Document And Entity Information
Document And Entity Information - shares | 3 Months Ended | |
Mar. 31, 2017 | May 11, 2017 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q1 | |
Entity Registrant Name | Rich Uncles NNN REIT, Inc. | |
Entity Central Index Key | 1,645,873 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 5,131,428 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 |
Real estate investments: | ||
Land | $ 7,346,251 | $ 5,369,238 |
Buildings and improvements | 40,570,593 | 24,243,072 |
Tenant origination and absorption costs | 5,362,271 | 3,632,731 |
Total investments in real estate property | 53,279,115 | 33,245,041 |
Accumulated depreciation and amortization | (924,044) | (493,185) |
Total investments in real estate property, net | 52,355,071 | 32,751,856 |
Investment in Rich Uncles REIT I | 3,464,185 | 3,523,809 |
Real estate investments, net | 55,819,256 | 36,275,665 |
Cash and cash equivalents | 6,788,539 | 3,431,769 |
Restricted cash | 0 | 245,604 |
Above-market lease intangibles, net | 756,880 | 148,577 |
Due from affiliates | 137,813 | 108,433 |
Prepaid expenses and other assets | 1,242,458 | 1,092,512 |
TOTAL ASSETS | 64,744,946 | 41,302,560 |
LIABILITIES & STOCKHOLDERS’ EQUITY (DEFICIT) | ||
Mortgage notes payable, net | 15,514,018 | 7,113,701 |
Unsecured credit facility, net | 6,529,519 | 10,156,685 |
Accounts payable, accrued expenses and other liabilities | 1,471,160 | 1,070,219 |
Below-market lease intangibles, net | 142,262 | 150,767 |
Due to affiliates | 277,775 | 383,422 |
TOTAL LIABILITIES | 23,934,734 | 18,874,794 |
Redeemable common stock | 152,073 | 196,660 |
Preferred stock, $0.001 par value, 50,000,000 shares authorized, no shares issued and outstanding | 0 | 0 |
Common stock $0.001 par value, 200,000,000 shares authorized, 4,466,881 and 2,458,811 shares issued and outstanding as of March 31, 2017 and December 31, 2016, respectively. | 4,467 | 2,458 |
Additional paid-in-capital | 43,012,645 | 23,643,435 |
Cumulative distributions and net losses | (2,358,973) | (1,414,787) |
TOTAL STOCKHOLDERS' EQUITY | 40,658,139 | 22,231,106 |
Commitments and contingencies (Note 7) | ||
TOTAL LIABILITIES & STOCKHOLDERS’ EQUITY | $ 64,744,946 | $ 41,302,560 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2017 | Dec. 31, 2016 |
Preferred Stock, Par or Stated Value Per Share | $ 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 |
Common Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 |
Common Stock, Shares Authorized | 200,000,000 | 200,000,000 |
Common Stock, Shares, Issued | 4,466,881 | 2,458,811 |
Common Stock, Shares, Outstanding | 4,466,881 | 2,458,811 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Revenue: | ||
Rental income | $ 696,694 | $ 0 |
Tenant recoveries | 162,516 | 0 |
Total revenue | 859,210 | 0 |
Expenses: | ||
Asset management fees to affiliate (Note 6) | 111,298 | 0 |
General and administrative | 1,186,844 | 91 |
Depreciation and amortization | 430,859 | 0 |
Interest expense | 131,837 | 0 |
Property expenses | 179,778 | 0 |
Total expenses | 2,040,616 | 91 |
Less: Expenses reimbursed/fees waived by Sponsor or affiliates (Note 6) | (715,850) | 0 |
Net expenses | 1,324,766 | 91 |
Other income: | ||
Interest income | 275 | 0 |
Equity in earnings from Rich Uncles REIT I | 7,957 | 0 |
Total other income | 8,232 | 0 |
Net loss | $ (457,324) | $ (91) |
Net loss per share, basic and diluted | $ (0.13) | $ 0 |
Weighted-average number of common shares outstanding, basic and diluted | 3,457,826 | 20,000 |
Dividends declared per common share | $ 0.175 | $ 0 |
Condensed Consolidated Stateme5
Condensed Consolidated Statement of Stockholders' Equity - 3 months ended Mar. 31, 2017 - USD ($) | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] |
Balance at Dec. 31, 2016 | $ 22,231,106 | $ 2,458 | $ 23,643,435 | $ (1,414,787) |
Balance (in shares) at Dec. 31, 2016 | 2,458,881 | |||
Issuance of common stock | 20,271,009 | $ 2,026 | 20,268,983 | 0 |
Issuance of common stock (in shares) | 2,027,101 | |||
Distributions declared | (486,862) | $ 0 | 0 | (486,862) |
Stock compensation expense | 30,000 | $ 3 | 29,997 | 0 |
Stock compensation expense (in shares) | 3,000 | |||
Repurchase of common stock | (214,384) | $ (20) | (214,364) | 0 |
Repurchase of common stock (in shares) | (22,101) | |||
Offering costs | (608,130) | $ 0 | (608,130) | 0 |
Net loss | (457,324) | 0 | 0 | (457,324) |
Reclassification to redeemable common stock | (107,276) | 0 | (107,276) | 0 |
Balance at Mar. 31, 2017 | $ 40,658,139 | $ 4,467 | $ 43,012,645 | $ (2,358,973) |
Balance (in shares) at Mar. 31, 2017 | 4,466,881 |
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 | $ (457,324) | $ (91) |
Adjustments to reconcile net loss to cash provided by (used in) operating activities | ||
Depreciation and amortization | 430,859 | 0 |
Stock compensation expense | 30,000 | 0 |
Deferred rents | (220) | 0 |
Amortization of deferred financing costs | 11,025 | 0 |
Amortization of above- and below-market lease intangibles, net | (174) | 0 |
Equity in earnings from investment in Rich Uncles REIT I | (7,957) | 0 |
Distributions from investment in Rich Uncles REIT I | 67,580 | 0 |
Change in operating assets and liabilities: | ||
Prepaid expenses and other assets | (124,901) | 0 |
Accounts payable, accrued expenses and other liabilities | 174,159 | 0 |
Due from affiliates | (29,380) | |
Due to affiliates | 89,097 | 0 |
Net cash provided by (used in) operating activities | 182,764 | (91) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Acquisition of real estate investments | (20,050,108) | 0 |
Payments of acquisition fees to affiliate | (874,800) | |
Net cash used in investing activities | (20,924,908) | 0 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Borrowings on unsecured credit facility | 14,240,000 | 0 |
Repayments of unsecured credit facility | (17,867,803) | 0 |
Proceeds from mortgage notes payable | 8,744,988 | 0 |
Principal payments on mortgage notes payable | (32,558) | 0 |
Payments of deferred financing costs | (347,326) | 0 |
Proceeds from issuance of common stock and investor deposits | 19,959,194 | 0 |
Payments of offering costs | (528,675) | 0 |
Payments to redeem common stock | (214,384) | 0 |
Distributions paid to common stockholders | (100,126) | 0 |
Net cash provided by financing activities | 23,853,310 | 0 |
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | 3,111,166 | (91) |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF PERIOD | 3,431,769 | 200,815 |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD | 6,788,539 | 200,724 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION : | ||
Cash paid for interest | 106,179 | 0 |
SUPPLEMENTAL SCHEDULE OF NONCASH FLOW INVESTING AND FINANCING ACTIVITIES: | ||
Reclassification to redeemable common stock | 107,276 | 0 |
Increase in share redemptions payable | 151,864 | 0 |
Increase in other offering costs due to affiliates | 79,455 | 0 |
Distributions paid to common stockholders through common stock issuances pursuant to the distribution reinvestment plan | $ 386,736 | $ 0 |
BUSINESS AND ORGANIZATION
BUSINESS AND ORGANIZATION | 3 Months Ended |
Mar. 31, 2017 | |
Accounting Policies [Abstract] | |
