |
MORTGAGES PAYABLE (Schedule of
MORTGAGES PAYABLE (Schedule of Mortgages Payable) (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2017 | Dec. 31, 2016 | |
Debt Disclosure [Abstract] | ||
Mortgage payable, Principal amount | $ 27,450,000 | $ 27,450,000 |
Unamortized debt issuance costs | (2,443) | (2,541) |
Total debt | $ 27,447,557 | $ 27,447,459 |
Mortgage payable, Interest rate | 3.64% | 3.64% |
EARNINGS (LOSS) PER SHARE - (Na
EARNINGS (LOSS) PER SHARE - (Narrative) (Details) - shares | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Earnings Per Share [Abstract] | ||
Antidilutive shares excluded from computation of diluted EPS | 371 | 207 |
EQUITY-BASED COMPENSATION (Narr
EQUITY-BASED COMPENSATION (Narrative) (Details) - Restricted Stock [Member] - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Unrecognized compensation cost related to the unvested restricted share awards | $ 7,894 | |
Weighted average remaining contractual term related to unvested restricted shares | 1 year 4 months 28 days | |
Director [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Share-based compensation expense | $ 2,361 | $ 2,760 |
Employee and Director Incentive Restricted Share Plan [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Percentage of outstanding shares that may be issued under RSP | 5.00% | |
Employee and Director Incentive Restricted Share Plan [Member] | Minimum [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Vesting period | 1 year | |
Employee and Director Incentive Restricted Share Plan [Member] | Maximum [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Vesting period | 3 years |
EQUITY-BASED COMPENSATION (Summ
EQUITY-BASED COMPENSATION (Summary of the Restricted Shares) (Details) - Restricted Stock [Member] | 3 Months Ended |
Mar. 31, 2017USD ($)$ / sharesshares | |
Shares | |
Outstanding, Shares | shares | 804 |
Vested, Shares | shares | (37) |
Outstanding, Shares | shares | 767 |
Weighted Average Grant Date Fair Value | |
Outstanding, Weighted Average Grant Date Fair Value | $ / shares | $ 18,334 |
Vested, Weighted Average Grant Date Fair Value | $ / shares | (833) |
Outstanding, Weighted Average Grant Date Fair Value | $ / shares | $ 17,501 |
Aggregate Intrinsic Value | |
Outstanding, Aggregate Intrinsic Value | $ | $ 18,334 |
Vested, Aggregate Intrinsic Value | $ | (833) |
Outstanding, Aggregate Intrinsic Value | $ | $ 17,501 |
SEGMENT REPORTING (Narrative) (
SEGMENT REPORTING (Narrative) (Details) - Segment | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Segment Reporting [Abstract] | ||
Number of reportable segments | 1 | 1 |
TRANSACTIONS WITH RELATED PAR31
TRANSACTIONS WITH RELATED PARTIES (Schedule of Transactions with Related Parties) (Details) - USD ($) | 3 Months Ended | |||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | ||
Related Party Transaction [Line Items] | ||||
Due to related parties | $ 5,893,494 | $ 5,684,753 | ||
Acquisition Related Costs [Member] | ||||
Related Party Transaction [Line Items] | ||||
Expenses with related parties | [1] | 34,858 | ||
Due to related parties | [1] | 712,821 | 686,250 | |
General and Administrative Reimbursements [Member] | ||||
Related Party Transaction [Line Items] | ||||
Due to related parties | [2] | 109,373 | 80,386 | |
Offering Costs [Member] | ||||
Related Party Transaction [Line Items] | ||||
Expenses with related parties | [3] | 398,029 | $ 549,807 | |
Due to related parties | [3] | 1,554,433 | 1,476,746 | |
Business Management Fee [Member] | ||||
Related Party Transaction [Line Items] | ||||
Expenses with related parties | [4] | 68,692 | 68,591 | |
Due to related parties | [4] | 434,687 | 365,995 | |
Mortgage Financing Fee [Member] | ||||
Related Party Transaction [Line Items] | ||||
Due to related parties | [5] | 114,375 | 114,375 | |
Sponsor Non-interest Bearing Advances [Member] | ||||
Related Party Transaction [Line Items] | ||||
Due to related parties | [6] | 2,950,000 | 2,950,000 | |
Property Operating Expenses [Member] | ||||
Related Party Transaction [Line Items] | ||||
Due to related parties | 17,805 | 11,001 | ||
Total General And Administrative Costs [Member] | ||||
Related Party Transaction [Line Items] | ||||
