Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Mar. 05, 2018 | Jun. 30, 2017 | |
Document And Entity Information [Line Items] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2017 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY | ||
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 Well-known Seasoned Issuer | No | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $ 13.4 | ||
Class A Common Stock | |||
Document And Entity Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 814,873 | ||
Class T Common Stock | |||
Document And Entity Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 2,464,806 | ||
Class I Common Stock | |||
Document And Entity Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 226,490 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
ASSETS | ||
Real estate investment properties, net | $ 31,085,939 | |
Cash | 12,310,920 | $ 5,977,241 |
Intangibles, net | 4,653,504 | |
Other assets | 192,423 | 48,928 |
Restricted cash | 110,999 | 383,000 |
Total assets | 48,353,785 | 6,409,169 |
Liabilities: | ||
Mortgages and notes payable, net | 19,532,986 | 312,500 |
Due to related parties | 1,023,909 | 240,651 |
Accounts payable and accrued liabilities | 836,647 | 23,263 |
Other liabilities | 450,311 | |
Total liabilities | 21,843,853 | 576,414 |
Commitments and contingencies (Note 11) | ||
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 | 28,984,932 | 6,226,141 |
Accumulated loss | (1,658,977) | (342,447) |
Accumulated distributions | (846,200) | (57,361) |
Total stockholders' equity | 26,509,932 | 5,832,755 |
Total liabilities and stockholders' equity | 48,353,785 | 6,409,169 |
Class A Common Stock | ||
Stockholders' equity: | ||
Common stock value | 8,080 | 3,251 |
Total stockholders' equity | 8,080 | 3,251 |
Class T Common Stock | ||
Stockholders' equity: | ||
Common stock value | 20,492 | 3,086 |
Total stockholders' equity | 20,492 | 3,086 |
Class I Common Stock | ||
Stockholders' equity: | ||
Common stock value | 1,605 | 85 |
Total stockholders' equity | $ 1,605 | $ 85 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 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 | 808,011 | 325,119 |
Common stock, shares outstanding | 808,011 | 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 | 2,049,223 | 308,587 |
Common stock, shares outstanding | 2,049,223 | 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 | 160,490 | 8,454 |
Common stock, shares outstanding | 160,490 | 8,454 |
CONSOLIDATED STATEMENT OF OPERA
CONSOLIDATED STATEMENT OF OPERATIONS - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | ||
Revenues: | |||
Resident fees and services | $ 3,290,191 | ||
Rental income and tenant reimbursements | 18,624 | ||
Total revenues | 3,308,815 | ||
Operating expenses: | |||
Property operating expenses | 1,852,057 | ||
General and administrative expenses | 917,700 | $ 309,998 | |
Property management fees | 196,632 | ||
Depreciation and amortization | 971,389 | ||
Acquisition fees and expenses | 2,500 | ||
Total operating expenses | 3,937,778 | 312,498 | |
Operating loss | (628,963) | (312,498) | |
Other income (expense): | |||
Interest and other income | 66 | ||
Interest expense and loan cost amortization | (589,540) | (29,949) | |
Total other expense | 589,474 | 29,949 | |
Loss before income taxes | (1,218,437) | (342,447) | |
Income tax expense | 98,093 | ||
Net loss attributable to common stockholders | (1,316,530) | (342,447) | |
Class A Common Stock | |||
Other income (expense): | |||
Net loss attributable to common stockholders | $ (440,931) | $ (253,380) | |
Net loss per share of common stock outstanding (basic and diluted) | $ (0.75) | $ (0.84) | |
Weighted average number of common shares outstanding (basic and diluted) | [1] | 584,653 | 301,272 |
Distributions declared per common share | $ 0.5370 | $ 0.1750 | |
Class T Common Stock | |||
Other income (expense): | |||
Net loss attributable to common stockholders | $ (832,661) | $ (81,792) | |
Net loss per share of common stock outstanding (basic and diluted) | $ (0.75) | $ (0.84) | |
Weighted average number of common shares outstanding (basic and diluted) | [1] | 1,104,068 | 97,252 |
Distributions declared per common share | $ 0.4254 | $ 0.1533 | |
Class I Common Stock | |||
Other income (expense): | |||
Net loss attributable to common stockholders | $ (42,938) | $ (7,275) | |
Net loss per share of common stock outstanding (basic and diluted) | $ (0.75) | $ (0.84) | |
Weighted average number of common shares outstanding (basic and diluted) | [1] | 56,934 | 8,650 |
Distributions declared per common share | $ 0.5026 | $ 0.1750 | |
[1] | For the purposes of determining the weighted average number of shares of common stock outstanding, stock dividends issued are treated as if such shares were outstanding as of July 11, 2016 (the date the Company commenced operations). |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED) - USD ($) | Total | Common Stock | Capital in Excess of Par Value | Accumulated Loss | Accumulated Distributions | Class A Common Stock | Class T Common Stock | Class I Common Stock |
Beginning Balance at Dec. 31, 2015 | $ 200,000 | $ 200 | $ 199,800 | |||||
Beginning Balance (in shares) at Dec. 31, 2015 | 20,000 | |||||||
Conversion of initial common stock shares | $ (200) | $ 200 | ||||||
Conversion of initial common stock shares (in shares) | (20,000) | 20,000 | ||||||
Subscriptions received for common stock, including distribution reinvestments | $ 6,386,693 | 6,380,503 | $ 3,024 | $ 3,082 | $ 84 | |||
Subscriptions received for common stock, including distribution reinvestments (in shares) | 600,000 | 302,430 | 308,138 | 8,375 | ||||
Stock dividends issued | (32) | $ 27 | $ 4 | $ 1 | ||||
Stock dividends issued (in shares) | 3,000 | 2,689 | 449 | 79 | ||||
Stock issuance and offering costs | $ (354,130) | (354,130) | ||||||
Net loss | (342,447) | $ (342,447) | ||||||
Cash distributions declared | (57,361) | $ (57,361) | ||||||
Ending Balance at Dec. 31, 2016 | 5,832,755 | 6,226,141 | (342,447) | (57,361) | $ 3,251 | $ 3,086 | $ 85 | |
Ending Balance (in shares) at Dec. 31, 2016 | 325,119 | 308,587 | 8,454 | |||||
Subscriptions received for common stock, including distribution reinvestments | $ 24,825,810 | 24,802,273 | $ 4,752 | $ 17,271 | $ 1,514 | |||
Subscriptions received for common stock, including distribution reinvestments (in shares) | 3,000,000 | 475,217 | 1,727,141 | 151,414 | ||||
Stock dividends issued | (218) | $ 77 | $ 135 | $ 6 | ||||
Stock dividends issued (in shares) | 3,000 | 7,675 | 13,495 | 622 | ||||
Stock issuance and offering costs | $ (2,043,264) | (2,043,264) | ||||||
Net loss | (1,316,530) | (1,316,530) | ||||||
Cash distributions declared | (788,839) | (788,839) | ||||||
Ending Balance at Dec. 31, 2017 | $ 26,509,932 | $ 28,984,932 | $ (1,658,977) | $ (846,200) | $ 8,080 | $ 20,492 | $ 1,605 | |
Ending Balance (in shares) at Dec. 31, 2017 | 808,011 | 2,049,223 | 160,490 |
CONSOLIDATED STATEMENT OF CASH
CONSOLIDATED STATEMENT OF CASH FLOWS - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Operating activities: | ||
Net loss | $ (1,316,530) | $ (342,447) |
Adjustments to reconcile net loss to net cash from operating activities: | ||
Depreciation and amortization | 971,389 | |
Amortization of loan costs | 33,000 | |
Straight-line rent adjustments | 46,175 | |
Deferred income tax benefit | (29,107) | |
Changes in operating assets and liabilities: | ||
Other assets | (111,387) | (48,928) |
Due to related parties | 123,689 | 73,545 |
Accounts payable and accrued liabilities | 320,659 | 23,263 |
Other liabilities | 6,622 | |
Net cash flows provided by (used in) operating activities | 44,510 | (294,567) |
Investing activities: | ||
Acquisition of properties | (35,779,205) | |
Capital expenditures | (54,785) | |
Net cash used in investing activities | (35,833,990) | |
Financing activities: | ||
Subscriptions received for common stock through primary offering | 24,437,278 | 6,132,100 |
Subscriptions received for common stock through private placement | 251,250 | |
Payment of underwriting compensation | (1,383,696) | (184,532) |
Payment of cash distributions, net of distribution reinvestments | (400,306) | (56,510) |
Proceeds from mortgages and notes payable | 21,650,000 | 312,500 |
Repayments on mortgages and notes payable | (2,150,000) | |
Payment of loan costs | (302,118) | |
Net cash flows provided by financing activities | 41,851,158 | 6,454,808 |
Net increase in cash and restricted cash | 6,061,678 | 6,160,241 |
Cash and restricted cash at beginning of year | 6,360,241 | 200,000 |
Cash and restricted cash at end of year | 12,421,919 | 6,360,241 |
Supplemental disclosure of cash flow information: | ||
Cash paid during the period for interest | 506,787 | 29,363 |
Cash paid during the period for income taxes | 300 | |
Amounts incurred but not paid (including amounts due to related parties): | ||
Acquisition fees and expenses related to asset acquisition | 6,000 | |
Selling commissions and Dealer Manager fees | 28,150 | 12,373 |
Annual distribution and stockholder servicing fee | 798,525 | $ 154,733 |
Assumption of liabilities on acquisition of properties | $ 530,452 |
Organization
Organization | 12 Months Ended |
Dec. 31, 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 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 and was formed primarily to acquire and manage a diversified portfolio of healthcare real estate and real estate-related assets that 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, 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 Primary Offering of up to $1.75 billion, in any combination, of Class A, Class T and Class I shares of common stock on a “best efforts” basis, which means that the Dealer Manager 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 Reinvestment Plan. 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 intends to own substantially all of its assets either directly or indirectly through an 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 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 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 | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of Presentation and Consolidation — The accompanying consolidated financial statements include the Company’s accounts, the Operating Partnership and its 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 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. 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. 2. Summary of Significant Accounting Policies (continued) 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. Cash — Cash consists of demand deposits at commercial banks with original maturities of three months or less. As of December 31, 2017, certain of the Company’s cash deposits exceeded federally insured amounts. However, the Company continues to monitor the third-party depository institutions that hold the Company’s cash, primarily with the goal of safeguarding principal. The Company attempts to limit cash investments to financial institutions with high credit standing; therefore, the Company believes it is not exposed to any significant credit risk on cash. Restricted Cash — Certain cash balances are escrowed to fund capital expenditures, property taxes and/or insurance as required by the loan or lease terms. 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. Deferred Lease-Related Costs – The Company defers lease-related costs that it incurs to obtain new or extend existing leases. The Company amortizes these costs 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 deferred lease-related costs not deemed to be recoverable. 