Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Nov. 01, 2017 | |
Document And Entity Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | CHPII | |
Entity Registrant Name | CNL Healthcare Properties II, Inc. | |
Entity Central Index Key | 1,648,383 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Class A Common Stock | ||
Document And Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 717,435 | |
Class T Common Stock | ||
Document And Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 1,640,300 | |
Class I Common Stock | ||
Document And Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 106,380 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
ASSETS | ||
Real estate investment properties, net | $ 20,407,427 | |
Cash | 15,467,018 | $ 5,977,241 |
Intangibles, net | 1,029,205 | |
Other assets | 217,443 | 48,928 |
Restricted cash | 119,478 | 383,000 |
Total assets | 37,240,571 | 6,409,169 |
Liabilities: | ||
Mortgage and notes payable | 16,176,403 | 312,500 |
Accounts payable and accrued liabilities | 606,502 | 23,263 |
Due to related parties | 640,447 | 240,651 |
Other liabilities | 112,965 | |
Total liabilities | 17,536,317 | 576,414 |
Commitments and contingencies (Note 10) | ||
Stockholders' equity: | ||
Preferred stock, $0.01 par value per share, 10,000,000 shares authorized; none issued or outstanding | ||
Capital in excess of par value | 21,509,803 | 6,226,141 |
Accumulated loss | (1,293,154) | (342,447) |
Accumulated distributions | (534,720) | (57,361) |
Total stockholders' equity | 19,704,254 | 5,832,755 |
Total liabilities and stockholders' equity | 37,240,571 | 6,409,169 |
Class A Common Stock | ||
Stockholders' equity: | ||
Common stock value | 7,087 | 3,251 |
Total stockholders' equity | 7,087 | 3,251 |
Class T Common Stock | ||
Stockholders' equity: | ||
Common stock value | 14,349 | 3,086 |
Total stockholders' equity | 14,349 | 3,086 |
Class I Common Stock | ||
Stockholders' equity: | ||
Common stock value | 889 | 85 |
Total stockholders' equity | $ 889 | $ 85 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - $ / shares | Sep. 30, 2017 | Dec. 31, 2016 |
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Class A Common Stock | ||
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 1,200,000,000 | 1,200,000,000 |
Common stock, shares issued | 708,626 | 325,119 |
Common stock, shares outstanding | 708,626 | 325,119 |
Class T Common Stock | ||
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 700,000,000 | 700,000,000 |
Common stock, shares issued | 1,434,980 | 308,587 |
Common stock, shares outstanding | 1,434,980 | 308,587 |
Class I Common Stock | ||
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 88,880 | 8,454 |
Common stock, shares outstanding | 88,880 | 8,454 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Revenues: | ||||
Resident fees and services | $ 1,095,696 | $ 2,178,566 | ||
Total revenues | 1,095,696 | 2,178,566 | ||
Operating expenses: | ||||
Property operating expenses | 626,933 | 1,236,358 | ||
General and administrative expenses | 178,940 | $ 93,439 | 664,727 | $ 93,439 |
Property management fees | 64,570 | 136,442 | ||
Depreciation and amortization | 324,417 | 647,185 | ||
Total operating expenses | 1,194,860 | 93,439 | 2,684,712 | 93,439 |
Operating loss | (99,164) | (93,439) | (506,146) | (93,439) |
Other expense: | ||||
Interest expense and loan cost amortization | 196,489 | 17,149 | 402,683 | 17,149 |
Total other expense | 196,489 | 17,149 | 402,683 | 17,149 |
Loss before income taxes | (295,653) | (110,588) | (908,829) | (110,588) |
Income tax expense | (12,253) | (41,878) | ||
Net loss attributable to common stockholders | (307,906) | (110,588) | (950,707) | (110,588) |
Class A Common Stock | ||||
Other expense: | ||||
Net loss attributable to common stockholders | $ (109,676) | $ (102,794) | $ (346,091) | $ (98,501) |
Net loss per share of common stock outstanding (basic and diluted) | $ (0.16) | $ (0.36) | $ (0.66) | $ (0.95) |
Weighted average number of common shares outstanding (basic and diluted) | 683,113 | 284,747 | 521,781 | 103,295 |
Distributions declared per common share | $ 0.1440 | $ 0.0700 | $ 0.3930 | $ 0.0700 |
Class T Common Stock | ||||
Other expense: | ||||
Net loss attributable to common stockholders | $ (188,994) | $ (5,411) | $ (582,723) | $ (10,002) |
Net loss per share of common stock outstanding (basic and diluted) | $ (0.16) | $ (0.36) | $ (0.66) | $ (0.95) |
Weighted average number of common shares outstanding (basic and diluted) | 1,177,167 | 14,990 | 878,536 | 10,489 |
Distributions declared per common share | $ 0.1169 | $ 0.0700 | $ 0.3087 | $ 0.0700 |
Class I Common Stock | ||||
Other expense: | ||||
Net loss attributable to common stockholders | $ (9,236) | $ (2,383) | $ (21,893) | $ (2,085) |
Net loss per share of common stock outstanding (basic and diluted) | $ (0.16) | $ (0.36) | $ (0.66) | $ (0.95) |
Weighted average number of common shares outstanding (basic and diluted) | 57,534 | 6,600 | 33,006 | 2,187 |
Distributions declared per common share | $ 0.1328 | $ 0.0700 | $ 0.3715 | $ 0.0700 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED) - USD ($) | Total | Common Stock | Class A Common Stock | Class T Common Stock | Class I Common Stock | Capital in Excess of Par Value | Accumulated Loss | Accumulated Distributions |
Beginning Balance at Dec. 31, 2015 | $ 200,000 | $ 200 | $ 199,800 | |||||
Beginning Balance (in shares) at Dec. 31, 2015 | 20,000 | |||||||
Subscriptions received for common stock, including distribution reinvestments | 2,778,749 | $ 2,602 | $ 91 | $ 84 | 2,775,972 | |||
Subscriptions received for common stock, including distribution reinvestments (in shares) | 260,180 | 9,089 | 8,375 | |||||
Stock dividends issued | $ 10 | (10) | ||||||
Stock dividends issued (in shares) | 1,047 | 32 | 32 | |||||
Stock issuance and offering costs | (2,681) | (2,681) | ||||||
Net loss | (110,588) | $ (110,588) | ||||||
Cash distributions declared | (20,662) | $ (20,662) | ||||||
Ending Balance at Sep. 30, 2016 | 2,844,818 | $ 2,812 | $ 91 | $ 84 | 2,973,081 | (110,588) | (20,662) | |
Ending Balance (in shares) at Sep. 30, 2016 | 281,227 | 9,121 | 8,407 | |||||
Conversion of initial common stock shares | $ (200) | $ 200 | ||||||
Conversion of initial common stock shares (in shares) | (20,000) | 20,000 | ||||||
Beginning Balance at Dec. 31, 2016 | 5,832,755 | $ 3,251 | $ 3,086 | $ 85 | 6,226,141 | (342,447) | (57,361) | |
Beginning Balance (in shares) at Dec. 31, 2016 | 325,119 | 308,587 | 8,454 | |||||
Subscriptions received for common stock, including distribution reinvestments | $ 16,665,946 | $ 3,781 | $ 11,178 | $ 801 | 16,650,186 | |||
Subscriptions received for common stock, including distribution reinvestments (in shares) | 2,200,000 | 378,053 | 1,117,844 | 80,135 | ||||
Stock dividends issued | $ 55 | $ 85 | $ 3 | (143) | ||||
Stock dividends issued (in shares) | 14,300 | 5,454 | 8,549 | 291 | ||||
Stock issuance and offering costs | $ (1,366,381) | (1,366,381) | ||||||
Net loss | (950,707) | (950,707) | ||||||
Cash distributions declared | (477,359) | (477,359) | ||||||
Ending Balance at Sep. 30, 2017 | $ 19,704,254 | $ 7,087 | $ 14,349 | $ 889 | $ 21,509,803 | $ (1,293,154) | $ (534,720) | |
Ending Balance (in shares) at Sep. 30, 2017 | 708,626 | 1,434,980 | 88,880 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED) - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Operating activities: | ||
Net cash flows provided by (used in) operating activities | $ 82,390 | $ (128,324) |
Investing activities: | ||
Acquisition of property | (21,854,119) | |
Payment of direct acquisition costs | (6,187) | |
Capital expenditures | (58,781) | |
Net cash used in investing activities | (21,919,087) | |
Financing activities: | ||
Subscriptions received for common stock through primary offering | 16,448,354 | 2,778,749 |
Payment of underwriting compensation | (967,600) | (2,306) |
Payment of cash distributions, net of distribution reinvestments | (259,767) | (20,662) |
Proceeds from mortgage and notes payable | 16,050,000 | 312,500 |
Payment of loan costs | (208,035) | |
Net cash flows provided by financing activities | 31,062,952 | 3,068,281 |
Net increase in cash and restricted cash | 9,226,255 | 2,939,957 |
Cash and restricted cash at beginning of period | 6,360,241 | 200,000 |
Cash and restricted cash at end of period | 15,586,496 | 3,139,957 |
Amounts incurred but not paid (including amounts due to related parties): | ||
Acquisition fees and expenses related to asset acquisition | 24,900 | |
Selling commissions and Dealer Manager fees | 16,438 | |
Annual distribution and stockholder servicing fee | $ 549,449 | 375 |
REIT Funding escrow | $ 383,000 |
Organization
Organization | 9 Months Ended |
Sep. 30, 2017 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Organization | 1. Organization CNL Healthcare Properties II, Inc. is a Maryland corporation organized on July 10, 2015 that intends to qualify as a real estate investment trust (“REIT”) for U.S. federal income tax purposes beginning with the year ending December 31, 2017 or the year in which the Company commences material operations. The Company is sponsored by CNL Financial Group, LLC (“Sponsor” or “CNL”) and was formed primarily to acquire and manage a diversified portfolio of healthcare real estate and real estate-related assets it believes will generate a steady current return and provide long-term value to its stockholders. It intends to focus on investing, primarily in the United States, within the seniors housing, medical office, acute care and post-acute care sectors, as well as other types of real estate and real estate-related securities and loans. The Company is externally managed and advised by CHP II Advisors, LLC, (“Advisor”) an affiliate of CNL. The Advisor provides advisory services to the Company relating to substantially all aspects of its investments and operations, including real estate acquisitions, asset management and other operational matters. During the period from July 10, 2015 to December 31, 2015, the Company sold 20,000 shares of common stock to the Advisor for an aggregate purchase price of $0.2 million, and these shares were converted into 20,000 Class A shares upon the filing of the Company’s Articles of Amendment and Restatement in March 2016. On March 2, 2016, pursuant to a registration statement on Form S-11 under the Securities Act of 1933, the Company commenced its initial public offering of up to $1.75 billion (“Primary Offering”), in any combination, of Class A, Class T and Class I shares of common stock on a “best efforts” basis, which means that CNL Securities Corp. (“Dealer Manager”), an affiliate of the Sponsor, will use its best efforts but is not required to sell any specific amount of shares. The Company also intends to offer up to $250 million, in any combination, of Class A, Class T and Class I shares to be issued pursuant to its distribution reinvestment plan (“Reinvestment Plan” and, together with the Primary Offering, the “Offering”). The Company reserves the right to reallocate the shares offered between the Primary Offering and the Reinvestment Plan. From the time of the Company’s formation on July 10, 2015 (inception) through July 10, 2016, the Company had not commenced operations because they were in their development stage and had not received the minimum required offering amount of $2.0 million in shares of common stock. T through the sale of 250,000 Class A shares to and The Company contributes the net proceeds from its Offering to CHP II Partners, LP (“Operating Partnership”) in exchange for partnership interests. The Company intends to own substantially all of its assets either directly or indirectly through the Operating Partnership in which the Company is the sole limited partner and its wholly-owned subsidiary, CHP II GP, LLC, is the sole general partner. The Operating Partnership may own assets through: (1) a wholly-owned taxable REIT subsidiary, CHP II TRS Holding, Inc. (“TRS Holdings”) and (2) property owner subsidiaries, which are single purpose entities. The Company generally expects to lease its seniors housing properties to single member limited liability companies wholly-owned by TRS Holdings and engage independent third-party managers under management agreements to operate the properties as permitted under the REIT Investment Diversification and Empowerment Act of 2007 (“RIDEA”) structures; however, the Company may also lease its properties to third-party tenants under triple-net or similar lease structures, where the tenant bears all or substantially all of the costs (including cost increases for real estate taxes, utilities, insurance and ordinary repairs). Medical office, acute care and post-acute care properties will generally be leased on a triple-net, net or modified gross basis to third-party tenants. In addition, the Company expects most investments will be wholly-owned, although, it may invest through partnerships with other entities where the Company believes it is appropriate and beneficial. The Company expects to invest in a combination of stabilized assets, new property developments and properties which have not reached full stabilization. Finally, the Company may invest in and originate mortgage, bridge or mezzanine loans or in entities that make investments similar to the foregoing investment types. The Company would generally make loans to the owners of properties to enable them to acquire land, buildings, or to develop property. In exchange, the owner generally grants the Company a first lien or collateralized interest in a participating mortgage collateralized by the property or by interests in the entity that owns the property. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of Presentation and Consolidation — The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and note disclosures required by generally accepted accounting principles in the United States (“GAAP”). The unaudited condensed consolidated financial statements reflect all normal recurring adjustments, which, in the opinion of management, are necessary for the fair statement of the Company’s results for the interim period presented. Operating results for the quarter and nine months ended September 30, 2017 may not be indicative of the results that may be expected for the year ending December 31, 2017. Amounts as of December 31, 2016 included in the unaudited condensed consolidated financial statements have been derived from audited consolidated financial statements as of that date but do not include all disclosures required by GAAP. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016. The accompanying condensed consolidated financial statements include the accounts of the Company, the Operating Partnership and its other subsidiaries. All material intercompany accounts and transactions have been eliminated in consolidation. Use of Estimates — The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts in the Company’s condensed consolidated financial statements and accompanying notes. Actual results could differ from those estimates. Allocation of Purchase Price for Real Estate Acquisitions — Upon acquisition of real estate, the Company first determines whether substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets in order to determine whether the acquisition should be accounted for as an asset acquisition. If the substantially all threshold is not met, the Company then determines whether the acquisition meets the definition of a business (i.e. does it include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create outputs). The Company estimates the fair value of acquired tangible assets (consisting of land and improvements, building and improvements, and furniture, fixtures and equipment), intangible assets (consisting of in-place leases and above- or below-market leases) and liabilities assumed in order to allocate the purchase price. In estimating the fair value of the assets acquired and liabilities assumed, the Company considers information obtained about each property as a result of its due diligence and utilizes various valuation methods, such as estimated cash flow projections using appropriate discount and capitalization rates, estimates of replacement costs net of depreciation and available market information. The fair value of the tangible assets of an acquired leased property is determined by valuing the property as if it were vacant, and the “as-if-vacant” value is then allocated to land and building. The purchase price is allocated to in-place lease intangibles based on management’s evaluation of the specific characteristics of the acquired lease(s). Factors considered include estimates of carrying costs during hypothetical expected lease-up periods, including estimates of lost rental income during the expected lease-up periods, and costs to execute similar leases such as leasing commissions, legal and other related expenses. Above- and below-market lease intangibles are recorded based on the present value of the difference between the contractual rents to be paid pursuant to the lease and management’s estimate of the fair market lease rates for each in-place lease and may include assumptions for lease renewals of below-market leases. Mortgages and Notes Payable — Mortgages and notes payable are recorded at the stated principal amount and are generally collateralized by the Company’s property. Mortgages and notes payable assumed in connection with an acquisition are recorded at fair market value as of the date of the acquisition. 2. Summary of Significant Accounting Policies (continued) Loan Costs — Loan costs paid in connection with obtaining indebtedness are deferred and amortized over the estimated life of the indebtedness using the effective interest method. Loan costs are presented as a direct deduction from the carrying amount of the related indebtedness in the balance sheet. Depreciation and Amortization — Real estate costs related to the acquisition and improvement of properties are capitalized. Repair and maintenance costs are charged to expense as incurred and significant costs incurred for replacements and improvements are capitalized. Repair and maintenance costs include all costs that do not extend the useful life of the real estate asset. The Company considers the period of future benefit of an asset to determine its appropriate useful life. Real estate assets are stated at cost less accumulated depreciation, which is computed using the straight-line method of accounting over the estimated useful lives of the related assets. Buildings and improvements are depreciated on the straight-line method over their estimated useful lives, which generally are limited to 39 and 15 years, respectively, or the remaining life of the ground lease. Furniture, fixtures and equipment are depreciated on the straight-line method over their estimated useful lives, which generally range between three and five years. Amortization of intangible assets is computed using the straight-line method of accounting over the shorter of the respective lease term or estimated useful life. If a lease is terminated or modified prior to its scheduled expiration, the Company recognizes a loss on lease termination related to the unamortized lease-related costs not deemed to be recoverable. Impairment of Real Estate Assets — Real estate assets are reviewed on an ongoing basis to determine whether there are any indicators, including property operating performance and general market conditions, that the value of the real estate properties (including any related amortizable intangible assets or liabilities) may be impaired. To assess if an asset group is potentially impaired, management compares the estimated current and projected undiscounted cash flows, including estimated net sales proceeds, of the asset group over its remaining useful life to the net carrying value of the asset group. Such cash flow projections consider factors such as expected future operating income, trends and prospects, as well as the effects of demand, competition and other factors. In the event that the carrying value exceeds the undiscounted operating cash flows, the Company would recognize an impairment provision to adjust the carrying value of the asset group to the estimated fair value of the asset group. Revenue Recognition — Resident fees and services are recorded in the period in which the services are performed and generally consist of (1) monthly rent, which covers occupancy of the residents’ unit as well as basic services, such as utilities, meals and certain housekeeping services, and (2) service level charges, such as assisted living care, memory care and ancillary services . Resident agreements are generally short-term in nature, billed monthly in advance and cancelable by the residents with a 30-day notice. Resident agreements may require the payment of upfront fees prior to moving into the community with any non-refundable portion of such fees being recorded as deferred revenue and amortized over the estimated resident stay. Shares Based Payments to Non-Employees — In connection with an expense support arrangement described in Note 6. “Related Party Arrangements,” the Company may issue forfeitable restricted Class A shares of common stock (“Restricted Stock”) to the Advisor on an annual basis in lieu of cash for services rendered, in the event that the Company does not achieve established distribution coverage targets. The Restricted Stock is forfeited if shareholders do not ultimately receive their original invested capital back with at least a 6% annualized return of investment upon a future liquidity or disposition event of the Company. Upon issuance of Restricted Stock, the Company measures the fair value at its then-current lowest aggregate fair value pursuant to Accounting Standards Codification (“ASC”) 505-50. On the date in which the Advisor satisfies the vesting criteria, the Company remeasures the fair value of the Restricted Stock pursuant to ASC 505-50 and records expense equal to the difference between the original fair value and that of the remeasurement date. In addition, given that performance is outside the control of the Advisor and involves both market conditions and counterparty performance conditions, the shares are treated as unissued for accounting purposes and the Company only includes the Restricted Stock in the calculation of diluted earnings per share to the extent their effect is dilutive and the vesting conditions have been satisfied as of the reporting date. 2. Summary of Significant Accounting Policies (continued) Pursuant to the amended expense support agreement, the Advisor shall be the record owner of the Restricted Stock until the shares of common stock are sold or otherwise disposed of, and shall be entitled to all of the rights of a stockholder of the Company including, without limitation, the right to vote such shares (to the extent permitted by the Company’s articles of incorporation) and receive all cash distributions and stock dividends paid with respect to such shares. All cash distributions and stock dividends paid to the Advisor related to the Restricted Stock shares shall vest immediately and will not be subject to forfeiture. The Company recognizes expense related to the cash distributions and stock dividends related to the Restricted Stock shares. Segment Information — Operating segments are components of an enterprise for which separate financial information is available and is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and assess performance. The Company has determined that it operates in one operating segment, real estate ownership. The Company’s chief operating decision maker evaluates the Company’s operations from a number of different operational perspectives including, but not limited to, a property-by-property basis and by tenant or operator. The Company derives all significant revenues from a single reportable operating segment of business, healthcare real estate, regardless of the type (seniors housing, medical office, etc.) or ownership structure (leased or managed). Accordingly, the Company does not report segment information; nevertheless, management periodically evaluates whether the Company continues to have one single reportable segment of business. Adopted Accounting Pronouncements — In August 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments,” which made eight targeted changes to how cash receipts and cash payments are presented and classified in the statement of cash flows. The ASU further clarified how the predominance principle should be applied to cash receipts and payments relating to more than one class of cash flows. The ASU is effective for annual reporting periods, and interim periods within those annual periods, beginning after December 15, 2017. The ASU is to be applied retrospectively for each period presented. Subsequently, in November 2016, the FASB issued ASU 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash,” which modifies the presentation of the statement of cash flows and requires reconciliation to the overall change in the total of cash, cash equivalents, restricted cash and restricted cash equivalents. As a result, the statement of cash flows will no longer present transfers between cash and cash equivalents and restricted cash and restricted cash equivalents. The ASU is effective for annual reporting periods, and interim periods within those annual periods, beginning after December 15, 2017. The ASU is to be applied retrospectively for each period presented. The Company early adopted both ASU 2016-15 and ASU 2016-18 on January 1, 2017; the adoption of which impacts the Company’s presentation of its statement of cash flows for all periods presented, but will not have an impact on the Company’s condensed consolidated balance sheets or condensed consolidated statements of operations. In October 2016, the FASB issued ASU 2016-17, “Consolidation (Topic 810): Interests Held Through Related Parties that are under Common Control,” which requires an entity to consider its indirect interests held by related parties that are under common control on a proportionate basis when evaluating whether the entity is a primary beneficiary of a VIE. The ASU is effective for annual reporting periods, and interim periods within those annual periods, beginning after December 15, 2016. The Company has adopted ASU 2016-17 on January 1, 2017; the adoption of which did not have a material impact to its condensed consolidated financial statements. In January 2017, the FASB issued ASU 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business,” which clarifies the definition of a business and provides a framework by which to evaluate whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The ASU is effective for annual reporting periods, and interim periods within those annual periods, beginning after December 15, 2017. The ASU is to be applied prospectively for each period presented. The Company early adopted ASU 2017-01 on January 1, 2017; the adoption of which did have a material impact on the Company’s condensed consolidated financial statements as a result of Summer Vista Assisted Living being considered an asset acquisition. 