Due to related parties | 109,373 | 80,386 | ||
Real Estate Manager Or Affiliates [Member] | ||||
Related Party Transaction [Line Items] | ||||
Due to related parties | [7] | 17,805 | $ 11,001 | |
Total General and Administrative Costs [Member] | ||||
Related Party Transaction [Line Items] | ||||
General and administrative expenses | 113,863 | 105,993 | ||
Total General and Administrative Costs [Member] | General and Administrative Reimbursements [Member] | ||||
Related Party Transaction [Line Items] | ||||
General and administrative expenses | [2] | 90,307 | 91,463 | |
Total General and Administrative Costs [Member] | Affiliate Share Purchase Discounts [Member] | ||||
Related Party Transaction [Line Items] | ||||
General and administrative expenses | [8] | 23,556 | 14,530 | |
Total Property Operating Expenses [Member] | ||||
Related Party Transaction [Line Items] | ||||
Operating property expenses | [7] | 132,565 | 109,837 | |
Total Property Operating Expenses [Member] | Property Management Fee [Member] | ||||
Related Party Transaction [Line Items] | ||||
Operating property expenses | 39,145 | 37,131 | ||
Total Property Operating Expenses [Member] | Property Operating Expenses [Member] | ||||
Related Party Transaction [Line Items] | ||||
Operating property expenses | $ 93,420 | $ 72,706 | ||
[1] | Prior to August 8, 2016 under the Business Management Agreement, the Company was required to pay the Business Manager or its affiliates an acquisition fee equal to 1.5% of the “contract purchase price,” as defined in that agreement, of each property and real estate-related asset acquired. The Business Management Agreement was amended to, among other things, delete the obligation to pay acquisition fees, real estate sales commissions and mortgage financing fees payable to the Business Manager by the Company with respect to transactions occurring on or after August 8, 2016. The Business Manager and its affiliates continue to be reimbursed for acquisition related costs of the Business Manager and its affiliates relating to the Company’s acquisition of properties and real estate assets, regardless of whether the Company acquires the properties or real estate assets, subject to the limits provided in the amended agreement. Of the $34,858 of total acquisition costs and fees, $16,887 are capitalized and classified in other assets in the accompanying consolidated balance sheets and $17,971 of such costs are included in acquisition related costs in the accompanying consolidated statements of operations. Acquisition fees earned prior to August 8, 2016, which have been previously accrued for and are owed to the Business Manager, are expected to be paid in the future and are included in due to related parties in the accompanying consolidated balance sheets. | |||
[2] | The Business Manager and its affiliates are entitled to reimbursement for certain general and administrative expenses incurred relating to the Company’s administration. Such costs are included in general and administrative expenses in the accompanying consolidated statements of operations. Unpaid amounts are included in due to related parties in the accompanying consolidated balance sheets. | |||
[3] | The Company reimburses the Sponsor and its affiliates for costs and other expenses of the Offering. Offering costs are offset against the stockholders’ equity accounts. Unpaid amounts are included in due to related parties in the accompanying consolidated balance sheets. An affiliate of the Business Manager also receives selling commissions equal to 6.0% of the sale price for each Class A Share sold, 2.0% of the sale price for each Class T Share sold and 3.0% of the sale price for each Class T-3 Share sold and a dealer manager fee equal to 2.75% of the sale price for each Class A and Class T Share sold and 2.5% of the sale price for each Class T-3 Share sold, the majority of which is re-allowed (paid) to third party soliciting dealers. The Company does not pay selling commissions or the dealer manager fee in connection with shares issued through the DRP and pays no or reduced selling commissions and dealer manager fees in connection with certain special sales. Unpaid