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. 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. Rental income from operating leases is recorded on the straight-line basis over the terms of the leases for new leases and the remaining terms of existing leases for those acquired as part of a property acquisition. The straight-line method records the periodic average amount of base rent earned over the term of a lease, taking into account contractual rent increases over the lease term. The Company records the difference between base rent revenues earned and amounts due per the respective lease agreements, as applicable, as an increase or decrease to deferred rent included as other assets in the accompanying consolidated balance sheets. 2. Summary of Significant Accounting Policies (continued) Tenant reimbursement income represents amounts tenants are required to reimburse the Company for expenses incurred on behalf of the tenants, in accordance with the terms of the leases and are recognized in the period in which the related reimbursable expenses are incurred. Income Taxes — The Company intends to qualify for taxation as a REIT under Sections 856 through 860 of the Internal Revenue Code commencing with its taxable year ending December 31, 2017 or the first year in which the Company commences material operations. Prior to the Company’s REIT election, it is subject to corporate federal and state income taxes. If the Company qualifies for taxation as a REIT, the Company generally will not be subject to federal corporate income tax to the extent it distributes at least 90 percent of its REIT taxable income to its stockholders. REITs are subject to a number of other organizational and operational requirements. Even if the Company qualifies for taxation as a REIT, it may be subject to certain state and local taxes on its income and property, and federal income and excise taxes on its undistributed income. The Company has formed a subsidiary that may elect to be taxed as a TRS for U.S. federal income tax purposes. Under the provisions of the Internal Revenue Code and applicable state laws, a TRS will be subject to taxation on taxable income from its operations. The Company will account for federal and state income taxes with respect to a TRS using the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the consolidated financial statement carrying amounts of existing assets and liabilities and respective tax bases and operating losses and tax-credit carry forwards. Fair Value Measurements — GAAP emphasizes that fair value is a market-based measurement, not an entity-specific measurement. Therefore, a fair value measurement should be determined based on the assumptions that market participants would use in pricing the asset or liability. GAAP requires the use of observable market data, when available, in making fair value measurements. Observable inputs are inputs that the market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of ours. When market data inputs are unobservable, the Company utilizes inputs that it believes reflects the Company’s best estimate of the assumptions market participants would use in pricing the asset or liability. When inputs used to measure fair value fall within different levels of the hierarchy, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurement. As a basis for considering market participant assumptions in fair value measurements, GAAP establishes a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy). The three levels of inputs used to measure fair value are as follows: • Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company as the ability to access. • Level 2 – Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. • Level 3 – Unobservable inputs for the asset or liability, which are typically based on the Company’s own assumptions, as there is little, if any, related market activity. Shares Based Payments to Non-Employees — In connection with an expense support arrangement described in Note 8. “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. 2. Summary of Significant Accounting Policies (continued) 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. Per Share Data — Net loss per share for the period presented is computed by dividing net loss by the weighted average number of common stock shares outstanding for each share class during the period in which the Company was operational. Diluted loss per share is computed based on the weighted average number of common stock shares outstanding for each share class and all potentially dilutive securities, if any. For purposes of determining the weighted average number of shares of common stock outstanding, stock dividends are treated as if such shares were outstanding as of July 11, 2016 (when the Company commenced operations). 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 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 did not have an impact on the Company’s consolidated balance sheets or consolidated statements of operations. The following table provides additional details by financial statement line item of the adjusted presentation in the Company’s consolidated statement of cash flows for the years ended December 31, 2016: As filed December 31, 2016 Adjustments Adjusted December 31, 2016 Financing activities: Private Placement escrow $ (383,000 ) $ 383,000 $ — Net cash flows provided by financing activities $ 6,071,808 $ 383,000 $ 6,454,808 Net increase in cash and restricted cash $ 5,777,241 $ 383,000 $ 6,160,241 Cash and restricted cash at beginning of period 200,000 ― 200,000 Cash and restricted cash at end of period $ 5,977,241 $ 383,000 $ 6,360,241 2. Summary of Significant Accounting Policies (continued) 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 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 consolidated financial statements as a result of two properties the Company acquired being considered asset acquisitions. 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, the FASB issued ASU 2017-05, “Other Income – Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20),” which clarifies the scope of subtopic 610-20, that was issued as a part of ASU 2014-09, as it relates to an in substance nonfinancial asset and must be adopted concurrently with ASC 606. Both ASUs 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 adopted these ASUs using the modified retrospective approach as its transition method effective January 1, 2018; the adoption of which did not have a material impact to its consolidated financial statements. 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 expects that adoption will impact the Company’s consolidated financial statements and related financial statement disclosures; specifically, the Company’s consolidated financial position as it relates to the required presentation for arrangements such as ground leases in which the Company is the lessee. However, 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. In addition, while still in exposure draft, the FASB has proposed a practical expedient for lessors allowing them to elect to not separate lease and non-lease components in a contract for the purpose of revenue recognition and disclosure if certain criteria are met. If the proposed practical expedient is finalized, the Company plans to elect the practical expedient. 2. Summary of Significant Accounting Policies (continued) 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. |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2017 | |
Business Combinations [Abstract] | |
Acquisitions | 3. Acquisitions Real Estate Investment Properties — During the year ended December 31, 2017, the Company acquired the following two properties, which were comprised of one MOB and one seniors housing community: Name and Location Structure Date Acquired Purchase Price (in thousands) Medical Office Mid America Surgery Institute Modified Lease 12/27/2017 $ 14,000 Overland Park, KS ("Kansas City") Seniors Housing Summer Vista Assisted Living Managed 3/31/2017 21,400 Pensacola, FL The following summarizes the purchase price allocation for the above properties, and the estimated fair values of the assets acquired and liabilities assumed: Land and land improvements $ 2,650,216 Buildings and building improvements 28,109,037 Furniture, fixtures and equipment 857,338 Intangibles (1) 5,039,456 Other liabilities (340,390 ) Liabilities assumed (530,452 ) Total purchase price consideration $ 35,785,205 FOOTNOTE: (1) At the acquisition date, the weighted-average amortization period on the acquired lease intangibles for the year ended December 31, 2017 was approximately 17.4 years. The acquired lease intangibles during the year ended December 31, 2017 were comprised of approximately $3.5 million and $1.5 million of in-place lease intangibles and ground lease intangibles, respectively. |
Real Estate Assets, net
Real Estate Assets, net | 12 Months Ended |
Dec. 31, 2017 | |
Real Estate [Abstract] | |
Real Estate Assets, net | 4. Real Estate Assets, net The gross carrying amount and accumulated depreciation of the Company’s real estate assets as of December 31, 2017 are as follows: December 31, 2017 Land and land improvements $ 2,683,051 Building and building improvements 28,109,037 Furniture, fixtures and equipment 879,288 Less: accumulated depreciation (585,437 ) Real estate investment properties, net $ 31,085,939 Depreciation expense on the Company’s real estate investment properties, net was approximately $0.6 million for the year ended December 31, 2017. |
Intangibles, net
Intangibles, net | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Intangibles, net | 5. Intangibles, net The gross carrying amount and accumulated amortization of the Company’s intangible assets and liabilities as of December 31, 2017 are as follows: December 31, 2017 In-place lease intangibles $ 3,495,632 Below-market ground lease intangibles 1,543,824 Less: accumulated amortization (385,952 ) Intangible assets, net $ 4,653,504 Below-market lease intangibles $ (340,390 ) Less: accumulated amortization — Intangible liabilities, net (1) $ (340,390 ) FOOTNOTE: (1) Intangible liabilities, net are included in other liabilities in the accompanying consolidated balance sheets. Amortization on the Company’s intangible assets was approximately $0.4 million for the year ended December 31, 2017, all of which were included in depreciation and amortization in the accompanying consolidated statements of operations. The estimated future amortization on the Company’s intangibles for each of the next five years and thereafter, in the aggregate, as of December 31, 2017 is as follows: In-place Lease Intangibles Below- market Ground Leases Total Assets Below- market Leases Total Liabilities 2018 $ 742,345 39,585 $ 781,930 $ 30,551 $ 30,551 2019 613,694 39,585 653,279 30,551 30,551 2020 198,353 39,585 237,938 27,101 27,101 2021 188,557 39,585 228,142 25,951 25,951 2022 188,557 39,585 228,142 25,951 25,951 Thereafter 1,178,174 1,345,899 2,524,073 200,285 200,285 $ 3,109,680 1,543,824 $ 4,653,504 $ 340,390 $ 340,390 5. Intangibles, net (continued) Weighted average remaining useful life as of December 31, 2017 (in years): In-place Lease Intangibles Below- market Ground Leases Below- market Leases 9.7 39.0 14.7 |
Operating Leases
Operating Leases | 12 Months Ended |
Dec. 31, 2017 | |
Leases [Abstract] | |