2. Summary of Significant Accounting Policies (continued) Recent Accounting Pronouncements — In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers,” as a new ASC topic (Topic 606). The core principle of this ASU is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The ASU further provides guidance for any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets, unless those contracts are within the scope of other standards (for example, lease contracts). The FASB subsequently issued ASU 2015-14 to defer the effective date of ASU 2014-09 until annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period, with earlier adoption permitted. In addition, in December 2016, the FASB issued ASU 2016-20, which provides technical corrections and improvements to ASC 606 based on questions that stakeholders have raised while working through the implementation. ASC 606 can be adopted using one of two retrospective transition methods: (i) retrospectively to each prior reporting period presented or (ii) as a cumulative-effect adjustment as of the date of adoption. The Company continues to execute on its implementation plan for ASC 606; specifically, as it relates to the allocation of consideration to different revenue streams within a given contract and the impact that the adoption of ASC 606 will have on the Company’s financial statement disclosures. The Company expects to use the modified retrospective approach as its transition method. The Company does not expect the adoption of this ASU to have a material impact (if any) on the amounts and timing of its revenue recognition. In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842): Accounting for Leases,” which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e. lessees and lessors). The ASU requires lessees to recognize assets and liabilities on the balance sheet for the rights and obligations created by all leases with terms of more than 12 months. The ASU further modifies lessors’ classification criteria for leases and the accounting for sales-type and direct financing leases. The ASU will also require qualitative and quantitative disclosures designed to give financial statement users additional information on the amount, timing, and uncertainty of cash flows arising from leases. The ASU is effective for annual reporting periods, and interim periods within those annual periods, beginning after December 15, 2018 with early adoption permitted. The ASU is to be applied using a modified retrospective approach. The Company is currently evaluating the impact this ASU will have on the Company’s condensed consolidated financial statements; specifically, as it relates to arrangements in which the Company is the lessee and the required presentation in the Company’s condensed consolidated financial position and related financial statement disclosures. In August 2017, the FASB issued ASU 2017-12 “Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities,” which amended the hedge accounting model to better reflect an entity’s risk management activities. The ASU expands an entities ability to hedge nonfinancial and financial risk components as well as reduce the complexity related to fair value hedges of interest rate risk. The ASU further eliminates the requirement to separately measure and report hedge ineffectiveness and generally requires the entire change in the fair value of a hedging instrument to be presented in the same income statement line as the hedged item. The ASU is effective for annual reporting periods, and interim periods within those annual periods, beginning after December 15, 2018. The Company does not expect the adoption of this ASU to have a material impact on the Company’s consolidated results of operations or cash flows until such time as the Company enters into interest protection arrangements. |
Real Estate Acquisitions
Real Estate Acquisitions | 9 Months Ended |
Sep. 30, 2017 | |
Business Combinations [Abstract] | |
Real Estate Acquisitions | 3. Real Estate Acquisitions During the nine months ended September 30, 2017, the Company acquired Summer Vista Assisted Living (“Summer Vista”), a seniors housing community in Pensacola, Florida, for a purchase price of approximately $21.4 million. In connection therewith, the Company incurred approximately $0.6 million of acquisition fees and expenses, which have been capitalized as a component of the cost of the assets acquired and allocated on a relative fair value basis. The seniors housing community features 89 residential units and is operated under a RIDEA structure pursuant to a newly negotiated five-year property management agreement with SRI Management, LLC (“Superior Residences”), the property’s existing third-party property manager who has managed the property since it opened in February 2016. The following summarizes the purchase price allocation for Summer Vista, and the related assets acquired and liabilities assumed in connection with the acquisition: Land and land improvements $ 2,269,406 Buildings and building improvements 17,611,786 Furniture, fixtures and equipment 857,338 In-place lease intangibles (1) 1,286,507 Liabilities assumed (170,918 ) Total purchase price consideration $ 21,854,119 _____________ FOOTNOTE: (1) At the acquisition date, the weighted-average amortization period on the acquired in-place lease intangibles was approximately 2.5 years and is based on the expected unit turnover. |
Real Estate Investment Properti
Real Estate Investment Properties, net | 9 Months Ended |
Sep. 30, 2017 | |
Real Estate [Abstract] | |
Real Estate Investment Properties, net | 4. Real Estate Investment Properties, net The gross carrying amount and accumulated depreciation of the Company’s real estate investment properties as of September 30, 2017 are as follows: September 30, 2017 Land and land improvements $ 2,302,242 Building and building improvements 17,611,786 Furniture, fixtures and equipment 883,283 Less: accumulated depreciation (389,884) Real estate investment properties, net $ 20,407,427 Depreciation expense on the Company’s real estate investment properties, net was approximately $0.2 million and $0.4 million for the quarter and nine months ended September 30, 2017, respectively. |
Intangibles, net
Intangibles, net | 9 Months Ended |
Sep. 30, 2017 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Intangibles, net | 5. Intangibles, net The gross carrying amount and accumulated amortization of the Company’s intangibles as of September 30, 2017 are as follows: September 30, 2017 In-place lease intangibles $ 1,286,507 Less: accumulated amortization (257,302 ) Intangibles, net $ 1,029,205 5. Intangibles, net (continued) Amortization on the Company’s intangibles was approximately $0.1 million and $0.3 million for the quarter and nine months ended September 30, 2017, respectively, all of which was included in depreciation and amortization in the accompanying condensed consolidated statements of operations. The weighted average remaining useful life of the Company’s intangibles was 2.0 years as of September 30, 2017. The estimated future amortization on the Company’s intangibles for the remainder of 2017, each of the next four years and thereafter, in the aggregate, as of September 30, 2017 is as follows: 2017 $ 128,651 2018 514,603 2019 385,951 2020 ― 2021 ― Thereafter ― $ 1,029,205 |
Related Party Arrangements
Related Party Arrangements | 9 Months Ended |
Sep. 30, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Arrangements | 6. Related Party Arrangements The Company is externally advised and has no direct employees. All of the Company’s executive officers are executive officers, or on the board, of managers of the Advisor. In addition, certain directors and officers hold similar positions with CNL Securities Corp., the Dealer Manager of the Offering and a wholly owned subsidiary of CNL. In connection with services provided to the Company, affiliates are entitled to the following fees: Dealer Manager — From the commencement of our Offering through March 19, 2017, the Dealer Manager received a selling commission of up to 7% of the sale price for each Class A share and 2% of the sale price for each Class T share sold in the Primary Offering, all or a portion of which was reallowed to participating broker dealers. In addition, the Dealer Manager received a dealer manager fee in an amount equal to 2.75% of the price of each Class A share or Class T share sold in the Primary Offering, all or a portion of which was reallowed to participating broker dealers. In March 2017, the Company entered into an amended and restated dealer manager agreement, which reduces the maximum combined sales commissions, dealer manager fees and ongoing annual distribution and stockholder servicing fees payable to the Dealer Manager and participating broker-dealers from 9.75% to 8.5% of the gross proceeds for each share class of common stock sold in the Primary Offering. Effective March 20, 2017 and subsequently, the Dealer Manager will receive a combined selling commission and dealer manager fee of up to 8.5% of the sale price for each Class A share and up to 4.5% of the sale price for each Class T share sold in the Primary Offering, all or a portion of which may be reallowed to participating broker dealers. In addition, effective March 20, 2017, for Class T shares sold in the Primary Offering, the Dealer Manager may choose the respective amounts of the commission and dealer manager fee, provided that the selling commission shall not exceed 3.0% of the gross proceeds from the completed sale of such Class T shares. Effective March 20, 2017, the Company and the Dealer Manager also agreed that the Company will cease paying the annual distribution and stockholder servicing fee of 1.00% and 0.50%, respectively (described further below), if the total underwriting compensation, comprised of the dealer manager fees, selling commissions, and annual distribution and stockholder servicing fees, payable to broker-dealers in connection with the sale of Class T and Class I shares in the Primary Offering exceeds 8.5% of the gross offering price of such Class T or Class I shares, respectively. Prior to March 20, 2017, the 8.5% cap was set as 9.75%. Separately, the Company’s stockholders approved an amendment to the Company’s charter to adjust the conversion feature of Class T and Class I shares to match this new 8.5% cap. To the extent stockholders that purchased Class A shares on the terms in effect prior to March 20, 2017 would have paid lower selling commissions and/or dealer manager fees on the terms in effect subsequently, the Advisor, or one of its affiliates, issued them a refund in March 2017. To the extent participating broker-dealers that sold Class T or Class I shares on the terms in effect prior to March 20, 2017 were entitled to greater ongoing annual distribution and stockholder servicing fees with respect to such sales compared to sales made on the terms in effect subsequently, the Advisor paid this liability on behalf of the Company. As a result of the overall reduction in underwriting compensation, the Company recorded an approximate $0.1 million reduction in its liability related to annual distribution and stockholder servicing fees for Class T and Class I shares sold through March 19, 2017. 6. Related Party Arrangements (continued) The Company has and will continue to pay a distribution and stockholder servicing fee, subject to certain underwriting compensation limits, with respect to the Class T and Class I shares sold in the Primary Offering in an annual amount equal to 1% and 0.50%, respectively, of the current gross offering price per Class T or Class I share, respectively, or if the Company is no longer offering shares in a public offering, the estimated per share value per Class T or Class I share, respectively. The annual distribution and stockholder servicing fee will continue to be calculated as a percentage of the current gross offering price per Class T or Class I share until the Company reports an estimated per share value following the termination of the Primary Offering, at which point the distribution fee will be calculated based on the new estimated per share value, until such underwriting compensation limits are met or the shares are converted to Class A shares pursuant to the terms of the securities. The Company records the annual distribution and stockholder servicing fees as a reduction to capital in excess of par value and measures the related liability in an amount equal to the maximum fees owed in relation to the Class T and Class I shares on the shares’ issuance date. The liability is relieved over time, as the fees are paid to the Dealer Manager, or is adjusted if the fees are no longer owed on any Class T or Class I share that is redeemed or repurchased, as well as upon the earliest occurrence of: (i) a listing on a national securities exchange; (ii) a merger or consolidation of the Company with or into another entity, or the sale or other disposition of all or substantially all of the Company’s assets; (iii) after the termination of the Primary Offering in which the initial shares in the account were sold, the end of the month in which total underwriting compensation paid in the Primary Offering is not less than 10% of the gross proceeds from all share classes of the Primary Offering; (iv) the end of the month in which the total underwriting compensation paid in a Primary Offering with respect to shares purchased in a Primary Offering is not less than 8.5% of the gross offering price of those shares purchased in such Primary Offering (excluding shares purchased through the Reinvestment Plan and those received as stock dividends); or (v) any other conditions described in the Company’s prospectus. CNL Capital Markets Corp. — The Company will pay CNL Capital Markets Corp., an affiliate of CNL, an annual fee payable monthly based on the average number of total investor accounts that will be open during the term of the capital markets service agreement pursuant to which certain administrative services are provided to the Company. These services may include, but are not limited to, the facilitation and coordination of the transfer agent’s activities, client services and administrative call center activities, financial advisor administrative correspondence services, material distribution services and various reporting and troubleshooting activities. 