Document And Entity Information
Document And Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | May 04, 2018 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 | |
Entity Registrant Name | RW Holdings NNN REIT, Inc. | |
Entity Central Index Key | 1,645,873 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Common Class C [Member] | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 10,493,138 | |
Common Class S [Member] | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 3,076 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Real estate investments: | ||
Land | $ 22,637,548 | $ 21,878,768 |
Buildings and improvements | 122,598,663 | 108,590,813 |
Tenant origination and absorption costs | 10,697,135 | 8,340,774 |
Total investments in real estate property | 155,933,346 | 138,810,355 |
Accumulated depreciation and amortization | (4,889,014) | (3,574,739) |
Total investments in real estate property, net | 151,044,332 | 135,235,616 |
Investments in unconsolidated entities | 14,330,898 | 14,524,022 |
Real estate investments, net | 165,375,230 | 149,759,638 |
Cash and cash equivalents | 11,070,028 | 3,238,173 |
Restricted cash | 805,416 | 944,582 |
Tenant receivables | 1,631,423 | 1,263,095 |
Above-market lease intangibles, net | 657,032 | 681,293 |
Due from affiliates (Note 9) | 209,876 | 34,194 |
Purchase and other deposits | 535,000 | 40,000 |
Prepaid expenses and other assets | 1,308,378 | 1,104,573 |
Interest rate swap derivatives | 230,934 | 7,899 |
Total assets | 181,823,317 | 157,073,447 |
Liabilities and Stockholders’ Equity | ||
Mortgage notes payable, net | 77,266,071 | 60,487,303 |
Unsecured credit facility, net | 8,972,286 | 12,000,000 |
Accounts payable, accrued and other liabilities | 2,399,466 | 2,411,484 |
Below-market lease intangibles, net | 2,951,175 | 1,584,229 |
Due to affiliates (Note 9) | 493,915 | 907,377 |
Share repurchases payable | 859,915 | 386,839 |
Total liabilities | 92,942,828 | 77,777,232 |
Commitments and contingencies (Note 10) | ||
Redeemable common stock | 3,580,021 | 46,349 |
Preferred stock, par value $0.001 per share, 50,000,000 shares authorized, no shares issued and outstanding | 0 | 0 |
Additional paid-in-capital | 93,582,794 | 85,324,921 |
Cumulative distributions and net losses | (8,292,416) | (6,083,896) |
Total stockholders’ equity | 85,300,468 | 79,249,866 |
Total liabilities and stockholders’ equity | 181,823,317 | 157,073,447 |
Common Class C [Member] | ||
Liabilities and Stockholders’ Equity | ||
Common Stock, Value, Issued | 10,087 | 8,838 |
Total stockholders’ equity | 10,087 | 8,838 |
Common Class S [Member] | ||
Liabilities and Stockholders’ Equity | ||
Common Stock, Value, Issued | 3 | 3 |
Total stockholders’ equity | $ 3 | $ 3 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2018 | Dec. 31, 2017 |
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 Class C [Member] | ||
Common Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 |
Common Stock, Shares Authorized | 300,000,000 | 300,000,000 |
Common Stock, Shares, Issued | 10,098,354 | 8,838,002 |
Common Stock, Shares, Outstanding | 10,098,354 | 8,838,002 |
Common Class S [Member] | ||
Common Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 |
Common Stock, Shares Authorized | 100,000,000 | 100,000,000 |
Common Stock, Shares, Issued | 3,065 | 3,032 |
Common Stock, Shares, Outstanding | 3,065 | 3,032 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Revenues: | ||
Rental income | $ 2,929,393 | $ 696,694 |
Tenant reimbursements | 528,585 | 162,516 |
Total revenues | 3,457,978 | 859,210 |
Expenses: | ||
Fees to affiliates (Note 9) | 401,315 | 111,298 |
General and administrative | 612,187 | 1,186,844 |
Depreciation and amortization | 1,314,276 | 430,859 |
Interest expense | 1,090,616 | 131,837 |
Property expenses | 492,978 | 179,778 |
Total expenses | 3,911,372 | 2,040,616 |
Less: Expenses reimbursed/fees waived by Sponsor or affiliates (Note 9) | (359,514) | (715,850) |
Net expenses | 3,551,858 | 1,324,766 |
Other income: | ||
Interest income | 3,676 | 275 |
Income from investments in unconsolidated entities | 54,879 | 7,957 |
Total other income | 58,555 | 8,232 |
Net loss | $ (35,325) | $ (457,324) |
Net loss per share, basic and diluted (Note 2) | $ 0 | $ (0.13) |
Weighted-average number of common shares outstanding, basic and diluted | 9,499,257 | 3,457,826 |
Dividends declared per common share | $ 0.234 | $ 0.175 |
Condensed Consolidated Stateme5
Condensed Consolidated Statement of Stockholders' Equity - 3 months ended Mar. 31, 2018 - USD ($) | Total | Common Class C [Member] | Common Class S [Member] | Additional Paid-in Capital [Member] | Cumulative Distributions and Net Losses [Member] |
Balance at Dec. 31, 2017 | $ 79,249,866 | $ 8,838 | $ 3 | $ 85,324,921 | $ (6,083,896) |
Balance (in shares) at Dec. 31, 2017 | 8,838,002 | 3,032 | |||
Issuance of common stock | 14,341,117 | $ 1,418 | $ 0 | 14,339,699 | 0 |
Issuance of common stock (in shares) | 1,429,021 | 33 | |||
Distributions declared | (2,173,195) | $ 0 | $ 0 | 0 | (2,173,195) |
Stock compensation expense | 38,190 | $ 4 | $ 0 | 38,186 | 0 |
Stock compensation expense (in shares) | 3,800 | 0 | |||
Repurchase of common stock | (1,683,343) | $ (173) | $ 0 | (1,683,170) | 0 |
Repurchase of common stock (in shares) | (172,469) | 0 | |||
Offering costs | (430,094) | $ 0 | $ 0 | (430,094) | 0 |
Net loss | (35,325) | 0 | 0 | 0 | (35,325) |
Reclassification to redeemable common stock | (4,006,748) | 0 | 0 | (4,006,748) | 0 |
Balance at Mar. 31, 2018 | $ 85,300,468 | $ 10,087 | $ 3 | $ 93,582,794 | $ (8,292,416) |
Balance (in shares) at Mar. 31, 2018 | 10,098,354 | 3,065 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Cash Flows from Operating Activities: | ||
Net loss | $ (35,325) | $ (457,324) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 1,314,276 | 430,859 |
Stock compensation expense | 38,190 | 30,000 |
Deferred rents | (303,476) | (220) |
Amortization of deferred financing costs | 411,173 | 11,025 |
Amortization of above-market leases | 24,261 | 8,331 |
Amortization of below-market leases | (50,536) | (8,505) |
Unrealized gain on interest rate swap valuation | (226,806) | 0 |
Income from investments in unconsolidated entities | (54,879) | (7,957) |
Distributions from investments in unconsolidated entities | 248,002 | 67,580 |
Changes in operating assets and liabilities: | ||
Tenant receivables | (64,852) | 0 |
Due from affiliates | (175,682) | (29,380) |
Prepaid expenses and other assets | (86,098) | (124,901) |
Accounts payable, accrued and other liabilities | (585,695) | 174,159 |
Due to affiliates | (414,409) | 89,097 |
Net cash provided by operating activities | 38,144 | 182,764 |
Cash Flows from Investing Activities: | ||
Acquisition of real estate investments | (15,245,676) | (19,550,108) |
Additions to real estate investments | (3,831) | 0 |
Payments of acquisition fees to affiliate | (456,000) | (874,800) |
Purchase deposits and other acquisition costs | (617,707) | (500,000) |
Net cash used in investing activities | (16,323,214) | (20,924,908) |
Cash Flows from Financing Activities: | ||
Borrowings on unsecured credit facility | 9,000,000 | 14,240,000 |
Repayments of unsecured credit facility | (12,000,000) | (17,867,803) |
Proceeds from mortgage notes payable | 29,315,000 | 8,744,988 |
Principal payments on mortgage notes payable | (12,225,822) | (32,558) |
Loan deposit | (35,000) | (25,000) |
Payments of deferred financing costs to third parties | (499,748) | (234,876) |
Payments of financing fees to affiliates | (209,550) | (87,450) |
Proceeds from issuance of common stock and investor deposits | 13,080,885 | 19,959,194 |
Payments of offering costs to affiliates | (429,297) | (528,675) |
Payment of commissions to Class S distributor | (150) | 0 |
Payments to redeem common stock | (1,683,343) | (214,384) |
Dividends paid to stockholders | (335,216) | (100,126) |
Net cash provided by financing activities | 23,977,759 | 23,853,310 |
Net increase in cash, cash equivalents and restricted cash | 7,692,689 | 3,111,166 |
Cash, cash equivalents and restricted cash, beginning of period | 4,182,755 | 3,677,373 |
Cash, cash equivalents and restricted cash, end of period | 11,875,444 | 6,788,539 |
Supplemental Disclosure of Cash Flow Information: | ||
Cash paid for interest | 887,530 | 106,179 |
Supplemental Schedule of Noncash Investing and Financing Activities: | ||
Reclassification to redeemable common stock | 4,006,748 | 107,276 |
Increase in share redemptions payable | 473,076 | 151,864 |
Decrease in deferred commission payable to Class S common stock distributor | (150) | 0 |
Withholding tax on distributions | 204 | 0 |
Accrued dividends | 579,368 | 0 |
Increase in other offering costs due to affiliates | 947 | 79,455 |
Distributions paid to common stockholders through common stock issuances pursuant to the distribution reinvestment plan | $ 1,260,232 | $ 386,736 |
BUSINESS AND ORGANIZATION
BUSINESS AND ORGANIZATION | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Business Description and Basis of Presentation [Text Block] | RW Holdings 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 changed its name on October 19, 2015 to Rich Uncles NNN REIT, Inc. and again on August 14, 2017 to its present name RW Holdings NNN REIT, Inc. The Company has the authority to issue 450,000,000 50,000 0.001 0.001 100,000,000 500 The Company holds its investments in real property through special purpose wholly-owned limited liability companies, which are wholly owned subsidiaries of Rich Uncles NNN Operating Partnership, LP, a Delaware limited partnership (the “Operating Partnership) or through 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, pursuant to an advisory agreement, as amended (the “Advisory Agreement”). The Advisor is wholly owned by the Company’s sponsor, BrixInvest, LLC (f/k/a Rich Uncles, LLC, the “Sponsor”), a Delaware limited liability company whose members include Harold Hofer and Ray Wirta. On each of 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 U.S. Securities and Exchange Commission (the “SEC”) to register an initial public offering of a maximum of 90,000,000 10,000,000 10.05 500 On August 11, 2017, the Company began offering up to 100,000,000 10.05 10.00 10.05 Through March 31, 2018, the Company had sold 10,484,196 444,514 104,892,549 3,065 65 30,654 As of March 31, 2018, the Company had invested in (i) eight retail properties, six office properties and five industrial properties, (ii) one tenant-in-common real estate investment in which the Company has an approximate 72.7 4.3 The Company continues to offer shares of common stock under its Offerings. In some states, the Company will need to renew the registration statement for the Registered Offering annually or file a new registration statement to continue the Registered Offering. The Company may terminate the Registered Offering at any time. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies [Text Block] | NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Principles of Consolidation The accompanying condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial statements and the rules and regulations of the SEC. Accordingly, they do not contain all information and footnotes required by GAAP for annual financial statements. Such unaudited condensed consolidated financial statements and accompanying notes are the representations of the Company’s management, who is responsible for their integrity and objectivity. These unaudited condensed consolidated financial statements should be read in conjunction with the December 31, 2017 audited consolidated financial statements included in the Company’s Form 10-K filed with the SEC on April 3, 2018. The accompanying unaudited condensed consolidated financial statements have been prepared on the same basis as the annual financial statements and, in the opinion of management, reflect all adjustments, which are normal and recurring, necessary to fairly state its financial position, results of operations and cash flows. All significant intercompany balances and transactions are eliminated in consolidation. The December 31, 2017 balance sheet included herein was derived from the audited financial statements but does not include all disclosures or notes required by GAAP for complete financial statements. 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. Restricted Cash Restricted cash is comprised of funds which are restricted for use as required by certain lenders in conjunction with an acquisition or debt financing and for in site and tenant improvements. Pursuant to lease agreements, the Company has obligations to pay for $ 1,778,649 in site and tenant improvements to be incurred by tenants as of March 31, 2018 , including a 72.7 % share of the tenant improvements for the Santa Clara property. At March 31, 2018, the Company had $ 805,416 of restricted cash held to fund the improvements. Other Comprehensive Income (Loss) For all periods presented, other comprehensive income (loss) is the same as net income (loss). Per Share Data Basic earnings per share is calculated by dividing net income (loss) by the weighted average number of common shares outstanding during the period. Diluted earnings per share of common stock equals basic earnings per share of common stock as there were no potentially dilutive securities outstanding for the three months ended March 31, 2018 and 2017. For the three months ended March 31, 2018, the Company has presented earnings per share amounts on the accompanying statements of operations for Class C and S share classes as a combined common share class. Application of the two-class method for allocating earnings (loss) in accordance with the provisions of Accounting Standards Codification (“ASC”) 260, Earnings per Share Since our board of directors declared distributions for four months (December 2017 through March 2018) during the three months ended March 31, 2018 in order to transition to a process of declaring dividends prior to the beginning of the month, the dividends declared per common share reflects four months of dividends rather than three months of dividends. Recent Accounting Pronouncements New Accounting Standard Issued and Adopted In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606) Revenue Recognition (Topic 605) New Accounting Standard Recently Issued and Not Yet Adopted In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) |