Operating Leases | 6. Operating Leases As of December 31, 2017, the Company owned one property that was leased to tenants on a modified gross basis, and accounted for as operating leases. The Company’s leases had a weighted average remaining lease term of 9.1 years based on annualized base rents expiring between 2020 and 2037, subject to the tenants’ options to extend the lease periods ranging from five to ten years. In addition, certain tenants hold options to extend their leases for multiple periods. Under the terms of the multi-tenant lease agreements that have third-party property managers, each tenant is responsible for the payment of their proportionate share of property taxes, general liability insurance, utilities, repairs and common area maintenance. These amounts are billed monthly and recorded as tenant reimbursement income in the accompanying consolidated statements of operations. The following are future minimum lease payments to be received under non-cancellable operating leases for the next five years and thereafter, in the aggregate, as of December 31, 2017: 2018 $ 1,010,583 2019 1,059,884 2020 1,008,129 2021 1,004,516 2022 1,023,166 Thereafter 4,518,797 $ 9,625,075 The above future minimum lease payments to be received excludes tenant reimbursements, straight-line rent adjustments, amortization of above- and below-market lease intangibles and base rent attributable to any renewal options exercised by the tenants in the future. |
Indebtedness
Indebtedness | 12 Months Ended |
Dec. 31, 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. 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 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. In December, 2017, the Company paid approximately $2.2 million of the outstanding principal balance of the Summer Vista Loan and as a result, the interest rate on the Summer Vista Loan was reduced to a rate equal to the sum of LIBOR plus 2.70% in accordance with the terms of the Summer Vista Loan. The Company may prepay, without a penalty, all or any part of the Summer Vista Loan at any time. 7. Indebtedness (continued) In December 2017, in connection with the Mid America Surgery acquisition, the Company entered into a secured mortgage loan agreement with Synovus Bank in the maximum aggregate principal amount of $8.4 million, of which approximately $5.6 million was funded in connection with the acquisition of Mid America Surgery and approximately $2.8 million can be funded upon request during the initial 36 month term of the loan provided certain debt service coverage requirements are met. The Mid America Surgery Loan matures on December 15, 2020, subject to one two-year extension option provided certain conditions are met. The Mid America Surgery Loan accrues interest at a rate equal to the sum of the LIBOR plus 2.20%, with monthly payments of interest only during the initial 36 months of the term of the Mid America Surgery Loan with the principal balance payable at maturity. The following table provides details of the Company’s indebtedness as of December 31, 2017 and December 31, 2016: December 31, 2017 2016 Mortgages and notes payable: Mortgage loans (1) $ 19,500,000 $ — Notes payable 312,500 312,500 Mortgages and notes payable 19,812,500 312,500 Loan costs, net (279,514 ) — Total mortgages and notes payable, net $ 19,532,986 $ 312,500 FOOTNOTE: (1) As of December 31, 2017, the Company’s mortgage loans are collateralized by the Summer Vista and Mid America Surgery properties. The fair market value of the mortgages and notes payable was approximately $19.9 million as of December 31, 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 next five years and thereafter, in the aggregate, as of December 31, 2017: 2018 $ 32,036 2019 199,072 2020 5,811,350 2021 224,386 2022 13,233,156 Thereafter 312,500 $ 19,812,500 |
Related Party Arrangements
Related Party Arrangements | 12 Months Ended |
Dec. 31, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Arrangements | 8. 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 the 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 reduced 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, the Dealer Manager receives 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 4.75% 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%, for Class T and Class I shares, 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 that provides, among other things, that Class T and Class I shares will convert into Class A shares on the earlier of a number of specified times, including the end of the month in which the total underwriting compensation paid with respect to such shares purchased in the Primary Offering exceeds 8.5% of the purchase price. 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. 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. 8. Related Party Arrangements (continued) 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. 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. 8. Related Party Arrangements (continued) 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 December 31, 2017, the Company’s total operating expenses were in excess of this limitation by approximately $0.5 million. As of December 31, 2017, the Company had received cumulative approvals by its independent directors For the year ended December 31, 2016, approximately $84,000 of personnel expenses of affiliates of the Advisor were waived and these 2016 expenses will not be reimbursed by the Company in future periods. 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, SEC registration fees, 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 years ended December 31, 2017 and 2016, the Company paid cash distributions of approximately $0.1 million and $47,000, respectively, and issued stock dividends of approximately 4,100 shares and 2,500 shares to the Advisor. 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. 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. 8. Related Party Arrangements (continued) 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 year ended December 31, 2017 and cumulatively as of December 31, 2017: Year Ended As of December 31, December 31, 2017 2017 Fees for services rendered: Asset management fees $ 130,366 $ 130,366 Advisor personnel expenses (1) 436,403 436,403 Total fees for services rendered $ 566,769 $ 566,769 Then-current NAV $ 10.06 $ 10.06 Restricted Stock shares (2) 56,339 56,339 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 December 31, 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. The fees payable to the Dealer Manager for the year ended December 31, 2017, and related amounts unpaid as of December 31, 2017 are as follows: Years Ended Unpaid amounts as of (1) December 31, December 31, 2017 2016 2017 2016 Selling commissions (2) $ 666,532 $ 97,022 $ 10,000 $ 6,550 Dealer Manager fees (2) 619,123 99,883 18,150 5,823 Distribution and stockholder servicing fees (2) 757,609 157,225 798,524 154,733 $ 2,043,264 $ 354,130 $ 826,674 $ 167,106 The expenses incurred by and reimbursable to the Company’s related parties for the year ended December 31, 2017, and related amounts unpaid as of December 31, 2017 are as follows: Years Ended Unpaid amounts as of (1) December 31, December 31, 2017 2016 2017 2016 Reimbursable expenses: Operating expenses (3) $ 983,493 $ 206,868 $ 197,235 $ 73,545 Acquisition fees and expenses (4) 29,922 ― ― ― 1,013,415 206,868 197,235 73,545 Investment service fees (5) 796,500 ― ― ― Asset management fees (6) 130,366 ― ― ― $ 1,940,281 $ 206,868 $ 197,235 $ 73,545 FOOTNOTES: (1) Amounts are recorded as due to related parties in the accompanying consolidated balance sheets. (2) Amounts are recorded as stock issuance and offering costs in the accompanying consolidated statements of stockholders’ equity. 8. Related Party Arrangements (continued) (3) Amounts are recorded as general and administrative expenses in the accompanying consolidated statements of operations unless such amounts represent prepaid expenses, which are capitalized in the accompanying consolidated balance sheets. Amounts include approximately $0.4 million and $0.1 million of personnel expenses of affiliates of the Advisor for the years ended December 31, 2017 and 2016, respectively. (4) Amounts are capitalized as a component of the cost of the assets acquired and allocated on a relative fair value basis. (5) For the year ended December 31, 2017, the Company incurred approximately $0.8 million in investment services fees all of which was capitalized and included in real estate investment properties, net in the accompanying consolidated balance sheets. No such fees were incurred for the year ended December 31, 2016. (6) For the year ended December 31, 2017, the Company incurred approximately $0.1 million in asset management fees, all of which are expected to be settled in accordance with the terms of the Expense Support Agreement. No such fees were incurred for the year ended December 31, 2016. |
Equity
Equity | 12 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
Equity | 9. Equity Subscription Proceeds — As of the years ended December 31, 2017 and 2016, the Company had received aggregate subscription proceeds of approximately $31.4 million (3.0 million shares) and $6.6 million (0.6 million shares), respectively, which both include $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 $391,900 (39,200 shares) and $3,000 (300 shares), respectively, of subscription proceeds pursuant to the Reinvestment Plan. Distributions — For the years ended December 31, 2017 and 2016, the Company declared and paid cash distributions of approximately $0.8 million and $57,000, respectively, which were net of class-specific expenses. In addition, the Company declared and issued stock dividends of approximately 22,000 shares and 3,000 shares of common stock during the years ended December 31, 2017 and 2016, respectively. For the years ended December 31, 2017 and 2016, 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 years ended December 31, 2017 and 2016 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 December 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 January 1, 2018, February 1, 2018 and March 1, 2018. These distributions and dividends are to be paid and distributed by March 31, 2018. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 10. Income Taxes For the year ended December 31, 2017, the Company recorded deferred tax assets and net current tax expense related to deferred income at its TRS. The components of the income tax benefit (expense) for the year ended December 31, 2017 are as follows: 2017 Current: Federal $ (111,000 ) State (16,200 ) Total current expense (127,200 ) Deferred: Federal 23,319 State 5,788 Total deferred benefit 29,107 Income tax expense $ (98,093 ) 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. In December 2017, the Tax Cuts and Jobs Act was signed into law and reduces the U.S. federal corporate tax rate to 21%, effective January 1, 2018. As a result, the Company recorded additional tax expense due to a remeasurement of deferred tax assets, which is included in total deferred tax expense in the table above. The Company did not identify items for which the income tax effects of the Tax Cuts and Jobs Act have not been completed and a reasonable estimate could not be determined as of December 31, 2017. However, the Company’s analysis may be impacted by new legislation, the Congressional Joint Committee Staff, Treasury, or other guidance. Based on the Tax Cuts and Jobs Act as enacted, the Company does not believe there will be further material impacts to its consolidated financial statements but cannot provide assurance as to the outcome of this matter. Significant components of the Company’s deferred tax assets as of December 31, 2017 are as follows: Prepaid and other rent $ 29,107 Deferred tax assets $ 29,107 A reconciliation of the income tax expense computed at the statutory federal tax rate on income before income taxes is as follows: Year Ended December 31, 2017 Tax benefit computed at federal statutory rate $ 426,453 35.00 % Impact of REIT election (511,104 ) (41.90 )% Effect of change in future tax rates (3,030 ) (0.25 )% State income tax expense (10,412 ) (0.87 )% Income tax expense $ (98,093 ) (8.02 )% The Company analyzed its material tax positions and determined that it has not taken any uncertain tax positions. The tax years 2016 and forward remain subject to examination by taxing authorities throughout the United States. |