Business Description and Basis of Presentation [Text Block] | NOTE 1. BUSINESS AND ORGANIZATION Rich Uncles NNN REIT, Inc. (the “Company”) was incorporated on May 14, 2015 as a Maryland corporation. The Company was originally incorporated under the name Rich Uncles Real Estate Investment Trust, Inc., but amended its name on October 19, 2015 to Rich Uncles NNN REIT, Inc. The Company has the authority to issue 250,000,000 200,000,000 0.001 50,000,000 0.001 10.00 500 The Company holds its investments in real property through special purpose wholly owned limited liability companies or through Rich Uncles NNN Operating Partnership, LP, a Delaware limited partnership (the “Operating Partnership”). The Operating Partnership was formed on January 28, 2016. The Company is the sole general partner of, and owns a 99 1 The Company is externally managed by its advisor, Rich Uncles NNN REIT Operator, LLC (the “Advisor”), a Delaware limited liability company wholly owned by the Company’s sponsor, Rich Uncles, LLC (the “Sponsor”), a Delaware limited liability company whose members include Harold Hofer, Howard Makler, and Ray Wirta. On June 24, 2015 and December 31, 2015, the Company issued 10,000 10.00 On July 15, 2015, the Company filed a registration statement on Form S-11 with the Securities and Exchange Commission (the “SEC”) to register an initial public offering of its common stock to offer a maximum of $ 900,000,000 100,000,000 On July 20, 2016, the Company began offering shares to the public and through March 31, 2017, the Company had sold 4,464,819 51,173 44,648,179 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2017 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies [Text Block] | NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information as contained in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“Codification”), and in conjunction with 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 certain information and footnote disclosures required by GAAP for audited financial statements. In the opinion of management, the unaudited condensed consolidated financial statements reflect all adjustments which are of a normal and recurring nature, necessary for a fair and consistent presentation of the financial position and the results for the interim period presented. Operating results for the three months ended March 31, 2017 are not necessarily indicative of the results that may be expected for the year ended December 31, 2017. The accompanying unaudited interim financial information should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2016 as filed with the SEC. The condensed consolidated financial statements include the accounts of the Company, the Operating Partnership, and directly wholly owned subsidiaries. All significant intercompany balances and transactions are eliminated in consolidation. For all periods presented, other comprehensive loss is the same as net loss. The preparation of the condensed consolidated financial statements and the accompanying notes thereto in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results may differ from those estimates. New Accounting Standards Issued and Adopted In January 2017, the FASB issued Accounting Standards Update (“ASU”) No. 2017-01 , Business Combinations (Topic 805): Clarifying the Definition of a Business In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments New Accounting Standards Recently Issued and Not Yet Adopted In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) Revenue Recognition (Topic 605) Leases (Topic 840). Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) |
REAL PROPERTY
REAL PROPERTY | 3 Months Ended |
Mar. 31, 2017 | |
Real Estate [Abstract] | |
Real Estate Disclosure [Text Block] | NOTE 3. REAL PROPERTY Property Location Acquisition Property Type Land, Tenant Accumulated Total Accredo Orlando, FL 6/15/2016 Office $ 9,656,862 $ 1,053,638 $ (386,997) $ 10,323,503 Walgreens Stockbridge, GA 6/21/2016 Retail 4,147,948 705,423 (259,634) 4,593,737 Dollar General Litchfield, ME 11/4/2016 Retail 1,281,812 116,302 (15,091) 1,383,023 Dollar General Wilton, ME 11/4/2016 Retail 1,543,776 140,653 (19,314) 1,665,115 Dollar General Thompsontown, PA 11/4/2016 Retail 1,199,860 106,730 (14,500) 1,292,090 Dollar General Mt. Gilead, OH 11/4/2016 Retail 1,174,188 111,847 (13,902) 1,272,133 Dollar General Lakeside, OH 11/4/2016 Retail 1,112,872 100,857 (14,268) 1,199,461 Dollar General Castalia, OH 11/4/2016 Retail 1,102,086 86,408 (13,863) 1,174,631 Dana Cedar Park, TX 12/27/2016 Industrial 8,392,906 1,210,873 (143,085) 9,460,694 Northrop Melbourne, FL 3/7/2017 Office 12,382,991 1,341,199 (32,626) 13,691,564 exp US Services Maitland, FL 3/27/2017 Office 5,921,542 388,341 (10,764) 6,299,120 $ 47,916,843 $ 5,362,271 $ (924,044) $ 52,355,071 Current Acquisitions Property Acquisition Date Land Buildings and Improvements Above-Market Lease Tenant Origination and Absorption Total Northrop 3/7/2017 $ 1,191,024 $ 11,191,967 $ - $ 1,341,199 $ 13,724,190 exp US Services 3/27/2017 785,989 5,135,553 616,634 388,341 6,926,517 $ 1,977,013 $ 16,327,520 $ 616,634 $ 1,729,540 $ 20,650,707 The purchase price allocations reflected in the accompanying condensed consolidated financial statements is based upon estimates and assumptions that are subject to change that may impact the fair value of the assets and liabilities above (including real estate investments, other assets and accrued liabilities). The Northrop lease expires on May 31, 2021 and the exp US Services lease expires on November 30, 2026. The Company recorded both acquisitions as asset acquisitions and capitalized $ 686,148 92,526 Operating Leases As of March 31, 2017, the Company had an asset concentration related to Northrop Grumman Systems Corporation (“Northrop”), the tenant at the Northrop property. As of March 31, 2017, the Northrop property represented 21.19% of total assets. The obligations under the Northrop lease are guaranteed by Northrop Grumman Corporation. April 1, 2017 through December 31, 2017 $ 3,225,730 2018 4,381,524 2019 4,476,230 2020 4,582,326 2021 3,063,008 2022 2,064,511 $ 21,793,329 Intangibles Tenant Above-Market Below-Market Cost $ 5,362,271 $ 783,263 $ (151,609) Accumulated amortization (369,027) (26,383) 9,347 Net amount $ 4,993,244 $ 756,880 $ (142,262) 6.5 Tenant Above- Below- April 1, 2017 through December 31, 2017 $ 695,016 $ 72,795 $ 11,709 2018 926,688 97,061 20,215 2019 926,688 97,061 20,215 2020 926,688 97,061 20,215 2021 510,428 79,009 20,215 2022 249,915 63,735 20,215 Thereafter 757,821 250,159 29,478 $ 4,993,244 $ 756,880 $ 142,262 Weighted-Average Remaining Amortization Period 6.5 years 8.7 years 7.2 years |
DEBT
DEBT | 3 Months Ended |
Mar. 31, 2017 | |
Debt Disclosure [Abstract] | |
Debt Disclosure [Text Block] | NOTE 4. DEBT Mortgage Notes Payable Collateral Principal Deferred Net Balance Contractual Loan Maturity Accredo/Walgreens properties $ 7,233,587 $ (143,911) $ 7,089,676 3.95 % 7/1/2021 Dana property 4,758,000 (139,991) 4,618,009 4.56 % 4/1/2023 Six Dollar General properties 3,986,988 (180,655) 3,806,333 4.69 % 4/1/2022 $ 15,978,575 $ (464,557) $ 15,514,018 Unsecured Credit Facility On June 7, 2016, the Operating Partnership (“Borrower”), entered into a credit agreement (the “Unsecured Credit Agreement”) with Pacific Mercantile Bank (“Lender”). Pursuant to the Unsecured Credit Agreement, the Borrower has a $ 12,000,000 th Agreement June 15, 2017 4.74 The Unsecured Credit Agreement is guaranteed in the amount of $12,000,000 by the Company, Rich Uncles NNN LP, LLC, Harold Hofer, Howard Makler and Ray Wirta and trusts affiliated with the aforementioned individuals. The guarantees are to be released once the Company has book equity of $ 60,000,000 We are negotiating the extension of the maturity date of the Unsecured Credit Agreement All Debt Agreements Pursuant to the terms of the mortgage notes payable and the Unsecured Credit Agreement, the Company and/or the Operating Partnership are subject to certain financial loan covenants. The Company and/or the Operating Partnership was in compliance with all terms and conditions of the loan agreement as of May 8, 2017. Mortgage Unsecured Total Remaining 2017 $ 201,816 $ 6,530,000 $ 6,731,816 2018 284,835 - 284,835 2019 290,365 - 290,365 2020 294,996 - 294,996 2021 6,852,001 - 6,852,001 2022 3,753,801 - 3,753,801 2023 4,300,761 - 4,300,761 Total principal 15,978,575 6,530,000 22,508,575 Deferred financing costs, net (464,557) (481) (465,038) Total principal $ 15,514,018 $ 6,529,519 $ 22,043,537 During the three months ended March 31, 2017, the Company incurred $ 131,837 40,972 11,025 |
FAIR VALUE DISCLOSURES
FAIR VALUE DISCLOSURES | 3 Months Ended |