CONDENSED CONSOLIDATED BALANCE9
CONDENSED CONSOLIDATED BALANCE SHEETS DETAILS | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure Text Block Supplement [Abstract] | |
Supplemental Balance Sheet Disclosures [Text Block] | NOTE 3. CONDENSED CONSOLIDATED BALANCE SHEETS DETAILS March 31, December 31, A. Tenant receivables: Straight-line rent $ 1,299,297 $ 995,822 Tenant rent 37,510 27,460 Tenant recoveries 294,616 239,813 $ 1,631,423 $ 1,263,095 B. Accounts payable, accrued and other liabilities: Accounts payable $ 28,943 $ 244,430 Accrued expenses 1,000,980 571,308 Accrued interest payable 201,790 186,841 Unearned rent 307,264 548,266 Deferred commission payable 2,100 2,250 Lease incentive obligation 858,389 858,389 $ 2,399,466 $ 2,411,484 |
REAL ESTATE
REAL ESTATE | 3 Months Ended |
Mar. 31, 2018 | |
Real Estate [Abstract] | |
Real Estate Disclosure [Text Block] | NOTE 4. REAL ESTATE Property Location Acquisition Property Type Land, Tenant Accumulated Total Accredo Health Orlando, FL 6/15/2016 Office $ 9,855,847 $ 1,053,637 $ (889,101) $ 10,020,383 Walgreens Stockbridge, GA 6/21/2016 Retail 4,147,948 705,423 (587,592) 4,265,779 Dollar General Litchfield, ME 11/4/2016 Retail 1,281,812 116,302 (55,335) 1,342,779 Dollar General Wilton, ME 11/4/2016 Retail 1,543,776 140,653 (70,817) 1,613,612 Dollar General Thompsontown, PA 11/4/2016 Retail 1,199,860 106,730 (53,167) 1,253,423 Dollar General Mt. Gilead, OH 11/4/2016 Retail 1,174,188 111,847 (50,975) 1,235,060 Dollar General Lakeside, OH 11/4/2016 Retail 1,112,872 100,857 (52,316) 1,161,413 Dollar General Castalia, OH 11/4/2016 Retail 1,102,086 86,408 (50,831) 1,137,663 Dana Cedar Park, TX 12/27/2016 Industrial 8,392,906 1,210,874 (633,662) 8,970,118 Northrop Grumman Melbourne, FL 3/7/2017 Office 12,382,991 1,341,199 (815,655) 12,908,535 exp US Services Maitland, FL 3/27/2017 Office 5,920,121 388,248 (226,187) 6,082,182 Harley Bedford, TX 4/13/2017 Retail 13,178,288 (303,992) 12,874,296 Wyndham Summerlin, NV 6/22/2017 Office 9,447,270 669,232 (230,013) 9,886,489 Williams Sonoma Summerlin, NV 6/22/2017 Office 7,531,809 550,486 (209,289) 7,873,006 Omnicare Richmond, VA 7/20/2017 Industrial 7,042,928 281,442 (162,878) 7,161,492 EMCOR Cincinnati, OH 8/29/2017 Office 5,960,610 463,488 (110,969) 6,313,129 Husqvarna Charlotte, NC 11/30/2017 Industrial 11,840,201 1,013,948 (131,909) 12,722,240 AvAir Chandler, AZ 12/28/2017 Industrial 27,357,900 (202,437) 27,155,463 3M DeKalb, IL 3/29/2018 Industrial 14,762,798 2,356,361 (51,889) 17,067,270 $ 145,236,211 $ 10,697,135 $ (4,889,014) $ 151,044,332 Current Year Acquisition Property Acquisition Land Buildings and Below-Market Tenant Total 3M 3/29/2018 $ 758,780 $ 14,004,018 $ (1,417,483) $ 2,356,361 $ 15,701,676 Purchase price $ 15,701,676 Acquisition fees to affiliate (456,000) Cash paid for acquisition of real estate investments $ 15,245,676 Property Lease Expiration 3M 7/31/2022 The purchase price allocations reflected in the condensed consolidated financial statements is based upon current 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 3M lease expires on July 31, 2022. The Company capitalized $ 505,507 22,972 Operating Leases Property and Location Net Carrying Percentage of AvAir, Chandler, AZ $ 27,155,463 14.9 % April 2018 to December 2018 $ 8,863,143 2019 12,029,905 2020 12,139,170 2021 10,919,726 2022 9,508,165 2023 8,394,782 Thereafter 45,898,687 $ 107,753,578 Revenue Concentration Property and Location Revenue Percentage of AvAir, AZ $ 635,572 18.4 % Northrop Grumman, FL $ 353,558 10.2 % Intangibles Tenant Above-Market Below-Market Cost $ 10,697,135 $ 783,115 $ (3,071,253) Accumulated amortization (1,518,526) (126,083) 120,078 Net amount $ 9,178,609 $ 657,032 $ (2,951,175) Tenant Above- Below- April 2018 through December 2018 $ 1,318,047 $ 72,784 $ (355,793) 2019 1,757,396 97,045 (474,391) 2020 1,757,396 97,045 (474,391) 2021 1,341,137 78,994 (474,391) 2022 805,067 63,719 (306,829) 2023 432,856 63,719 (78,369) Thereafter 1,766,710 183,726 (787,011) $ 9,178,609 $ 657,032 $ (2,951,175) Weighted-average remaining amortization period 7.7 years 7.8 years 10.0 years |
INVESTMENTS IN UNCONSOLIDATED E
INVESTMENTS IN UNCONSOLIDATED ENTITIES | 3 Months Ended |
Mar. 31, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Cost and Equity Method Investments Disclosure [Text Block] | NOTE 5. INVESTMENTS IN UNCONSOLIDATED ENTITIES March 31, December 31, RU Martin Street Santa Clara (“TIC”) $ 10,973,640 $ 11,103,547 Rich Uncles Real Estate Investment Trust I (“REIT I”) 3,357,258 3,420,475 $ 14,330,898 $ 14,524,022 Three Months Ended March 31, 2018 2017 TIC $ 49,780 $ REIT I 5,099 7,957 $ 54,879 $ 7,957 TIC On September 28, 2017, the Company acquired an approximate 72.7 27.3 23.4 3.9 March 31 December 31 Assets: Real estate investments, net $ 32,412,708 $ 32,587,034 Cash and cash equivalents 599,327 615,436 Other assets 122,016 103,700 Total assets $ 33,134,051 $ 33,306,170 Liabilities: Mortgage notes payable $ 14,172,229 $ 14,235,256 Below-market lease, net 3,216,592 3,247,480 Other liabilities 344,788 246,085 Total liabilities 17,733,609 17,728,821 Total equity 15,400,442 15,577,349 Total liabilities and equity $ 33,134,051 $ 33,306,170 Three Months Ended Total revenue $ 608,794 Expenses: Interest expense 145,025 Depreciation and amortization 247,213 Other expense 146,336 Total expenses 538,574 Net income $ 70,220 (1) The Company’s investment in the TIC commenced on September 28, 2017; therefore, no TIC operating results are presented for the three months ended March 31, 2017. REIT I The Company’s investment in REIT I represented an approximate 4.3 4.4 March 31, December 31, Assets: Real estate investments, net $ 129,945,167 $ 131,166,670 Cash and cash equivalents and restricted cash 6,248,951 6,027,807 Other assets 2,784,434 2,658,777 Total assets $ 138,978,552 $ 139,853,254 Liabilities: Mortgage notes payable, net $ 62,054,451 $ 62,277,387 Below-market lease intangibles, net 3,750,967 3,966,008 Other liabilities 3,992,026 2,937,247 Total liabilities 69,797,444 69,180,642 Redeemable common stock 586,895 586,242 Total shareholders’ equity 68,594,213 70,086,370 Total liabilities and shareholders’ equity $ 138,978,552 $ 139,853,254 Three Months Ended March 31, 2018 2017 Total revenue $ 3,231,218 $ 2,726,267 Expenses: Depreciation and amortization 1,448,244 1,218,074 Interest expense 484,873 461,200 Other expense 1,180,037 652,825 Total expenses 3,113,154 2,332,099 Other income: Other income 280 Net income $ 118,064 $ 394,448 |
DEBT
DEBT | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Debt Disclosure [Text Block] | NOTE 6. DEBT Mortgage Notes Payable March 31, 2018 December 31, 2017 Collateral Principal Deferred Net Principal Deferred Net Contractual Effective Loan Accredo/Walgreen properties $ 7,100,098 $ (115,763) $ 6,984,335 $ 7,133,966 $ (124,763) $ 7,009,203 3.95 % 3.95 % 7/1/2021 Dana property 4,690,114 (119,136) 4,570,978 4,709,889 (125,132) 4,584,757 4.56 % 4.56 % 4/1/2023 Six Dollar General properties 3,930,530 (145,156) 3,785,374 3,951,846 (153,290) 3,798,556 4.69 % 4.69 % 4/1/2022 Wyndham property (2) 5,896,200 (107,016) 5,789,184 5,920,800 (109,936) 5,810,864 One-month LIBOR+2.05 % 4.34 % 6/5/2027 Williams Sonoma property (2) 4,678,800 (81,992) 4,596,808 4,699,200 (85,227) 4,613,973 One-month LIBOR+2.05 % 4.05 % 6/5/2022 Omnicare property 4,404,812 (164,264) 4,240,548 4,423,574 (169,372) 4,254,202 4.36 % 4.36 % 5/1/2026 Harley property 6,954,071 (193,235) 6,760,836 6,983,418 (200,811) 6,782,607 4.25 % 4.25 % 9/1/2024 Northrop Grumman property 5,911,255 (200,404) 5,710,851 5,945,655 (217,584) 5,728,071 4.40 % 4.40 % 3/2/2021 EMCOR property 2,946,563 (80,713) 2,865,850 2,955,000 (83,743) 2,871,257 4.35 % 4.35 % 12/1/2024 exp US Services property 3,490,143 (137,093) 3,353,050 3,505,061 (140,382) 3,364,679 Initial 4.25%; 3.25% + T-Bill index 4.25 % 11/17/2024 Husqvarna property 6,380,000 (205,462) 6,174,538 4.60% for 1st 5-years; greater of 4.60% nd 4.60% 2/20/2028 AvAir property (3) 14,575,000 (355,710) 14,219,290 12,000,000 (330,866) 11,669,134 4.84% for 1st 5-years; greater of 4.60% nd 4.84% 3/27/2028 3M property 8,360,000 (145,571) 8,214,429 One-month LIBOR+2.25 % 4.13 % 3/29/2023 $ 79,317,586 $ (2,051,515) $ 77,266,071 $ 62,228,409 $ (1,741,106) $ 60,487,303 (1) Contractual interest rate represents the interest rate in effect under the mortgage note payable as of March 31, 2018. Effective interest rate is calculated as the actual interest rate in effect as of March 31, 2018 (consisting of the contractual interest rate and the effect of the interest rate swap, if applicable). For further information regarding the Company’s derivative instruments (see Note 7). (2) The loans on each of the Williams Sonoma and Wyndham properties (collectively, the “Property”) located in Summerlin, Nevada were originated by Nevada State Bank (“Bank”). The loans are collateralized by a deed of trust and a security agreement with assignment of rents and fixture filing. In addition, the individual loans are subject to a cross collateralization and cross default agreement whereby any default under, or failure to comply with the terms of any one or both of the loans is an event of default under the terms of both loans. The value of the Property must be in an amount sufficient to maintain a loan to value ratio of no more than 60%. If the loan to value ratio is ever more than 60%, the borrower shall, upon the Bank’s written demand, reduce the principal balance of the loans so that the loan to value ratio is no more than 60 (3) On March 27, 2018, the Company refinanced the mortgage loan for $ 14,575,000 4.84 March 27, 2028 Unsecured Credit Facility On February 28, 2018, the Company, together with the Operating Partnership and Rich Uncles NNN LP, LLC (“Borrowers”), entered into a Business Loan Agreement and Promissory Note (the “New Credit Facility”) with Pacific Mercantile Bank (“Lender”). The New Credit Facility replaced the $ 12,000,000 9,000,000 January 26, 2019 5.50 5.75 The New Credit Facility contains customary representations, warranties and covenants, which are substantially similar to those in the Former Credit Facility. The Company’s ability to borrow under the New Credit Facility will be subject to its ongoing compliance with various affirmative and negative covenants, including with respect to indebtedness, guaranties, mergers and asset sales, liens, dividends, corporate existence and financial reporting obligations. The New Credit Facility also contains customary events of default, including, without limitation, nonpayment of principal, interest, fees or other amounts when due, violation of covenants, breaches of representations or warranties and change of ownership. Upon the occurrence of an event of default, Lender may accelerate the repayment of amounts outstanding under the New Credit Facility and exercise other remedies subject, in certain instances, to the expiration of an applicable cure period. The New Credit Facility is secured by guaranties executed by Raymond E. Wirta, Chairman of the Board of the Company, a trust belonging to Mr. Wirta, Harold C. Hofer, President and Chief Executive Officer of the Company, and a trust belonging to Mr. Hofer, each in the amount of $9,000,000. Such guaranties become effective upon certain triggering events, including an event of default under the New Credit Facility and the failure by Borrowers to pay one or more subsequent advances within 90 days of disbursement. As of March 31, 2018, the New Credit Facility has total outstanding borrowings of $9,000,000. As of December 31, 2017, the Former Credit Facility had total outstanding borrowings of $12,000,000. All Debt Agreements Pursuant to the terms of mortgage notes payable on certain of the Company’s properties and the New Credit Facility, the Company and/or the Borrowers are subject to certain financial loan covenants. The Company and/or the Borrowers were in compliance with all terms and conditions of the applicable loan agreements as of March 31, 2018. Mortgage Unsecured Total April 2018 through December 2018 $ 672,562 $ 9,000,000 $ 9,672,562 2019 1,028,465 1,028,465 2020 1,239,009 1,239,009 2021 7,922,500 7,922,500 2022 14,288,741 14,288,741 2023 12,982,910 12,982,910 Thereafter 41,183,399 41,183,399 Total principal 79,317,586 9,000,000 88,317,586 Deferred financing costs, net (2,051,515) (27,714) (2,079,229) Total $ 77,266,071 $ 8,972,286 $ 86,238,357 Interest Expense Three Months Ended March 31, 2018 2017 Mortgage notes payable Interest expense $ 823,260 $ 81,658 Amortization of deferred financing costs 406,887 10,388 Unrealized gain on interest rate swaps (see Note 7) (226,806) Unsecured credit facility Interest expense 82,989 39,154 Amortization of deferred financing costs 4,286 637 Total interest expense $ 1,090,616 $ 131,837 |
