Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | May 07, 2019 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | CHPII | |
Entity Registrant Name | CNL Healthcare Properties II, Inc. | |
Entity Central Index Key | 0001648383 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | true | |
Entity Common Stock, Shares Outstanding | 4,899,139 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
ASSETS | ||
Real estate investment properties, net | $ 42,606,568 | $ 42,969,180 |
Assets held for sale, net | 14,172,336 | 14,202,202 |
Cash | 7,617,179 | 8,003,576 |
Intangibles, net | 1,240,867 | 1,497,809 |
Other assets | 289,453 | 382,637 |
Restricted cash | 290,368 | 233,971 |
Total assets | 66,216,771 | 67,289,375 |
Liabilities: | ||
Mortgage loans, net | 18,679,824 | 18,665,013 |
Liabilities associated with assets held for sale | 6,210,165 | 6,247,187 |
Accounts payable and accrued liabilities | 647,106 | 497,081 |
Other liabilities | 146,759 | 128,957 |
Due to related parties | 129,278 | 85,902 |
Total liabilities | 25,813,132 | 25,624,140 |
Commitments and contingencies (Note 10) | ||
Stockholders' equity: | ||
Preferred stock, $0.01 par value per share, 10,000,000 shares authorized; none issued or outstanding | ||
Capital in excess of par value | 48,039,220 | 48,039,220 |
Accumulated loss | (4,020,283) | (3,464,160) |
Accumulated distributions | (3,664,293) | (2,958,820) |
Total stockholders' equity | 40,403,639 | 41,665,235 |
Total liabilities and stockholders' equity | 66,216,771 | 67,289,375 |
Class A Common Stock | ||
Stockholders' equity: | ||
Common stock value | 48,995 | 48,995 |
Total stockholders' equity | $ 48,995 | $ 48,995 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - $ / shares | Mar. 31, 2019 | Dec. 31, 2018 |
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 | 4,899,139 | 4,899,139 |
Common stock, shares outstanding | 4,899,139 | 4,899,139 |
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 | 0 | 0 |
Common stock, shares outstanding | 0 | 0 |
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 | 0 | 0 |
Common stock, shares outstanding | 0 | 0 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Revenues: | ||
Resident fees and services | $ 2,198,350 | $ 1,124,525 |
Type of Revenue [Extensible List] | us-gaap:HealthCareResidentServiceMember | us-gaap:HealthCareResidentServiceMember |
Total revenues | $ 2,198,350 | $ 1,124,525 |
Operating expenses: | ||
Property operating expenses | 1,392,468 | 617,148 |
General and administrative expenses | 403,247 | 319,233 |
Acquisition fees and expenses | 818 | |
Property management fees | $ 109,747 | $ 73,962 |
Type of Cost, Good or Service [Extensible List] | us-gaap:ManagementServiceMember | us-gaap:ManagementServiceMember |
Depreciation and amortization | $ 670,181 | $ 323,724 |
Total operating expenses | 2,575,643 | 1,334,885 |
Operating loss | (377,293) | (210,360) |
Other income (expense): | ||
Interest and other income | 6,225 | 22 |
Interest expense and loan cost amortization | (257,569) | (181,084) |
Total other expense | (251,344) | (181,062) |
Loss before income taxes | (628,637) | (391,422) |
Income tax expense | (30,533) | (31,356) |
Loss from continuing operations | (659,170) | (422,778) |
Income from discontinued operations | 103,047 | 32,540 |
Net loss attributable to common stockholders | (556,123) | (390,238) |
Class A Common Stock | ||
Other income (expense): | ||
Net loss attributable to common stockholders | $ (556,123) | $ (95,926) |
Net loss per share of common stock outstanding (basic and diluted) | $ (0.11) | $ (0.12) |
Weighted average number of common shares outstanding (basic and diluted) | 4,899,139 | 825,185 |
Distributions declared per common share | $ 0.1440 | $ 0.1440 |
Class T Common Stock | ||
Other income (expense): | ||
Net loss attributable to common stockholders | $ (269,815) | |
Net loss per share of common stock outstanding (basic and diluted) | $ (0.12) | |
Weighted average number of common shares outstanding (basic and diluted) | 2,321,014 | |
Distributions declared per common share | $ 0.1178 | |
Class I Common Stock | ||
Other income (expense): | ||
Net loss attributable to common stockholders | $ (24,497) | |
Net loss per share of common stock outstanding (basic and diluted) | $ (0.12) | |
Weighted average number of common shares outstanding (basic and diluted) | 210,726 | |
Distributions declared per common share | $ 0.1312 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED) - USD ($) | Total | 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, 2017 | $ 26,509,932 | $ 28,984,932 | $ (1,658,977) | $ (846,200) | $ 8,080 | $ 20,492 | $ 1,605 |
Beginning Balance (in shares) at Dec. 31, 2017 | 808,011 | 2,049,223 | 160,490 | ||||