Mar. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Disclosures [Text Block] | NOTE 5. FAIR VALUE DISCLOSURES The fair value for certain financial instruments is derived using valuation techniques that involve significant management judgment. The price transparency of financial instruments is a key determinant of the degree of judgment involved in determining the fair value of the Company’s financial instruments. Financial instruments for which actively quoted prices or pricing parameters are available and for which markets contain orderly transactions will generally have a higher degree of price transparency than financial instruments for which markets are inactive or consist of non-orderly trades. The Company evaluates several factors when determining if a market is inactive or when market transactions are not orderly. The following is a summary of the methods and assumptions used by management in estimating the fair value of each class of financial instrument for which it is practicable to estimate the fair value: Cash and cash equivalents, restricted cash, due from affiliates, prepaid expenses and other assets, accounts payable, accrued expenses and other liabilities and due to affiliates: Unsecured Credit Facility : The fair value of the Company’s Unsecured Credit Facility approximates its carrying value as the interest rates and other terms are comparable to those available in the market place for a similar credit facility. Mortgage notes payable: The fair value of the Company’s mortgage notes payable is estimated using a discounted cash flow analysis based on management’s estimates of current market interest rates for instruments with similar characteristics, including remaining loan term, loan-to-value ratio, type of collateral and other credit enhancements. Additionally, when determining the fair value of liabilities in circumstances in which a quoted price in an active market for an identical liability is not available, the Company measures fair value using (i) a valuation technique that uses the quoted price of the identical liability when traded as an asset or quoted prices for similar liabilities or similar liabilities when traded as assets or (ii) another valuation technique that is consistent with the principles of fair value measurement, such as the income approach or the market approach. The Company classifies these inputs as Level 3 inputs. The following were the face value, carrying amount and fair value of the Company’s mortgage notes payable as of March 31, 2017: Face value Carrying value Fair value $ 15,978,575 $ 15,514,018 $ 15,827,028 Disclosures of the fair values of financial instruments are based on pertinent information available to the Company as of March 31, 2017 and require a significant amount of judgment. The actual value could be materially different from the Company’s estimate of value. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Mar. 31, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions Disclosure [Text Block] | NOTE 6. RELATED PARTY TRANSACTIONS The Company has entered into an agreement (the “Advisory Agreement”) with the Advisor. This agreement entitles the Advisor to specified fees upon the provision of certain services with regard to the investment of funds in real estate investments, the management of those investments, among other services, and the disposition of investments, as well as entitles the Advisor to reimbursement of organization and offering costs incurred by the Advisor or Sponsor on behalf of the Company, such as expenses related to the Offering, and certain costs incurred by the Advisor or Sponsor in providing services to the Company. In addition, the Advisor is entitled to certain other fees, including an incentive fee upon achieving certain performance goals, as detailed in the Advisory Agreement. The Sponsor also serves as the sponsor for Rich Uncles REIT I. During the three months ended March 31, 2017, no other business transactions occurred between the Company and Rich Uncles REIT I, other than described below and those relating to the Company’s investment in Rich Uncles REIT I. Three March 31, December 31, March 31, December 31, Incurred Receivable Receivable Payable Payable Expensed: Acquisition fees $ - $ - $ - $ - $ - Asset management fees 111,298 - - 113,050 29,577 Payroll expense reimbursement from Sponsor (1) (688,026) 109,242 79,862 - - Waiver of asset management fees (2) (27,824) - - - - Capitalized Acquisition fees 600,600 - - - 274,200 Financing coordination fees 87,450 - - - - Additional paid-in-capital Reimbursable organizational and offering expenses (3) 608,130 - - 159,100 79,645 Other Costs advanced by Sponsor (1) - - - 5,625 - Costs reimbursable from Rich Uncles REIT I (4) - 28,571 28,571 - - $ 691,628 $ 137,813 $ 108,433 $ 277,775 $ 383,422 (1) The Company records payroll costs related to Company employees that answer questions from prospective shareholders. The Sponsor has agreed to reimburse the Company for these investor relations payroll costs which the Sponsor considers to be offering expenses in accordance with the Advisory Agreement. (2) To the extent the Advisor elects, in its sole discretion to defer all or any portion of its monthly asset management fee, the Advisor will be deemed to have waived, not deferred, that portion up to 0.025 27,824 (3) As of March 31, 2017, the Sponsor had incurred 3,054,852 3 (4) The Company incurred $ 28,571 Organizational and Offering Expenses During the Offering, pursuant to the Advisory Agreement, the Company is obligated to reimburse the Sponsor or its affiliates for organizational and offering expenses (as defined by the Sponsor) paid by the Sponsor on behalf of the Company. The Company will reimburse the Sponsor for organizational and offering expenses up to 3.0% of gross offering proceeds. The Sponsor and affiliates will be responsible for any organizational and offering expenses related to the Offering to the extent they exceed 3.0% of gross offering proceeds from the Offering. As of March 31, 2017, the Sponsor has incurred organizational and offering expenses in excess of 3.0% of the gross offering proceeds received by the Company. To the extent the Company has more gross offering proceeds from future shareholders, the Company will be obligated to reimburse the Sponsor. As the amount of future gross offering proceeds is uncertain, the amount the Company is obligated to reimburse to the Sponsor is uncertain. As of March 31, 2017, the Company has reimbursed the Sponsor $ 1,186,345 1,345,445 159,000 Investor relations payroll expense reimbursement from Sponsor The Company employs investor personnel that answer inquiries from potential investors regarding the Company and/or its prospectus. The payroll expense associated with the investor relations personnel is reimbursed by the Sponsor. The Sponsor considers these payroll costs to be offering expenses. The total amount of such payroll expense reimbursements was $ 688,026 Acquisition Fees Asset Management Fee The Company shall pay to the Advisor as compensation for the advisory services rendered to the Company, a monthly fee in an amount equal to 0.1% of the Company’s Average Invested Assets, as defined (the “Asset Management Fee”), as of the end of the preceding month. The Asset Management Fee shall be payable monthly on the last day of such month, or the first business day following the last day of such month. The Asset Management Fee, which must be reasonable in the determination of the Company’s independent directors at least annually, may or may not be taken, in whole or in part as to any year, in the sole discretion of the Advisor. All or any portion of the Asset Management Fee not paid as to any fiscal year shall be deferred without interest and may be paid in such other fiscal year as the Advisor shall determine. Additionally, to the extent the Advisor elects, in its sole discretion, to defer all or any portion of its monthly Asset Management Fee (which is payable in the amount equal to 0.1 0.025 