6. Related Party Arrangements (continued) Advisor — The Company will pay the Advisor a monthly asset management fee in an amount equal to 0.0667% of the monthly average of the sum of the Company’s and the Operating Partnership’s respective daily real estate asset value, without duplication, plus the outstanding principal amount of any loans made, plus the amount invested in other permitted investments. For this purpose, “real estate asset value” equals the amount invested in wholly-owned properties, determined on the basis of cost, and in the case of properties owned by any joint venture or partnership in which the Company is a co-venturer or partner the portion of the cost of such properties paid by the Company, exclusive of acquisition fees and acquisition expenses and will not be reduced for any recognized impairment. Any recognized impairment loss will not reduce the real estate asset value for the purposes of calculating the asset management fee. The asset management fee, which will not exceed fees which are competitive for similar services in the same geographic area, may or may not be taken, in whole or in part as to any year, in the Advisor’s sole discretion. All or any portion of the asset management fee not taken as to any fiscal year shall be deferred without interest and may be taken in such other fiscal year as the Advisor shall determine. The Company will pay the Advisor a construction management fee of up to 1% of hard and soft costs associated with the initial construction or renovation of a property, or with the management and oversight of expansion projects and other capital improvements, in those cases in which the value of the construction, renovation, expansion or improvements exceeds (i) 10% of the initial purchase price of the property and (ii) $1 million in which case such fee will be due and payable as draws are funded for such projects. The Advisor will receive an investment services fee of 2.25% of the purchase price of properties and funds advanced for loans or the amount invested in the case of other assets for services in connection with the selection, evaluation, structure and purchase of assets. No investment services fee will be paid to the Advisor in connection with the Company’s purchase of securities. The Advisor, its affiliates and related parties also are entitled to reimbursement of certain operating expenses in connection with their provision of services to the Company, including personnel costs, subject to the limitation that the Company will not reimburse the Advisor for any amount by which operating expenses exceed the greater of 2% of its average invested assets or 25% of its net income in any expense year unless approved by the independent directors. The Company commenced its Primary Offering in March 2016 and made its first investment in March 2017. For the expense year ended September 30, 2017, the Company’s total operating expenses were in excess of this limitation by approximately $0.6 million. The Company’s independent directors determined that the higher relationship of operating expenses to average invested assets was justified based on the Company being in the early stages of raising and deploying capital and the limited number of investments to date, both of which were impacted by the downtime required to modify the dealer manager agreement to reduce overall underwriting compensation as discussed above, and the cost of operating a public company. The Advisor will pay all other organizational and offering expenses incurred in connection with the formation of the Company, without reimbursement by the Company. These expenses include, but are not limited to, Security and Exchange Commission (“SEC”) registration fees, Financial Industry Regulatory Authority (“FINRA”) filing fees, printing and mailing expenses, blue sky fees and expenses, legal fees and expenses, accounting fees and expenses, advertising and sales literature, transfer agent fees, due diligence expenses, personnel costs associated with processing investor subscriptions, escrow fees and other administrative expenses of the Offering. For the quarter and nine months ended September 30, 2017, the Company paid cash distributions of approximately $40,000 and $108,000, respectively, and issued stock dividends of approximately 800 shares and 3,200 shares, respectively, to the Advisor. 6. Related Party Arrangements (continued) Pursuant to an expense support arrangement, the Advisor has agreed to accept payment in Restricted Stock in lieu of cash for services rendered, in the event that the Company does not achieve established distribution coverage targets (“Expense Support Agreement”). Under the terms of the Expense Support Agreement, for each quarter within a calendar expense support year, the Company will record a proportional estimate of the cumulative year-to-date period based on an estimate of the annual expense support expected for the calendar expense support year. In exchange for services rendered and in consideration of the expense support provided under this arrangement, the Company shall issue, following each determination date, a number of shares of Restricted Stock equal to the quotient of the expense support amount provided by the Advisor for the preceding year divided by the board of directors’ most recent determination of net asset value per share of the Class A common shares, if the board has made such a determination, or otherwise the most recent public offering price per Class A common share, on the terms and conditions and subject to the restrictions set forth in the Expense Support Agreement. The Restricted Stock is subordinated and forfeited to the extent that shareholders do not receive a Priority Return on their Invested Capital (as such terms are defined in the Company’s prospectus), excluding for the purposes of calculating this threshold any shares of Restricted Stock owned by the Advisor. The following fees for services rendered are expected to be settled in the form of Restricted Stock pursuant to the Expense Support Agreement for the quarter and nine months ended September 30, 2017 and cumulatively as of September 30, 2017: Quarter Ended Nine Months Ended As of September 30, September 30, September 30, 2017 2017 2017 Fees for services rendered: Asset management fees $ 42,800 $ 86,060 $ 86,060 Advisor personnel expenses (1) 95,805 320,204 320,204 Total fees for services rendered $ 138,605 $ 406,264 $ 406,264 Then-current public offering price $ 10.93 $ 10.93 $ 10.93 Restricted Stock shares (2) 12,681 37,170 37,170 _____________ FOOTNOTES: (1) Amounts consist of personnel and related overhead costs of the Advisor or its affiliates (which, in general, are those expenses relating to the Company’s administration on an on-going basis) that are reimbursable by the Company. (2) Represents Restricted Stock shares expected to be issued to the Advisor as of September 30, 2017 pursuant to the Expense Support Agreement. No fair value was assigned to the Restricted Stock shares as the shares are expected to be valued at zero upon issuance, which represents the lowest possible value estimated at vesting. In addition, the Restricted Stock shares will be treated as unissued for financial reporting purposes until the vesting criteria are met. 6. Related Party Arrangements (continued) The fees payable to the Dealer Manager for the quarter and nine months ended September 30, 2017 and 2016, and related amounts unpaid as of September 30, 2017 and December 31, 2016 are as follows: Quarter Ended Nine Months Ended Unpaid amounts as of (1) September 30, September 30, September 30, December 31, 2017 2016 2017 2016 2017 2016 Selling commissions (2) $ 138,544 $ 1,550 $ 481,913 $ 1,550 $ 5,020 $ 6,550 Dealer Manager fees (2) 161,461 756 422,112 756 11,418 5,823 Distribution and stockholder servicing fees (2) 239,677 375 462,356 375 549,449 154,733 $ 539,682 $ 2,681 $ 1,366,381 $ 2,681 $ 565,887 $ 167,106 The fees and expenses incurred by and reimbursable to the Company’s related parties for the quarter and nine months ended September 30, 2017 and 2016, and related amounts unpaid as of September 30, 2017 and December 31, 2016 are as follows: Quarter Ended Nine Months Ended Unpaid amounts as of (1) September 30, September 30, September 30, December 31, 2017 2016 2017 2016 2017 2016 Reimbursable expenses: Operating expenses (3) $ 221,415 $ 132,098 $ 652,824 $ 132,098 $ 74,560 73,545 Acquisition fees and expenses 5,816 ― 27,705 ― ― ― $ 227,231 $ 132,098 $ 680,529 $ 132,098 $ 74,560 $ 73,545 Investment Service Fees (4) ― ― 481,500 ― ― ― Asset Management Fees (5) 42,800 ― 86,060 ― ― ― $ 270,031 $ 132,098 $ 1,248,089 $ 132,098 $ 74,560 $ 73,545 _____________ FOOTNOTES: (1) Amounts are recorded as due to related parties in the accompanying condensed consolidated balance sheets. (2) Amounts are recorded as stock issuance and offering costs in the accompanying condensed consolidated statements of stockholders’ equity. (3) Amounts are recorded as general and administrative expenses in the accompanying condensed consolidated statements of operations unless such amounts represent prepaid expenses, which are capitalized in the accompanying condensed consolidated balance sheets. For the quarter and nine months ended September 30, 2017, approximately $0.1 million and $0.3 million, respectively, of personnel expenses of affiliates of the Advisor are expected to be settled in accordance with the terms of the Expense Support Agreement. (4) For the nine months ended September 30, 2017, the Company incurred approximately $0.5 million in investment services fees of which approximately $0.5 million was capitalized and included in real estate investment properties, net in the accompanying condensed consolidated balance sheets. No such fees were incurred for the quarter ended September 30, 2017. (5) For the quarter and nine months ended September 30, 2017, the Company incurred approximately $42,800 and $86,100, respectively, in asset management fees, all of which are expected to be settled in accordance with the terms of the Expense Support Agreement. |
Indebtedness
Indebtedness | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Indebtedness | 7. Indebtedness In March 2017, in connection with the Summer Vista acquisition, the Company entered into a secured mortgage loan agreement with Synovus Bank in the amount of approximately $16.1 million (“Summer Vista Loan”). The Summer Vista Loan matures on April 1, 2022, subject to two one-year extension options provided certain conditions are met. The Summer Vista Loan accrues interest at a rate equal to the sum of the London Interbank Offered Rate (“LIBOR”) plus 2.85%, with monthly payments of interest only for the first 18 months of the term of the Summer Vista Loan, and monthly payments of interest and principal for the remaining 42 months of the term of the Summer Vista Loan using a 30-year amortization period with the remaining principal balance payable at maturity. Prior to April 1, 2019, the interest payable on the Summer Vista Loan may be reduced to a rate equal to the sum of LIBOR plus 2.70% if, at such time, no event of default exists, certain debt yield thresholds are met, and at least $2,150,000 of the original outstanding principal balance of the Summer Vista Loan has been paid. The Company may prepay, without a penalty, all or any part of the Summer Vista Loan at any time. The following table provides details of the Company’s indebtedness as of September 30, 2017 and December 31, 2016: September 30, December 31, 2017 2016 Mortgage and notes payable: Mortgage loan (1) $ 16,050,000 $ — Notes payable 312,500 312,500 Mortgage and notes payable 16,362,500 312,500 Loan costs, net (186,097 ) ― Total mortgage and notes payable, net $ 16,176,403 $ 312,500 _____________ FOOTNOTE: (1) As of September 30, 2017, the Company’s mortgage loan is collateralized by the Summer Vista property. The fair market value of the mortgage and notes payable was approximately $16.4 million as of September 30, 2017, which is based on current rates and spreads the Company would expect to obtain for similar borrowings. Since this methodology includes inputs that are less observable by the public and are not necessarily reflected in active markets, the measurement of the estimated fair values is categorized as Level 3 on the three-level valuation hierarchy. The following is a schedule of future principal payments and maturity for the Company’s indebtedness for the remainder of 2017, each of the next four years and thereafter, in the aggregate, as of September 30, 2017: 2017 $ — 2018 32,036 2019 199,072 2020 211,350 2021 224,386 Thereafter 15,695,656 $ 16,362,500 |