INTEREST RATE SWAP DERIVATIVES
INTEREST RATE SWAP DERIVATIVES | 3 Months Ended |
Mar. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments and Hedging Activities Disclosure [Text Block] | NOTE 7. INTEREST RATE SWAP DERIVATIVES The primary goal of the Company’s risk management practices related to interest rate risk is to prevent changes in interest rates from adversely impacting the Company’s ability to achieve its investment return objectives. The Company does not enter into derivatives for speculative purposes. The Company enters into interest rate swaps as a fixed rate payer to mitigate its exposure to rising interest rates on its variable rate mortgage notes payable. The value of interest rate swaps is primarily impacted by interest rates, market expectations about interest rates, and the remaining life of the applicable instrument. In general, increases in interest rates, or anticipated increases in interest rates, will increase the value of the fixed rate payer position and decrease the value of the variable rate payer position. As the remaining life of the interest rate swap decreases, the value of both positions will generally move towards zero. In June 2017, the Company (or its wholly-owned limited liability company subsidiaries) entered into interest rate swap agreements with amortizing notional amounts relating to two of its mortgage notes payable. The notional amount is an indication of the extent of the Company’s involvement in each instrument at that time, but does not represent exposure to credit, interest rate or market risks. March 31, 2018 Derivative Number of Notional Amount Reference Rate (ii) Weighted Average Weighted Average Interest Rate 2 $ 10,575,000 One-month LIBOR + applicable spread/Fixed at 4.05%-4.34% 4.16 % 7.0 years (i) The notional amount of the Company’s swaps decreases each month to correspond to the outstanding principal balance on the related mortgage. The minimum notional amount (outstanding principal balance at the maturity date) as of March 31, 2018 was $ 9,083,700 (ii) The reference rate was June 30, 2017 for two interest rate swaps. The following table sets forth the fair value of the Company’s derivative instruments (Level 2 measurement), as well as their classification in the condensed consolidated balance sheet as of March 31, 2018: Derivative Instrument Balance Sheet Location Number of Fair Value Interest Rate Swaps Asset Interest rate swap derivatives, at fair value 2 $ 230,934 The change in fair value of a derivative instrument that is not designated as a cash flow hedge for financial accounting purposes is recorded as interest expense in the condensed consolidated statements of operations. None of the Company’s derivatives at March 31, 2018 were designated as hedging instruments; therefore, the net realized gain recognized on interest rate swaps of $ 226,806 December 31, 2017 Derivative Number of Notional Amount Reference Rate Weighted Average Weighted Average Interest Rate 2 $ 10,620,000 One-month LIBOR + applicable spread/Fixed at 4.05%-4.34% 4.21 % 7.2 years (i) The notional amount of the Company’s swaps decreases each month to correspond to the outstanding principal balance on the related mortgage. The minimum notional amount (outstanding principal balance at the maturity date) as of December 31, 2017 was $ 9,083,700 Derivative Instrument Balance Sheet Location Number of Fair Value Interest Rate Swaps Asset Interest rate swap derivatives, at fair value 2 $ 7,899 |
FAIR VALUE DISCLOSURES
FAIR VALUE DISCLOSURES | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Disclosures [Text Block] | NOTE 8. 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, tenant receivables, purchase and other deposits, prepaid expenses and other assets, accounts payable, accrued and other liabilities, due to affiliates and share repurchases payable: Unsecured credit facility Mortgage notes payable: March 31, 2018 December 31, 2017 Face Value Carrying Fair Value Face value Carrying Fair Value Mortgage notes payable $ 79,317,586 $ 77,266,071 $ 80,561,846 $ 62,228,409 $ 60,487,303 $ 62,363,284 Disclosures of the fair values of financial instruments are based on pertinent information available to the Company as of the period end 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, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions Disclosure [Text Block] | NOTE 9. RELATED PARTY TRANSACTIONS The Company paid the independent members of its board of directors for services rendered. The total amount paid was $ 38,190 30,000 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 Offerings, 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 and advisor for REIT I and Brix Student Housing REIT, Inc. During the three months ended March 31, 2018 and 2017, no other business transactions occurred between the Company and REIT I, or Brix Student Housing REIT, Inc., other than as described below or elsewhere herein, and those relating to the Company’s investment in REIT I. Three Months March 31, 2018 Three Months December 31, 2017 Incurred Receivable Payable Incurred Receivable Payable Expensed: Asset management fees (1) $ 401,315 $ $ 460,389 $ 111,298 $ 567,661 Subordinated participation fees 315,802 Fees to affiliates 401,315 111,298 Property management fees* 12,939 7,969 Directors and officers insurance reimbursements** 16,634 16,634 Expense reimbursements from Sponsor (2) (359,514) 209,876 (688,026) 34,194 Waiver of asset management fees (1) (27,824) Capitalized: Acquisition fees 456,000 600,600 Financing coordination fees 209,550 87,450 Additional paid-in-capital: Reimbursable organizational and offering expenses (3) 430,244 16,892 608,130 15,945 $ 209,876 $ 493,915 $ 34,194 $ 907,377 * Property management fees are classified within property operating expenses on the condensed consolidated statements of operations. ** Directors and officers insurance reimbursements are classified within general and administrative expenses on the condensed consolidated statements of operations. (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 0 27,824 47,984 (2) The Company records payroll costs related to Company employees that answer questions from prospective stockholders. 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. The expense reimbursements from the Sponsor for the three months ended March 31, 2018 included $ 48,422 (3) As of March 31, 2018, the Sponsor had incurred $ 7,250,015 3 Organizational and Offering Expenses The Company is obligated to reimburse the Sponsor or its affiliates for organizational and offering expenses (as defined in the Advisory Agreement) 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 to the extent they exceed 3.0% of gross offering proceeds. As of March 31, 2018, 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 stockholders, 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, 2018, the Company has reimbursed the Sponsor $ 3,136,814 3,153,706 16,892 Investor Relations Payroll Expense Reimbursement from Sponsor The Company employs investor personnel that answer inquiries from potential investors regarding the Company and/or its Registered Offering. The payroll expense associated with the investor relations personnel is reimbursed by the Sponsor. The Sponsor considers these payroll costs to be offering expenses. Acquisition Fees The Company shall pay the Advisor a fee in an amount equal to 3.0% of the contract purchase price of the Company’s 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 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 total investment value, 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, the Advisor will be deemed to have waived, not deferred, that portion of its monthly Asset Management Fee that is up to 0.025 401,315 111,298 0 27,824 460,389 567,661 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 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 the Company’s Advisor or its affiliates, the disposition fees paid to its Advisor, its 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. Subordinated Participation Fees The Company shall pay to the Advisor or an affiliate a subordinated participation fee calculated as of December 31 of each year and paid (if at all) in the immediately following January. The subordinated participation fee is only due if the Preferred Return, as defined, is achieved and is equal to the sum of (using terms as defined in the Advisory Agreement): (i) 30% of the product of (a) the difference of (x) the Preliminary NAV per share minus (y) the Highest Prior NAV per share, multiplied by (b) the number of shares outstanding as of December 31 of the relevant annual period, but only if this results in a positive number, plus (ii) 30% of the product of: (a) the amount by which aggregate distributions to stockholders during the annual period, excluding return of capital distributions, divided by the weighted average number of shares outstanding for the annual period, exceed the Preferred Return, multiplied by (b) the weighted average number of shares outstanding for the annual period calculated on a monthly-basis. The Company announced that the amount of the subordinated participation fee of $ 315,802 6,075 Leasing Commission Fees If a property or properties of the Company becomes unleased and 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. Operating Expenses Under the Company’s charter, 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 (the “2%/25% Limitation”). |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies Disclosure [Text Block] | NOTE 10. 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 lease agreements, the Company has obligations to pay for $ 1,778,649 , including a 72.7% share of the tenant improvements for the Santa Clara property 805,416 Redemption of Common Stock Following the Company’s board of directors’ determination of its Net Asset Value (“NAV”) and NAV per share on January 18, 2018, the maximum amount that may be repurchased per month is limited to no more than 2% of the Company’s most recently determined aggregate NAV. Repurchases for any calendar quarter will be limited to no more than 5% of its most recently determined aggregate NAV. The foregoing repurchase limitations are based on “net repurchases” during a quarter or month, as applicable. Thus, for any given calendar quarter or month, the maximum amount of repurchases during that quarter or month will be equal to (1) 5% or 2% (as applicable) of the Company’s most recently determined aggregate NAV, plus (2) proceeds from sales of new shares in the Registered Offering and Class S Offering (including purchases pursuant to its Registered DRP Offering) since the beginning of a current calendar quarter or month, less (3) repurchase proceeds paid since the beginning of the current calendar quarter or month. The Company In addition, the Company’s board of directors may amend, suspend or terminate the share repurchase program without stockholder approval upon 30 days’ notice . The Company’s board of directors may also amend, suspend or terminate the share repurchase program due to changes in law or regulation, or if the board of directors becomes aware of undisclosed material information that the Company believes should be publicly disclosed before shares are repurchased 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 as discussed 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 SEC is conducting an investigation related to the advertising and sale of securities by the Company in connection with the Registered 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 affiliates have received and responded to subpoenas from the SEC requesting documents and other information related to the Company and the Registered Offering. The SEC’s investigation is ongoing. The Company has cooperated and intends to continue to cooperate with the SEC in this matter. The Company is unable to predict the likely outcome of the investigation or determine its potential impact, if any, on the Company. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | NOTE 11. SUBSEQUENT EVENTS The Company evaluates subsequent events up until the date the condensed consolidated financial statements are issued. Offering Status Through May 4, 2018, the Company had sold 11,048,439 shares of Class C common stock in the Registered Offering for aggregate gross offering proceeds of $110,563,193 including 489,638 4,904,904 3,076 30,765 76 765 Distributions On April 3, 2018, the Company’s board of directors declared distributions based on daily record dates for the period April 1, 2018 through April 30, 2018 at a rate of $ 0.0019542 May 25, 2018 On April 30, 2018, the Company’s board of directors declared distributions based on daily record dates for the period May 1, 2018 through May 31, 2018 at a rate of $ 0.0018911 June 25, 2018 Redeemable common stock For the period from April 1, 2018 169,460 1,703,068 Interest Rate Swap Agreement In April 2018, the Company entered into an interest rate swap agreement to fix the interest rate of the 3M property mortgage loan from a variable interest rate of one-month LIBOR plus 2.25% 5.09 Acquisitions On April 4, 2018, the Company, through a wholly-owned subsidiary of the Operating Partnership, completed the acquisition of an office property with approximately 87,230 15,500,000 6,840,084 8, 350,000 one-month LIBOR plus 2.25% April 4, 2023 5.155 |