111,298 27,824 113,050 Financing Coordination Fee Other than with respect to any mortgage or other financing related to a property concurrent with its acquisition, if the Advisor or an affiliate provides a substantial amount of the services (as determined by a majority of the Company’s independent directors) in connection with the post-acquisition financing or refinancing of any debt that the Company obtains relative to a property, then the Company shall pay to the Advisor or such affiliate a financing coordination fee equal to 1.0 87,450 Property Management Fees If the Advisor or any of its affiliates provides a substantial amount of the property management services (as determined by a majority of the Company’s independent directors) for the Company’s properties, then the Company shall pay to the Advisor or such affiliate a property management fee equal to 1.5 Disposition Fees For substantial assistance in connection with the sale of properties, the Company shall pay to its Advisor or one of its affiliates 3.0% of the contract sales price, as defined, of each property sold; provided, however, that if, in connection with such disposition, commissions are paid to third parties unaffiliated with our Advisor or its affiliates, the disposition fees paid to our Advisor, our Sponsor, their affiliates and unaffiliated third parties may not exceed the lesser of the competitive real estate commission or 6% of the contract sales price. Leasing Commission Fees If the Advisor or any of its affiliates provides a substantial amount of the services (as determined by a majority of the Company’s independent directors) in connection with the Company’s leasing of a property or properties to unaffiliated third parties, then the Company shall pay to the Advisor or such affiliate leasing commissions equal to 6.0% of the rents due pursuant to such lease for the first ten years of the lease term; provided, however (i) if the term of the lease is less than ten years, such commission percentage will apply to the full term of the lease and (ii) any rents due under a renewal of a lease of an existing tenant upon expiration of the initial lease agreement (including any extensions provided for thereunder) shall accrue a commission of 3.0% in lieu of the aforementioned 6.0% commission. Other Operating Expense Reimbursement Under the prospectus, total operating expenses of the Company are limited to the greater of 2% of average invested assets or 25% of net income for the four most recently completed fiscal quarters (2%/25% Limitation). Operating expense reimbursements for the four fiscal quarters ended March 31, 2017 exceeded the 2%/25% Limitation. The Company’s conflicts committee approved the operating expenses above the 2%/25% Limitation, as they determined that the relationship of the Company’s operating expenses to average invested assets were justified for the four fiscal quarters ended March 31, 2017 given the costs of operating a public company and the early stage of the Company’s operations. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies Disclosure [Text Block] | NOTE 7. COMMITMENTS AND CONTINGENCIES Economic Dependency The Company depends on its Sponsor and its Advisor for certain services that are essential to the Company, including the sale of the Company’s shares of common stock, the identification, evaluation, negotiation, origination, acquisition and disposition of investments; management of the daily operations of the Company’s 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. Environmental As an owner of real estate, the Company is subject to various environmental laws of federal, state and local governments. Although there can be no assurance, the Company is not aware of any environmental liability that could have a material adverse effect on its financial condition or results of operations. However, changes in applicable environmental laws and regulations, the uses and conditions of properties in the vicinity of the Company’s properties, the activities of its tenants and other environmental conditions of which the Company is unaware with respect to the property could result in future environmental liabilities. Tenant Improvements Pursuant to a lease agreement, the Company has an obligation to pay for $55,440 in tenant improvements to be incurred by a tenant. Legal Matters From time to time, the Company may become party to legal proceedings that arise in the ordinary course of its business. Other than the below, the Company is not a party to any legal proceeding, nor is the Company aware of any pending or threatened litigation that could have a material adverse effect on the Company’s business, operating results, cash flows or financial condition should such litigation be resolved unfavorably. The U.S. Securities and Exchange Commission (the “SEC”) is conducting an investigation related to the advertising and sale of securities by the Company in connection with the Offering. The investigation is a non-public fact finding inquiry. It is neither an allegation of wrongdoing nor a finding that violations of law have occurred. In connection with the investigation, the Company and certain |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | NOTE 8. SUBSEQUENT EVENTS The Company evaluates subsequent events up until the date the condensed consolidated financial statements are issued. Distributions On April 10, 2017, the Company’s board of directors declared dividends based on daily record dates for the period March 1, 2017 through March 31, 2017 at a rate of $ 0.00188172 241,376 241,376 196,091 On May 10, 2017, the Company’s board of directors declared dividends based on daily record dates for the period April 1, 2017 through April 30, 2017 at a rate of $ 0.0019444 274,851 274,851 225,969 Offering Status Through May 11, 2017, the Company had sold 5,167,876 51,678,761 93,378 933,783 Acquisitions On April 17, 2017, through a wholly owned subsidiary, the Company acquired a 70,960 12,750,000 428,284 Redeemable common stock For the period from April 1, 2017 through May 11, 2017, the Company redeemed 38,609 386,092 |
SUMMARY OF SIGNIFICANT ACCOUN15
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2017 | |
Accounting Policies [Abstract] | |
Consolidation, Policy [Policy Text Block] | Basis of Presentation and Principles of Consolidation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information as contained in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“Codification”), and in conjunction with 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 certain information and footnote disclosures required by GAAP for audited financial statements. In the opinion of management, the unaudited condensed consolidated financial statements reflect all adjustments which are of a normal and recurring nature, necessary for a fair and consistent presentation of the financial position and the results for the interim period presented. Operating results for the three months ended March 31, 2017 are not necessarily indicative of the results that may be expected for the year ended December 31, 2017. The accompanying unaudited interim financial information should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2016 as filed with the SEC. The condensed consolidated financial statements include the accounts of the Company, the Operating Partnership, and directly wholly owned subsidiaries. All significant intercompany balances and transactions are eliminated in consolidation. |
Comprehensive Income, Policy [Policy Text Block] | Other Comprehensive Income For all periods presented, other comprehensive loss is the same as net loss. |
Use of Estimates, Policy [Policy Text Block] | Use of Estimates The preparation of the condensed consolidated financial statements and the accompanying notes thereto in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results may differ from those estimates. |