Commitment and Contingencies
Commitment and Contingencies | 12 Months Ended |
Dec. 31, 2017 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 11. 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. |
Selected Quarterly Financial Da
Selected Quarterly Financial Data (Unaudited) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Selected Quarterly Financial Data (Unaudited) | 12. Selected Quarterly Financial Data (Unaudited) The following presents selected unaudited quarterly financial data for the years ended December 31, 2017 and 2016: 2017 Quarters First Second Third Fourth Full Year Total revenues $ 11,430 $ 1,071,441 $ 1,095,696 $ 1,130,248 $ 3,308,815 Operating loss (231,794 ) (175,188 ) (99,164 ) (122,817 ) (628,963 ) Net loss (251,120 ) (391,681 ) (307,906 ) (365,823 ) (1,316,530 ) Class A common stock: Net loss attributable to Class A stockholders (94,685 ) (142,414 ) (109,442 ) (105,730 ) (440,931 ) Weighted average number of Class A common shares outstanding (basic and diluted) (1) 377,773 518,619 687,782 763,951 584,653 Loss per share of Class A common stock (basic and diluted) $ (0.25 ) $ (0.27 ) $ (0.16 ) $ (0.14 ) $ (0.75 ) Class T common stock: Net loss attributable to Class T stockholders (153,460 ) (240,634 ) (189,163 ) (242,627 ) (832,661 ) Weighted average number of Class T common shares outstanding (basic and diluted) (1) 612,266 876,299 1,188,777 1,753,087 1,104,068 Loss per share of Class T common stock (basic and diluted) $ (0.25 ) $ (0.27 ) $ (0.16 ) $ (0.14 ) $ (0.75 ) Class I common stock: Net loss attributable to Class I stockholders (2,975 ) (8,633 ) (9,301 ) (17,466 ) (42,938 ) Weighted average number of Class I common shares outstanding (basic and diluted) (1) 11,868 31,440 58,451 126,198 56,934 Loss per share of Class I common stock (basic and diluted) $ (0.25 ) $ (0.27 ) $ (0.16 ) $ (0.14 ) $ (0.75 ) 2016 Quarters First Second Third Fourth Full Year Total revenues $ — $ — $ — $ — $ — Operating loss ― ― (93,439 ) (219,059 ) (312,498 ) Net loss ― ― (110,588 ) (231,859 ) (342,447 ) Class A common stock: Net loss attributable to Class A stockholders ― ― (98,927 ) (150,177 ) (253,380 ) Weighted average number of Class A common shares outstanding (basic and diluted) (1) ― ― 289,416 311,838 301,272 Loss per share of Class A common stock (basic and diluted) $ — $ — $ (0.34 ) $ (0.48 ) $ (0.84 ) Class T common stock: Net loss attributable to Class T stockholders ― ― (9,092 ) (77,029 ) (81,792 ) Weighted average number of Class T common shares outstanding (basic and diluted) (1) ― ― 26,600 159,949 97,252 Loss per share of Class T common stock (basic and diluted) $ — $ — $ (0.34 ) $ (0.48 ) $ (0.84 ) Class I common stock: Net loss attributable to Class I stockholders ― ― (2,569 ) (4,653 ) (7,275 ) Weighted average number of Class I common shares outstanding (basic and diluted) (1) ― ― 7,516 9,661 8,650 Loss per share of Class I common stock (basic and diluted) $ — $ — $ (0.34 ) $ (0.48 ) $ (0.84 ) FOOTNOTE: (1) For the purposes of determining the weighted average number of shares of common stock outstanding, stock dividends issued are treated as if such shares were outstanding as of July 11, 2016 (the date the Company commenced operations). |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | 13. Subsequent Events During the period from January 1, 2018 through March 5, 2018, the Company received additional subscription proceeds of approximately $5.1 million (0.5 million shares). In March 2018, the Company’s board of directors declared a monthly cash distribution of $0.0480 and a monthly stock dividend of 0.00100625 shares on each outstanding share of common stock on April 1, 2018, May 1, 2018 and June 1, 2018. These dividends are to be paid and distributed by June 30, 2018. |
SCHEDULE III-Real Estate and Ac
SCHEDULE III-Real Estate and Accumulated Depreciation | 12 Months Ended |
Dec. 31, 2017 | |
Real Estate And Accumulated Depreciation Disclosure [Abstract] | |
SCHEDULE III-Real Estate and Accumulated Depreciation | Initial Costs Costs Capitalized Subsequent to Acquisition Gross Amounts at which Carried at Close of Period (2) Property/Location Encum- brances Land & Land Improve- ments Building and Building Improve- ments Land & Land Improve- ments Building and Building Improve- ments Construc- tion in Process Land & Land Improve- ments Building and Building Improve- ments Construc- tion in Process Total Accumu- lated Depreci- ation Date of Construction Date Acquired Life on which depreciation in latest income statement is computed Summer Vista Assisted Living Pensacola, FL $ 13,900 $ 2,269 $ 17,612 $ 33 $ — $ — $ 2,302 $ 17,612 $ — $ 19,914 $ (369 ) 2016 3/31/2017 (1 ) Mid America Surgery Institute Overland Park, KS ("Kansas City") $ 5,600 $ 381 $ 10,497 $ — $ — $ — $ 381 $ 10,497 $ — $ 10,878 $ — 2007 12/27/2017 (1 ) $ 19,500 $ 2,650 $ 28,109 $ 33 $ — $ — $ 2,683 $ 28,109 $ — $ 30,792 $ (369 ) Transactions in real estate and accumulated depreciation as of December 31, 2017 are as follows: Balance December 31, 2016 ― Balance December 31, 2016 $ — 2017 Acquisitions 30,759 2017 Depreciation 369 2017 Improvements 33 Balance December 31, 2017 $ 369 Balance December 31, 2017 $ 30,792 FOOTNOTES: (1) Buildings and building improvements are depreciated over 39 and 15 years, respectively. (2) The aggregate cost for federal income tax purposes is approximately $35.4 million. |
Summary of Significant Accoun21
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Consolidation | Basis of Presentation and Consolidation — The accompanying consolidated financial statements include the Company’s accounts, the Operating Partnership and its 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 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. |
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. |
Cash | Cash — Cash consists of demand deposits at commercial banks with original maturities of three months or less. As of December 31, 2017, certain of the Company’s cash deposits exceeded federally insured amounts. However, the Company continues to monitor the third-party depository institutions that hold the Company’s cash, primarily with the goal of safeguarding principal. The Company attempts to limit cash investments to financial institutions with high credit standing; therefore, the Company believes it is not exposed to any significant credit risk on cash. |
Restricted Cash | Restricted Cash — Certain cash balances are escrowed to fund capital expenditures, property taxes and/or insurance as required by the loan or lease terms. |
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. |
Deferred Lease-Related Costs | Deferred Lease-Related Costs – The Company defers lease-related costs that it incurs to obtain new or extend existing leases. The Company amortizes these costs 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 deferred lease-related costs not deemed to be recoverable. |
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. |
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. Rental income from operating leases is recorded on the straight-line basis over the terms of the leases for new leases and the remaining terms of existing leases for those acquired as part of a property acquisition. The straight-line method records the periodic average amount of base rent earned over the term of a lease, taking into account contractual rent increases over the lease term. The Company records the difference between base rent revenues earned and amounts due per the respective lease agreements, as applicable, as an increase or decrease to deferred rent included as other assets in the accompanying consolidated balance sheets. 2. Summary of Significant Accounting Policies (continued) Tenant reimbursement income represents amounts tenants are required to reimburse the Company for expenses incurred on behalf of the tenants, in accordance with the terms of the leases and are recognized in the period in which the related reimbursable expenses are incurred. |
Income Taxes | Income Taxes — The Company intends to qualify for taxation as a REIT under Sections 856 through 860 of the Internal Revenue Code commencing with its taxable year ending December 31, 2017 or the first year in which the Company commences material operations. Prior to the Company’s REIT election, it is subject to corporate federal and state income taxes. If the Company qualifies for taxation as a REIT, the Company generally will not be subject to federal corporate income tax to the extent it distributes at least 90 percent of its REIT taxable income to its stockholders. REITs are subject to a number of other organizational and operational requirements. Even if the Company qualifies for taxation as a REIT, it may be subject to certain state and local taxes on its income and property, and federal income and excise taxes on its undistributed income. The Company has formed a subsidiary that may elect to be taxed as a TRS for U.S. federal income tax purposes. Under the provisions of the Internal Revenue Code and applicable state laws, a TRS will be subject to taxation on taxable income from its operations. The Company will account for federal and state income taxes with respect to a TRS using the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the consolidated financial statement carrying amounts of existing assets and liabilities and respective tax bases and operating losses and tax-credit carry forwards. |
Fair Value Measurements | Fair Value Measurements — GAAP emphasizes that fair value is a market-based measurement, not an entity-specific measurement. Therefore, a fair value measurement should be determined based on the assumptions that market participants would use in pricing the asset or liability. GAAP requires the use of observable market data, when available, in making fair value measurements. Observable inputs are inputs that the market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of ours. When market data inputs are unobservable, the Company utilizes inputs that it believes reflects the Company’s best estimate of the assumptions market participants would use in pricing the asset or liability. When inputs used to measure fair value fall within different levels of the hierarchy, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurement. As a basis for considering market participant assumptions in fair value measurements, GAAP establishes a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy). The three levels of inputs used to measure fair value are as follows: • Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company as the ability to access. • Level 2 – Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. • Level 3 – Unobservable inputs for the asset or liability, which are typically based on the Company’s own assumptions, as there is little, if any, related market activity. |