SUMMARY OF SIGNIFICANT ACCOUN18
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Consolidation, Policy [Policy Text Block] | Basis of Presentation and Principles of Consolidation The accompanying condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial statements and the rules and regulations of the SEC. Accordingly, they do not contain all information and footnotes required by GAAP for annual financial statements. Such unaudited condensed consolidated financial statements and accompanying notes are the representations of the Company’s management, who is responsible for their integrity and objectivity. These unaudited condensed consolidated financial statements should be read in conjunction with the December 31, 2017 audited consolidated financial statements included in the Company’s Form 10-K filed with the SEC on April 3, 2018. The accompanying unaudited condensed consolidated financial statements have been prepared on the same basis as the annual financial statements and, in the opinion of management, reflect all adjustments, which are normal and recurring, necessary to fairly state its financial position, results of operations and cash flows. All significant intercompany balances and transactions are eliminated in consolidation. The December 31, 2017 balance sheet included herein was derived from the audited financial statements but does not include all disclosures or notes required by GAAP for complete financial statements. |
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. |
Cash and Cash Equivalents, Restricted Cash and Cash Equivalents, Policy [Policy Text Block] | Restricted cash is comprised of funds which are restricted for use as required by certain lenders in conjunction with an acquisition or debt financing and for in site and tenant improvements. Pursuant to lease agreements, the Company has obligations to pay for $ 1,778,649 , including a 72.7 805,416 |
Other Comprehensive Income Loss [Policy Text Block] | Other Comprehensive Income (Loss) For all periods presented, other comprehensive income (loss) is the same as net income (loss). |
Earnings Per Share, Policy [Policy Text Block] | Per Share Data Basic earnings per share is calculated by dividing net income (loss) by the weighted average number of common shares outstanding during the period. Diluted earnings per share of common stock equals basic earnings per share of common stock as there were no potentially dilutive securities outstanding for the three months ended March 31, 2018 and 2017. For the three months ended March 31, 2018, the Company has presented earnings per share amounts on the accompanying statements of operations for Class C and S share classes as a combined common share class. Application of the two-class method for allocating earnings (loss) in accordance with the provisions of Accounting Standards Codification (“ASC”) 260, Earnings per Share Since our board of directors declared distributions for four months (December 2017 through March 2018) during the three months ended March 31, 2018 in order to transition to a process of declaring dividends prior to the beginning of the month, the dividends declared per common share reflects four months of dividends rather than three months of dividends. |
New Accounting Pronouncements, Policy [Policy Text Block] | Recent Accounting Pronouncements New Accounting Standard Issued and Adopted In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606) Revenue Recognition (Topic 605) New Accounting Standard Recently Issued and Not Yet Adopted In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) |
CONDENSED CONSOLIDATED BALANC19
CONDENSED CONSOLIDATED BALANCE SHEETS DETAILS (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure Text Block Supplement [Abstract] | |
Supplemental Detail Disclosures for Consolidate Balance Sheet [Table Text Block] | March 31, December 31, A. Tenant receivables: Straight-line rent $ 1,299,297 $ 995,822 Tenant rent 37,510 27,460 Tenant recoveries 294,616 239,813 $ 1,631,423 $ 1,263,095 B. Accounts payable, accrued and other liabilities: Accounts payable $ 28,943 $ 244,430 Accrued expenses 1,000,980 571,308 Accrued interest payable 201,790 186,841 Unearned rent 307,264 548,266 Deferred commission payable 2,100 2,250 Lease incentive obligation 858,389 858,389 $ 2,399,466 $ 2,411,484 |
REAL ESTATE (Tables)
REAL ESTATE (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Real Estate [Abstract] | |
Schedule of Real Estate Properties [Table Text Block] | As of March 31, 2018, the Company’s real estate portfolio consisted of 19 properties in 11 states consisting of: (i) eight retail, (ii) six office and (iii) five industrial properties. The following table provides summary information regarding the Company’s real estate as of March 31, 2018: Property Location Acquisition Property Type Land, Tenant Accumulated Total Accredo Health Orlando, FL 6/15/2016 Office $ 9,855,847 $ 1,053,637 $ (889,101) $ 10,020,383 Walgreens Stockbridge, GA 6/21/2016 Retail 4,147,948 705,423 (587,592) 4,265,779 Dollar General Litchfield, ME 11/4/2016 Retail 1,281,812 116,302 (55,335) 1,342,779 Dollar General Wilton, ME 11/4/2016 Retail 1,543,776 140,653 (70,817) 1,613,612 Dollar General Thompsontown, PA 11/4/2016 Retail 1,199,860 106,730 (53,167) 1,253,423 Dollar General Mt. Gilead, OH 11/4/2016 Retail 1,174,188 111,847 (50,975) 1,235,060 Dollar General Lakeside, OH 11/4/2016 Retail 1,112,872 100,857 (52,316) 1,161,413 Dollar General Castalia, OH 11/4/2016 Retail 1,102,086 86,408 (50,831) 1,137,663 Dana Cedar Park, TX 12/27/2016 Industrial 8,392,906 1,210,874 (633,662) 8,970,118 Northrop Grumman Melbourne, FL 3/7/2017 Office 12,382,991 1,341,199 (815,655) 12,908,535 exp US Services Maitland, FL 3/27/2017 Office 5,920,121 388,248 (226,187) 6,082,182 Harley Bedford, TX 4/13/2017 Retail 13,178,288 (303,992) 12,874,296 Wyndham Summerlin, NV 6/22/2017 Office 9,447,270 669,232 (230,013) 9,886,489 Williams Sonoma Summerlin, NV 6/22/2017 Office 7,531,809 550,486 (209,289) 7,873,006 Omnicare Richmond, VA 7/20/2017 Industrial 7,042,928 281,442 (162,878) 7,161,492 EMCOR Cincinnati, OH 8/29/2017 Office 5,960,610 463,488 (110,969) 6,313,129 Husqvarna Charlotte, NC 11/30/2017 Industrial 11,840,201 1,013,948 (131,909) 12,722,240 AvAir Chandler, AZ 12/28/2017 Industrial 27,357,900 (202,437) 27,155,463 3M DeKalb, IL 3/29/2018 Industrial 14,762,798 2,356,361 (51,889) 17,067,270 $ 145,236,211 $ 10,697,135 $ (4,889,014) $ 151,044,332 |
Schedule Of Real Estate Property Acquisitions [Table Text Block] | Property Acquisition Land Buildings and Below-Market Tenant Total 3M 3/29/2018 $ 758,780 $ 14,004,018 $ (1,417,483) $ 2,356,361 $ 15,701,676 |
Schedule Of Real Estate Investment Property Purchase Price [Table Text Block] | Purchase price $ 15,701,676 Acquisition fees to affiliate (456,000) Cash paid for acquisition of real estate investments $ 15,245,676 |
Schedule Of Lease Expiration Date [Table Text Block] | The non-cancellable lease term of the property acquired during the three months ended March 31, 2018 is as follows: Property Lease Expiration 3M 7/31/2022 |
Schedule Of Portfolios Asset Concentration [Table Text Block] | As of March 31, 2018, the Company’s portfolio’s asset concentration (greater than 10% of total assets) was as follows: Property and Location Net Carrying Percentage of AvAir, Chandler, AZ $ 27,155,463 14.9 % |
Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block] | April 2018 to December 2018 $ 8,863,143 2019 12,029,905 2020 12,139,170 2021 10,919,726 2022 9,508,165 2023 8,394,782 Thereafter 45,898,687 $ 107,753,578 |
Schedule Of Portfolios Revenue Concentration [Table Text Block] | For the three months ended March 31, 2018, the following tenants accounted for more than 10% of the Company’s total revenue: Property and Location Revenue Percentage of AvAir, AZ $ 635,572 18.4 % Northrop Grumman, FL $ 353,558 10.2 % |
Schedule of Finite-Lived Intangible Assets [Table Text Block] | As of March 31, 2018, the Company’s intangibles were as follows: Tenant Above-Market Below-Market Cost $ 10,697,135 $ 783,115 $ (3,071,253) Accumulated amortization (1,518,526) (126,083) 120,078 Net amount $ 9,178,609 $ 657,032 $ (2,951,175) |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block] | The amortization of intangible assets over the next five years is expected to be as follows: Tenant Above- Below- April 2018 through December 2018 $ 1,318,047 $ 72,784 $ (355,793) 2019 1,757,396 97,045 (474,391) 2020 1,757,396 97,045 (474,391) 2021 1,341,137 78,994 (474,391) 2022 805,067 63,719 (306,829) 2023 432,856 63,719 (78,369) Thereafter 1,766,710 183,726 (787,011) $ 9,178,609 $ 657,032 $ (2,951,175) Weighted-average remaining amortization period 7.7 years 7.8 years 10.0 years |
INVESTMENTS IN UNCONSOLIDATED21
INVESTMENTS IN UNCONSOLIDATED ENTITIES (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Equity Method Investments [Table Text Block] | The Company’s investments in unconsolidated entities are as follows: March 31, December 31, RU Martin Street Santa Clara (“TIC”) $ 10,973,640 $ 11,103,547 Rich Uncles Real Estate Investment Trust I (“REIT I”) 3,357,258 3,420,475 $ 14,330,898 $ 14,524,022 |
Equity Method Investments, Entities Equity In Earnings [Table Text Block] | Three Months Ended March 31, 2018 2017 TIC $ 49,780 $ REIT I 5,099 7,957 $ 54,879 $ 7,957 |
RuMartin Street Santa Clara [Member] | |
Equity Method Investments, Summarized Financial Information [Table Text Block] | The following is summarized financial information for the TIC: March 31 December 31 Assets: Real estate investments, net $ 32,412,708 $ 32,587,034 Cash and cash equivalents 599,327 615,436 Other assets 122,016 103,700 Total assets $ 33,134,051 $ 33,306,170 Liabilities: Mortgage notes payable $ 14,172,229 $ 14,235,256 Below-market lease, net 3,216,592 3,247,480 Other liabilities 344,788 246,085 Total liabilities 17,733,609 17,728,821 Total equity 15,400,442 15,577,349 Total liabilities and equity $ 33,134,051 $ 33,306,170 Three Months Ended Total revenue $ 608,794 Expenses: Interest expense 145,025 Depreciation and amortization 247,213 Other expense 146,336 Total expenses 538,574 Net income $ 70,220 (1) The Company’s investment in the TIC commenced on September 28, 2017; therefore, no TIC operating results are presented for the three months ended March 31, 2017. |
Rich Uncles Real Estate Investment Trust 1 [Member] | |
Equity Method Investments, Summarized Financial Information [Table Text Block] | The following is summarized financial information for REIT I: March 31, December 31, Assets: Real estate investments, net $ 129,945,167 $ 131,166,670 Cash and cash equivalents and restricted cash 6,248,951 6,027,807 Other assets 2,784,434 2,658,777 Total assets $ 138,978,552 $ 139,853,254 Liabilities: Mortgage notes payable, net $ 62,054,451 $ 62,277,387 Below-market lease intangibles, net 3,750,967 3,966,008 Other liabilities 3,992,026 2,937,247 Total liabilities 69,797,444 69,180,642 Redeemable common stock 586,895 586,242 Total shareholders’ equity 68,594,213 70,086,370 Total liabilities and shareholders’ equity $ 138,978,552 $ 139,853,254 Three Months Ended March 31, 2018 2017 Total revenue $ 3,231,218 $ 2,726,267 Expenses: Depreciation and amortization 1,448,244 1,218,074 Interest expense 484,873 461,200 Other expense 1,180,037 652,825 Total expenses 3,113,154 2,332,099 Other income: Other income 280 Net income $ 118,064 $ 394,448 |
DEBT (Tables)