Subscriptions received for common stock, including distribution reinvestments | $ 7,187,473 | 7,180,587 | $ 290 | $ 5,672 | $ 924 | ||
Subscriptions received for common stock, including distribution reinvestments (in shares) | 700,000 | 28,955 | 567,249 | 92,413 | |||
Stock dividends issued | (97) | $ 24 | $ 67 | $ 6 | |||
Stock dividends issued (in shares) | 2,444 | 6,662 | 586 | ||||
Redemptions of common stock | $ (25,382) | (25,357) | $ (25) | ||||
Redemptions of common stock, shares | (2,358) | ||||||
Stock issuance and offering costs | (590,975) | (590,975) | |||||
Net loss | (390,238) | (390,238) | |||||
Cash distributions declared | (402,305) | (402,305) | |||||
Ending Balance at Mar. 31, 2018 | 32,288,505 | 35,549,090 | (2,049,215) | (1,248,505) | $ 8,394 | $ 26,206 | $ 2,535 |
Ending Balance (in shares) at Mar. 31, 2018 | 839,410 | 2,620,776 | 253,489 | ||||
Beginning Balance at Dec. 31, 2018 | $ 41,665,235 | 48,039,220 | (3,464,160) | (2,958,820) | $ 48,995 | ||
Beginning Balance (in shares) at Dec. 31, 2018 | 4,899,139 | 0 | 0 | ||||
Subscriptions received for common stock, including distribution reinvestments (in shares) | 0 | ||||||
Net loss | $ (556,123) | (556,123) | |||||
Cash distributions declared | (705,473) | (705,473) | |||||
Ending Balance at Mar. 31, 2019 | $ 40,403,639 | $ 48,039,220 | $ (4,020,283) | $ (3,664,293) | $ 48,995 | ||
Ending Balance (in shares) at Mar. 31, 2019 | 4,899,139 | 0 | 0 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Operating activities: | ||
Net cash flow provided by (used in) operating activities – continuing operations | $ 319,688 | $ (23,713) |
Net cash flow provided by operating activities – discontinued operations | 106,413 | 180,603 |
Net cash flows provided by operating activities | 426,101 | 156,890 |
Investing activities: | ||
Capital expenditures | (50,628) | (3,719) |
Net cash used in investing activities – continuing operations | (50,628) | (3,719) |
Net cash used in investing activities – discontinued operations | (6,911) | |
Net cash used in investing activities | (50,628) | (10,630) |
Financing activities: | ||
Subscriptions received for common stock through primary offering | 6,962,029 | |
Payment of underwriting compensation | (383,228) | |
Payment of cash distributions, net of distribution reinvestments | (705,473) | (176,860) |
Redemptions of common stock | 0 | (25,382) |
Payment of loan costs | (10,397) | |
Net cash flows (used in) provided by financing activities | (705,473) | 6,366,162 |
Net (decrease) increase in cash and restricted cash | (330,000) | 6,512,422 |
Cash and restricted cash at beginning of period, including assets held for sale | 8,237,547 | 12,421,919 |
Cash and restricted cash at end of period, including assets held for sale | $ 7,907,547 | 18,934,341 |
Amounts incurred but not paid (including amounts due to related parties): | ||
Selling commissions and Dealer Manager fees | 2,809 | |
Annual distribution and stockholder servicing fee | $ 1,031,613 |
Organization
Organization | 3 Months Ended |
Mar. 31, 2019 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Organization | 1. Organization CNL Healthcare Properties II, Inc. (“Company”) is a Maryland corporation that incorporated on July 10, 2015 and elected to be taxed as a real estate investment trust (“REIT”) for United States (“U.S.”) federal income tax purposes beginning with the year ended December 31, 2017. The Company is sponsored by CNL Financial Group, LLC (“Sponsor” or “CNL”) and is externally managed and advised by CHP II Advisors, LLC (“Advisor”), an affiliate of CNL. The Advisor provides advisory services to the Company relating to substantially all aspects of its investments and operations, including real estate acquisitions and dispositions, asset management and other operational matters. On March 2, 2016, pursuant to a registration statement on Form S-11 under the Securities Act of 1933, the Company commenced its initial public offering of up to $1.75 billion (“Primary Offering”), in any combination, of Class A, Class T and Class I shares of common stock on a “best efforts” basis, which meant that CNL Securities Corp. (“Dealer Manager”), an affiliate of the Sponsor, used its best efforts but was not required to sell any specific amount of shares. The Company also offered up to $250 million, in any combination, of Class A, Class T and Class I shares pursuant to its distribution reinvestment plan (“Reinvestment Plan” and, together with the Primary Offering, the “Offering”). The Company has contributed the net proceeds from its Offering to CHP II Partners, LP (“Operating Partnership”) in exchange for partnership interests. The Company owns substantially all of its assets either directly or indirectly through the