amounts are included in due to related parties in the accompanying consolidated balance sheets. The Company pays a distribution and stockholder servicing fee equal to 1.0% per annum of the purchase price per share (or, once reported, the amount of the Company’s estimated value per share) for each Class T Share and Class T-3 Share sold in the Offering. The fee is not paid at the time of purchase. The Company accounts for the total fee as a charge to equity at the time each Class T Share or Class T-3 Share is sold in the Offering and records a corresponding payable in due to related parties. The distribution and stockholder servicing fee is payable monthly in arrears as it becomes contractually due. At March 31, 2017 and December 31, 2016, the unpaid fee equal to $384,233 and $335,327, respectively, was recorded in due to related parties in the accompanying consolidated balance sheets. | |||
[4] | The Company pays the Business Manager an annual business management fee equal to 0.6% of its “average invested assets,” payable quarterly in an amount equal to 0.15% of the Company’s average invested assets as of the last day of the immediately preceding quarter. “Average invested assets” means, for any period, the average of the aggregate book value of the Company’s assets, including all intangibles and goodwill, invested, directly or indirectly, in equity interests in, and loans secured by, properties, as well as amounts invested in securities or consolidated and unconsolidated joint ventures or other partnerships, before reserves for amortization and depreciation or bad debts, impairments or other similar non-cash reserves, computed by taking the average of these values at the end of each month during the relevant calendar quarter. Unpaid amounts are included in due to related parties in the accompanying consolidated balance sheets. | |||
[5] | Prior to August 8, 2016 under the Business Management Agreement, the Company was required to pay the Business Manager or its affiliates a mortgage financing fee equal to 0.25% of the amount available or borrowed under the financing or the assumed debt if the Business Manager or its affiliates provided services in connection with the origination or refinancing of any debt that the Company obtained and used to finance properties or other assets, or that was assumed, directly or indirectly, in connection with the acquisition of properties or other assets. Pursuant to the amended Business Management Agreement, mortgage financing fees were eliminated with respect to transactions occurring on or after August 8, 2016. Mortgage financing fees earned prior to August 8, 2016, which have been previously accrued for and are owed to the Business Manager, are expected to be paid in the future and are included in due to related parties in the accompanying consolidated balance sheets. | |||
[6] | This amount represents non-interest bearing advances made by the Sponsor which the Company intends to repay. Unpaid amounts are included in due to related parties in the accompanying consolidated balance sheets. | |||
[7] | The Company pays Inland Residential Real Estate Services, LLC (the “Real Estate Manager”) a monthly property management fee of up to 4% of the gross income from any property managed directly by the Real Estate Manager or its affiliates. The Real Estate Manager may reduce, in its sole discretion, the amount of the management fee payable in connection with a particular property, subject to these limits. The Company also reimburses the Real Estate Manager and its affiliates for property-level expenses that they pay or incur on the Company’s behalf, including the salaries, bonuses, benefits and severance payments for persons performing services, including without limitation acquisition due diligence services, for the Real Estate Manager and its affiliates (excluding the executive officers of the Real Estate Manager and the Company’s executive officers). | |||
[8] | The Company established a discount stock purchase policy for affiliates and affiliates of the Business Manager that enable them to purchase shares of common stock at $22.81 per share. The Company sold 10,756 shares and 6,635 shares to affiliates during the three months ended March 31, 2017 and 2016, respectively. |