DEBT (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Debt [Table Text Block] | March 31, 2018 December 31, 2017 Collateral Principal Deferred Net Principal Deferred Net Contractual Effective Loan Accredo/Walgreen properties $ 7,100,098 $ (115,763) $ 6,984,335 $ 7,133,966 $ (124,763) $ 7,009,203 3.95 % 3.95 % 7/1/2021 Dana property 4,690,114 (119,136) 4,570,978 4,709,889 (125,132) 4,584,757 4.56 % 4.56 % 4/1/2023 Six Dollar General properties 3,930,530 (145,156) 3,785,374 3,951,846 (153,290) 3,798,556 4.69 % 4.69 % 4/1/2022 Wyndham property (2) 5,896,200 (107,016) 5,789,184 5,920,800 (109,936) 5,810,864 One-month LIBOR+2.05 % 4.34 % 6/5/2027 Williams Sonoma property (2) 4,678,800 (81,992) 4,596,808 4,699,200 (85,227) 4,613,973 One-month LIBOR+2.05 % 4.05 % 6/5/2022 Omnicare property 4,404,812 (164,264) 4,240,548 4,423,574 (169,372) 4,254,202 4.36 % 4.36 % 5/1/2026 Harley property 6,954,071 (193,235) 6,760,836 6,983,418 (200,811) 6,782,607 4.25 % 4.25 % 9/1/2024 Northrop Grumman property 5,911,255 (200,404) 5,710,851 5,945,655 (217,584) 5,728,071 4.40 % 4.40 % 3/2/2021 EMCOR property 2,946,563 (80,713) 2,865,850 2,955,000 (83,743) 2,871,257 4.35 % 4.35 % 12/1/2024 exp US Services property 3,490,143 (137,093) 3,353,050 3,505,061 (140,382) 3,364,679 Initial 4.25%; 3.25% + T-Bill index 4.25 % 11/17/2024 Husqvarna property 6,380,000 (205,462) 6,174,538 4.60% for 1st 5-years; greater of 4.60% nd 4.60% 2/20/2028 AvAir property (3) 14,575,000 (355,710) 14,219,290 12,000,000 (330,866) 11,669,134 4.84% for 1st 5-years; greater of 4.60% nd 4.84% 3/27/2028 3M property 8,360,000 (145,571) 8,214,429 One-month LIBOR+2.25 % 4.13 % 3/29/2023 $ 79,317,586 $ (2,051,515) $ 77,266,071 $ 62,228,409 $ (1,741,106) $ 60,487,303 (1) Contractual interest rate represents the interest rate in effect under the mortgage note payable as of March 31, 2018. Effective interest rate is calculated as the actual interest rate in effect as of March 31, 2018 (consisting of the contractual interest rate and the effect of the interest rate swap, if applicable). For further information regarding the Company’s derivative instruments (see Note 7). (2) The loans on each of the Williams Sonoma and Wyndham properties (collectively, the “Property”) located in Summerlin, Nevada were originated by Nevada State Bank (“Bank”). The loans are collateralized by a deed of trust and a security agreement with assignment of rents and fixture filing. In addition, the individual loans are subject to a cross collateralization and cross default agreement whereby any default under, or failure to comply with the terms of any one or both of the loans is an event of default under the terms of both loans. The value of the Property must be in an amount sufficient to maintain a loan to value ratio of no more than 60%. If the loan to value ratio is ever more than 60%, the borrower shall, upon the Bank’s written demand, reduce the principal balance of the loans so that the loan to value ratio is no more than 60 (3) On March 27, 2018, the Company refinanced the mortgage loan for $ 14,575,000 4.84 March 27, 2028 |
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 New Credit Facility as of March 31, 2018: Mortgage Unsecured Total April 2018 through December 2018 $ 672,562 $ 9,000,000 $ 9,672,562 2019 1,028,465 1,028,465 2020 1,239,009 1,239,009 2021 7,922,500 7,922,500 2022 14,288,741 14,288,741 2023 12,982,910 12,982,910 Thereafter 41,183,399 41,183,399 Total principal 79,317,586 9,000,000 88,317,586 Deferred financing costs, net (2,051,515) (27,714) (2,079,229) Total $ 77,266,071 $ 8,972,286 $ 86,238,357 |
Schedule Of Interest Expenses Reconciliation [Table Text Block] | The following is a reconciliation of the components of interest expense: Three Months Ended March 31, 2018 2017 Mortgage notes payable Interest expense $ 823,260 $ 81,658 Amortization of deferred financing costs 406,887 10,388 Unrealized gain on interest rate swaps (see Note 7) (226,806) Unsecured credit facility Interest expense 82,989 39,154 Amortization of deferred financing costs 4,286 637 Total interest expense $ 1,090,616 $ 131,837 |
INTEREST RATE SWAP DERIVATIVES
INTEREST RATE SWAP DERIVATIVES (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments [Table Text Block] | The following table summarizes the notional amount and other information related to the Company’s interest rate swaps as of March 31, 2018: March 31, 2018 Derivative Number of Notional Amount Reference Rate (ii) Weighted Average Weighted Average Interest Rate 2 $ 10,575,000 One-month LIBOR + applicable spread/Fixed at 4.05%-4.34% 4.16 % 7.0 years (i) The notional amount of the Company’s swaps decreases each month to correspond to the outstanding principal balance on the related mortgage. The minimum notional amount (outstanding principal balance at the maturity date) as of March 31, 2018 was $ 9,083,700 (ii) The reference rate was June 30, 2017 for two interest rate swaps. The following table summarizes the notional amount and other information related to the Company’s interest rate swaps as of December 31, 2017: December 31, 2017 Derivative Number of Notional Amount Reference Rate Weighted Average Weighted Average Interest Rate 2 $ 10,620,000 One-month LIBOR + applicable spread/Fixed at 4.05%-4.34% 4.21 % 7.2 years (i) The notional amount of the Company’s swaps decreases each month to correspond to the outstanding principal balance on the related mortgage. The minimum notional amount (outstanding principal balance at the maturity date) as of December 31, 2017 was $ 9,083,700 |
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value [Table Text Block] | The following table sets forth the fair value of the Company’s derivative instruments (Level 2 measurement), as well as their classification in the condensed consolidated balance sheet as of March 31, 2018: Derivative Instrument Balance Sheet Location Number of Fair Value Interest Rate Swaps Asset Interest rate swap derivatives, at fair value 2 $ 230,934 The following table sets forth the fair value of the Company’s derivative instruments (Level 2 measurement), as well as their classification in the condensed consolidated balance sheet as of December 31, 2017: Derivative Instrument Balance Sheet Location Number of Fair Value Interest Rate Swaps Asset Interest rate swap derivatives, at fair value 2 $ 7,899 |
FAIR VALUE DISCLOSURES (Tables)
FAIR VALUE DISCLOSURES (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
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: March 31, 2018 December 31, 2017 Face Value Carrying Fair Value Face value Carrying Fair Value Mortgage notes payable $ 79,317,586 $ 77,266,071 $ 80,561,846 $ 62,228,409 $ 60,487,303 $ 62,363,284 |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions [Table Text Block] | Three Months March 31, 2018 Three Months December 31, 2017 Incurred Receivable Payable Incurred Receivable Payable Expensed: Asset management fees (1) $ 401,315 $ $ 460,389 $ 111,298 $ 567,661 Subordinated participation fees 315,802 Fees to affiliates 401,315 111,298 Property management fees* 12,939 7,969 Directors and officers insurance reimbursements** 16,634 16,634 Expense reimbursements from Sponsor (2) (359,514) 209,876 (688,026) 34,194 Waiver of asset management fees (1) (27,824) Capitalized: Acquisition fees 456,000 600,600 Financing coordination fees 209,550 87,450 Additional paid-in-capital: Reimbursable organizational and offering expenses (3) 430,244 16,892 608,130 15,945 $ 209,876 $ 493,915 $ 34,194 $ 907,377 * Property management fees are classified within property operating expenses on the condensed consolidated statements of operations. ** Directors and officers insurance reimbursements are classified within general and administrative expenses on the condensed consolidated statements of operations. (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 0 27,824 47,984 (2) The Company records payroll costs related to Company employees that answer questions from prospective stockholders. 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. The expense reimbursements from the Sponsor for the three months ended March 31, 2018 included $ 48,422 (3) As of March 31, 2018, the Sponsor had incurred $ 7,250,015 3 |
BUSINESS AND ORGANIZATION (Deta
BUSINESS AND ORGANIZATION (Details Textual) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||
Jun. 24, 2015 | Mar. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2015 | Jan. 19, 2018 | Jan. 18, 2018 | Jan. 02, 2018 | Aug. 11, 2017 | Jul. 15, 2015 | |
Business And Organisation [Line Items] | |||||||||
Authority To Issue of Common Stock | 450,000,000 | ||||||||
Preferred Stock, Shares Authorized | 50,000,000 | 50,000,000 | |||||||
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 | |||||||
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, Value, New Issues | $ 14,341,117 | $ 500 | |||||||
Tenant-in-common [Member] | Real Estate Investment [Member] | |||||||||
Business And Organisation [Line Items] | |||||||||
Equity Method Investment, Ownership Percentage | 72.70% | ||||||||
Affiliated REIT [Member] | Real Estate Investment [Member] | |||||||||
Business And Organisation [Line Items] | |||||||||
Equity Method Investment, Ownership Percentage | 4.30% | ||||||||
Common Class S [Member] | |||||||||
Business And Organisation [Line Items] | |||||||||
Common Stock, Shares Authorized | 100,000,000 | 100,000,000 | 100,000,000 | ||||||
Common Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 | |||||||
Stock Issued During Period, Shares, New Issues | 33 | ||||||||
Stock Issued During Period, Value, New Issues | $ 0 | ||||||||
Net Asset Value Per Share | $ 10.05 | $ 10.05 | $ 10 | ||||||
Shares, Outstanding | 3,065 | 3,032 | |||||||
Common Class C [Member] | |||||||||
Business And Organisation [Line Items] | |||||||||
Common Stock, Shares Authorized | 300,000,000 | 300,000,000 | |||||||
Common Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 | |||||||
Stock Issued During Period, Shares, New Issues | 1,429,021 | ||||||||
Shares Issued, Price Per Share | $ 10.05 | ||||||||
Stock Issued During Period, Value, New Issues | $ 1,418 | ||||||||
Shares, Outstanding | 10,098,354 | 8,838,002 | |||||||
Common Class C [Member] | Minimum [Member] | |||||||||
Business And Organisation [Line Items] | |||||||||
Stock Issued During Period, Value, New Issues | $ 500 | ||||||||
Preferred Stock [Member] | |||||||||
Business And Organisation [Line Items] | |||||||||
Preferred Stock, Shares Authorized | 50,000 | ||||||||
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | ||||||||
IPO [Member] | |||||||||
Business And Organisation [Line Items] | |||||||||
Common Stock, Value, Subscriptions | $ 90,000,000 | ||||||||
DRP Offering [Member] | |||||||||
Business And Organisation [Line Items] | |||||||||
Common Stock, Value, Subscriptions | $ 10,000,000 | ||||||||
DRP Offering [Member] | Common Class S [Member] | |||||||||
Business And Organisation [Line Items] | |||||||||
Stock Issued During Period, Shares, New Issues | 65 | ||||||||
Stock Issued During Period, Value, New Issues | $ 30,654 | ||||||||
DRP Offering [Member] | Common Class C [Member] | |||||||||
Business And Organisation [Line Items] | |||||||||
Stock Issued During Period, Shares, New Issues | 10,484,196 | ||||||||
Stock Issued During Period, Value, New Issues | $ 104,892,549 | ||||||||
DRP Offering [Member] | Distribution Reinvestment Plan [Member] | Common Class C [Member] | |||||||||
Business And Organisation [Line Items] | |||||||||
Stock Issued During Period, Shares, New Issues | 444,514 | ||||||||
Sponsor [Member] | |||||||||
Business And Organisation [Line Items] | |||||||||
Stock Issued During Period, Shares, New Issues | 10,000 | 10,000 | |||||||
Shares Issued, Price Per Share | $ 10 | $ 10 |
SUMMARY OF SIGNIFICANT ACCOUN27
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Textual) - USD ($) | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Accounting Policies [Line Items] | |||
Restricted Cash and Cash Equivalents | $ 805,416 | $ 944,582 | |
Earnings Per Share, Basic and Diluted | $ 0 | $ (0.13) | |
Lease Agreements [Member] | |||
Accounting Policies [Line Items] | |||
Restricted Cash and Cash Equivalents | $ 805,416 | ||
Other Commitment | $ 1,778,649 | ||
Common Class C [Member] | |||
Accounting Policies [Line Items] | |||
Earnings Per Share, Basic and Diluted | $ 0 | ||
Common Class S [Member] | |||
Accounting Policies [Line Items] | |||
Earnings Per Share, Basic and Diluted | $ (0.05) | ||
Santa Clara Property [Member] | Lease Agreements [Member] | |||
Accounting Policies [Line Items] | |||
Equity Method Investment, Ownership Percentage | 72.70% |
CONDENSED CONSOLIDATED BALANC28
CONDENSED CONSOLIDATED BALANCE SHEETS DETAILS (Details) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Tenant receivables: | ||
Straight-line rent | $ 1,299,297 | $ 995,822 |
Tenant rent | 37,510 | 27,460 |
Tenant recoveries | 294,616 | 239,813 |
Accounts Receivable, Gross | 1,631,423 | 1,263,095 |
Accounts payable, accrued and other liabilities: | ||
Accounts payable | 28,943 | 244,430 |
Accrued expenses | 1,000,980 | 571,308 |
Accrued interest payable | 201,790 | 186,841 |
Unearned rent | 307,264 | 548,266 |
Deferred commission payable | 2,100 | 2,250 |
Lease incentive obligation | 858,389 | 858,389 |
Deferred tenant reimbursement | $ 2,399,466 | $ 2,411,484 |
REAL ESTATE (Details)
REAL ESTATE (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | |
Real Estate [Line Items] | ||
Land, building and improvements | $ 145,236,211 | |
Tenant origination and absorption costs | 10,697,135 | $ 8,340,774 |
Accumulated depreciation and amortization | (4,889,014) | (3,574,739) |
Total real estate investments, net | $ 151,044,332 | $ 135,235,616 |
Accredo Health [Member] | ||
Real Estate [Line Items] | ||
Real Estate, Acquisition, Property Location | Orlando, FL | |
Walgreens [Member] | ||
Real Estate [Line Items] | ||
Real Estate, Acquisition, Property Location | Stockbridge, GA | |
Dollar General One [Member] | ||
Real Estate [Line Items] | ||
Real Estate, Acquisition, Property Location | Litchfield, ME | |
Dollar General Two [Member] | ||
Real Estate [Line Items] | ||
Real Estate, Acquisition, Property Location | Wilton, ME | |
Dollar General Three [Member] | ||
Real Estate [Line Items] | ||
Real Estate, Acquisition, Property Location | Thompsontown, PA | |
Dollar General Four [Member] | ||
Real Estate [Line Items] | ||
Real Estate, Acquisition, Property Location | Mt. Gilead, OH | |