Operating Partnership in which the Company is the sole limited partner and its wholly-owned subsidiary, CHP II GP, LLC, is the sole general partner. The Operating Partnership owns assets through: (1) a wholly-owned taxable REIT subsidiary (“TRS”), CHP II TRS Holding, Inc. (“TRS Holdings”) and (2) property owner subsidiaries, which are single purpose entities. On August 31, 2018, the Company’s board of directors approved the termination of its Offering and the suspension of its Reinvestment Plan, effective October 1, 2018. The Company also suspended its share redemption plan (“Redemption Plan”) and discontinued its stock dividends concurrently. In October 2018, the Company deregistered the unsold shares of its common stock under its previous registration statement on Form S-11. Through the close of its Offering, the Company had received aggregate proceeds of approximately $51.2 million (4.9 million shares), including approximately $1.2 million (0.1 million shares) of proceeds pursuant to the Reinvestment Plan. In 2018, the Company announced it had formed a special committee consisting solely of its independent directors (“Special Committee”) to consider possible strategic alternatives available to the Company, including, without limitation, (i) an orderly disposition of the Company’s assets or one or more of the Company’s asset classes and the distribution of the net sale proceeds thereof to the stockholders of the Company and (ii) a potential business combination or other transaction In March 2019, the Company entered into an asset purchase agreement (“Sale Agreement”) with HCP Medical Office Buildings, LLC related to the sale of Mid America Surgery for a gross sales price of $15.4 million (“MOB Sale”), subject to certain pro-rations and other adjustments as described in the Sale Agreement. The anticipated net sales proceeds of the MOB Sale are expected to exceed the net carrying value of Mid America Surgery. The Company completed the MOB Sale in May 2019; refer to Note 12. “Subsequent Events” for additional information. In March 2019, in connection with the exploration of strategic alternatives, the Company’s board of directors suspended monthly cash distributions to stockholders effective April 1, 2019. Accordingly, the Company’s board of directors does not currently intend to declare any regular distributions after the effective date of the suspension, though special distributions may be made from time to time from net sales proceeds received from the sale of properties. In addition, in March 2019, the Company’s board of directors and its Advisor agreed to terminate the Expense Support Agreement effective April 1, 2019; refer to Note 8. “Related Party Arrangements” for additional information. As of March 31, 2019, the Company owned three properties consisting of two seniors housing communities and one MOB, which has been classified as held for sale as further described in Note 6. “Assets and Associated Liabilities Held For Sale and Discontinued Operations.” The Company has leased its two seniors housing properties to single member limited liability companies wholly-owned by TRS Holdings, a subsidiary of the Company. TRS Holdings has engaged independent third-party managers under management agreements to operate the properties as permitted under the REIT Investment Diversification and Empowerment Act of 2007 (“RIDEA”) structures; whereas, its MOB has been leased on a net or modified gross basis to third-party tenants. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of Presentation and Consolidation — The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and note disclosures required by generally accepted accounting principles in the U.S. (“GAAP”). The unaudited condensed consolidated financial statements reflect all normal recurring adjustments, which, in the opinion of management, are necessary for the fair statement of the Company’s operating results for the interim period presented. Operating results for the three months ended March 31, 2019 may not be indicative of the results that may be expected for the year ending December 31, 2019. Amounts as of December 31, 2018 included in the unaudited condensed consolidated financial statements have been derived from audited consolidated financial statements as of that date but do not include all disclosures required by GAAP. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018. The accompanying unaudited condensed consolidated financial statements include the accounts of the Company, the Operating Partnership and its other subsidiaries. All material intercompany accounts and transactions have been eliminated in consolidation. Assets Held For Sale, net and Discontinued Operations — The Company determines to classify a property as held for sale once management has the authority to approve and commits to a plan to sell the property, the property is available for immediate sale, there is an active program to locate a buyer, the sale of the property is probable and the transfer of the property is expected to occur within one year. Upon the determination to classify a property as held for sale, the Company ceases recording further depreciation and amortization relating to the associated assets and those assets are measured at the lower of its carrying amount or fair value less disposition costs and are presented separately in the consolidated balance sheets for all periods presented. In addition, the Company classifies assets held for sale as discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on the Company’s operations and financial results. For any disposal(s) qualifying as discontinued operations, the Company allocates interest expense and loan cost amortization that directly relates to any mortgage loan(s) collateralized by properties classified as discontinued operations. Reclassifications – Certain amounts in the prior year’s condensed consolidated balance sheet, statement of operations and statement of cash flows have been reclassified to conform to the current year’s presentation, primarily related to the classification of the Company’s MOB property as held for sale and discontinued operations, with no effect on the other previously reported consolidated financial statements. Use of Estimates — The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts in the Company’s condensed consolidated financial statements and accompanying notes. Actual results could differ from those estimates. Adopted Accounting Pronouncements — In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“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 also requires qualitative and quantitative disclosures designed to give financial statement users additional information on the amount, timing, and uncertainty of cash flows arising from leases. In July 2018, the FASB issued ASU 2018-11, “Leases (Topic 842): Targeted Improvements,” which includes a practical expedient for lessors that allows 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. The Company elected the practical expedient and applied the guidance to all of the leases that qualified under the established criteria. In December 2018, the FASB issued ASU 2018-20, “Leases (Topic 842): Narrow-Scope Improvements for Lessors,” which addressed challenges encountered in determining certain lessor costs paid by the lessee directly to third parties by allowing lessors to exclude these costs from its variable lease payments. This amendment did not have a material impact on the Company’s financial statements and related disclosures as it conformed Accounting Standard Codification (“ASC”) 842 to the Company’s historical accounting under ASC 840. In March 2019, the FASB issued ASU 2019-01, “Leases (Topic 842): Codification Improvements,” which clarified the transition guidance related to interim disclosure requirements in the year of adoption. All of the ASC 842 ASUs are effective for annual reporting periods, and interim periods within those annual periods, beginning after December 15, 2018. 2. Summary of Significant Accounting Policies (continued) The Company adopted these ASUs on January 1, 2019 using a modified retrospective approach, the adoption of these ASUs did not have a material impact on the Company’s consolidated results of operations or cash flows. However, the adoption of these ASUs did impact the Company’s consolidated financial position for arrangements such as ground or other leases in which the Company is the lessee. More specifically, the adoption of ASC 842 resulted in the Company recording operating lease assets and liabilities on January 1, 2019. The following table provides additional details by financial statement line item of the adjusted presentation in the Company’s consolidated financial position: As Presented Effect of As Adjusted December 31, ASC 842 January 1, 2018 Adoption 2019 Other assets $ 382,637 $ 32,500 $ 415,137 Total assets $ 67,289,375 $ 32,500 $ 67,321,875 Other liabilities $ (128,957 ) $ (32,500 ) $ (161,457 ) Total liabilities $ (25,624,140 ) $ (32,500 ) $ (25,656,640 ) In addition, the Company reclassified approximately $1.5 million of below-market ground lease intangibles related to the Company’s MOB, Mid America Surgery, to operating lease assets as a result of adopting these ASUs on January 1, 2019. However, as further described in Note 6. “Assets and Associated Liabilities Held For Sale and Discontinued Operations,” Mid America Surgery was subsequently classified as held for sale and, therefore, there