New Accounting Pronouncements, Policy [Policy Text Block] | Recent Accounting Pronouncements New Accounting Standards Issued and Adopted In January 2017, the FASB issued Accounting Standards Update (“ASU”) No. 2017-01 , Business Combinations (Topic 805): Clarifying the Definition of a Business In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments New Accounting Standards Recently Issued and Not Yet Adopted In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) Revenue Recognition (Topic 605) Leases (Topic 840). Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) |
REAL PROPERTY (Tables)
REAL PROPERTY (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Real Estate [Abstract] | |
Schedule of Real Estate Properties [Table Text Block] | As of March 31, 2017, the Company’s real estate portfolio consisted of eleven properties in six states consisting of six retail, four office and one industrial property. The following table provides summary information regarding the Company’s real estate as of March 31, 2017: Property Location Acquisition Property Type Land, Tenant Accumulated Total Accredo Orlando, FL 6/15/2016 Office $ 9,656,862 $ 1,053,638 $ (386,997) $ 10,323,503 Walgreens Stockbridge, GA 6/21/2016 Retail 4,147,948 705,423 (259,634) 4,593,737 Dollar General Litchfield, ME 11/4/2016 Retail 1,281,812 116,302 (15,091) 1,383,023 Dollar General Wilton, ME 11/4/2016 Retail 1,543,776 140,653 (19,314) 1,665,115 Dollar General Thompsontown, PA 11/4/2016 Retail 1,199,860 106,730 (14,500) 1,292,090 Dollar General Mt. Gilead, OH 11/4/2016 Retail 1,174,188 111,847 (13,902) 1,272,133 Dollar General Lakeside, OH 11/4/2016 Retail 1,112,872 100,857 (14,268) 1,199,461 Dollar General Castalia, OH 11/4/2016 Retail 1,102,086 86,408 (13,863) 1,174,631 Dana Cedar Park, TX 12/27/2016 Industrial 8,392,906 1,210,873 (143,085) 9,460,694 Northrop Melbourne, FL 3/7/2017 Office 12,382,991 1,341,199 (32,626) 13,691,564 exp US Services Maitland, FL 3/27/2017 Office 5,921,542 388,341 (10,764) 6,299,120 $ 47,916,843 $ 5,362,271 $ (924,044) $ 52,355,071 |
Schedule Of Acquisition Of Property [Table Text Block] | During the three months ended March 31, 2017, the Company acquired the following properties: Property Acquisition Date Land Buildings and Improvements Above-Market Lease Tenant Origination and Absorption Total Northrop 3/7/2017 $ 1,191,024 $ 11,191,967 $ - $ 1,341,199 $ 13,724,190 exp US Services 3/27/2017 785,989 5,135,553 616,634 388,341 6,926,517 $ 1,977,013 $ 16,327,520 $ 616,634 $ 1,729,540 $ 20,650,707 |
Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block] | As of March 31, 2017 the future minimum contractual rent payments due under the Company’s non-cancelable operating leases are as follows:. April 1, 2017 through December 31, 2017 $ 3,225,730 2018 4,381,524 2019 4,476,230 2020 4,582,326 2021 3,063,008 2022 2,064,511 $ 21,793,329 |
Schedule of Finite-Lived Intangible Assets [Table Text Block] | As of March 31, 2017, the Company’s intangibles were as follows: Tenant Above-Market Below-Market Cost $ 5,362,271 $ 783,263 $ (151,609) Accumulated amortization (369,027) (26,383) 9,347 Net amount $ 4,993,244 $ 756,880 $ (142,262) |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block] | The intangible assets are amortized over their remaining respective lease terms, which was approximately 6.5 Tenant Above- Below- April 1, 2017 through December 31, 2017 $ 695,016 $ 72,795 $ 11,709 2018 926,688 97,061 20,215 2019 926,688 97,061 20,215 2020 926,688 97,061 20,215 2021 510,428 79,009 20,215 2022 249,915 63,735 20,215 Thereafter 757,821 250,159 29,478 $ 4,993,244 $ 756,880 $ 142,262 Weighted-Average Remaining Amortization Period 6.5 years 8.7 years 7.2 years |
DEBT (Tables)
DEBT (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Debt [Table Text Block] | As of March 31, 2017, the Company’s mortgage notes payable consisted of the following: Collateral Principal Deferred Net Balance Contractual Loan Maturity Accredo/Walgreens properties $ 7,233,587 $ (143,911) $ 7,089,676 3.95 % 7/1/2021 Dana property 4,758,000 (139,991) 4,618,009 4.56 % 4/1/2023 Six Dollar General properties 3,986,988 (180,655) 3,806,333 4.69 % 4/1/2022 $ 15,978,575 $ (464,557) $ 15,514,018 |
Schedule of Maturities of Long-term Debt [Table Text Block] | The following summarizes the future principal repayment of the Company’s mortgage notes payable and unsecured credit facility as of March 31, 2017: Mortgage Unsecured Total Remaining 2017 $ 201,816 $ 6,530,000 $ 6,731,816 2018 284,835 - 284,835 2019 290,365 - 290,365 2020 294,996 - 294,996 2021 6,852,001 - 6,852,001 2022 3,753,801 - 3,753,801 2023 4,300,761 - 4,300,761 Total principal 15,978,575 6,530,000 22,508,575 Deferred financing costs, net (464,557) (481) (465,038) Total principal $ 15,514,018 $ 6,529,519 $ 22,043,537 |
FAIR VALUE DISCLOSURES (Tables)
FAIR VALUE DISCLOSURES (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Schedule of Carrying Values and Estimated Fair Values of Debt Instruments [Table Text Block] | The following were the face value, carrying amount and fair value of the Company’s mortgage notes payable as of March 31, 2017: Face value Carrying value Fair value $ 15,978,575 $ 15,514,018 $ 15,827,028 |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions [Table Text Block] | Pursuant to the terms of the agreement, summarized below are the related party costs incurred by the Company for the three months ended March 31, 2017: Three March 31, December 31, March 31, December 31, Incurred Receivable Receivable Payable Payable Expensed: Acquisition fees $ - $ - $ - $ - $ - Asset management fees 111,298 - - 113,050 29,577 Payroll expense reimbursement from Sponsor (1) (688,026) 109,242 79,862 - - Waiver of asset management fees (2) (27,824) - - - - Capitalized Acquisition fees 600,600 - - - 274,200 Financing coordination fees 87,450 - - - - Additional paid-in-capital Reimbursable organizational and offering expenses (3) 608,130 - - 159,100 79,645 Other Costs advanced by Sponsor (1) - - - 5,625 - Costs reimbursable from Rich Uncles REIT I (4) - 28,571 28,571 - - $ 691,628 $ 137,813 $ 108,433 $ 277,775 $ 383,422 (1) The Company records payroll costs related to Company employees that answer questions from prospective shareholders. The Sponsor has agreed to reimburse the Company for these investor relations payroll costs which the Sponsor considers to be offering expenses in accordance with the Advisory Agreement. (2) To the extent the Advisor elects, in its sole discretion to defer all or any portion of its monthly asset management fee, the Advisor will be deemed to have waived, not deferred, that portion up to 0.025 27,824 (3) As of March 31, 2017, the Sponsor had incurred 3,054,852 3 (4) The Company incurred $ 28,571 |
BUSINESS AND ORGANIZATION (Deta
BUSINESS AND ORGANIZATION (Details Textual) - USD ($) | May 11, 2017 | Jul. 20, 2016 | Oct. 19, 2015 | Jun. 24, 2015 | Mar. 31, 2017 | Dec. 31, 2016 | Jul. 15, 2015 |
Business And Organisation [Line Items] | |||||||
Authority To Issue of Common Stock | 250,000,000 | ||||||
Minimum Investment in Shares Value | $ 500 | ||||||
Common Stock, Shares Authorized | 200,000,000 | 200,000,000 | 200,000,000 | ||||
Common Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 | $ 0.001 | ||||
Preferred Stock, Shares Authorized | 50,000,000 | 50,000,000 | 50,000,000 | ||||
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 | $ 0.001 | ||||
Share Price | $ 10 | ||||||
Limited Liability Company (LLC) or Limited Partnership (LP), Managing Member or General Partner, Ownership Interest | 99.00% | ||||||
Limited Liability Company (LLC) or Limited Partnership (LP), Members or Limited Partners, Ownership Interest | 1.00% | ||||||
Stock Issued During Period, Shares, New Issues | 5,167,876 | 4,464,819 | |||||
Stock Issued During Period, Value, New Issues | $ 51,678,761 | $ 44,648,179 | $ 20,271,009 | ||||
Distribution Reinvestment Plan [Member] | |||||||
Business And Organisation [Line Items] | |||||||
Stock Issued During Period, Shares, New Issues | 51,173 | ||||||