Shares Based Payments to Non-Employees | Shares Based Payments to Non-Employees — In connection with an expense support arrangement described in Note 8. “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. 2. Summary of Significant Accounting Policies (continued) 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. |
Per Share Data | Per Share Data — Net loss per share for the period presented is computed by dividing net loss by the weighted average number of common stock shares outstanding for each share class during the period in which the Company was operational. Diluted loss per share is computed based on the weighted average number of common stock shares outstanding for each share class and all potentially dilutive securities, if any. For purposes of determining the weighted average number of shares of common stock outstanding, stock dividends are treated as if such shares were outstanding as of July 11, 2016 (when the Company commenced operations). |
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 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 did not have an impact on the Company’s consolidated balance sheets or consolidated statements of operations. The following table provides additional details by financial statement line item of the adjusted presentation in the Company’s consolidated statement of cash flows for the years ended December 31, 2016: As filed December 31, 2016 Adjustments Adjusted December 31, 2016 Financing activities: Private Placement escrow $ (383,000 ) $ 383,000 $ — Net cash flows provided by financing activities $ 6,071,808 $ 383,000 $ 6,454,808 Net increase in cash and restricted cash $ 5,777,241 $ 383,000 $ 6,160,241 Cash and restricted cash at beginning of period 200,000 ― 200,000 Cash and restricted cash at end of period $ 5,977,241 $ 383,000 $ 6,360,241 2. Summary of Significant Accounting Policies (continued) 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 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 consolidated financial statements as a result of two properties the Company acquired being considered asset acquisitions. |
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, the FASB issued ASU 2017-05, “Other Income – Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20),” which clarifies the scope of subtopic 610-20, that was issued as a part of ASU 2014-09, as it relates to an in substance nonfinancial asset and must be adopted concurrently with ASC 606. Both ASUs 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 adopted these ASUs using the modified retrospective approach as its transition method effective January 1, 2018; the adoption of which did not have a material impact to its consolidated financial statements. 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 expects that adoption will impact the Company’s consolidated financial statements and related financial statement disclosures; specifically, the Company’s consolidated financial position as it relates to the required presentation for arrangements such as ground leases in which the Company is the lessee. However, 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. In addition, while still in exposure draft, the FASB has proposed a practical expedient for lessors allowing them to elect to not separate lease and non-lease components in a contract for the purpose of revenue recognition and disclosure if certain criteria are met. If the proposed practical expedient is finalized, the Company plans to elect the practical expedient. 2. Summary of Significant Accounting Policies (continued) 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. |
Summary of Significant Accoun22
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Schedule of Adjusted Presentation of Consolidated Statement of Cash Flows | The following table provides additional details by financial statement line item of the adjusted presentation in the Company’s consolidated statement of cash flows for the years ended December 31, 2016: As filed December 31, 2016 Adjustments Adjusted December 31, 2016 Financing activities: Private Placement escrow $ (383,000 ) $ 383,000 $ — Net cash flows provided by financing activities $ 6,071,808 $ 383,000 $ 6,454,808 Net increase in cash and restricted cash $ 5,777,241 $ 383,000 $ 6,160,241 Cash and restricted cash at beginning of period 200,000 ― 200,000 Cash and restricted cash at end of period $ 5,977,241 $ 383,000 $ 6,360,241 |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Business Acquisition [Line Items] | |
Schedule of Business Acquisitions | Real Estate Investment Properties — During the year ended December 31, 2017, the Company acquired the following two properties, which were comprised of one MOB and one seniors housing community: Name and Location Structure Date Acquired Purchase Price (in thousands) Medical Office Mid America Surgery Institute Modified Lease 12/27/2017 $ 14,000 Overland Park, KS ("Kansas City") Seniors Housing Summer Vista Assisted Living Managed 3/31/2017 21,400 Pensacola, FL |
Mid America Surgery Institute and Summer Vista Assisted Living | |
Business Acquisition [Line Items] | |
Summary of Purchase Price Allocation and Related Assets Acquired and Liabilities Assumed | The following summarizes the purchase price allocation for the above properties, and the estimated fair values of the assets acquired and liabilities assumed: Land and land improvements $ 2,650,216 Buildings and building improvements 28,109,037 Furniture, fixtures and equipment 857,338 Intangibles (1) 5,039,456 Other liabilities (340,390 ) Liabilities assumed (530,452 ) Total purchase price consideration $ 35,785,205 (1) At the acquisition date, the weighted-average amortization period on the acquired lease intangibles for the year ended December 31, 2017 was approximately 17.4 years. The acquired lease intangibles during the year ended December 31, 2017 were comprised of approximately $3.5 million and $1.5 million of in-place lease intangibles and ground lease intangibles, respectively. |
Real Estate Assets, net (Tables
Real Estate Assets, net (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Real Estate [Abstract] | |
Schedule of Real Estate Assets | The gross carrying amount and accumulated depreciation of the Company’s real estate assets as of December 31, 2017 are as follows: December 31, 2017 Land and land improvements $ 2,683,051 Building and building improvements 28,109,037 Furniture, fixtures and equipment 879,288 Less: accumulated depreciation (585,437 ) Real estate investment properties, net $ 31,085,939 |
Intangibles, net (Tables)
Intangibles, net (Tables) | 12 Months Ended |
Dec. 31, 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 intangible assets and liabilities as of December 31, 2017 are as follows: December 31, 2017 In-place lease intangibles $ 3,495,632 Below-market ground lease intangibles 1,543,824 Less: accumulated amortization (385,952 ) Intangible assets, net $ 4,653,504 Below-market lease intangibles $ (340,390 ) Less: accumulated amortization — Intangible liabilities, net (1) $ (340,390 ) FOOTNOTE: (1) Intangible liabilities, net are included in other liabilities in the accompanying consolidated balance sheets. |
Schedule of Estimated Future Amortization of Intangibles | The estimated future amortization on the Company’s intangibles for each of the next five years and thereafter, in the aggregate, as of December 31, 2017 is as follows: In-place Lease Intangibles Below- market Ground Leases Total Assets Below- market Leases Total Liabilities 2018 $ 742,345 39,585 $ 781,930 $ 30,551 $ 30,551 2019 613,694 39,585 653,279 30,551 30,551 2020 198,353 39,585 237,938 27,101 27,101 2021 188,557 39,585 228,142 25,951 25,951 2022 188,557 39,585 228,142 25,951 25,951 Thereafter 1,178,174 1,345,899 2,524,073 200,285 200,285 $ 3,109,680 1,543,824 $ 4,653,504 $ 340,390 $ 340,390 |
Schedule of Weighted Average Remaining Useful Life | Weighted average remaining useful life as of December 31, 2017 (in years): In-place Lease Intangibles Below- market Ground Leases Below- market Leases 9.7 39.0 14.7 |
Operating Leases (Tables)
Operating Leases (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Leases [Abstract] | |
Schedule of Future Minimum Lease Payments to be Received Under Non-Cancellable Operating Leases | The following are future minimum lease payments to be received under non-cancellable operating leases for the next five years and thereafter, in the aggregate, as of December 31, 2017: 2018 $ 1,010,583 2019 1,059,884 2020 1,008,129 2021 1,004,516 2022 1,023,166 Thereafter 4,518,797 $ 9,625,075 |
Indebtedness (Tables)
Indebtedness (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Indebtedness | The following table provides details of the Company’s indebtedness as of December 31, 2017 and December 31, 2016: December 31, 2017 2016 Mortgages and notes payable: Mortgage loans (1) $ 19,500,000 $ — Notes payable 312,500 312,500 Mortgages and notes payable 19,812,500 312,500 Loan costs, net (279,514 ) — Total mortgages and notes payable, net $ 19,532,986 $ 312,500 FOOTNOTE: (1) As of December 31, 2017, the Company’s mortgage loans are collateralized by the Summer Vista and Mid America Surgery properties. |
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 next five years and thereafter, in the aggregate, as of December 31, 2017: 2018 $ 32,036 2019 199,072 2020 5,811,350 2021 224,386 2022 13,233,156 Thereafter 312,500 $ 19,812,500 |
Related Party Arrangements (Tab
Related Party Arrangements (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Related Party Arrangement, Fees and Expenses Incurred By, Reimbursable, Settled and Paid | The expenses incurred by and reimbursable to the Company’s related parties for the year ended December 31, 2017, and related amounts unpaid as of December 31, 2017 are as follows: Years Ended Unpaid amounts as of (1) December 31, December 31, 2017 2016 2017 2016 Reimbursable expenses: Operating expenses (3) $ 983,493 $ 206,868 $ 197,235 $ 73,545 Acquisition fees and expenses (4) 29,922 ― ― ― 1,013,415 206,868 197,235 73,545 Investment service fees (5) 796,500 ― ― ― Asset management fees (6) 130,366 ― ― ― $ 1,940,281 $ 206,868 $ 197,235 $ 73,545 FOOTNOTES: (1) Amounts are recorded as due to related parties in the accompanying consolidated balance sheets. (2) Amounts are recorded as stock issuance and offering costs in the accompanying consolidated statements of stockholders’ equity. 8. Related Party Arrangements (continued) (3) Amounts are recorded as general and administrative expenses in the accompanying consolidated statements of operations unless such amounts represent prepaid expenses, which are capitalized in the accompanying consolidated balance sheets. Amounts include approximately $0.4 million and $0.1 million of personnel expenses of affiliates of the Advisor for the years ended December 31, 2017 and 2016, respectively. (4) Amounts are capitalized as a component of the cost of the assets acquired and allocated on a relative fair value basis. (5) For the year ended December 31, 2017, the Company incurred approximately $0.8 million in investment services fees all of which was capitalized and included in real estate investment properties, net in the accompanying consolidated balance sheets. No such fees were incurred for the year ended December 31, 2016. (6) For the year ended December 31, 2017, the Company incurred approximately $0.1 million in asset management fees, all of which are expected to be settled in accordance with the terms of the Expense Support Agreement. No such fees were incurred for the year ended December 31, 2016. |