Equity
Equity | 9 Months Ended |
Sep. 30, 2017 | |
Equity [Abstract] | |
Equity | 8. Equity Subscription Proceeds — As of September 30, 2017, the Company had received aggregate subscription proceeds of approximately $23.3 million (2.2 million shares), which includes $200,000 (20,000 shares) of subscription proceeds received from the Advisor prior to the commencement of the Offering, approximately $251,250 (25,125 shares) of subscription proceeds received in connection with a private placement made in 2016 and approximately $221,000 (22,100 shares) of subscription proceeds pursuant to the Reinvestment Plan. Distributions — For the nine months ended September 30, 2017, the Company declared and paid cash distributions of approximately $477,400, which were net of class-specific expenses. In addition, the Company declared and issued stock dividends of approximately 14,300 shares of common stock during the nine months ended September 30, 2017. For the nine months ended September 30, 2017, 100% of the cash distributions paid to stockholders were considered a return of capital to stockholders for federal income tax purposes. The distribution of new common shares to recipients is non-taxable. No amounts distributed to stockholders for the nine months ended September 30, 2017 were required to be or have been treated by the Company as a return of capital for purposes of calculating the stockholders’ return on their invested capital as described in the Company’s advisory agreement. In September 2017, the Company’s board of directors declared a monthly cash distribution of $0.0480, less class-specific expenses, and a monthly stock dividend of 0.00100625 shares on each outstanding share of common stock on October 1, 2017, November 1, 2017 and December 1, 2017. These distributions and dividends are to be paid and distributed by December 31, 2017. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 9. Income Taxes As of September 30, 2017, the Company recorded current deferred tax assets and net current tax expense related to deferred income at its TRS. The components of the income tax expense as of September 30, 2017 are as follows: September 30, 2017 Current: Federal $ (63,333 ) State (9,133 ) Total current expense $ (72,466 ) Deferred: Federal $ 26,446 State 4,142 Total deferred benefit 30,588 Income tax expense $ (41,878 ) Deferred income taxes reflect the tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets as of September 30, 2017 are as follows: Carryforwards of net operating loss $ — Prepaid rent 21,043 Valuation allowance 9,545 Net deferred tax assets $ 30,588 9. Income Taxes (continued) A reconciliation of the income tax expense computed at the statutory federal tax rate on income before income taxes is as follows: Quarter Ended Nine Months Ended September 30, 2017 September 30, 2017 Tax benefit computed at federal statutory rate $ 103,479 35.0 % $ 318,090 35.0 % Impact of REIT election (114,441 ) (38.7 )% (354,977 ) (39.1 )% State income tax expense (1,291 ) (0.4 )% (4,991 ) (0.5 )% Income tax expense $ (12,253 ) (4.1 )% $ (41,878 ) (4.6 )% The Company analyzed its material tax positions and determined that it has not taken any uncertain tax positions. The tax year 2016 remains subject to examination by taxing authorities. |
Commitment and Contingencies
Commitment and Contingencies | 9 Months Ended |
Sep. 30, 2017 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 10. Commitments and Contingencies From time to time, the Company may be a party to legal proceedings in the ordinary course of, or incidental to the normal course of, its business, including proceedings to enforce its contractual or statutory rights. While the Company cannot predict the outcome of these legal proceedings with certainty, based upon currently available information, the Company does not believe the final outcome of any pending or threatened legal proceeding will have a material adverse effect on its results of operations or financial condition. Refer to Note 6. “Related Party Arrangements” for information on contingent Restricted Stock shares due to the Company’s Advisor in connection with the Expense Support Agreement. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | 11. Subsequent Events Subscription Proceeds During the period from October 1, 2017 through November 1, 2017, the Company received additional subscription proceeds of approximately $2.4 million (0.2 million shares). |
Summary of Significant Accoun18
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Consolidation | Basis of Presentation and Consolidation — The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and note disclosures required by generally accepted accounting principles in the United States (“GAAP”). The unaudited condensed consolidated financial statements reflect all normal recurring adjustments, which, in the opinion of management, are necessary for the fair statement of the Company’s results for the interim period presented. Operating results for the quarter and nine months ended September 30, 2017 may not be indicative of the results that may be expected for the year ending December 31, 2017. Amounts as of December 31, 2016 included in the unaudited condensed consolidated financial statements have been derived from audited consolidated financial statements as of that date but do not include all disclosures required by GAAP. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016. The accompanying condensed consolidated financial statements include the accounts of the Company, the Operating Partnership and its other subsidiaries. All material intercompany accounts and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates — The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts in the Company’s condensed consolidated financial statements and accompanying notes. Actual results could differ from those estimates. |
Allocation of Purchase Price for Real Estate Acquisitions | Allocation of Purchase Price for Real Estate Acquisitions — Upon acquisition of real estate, the Company first determines whether substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets in order to determine whether the acquisition should be accounted for as an asset acquisition. If the substantially all threshold is not met, the Company then determines whether the acquisition meets the definition of a business (i.e. does it include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create outputs). The Company estimates the fair value of acquired tangible assets (consisting of land and improvements, building and improvements, and furniture, fixtures and equipment), intangible assets (consisting of in-place leases and above- or below-market leases) and liabilities assumed in order to allocate the purchase price. In estimating the fair value of the assets acquired and liabilities assumed, the Company considers information obtained about each property as a result of its due diligence and utilizes various valuation methods, such as estimated cash flow projections using appropriate discount and capitalization rates, estimates of replacement costs net of depreciation and available market information. The fair value of the tangible assets of an acquired leased property is determined by valuing the property as if it were vacant, and the “as-if-vacant” value is then allocated to land and building. The purchase price is allocated to in-place lease intangibles based on management’s evaluation of the specific characteristics of the acquired lease(s). Factors considered include estimates of carrying costs during hypothetical expected lease-up periods, including estimates of lost rental income during the expected lease-up periods, and costs to execute similar leases such as leasing commissions, legal and other related expenses. Above- and below-market lease intangibles are recorded based on the present value of the difference between the contractual rents to be paid pursuant to the lease and management’s estimate of the fair market lease rates for each in-place lease and may include assumptions for lease renewals of below-market leases. |
Mortgages and Notes Payable | Mortgages and Notes Payable — Mortgages and notes payable are recorded at the stated principal amount and are generally collateralized by the Company’s property. Mortgages and notes payable assumed in connection with an acquisition are recorded at fair market value as of the date of the acquisition. |
Loan Costs | Loan Costs — Loan costs paid in connection with obtaining indebtedness are deferred and amortized over the estimated life of the indebtedness using the effective interest method. Loan costs are presented as a direct deduction from the carrying amount of the related indebtedness in the balance sheet. |
Depreciation and Amortization | Depreciation and Amortization — Real estate costs related to the acquisition and improvement of properties are capitalized. Repair and maintenance costs are charged to expense as incurred and significant costs incurred for replacements and improvements are capitalized. Repair and maintenance costs include all costs that do not extend the useful life of the real estate asset. The Company considers the period of future benefit of an asset to determine its appropriate useful life. Real estate assets are stated at cost less accumulated depreciation, which is computed using the straight-line method of accounting over the estimated useful lives of the related assets. Buildings and improvements are depreciated on the straight-line method over their estimated useful lives, which generally are limited to 39 and 15 years, respectively, or the remaining life of the ground lease. Furniture, fixtures and equipment are depreciated on the straight-line method over their estimated useful lives, which generally range between three and five years. Amortization of intangible assets is computed using the straight-line method of accounting over the shorter of the respective lease term or estimated useful life. If a lease is terminated or modified prior to its scheduled expiration, the Company recognizes a loss on lease termination related to the unamortized lease-related costs not deemed to be recoverable. |
Impairment of Real Estate Assets | Impairment of Real Estate Assets — Real estate assets are reviewed on an ongoing basis to determine whether there are any indicators, including property operating performance and general market conditions, that the value of the real estate properties (including any related amortizable intangible assets or liabilities) may be impaired. To assess if an asset group is potentially impaired, management compares the estimated current and projected undiscounted cash flows, including estimated net sales proceeds, of the asset group over its remaining useful life to the net carrying value of the asset group. Such cash flow projections consider factors such as expected future operating income, trends and prospects, as well as the effects of demand, competition and other factors. In the event that the carrying value exceeds the undiscounted operating cash flows, the Company would recognize an impairment provision to adjust the carrying value of the asset group to the estimated fair value of the asset group. |
Revenue Recognition | Revenue Recognition — Resident fees and services are recorded in the period in which the services are performed and generally consist of (1) monthly rent, which covers occupancy of the residents’ unit as well as basic services, such as utilities, meals and certain housekeeping services, and (2) service level charges, such as assisted living care, memory care and ancillary services . Resident agreements are generally short-term in nature, billed monthly in advance and cancelable by the residents with a 30-day notice. Resident agreements may require the payment of upfront fees prior to moving into the community with any non-refundable portion of such fees being recorded as deferred revenue and amortized over the estimated resident stay. |