TRANSACTIONS WITH RELATED PAR32
TRANSACTIONS WITH RELATED PARTIES (Narrative) (Details) - USD ($) | Aug. 07, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 |
Related Party Transaction [Line Items] | ||||
Acquisition related costs | $ 41,213 | |||
Class T Common Stock and Class T-3 Common Stock [Member] | ||||
Related Party Transaction [Line Items] | ||||
Percentage of distribution and stockholder servicing fee | 1.00% | |||
Class T Common Stock [Member] | ||||
Related Party Transaction [Line Items] | ||||
Unpaid fee under distribution and servicing | $ 384,233 | $ 335,327 | ||
Business Manager [Member] | ||||
Related Party Transaction [Line Items] | ||||
Common stock shares sold to affiliates during period | 10,756 | 6,635 | ||
Price per share of common stock sold to affiliates during period | $ 22.81 | |||
Fee required to pay the Business Manager or its affiliates expressed as a percentage of the 'contract purchase price' as defined, of each property and real estate-related asset acquired | 1.50% | |||
Total acquisition costs and fees | $ 34,858 | |||
Capitalized acquisition costs and fees | 16,887 | |||
Acquisition related costs | $ 17,971 | |||
Selling commission paid to affiliate of the Business Manager expressed as a percentage of the sales price for each Class A Share sold | 6.00% | |||
Selling commission paid to affiliate of the Business Manager expressed as a percentage of the sales price for each Class T Share sold | 2.00% | |||
Selling commission paid to affiliate of the Business Manager expressed as a percentage of the sales price for each Class T-3 Share sold | 3.00% | |||
Dealer manager fee paid to affiliate of the Business Manager expressed as a percentage of the sales price for each Class A and Class T share sold | 2.75% | |||
Dealer manager fee paid to affiliate of the Business Manager expressed as a percentage of the sales price for each Class T-3 share sold | 2.50% | |||
Annual business management fee paid to the Business Manager expressed as a percentage of the Company’s “average invested assets” | 0.60% | |||
Fee paid to Business Manager or its affiliates expressed as a percentage of the 'average invested assets' as defined | 0.15% | |||
Mortgage financing fee required to pay Business Manager or its affiliates expressed as a percentage of the amount available or borrowed under financing or assumed debt | 0.25% | |||
Real Estate Manager Or Affiliates [Member] | Maximum [Member] | ||||
Related Party Transaction [Line Items] | ||||
Property management fee percentage | 4.00% |
SUBSEQUENT EVENTS (Narrative) (
SUBSEQUENT EVENTS (Narrative) (Details) - $ / shares | May 31, 2017 | Jun. 30, 2017 | Mar. 31, 2017 |
Class A Common Stock [Member] | Stock Dividend [Member] | |||
Subsequent Event [Line Items] | |||
Amount per share of distributions | $ 0.000833333 | ||
Class A Common Stock [Member] | Scenario Forecast [Member] | Stock Dividend [Member] | |||
Subsequent Event [Line Items] | |||
Dividends payable, record date | May 31, 2017 | ||
Dividends per share, declared | $ 0.01 | ||
Class T Common Stock [Member] | Stock Dividend [Member] | |||
Subsequent Event [Line Items] | |||
Amount per share of distributions | $ 0.000833333 | ||
Class T Common Stock [Member] | Scenario Forecast [Member] | Stock Dividend [Member] | |||
Subsequent Event [Line Items] | |||
Dividends payable, record date | May 31, 2017 | ||
Dividends per share, declared | $ 0.01 | ||
Class T-3 Common Stock [Member] | Scenario Forecast [Member] | Stock Dividend [Member] | |||
Subsequent Event [Line Items] | |||
Dividends payable, record date | May 31, 2017 | ||
Dividends per share, declared | $ 0.01 | ||
Minimum [Member] | Class A Common Stock [Member] | Stock Dividend [Member] | |||
Subsequent Event [Line Items] | |||
Dividends payable, record date | Mar. 31, 2017 | ||
Minimum [Member] | Class T Common Stock [Member] | Stock Dividend [Member] | |||
Subsequent Event [Line Items] | |||
Dividends payable, record date | Mar. 31, 2017 | ||
Cash Distributions [Member] | Class A Common Stock [Member] | Scenario Forecast [Member] | |||