IPO [Member] | |||||||
Business And Organisation [Line Items] | |||||||
Common Stock, Value, Subscriptions | $ 900,000,000 | ||||||
DRP Offering [Member] | |||||||
Business And Organisation [Line Items] | |||||||
Common Stock, Value, Subscriptions | $ 100,000,000 | ||||||
Sponsor [Member] | |||||||
Business And Organisation [Line Items] | |||||||
Stock Issued During Period, Shares, New Issues | 10,000 | ||||||
Shares Issued, Price Per Share | $ 10 |
REAL PROPERTY (Details)
REAL PROPERTY (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Dec. 31, 2016 | |
Real Estate [Line Items] | ||
Land, building and improvements | $ 47,916,843 | |
Tenant origination and absorption costs | 5,362,271 | $ 3,632,731 |
Accumulated depreciation and amortization | (924,044) | (493,185) |
Total real estate investments, net | $ 52,355,071 | $ 32,751,856 |
Accredo [Member] | ||
Real Estate [Line Items] | ||
Real Estate, Acquisition, Description | Accredo | |
Real Estate, Acquisition, Property Location | Orlando, FL | |
Walgreens [Member] | ||
Real Estate [Line Items] | ||
Real Estate, Acquisition, Description | Walgreens | |
Real Estate, Acquisition, Property Location | Stockbridge, GA | |
Dollar General One [Member] | ||
Real Estate [Line Items] | ||
Real Estate, Acquisition, Description | Dollar General | |
Real Estate, Acquisition, Property Location | Litchfield, ME | |
Dollar GeneralTwo [Member] | ||
Real Estate [Line Items] | ||
Real Estate, Acquisition, Description | Dollar General | |
Real Estate, Acquisition, Property Location | Wilton, ME | |
Dollar General Three [Member] | ||
Real Estate [Line Items] | ||
Real Estate, Acquisition, Description | Dollar General | |
Real Estate, Acquisition, Property Location | Thompsontown, PA | |
Dollar General Four [Member] | ||
Real Estate [Line Items] | ||
Real Estate, Acquisition, Description | Dollar General | |
Real Estate, Acquisition, Property Location | Mt. Gilead, OH | |
Dollar General Five [Member] | ||
Real Estate [Line Items] | ||
Real Estate, Acquisition, Description | Dollar General | |
Real Estate, Acquisition, Property Location | Lakeside, OH | |
Dollar General Six [Member] | ||
Real Estate [Line Items] | ||
Real Estate, Acquisition, Description | Dollar General | |
Real Estate, Acquisition, Property Location | Castalia, OH | |
Dana [Member] | ||
Real Estate [Line Items] | ||
Real Estate, Acquisition, Description | Dana | |
Real Estate, Acquisition, Property Location | Cedar Park, TX | |
Northrop [Member] | ||
Real Estate [Line Items] | ||
Real Estate, Acquisition, Description | Northrop | |
Real Estate, Acquisition, Property Location | Melbourne, FL | |
Ex Us Services [Member] | ||
Real Estate [Line Items] | ||
Real Estate, Acquisition, Description | exp US Services | |
Real Estate, Acquisition, Property Location | Maitland, FL | |
Office Building [Member] | Accredo [Member] | ||
Real Estate [Line Items] | ||
Land, building and improvements | $ 9,656,862 | |
Tenant origination and absorption costs | 1,053,638 | |
Accumulated depreciation and amortization | (386,997) | |
Total real estate investments, net | 10,323,503 | |
Office Building [Member] | Northrop [Member] | ||
Real Estate [Line Items] | ||
Land, building and improvements | 12,382,991 | |
Tenant origination and absorption costs | 1,341,199 | |
Accumulated depreciation and amortization | (32,626) | |
Total real estate investments, net | 13,691,564 | |
Office Building [Member] | Ex Us Services [Member] | ||
Real Estate [Line Items] | ||
Land, building and improvements | 5,921,542 | |
Tenant origination and absorption costs | 388,341 | |
Accumulated depreciation and amortization | (10,764) | |
Total real estate investments, net | 6,299,120 | |
Retail Site [Member] | Walgreens [Member] | ||
Real Estate [Line Items] | ||
Land, building and improvements | 4,147,948 | |
Tenant origination and absorption costs | 705,423 | |
Accumulated depreciation and amortization | (259,634) | |
Total real estate investments, net | 4,593,737 | |
Retail Site [Member] | Dollar General One [Member] | ||
Real Estate [Line Items] | ||
Land, building and improvements | 1,281,812 | |
Tenant origination and absorption costs | 116,302 | |
Accumulated depreciation and amortization | (15,091) | |
Total real estate investments, net | 1,383,023 | |
Retail Site [Member] | Dollar GeneralTwo [Member] | ||
Real Estate [Line Items] | ||
Land, building and improvements | 1,543,776 | |
Tenant origination and absorption costs | 140,653 | |
Accumulated depreciation and amortization | (19,314) | |
Total real estate investments, net | 1,665,115 | |
Retail Site [Member] | Dollar General Three [Member] | ||
Real Estate [Line Items] | ||
Land, building and improvements | 1,199,860 | |
Tenant origination and absorption costs | 106,730 | |
Accumulated depreciation and amortization | (14,500) | |
Total real estate investments, net | 1,292,090 | |
Retail Site [Member] | Dollar General Four [Member] | ||
Real Estate [Line Items] | ||
Land, building and improvements | 1,174,188 | |
Tenant origination and absorption costs | 111,847 | |
Accumulated depreciation and amortization | (13,902) | |
Total real estate investments, net | 1,272,133 | |
Retail Site [Member] | Dollar General Five [Member] | ||
Real Estate [Line Items] | ||
Land, building and improvements | 1,112,872 | |
Tenant origination and absorption costs | 100,857 | |
Accumulated depreciation and amortization | (14,268) | |
Total real estate investments, net | 1,199,461 | |
Retail Site [Member] | Dollar General Six [Member] | ||
Real Estate [Line Items] | ||
Land, building and improvements | 1,102,086 | |
Tenant origination and absorption costs | 86,408 | |
Accumulated depreciation and amortization | (13,863) | |
Total real estate investments, net | 1,174,631 | |
Industrial [Member] | Dana [Member] | ||
Real Estate [Line Items] | ||
Land, building and improvements | 8,392,906 | |
Tenant origination and absorption costs | 1,210,873 | |
Accumulated depreciation and amortization | (143,085) | |
Total real estate investments, net | $ 9,460,694 |
REAL PROPERTY (Details 1)
REAL PROPERTY (Details 1) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Real Estate [Line Items] | ||
Payments to Acquire Real Estate | $ 20,050,108 | $ 0 |
Northrop [Member] | ||
Real Estate [Line Items] | ||
Payments to Acquire Real Estate | 13,724,190 | |
Ex Us Services [Member] | ||
Real Estate [Line Items] | ||
Payments to Acquire Real Estate | 6,926,517 | |
Land [Member] | ||
Real Estate [Line Items] | ||
Payments to Acquire Real Estate | 1,977,013 | |
Land [Member] | Northrop [Member] | ||
Real Estate [Line Items] | ||
Payments to Acquire Real Estate | 1,191,024 | |
Land [Member] | Ex Us Services [Member] | ||
Real Estate [Line Items] | ||
Payments to Acquire Real Estate | 785,989 | |
Buildings and Improvements [Member] | ||
Real Estate [Line Items] | ||
Payments to Acquire Real Estate | 16,327,520 | |
Buildings and Improvements [Member] | Northrop [Member] | ||
Real Estate [Line Items] | ||
Payments to Acquire Real Estate | 11,191,967 | |
Buildings and Improvements [Member] | Ex Us Services [Member] | ||
Real Estate [Line Items] | ||
Payments to Acquire Real Estate | 5,135,553 | |
Above Market Leases [Member] | ||
Real Estate [Line Items] | ||
Payments to Acquire Real Estate | 616,634 | |
Above Market Leases [Member] | Northrop [Member] | ||
Real Estate [Line Items] | ||
Payments to Acquire Real Estate | 0 | |
Above Market Leases [Member] | Ex Us Services [Member] | ||
Real Estate [Line Items] | ||
Payments to Acquire Real Estate | 616,634 | |
Tenant origination and absorption costs [Member] | ||
Real Estate [Line Items] | ||
Payments to Acquire Real Estate | 1,729,540 | |
Tenant origination and absorption costs [Member] | Northrop [Member] | ||
Real Estate [Line Items] | ||
Payments to Acquire Real Estate | 1,341,199 | |
Tenant origination and absorption costs [Member] | Ex Us Services [Member] | ||
Real Estate [Line Items] | ||
Payments to Acquire Real Estate | $ 388,341 |