Shares Based Payments to Non-Employees | Shares Based Payments to Non-Employees — In connection with an expense support arrangement described in Note 6. “Related Party Arrangements,” the Company may issue forfeitable restricted Class A shares of common stock (“Restricted Stock”) to the Advisor on an annual basis in lieu of cash for services rendered, in the event that the Company does not achieve established distribution coverage targets. The Restricted Stock is forfeited if shareholders do not ultimately receive their original invested capital back with at least a 6% annualized return of investment upon a future liquidity or disposition event of the Company. Upon issuance of Restricted Stock, the Company measures the fair value at its then-current lowest aggregate fair value pursuant to Accounting Standards Codification (“ASC”) 505-50. On the date in which the Advisor satisfies the vesting criteria, the Company remeasures the fair value of the Restricted Stock pursuant to ASC 505-50 and records expense equal to the difference between the original fair value and that of the remeasurement date. In addition, given that performance is outside the control of the Advisor and involves both market conditions and counterparty performance conditions, the shares are treated as unissued for accounting purposes and the Company only includes the Restricted Stock in the calculation of diluted earnings per share to the extent their effect is dilutive and the vesting conditions have been satisfied as of the reporting date. Pursuant to the amended expense support agreement, the Advisor shall be the record owner of the Restricted Stock until the shares of common stock are sold or otherwise disposed of, and shall be entitled to all of the rights of a stockholder of the Company including, without limitation, the right to vote such shares (to the extent permitted by the Company’s articles of incorporation) and receive all cash distributions and stock dividends paid with respect to such shares. All cash distributions and stock dividends paid to the Advisor related to the Restricted Stock shares shall vest immediately and will not be subject to forfeiture. The Company recognizes expense related to the cash distributions and stock dividends related to the Restricted Stock shares. |
Segment Information | Segment Information — Operating segments are components of an enterprise for which separate financial information is available and is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and assess performance. The Company has determined that it operates in one operating segment, real estate ownership. The Company’s chief operating decision maker evaluates the Company’s operations from a number of different operational perspectives including, but not limited to, a property-by-property basis and by tenant or operator. The Company derives all significant revenues from a single reportable operating segment of business, healthcare real estate, regardless of the type (seniors housing, medical office, etc.) or ownership structure (leased or managed). Accordingly, the Company does not report segment information; nevertheless, management periodically evaluates whether the Company continues to have one single reportable segment of business. |
Adopted Accounting Pronouncements | Adopted Accounting Pronouncements — In August 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments,” which made eight targeted changes to how cash receipts and cash payments are presented and classified in the statement of cash flows. The ASU further clarified how the predominance principle should be applied to cash receipts and payments relating to more than one class of cash flows. The ASU is effective for annual reporting periods, and interim periods within those annual periods, beginning after December 15, 2017. The ASU is to be applied retrospectively for each period presented. Subsequently, in November 2016, the FASB issued ASU 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash,” which modifies the presentation of the statement of cash flows and requires reconciliation to the overall change in the total of cash, cash equivalents, restricted cash and restricted cash equivalents. As a result, the statement of cash flows will no longer present transfers between cash and cash equivalents and restricted cash and restricted cash equivalents. The ASU is effective for annual reporting periods, and interim periods within those annual periods, beginning after December 15, 2017. The ASU is to be applied retrospectively for each period presented. The Company early adopted both ASU 2016-15 and ASU 2016-18 on January 1, 2017; the adoption of which impacts the Company’s presentation of its statement of cash flows for all periods presented, but will not have an impact on the Company’s condensed consolidated balance sheets or condensed consolidated statements of operations. In October 2016, the FASB issued ASU 2016-17, “Consolidation (Topic 810): Interests Held Through Related Parties that are under Common Control,” which requires an entity to consider its indirect interests held by related parties that are under common control on a proportionate basis when evaluating whether the entity is a primary beneficiary of a VIE. The ASU is effective for annual reporting periods, and interim periods within those annual periods, beginning after December 15, 2016. The Company has adopted ASU 2016-17 on January 1, 2017; the adoption of which did not have a material impact to its condensed consolidated financial statements. In January 2017, the FASB issued ASU 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business,” which clarifies the definition of a business and provides a framework by which to evaluate whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The ASU is effective for annual reporting periods, and interim periods within those annual periods, beginning after December 15, 2017. The ASU is to be applied prospectively for each period presented. The Company early adopted ASU 2017-01 on January 1, 2017; the adoption of which did have a material impact on the Company’s condensed consolidated financial statements as a result of Summer Vista Assisted Living being considered an asset acquisition. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements — In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers,” as a new ASC topic (Topic 606). The core principle of this ASU is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The ASU further provides guidance for any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets, unless those contracts are within the scope of other standards (for example, lease contracts). The FASB subsequently issued ASU 2015-14 to defer the effective date of ASU 2014-09 until annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period, with earlier adoption permitted. In addition, in December 2016, the FASB issued ASU 2016-20, which provides technical corrections and improvements to ASC 606 based on questions that stakeholders have raised while working through the implementation. ASC 606 can be adopted using one of two retrospective transition methods: (i) retrospectively to each prior reporting period presented or (ii) as a cumulative-effect adjustment as of the date of adoption. The Company continues to execute on its implementation plan for ASC 606; specifically, as it relates to the allocation of consideration to different revenue streams within a given contract and the impact that the adoption of ASC 606 will have on the Company’s financial statement disclosures. The Company expects to use the modified retrospective approach as its transition method. The Company does not expect the adoption of this ASU to have a material impact (if any) on the amounts and timing of its revenue recognition. In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842): Accounting for Leases,” which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e. lessees and lessors). The ASU requires lessees to recognize assets and liabilities on the balance sheet for the rights and obligations created by all leases with terms of more than 12 months. The ASU further modifies lessors’ classification criteria for leases and the accounting for sales-type and direct financing leases. The ASU will also require qualitative and quantitative disclosures designed to give financial statement users additional information on the amount, timing, and uncertainty of cash flows arising from leases. The ASU is effective for annual reporting periods, and interim periods within those annual periods, beginning after December 15, 2018 with early adoption permitted. The ASU is to be applied using a modified retrospective approach. The Company is currently evaluating the impact this ASU will have on the Company’s condensed consolidated financial statements; specifically, as it relates to arrangements in which the Company is the lessee and the required presentation in the Company’s condensed consolidated financial position and related financial statement disclosures. In August 2017, the FASB issued ASU 2017-12 “Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities,” which amended the hedge accounting model to better reflect an entity’s risk management activities. The ASU expands an entities ability to hedge nonfinancial and financial risk components as well as reduce the complexity related to fair value hedges of interest rate risk. The ASU further eliminates the requirement to separately measure and report hedge ineffectiveness and generally requires the entire change in the fair value of a hedging instrument to be presented in the same income statement line as the hedged item. The ASU is effective for annual reporting periods, and interim periods within those annual periods, beginning after December 15, 2018. The Company does not expect the adoption of this ASU to have a material impact on the Company’s consolidated results of operations or cash flows until such time as the Company enters into interest protection arrangements. |
Real Estate Acquisitions (Table
Real Estate Acquisitions (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Summer Vista | |
Business Acquisition [Line Items] | |
Summary of Purchase Price Allocation and Related Assets Acquired and Liabilities Assumed | The following summarizes the purchase price allocation for Summer Vista, and the related assets acquired and liabilities assumed in connection with the acquisition: Land and land improvements $ 2,269,406 Buildings and building improvements 17,611,786 Furniture, fixtures and equipment 857,338 In-place lease intangibles (1) 1,286,507 Liabilities assumed (170,918 ) Total purchase price consideration $ 21,854,119 _____________ FOOTNOTE: (1) At the acquisition date, the weighted-average amortization period on the acquired in-place lease intangibles was approximately 2.5 years and is based on the expected unit turnover. |
Real Estate Investment Proper20
Real Estate Investment Properties, net (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Real Estate [Abstract] | |
Schedule of Real Estate Investment Properties | The gross carrying amount and accumulated depreciation of the Company’s real estate investment properties as of September 30, 2017 are as follows: September 30, 2017 Land and land improvements $ 2,302,242 Building and building improvements 17,611,786 Furniture, fixtures and equipment 883,283 Less: accumulated depreciation (389,884) Real estate investment properties, net $ 20,407,427 |
Intangibles, net (Tables)
Intangibles, net (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Schedule of Gross Carrying Amount and Accumulated Amortization of Intangibles | The gross carrying amount and accumulated amortization of the Company’s intangibles as of September 30, 2017 are as follows: September 30, 2017 In-place lease intangibles $ 1,286,507 Less: accumulated amortization (257,302 ) Intangibles, net $ 1,029,205 |
Schedule of Estimated Future Amortization of Intangibles | The estimated future amortization on the Company’s intangibles for the remainder of 2017, each of the next four years and thereafter, in the aggregate, as of September 30, 2017 is as follows: 2017 $ 128,651 2018 514,603 2019 385,951 2020 ― 2021 ― Thereafter ― $ 1,029,205 |
Related Party Arrangements (Tab
Related Party Arrangements (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Related Party Arrangement, Fees and Expenses Incurred By, Reimbursable, Settled and Paid | The fees and expenses incurred by and reimbursable to the Company’s related parties for the quarter and nine months ended September 30, 2017 and 2016, and related amounts unpaid as of September 30, 2017 and December 31, 2016 are as follows: Quarter Ended Nine Months Ended Unpaid amounts as of (1) September 30, September 30, September 30, December 31, 2017 2016 2017 2016 2017 2016 Reimbursable expenses: Operating expenses (3) $ 221,415 $ 132,098 $ 652,824 $ 132,098 $ 74,560 73,545 Acquisition fees and expenses 5,816 ― 27,705 ― ― ― $ 227,231 $ 132,098 $ 680,529 $ 132,098 $ 74,560 $ 73,545 Investment Service Fees (4) ― ― 481,500 ― ― ― Asset Management Fees (5) 42,800 ― 86,060 ― ― ― $ 270,031 $ 132,098 $ 1,248,089 $ 132,098 $ 74,560 $ 73,545 _____________ FOOTNOTES: (1) Amounts are recorded as due to related parties in the accompanying condensed consolidated balance sheets. (2) Amounts are recorded as stock issuance and offering costs in the accompanying condensed consolidated statements of stockholders’ equity. (3) Amounts are recorded as general and administrative expenses in the accompanying condensed consolidated statements of operations unless such amounts represent prepaid expenses, which are capitalized in the accompanying condensed consolidated balance sheets. For the quarter and nine months ended September 30, 2017, approximately $0.1 million and $0.3 million, respectively, of personnel expenses of affiliates of the Advisor are expected to be settled in accordance with the terms of the Expense Support Agreement. (4) For the nine months ended September 30, 2017, the Company incurred approximately $0.5 million in investment services fees of which approximately $0.5 million was capitalized and included in real estate investment properties, net in the accompanying condensed consolidated balance sheets. No such fees were incurred for the quarter ended September 30, 2017. (5) For the quarter and nine months ended September 30, 2017, the Company incurred approximately $42,800 and $86,100, respectively, in asset management fees, all of which are expected to be settled in accordance with the terms of the Expense Support Agreement. |