Dollar General Five [Member] | ||
Real Estate [Line Items] | ||
Real Estate, Acquisition, Property Location | Lakeside, OH | |
Dollar General Six [Member] | ||
Real Estate [Line Items] | ||
Real Estate, Acquisition, Property Location | Castalia, OH | |
Dana [Member] | ||
Real Estate [Line Items] | ||
Real Estate, Acquisition, Property Location | Cedar Park, TX | |
Northrop [Member] | ||
Real Estate [Line Items] | ||
Real Estate, Acquisition, Property Location | Melbourne, FL | |
Ex Us Services [Member] | ||
Real Estate [Line Items] | ||
Real Estate, Acquisition, Property Location | Maitland, FL | |
Harley [Member] | ||
Real Estate [Line Items] | ||
Real Estate, Acquisition, Property Location | Bedford, TX | |
Wyndham [Member] | ||
Real Estate [Line Items] | ||
Real Estate, Acquisition, Property Location | Summerlin, NV | |
Wiiliams Sonoma [Member] | ||
Real Estate [Line Items] | ||
Real Estate, Acquisition, Property Location | Summerlin, NV | |
Omnicare [Member] | ||
Real Estate [Line Items] | ||
Real Estate, Acquisition, Property Location | Richmond, VA | |
EMCOR [Member] | ||
Real Estate [Line Items] | ||
Real Estate, Acquisition, Property Location | Cincinnati, OH | |
Husqvarna [Member] | ||
Real Estate [Line Items] | ||
Real Estate, Acquisition, Property Location | Charlotte, NC | |
AvAir [Member] | ||
Real Estate [Line Items] | ||
Real Estate, Acquisition, Property Location | Chandler, AZ | |
3M [Member] | ||
Real Estate [Line Items] | ||
Real Estate, Acquisition, Property Location | DeKalb, IL | |
Office Building [Member] | Accredo Health [Member] | ||
Real Estate [Line Items] | ||
Land, building and improvements | $ 9,855,847 | |
Tenant origination and absorption costs | 1,053,637 | |
Accumulated depreciation and amortization | (889,101) | |
Total real estate investments, net | 10,020,383 | |
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 | (815,655) | |
Total real estate investments, net | 12,908,535 | |
Office Building [Member] | Ex Us Services [Member] | ||
Real Estate [Line Items] | ||
Land, building and improvements | 5,920,121 | |
Tenant origination and absorption costs | 388,248 | |
Accumulated depreciation and amortization | (226,187) | |
Total real estate investments, net | 6,082,182 | |
Office Building [Member] | Wyndham [Member] | ||
Real Estate [Line Items] | ||
Land, building and improvements | 9,447,270 | |
Tenant origination and absorption costs | 669,232 | |
Accumulated depreciation and amortization | (230,013) | |
Total real estate investments, net | 9,886,489 | |
Office Building [Member] | Wiiliams Sonoma [Member] | ||
Real Estate [Line Items] | ||
Land, building and improvements | 7,531,809 | |
Tenant origination and absorption costs | 550,486 | |
Accumulated depreciation and amortization | (209,289) | |
Total real estate investments, net | 7,873,006 | |
Office Building [Member] | EMCOR [Member] | ||
Real Estate [Line Items] | ||
Land, building and improvements | 5,960,610 | |
Tenant origination and absorption costs | 463,488 | |
Accumulated depreciation and amortization | (110,969) | |
Total real estate investments, net | 6,313,129 | |
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 | (587,592) | |
Total real estate investments, net | 4,265,779 | |
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 | (55,335) | |
Total real estate investments, net | 1,342,779 | |
Retail Site [Member] | Dollar General Two [Member] | ||
Real Estate [Line Items] | ||
Land, building and improvements | 1,543,776 | |
Tenant origination and absorption costs | 140,653 | |
Accumulated depreciation and amortization | (70,817) | |
Total real estate investments, net | 1,613,612 | |
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 | (53,167) | |
Total real estate investments, net | 1,253,423 | |
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 | (50,975) | |
Total real estate investments, net | 1,235,060 | |
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 | (52,316) | |
Total real estate investments, net | 1,161,413 | |
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 | (50,831) | |
Total real estate investments, net | 1,137,663 | |
Industrial [Member] | Dana [Member] | ||
Real Estate [Line Items] | ||
Land, building and improvements | 8,392,906 | |
Tenant origination and absorption costs | 1,210,874 | |
Accumulated depreciation and amortization | (633,662) | |
Total real estate investments, net | 8,970,118 | |
Industrial [Member] | Harley [Member] | ||
Real Estate [Line Items] | ||
Land, building and improvements | 13,178,288 | |
Tenant origination and absorption costs | 0 | |
Accumulated depreciation and amortization | (303,992) | |
Total real estate investments, net | 12,874,296 | |
Industrial [Member] | Omnicare [Member] | ||
Real Estate [Line Items] | ||
Land, building and improvements | 7,042,928 | |
Tenant origination and absorption costs | 281,442 | |
Accumulated depreciation and amortization | (162,878) | |
Total real estate investments, net | 7,161,492 | |
Industrial [Member] | Husqvarna [Member] | ||
Real Estate [Line Items] | ||
Land, building and improvements | 11,840,201 | |
Tenant origination and absorption costs | 1,013,948 | |
Accumulated depreciation and amortization | (131,909) | |
Total real estate investments, net | 12,722,240 | |
Industrial [Member] | AvAir [Member] | ||
Real Estate [Line Items] | ||
Land, building and improvements | 27,357,900 | |
Tenant origination and absorption costs | 0 | |
Accumulated depreciation and amortization | (202,437) | |
Total real estate investments, net | 27,155,463 | |
Industrial [Member] | 3M [Member] | ||
Real Estate [Line Items] | ||
Land, building and improvements | 14,762,798 | |
Tenant origination and absorption costs | 2,356,361 | |
Accumulated depreciation and amortization | (51,889) | |
Total real estate investments, net | $ 17,067,270 |
REAL ESTATE (Details 1)
REAL ESTATE (Details 1) - 3M [Member] | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Real Estate [Line Items] | |
Payments to Acquire Real Estate | $ 15,701,676 |
Land [Member] | |
Real Estate [Line Items] | |
Payments to Acquire Real Estate | 758,780 |
Buildings and Improvements [Member] | |
Real Estate [Line Items] | |
Payments to Acquire Real Estate | 14,004,018 |
Below Market Leases [Member] | |
Real Estate [Line Items] | |
Payments to Acquire Real Estate | (1,417,483) |
Tenant origination and absorption costs [Member] | |
Real Estate [Line Items] | |
Payments to Acquire Real Estate | $ 2,356,361 |
REAL ESTATE (Details 2)
REAL ESTATE (Details 2) | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Real Estate Properties [Line Items] | |
Purchase price | $ 15,701,676 |
Acquisition fees to affiliate | (456,000) |
Cash paid for acquisition of real estate investments | $ 15,245,676 |
REAL ESTATE (Details 3)
REAL ESTATE (Details 3) | 3 Months Ended |
Mar. 31, 2018 | |
3M [Member] | |
Lease Expiration Date | Jul. 31, 2022 |
REAL ESTATE (Details 4)
REAL ESTATE (Details 4) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | |
Real Estate Investments, Net | $ 165,375,230 | $ 149,759,638 |
AvAir, AZ [Member] | ||
Concentration Risk, Percentage | 18.40% | |
Revenue, Net | $ 635,572 | |
Northrop Grumman, FL [Member] | ||
Concentration Risk, Percentage | 10.20% | |
Revenue, Net | $ 353,558 | |
AvAir, Chandler, AZ [Member] | ||
Real Estate Investments, Net | $ 27,155,463 | |
Concentration Risk, Percentage | 14.90% |
REAL ESTATE (Details 5)
REAL ESTATE (Details 5) | Mar. 31, 2018USD ($) |
April 2018 to December 2018 | $ 8,863,143 |
2,019 | 12,029,905 |
2,020 | 12,139,170 |
2,021 | 10,919,726 |
2,022 | 9,508,165 |
2,023 | 8,394,782 |
Thereafter | 45,898,687 |
Operating Leases, Future Minimum Payments Receivable | $ 107,753,578 |
REAL ESTATE (Details 6)
REAL ESTATE (Details 6) | Mar. 31, 2018USD ($) |
Tenant origination and absorption costs [Member] | |
Cost | $ 10,697,135 |
Accumulated amortization | (1,518,526) |
Net amount | 9,178,609 |
Above-market lease [Member] | |
Cost | 783,115 |
Accumulated amortization | (126,083) |
Net amount | 657,032 |
Below-market lease intangibles [Member] | |
Cost | (3,071,253) |
Accumulated amortization | 120,078 |
Net amount | $ (2,951,175) |
REAL ESTATE (Details 7)
REAL ESTATE (Details 7) | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Above market lease intangibles [Member] | |
Real Estate [Line Items] | |
April 2018 through December 2018 | $ 72,784 |
2,019 | 97,045 |
2,020 | 97,045 |
2,021 | 78,994 |
2,022 | 63,719 |
2,023 | 63,719 |
Thereafter | 183,726 |
Total | $ 657,032 |
Weighted-Average Remaining Amortization Period | 7 years 9 months 18 days |
Tenant origination and absorption costs intangibles [Member] | |
Real Estate [Line Items] | |
April 2018 through December 2018 | $ 1,318,047 |
2,019 | 1,757,396 |
2,020 | 1,757,396 |
2,021 | 1,341,137 |
2,022 | 805,067 |
2,023 | 432,856 |
Thereafter | 1,766,710 |
Total | $ 9,178,609 |
Weighted-Average Remaining Amortization Period | 7 years 8 months 12 days |
Below-market lease intangibles [Member] | |
Real Estate [Line Items] | |
April 2018 through December 2018 | $ (355,793) |
2,019 | (474,391) |
2,020 | (474,391) |
2,021 | (474,391) |
2,022 | (306,829) |
2,023 | (78,369) |
Thereafter | (787,011) |
Total | $ (2,951,175) |
Weighted-Average Remaining Amortization Period | 10 years |
REAL ESTATE (Details Textual)
REAL ESTATE (Details Textual) - Accredo and Walgreens acquisitions [Member] | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Real Estate [Line Items] | |
Business Combination, Acquisition Related Costs | $ 505,507 |
Fair Value of Assets Acquired | $ 22,972 |
INVESTMENTS IN UNCONSOLIDATED38
INVESTMENTS IN UNCONSOLIDATED ENTITIES (Details) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Equity Method Investments | $ 14,330,898 | $ 14,524,022 |
Rich Uncles Real Estate Investment Trust 1 [Member] | ||
Equity Method Investments | 3,357,258 | 3,420,475 |
RuMartin Street Santa Clara [Member] | ||
Equity Method Investments | $ 10,973,640 | $ 11,103,547 |
INVESTMENTS IN UNCONSOLIDATED39
INVESTMENTS IN UNCONSOLIDATED ENTITIES (Details 1) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Income (Loss) from Equity Method Investments | $ 54,879 | $ 7,957 |
RuMartin Street Santa Clara [Member] | ||
Income (Loss) from Equity Method Investments | 49,780 | 0 |
Rich Uncles Real Estate Investment Trust 1 [Member] | ||
Income (Loss) from Equity Method Investments | $ 5,099 | $ 7,957 |
INVESTMENTS IN UNCONSOLIDATED40
INVESTMENTS IN UNCONSOLIDATED ENTITIES (Details 2) - USD ($) | 3 Months Ended | ||||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Assets: | |||||
Cash and cash equivalents and restricted cash | $ 11,875,444 | $ 6,788,539 | $ 4,182,755 | $ 3,677,373 | |
RuMartin Street Santa Clara [Member] | |||||
Assets: | |||||
Real estate investments, net | 32,412,708 | 32,587,034 | |||
Cash and cash equivalents | 599,327 | 615,436 | |||
Other assets | 122,016 | 103,700 | |||
Total assets | 33,134,051 | 33,306,170 | |||
Liabilities: | |||||
Mortgage notes payable | 14,172,229 | 14,235,256 | |||
Below-market lease intangibles, net | 3,216,592 | 3,247,480 | |||
Other liabilities | 344,788 | 246,085 | |||
Total liabilities | 17,733,609 | 17,728,821 | |||
Total equity | 15,400,442 | 15,577,349 | |||
Total liabilities and equity | 33,134,051 | 33,306,170 | |||
Total shareholders’ equity | 15,400,442 | 15,577,349 | |||
Total liabilities and shareholders’ equity | 33,134,051 | 33,306,170 | |||
Total revenue | [1] | 608,794 | |||
Expenses: | |||||
Interest expense | [1] | 145,025 | |||
Depreciation and amortization | [1] | 247,213 | |||
Other expense | [1] | 146,336 | |||
Total expenses | [1] | 538,574 | |||
Net income | [1] | 70,220 | |||
Other income: | |||||
Net income | [1] | 70,220 | |||
Rich Uncles Real Estate Investment Trust 1 [Member] | |||||
Assets: | |||||
Real estate investments, net | 129,945,167 | 131,166,670 | |||
Cash and cash equivalents and restricted cash | 6,248,951 | 6,027,807 | |||
Other assets | 2,784,434 | 2,658,777 | |||
Total assets | 138,978,552 | 139,853,254 | |||
Liabilities: | |||||
Mortgage notes payable | 62,054,451 | 62,277,387 | |||
Below-market lease intangibles, net | 3,750,967 | 3,966,008 | |||
Other liabilities | 3,992,026 | 2,937,247 | |||
Total liabilities | 69,797,444 | 69,180,642 | |||
Total equity | 68,594,213 | 70,086,370 | |||
Total liabilities and equity | 138,978,552 | 139,853,254 | |||
Redeemable common stock | 586,895 | 586,242 | |||
Total shareholders’ equity | 68,594,213 | 70,086,370 | |||
Total liabilities and shareholders’ equity | 138,978,552 | $ 139,853,254 | |||
Total revenue | 3,231,218 | 2,726,267 | |||
Expenses: | |||||
Interest expense | 484,873 | 461,200 | |||
Depreciation and amortization | 1,448,244 | 1,218,074 | |||
Other expense | 1,180,037 | 652,825 | |||
Total expenses | 3,113,154 | 2,332,099 | |||
Net income | 118,064 | 394,448 | |||
Other income: | |||||
Other income | 0 | 280 | |||
Net income | $ 118,064 | $ 394,448 | |||
[1] | The Company’s investment in the TIC commenced on September 28, 2017; therefore, no TIC operating results are presented for the three months ended March 31, 2017. |
INVESTMENTS IN UNCONSOLIDATED41
INVESTMENTS IN UNCONSOLIDATED ENTITIES (Details Textual) - Rich Uncles Real Estate Investment Trust 1 [Member] | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 28, 2017 |