was no impact to assets held for sale, net as of March 31, 2019 since both intangibles and operating lease assets are grouped in a single financial statement line item. In June 2018, the FASB issued ASU 2018-07, “Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting,” which expands the scope to include share-based payment transactions for acquiring goods and services from nonemployees. The amendments specify that Topic 718 applies to all share-based payment transactions in which a grantor acquires goods or services to be used or consumed in a grantor’s own operations by issuing share-based payments. The amendments also clarify that this ASU does not apply to share-based payments used to provide financing to the issuer or awards granted in conjunction with selling of goods or services to customers as a part of a contract accounted for under Revenue from Contracts with Customers (Topic 606). The ASU is effective for annual reporting periods, and interim periods within those annual periods, beginning after December 15, 2018. The Company adopted this ASU prospectively on January 1, 2019; the adoption of which did not have a material impact on the Company’s consolidated results of operations or cash flows. |
Revenue
Revenue | 3 Months Ended |
Mar. 31, 2019 | |
Revenue From Contract With Customer [Abstract] | |
Revenue | 3. Revenue The following table presents disaggregated revenue related to the Company’s resident fees and services during the three months ended March 31, 2019 and 2018: Three Months Ended March 31, Type of Investment Number of Units Revenues Percentage of Revenues Resident fees and services: 2019 2018 2019 2018 2019 2018 Assisted living 125 63 $ 1,520,053 $ 818,006 69.1 % 72.8 % Memory care 50 20 654,492 292,786 29.8 % 26.0 % Other revenues ― ― 23,805 13,733 1.1 % 1.2 % 175 83 $ 2,198,350 $ 1,124,525 100.0 % 100.0 % |
Real Estate Assets, net
Real Estate Assets, net | 3 Months Ended |
Mar. 31, 2019 | |
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 March 31, 2019 and December 31, 2018, excluding assets held for sale, are as follows: March 31, December 31, 2019 2018 Land and land improvements $ 4,075,733 $ 4,075,733 Building and building improvements 38,700,052 38,700,052 Furniture, fixtures and equipment 1,923,587 1,872,959 Less: accumulated depreciation (2,092,804 ) (1,679,564 ) Real estate investment properties, net $ 42,606,568 $ 42,969,180 Depreciation expense on the Company’s real estate investment properties, net was approximately $0.4 million and $0.2 million for the three months ended March 31, 2019 and 2018, respectively. |
Intangibles, net
Intangibles, net | 3 Months Ended |
Mar. 31, 2019 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Intangibles, net | 5. Intangibles, net The gross carrying amount and accumulated amortization of the Company’s intangibles as of March 31, 2019 and December 31, 2018, excluding assets held for sale, are as follows: March 31, December 31, 2019 2018 In-place resident agreement intangibles $ 2,569,419 $ 2,569,419 Less: accumulated amortization (1,328,552 ) (1,071,610 ) Intangible assets, net $ 1,240,867 $ 1,497,809 For the three months ended March 31, 2019 and 2018, amortization on the Company’s intangibles was approximately $0.3 million and $0.1 million, respectively, all of which was included in depreciation and amortization. |
Assets and Associated Liabiliti
Assets and Associated Liabilities Held For Sale and Discontinued Operations | 3 Months Ended |
Mar. 31, 2019 | |
Real Estate Liabilities Associated With Assets Held For Development And Sale [Abstract] | |
Assets and Associated Liabilities Held For Sale and Discontinued Operations | 6. Assets and Associated Liabilities Held For Sale and Discontinued Operations In March 2019, the Company entered into a Sale Agreement with HCP Medical Office Buildings, LLC related to the MOB Sale. As of March 31, 2019, as part of executing on strategic alternatives, the Company had committed to a plan to sell its MOB, Mid America Surgery, and classified the property as held for sale. The Company believes the sale of Mid America Surgery would cause a strategic shift in the Company’s operations and, therefore, has classified the corresponding revenues and expenses for its MOB property as discontinued operations. As of March 31, 2019 and December 31, 2018, the amounts classified as assets held for sale and the liabilities associated with those assets held for sale consisted of the following: March 31, December 31, 2019 2018 Real estate investment properties, net $ 10,579,020 $ 10,603,833 Intangibles, net 1,962,515 3,485,818 Operating lease asset, net 1,501,024 ― Other assets 129,777 112,551 Assets held for sale, net $ 14,172,336 $ 14,202,202 Mortgage loan, net $ 5,541,058 $ 5,532,346 Accounts payable and accrued liabilities 343,725 391,735 Other liabilities 325,382 323,106 Liabilities associated with assets held for sale $ 6,210,165 $ 6,247,187 The following table is a summary of the Company’s income from discontinued operations for the three months ended March 31, 2019 and 2018: Three Months Ended March 31, 2019 2018 Revenues: Rental income and related revenues $ 342,272 $ 408,816 Operating expenses: Property operating expenses 111,685 171,233 General and administrative 559 451 Property management fees 7,928 10,050 Depreciation and amortization 43,793 130,694 Total operating expenses 163,965 312,428 Operating income 178,307 96,388 Other expense: Interest expense and loan cost amortization (75,260 ) (63,848 ) Total other expense (75,260 ) (63,848 ) Income before income taxes 103,047 32,540 Income tax expense ― ― Income from discontinued operations $ 103,047 $ 32,540 The Company completed the MOB Sale in May 2019; refer to Note 12. “Subsequent Events” for additional information. |
Indebtedness
Indebtedness | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Indebtedness | 7 . Indebtedness The Company had mortgage loans, excluding indebtedness associated with assets held for sale, of approximately $18.7 million as of March 31, 2019 and December 31, 2018. The fair market value of the Company’s mortgage loans, excluding assets held for sale, was approximately $18.9 million as of March 31, 2019 and December 31, 2018, which is based on then-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. |
Related Party Arrangements
Related Party Arrangements | 3 Months Ended |
Mar. 31, 2019 | |
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 connection with services provided to the Company, affiliates are entitled to the following fees: Dealer Manager — Through the termination of the Offering in October 2018, the Dealer Manager received 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 could be reallowed to participating broker dealers. In addition, for Class T shares sold in the Primary Offering, the Dealer Manager could choose the respective amounts of the commission and dealer manager fee, provided that the selling commission did not exceed 3.0% of the gross proceeds from the completed sale of such Class T shares. The Company paid 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 then-current gross offering price per Class T or Class I share. The Company recorded the annual distribution and stockholder servicing fees as a reduction to capital in excess of par value and measured 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 was relieved over time, as the fees were paid to the Dealer Manager. In connection with the close of the Offering effective October 1, 2018, certain underwriting compensation limits were met and, effective October 31, 2018, each Class T and Class I share automatically converted into a Class A share pursuant to the terms of the Company’s charter. The Class T and Class I shares converted into Class A shares on a one-for-one basis because the then-current estimated net asset value (“NAV”) per share of $10.06 was the same for all share classes. Effective October 31, 2018, Class T and Class I shares were no longer subject to class specific expenses upon conversion into Class A shares. The Company’s obligation to pay the remaining distribution and stockholder servicing fees liability of approximately $1.4 million to the Dealer Manager ceased effective October 31, 2018 upon the conversion of the Class T and Class I shares into Class A Shares. CNL Capital Markets, LLC — The Company will pay CNL Capital Markets, LLC, an affiliate of CNL, an annual fee payable monthly based on the average number of total investor accounts that are 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 — Pursuant to the Company’s advisory agreement, dated as of March 2, 2016, the Company paid the Advisor asset management fees in an amount equal to 0.80% per annum of average invested assets (“AUM Fee”). In March 2019, the Company’s advisory agreement was amended and restated to eliminate acquisition fees and dispositions fees as well as to reduce the AUM Fee to 0.40% per annum of average invested assets. The reduced AUM Fee is further subject and subordinate to an agreed upon hurdle relating to the total operating expenses (as described in the amended and restated advisory agreement) of the Company, though to the extent any portion of the AUM Fee is not paid as a result of total operating expenses exceeding the prescribed limits, it may be recovered by the Advisor if certain Company performance thresholds are subsequently met. The Company’s board of directors approved renewing the amended and restated advisory agreement through March 2020. 