Dealer Manager | |
Related Party Arrangement, Fees and Expenses Incurred By, Reimbursable, Settled and Paid | The fees payable to the Dealer Manager for the quarter and nine months ended September 30, 2017 and 2016, and related amounts unpaid as of September 30, 2017 and December 31, 2016 are as follows: Quarter Ended Nine Months Ended Unpaid amounts as of (1) September 30, September 30, September 30, December 31, 2017 2016 2017 2016 2017 2016 Selling commissions (2) $ 138,544 $ 1,550 $ 481,913 $ 1,550 $ 5,020 $ 6,550 Dealer Manager fees (2) 161,461 756 422,112 756 11,418 5,823 Distribution and stockholder servicing fees (2) 239,677 375 462,356 375 549,449 154,733 $ 539,682 $ 2,681 $ 1,366,381 $ 2,681 $ 565,887 $ 167,106 |
Expense Support Agreement | |
Related Party Arrangement, Fees and Expenses Incurred By, Reimbursable, Settled and Paid | The following fees for services rendered are expected to be settled in the form of Restricted Stock pursuant to the Expense Support Agreement for the quarter and nine months ended September 30, 2017 and cumulatively as of September 30, 2017: Quarter Ended Nine Months Ended As of September 30, September 30, September 30, 2017 2017 2017 Fees for services rendered: Asset management fees $ 42,800 $ 86,060 $ 86,060 Advisor personnel expenses (1) 95,805 320,204 320,204 Total fees for services rendered $ 138,605 $ 406,264 $ 406,264 Then-current public offering price $ 10.93 $ 10.93 $ 10.93 Restricted Stock shares (2) 12,681 37,170 37,170 _____________ FOOTNOTES: (1) Amounts consist of personnel and related overhead costs of the Advisor or its affiliates (which, in general, are those expenses relating to the Company’s administration on an on-going basis) that are reimbursable by the Company. (2) Represents Restricted Stock shares expected to be issued to the Advisor as of September 30, 2017 pursuant to the Expense Support Agreement. No fair value was assigned to the Restricted Stock shares as the shares are expected to be valued at zero upon issuance, which represents the lowest possible value estimated at vesting. In addition, the Restricted Stock shares will be treated as unissued for financial reporting purposes until the vesting criteria are met. |
Indebtedness (Tables)
Indebtedness (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Indebtedness | The following table provides details of the Company’s indebtedness as of September 30, 2017 and December 31, 2016: September 30, December 31, 2017 2016 Mortgage and notes payable: Mortgage loan (1) $ 16,050,000 $ — Notes payable 312,500 312,500 Mortgage and notes payable 16,362,500 312,500 Loan costs, net (186,097 ) ― Total mortgage and notes payable, net $ 16,176,403 $ 312,500 _____________ FOOTNOTE: (1) As of September 30, 2017, the Company’s mortgage loan is collateralized by the Summer Vista property. |
Schedule of Future Principal Payments and Maturity | The following is a schedule of future principal payments and maturity for the Company’s indebtedness for the remainder of 2017, each of the next four years and thereafter, in the aggregate, as of September 30, 2017: 2017 $ — 2018 32,036 2019 199,072 2020 211,350 2021 224,386 Thereafter 15,695,656 $ 16,362,500 |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
Components of Income Tax Expense | As of September 30, 2017, the Company recorded current deferred tax assets and net current tax expense related to deferred income at its TRS. The components of the income tax expense as of September 30, 2017 are as follows: September 30, 2017 Current: Federal $ (63,333 ) State (9,133 ) Total current expense $ (72,466 ) Deferred: Federal $ 26,446 State 4,142 Total deferred benefit 30,588 Income tax expense $ (41,878 ) |
Significant Components of Deferred Tax Assets | Significant components of the Company’s deferred tax assets as of September 30, 2017 are as follows: Carryforwards of net operating loss $ — Prepaid rent 21,043 Valuation allowance 9,545 Net deferred tax assets $ 30,588 |
Reconciliation of Income Tax Expense | A reconciliation of the income tax expense computed at the statutory federal tax rate on income before income taxes is as follows: Quarter Ended Nine Months Ended September 30, 2017 September 30, 2017 Tax benefit computed at federal statutory rate $ 103,479 35.0 % $ 318,090 35.0 % Impact of REIT election (114,441 ) (38.7 )% (354,977 ) (39.1 )% State income tax expense (1,291 ) (0.4 )% (4,991 ) (0.5 )% Income tax expense $ (12,253 ) (4.1 )% $ (41,878 ) (4.6 )% |
Organization - Additional Infor
Organization - Additional Information (Details) - USD ($) | 6 Months Ended | 9 Months Ended | ||||
Dec. 31, 2015 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Jul. 11, 2016 | Mar. 02, 2016 | |
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | ||||||
Common stock, shares sold | 2,200,000 | |||||
Aggregate purchase price | $ 16,665,946 | $ 2,778,749 | ||||
Minimum offering amount | $ 2,000,000 | |||||
Initial Public Offering | ||||||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | ||||||
Common stock, value authorized | $ 1,750,000,000 | |||||
Reinvestment Plan | ||||||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | ||||||
Common stock, value authorized | $ 250,000,000 | |||||
Advisor | ||||||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | ||||||
Common stock, shares sold | 20,000 | |||||
Aggregate purchase price | $ 200,000 | |||||
Class A Common Stock | ||||||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | ||||||
Common stock, shares sold | 378,053 | 260,180 | ||||
Aggregate purchase price | $ 3,781 | $ 2,602 | ||||
Conversion of shares | 20,000 | |||||
Sale of common stock, shares | 708,626 | 325,119 | ||||
Sale of common stock, value | $ 7,087 | $ 3,251 | ||||
Class A Common Stock | Advisor | ||||||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | ||||||
Conversion of shares | 20,000 | |||||
Sale of common stock, shares | 250,000 | |||||
Sale of common stock, value | $ 2,500,000 |
Summary of Significant Accoun26
Summary of Significant Accounting Policies - Additional Information (Details) | 9 Months Ended |
Sep. 30, 2017Segment | |
Summary Of Significant Accounting Policies [Line Items] | |
Lease termination, notice period | 30 days |
Number of operating segments | 1 |
Minimum | |
Summary Of Significant Accounting Policies [Line Items] | |
Annualized return of investment | 6.00% |
Building | Maximum | |
Summary Of Significant Accounting Policies [Line Items] | |
Real estate assets, estimated useful life | 39 years |
Building Improvements | Maximum | |
Summary Of Significant Accounting Policies [Line Items] | |
Real estate assets, estimated useful life | 15 years |
Furniture, Fixtures and Equipment | Maximum | |
Summary Of Significant Accounting Policies [Line Items] | |
Real estate assets, estimated useful life | 5 years |
Furniture, Fixtures and Equipment | Minimum | |
Summary Of Significant Accounting Policies [Line Items] | |
Real estate assets, estimated useful life | 3 years |
Real Estate Acquisitions - Addi
Real Estate Acquisitions - Additional Information (Details) - Summer Vista $ in Millions | 9 Months Ended |
Sep. 30, 2017USD ($)Residential | |
Business Acquisition [Line Items] | |
Purchase price | $ 21.4 |
Acquisition fees and expenses | $ 0.6 |
Number of residential units | Residential | 89 |
Superior Residences | |
Business Acquisition [Line Items] | |
Property management agreement period | 5 years |
Real Estate Acquisitions - Summ
Real Estate Acquisitions - Summary of Purchase Price Allocation and Related Assets Acquired and Liabilities Assumed (Details) - Summer Vista | Sep. 30, 2017USD ($) | |
Business Acquisition [Line Items] | ||
Land and land improvements | $ 2,269,406 | |
Buildings and building improvements | 17,611,786 | |
Furniture, fixtures and equipment | 857,338 | |
In-place lease intangibles | 1,286,507 | [1] |
Liabilities assumed | (170,918) | |
Total purchase price consideration | $ 21,854,119 | |
[1] | At the acquisition date, the weighted-average amortization period on the acquired in-place lease intangibles was approximately 2.5 years and is based on the expected unit turnover. |
Real Estate Acquisitions - Su29
Real Estate Acquisitions - Summary of Purchase Price Allocation and Related Assets Acquired and Liabilities Assumed (Parenthetical) (Details) | 9 Months Ended |
Sep. 30, 2017 | |
Summer Vista | |
Business Acquisition [Line Items] | |
Weighted average amortization period on acquired in-place lease intangibles | 2 years 6 months |
Real Estate Investment Proper30
Real Estate Investment Properties, net - Schedule of Real Estate Investment Properties (Details) | Sep. 30, 2017USD ($) |
Real Estate [Abstract] | |
Land and land improvements | $ 2,302,242 |
Building and building improvements | 17,611,786 |
Furniture, fixtures and equipment | 883,283 |
Less: accumulated depreciation | 389,884 |
Real estate investment properties, net | $ 20,407,427 |
Real Estate Investment Proper31
Real Estate Investment Properties, net - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2017 | Sep. 30, 2017 | |
Real Estate Investment Properties | ||
Real Estate Properties [Line Items] | ||
Depreciation expense | $ 0.2 | $ 0.4 |
Intangibles, net - Schedule of
Intangibles, net - Schedule of Gross Carrying Amount and Accumulated Amortization of Intangibles (Details) | Sep. 30, 2017USD ($) |
Goodwill And Intangible Assets Disclosure [Abstract] | |
In-place lease intangibles | $ 1,286,507 |
Less: accumulated amortization | (257,302) |
Intangibles, net | $ 1,029,205 |
Intangibles, net - Additional I
Intangibles, net - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2017 | Sep. 30, 2017 | |
Goodwill And Intangible Assets Disclosure [Abstract] | ||
Amortization of Intangible Assets | $ 0.1 | $ 0.3 |
Weighted average useful life of Intangibles | 2 years |
Intangibles, net - Schedule o34
Intangibles, net - Schedule of Estimated Future Amortization of Intangibles (Details) | Sep. 30, 2017USD ($) |
Goodwill And Intangible Assets Disclosure [Abstract] | |
2,017 | $ 128,651 |
2,018 | 514,603 |
2,019 | 385,951 |
Intangibles, net | $ 1,029,205 |
Related Party Arrangements - Ad
Related Party Arrangements - Additional Information (Details) - USD ($) | Mar. 20, 2017 | Mar. 19, 2017 | Sep. 30, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Mar. 31, 2017 |
Related Party Transaction [Line Items] | ||||||
Underwriting compensation percentage on gross offering price from shares of primary offering | 8.50% | 9.75% | ||||
Investment services fee | $ 100,000 | $ 300,000 | ||||
Cash distributions paid | $ 259,767 | $ 20,662 | ||||
Stock dividends issued | 14,300 | |||||
Advisor | ||||||
Related Party Transaction [Line Items] | ||||||
Monthly asset management fee as percentage of real estate value | 0.0667% | |||||
Initial purchase price of property percentage | 10.00% | |||||
Property management fee | 1,000,000 | $ 1,000,000 | ||||
Investment service fee as percentage of purchase price of properties | 2.25% | |||||
Investment services fee | $ 0 | |||||
Operating expenses in excess of limitation | 600,000 | |||||
Cash distributions paid | $ 40,000 | $ 108,000 | ||||
Stock dividends issued | 800 | 3,200 | ||||
Class A Common Stock | ||||||
Related Party Transaction [Line Items] | ||||||
Stock dividends issued | 5,454 | 1,047 | ||||
Class T Common Stock | ||||||
Related Party Transaction [Line Items] | ||||||
Selling commission | 2.00% | |||||
Underwriting compensation percentage on gross offering price from shares of primary offering | 8.50% | |||||
Reduction in liability related to annual distribution and stockholder servicing fee | $ 100,000 | |||||
Distribution and stockholder servicing fee | 1.00% | |||||
Stock dividends issued | 8,549 | 32 | ||||
Class I Common Stock | ||||||
Related Party Transaction [Line Items] | ||||||
Underwriting compensation percentage on gross offering price from shares of primary offering | 8.50% | |||||
Reduction in liability related to annual distribution and stockholder servicing fee | $ 100,000 | |||||
Distribution and stockholder servicing fee | 0.50% | |||||
Stock dividends issued | 291 | 32 | ||||
Maximum | ||||||
Related Party Transaction [Line Items] | ||||||
Annual distribution percentage cease upon exceeding of restated underwriting compensation | 1.00% | |||||
Maximum | Advisor | ||||||
Related Party Transaction [Line Items] | ||||||
Construction management fee as percentage of hard and soft costs | 1.00% | |||||
Operating expenses reimbursement percentage of average invested assets | 2.00% | |||||
Operating expenses reimbursement percentage of net income | 25.00% | |||||
Maximum | Class A Common Stock | ||||||
Related Party Transaction [Line Items] | ||||||
Selling commission | 7.00% | |||||
Dealer manager fee | 2.75% | |||||
Selling commission and dealer manager fee | 8.50% | |||||
Maximum | Class T Common Stock | ||||||
Related Party Transaction [Line Items] | ||||||
Selling commission | 3.00% | |||||
Dealer manager fee | 2.75% | |||||
Selling commission and dealer manager fee | 4.50% | |||||
Minimum | ||||||
Related Party Transaction [Line Items] | ||||||