Equity Method Investment, Ownership Percentage | 4.30% | 4.40% | 72.70% |
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners | 27.30% | ||
Hagg Lane II, LLC [Member] | |||
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners | 23.40% | ||
Hagg Lane III, LLC [Member] | |||
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners | 3.90% |
DEBT (Details)
DEBT (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2018 | Dec. 31, 2017 | ||
Short Term Debt [LineItems] | |||
Principal Amount | $ 79,317,586 | $ 62,228,409 | |
Deferred Loan Costs, net | (2,079,229) | (1,741,106) | |
Accredo/Walgreen properties [Member] | |||
Short Term Debt [LineItems] | |||
Principal Amount | 7,100,098 | 7,133,966 | |
Deferred Loan Costs, net | (115,763) | (124,763) | |
Net Balance | $ 6,984,335 | 7,009,203 | |
Contractual Interest Rate | [1] | 3.95% | |
Effective Interest Rate | [1] | 3.95% | |
Loan Maturity | Jul. 1, 2021 | ||
Dana property [Member] | |||
Short Term Debt [LineItems] | |||
Principal Amount | $ 4,690,114 | 4,709,889 | |
Deferred Loan Costs, net | (119,136) | (125,132) | |
Net Balance | $ 4,570,978 | 4,584,757 | |
Contractual Interest Rate | [1] | 4.56% | |
Effective Interest Rate | [1] | 4.56% | |
Loan Maturity | Apr. 1, 2023 | ||
MorSix Dollar General properties [Member] | |||
Short Term Debt [LineItems] | |||
Principal Amount | $ 3,930,530 | 3,951,846 | |
Deferred Loan Costs, net | (145,156) | (153,290) | |
Net Balance | $ 3,785,374 | 3,798,556 | |
Contractual Interest Rate | [1] | 4.69% | |
Effective Interest Rate | [1] | 4.69% | |
Loan Maturity | Apr. 1, 2022 | ||
Wyndham property [Member] | |||
Short Term Debt [LineItems] | |||
Principal Amount | [2] | $ 5,896,200 | 5,920,800 |
Deferred Loan Costs, net | [2] | (107,016) | (109,936) |
Net Balance | [2] | $ 5,789,184 | 5,810,864 |
Debt Instrument, Description of Variable Rate Basis | [1],[2] | One-month LIBOR+2.05 % | |
Effective Interest Rate | [1],[2] | 4.34% | |
Loan Maturity | Jun. 5, 2027 | ||
Williams Sonoma property [Member] | |||
Short Term Debt [LineItems] | |||
Principal Amount | [2] | $ 4,678,800 | 4,699,200 |
Deferred Loan Costs, net | [2] | (81,992) | (85,227) |
Net Balance | [2] | $ 4,596,808 | 4,613,973 |
Debt Instrument, Description of Variable Rate Basis | [1],[2],[3] | One-month LIBOR+2.05 % | |
Effective Interest Rate | [1],[2] | 4.05% | |
Loan Maturity | Jun. 5, 2022 | ||
Omnicare property [Member] | |||
Short Term Debt [LineItems] | |||
Principal Amount | $ 4,404,812 | 4,423,574 | |
Deferred Loan Costs, net | (164,264) | (169,372) | |
Net Balance | $ 4,240,548 | 4,254,202 | |
Contractual Interest Rate | [1] | 4.36% | |
Effective Interest Rate | [1] | 4.36% | |
Loan Maturity | May 1, 2026 | ||
Harley property [Member] | |||
Short Term Debt [LineItems] | |||
Principal Amount | $ 6,954,071 | 6,983,418 | |
Deferred Loan Costs, net | (193,235) | (200,811) | |
Net Balance | $ 6,760,836 | 6,782,607 | |
Contractual Interest Rate | [1] | 4.25% | |
Effective Interest Rate | [1] | 4.25% | |
Loan Maturity | Sep. 1, 2024 | ||
Northrop Grumman property [Member] | |||
Short Term Debt [LineItems] | |||
Principal Amount | $ 5,911,255 | 5,945,655 | |
Deferred Loan Costs, net | (200,404) | (217,584) | |
Net Balance | $ 5,710,851 | 5,728,071 | |
Contractual Interest Rate | [1] | 4.40% | |
Effective Interest Rate | [1] | 4.40% | |
Loan Maturity | Mar. 2, 2021 | ||
EMCOR property [Member] | |||
Short Term Debt [LineItems] | |||
Principal Amount | $ 2,946,563 | 2,955,000 | |
Deferred Loan Costs, net | (80,713) | (83,743) | |
Net Balance | $ 2,865,850 | 2,871,257 | |
Contractual Interest Rate | [1] | 4.35% | |
Effective Interest Rate | [1] | 4.35% | |
Loan Maturity | Dec. 1, 2024 | ||
Moexp US Services property [Member] | |||
Short Term Debt [LineItems] | |||
Principal Amount | $ 3,490,143 | 3,505,061 | |
Deferred Loan Costs, net | (137,093) | (140,382) | |
Net Balance | $ 3,353,050 | 3,364,679 | |
Debt Instrument, Description of Variable Rate Basis | [1] | Initial 4.25%; 3.25% + T-Bill index starting 11/18/2022 | |
Effective Interest Rate | [1] | 4.25% | |
Loan Maturity | Nov. 17, 2024 | ||
Mortgage Note Payable Eleven [Member] | |||
Short Term Debt [LineItems] | |||
Debt Instrument, Interest Rate Terms | [1] | 4.60% for 1st 5-years; greater of 4.60% or 5-yr. Treasury Constant Maturity + 2.5 % for the 2~nd~ 5-years | |
Effective Interest Rate | [1],[3] | 4.60% | |
Mortgage Note Payable Thirteen [Member] | |||
Short Term Debt [LineItems] | |||
Debt Instrument, Description of Variable Rate Basis | [1] | One-month LIBOR+2.25 % | |
Husqvarna property [Member] | |||
Short Term Debt [LineItems] | |||
Principal Amount | $ 6,380,000 | 0 | |
Deferred Loan Costs, net | (205,462) | 0 | |
Net Balance | $ 6,174,538 | 0 | |
Contractual Interest Rate | [1] | 4.60% | |
Debt Instrument, Interest Rate Terms | [1],[3] | 4.60% for 1st 5-years; greater of 4.60% or 5-yr. Treasury Constant Maturity + 2.5 % for the 2nd 5-years | |
Loan Maturity | Feb. 20, 2028 | ||
AvAir property [Member] | |||
Short Term Debt [LineItems] | |||
Principal Amount | [3] | $ 14,575,000 | 12,000,000 |
Deferred Loan Costs, net | [3] | (355,710) | (330,866) |
Net Balance | [3] | $ 14,219,290 | 11,669,134 |
Contractual Interest Rate | [1],[3] | 4.84% | |
Debt Instrument, Interest Rate Terms | 4.84% for 1st 5-years; greater of 4.60% or 5-yr. Treasury Constant Maturity + 2.5 % for the 2nd 5-years | ||
Loan Maturity | [3] | Mar. 27, 2028 | |
3M property [Member] | |||
Short Term Debt [LineItems] | |||
Principal Amount | $ 8,360,000 | 0 | |
Deferred Loan Costs, net | (145,571) | 0 | |
Net Balance | $ 8,214,429 | $ 0 | |
Debt Instrument, Description of Variable Rate Basis | One-month LIBOR+2.25 | ||
Effective Interest Rate | [1] | 4.13% | |
Loan Maturity | Mar. 29, 2023 | ||
[1] | Contractual interest rate represents the interest rate in effect under the mortgage note payable as of March 31, 2018. Effective interest rate is calculated as the actual interest rate in effect as of March 31, 2018 (consisting of the contractual interest rate and the effect of the interest rate swap, if applicable). For further information regarding the Company’s derivative instruments (see Note 7). | ||
[2] | The loans on each of the Williams Sonoma and Wyndham properties (collectively, the “Property”) located in Summerlin, Nevada were originated by Nevada State Bank (“Bank”). The loans are collateralized by a deed of trust and a security agreement with assignment of rents and fixture filing. In addition, the individual loans are subject to a cross collateralization and cross default agreement whereby any default under, or failure to comply with the terms of any one or both of the loans is an event of default under the terms of both loans. The value of the Property must be in an amount sufficient to maintain a loan to value ratio of no more than 60%. If the loan to value ratio is ever more than 60%, the borrower shall, upon the Bank’s written demand, reduce the principal balance of the loans so that the loan to value ratio is no more than 60%. | ||
[3] | On March 27, 2018, the Company refinanced the mortgage loan for $14,575,000 through a nonaffiliated lender with interest rate based on: 4.84% for the first five years and the greater of 4.60% or 5-Year Treasury Constant Maturity plus 2.5 % for the second five years. The loan is secured by the AvAir property and it matures on March 27, 2028. |
DEBT (Details 1)
DEBT (Details 1) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Debt Instrument [Line Items] | ||
April 2018 through December 2018 | $ 9,672,562 | |
2,019 | 1,028,465 | |
2,020 | 1,239,009 | |
2,021 | 7,922,500 | |
2,022 | 14,288,741 | |
2,023 | 12,982,910 | |
Thereafter | 41,183,399 | |
Total principal | 88,317,586 | |
Deferred financing costs, net | (2,079,229) | $ (1,741,106) |
Total | 86,238,357 | |
Mortgage Notes Payable [Member] | ||
Debt Instrument [Line Items] | ||
April 2018 through December 2018 | 672,562 | |
2,019 | 1,028,465 | |
2,020 | 1,239,009 | |
2,021 | 7,922,500 | |
2,022 | 14,288,741 | |
2,023 | 12,982,910 | |
Thereafter | 41,183,399 | |
Total principal | 79,317,586 | |
Deferred financing costs, net | (2,051,515) | |
Total | 77,266,071 | |
Unsecured Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
April 2018 through December 2018 | 9,000,000 | |
2,019 | 0 | |
2,020 | 0 | |
2,021 | 0 | |
2,022 | 0 | |
2,023 | 0 | |
Thereafter | 0 | |
Total principal | 9,000,000 | |
Deferred financing costs, net | (27,714) | |
Total | $ 8,972,286 |
DEBT (Details 2)
DEBT (Details 2) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Debt Instrument [Line Items] | ||
Interest expense | $ 1,090,616 | $ 131,837 |
Unrealized gain on interest rate swaps (see Note 7) | 226,806 | |
Secured Debt [Member] | ||
Debt Instrument [Line Items] | ||
Interest expense | 823,260 | 81,658 |
Amortization of deferred financing costs | 406,887 | 10,388 |
Unrealized gain on interest rate swaps (see Note 7) | (226,806) | 0 |
Unsecured Debt [Member] | ||
Debt Instrument [Line Items] | ||
Interest expense | 82,989 | 39,154 |
Amortization of deferred financing costs | $ 4,286 | $ 637 |
DEBT (Details Textual)
DEBT (Details Textual) - USD ($) | 1 Months Ended | 3 Months Ended | |
Feb. 28, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | |
Debt Instrument [Line Items] | |||
Loans To Assets Ratio | 60.00% | ||
Debt Instrument, Face Amount | $ 79,317,586 | $ 62,228,409 | |
New Credit Facility [Member] | |||
Debt Instrument [Line Items] | |||
Line of Credit Facility, Maximum Borrowing Capacity | $ 12,000,000 | ||
New Credit Facility [Member] | Unsecured Debt [Member] | |||
Debt Instrument [Line Items] | |||
Line of Credit Facility, Maximum Borrowing Capacity | $ 9,000,000 | ||
Line of Credit Facility, Interest Rate Description | Under the terms of the New Credit Facility, Borrowers pay a variable rate of interest on outstanding amounts equal to one (1) percentage point over an independent index published in The Wall Street Journal based on the highest rate on corporate loans posted by at least 75% of the largest banks (the Index). | ||
Line of Credit Facility, Interest Rate at Period End | 5.75% | ||
Line of Credit Facility, Expiration Date | Jan. 26, 2019 | ||
Credit Facility, Guarantee Executed, Description | The New Credit Facility is secured by guaranties executed by Raymond E. Wirta, Chairman of the Board of the Company, a trust belonging to Mr. Wirta, Harold C. Hofer, President and Chief Executive Officer of the Company, and a trust belonging to Mr. Hofer, each in the amount of $9,000,000. Such guaranties become effective upon certain triggering events, including an event of default under the New Credit Facility and the failure by Borrowers to pay one or more subsequent advances within 90 days of disbursement. | ||
Line of Credit Facility, Interest Rate at Period Start | 5.50% | ||
Mortgage Note Payable Twelve [Member] | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Face Amount | $ 14,575,000 | ||
Debt Instrument, Interest Rate, Effective Percentage | 4.84% | ||
Debt Instrument, Maturity Date | Mar. 27, 2028 | ||
Debt Instrument, Term | 5 years | ||
Debt Instrument, Interest Rate Terms | 4.84% for the first five years and the greater of 4.60% or 5-Year Treasury Constant Maturity plus 2.5 % for the second five years |
INTEREST RATE SWAP DERIVATIVE46
INTEREST RATE SWAP DERIVATIVES (Details) - Interest Rate Swap [Member] | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2018USD ($)Number | Dec. 31, 2017USD ($)Number | |||
Derivatives, Fair Value [Line Items] | ||||
Derivative Liability, Number of Instruments Held | Number | 2 | 2 | ||
Derivative Variable Interest Rate Description | One-month LIBOR + applicable spread/Fixed at 4.05%-4.34% | [1] | One-month LIBOR + applicable spread/Fixed at 4.05%-4.34% | |
Derivative, Remaining Maturity | 7 years | 7 years 2 months 12 days | ||
Derivative, Average Fixed Interest Rate | 4.16% | 4.21% | ||
Maximum [Member] | ||||
Derivatives, Fair Value [Line Items] | ||||
Derivative Liability, Notional Amount | $ | [2] | $ 10,575,000 | $ 10,620,000 | |
[1] | The reference rate was June 30, 2017 for two interest rate swaps. | |||
[2] | The notional amount of the Company’s swaps decreases each month to correspond to the outstanding principal balance on the related mortgage. The minimum notional amount (outstanding principal balance at the maturity date) as of December 31, 2017 was $9,083,700. |
INTEREST RATE SWAP DERIVATIVE47
INTEREST RATE SWAP DERIVATIVES (Details 1) - Interest Rate Swap [Member] | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018USD ($)Number | Dec. 31, 2017USD ($)Number | |
Derivatives, Fair Value [Line Items] | ||
Derivative Liability, Number of Instruments Held | Number | 2 | 2 |
Derivative Liability | $ | $ 230,934 | $ 7,899 |
Description of Location of Interest Rate Fair Value Hedge Derivative on Balance Sheet | Asset – Interest rate swap derivatives, at fair value | Asset – Interest rate swap derivatives, at fair value |
INTEREST RATE SWAP DERIVATIVE48
INTEREST RATE SWAP DERIVATIVES (Details Textual) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | |
Derivatives, Fair Value [Line Items] | ||
Unrealized Gain (Loss) on Derivatives | $ 226,806 | |
Interest Rate Swap [Member] | Minimum [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Liability, Notional Amount | $ 9,083,700 | $ 9,083,700 |