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 four consecutive fiscal quarters (“Expense Year”) unless approved by the independent directors. For the Expense Year ended March 31, 2019, the Company’s total operating expenses were in excess of this limitation by approximately $28,000. As of March 31, 2019, the Company had received cumulative approvals from its independent directors for total operating expenses in excess of this limitation of approximately $0.9 million. The Company’s independent directors determined that the higher relationship of operating expenses to average invested assets was justified based on unattained capital raise expectations, which limited the number of investments, and the cost of operating a public company. For each of the three months ended March 31, 2019 and 2018, the Company paid cash distributions of approximately $38,000 to the Advisor related to the Class A common stock held by the Advisor. In addition, for the three months ended March 31, 2018, the Company issued stock dividends of approximately 7,400 shares to the Advisor. There were no stock dividends for the three months ended March 31, 2019 as the Company discontinued its stock dividends in October 2018. Pursuant to an expense support arrangement, the Advisor agreed to accept payment in restricted stock in lieu of cash for services rendered, in the event that the Company does not achieve established distribution coverage targets (“Expense Support Agreement”). In exchange for services rendered and in consideration of the expense support provided under this arrangement, the Company issued, 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 NAV per share of the Class A common shares 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. In March 2019, the Company’s board of directors and the Advisor agreed to terminate the Expense Support Agreement effective April 1, 2019. The following fees for services rendered have been or are expected to be settled in the form of restricted stock pursuant to the Expense Support Agreement for the three months ended March 31, 2019 and 2018 and cumulatively as of March 31, 2019: Three Months Ended March 31, As of March 31, 2019 2018 2019 Fees for services rendered: Asset management fees $ 99,417 $ 70,800 $ 578,171 Advisor personnel expenses (1) 127,950 126,629 1,058,676 Total fees for services rendered $ 227,367 $ 197,429 $ 1,636,847 Then-current NAV $ 9.92 $ 10.06 $ 9.92 Restricted stock shares (2) 22,920 19,625 164,210 Cash distributions on restricted stock (3) $ 8,113 $ — $ 32,452 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 issued or expected to be issued to the Advisor as of March 31, 2019 pursuant to the Expense Support Agreement. No fair value was assigned to the restricted stock shares as the shares do not vest until a liquidity event is consummated and certain market conditions are achieved. In addition, the restricted stock shares will be treated as unissued for financial reporting purposes until the vesting criteria are met (3) The cash distributions on Restricted Stock shares issued have been recognized as compensation expense as declared and included in general and administrative expenses in the accompanying condensed consolidated statements of operations. 8. Related Party Arrangements (continued) The fees payable through the termination of the Offering in October 2018 to the Dealer Manager for the three months ended March 31, 2019 and 2018, and related amounts unpaid as of March 31, 2019 and December 31, 2018 are as follows: Three Months Ended Unpaid amounts as of (1) March 31, March 31, December 31, 2019 2018 2019 2018 Selling commissions (2) $ — $ 131,841 $ — $ — Dealer manager fees (2) ― 165,756 ― ― Distribution and stockholder servicing fees (2) ― 293,378 ― ― $ — $ 590,975 $ — $ — The expenses incurred by and reimbursable to the Company’s related parties, including amounts included in income from discontinued operations, for the three months ended March 31, 2019 and 2018, and related amounts unpaid as of March 31, 2019 and December 31, 2018 are as follows: Three Months Ended Unpaid amounts as of (1) March 31, March 31, December 31, 2019 2018 2019 2018 Reimbursable expenses: Operating expenses (3) $ 230,823 $ 274,844 $ 129,278 $ 85,902 Acquisition fees and expenses ― 901 ― ― 230,823 275,745 129,278 85,902 Asset management fees (4) 99,417 70,800 ― ― $ 330,240 $ 346,545 $ 129,278 $ 85,902 FOOTNOTES: (1) Amounts are recorded as due to related parties in the accompanying condensed consolidated balance sheets. (2) Amounts are recorded as stock issuance and offering costs in the accompanying condensed consolidated statements of stockholders’ equity. (3) Amounts are recorded as general and administrative