Dealer Manager | |
Related Party Arrangement, Fees and Expenses Incurred By, Reimbursable, Settled and Paid | The fees payable to the Dealer Manager for the year ended December 31, 2017, and related amounts unpaid as of December 31, 2017 are as follows: Years Ended Unpaid amounts as of (1) December 31, December 31, 2017 2016 2017 2016 Selling commissions (2) $ 666,532 $ 97,022 $ 10,000 $ 6,550 Dealer Manager fees (2) 619,123 99,883 18,150 5,823 Distribution and stockholder servicing fees (2) 757,609 157,225 798,524 154,733 $ 2,043,264 $ 354,130 $ 826,674 $ 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 year ended December 31, 2017 and cumulatively as of December 31, 2017: Year Ended As of December 31, December 31, 2017 2017 Fees for services rendered: Asset management fees $ 130,366 $ 130,366 Advisor personnel expenses (1) 436,403 436,403 Total fees for services rendered $ 566,769 $ 566,769 Then-current NAV $ 10.06 $ 10.06 Restricted Stock shares (2) 56,339 56,339 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 December 31, 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. |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Components of Income Tax Benefit (Expense) | For the year ended December 31, 2017, the Company recorded deferred tax assets and net current tax expense related to deferred income at its TRS. The components of the income tax benefit (expense) for the year ended December 31, 2017 are as follows: 2017 Current: Federal $ (111,000 ) State (16,200 ) Total current expense (127,200 ) Deferred: Federal 23,319 State 5,788 Total deferred benefit 29,107 Income tax expense $ (98,093 ) |
Significant Components of Deferred Tax Assets | Significant components of the Company’s deferred tax assets as of December 31, 2017 are as follows: Prepaid and other rent $ 29,107 Deferred tax assets $ 29,107 |
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: Year Ended December 31, 2017 Tax benefit computed at federal statutory rate $ 426,453 35.00 % Impact of REIT election (511,104 ) (41.90 )% Effect of change in future tax rates (3,030 ) (0.25 )% State income tax expense (10,412 ) (0.87 )% Income tax expense $ (98,093 ) (8.02 )% |
Selected Quarterly Financial 30
Selected Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Selected Unaudited Quarterly Financial Data | The following presents selected unaudited quarterly financial data for the years ended December 31, 2017 and 2016: 2017 Quarters First Second Third Fourth Full Year Total revenues $ 11,430 $ 1,071,441 $ 1,095,696 $ 1,130,248 $ 3,308,815 Operating loss (231,794 ) (175,188 ) (99,164 ) (122,817 ) (628,963 ) Net loss (251,120 ) (391,681 ) (307,906 ) (365,823 ) (1,316,530 ) Class A common stock: Net loss attributable to Class A stockholders (94,685 ) (142,414 ) (109,442 ) (105,730 ) (440,931 ) Weighted average number of Class A common shares outstanding (basic and diluted) (1) 377,773 518,619 687,782 763,951 584,653 Loss per share of Class A common stock (basic and diluted) $ (0.25 ) $ (0.27 ) $ (0.16 ) $ (0.14 ) $ (0.75 ) Class T common stock: Net loss attributable to Class T stockholders (153,460 ) (240,634 ) (189,163 ) (242,627 ) (832,661 ) Weighted average number of Class T common shares outstanding (basic and diluted) (1) 612,266 876,299 1,188,777 1,753,087 1,104,068 Loss per share of Class T common stock (basic and diluted) $ (0.25 ) $ (0.27 ) $ (0.16 ) $ (0.14 ) $ (0.75 ) Class I common stock: Net loss attributable to Class I stockholders (2,975 ) (8,633 ) (9,301 ) (17,466 ) (42,938 ) Weighted average number of Class I common shares outstanding (basic and diluted) (1) 11,868 31,440 58,451 126,198 56,934 Loss per share of Class I common stock (basic and diluted) $ (0.25 ) $ (0.27 ) $ (0.16 ) $ (0.14 ) $ (0.75 ) 2016 Quarters First Second Third Fourth Full Year Total revenues $ — $ — $ — $ — $ — Operating loss ― ― (93,439 ) (219,059 ) (312,498 ) Net loss ― ― (110,588 ) (231,859 ) (342,447 ) Class A common stock: Net loss attributable to Class A stockholders ― ― (98,927 ) (150,177 ) (253,380 ) Weighted average number of Class A common shares outstanding (basic and diluted) (1) ― ― 289,416 311,838 301,272 Loss per share of Class A common stock (basic and diluted) $ — $ — $ (0.34 ) $ (0.48 ) $ (0.84 ) Class T common stock: Net loss attributable to Class T stockholders ― ― (9,092 ) (77,029 ) (81,792 ) Weighted average number of Class T common shares outstanding (basic and diluted) (1) ― ― 26,600 159,949 97,252 Loss per share of Class T common stock (basic and diluted) $ — $ — $ (0.34 ) $ (0.48 ) $ (0.84 ) Class I common stock: Net loss attributable to Class I stockholders ― ― (2,569 ) (4,653 ) (7,275 ) Weighted average number of Class I common shares outstanding (basic and diluted) (1) ― ― 7,516 9,661 8,650 Loss per share of Class I common stock (basic and diluted) $ — $ — $ (0.34 ) $ (0.48 ) $ (0.84 ) FOOTNOTE: (1) For the purposes of determining the weighted average number of shares of common stock outstanding, stock dividends issued are treated as if such shares were outstanding as of July 11, 2016 (the date the Company commenced operations). |
Organization - Additional Infor
Organization - Additional Information (Details) - USD ($) | 6 Months Ended | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Jul. 11, 2016 | Mar. 02, 2016 | |
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | |||||
Common stock, shares sold | 3,000,000 | 600,000 | |||
Aggregate purchase price | $ 24,825,810 | $ 6,386,693 | |||
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 | 475,217 | 302,430 | |||
Aggregate purchase price | $ 4,752 | $ 3,024 | |||
Conversion of shares | 20,000 | ||||
Sale of common stock, shares | 808,011 | 325,119 | |||
Sale of common stock, value | $ 8,080 | $ 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 Accoun32
Summary of Significant Accounting Policies - Additional Information (Details) | 12 Months Ended |
Dec. 31, 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] | |
Percentage of taxable income for distribution to stockholders | 90.00% |
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 |
Summary of Significant Accoun33
Summary of Significant Accounting Policies - Schedule of Adjusted Presentation of Consolidated Statement of Cash Flows (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Financing activities: | ||
Net cash flows provided by financing activities | $ 41,851,158 | $ 6,454,808 |
Net increase in cash and restricted cash | 6,061,678 | 6,160,241 |
Cash and restricted cash at beginning of year | 6,360,241 | 200,000 |
Cash and restricted cash at end of year | 12,421,919 | 6,360,241 |
As filed | ||
Financing activities: | ||
Private Placement escrow | (383,000) | |
Net cash flows provided by financing activities | 6,071,808 | |
Net increase in cash and restricted cash | 5,777,241 | |
Cash and restricted cash at beginning of year | 5,977,241 | 200,000 |
Cash and restricted cash at end of year | 5,977,241 | |
Adjustments | ||
Financing activities: | ||
Private Placement escrow | 383,000 | |
Net cash flows provided by financing activities | 383,000 | |
Net increase in cash and restricted cash | 383,000 | |
Cash and restricted cash at beginning of year | $ 383,000 | |
Cash and restricted cash at end of year | $ 383,000 |
Acquisitions - Additional Infor
Acquisitions - Additional Information (Details) | 12 Months Ended |
Dec. 31, 2017Property | |
Business Combinations [Abstract] | |
Number of properties acquired | 2 |
Acquisitions - Schedule of Busi
Acquisitions - Schedule of Business Acquisitions (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Mid America Surgery Institute | Medical Office | Overland Park, KS | |
Business Acquisition [Line Items] | |
Structure | Modified Lease |
Date Acquired | Dec. 27, 2017 |
Purchase Price (in thousands) | $ 14,000 |
Summer Vista Assisted Living | Seniors Housing | Pensacola, FL | |
Business Acquisition [Line Items] | |
Structure | Managed |
Date Acquired | Mar. 31, 2017 |
Purchase Price (in thousands) | $ 21,400 |
Acquisitions - Summary of Purch
Acquisitions - Summary of Purchase Price Allocation and Related Assets Acquired and Liabilities Assumed (Details) - Mid America Surgery Institute and Summer Vista Assisted Living | Dec. 31, 2017USD ($) | |
Business Acquisition [Line Items] | ||
Land and land improvements | $ 2,650,216 | |
Buildings and building improvements | 28,109,037 | |
Furniture, fixtures and equipment | 857,338 | |
Intangibles | 5,039,456 | [1] |
Other liabilities | (340,390) | |
Liabilities assumed | (530,452) | |
Total purchase price consideration | $ 35,785,205 | |
[1] | At the acquisition date, the weighted-average amortization period on the acquired lease intangibles for the year ended December 31, 2017 was approximately 17.4 years. The acquired lease intangibles during the year ended December 31, 2017 were comprised of approximately $3.5 million and $1.5 million of in-place lease intangibles and ground lease intangibles, respectively. |
Acquisitions - Summary of Pur37
Acquisitions - Summary of Purchase Price Allocation and Related Assets Acquired and Liabilities Assumed (Parenthetical) (Details) - Mid America Surgery Institute and Summer Vista Assisted Living | 12 Months Ended | |
Dec. 31, 2017USD ($) | ||
Business Acquisition [Line Items] | ||
Weighted average amortization period on acquired lease intangibles | 17 years 4 months 24 days | |
Acquired lease intangibles | $ 5,039,456 | [1] |
In-place Lease | ||
Business Acquisition [Line Items] | ||
Acquired lease intangibles | 3,500,000 | |
Ground Lease | ||
Business Acquisition [Line Items] | ||
Acquired lease intangibles | $ 1,500,000 | |
[1] | At the acquisition date, the weighted-average amortization period on the acquired lease intangibles for the year ended December 31, 2017 was approximately 17.4 years. The acquired lease intangibles during the year ended December 31, 2017 were comprised of approximately $3.5 million and $1.5 million of in-place lease intangibles and ground lease intangibles, respectively. |
Real Estate Assets, net - Sched
Real Estate Assets, net - Schedule of Real Estate Assets (Details) | Dec. 31, 2017USD ($) |
Real Estate [Abstract] | |
Land and land improvements | $ 2,683,051 |
Building and building improvements | 28,109,037 |
Furniture, fixtures and equipment | 879,288 |
Less: accumulated depreciation | (585,437) |
Real estate investment properties, net | $ 31,085,939 |
Real Estate Assets, net - Addit
Real Estate Assets, net - Additional Information (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Real Estate Investment Properties | |
Real Estate Properties [Line Items] | |
Depreciation expense | $ 0.6 |
Intangibles, net - Schedule of
Intangibles, net - Schedule of Gross Carrying Amount and Accumulated Amortization of Intangibles (Details) | Dec. 31, 2017USD ($) |
Goodwill And Intangible Assets Disclosure [Abstract] | |
In-place lease intangibles | $ 3,495,632 |
Below-market ground lease intangibles | 1,543,824 |
Less: accumulated amortization | (385,952) |
Intangible assets, net | 4,653,504 |
Below-market lease intangibles | (340,390) |
Intangible liabilities, net | $ (340,390) |
Intangibles, net - Additional I
Intangibles, net - Additional Information (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Amortization of Intangible Assets | $ 0.4 |