Subsequent Event [Line Items] | |||
Amount per share of distributions | $ 0.003424658 | ||
Cash Distributions [Member] | Class T Common Stock [Member] | Scenario Forecast [Member] | |||
Subsequent Event [Line Items] | |||
Amount per share of distributions | 0.002768493 | ||
Cash Distributions [Member] | Class T-3 Common Stock [Member] | Scenario Forecast [Member] | |||
Subsequent Event [Line Items] | |||
Amount per share of distributions | $ 0.003306849 | ||
Cash Distributions [Member] | Minimum [Member] | Class A Common Stock [Member] | Scenario Forecast [Member] | |||
Subsequent Event [Line Items] | |||
Dividends payable, record date | Apr. 1, 2017 | ||
Cash Distributions [Member] | Minimum [Member] | Class T Common Stock [Member] | Scenario Forecast [Member] | |||
Subsequent Event [Line Items] | |||
Dividends payable, record date | Apr. 1, 2017 | ||
Cash Distributions [Member] | Minimum [Member] | Class T-3 Common Stock [Member] | Scenario Forecast [Member] | |||
Subsequent Event [Line Items] | |||
Dividends payable, record date | Apr. 1, 2017 | ||
Cash Distributions [Member] | Maximum [Member] | Class A Common Stock [Member] | Scenario Forecast [Member] | |||
Subsequent Event [Line Items] | |||
Dividends payable, record date | Sep. 30, 2017 | ||
Cash Distributions [Member] | Maximum [Member] | Class T Common Stock [Member] | Scenario Forecast [Member] | |||
Subsequent Event [Line Items] | |||
Dividends payable, record date | Sep. 30, 2017 | ||
Cash Distributions [Member] | Maximum [Member] | Class T-3 Common Stock [Member] | Scenario Forecast [Member] | |||
Subsequent Event [Line Items] | |||
Dividends payable, record date | Sep. 30, 2017 |
SUBSEQUENT EVENTS (Schedule of
SUBSEQUENT EVENTS (Schedule of Dividends Distributions) (Details) - USD ($) | 1 Months Ended | 3 Months Ended | |
Apr. 30, 2017 | Mar. 31, 2017 | Mar. 31, 2017 | |
Subsequent Event [Line Items] | |||
Distribution reinvested through distribution reinvestment plan | $ 83,025 | $ 219,275 | |
Shares Issued | 1,308 | ||
Net Cash Distribution | $ 74,623 | ||
Stock Dividend [Member] | |||
Subsequent Event [Line Items] | |||
Distribution Month | 2017-03 | 2017-03 | |
Month Distribution Paid | 2017-04 | 2017-04 | |
Cash Distributions [Member] | |||
Subsequent Event [Line Items] | |||
Distribution Month | 2017-03 | 2017-03 | |
Month Distribution Paid | 2017-04 | 2017-04 | |
Gross Amount of Distribution Paid | $ 157,648 | ||
Shares Issued | 3,526 | ||
Subsequent Event [Member] | |||
Subsequent Event [Line Items] | |||
Distribution reinvested through distribution reinvestment plan | $ 84,132 | ||
Net Cash Distribution | $ 73,959 | ||
Subsequent Event [Member] | Cash Distributions [Member] | |||
Subsequent Event [Line Items] | |||
Distribution Month | 2017-04 | ||
Month Distribution Paid | 2017-05 | ||
Gross Amount of Distribution Paid | $ 158,091 | ||
Shares Issued | 3,574 |
SUBSEQUENT EVENTS (Schedule o35
SUBSEQUENT EVENTS (Schedule of Acquisitions) (Details) | May 03, 2017USD ($)ft² | Mar. 31, 2017ft² |
Subsequent Event [Line Items] | ||
Property acquisition, square footage | 194,732 | |
Commons at Town Center [Member] | Subsequent Event [Member] | ||
Subsequent Event [Line Items] | ||
Property acquisition, date acquired | May 3, 2017 | |
Property acquisition, location | Vernon Hills, IL | |
Property acquisition, square footage | 116,051 | |
Property acquisition, purchase price | $ | $ 23,000,000 |
SUBSEQUENT EVENTS (Schedule o36
SUBSEQUENT EVENTS (Schedule of Financing) (Details) - Commons at Town Center [Member] - Subsequent Event [Member] | May 03, 2017USD ($) |
Debt Instrument Due May 3, 2024 [Member] | |
Subsequent Event [Line Items] | |
Date | May 3, 2017 |
Principal Amount | $ 13,800,000 |
Maturity Date | May 3, 2024 |
Debt Instrument Due May 3, 2024 For Years 1-5 [Member] | |
Subsequent Event [Line Items] | |
Interest Rate (stated) | 3.69% |
Debt Instrument Due May 3, 2024 For Years 6-7 [Member] | |
Subsequent Event [Line Items] | |
Interest Rate (stated) | 4.00% |
Debt Instrument Due February 3, 2018 [Member] | |
Subsequent Event [Line Items] | |
Date | May 3, 2017 |
Interest Rate (stated) | 5.40% |
Principal Amount | $ 9,200,000 |
Maturity Date | Jan. 3, 2018 |