REAL PROPERTY (Details 2)
REAL PROPERTY (Details 2) | Mar. 31, 2017USD ($) |
2,017 | $ 3,225,730 |
2,018 | 4,381,524 |
2,019 | 4,476,230 |
2,020 | 4,582,326 |
2,021 | 3,063,008 |
2,022 | 2,064,511 |
Operating Leases, Future Minimum Payments Receivable | $ 21,793,329 |
REAL PROPERTY (Details 3)
REAL PROPERTY (Details 3) | Mar. 31, 2017USD ($) |
Tenant origination and absorption costs [Member] | |
Cost | $ 5,362,271 |
Accumulated amortization | (369,027) |
Net amount | 4,993,244 |
Above market lease [Member] | |
Cost | 783,263 |
Accumulated amortization | (26,383) |
Net amount | 756,880 |
Below-market lease intangibles [Member] | |
Cost | (151,609) |
Accumulated amortization | 9,347 |
Net amount | $ 142,262 |
REAL PROPERTY (Details 4)
REAL PROPERTY (Details 4) | 3 Months Ended |
Mar. 31, 2017USD ($) | |
Above market lease intangibles [Member] | |
Real Estate [Line Items] | |
2,017 | $ 72,795 |
2,018 | 97,061 |
2,019 | 97,061 |
2,020 | 97,061 |
2,021 | 79,009 |
2,022 | 63,735 |
Thereafter | 250,159 |
Finite-Lived Intangible Assets, Net | $ 756,880 |
Weighted-Average Remaining Amortization Period | 8 years 8 months 12 days |
Tenant origination and absorption costs intangibles [Member] | |
Real Estate [Line Items] | |
2,017 | $ 695,016 |
2,018 | 926,688 |
2,019 | 926,688 |
2,020 | 926,688 |
2,021 | 510,428 |
2,022 | 249,915 |
Thereafter | 757,821 |
Finite-Lived Intangible Assets, Net | $ 4,993,244 |
Weighted-Average Remaining Amortization Period | 6 years 6 months |
Below-market lease intangibles [Member] | |
Real Estate [Line Items] | |
2,017 | $ 11,709 |
2,018 | 20,215 |
2,019 | 20,215 |
2,020 | 20,215 |
2,021 | 20,215 |
2,022 | 20,215 |
Thereafter | 29,478 |
Finite-Lived Intangible Assets, Net | $ 142,262 |
Weighted-Average Remaining Amortization Period | 7 years 2 months 12 days |
REAL PROPERTY (Details Textual)
REAL PROPERTY (Details Textual) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Real Estate [Line Items] | ||
Real Estate Revenue, Net | $ 696,694 | $ 0 |
Accredo and Walgreens acquisitions [Member] | ||
Real Estate [Line Items] | ||
Acquisition Costs, Period Cost | 686,148 | |
Real Estate Revenue, Net | $ 92,526 | |
Northrop [Member] | ||
Real Estate [Line Items] | ||
Concentration Risk, Percentage | 21.19% | |
Tenant Origination And Absorption Costs [Member] | ||
Real Estate [Line Items] | ||
Finite-Lived Intangible Assets, Remaining Amortization Period | 6 years 6 months |
DEBT (Details)
DEBT (Details) | 3 Months Ended |
Mar. 31, 2017USD ($) | |
Debt Instrument [Line Items] | |
Deferred Financing Costs, Net | $ (465,038) |
Net Balance | 22,043,537 |
Mortgage Notes Payable [Member] | |
Debt Instrument [Line Items] | |
Principal Amount | 15,978,575 |
Deferred Financing Costs, Net | (464,557) |
Net Balance | 15,514,018 |
Mortgage Note Payable One [Member] | Mortgage Notes Payable [Member] | |
Debt Instrument [Line Items] | |
Principal Amount | 7,233,587 |
Deferred Financing Costs, Net | (143,911) |
Net Balance | $ 7,089,676 |
Contractual Interest Rate | 3.95% |
Loan Maturity | Jul. 1, 2021 |
Mortgage Note Payable Two [Member] | Mortgage Notes Payable [Member] | |
Debt Instrument [Line Items] | |
Principal Amount | $ 4,758,000 |
Deferred Financing Costs, Net | (139,991) |
Net Balance | $ 4,618,009 |
Contractual Interest Rate | 4.56% |
Loan Maturity | Apr. 1, 2023 |
Mortgage Note Payable Three [Member] | Mortgage Notes Payable [Member] | |
Debt Instrument [Line Items] | |
Principal Amount | $ 3,986,988 |
Deferred Financing Costs, Net | (180,655) |
Net Balance | $ 3,806,333 |
Contractual Interest Rate | 4.69% |
Loan Maturity | Apr. 1, 2022 |
DEBT (Details 1)
DEBT (Details 1) | Mar. 31, 2017USD ($) |
Debt Instrument [Line Items] | |
Remaining 2,017 | $ 6,731,816 |
2,018 | 284,835 |
2,019 | 290,365 |
2,020 | 294,996 |
2,021 | 6,852,001 |
2,022 | 3,753,801 |
2,023 | 4,300,761 |
Total principal | 22,508,575 |
Deferred financing costs, net | (465,038) |
Total | 22,043,537 |
Mortgage note payable [Member] | |
Debt Instrument [Line Items] | |
Remaining 2,017 | 201,816 |
2,018 | 284,835 |
2,019 | 290,365 |
2,020 | 294,996 |
2,021 | 6,852,001 |
2,022 | 3,753,801 |
2,023 | 4,300,761 |
Total principal | 15,978,575 |
Deferred financing costs, net | (464,557) |
Total | 15,514,018 |
Unsecured Credit Facility [Member] | |
Debt Instrument [Line Items] | |
Remaining 2,017 | 6,530,000 |
2,018 | 0 |
2,019 | 0 |
2,020 | 0 |
2,021 | 0 |
2,022 | 0 |
2,023 | 0 |
Total principal | 6,530,000 |
Deferred financing costs, net | (481) |
Total | $ 6,529,519 |
DEBT (Details Textual)
DEBT (Details Textual) - USD ($) | 3 Months Ended | |||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | Jun. 07, 2016 | |
Debt Instrument [Line Items] | ||||
Interest Expense | $ 131,837 | $ 0 | ||
Interest Payable | 40,972 | |||
Amortization of Debt Issuance Costs | 11,025 | |||
Stockholders' Equity Attributable to Parent | 40,658,139 | $ 22,231,106 | ||
RICH UNCLES NNN REIT, INC. [Member] | ||||
Debt Instrument [Line Items] | ||||
Stockholders' Equity Attributable to Parent | $ 60,000,000 | |||
Pacific Mercantile Bank [Member] | Unsecured Debt [Member] | ||||
Debt Instrument [Line Items] | ||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 12,000,000 | |||
Unsecured Credit Agreement [Member] | ||||
Debt Instrument [Line Items] | ||||
Line of Credit Facility, Interest Rate Description | an interest rate equal to 1% over an independent index, that is the highest rate on corporate loans posted by at least 75% of the thirty (30) largest banks in the United States, known as The Wall Street Journal Prime Rate, as published in the Wall Street Journal. | |||
Line of Credit Facility, Interest Rate at Period End | 4.74% | |||
Line of Credit Facility, Expiration Date | Jun. 15, 2017 |
FAIR VALUE DISCLOSURES (Details
FAIR VALUE DISCLOSURES (Details) | Mar. 31, 2017USD ($) |
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items] | |
Net Balance | $ 22,043,537 |
Mortgage note payable [Member] | |
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items] | |
Face value | 15,978,575 |
Net Balance | 15,514,018 |
Fair value | $ 15,827,028 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2017 | Dec. 31, 2016 | ||
Related Party Transaction [Line Items] | |||
Expenses incurred To Related Parties | $ 691,628 | ||
Due from Related Parties | 137,813 | $ 108,433 | |
Due to Affiliates | 277,775 | 383,422 | |
Additional Paid-in Capital [Member] | |||
Related Party Transaction [Line Items] | |||
Expenses incurred To Related Parties | [1] | 608,130 | |
Due from Related Parties | [1] | 0 | 0 |
Due to Affiliates | [1] | 159,100 | 79,645 |
Acquisition Fee [Member] | |||
Related Party Transaction [Line Items] | |||
Expenses incurred To Related Parties | 0 | ||
Due from Related Parties | 0 | 0 | |
Due to Affiliates | 0 | 0 | |
Asset Management Fees [Member] | |||
Related Party Transaction [Line Items] | |||
Expenses incurred To Related Parties | 111,298 | ||
Due from Related Parties | 0 | 0 | |
Due to Affiliates | 113,050 | 29,577 | |
Costs Advanced By The Sponsor [Member] | |||
Related Party Transaction [Line Items] | |||
Expenses incurred To Related Parties | [2] | 0 | |
Due from Related Parties | [2] | 0 | 0 |
Due to Affiliates | [2] | 5,625 | 0 |
Expense reimbursements from Sponsor [Member] | |||
Related Party Transaction [Line Items] | |||
Due from Related Parties | [2] | 109,242 | 79,862 |
Due to Affiliates | [2] | 0 | 0 |
Incurred To Related Parties | [2] | (688,026) | |
Waiver of Assets Management Fees [Member] | |||
Related Party Transaction [Line Items] | |||
Due from Related Parties | [3] | 0 | 0 |
Due to Affiliates | [3] | 0 | 0 |
Incurred To Related Parties | [3] | (27,824) | |
Capitalized Acquisition Fees [Member] | |||
Related Party Transaction [Line Items] | |||
Expenses incurred To Related Parties | 600,600 | ||
Due from Related Parties | 0 | 0 | |
Due to Affiliates | 0 | 274,200 | |
Costs reimbursable from Rich Uncles REIT I [Member] | |||
Related Party Transaction [Line Items] | |||