Intangibles, net - Schedule o42
Intangibles, net - Schedule of Estimated Future Amortization of Intangibles (Details) | Dec. 31, 2017USD ($) |
Finite Lived Intangible Assets And Liabilities [Line Items] | |
2,018 | $ 781,930 |
2,019 | 653,279 |
2,020 | 237,938 |
2,021 | 228,142 |
2,022 | 228,142 |
Thereafter | 2,524,073 |
Intangible assets, net | 4,653,504 |
2,018 | 30,551 |
2,019 | 30,551 |
2,020 | 27,101 |
2,021 | 25,951 |
2,022 | 25,951 |
Thereafter | 200,285 |
Below-market lease intangibles | 340,390 |
2,018 | 30,551 |
2,019 | 30,551 |
2,020 | 27,101 |
2,021 | 25,951 |
2,022 | 25,951 |
Thereafter | 200,285 |
Finite-lived intangible liabilities | 340,390 |
In-place Lease | |
Finite Lived Intangible Assets And Liabilities [Line Items] | |
2,018 | 742,345 |
2,019 | 613,694 |
2,020 | 198,353 |
2,021 | 188,557 |
2,022 | 188,557 |
Thereafter | 1,178,174 |
Intangible assets, net | 3,109,680 |
Below-Market Ground Leases | |
Finite Lived Intangible Assets And Liabilities [Line Items] | |
2,018 | 39,585 |
2,019 | 39,585 |
2,020 | 39,585 |
2,021 | 39,585 |
2,022 | 39,585 |
Thereafter | 1,345,899 |
Intangible assets, net | $ 1,543,824 |
Intangibles, net - Schedule o43
Intangibles, net - Schedule of Weighted Average Remaining Useful Life (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Finite Lived Intangible Assets And Liabilities [Line Items] | |
Weighted average remaining useful life, below-market lease | 14 years 8 months 12 days |
In-place Lease | |
Finite Lived Intangible Assets And Liabilities [Line Items] | |
Weighted average remaining useful life, intangible assets | 9 years 8 months 12 days |
Below-Market Ground Leases | |
Finite Lived Intangible Assets And Liabilities [Line Items] | |
Weighted average remaining useful life, intangible assets | 39 years |
Operating Leases - Additional I
Operating Leases - Additional Information (Details) | 12 Months Ended |
Dec. 31, 2017Property | |
Operating Leased Assets [Line Items] | |
Number of properties owned | 1 |
Weighted average remaining lease term | 9 years 1 month 6 days |
Minimum | |
Operating Leased Assets [Line Items] | |
Lease expiration year | 2,020 |
Extended lease period | 5 years |
Maximum | |
Operating Leased Assets [Line Items] | |
Lease expiration year | 2,037 |
Extended lease period | 10 years |
Operating Leases - Schedule of
Operating Leases - Schedule of Future Minimum Lease Payments to be Received Under Non-Cancellable Operating Leases (Details) | Dec. 31, 2017USD ($) |
Leases [Abstract] | |
2,018 | $ 1,010,583 |
2,019 | 1,059,884 |
2,020 | 1,008,129 |
2,021 | 1,004,516 |
2,022 | 1,023,166 |
Thereafter | 4,518,797 |
Total | $ 9,625,075 |
Indebtedness - Additional Infor
Indebtedness - Additional Information (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Dec. 31, 2017 | Mar. 31, 2017 | Dec. 31, 2017 | ||
Debt Instrument [Line Items] | ||||
Secured mortgage loan amount | [1] | $ 19,500,000 | $ 19,500,000 | |
Level 3 | ||||
Debt Instrument [Line Items] | ||||
Mortgage and notes payable, fair market value | 19,900,000 | $ 19,900,000 | ||
Summer Vista Assisted Living | ||||
Debt Instrument [Line Items] | ||||
Secured mortgage loan amount | $ 16,100,000 | |||
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 | |||
Secured mortgage loan, reduction of interest outstanding principal amount paid | 2,200,000 | $ 2,200,000 | ||
Summer Vista Assisted Living | LIBOR | ||||
Debt Instrument [Line Items] | ||||
Secured mortgage loan, interest rate | 2.85% | 2.70% | ||
Mid America Surgery Institute | ||||
Debt Instrument [Line Items] | ||||
Secured mortgage loan amount | $ 8,400,000 | $ 8,400,000 | ||
Secured mortgage loan, maturity date | Dec. 15, 2020 | |||
Secured mortgage loan, maturity extension | The Mid America Surgery Loan matures on December 15, 2020, subject to one two-year extension option provided certain conditions are met. | |||
Secured mortgage loan, payment of interest, term | 36 months | |||
Amount funded in connection with acquisition | $ 5,600,000 | |||
Secured mortgage loan, remaining borrowing capacity | $ 2,800,000 | $ 2,800,000 | ||
Secured mortgage loan, available borrowing term subject to conditions | 36 months | |||
Mid America Surgery Institute | LIBOR | ||||
Debt Instrument [Line Items] | ||||
Secured mortgage loan, interest rate | 2.20% | |||
[1] | As of December 31, 2017, the Company’s mortgage loans are collateralized by the Summer Vista and Mid America Surgery properties. |
Indebtedness - Schedule of Inde
Indebtedness - Schedule of Indebtedness (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 | |
Mortgages and notes payable: | |||
Mortgage loans | [1] | $ 19,500,000 | |
Notes payable | 312,500 | $ 312,500 | |
Mortgages and notes payable | 19,812,500 | 312,500 | |
Loan costs, net | (279,514) | ||
Total mortgages and notes payable, net | $ 19,532,986 | $ 312,500 | |
[1] | As of December 31, 2017, the Company’s mortgage loans are collateralized by the Summer Vista and Mid America Surgery properties. |
Indebtedness - Schedule of Futu
Indebtedness - Schedule of Future Principal Payments and Maturity (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Debt Disclosure [Abstract] | ||
2,018 | $ 32,036 | |
2,019 | 199,072 | |
2,020 | 5,811,350 | |
2,021 | 224,386 | |
2,022 | 13,233,156 | |
Thereafter | 312,500 | |
Mortgages and notes payable | $ 19,812,500 | $ 312,500 |
Related Party Arrangements - Ad
Related Party Arrangements - Additional Information (Details) - USD ($) | Mar. 20, 2017 | Mar. 19, 2017 | Dec. 31, 2017 | Dec. 31, 2016 |
Related Party Transaction [Line Items] | ||||
Underwriting compensation percentage on gross offering price from shares of primary offering | 8.50% | 9.75% | ||
Investment services fee | $ 400,000 | $ 100,000 | ||
Cash distributions paid | $ 400,306 | $ 56,510 | ||
Stock dividends issued | 3,000 | 3,000 | ||
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 | |||
Investment service fee as percentage of purchase price of properties | 2.25% | |||
Investment services fee | $ 0 | |||
Operating expenses in excess of limitation | 500,000 | |||
Operating expenses in excess of limitation approved | 700,000 | |||
Personnel expenses of affiliates | $ 84,000 | |||
Cash distributions paid | $ 100,000 | $ 47,000 | ||
Stock dividends issued | 4,100 | 2,500 | ||
Class A Common Stock | ||||
Related Party Transaction [Line Items] | ||||
Stock dividends issued | 7,675 | 2,689 | ||
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 | 13,495 | 449 | ||
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 | 622 | 79 | ||
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 | 4.75% | |||
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) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | ||
Fees for services rendered: | |||
Advisor personnel expenses | $ 400,000 | $ 100,000 | |
Expense Support Agreement | |||
Fees for services rendered: | |||
Asset management fees | 130,366 | ||
Advisor personnel expenses | [1] | 436,403 | |
Total fees for services rendered | 566,769 | ||
Asset management fees | 130,366 | ||
Advisor personnel expenses | [1] | 436,403 | |
Total fees for services rendered | $ 566,769 | ||
Then-current NAV | $ 10.06 | ||
Then-current NAV | $ 10.06 | ||
Expense Support Agreement | Restricted Stock | |||
Fees for services rendered: | |||
Restricted Stock shares | [2] | 56,339 | |
Restricted Stock shares | [2] | 56,339 | |
[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 December 31, 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 - 51
Related Party Arrangements - Summary of Fees for Services Rendered Expected to be Settled in Restricted Stock (Parenthetical) (Details) | 12 Months Ended |
Dec. 31, 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 ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | ||
Related Party Transaction [Line Items] | |||
Distribution and stockholder servicing fees | $ 798,525 | $ 154,733 | |
Acquisition fees and expenses | 2,500 | ||
Total reimbursable expenses | 1,013,415 | 206,868 | |
Investment service fees | [1] | 796,500 | |
Asset management fees | [2] | 130,366 | |
Total reimbursable expenses, net | 1,940,281 | 206,868 | |
Operating expenses, Unpaid amount | [3] | 197,235 | 73,545 |
Total reimbursable expenses due | 197,235 | 73,545 | |
Related parties, Unpaid amount | 197,235 | 73,545 | |
Reimbursable Expense | |||
Related Party Transaction [Line Items] | |||
Operating expenses | [3] | 983,493 | 206,868 |
Acquisition fees and expenses | [4] | 29,922 | |
Dealer Manager | |||
Related Party Transaction [Line Items] | |||
Selling commissions | [5] | 666,532 | 97,022 |
Dealer Manager fees | [5] | 619,123 | 99,883 |
Distribution and stockholder servicing fees | [5] | 757,609 | 157,225 |
Total offering expenses | 2,043,264 | 354,130 | |
Selling commissions, Unpaid amount | [5] | 10,000 | 6,550 |
Dealer Manager fees, Unpaid amount | [5] | 18,150 | 5,823 |
Distribution and stockholder servicing fees, Unpaid amount | [5] | 798,524 | 154,733 |
Total offering expenses unpaid | $ 826,674 | $ 167,106 | |
[1] | For the year ended December 31, 2017, the Company incurred approximately $0.8 million in investment services fees all of which was capitalized and included in real estate investment properties, net in the accompanying consolidated balance sheets. No such fees were incurred for the year ended December 31, 2016. | ||
[2] | For the year ended December 31, 2017, the Company incurred approximately $0.1 million in asset management fees, all of which are expected to be settled in accordance with the terms of the Expense Support Agreement. No such fees were incurred for the year ended December 31, 2016. | ||
[3] | Amounts are recorded as general and administrative expenses in the accompanying consolidated statements of operations unless such amounts represent prepaid expenses, which are capitalized in the accompanying consolidated balance sheets. Amounts include approximately $0.4 million and $0.1 million of personnel expenses of affiliates of the Advisor for the years ended December 31, 2017 and 2016, respectively. | ||
[4] | Amounts are capitalized as a component of the cost of the assets acquired and allocated on a relative fair value basis. | ||
[5] | Amounts are recorded as stock issuance and offering costs in the accompanying consolidated statements of stockholders’ equity. |
Related Party Arrangements - 53
Related Party Arrangements - Fees and Expenses Incurred and Reimbursable to Affiliates and Related Parties (Parenthetical) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | ||
Related Party Transaction [Line Items] | |||
Advisor personnel expenses | $ 400,000 | $ 100,000 | |
Investment services fees | [1] | 796,500 | |
Investment service fees capitalized | 31,085,939 | ||
Asset management fees | [2] | 130,366 | |
Expense Support Agreement | |||
Related Party Transaction [Line Items] | |||
Advisor personnel expenses | [3] | 436,403 | |
Asset management fees | 100,000 | 0 | |
Investment Services Fees | |||
Related Party Transaction [Line Items] | |||
Investment services fees | 800,000 | $ 0 | |
Investment service fees capitalized | $ 800,000 | ||
[1] | For the year ended December 31, 2017, the Company incurred approximately $0.8 million in investment services fees all of which was capitalized and included in real estate investment properties, net in the accompanying consolidated balance sheets. No such fees were incurred for the year ended December 31, 2016. | ||