Underwriting compensation percentage on gross offering price from shares of primary offering | 8.50% | |||||
Stockholder percentage cease upon exceeding of restated underwriting compensation | 0.50% | |||||
Underwriting compensation percentage on gross proceeds from shares of primary offering | 10.00% |
Related Party Arrangements - Su
Related Party Arrangements - Summary of Fees for Services Rendered Expected to be Settled in Restricted Stock (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017USD ($)$ / sharesshares | Sep. 30, 2017USD ($)$ / sharesshares | |||
Fees for services rendered: | ||||
Advisor personnel expenses | $ 100,000 | $ 300,000 | ||
Expense Support Agreement | ||||
Fees for services rendered: | ||||
Asset management fees | 42,800 | 86,060 | ||
Advisor personnel expenses | 95,805 | [1] | 320,204 | [1] |
Total fees for services rendered | 138,605 | 406,264 | ||
Asset management fees | 86,060 | 86,060 | ||
Advisor personnel expenses | 320,204 | [1] | 320,204 | [1] |
Total fees for services rendered | $ 406,264 | $ 406,264 | ||
Then-current public offering price | $ / shares | $ 10.93 | $ 10.93 | ||
Then-current public offering price | $ / shares | $ 10.93 | $ 10.93 | ||
Expense Support Agreement | Restricted Stock | ||||
Fees for services rendered: | ||||
Restricted Stock shares | shares | 12,681 | [2] | 37,170 | [2] |
Restricted Stock shares | shares | 37,170 | [2] | 37,170 | [2] |
[1] | Amounts consist of personnel and related overhead costs of the Advisor or its affiliates (which, in general, are those expenses relating to the Company’s administration on an on-going basis) that are reimbursable by the Company. | |||
[2] | Represents Restricted Stock shares expected to be issued to the Advisor as of September 30, 2017 pursuant to the Expense Support Agreement. No fair value was assigned to the Restricted Stock shares as the shares are expected to be valued at zero upon issuance, which represents the lowest possible value estimated at vesting. In addition, the Restricted Stock shares will be treated as unissued for financial reporting purposes until the vesting criteria are met. |
Related Party Arrangements - 37
Related Party Arrangements - Summary of Fees for Services Rendered Expected to be Settled in Restricted Stock (Parenthetical) (Details) | 9 Months Ended |
Sep. 30, 2017USD ($) | |
Related Party Transactions [Abstract] | |
Restricted stock fair value | $ 0 |
Related Party Arrangements - Fe
Related Party Arrangements - Fees and Expenses Incurred and Reimbursable to Affiliates and Related Parties (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | ||
Related Party Transaction [Line Items] | ||||||
Distribution and stockholder servicing fees | $ 549,449 | $ 375 | ||||
Total reimbursable expenses | $ 227,231 | $ 132,098 | 680,529 | 132,098 | ||
Investment Service Fees | [1] | 481,500 | ||||
Asset Management Fees | [2] | 42,800 | 86,060 | |||
Total reimbursable expenses, net | 270,031 | 132,098 | 1,248,089 | 132,098 | ||
Operating expenses, Unpaid amount | [3],[4] | 74,560 | 74,560 | $ 73,545 | ||
Total reimbursable expenses due | [3] | 74,560 | 74,560 | 73,545 | ||
Related parties, Unpaid amount | [3] | 74,560 | 74,560 | 73,545 | ||
Reimbursable Expense | ||||||
Related Party Transaction [Line Items] | ||||||
Operating expenses | [4] | 221,415 | 132,098 | 652,824 | 132,098 | |
Acquisition fees and expenses | 5,816 | 27,705 | ||||
Dealer Manager | ||||||
Related Party Transaction [Line Items] | ||||||
Selling commissions | [5] | 138,544 | 1,550 | 481,913 | 1,550 | |
Dealer Manager fees | [5] | 161,461 | 756 | 422,112 | 756 | |
Distribution and stockholder servicing fees | [5] | 239,677 | 375 | 462,356 | 375 | |
Total offering expenses | 539,682 | $ 2,681 | 1,366,381 | $ 2,681 | ||
Selling commissions, Unpaid amount | [3],[5] | 5,020 | 5,020 | 6,550 | ||
Dealer Manager fees, Unpaid amount | [3],[5] | 11,418 | 11,418 | 5,823 | ||
Distribution and stockholder servicing fees, Unpaid amount | [3],[5] | 549,449 | 549,449 | 154,733 | ||
Total offering expenses unpaid | [3] | $ 565,887 | $ 565,887 | $ 167,106 | ||
[1] | For the nine months ended September 30, 2017, the Company incurred approximately $0.5 million in investment services fees of which approximately $0.5 million was capitalized and included in real estate investment properties, net in the accompanying condensed consolidated balance sheets. No such fees were incurred for the quarter ended September 30, 2017. | |||||
[2] | For the quarter and nine months ended September 30, 2017, the Company incurred approximately $42,800 and $86,100, respectively, in asset management fees, all of which are expected to be settled in accordance with the terms of the Expense Support Agreement. | |||||
[3] | Amounts are recorded as due to related parties in the accompanying condensed consolidated balance sheets. | |||||
[4] | Amounts are recorded as general and administrative expenses in the accompanying condensed consolidated statements of operations unless such amounts represent prepaid expenses, which are capitalized in the accompanying condensed consolidated balance sheets. For the quarter and nine months ended September 30, 2017, approximately $0.1 million and $0.3 million, respectively, of personnel expenses of affiliates of the Advisor are expected to be settled in accordance with the terms of the Expense Support Agreement. | |||||
[5] | Amounts are recorded as stock issuance and offering costs in the accompanying condensed consolidated statements of stockholders’ equity. |
Related Party Arrangements - 39
Related Party Arrangements - Fees and Expenses Incurred and Reimbursable to Affiliates and Related Parties (Parenthetical) (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017USD ($) | Sep. 30, 2017USD ($) | |||
Related Party Transaction [Line Items] | ||||
Advisor personnel expenses | $ 100,000 | $ 300,000 | ||
Investment services fees | 481,500 | [1] | ||
Investment service fees capitalized | 20,407,427 | 20,407,427 | ||
Asset management fees | 42,800 | [2] | 86,060 | [2] |
Expense Support Agreement | ||||
Related Party Transaction [Line Items] | ||||
Advisor personnel expenses | 95,805 | [3] | 320,204 | [3] |
Asset management fees | 42,800 | 86,100 | ||
Investment Services Fees | ||||
Related Party Transaction [Line Items] | ||||
Investment services fees | 0 | 500,000 | ||
Investment service fees capitalized | $ 500,000 | $ 500,000 | ||
[1] | For the nine months ended September 30, 2017, the Company incurred approximately $0.5 million in investment services fees of which approximately $0.5 million was capitalized and included in real estate investment properties, net in the accompanying condensed consolidated balance sheets. No such fees were incurred for the quarter ended September 30, 2017. | |||
[2] | For the quarter and nine months ended September 30, 2017, the Company incurred approximately $42,800 and $86,100, respectively, in asset management fees, all of which are expected to be settled in accordance with the terms of the Expense Support Agreement. | |||
[3] | Amounts consist of personnel and related overhead costs of the Advisor or its affiliates (which, in general, are those expenses relating to the Company’s administration on an on-going basis) that are reimbursable by the Company. |
Indebtedness - Additional Infor
Indebtedness - Additional Information (Details) - USD ($) | 1 Months Ended | 9 Months Ended | |
Mar. 31, 2017 | Sep. 30, 2017 | ||
Debt Instrument [Line Items] | |||
Secured mortgage loan amount | $ 16,100,000 | $ 16,050,000 | [1] |
Secured mortgage loan, maturity date | Apr. 1, 2022 | ||
Secured mortgage loan, maturity extension | The Summer Vista Loan matures on April 1, 2022, subject to two one-year extension options provided certain conditions are met. | ||
Secured mortgage loan, payment of interest, term | 18 months | ||
Secured mortgage loan, payment of interest and principal, term | 42 months | ||
Secured mortgage loan, amortization period | 30 years | ||
Level 3 | |||
Debt Instrument [Line Items] | |||
Mortgage and notes payable, fair market value | $ 16,400,000 | ||
LIBOR | |||
Debt Instrument [Line Items] | |||
Secured mortgage loan, interest rate | 2.85% | ||
Prior to April 1, 2019 | LIBOR | |||
Debt Instrument [Line Items] | |||
Secured mortgage loan, interest rate | 2.70% | ||
Prior to April 1, 2019 | Minimum | |||
Debt Instrument [Line Items] | |||
Secured mortgage loan, reduction of interest threshold outstanding principal amount to be paid | $ 2,150,000 | ||
[1] | As of September 30, 2017, the Company’s mortgage loan is collateralized by the Summer Vista property. |
Indebtedness - Schedule of Inde
Indebtedness - Schedule of Indebtedness (Details) - USD ($) | Sep. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | |
Mortgage and notes payable: | ||||
Mortgage loan | $ 16,050,000 | [1] | $ 16,100,000 | |
Notes payable | 312,500 | $ 312,500 | ||
Mortgage and notes payable | 16,362,500 | 312,500 | ||
Loan costs, net | (186,097) | |||
Total mortgage and notes payable, net | $ 16,176,403 | $ 312,500 | ||
[1] | As of September 30, 2017, the Company’s mortgage loan is collateralized by the Summer Vista property. |
Indebtedness - Schedule of Futu
Indebtedness - Schedule of Future Principal Payments and Maturity (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Debt Disclosure [Abstract] | ||
2,018 | $ 32,036 | |
2,019 | 199,072 | |
2,020 | 211,350 | |
2,021 | 224,386 | |
Thereafter | 15,695,656 | |
Mortgage and notes payable | $ 16,362,500 | $ 312,500 |
Equity - Additional Information
Equity - Additional Information (Details) - USD ($) | Dec. 01, 2017 | Nov. 01, 2017 | Oct. 01, 2017 | Nov. 01, 2017 | Sep. 30, 2017 | Sep. 30, 2017 | Dec. 31, 2015 | Sep. 30, 2017 |
Class Of Stock [Line Items] | ||||||||
Aggregate proceeds from public offering | $ 23,300,000 | |||||||
Common stock, shares sold | 2,200,000 | |||||||
Subscription proceeds pursuant to the Reinvestment Plan | $ 221,000 | |||||||
Subscription proceeds pursuant to the Reinvestment Plan, shares | 22,100 | |||||||
Cash distributions declared net of class-specific expenses | $ 477,400 | |||||||
Cash distributions paid net of class-specific expenses | $ 477,400 | |||||||
Stock dividends declared | 14,300 | |||||||
Stock dividends issued | 14,300 | |||||||
Percentage of cash distributions considered as return on capital for income tax purposes | 100.00% | |||||||
Amount of distributions to stockholders considered as return of capital by the company | $ 0 | |||||||
Monthly cash distributions less class-specific expenses per share | $ 0.0480 | $ 0.0480 | $ 0.0480 | |||||
Monthly stock dividend, shares | $ 0.00100625 | |||||||
Distributions to be paid and distributed date | Dec. 31, 2017 | |||||||
Dividends payable, date declared | 2017-09 | 2017-09 | 2017-09 | |||||
Subsequent Event | ||||||||
Class Of Stock [Line Items] | ||||||||
Common stock, shares sold | 200,000 | |||||||
Cash distribution and stock dividend declared date | Nov. 1, 2017 | Oct. 1, 2017 | ||||||
Scenario Forecast | ||||||||
Class Of Stock [Line Items] | ||||||||
Cash distribution and stock dividend declared date | Dec. 1, 2017 | |||||||
Private Placement | ||||||||
Class Of Stock [Line Items] | ||||||||
Aggregate proceeds from public offering | $ 251,250 | |||||||
Common stock, shares sold | 25,125 | |||||||
Advisor | ||||||||
Class Of Stock [Line Items] | ||||||||
Common stock, shares sold | 20,000 | |||||||
Stock dividends issued | 800 | 3,200 | ||||||
Advisor | Prior to Commencement of Offering | ||||||||
Class Of Stock [Line Items] | ||||||||
Aggregate proceeds from public offering | $ 200,000 | |||||||
Common stock, shares sold | 20,000 |
Income Taxes - Components of In
Income Taxes - Components of Income Tax Expense (Details) - USD ($) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2017 | Sep. 30, 2017 | |
Current: | ||
Federal | $ (63,333) | |
State | (9,133) | |
Total current expense | (72,466) | |
Deferred: | ||
Federal | 26,446 | |
State | 4,142 | |
Total deferred benefit | 30,588 | |
Income tax expense | $ (12,253) | $ (41,878) |
Income Taxes - Significant Comp
Income Taxes - Significant Components of Deferred Tax Assets (Details) | Sep. 30, 2017USD ($) |
Income Tax Disclosure [Abstract] | |
Carryforwards of net operating loss | $ 0 |
Prepaid rent | 21,043 |
Valuation allowance | 9,545 |
Net deferred tax assets | $ 30,588 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Income Tax Expense (Details) - USD ($) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2017 | Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | ||
Tax benefit computed at federal statutory rate | $ 103,479 | $ 318,090 |
Impact of REIT election | (114,441) | (354,977) |
State income tax expense | (1,291) | (4,991) |
Income tax expense | $ (12,253) | $ (41,878) |
Tax benefit computed at federal statutory rate | 35.00% | 35.00% |
Impact of REIT election | (38.70%) | (39.10%) |
State income tax expense | (0.40%) | (0.50%) |
Income tax expense | (4.10%) | (4.60%) |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) - USD ($) shares in Millions | 1 Months Ended | 9 Months Ended | |
Nov. 01, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | |
Subsequent Event [Line Items] | |||
Aggregate proceeds from offering | $ 16,448,354 | $ 2,778,749 | |
Common stock, shares sold | 2.2 | ||
Subsequent Event | |||
Subsequent Event [Line Items] | |||
Aggregate proceeds from offering | $ 2,400,000 | ||
Common stock, shares sold | 0.2 |