FAIR VALUE DISCLOSURES (Details
FAIR VALUE DISCLOSURES (Details) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items] | ||
Face value | $ 79,317,586 | $ 62,228,409 |
Carrying value | 86,238,357 | |
Mortgage note payable [Member] | ||
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items] | ||
Face value | 79,317,586 | 62,228,409 |
Carrying value | 77,266,071 | 60,487,303 |
Fair value | $ 80,561,846 | $ 62,363,284 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) | 3 Months Ended | |||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | ||
Related Party Transaction [Line Items] | ||||
Due from Related Parties | $ 209,876 | $ 34,194 | ||
Due to Affiliates | 493,915 | 907,377 | ||
Due from Related Parties, Current | 209,876 | 34,194 | ||
Asset Management Fees [Member] | ||||
Related Party Transaction [Line Items] | ||||
Expenses incurred To Related Parties | 401,315 | $ 111,298 | ||
Due from Related Parties | [1] | 0 | 0 | |
Due to Affiliates | [1] | 460,389 | 567,661 | |
Fees to affiliates [Member] | ||||
Related Party Transaction [Line Items] | ||||
Expenses incurred To Related Parties | 401,315 | 111,298 | ||
Due from Related Parties | 0 | 0 | ||
Due to Affiliates | 0 | 0 | ||
Reimbursable organizational and offering expenses [Member] | ||||
Related Party Transaction [Line Items] | ||||
Expenses incurred To Related Parties | [2] | 430,244 | 608,130 | |
Due from Related Parties | [2] | 0 | 0 | |
Due to Affiliates | [2] | 16,892 | 15,945 | |
Expense reimbursements from Sponsor [Member] | ||||
Related Party Transaction [Line Items] | ||||
Expenses incurred To Related Parties | [3] | (359,514) | (688,026) | |
Due from Related Parties | [3] | 209,876 | 34,194 | |
Due to Affiliates | [3] | 0 | 0 | |
Waiver of Assets Management Fees [Member] | ||||
Related Party Transaction [Line Items] | ||||
Expenses incurred To Related Parties | [1] | 0 | (27,824) | |
Due from Related Parties | [1] | 0 | 0 | |
Due to Affiliates | [1] | 0 | 0 | |
Capitalized Acquisition Fees [Member] | ||||
Related Party Transaction [Line Items] | ||||
Expenses incurred To Related Parties | 456,000 | 600,600 | ||
Due from Related Parties | 0 | 0 | ||
Due to Affiliates | 0 | 0 | ||
Subordinated participation fees [Member] | ||||
Related Party Transaction [Line Items] | ||||
Expenses incurred To Related Parties | [1] | 0 | 0 | |
Due from Related Parties | 0 | |||
Due to Affiliates | 0 | 315,802 | ||
Property management fees [Member] | ||||
Related Party Transaction [Line Items] | ||||
Expenses incurred To Related Parties | [4] | 12,939 | 0 | |
Due from Related Parties | [4] | 0 | 0 | |
Due to Affiliates | [4] | 0 | 7,969 | |
Capitalized Financing coordination fees [Member] | ||||
Related Party Transaction [Line Items] | ||||
Expenses incurred To Related Parties | 209,550 | 87,450 | ||
Due from Related Parties | 0 | 0 | ||
Due to Affiliates | 0 | 0 | ||
Director and Officer Insurance Reimbursements [Member] | ||||
Related Party Transaction [Line Items] | ||||
Expenses incurred To Related Parties | [5] | 16,634 | $ 0 | |
Due from Related Parties | [5] | 0 | 0 | |
Due to Affiliates | [5] | $ 16,634 | $ 0 | |
[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, 2018 and 2017, the Advisor waived $0 and $27,824, respectively, of asset management fees, which are not subject to future recoupment by the Advisor. In addition to amounts presented in this table, the Company also incurred asset management fees to the Advisor of $47,984 related to its TIC interest in the Santa Clara property during the three months ended March 31, 2018 which amount is reflected as a reduction of income recognized from investments in unconsolidated entities. | |||
[2] | As of March 31, 2018, the Sponsor had incurred $7,250,015 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. | |||
[3] | The Company records payroll costs related to Company employees that answer questions from prospective stockholders. 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. The expense reimbursements from the Sponsor for the three months ended March 31, 2018 included $48,422 of employment related legal fees which the Sponsor also agreed to reimburse the Company. The receivables related to these costs are reflected in “Due from affiliates” in the condensed consolidated balance sheets. | |||
[4] | Property management fees are classified within property operating expenses on the condensed consolidated statements of operations. | |||
[5] | Directors and officers insurance reimbursements are classified within general and administrative expenses on the condensed consolidated statements of operations. |
RELATED PARTY TRANSACTIONS (D51
RELATED PARTY TRANSACTIONS (Details Textual) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | ||
Related Party Transaction [Line Items] | ||||
Due to Related Parties | $ 493,915 | $ 907,377 | ||
Property Management Fees Percentage | 1.50% | |||
Operating Expenses Reimbursement, Maximum Limit Reimbursements | Under the Companys charter, 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 (the 2%/25% Limitation). | |||
Subordinated Participation Fee Description |  (i) 30% of the product of (a) the difference of (x) the Preliminary NAV per share minus (y) the Highest Prior NAV per share, multiplied by (b) the number of shares outstanding as of December 31 of the relevant annual period, but only if this results in a positive number, plus  (ii) 30% of the product of: (a) the amount by which aggregate distributions to stockholders during the annual period, excluding return of capital distributions, divided by the weighted average number of shares outstanding for the annual period, exceed the Preferred Return, multiplied by (b) the weighted average number of shares outstanding for the annual period calculated on a monthly-basis. | |||
Share-based Compensation | $ 38,190 | $ 30,000 | ||
Common Class C [Member] | ||||
Related Party Transaction [Line Items] | ||||
Stock Issued During Period, Shares, Other | 6,075 | |||
Advisor [Member] | ||||
Related Party Transaction [Line Items] | ||||
Acquisition Fees Description | The Company shall pay the Advisor a fee in an amount equal to 3.0% of the contract purchase price of the Companys 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. | |||
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 the Companys Advisor or its affiliates, the disposition fees paid to its Advisor, its 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. | |||
Due to Affiliates [Member] | ||||
Related Party Transaction [Line Items] | ||||
Due to Related Parties | $ 16,892 | |||
Reimbursable Organizational and Offering Expenses [Member] | ||||
Related Party Transaction [Line Items] | ||||
Due to Related Parties | [1] | 16,892 | $ 15,945 | |
Accrual organization and offering cost | $ 3,136,814 | |||
Reimbursable Organizational and Offering Expenses [Member] | Sponsor [Member] | ||||
Related Party Transaction [Line Items] | ||||
Gross Offering Proceeds Percentage | 3.00% | |||
Reimbursable Organizational and Offering Expenses [Member] | Due to Affiliates [Member] | ||||
Related Party Transaction [Line Items] | ||||
Related Party Transaction, Expenses from Transactions with Related Party | $ 3,153,706 | |||
Waiver Of Assets Management Fees [Member] | ||||
Related Party Transaction [Line Items] | ||||
Due to Related Parties | [2] | $ 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 | $ 0 | 27,824 | ||
Related Party Transaction, Expenses from Transactions with Related Party | 0 | 27,824 | ||
Expense reimbursement from Sponsor [Member] | ||||
Related Party Transaction [Line Items] | ||||
Due to Related Parties | [3] | 0 | 0 | |
Legal Fees | 48,422 | |||
Rich Uncles REIT I [Member] | ||||
Related Party Transaction [Line Items] | ||||
Accrual organization and offering cost, Related Party | 7,250,015 | |||
Asset Management Fees [Member] | ||||
Related Party Transaction [Line Items] | ||||
Due to Related Parties | [2] | 460,389 | 567,661 | |
Related Party Transaction, Expenses from Transactions with Related Party | 401,315 | $ 111,298 | ||
Asset Management Fees [Member] | Advisor [Member] | ||||
Related Party Transaction [Line Items] | ||||
Related Party Transaction, Expenses from Transactions with Related Party | 47,984 | |||
Subordinated participation fees [Member] | ||||
Related Party Transaction [Line Items] | ||||
Due to Related Parties | $ 0 | 315,802 | ||
Related Party Transaction, Expenses from Transactions with Related Party | $ 315,802 | |||
[1] | As of March 31, 2018, the Sponsor had incurred $7,250,015 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. | |||
[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% of the total investment value of the Company’s assets. For the three months ended March 31, 2018 and 2017, the Advisor waived $0 and $27,824, respectively, of asset management fees, which are not subject to future recoupment by the Advisor. In addition to amounts presented in this table, the Company also incurred asset management fees to the Advisor of $47,984 related to its TIC interest in the Santa Clara property during the three months ended March 31, 2018 which amount is reflected as a reduction of income recognized from investments in unconsolidated entities. | |||
[3] | The Company records payroll costs related to Company employees that answer questions from prospective stockholders. 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. The expense reimbursements from the Sponsor for the three months ended March 31, 2018 included $48,422 of employment related legal fees which the Sponsor also agreed to reimburse the Company. The receivables related to these costs are reflected in “Due from affiliates” in the condensed consolidated balance sheets. |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Textual) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
COMMITMENTS AND CONTINGENCIES [Line Items] | ||
Restricted Cash and Cash Equivalents | $ 805,416 | $ 944,582 |
Lease Agreements [Member] | ||
COMMITMENTS AND CONTINGENCIES [Line Items] | ||
Other Commitment | 1,778,649 | |
Restricted Cash and Cash Equivalents | $ 805,416 | |
Lease Agreements [Member] | Santa Clara Property [Member] | ||
COMMITMENTS AND CONTINGENCIES [Line Items] | ||
Equity Method Investment, Ownership Percentage | 72.70% |
SUBSEQUENT EVENTS (Details Text
SUBSEQUENT EVENTS (Details Textual) | May 04, 2018USD ($)shares | Apr. 04, 2018USD ($)a | Apr. 03, 2018$ / shares | May 31, 2018 | Apr. 30, 2018$ / shares | Mar. 31, 2018USD ($)shares | Mar. 31, 2017USD ($) | Dec. 31, 2017USD ($) |
Subsequent Event [Line Items] | ||||||||
Stock Issued During Period, Value, New Issues | $ 14,341,117 | $ 500 | ||||||
Payments to Acquire Real Estate | 15,245,676 | $ 19,550,108 | ||||||
Debt Instrument, Face Amount | $ 79,317,586 | $ 62,228,409 | ||||||
Common Class C [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Stock Issued During Period, Shares, New Issues | shares | 1,429,021 | |||||||
Stock Issued During Period, Value, New Issues | $ 1,418 | |||||||
Subsequent Event [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Payments to Acquire Real Estate | $ 15,500,000 | |||||||
Dividends Payable, Amount Per Share Per Day | $ / shares | $ 0.0019542 | $ 0.0018911 | ||||||
Dividends Payable, Date to be Paid | May 25, 2018 | May 31, 2018 | Jun. 25, 2018 | |||||
Debt Instrument, Interest Rate, Stated Percentage | 5.155% | |||||||
Debt Instrument, Maturity Date | Apr. 4, 2023 | |||||||
Debt Instrument, Description of Variable Rate Basis | one-month LIBOR plus 2.25% | |||||||
Area of Land | a | 87,230 | |||||||
Operating Leases, Income Statement, Contingent Revenue | $ 6,840,084 | |||||||
Debt Instrument, Face Amount | $ 8,350,000 | |||||||
Debt Instrument, Basis Spread on Variable Rate | 2.25% | |||||||
Subsequent Event [Member] | Common Stock [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Stock Issued During Period, Shares, Dividend Reinvestment Plan | shares | 489,638 | |||||||
Stock Issued During Period, Value, Dividend Reinvestment Plan | $ 4,904,904 | |||||||
Subsequent Event [Member] | Mortgages [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Derivative, Fixed Interest Rate | 5.09% | |||||||
Debt Instrument, Description of Variable Rate Basis | one-month LIBOR plus 2.25% | |||||||
Debt Instrument, Basis Spread on Variable Rate | 2.25% | |||||||
Subsequent Event [Member] | Redeemable Common Stock [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Stock Issued During Period, Shares, New Issues | shares | 169,460 | |||||||
Stock Issued During Period, Value, New Issues | $ 1,703,068 | |||||||
Dividends Payable, Date Declared | Apr. 1, 2018 | |||||||
Subsequent Event [Member] | Common Class C [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Stock Issued During Period, Shares, New Issues | shares | 11,048,439 | |||||||
Stock Issued During Period, Value, New Issues | $ 110,563,193 | |||||||
Subsequent Event [Member] | Class S Common stock [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Stock Issued During Period, Shares, New Issues | shares | 3,076 | |||||||
Stock Issued During Period, Value, New Issues | $ 30,765 | |||||||
Stock Issued During Period, Shares, Dividend Reinvestment Plan | shares | 76 | |||||||
Stock Issued During Period, Value, Dividend Reinvestment Plan | $ 765 |