Expenses incurred To Related Parties | [4] | 0 | |
Due from Related Parties | [4] | 28,571 | 28,571 |
Due to Affiliates | [4] | 0 | 0 |
Financing Coordination Fees [Member] | |||
Related Party Transaction [Line Items] | |||
Expenses incurred To Related Parties | 87,450 | ||
Due from Related Parties | 0 | 0 | |
Due to Affiliates | $ 0 | $ 0 | |
[1] | As of March 31, 2017, the Sponsor had incurred 3,054,852 of organizational and offering costs on behalf of the Company. However, the Company is only obligated to reimburse the Sponsor for such organizational and offering expenses to the extent of 3% of gross offering proceeds. The payable related to this obligation is reflected in “Due to affiliates” in the consolidated balance sheets. | ||
[2] | The Company records payroll costs related to Company employees that answer questions from prospective shareholders. The Sponsor has agreed to reimburse the Company for these investor relations payroll costs which the Sponsor considers to be offering expenses in accordance with the Advisory Agreement. | ||
[3] | To the extent the Advisor elects, in its sole discretion to defer all or any portion of its monthly asset management fee, the Advisor will be deemed to have waived, not deferred, that portion up to 0.025% of the total investment value of the Company’s assets. For the three months ended March 31, 2017, the Advisor waived $27,824 of asset management fees, which are not subject to future recoupment by the Advisor. | ||
[4] | The Company incurred $28,571 of costs in conjunction with due diligence for a property acquisition which is owed to the Company from Rich Uncles REIT I and reflected in “Due from affiliates” in the consolidated balance sheets. |
RELATED PARTY TRANSACTIONS (D32
RELATED PARTY TRANSACTIONS (Details Textual) - USD ($) | 3 Months Ended | ||
Mar. 31, 2017 | Dec. 31, 2016 | ||
Related Party Transaction [Line Items] | |||
Due to Related Parties | $ 277,775 | $ 383,422 | |
Property Management Fees Percentage | 1.50% | ||
Operating Expenses Reimbursement, Maximum Limit Reimbursements | Under the prospectus, total operating expenses of the Company are limited to the greater of 2% of average invested assets or 25% of net income for the four most recently completed fiscal quarters (2%/25% Limitation). | ||
Related Party Transaction, Expenses from Transactions with Related Party | $ 691,628 | ||
Advisor [Member] | |||
Related Party Transaction [Line Items] | |||
Acquisition Fees Description | The Company shall pay the Advisor a fee in an amount equal 3.0% of Companys contract purchase price of its properties, as defined, as acquisition fees. The total of all acquisition fees and acquisition expenses shall be reasonable, and shall not exceed 6.0% of the contract price of the property. | ||
Asset Management Fees Percentage | 0.10% | ||
Financing Coordination Fees Percentage | 1.00% | ||
Disposition Fees Description | the Company shall pay to its Advisor or one of its affiliates 3.0% of the contract sales price, as defined, of each property sold; provided, however, that if, in connection with such disposition, commissions are paid to third parties unaffiliated with our Advisor or its affiliates, the disposition fees paid to our Advisor, our Sponsor, their affiliates and unaffiliated third parties may not exceed the lesser of the competitive real estate commission or 6% of the contract sales price. | ||
Leasing Commission Fees Description | the Company shall pay to the Advisor or such affiliate leasing commissions equal to 6.0% of the rents due pursuant to such lease for the first ten years of the lease term; provided, however (i) if the term of the lease is less than ten years, such commission percentage will apply to the full term of the lease and (ii) any rents due under a renewal of a lease of an existing tenant upon expiration of the initial lease agreement (including any extensions provided for thereunder) shall accrue a commission of 3.0% in lieu of the aforementioned 6.0% commission. | ||
Reimbursable Organizational and Offering Expenses [Member] | |||
Related Party Transaction [Line Items] | |||
Due to Related Parties | $ 159,000 | ||
Accrual organization and offering cost | 1,186,345 | ||
Related Party Transaction, Expenses from Transactions with Related Party | $ 1,345,445 | ||
Reimbursable Organizational and Offering Expenses [Member] | Sponsor [Member] | |||
Related Party Transaction [Line Items] | |||
Gross Offering Proceeds Percentage | 3.00% | ||
Waiver Of Assets Management Fees [Member] | |||
Related Party Transaction [Line Items] | |||
Due to Related Parties | [1] | $ 0 | 0 |
Asset Management Fees Waive Percentage | 0.025% | ||
Monthly Asset Management Fees Waive Percentage | 0.025% | ||
Related Party Transaction, Other Revenues from Transactions with Related Party | [1] | $ 27,824 | |
Rich Uncles REIT I [Member] | |||
Related Party Transaction [Line Items] | |||
Accrual organization and offering cost, Related Party | 3,054,852 | ||
Related Party Transaction, Expenses from Transactions with Related Party | 28,571 | ||
Sponsor Reimbursement [Member] | |||
Related Party Transaction [Line Items] | |||
Related Party Transaction, Other Revenues from Transactions with Related Party | 688,026 | ||
Acquisition Fees [Member] | |||
Related Party Transaction [Line Items] | |||
Due to Related Parties | 0 | 0 | |
Related Party Transaction, Expenses from Transactions with Related Party | 0 | ||
Asset Management Fees [Member] | |||
Related Party Transaction [Line Items] | |||
Due to Related Parties | 113,050 | 29,577 | |
Related Party Transaction, Expenses from Transactions with Related Party | 111,298 | ||
Financing Coordination Fees [Member] | |||
Related Party Transaction [Line Items] | |||
Due to Related Parties | 0 | $ 0 | |
Related Party Transaction, Expenses from Transactions with Related Party | $ 87,450 | ||
[1] | To the extent the Advisor elects, in its sole discretion to defer all or any portion of its monthly asset management fee, the Advisor will be deemed to have waived, not deferred, that portion up to 0.025% of the total investment value of the Company’s assets. For the three months ended March 31, 2017, the Advisor waived $27,824 of asset management fees, which are not subject to future recoupment by the Advisor. |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Textual) | Mar. 31, 2017USD ($) |
COMMITMENTS AND CONTINGENCIES [Line Items] | |
Other Commitment | $ 55,440 |
SUBSEQUENT EVENTS (Details Text
SUBSEQUENT EVENTS (Details Textual) | May 11, 2017USD ($)shares | May 10, 2017USD ($)$ / shares | Apr. 17, 2017USD ($)a | Apr. 10, 2017USD ($)$ / shares | Apr. 01, 2017USD ($)shares | Jul. 20, 2016USD ($)shares | Mar. 31, 2017USD ($) | Mar. 31, 2016USD ($) |
Subsequent Event [Line Items] | ||||||||
Dividends | $ 486,862 | |||||||
Stock Issued During Period, Shares, New Issues | shares | 5,167,876 | 4,464,819 | ||||||
Stock Issued During Period, Value, New Issues | $ 51,678,761 | $ 44,648,179 | 20,271,009 | |||||
Payments to Acquire Real Estate | $ 20,050,108 | $ 0 | ||||||
Stock Issued During Period, Shares, Dividend Reinvestment Plan | shares | 93,378 | |||||||
Stock Issued During Period, Value, Dividend Reinvestment Plan | $ 933,783 | |||||||
Subsequent Event [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Dividends | $ 274,851 | $ 241,376 | ||||||
Area of Real Estate Property | a | 70,960 | |||||||
Payments to Acquire Real Estate | $ 12,750,000 | |||||||
Stock Issued During Period, Value, Dividend Reinvestment Plan | $ 225,969 | $ 196,091 | ||||||
Dividends Payable, Amount Per Share Per Day | $ / shares | $ 0.0019444 | $ 0.00188172 | ||||||
Dividends Payable | $ 274,851 | $ 241,376 | ||||||
Business Acquisition, Transaction Costs | $ 428,284 | |||||||
Subsequent Event [Member] | Redeemable Common Stock [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Stock Issued During Period, Shares, New Issues | shares | 38,609 | |||||||
Stock Issued During Period, Value, New Issues | $ 386,092 |