[2] | For the year ended December 31, 2017, the Company incurred approximately $0.1 million in asset management fees, all of which are expected to be settled in accordance with the terms of the Expense Support Agreement. No such fees were incurred for the year ended December 31, 2016. | ||
[3] | Amounts consist of personnel and related overhead costs of the Advisor or its affiliates (which, in general, are those expenses relating to the Company’s administration on an on-going basis) that are reimbursable by the Company. |
Equity - Additional Information
Equity - Additional Information (Details) - USD ($) | Jun. 01, 2018 | May 01, 2018 | Apr. 01, 2018 | Mar. 01, 2018 | Feb. 01, 2018 | Jan. 01, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Mar. 05, 2018 | Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 |
Class Of Stock [Line Items] | |||||||||||||
Aggregate proceeds from public offering | $ 31,400,000 | $ 6,600,000 | |||||||||||
Common stock, shares sold | 3,000,000 | 600,000 | |||||||||||
Subscription proceeds pursuant to the Reinvestment Plan | $ 391,900 | $ 3,000 | |||||||||||
Subscription proceeds pursuant to the Reinvestment Plan, shares | 39,200 | 300 | |||||||||||
Cash distributions declared net of class-specific expenses | $ 800,000 | $ 57,000 | |||||||||||
Cash distributions paid net of class-specific expenses | $ 800,000 | $ 57,000 | |||||||||||
Stock dividends declared | 22,000 | 22,000 | |||||||||||
Stock dividends issued | 3,000 | 3,000 | |||||||||||
Percentage of cash distributions considered as return on capital for income tax purposes | 100.00% | 100.00% | |||||||||||
Amount of distributions to stockholders considered as return of capital by the company | $ 0 | $ 0 | |||||||||||
Monthly cash distributions less class-specific expenses per share | $ 0.0480 | $ 0.0480 | |||||||||||
Monthly stock dividend, shares | $ 0.00100625 | ||||||||||||
Distributions to be paid and distributed date | Mar. 31, 2018 | ||||||||||||
Dividends payable, date declared | 2017-12 | 2017-12 | |||||||||||
Subsequent Event | |||||||||||||
Class Of Stock [Line Items] | |||||||||||||
Common stock, shares sold | 500,000 | ||||||||||||
Monthly cash distributions less class-specific expenses per share | $ 0.0480 | ||||||||||||
Monthly stock dividend, shares | $ 0.00100625 | ||||||||||||
Cash distribution and stock dividend declared date | Feb. 1, 2018 | Jan. 1, 2018 | |||||||||||
Dividends payable, date declared | 2018-03 | ||||||||||||
Scenario Forecast | |||||||||||||
Class Of Stock [Line Items] | |||||||||||||
Cash distribution and stock dividend declared date | Jun. 1, 2018 | May 1, 2018 | Apr. 1, 2018 | Mar. 1, 2018 | |||||||||
Distributions to be paid and distributed date | Jun. 30, 2018 | ||||||||||||
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 | 4,100 | 2,500 | |||||||||||
Advisor | Prior to Commencement of Offering | |||||||||||||
Class Of Stock [Line Items] | |||||||||||||
Aggregate proceeds from public offering | $ 200,000 | $ 200,000 | |||||||||||
Common stock, shares sold | 20,000 | 20,000 |
Income Taxes - Components of In
Income Taxes - Components of Income Tax Benefit (Expense) (Details) | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Current: | |
Federal | $ (111,000) |
State | (16,200) |
Total current expense | (127,200) |
Deferred: | |
Federal | 23,319 |
State | 5,788 |
Total deferred benefit | 29,107 |
Income tax expense | $ (98,093) |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Taxes [Line Items] | ||
US federal corporate tax rate | 35.00% | |
Scenario Plan | ||
Income Taxes [Line Items] | ||
US federal corporate tax rate | 21.00% |
Income Taxes - Significant Comp
Income Taxes - Significant Components of Deferred Tax Assets (Details) | Dec. 31, 2017USD ($) |
Income Tax Disclosure [Abstract] | |
Prepaid and other rent | $ 29,107 |
Deferred tax assets | $ 29,107 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Income Tax Expense (Details) | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Income Tax Disclosure [Abstract] | |
Tax benefit computed at federal statutory rate | $ 426,453 |
Impact of REIT election | (511,104) |
Effect of change in future tax rates | (3,030) |
State income tax expense | (10,412) |
Income tax expense | $ (98,093) |
Tax benefit computed at federal statutory rate | 35.00% |
Impact of REIT election | (41.90%) |
Effect of change in future tax rates | (0.25%) |
State income tax expense | (0.87%) |
Income tax expense | (8.02%) |
Selected Quarterly Financial 59
Selected Quarterly Financial Data (Unaudited) - Schedule of Selected Unaudited Quarterly Financial Data (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Selected Quarterly Financial Information [Line Items] | |||||||||
Total revenues | $ 1,130,248 | $ 1,095,696 | $ 1,071,441 | $ 11,430 | $ 3,308,815 | ||||
Operating loss | (122,817) | (99,164) | (175,188) | (231,794) | $ (219,059) | $ (93,439) | (628,963) | $ (312,498) | |
Net loss attributable to common stockholders | (365,823) | (307,906) | (391,681) | (251,120) | (231,859) | (110,588) | (1,316,530) | (342,447) | |
Class A Common Stock | |||||||||
Selected Quarterly Financial Information [Line Items] | |||||||||
Net loss attributable to common stockholders | $ (105,730) | $ (109,442) | $ (142,414) | $ (94,685) | $ (150,177) | $ (98,927) | $ (440,931) | $ (253,380) | |
Weighted average number of common shares outstanding (basic and diluted) | [1] | 763,951 | 687,782 | 518,619 | 377,773 | 311,838 | 289,416 | 584,653 | 301,272 |
Loss per share of common stock (basic and diluted) | $ (0.14) | $ (0.16) | $ (0.27) | $ (0.25) | $ (0.48) | $ (0.34) | $ (0.75) | $ (0.84) | |
Class T Common Stock | |||||||||
Selected Quarterly Financial Information [Line Items] | |||||||||
Net loss attributable to common stockholders | $ (242,627) | $ (189,163) | $ (240,634) | $ (153,460) | $ (77,029) | $ (9,092) | $ (832,661) | $ (81,792) | |
Weighted average number of common shares outstanding (basic and diluted) | [1] | 1,753,087 | 1,188,777 | 876,299 | 612,266 | 159,949 | 26,600 | 1,104,068 | 97,252 |
Loss per share of common stock (basic and diluted) | $ (0.14) | $ (0.16) | $ (0.27) | $ (0.25) | $ (0.48) | $ (0.34) | $ (0.75) | $ (0.84) | |
Class I Common Stock | |||||||||
Selected Quarterly Financial Information [Line Items] | |||||||||
Net loss attributable to common stockholders | $ (17,466) | $ (9,301) | $ (8,633) | $ (2,975) | $ (4,653) | $ (2,569) | $ (42,938) | $ (7,275) | |
Weighted average number of common shares outstanding (basic and diluted) | [1] | 126,198 | 58,451 | 31,440 | 11,868 | 9,661 | 7,516 | 56,934 | 8,650 |
Loss per share of common stock (basic and diluted) | $ (0.14) | $ (0.16) | $ (0.27) | $ (0.25) | $ (0.48) | $ (0.34) | $ (0.75) | $ (0.84) | |
[1] | For the purposes of determining the weighted average number of shares of common stock outstanding, stock dividends issued are treated as if such shares were outstanding as of July 11, 2016 (the date the Company commenced operations). |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) - USD ($) $ / shares in Units, shares in Millions | Jun. 01, 2018 | May 01, 2018 | Apr. 01, 2018 | Mar. 01, 2018 | Feb. 01, 2018 | Jan. 01, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Mar. 05, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Subsequent Event [Line Items] | ||||||||||||
Aggregate proceeds from offering | $ 24,437,278 | $ 6,132,100 | ||||||||||
Common stock, shares sold | 3 | 0.6 | ||||||||||
Dividends payable, date declared | 2017-12 | 2017-12 | ||||||||||
Monthly cash distributions per share | $ 0.0480 | $ 0.0480 | ||||||||||
Monthly stock dividend, shares | $ 0.00100625 | |||||||||||
Distributions to be paid and distributed date | Mar. 31, 2018 | |||||||||||
Scenario Forecast | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Cash distribution and stock dividend declared date | Jun. 1, 2018 | May 1, 2018 | Apr. 1, 2018 | Mar. 1, 2018 | ||||||||
Distributions to be paid and distributed date | Jun. 30, 2018 | |||||||||||
Subsequent Event | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Aggregate proceeds from offering | $ 5,100,000 | |||||||||||
Common stock, shares sold | 0.5 | |||||||||||
Dividends payable, date declared | 2018-03 | |||||||||||
Monthly cash distributions per share | $ 0.0480 | |||||||||||
Monthly stock dividend, shares | $ 0.00100625 | |||||||||||
Cash distribution and stock dividend declared date | Feb. 1, 2018 | Jan. 1, 2018 |
Schedule III-Real Estate And 61
Schedule III-Real Estate And Accumulated Depreciation (Detail) | 12 Months Ended | |
Dec. 31, 2017USD ($) | ||
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] | ||
Encumbrances | $ 19,500 | |
Initial Costs, Land & Land Improvements | 2,650 | |
Initial Costs, Building and Building Improvements | 28,109 | |
Costs Capitalized Subsequent to Acquisition, Land & Land Improvements | 33 | |
Gross Amounts at which Carried at Close of period, Land & Land Improvements | 2,683 | [1] |
Gross Amounts at which Carried at Close of period, Building & Building Improvements | 28,109 | [1] |
Total | 30,792 | [1] |
Accumulated Depreciation | (369) | |
Summer Vista Assisted Living | ||
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] | ||
Encumbrances | 13,900 | [2] |
Initial Costs, Land & Land Improvements | 2,269 | [2] |
Initial Costs, Building and Building Improvements | 17,612 | [2] |
Costs Capitalized Subsequent to Acquisition, Land & Land Improvements | 33 | [2] |
Gross Amounts at which Carried at Close of period, Land & Land Improvements | 2,302 | [1],[2] |
Gross Amounts at which Carried at Close of period, Building & Building Improvements | 17,612 | [1],[2] |
Total | 19,914 | [1],[2] |
Accumulated Depreciation | $ (369) | [2] |
Date of Construction | 2,016 | [2] |
Date Acquired | Mar. 31, 2017 | [2] |
Mid America Surgery Institute | ||
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] | ||
Encumbrances | $ 5,600 | [2] |
Initial Costs, Land & Land Improvements | 381 | [2] |
Initial Costs, Building and Building Improvements | 10,497 | [2] |
Gross Amounts at which Carried at Close of period, Land & Land Improvements | 381 | [1],[2] |
Gross Amounts at which Carried at Close of period, Building & Building Improvements | 10,497 | [1],[2] |
Total | $ 10,878 | [1],[2] |
Date of Construction | 2,007 | [2] |
Date Acquired | Dec. 27, 2017 | [2] |
[1] | The aggregate cost for federal income tax purposes is approximately $35.4 million. | |
[2] | Buildings and building improvements are depreciated over 39 and 15 years, respectively. |
Schedule III-Real Estate And 62
Schedule III-Real Estate And Accumulated Depreciation Transactions in Real Estate and Accumulated Depreciation (Detail) | 12 Months Ended | |
Dec. 31, 2017USD ($) | ||
Real Estate And Accumulated Depreciation Disclosure [Abstract] | ||
Acquisitions | $ 30,759 | |
Improvements | 33 | |
Real Estate gross carrying value, Ending Balance | 30,792 | [1] |
Depreciation | 369 | |
Real Estate accumulated depreciation, Ending Balance | $ 369 | |
[1] | The aggregate cost for federal income tax purposes is approximately $35.4 million. |
Schedule III-Real Estate And 63
Schedule III-Real Estate And Accumulated Depreciation (Parenthetical) (Detail) $ in Millions | 12 Months Ended |
Dec. 31, 2017USD ($) | |
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] | |
Aggregate cost for federal income tax purpose | $ 35.4 |
Building | |
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] | |
Buildings and improvements useful life | 39 years |
Building Improvements | |
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] | |
Buildings and improvements useful life | 15 years |