expenses in the accompanying condensed consolidated statements of operations unless such amounts represent prepaid expenses, which are capitalized in the accompanying condensed consolidated balance sheets. For each of the three months ended March 31, 2019 and 2018, approximately $0.1 million of personnel expenses of affiliates of the Advisor have been or are expected to be settled in accordance with the terms of the Expense Support Agreement and as such our general and administrative expenses were reduced by approximately $0.1 million for each of the three months ended March 31, 2019 and 2018. (4) For each of the three months ended March 31, 2019 and 2018, the Company incurred asset management fees of approximately $0.1 million, all of which have been or are expected to be settled in accordance with the terms of the Expense Support Agreement and as such asset management fees were reduced by approximately $0.1 million. |
Equity
Equity | 3 Months Ended |
Mar. 31, 2019 | |
Equity [Abstract] | |
Equity | 9. Equity Subscription Proceeds — In October 2018, in light of the Company’s decision to terminate its Offering, the Company suspended the Reinvestment Plan and the Redemption Plan. As such, there were no subscriptions proceeds received for the three months ended March 31, 2019. For the three months ended March 31, 2018, the Company received subscription proceeds of approximately $7.0 million (0.7 million shares) and $0.2 million (0.02 million shares) through its Offering and Reinvestment Plan, respectively Distributions — In October 2018, in light of the Company’s decision to terminate its Offering, the Company suspended the Reinvestment Plan and discontinued the issuance of stock dividends concurrently. For the three months ended March 31, 2019 and 2018, the Company declared cash distributions of approximately $0.7 million and $0.4 million, respectively, of which approximately $0.7 million and $0.2 million, respectively, were paid in cash to stockholders. None of the cash distributions were reinvested during three months ended March 31, 2019 due to the suspension of the Reinvestment Plan. For the three months ended March 31, 2018, approximately $0.2 million was reinvested pursuant to the Reinvestment Plan In March 2019, in connection with the Company’s strategic alternatives discussed in Note 1. “Organization,” the Company’s board of directors suspended monthly cash distributions to stockholders effective April 1, 2019. Redemptions — In October 2018, in light of the Company’s decision to terminate its Offering, the Company suspended the Reinvestment Plan and the Redemption Plan. As such, there were no requests for the redemption of common stock during the three months ended March 31, 2019. During the three months ended March 31, 2018, the Company received requests for the redemption of common stock of approximately $25,000, all of which were approved for redemption at an average price of $10 per share |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 10 . Commitments and Contingencies From time to time, the Company may be a party to legal proceedings in the ordinary course of, or incidental to the normal course of, its business, including proceedings to enforce its contractual or statutory rights. While the Company cannot predict the outcome of these legal proceedings with certainty, based upon currently available information, the Company does not believe the final outcome of any pending or threatened legal proceeding will have a material adverse effect on its results of operations or financial condition. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 11 . Income Taxes The accompanying condensed consolidated financial statements include an interim tax provision for the three months ended March 31, 2019 and 2018. The components of income tax expense for the three months ended March 31, 2019 and 2018 are as follows: Three Months Ended March 31, 2019 2018 Current: Federal $ — $ (25,250 ) State ― (5,150 ) Total current expense ― (30,400 ) Deferred: Federal (25,300 ) (593 ) State (5,233 ) (363 ) Total deferred expense (30,533 ) (956 ) Income tax expense $ (30,533 ) $ (31,356 ) 11 . Income Taxes (continued) Deferred income taxes reflect the tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets as of March 31, 2019 and December 31, 2018 are as follows: March 31, 2019 December 31, 2018 Carryforwards of net operating loss $ 85,010 $ — Prepaid rent 35,768 30,533 Valuation allowance (120,778 ) ― Deferred tax assets, net $ — $ 30,533 A reconciliation of the income tax expense for the three months ended March 31, 2019 and 2018 computed at the statutory federal tax rate on income (loss) before income taxes is as follows: Three Months Ended March 31, 2019 2018 Tax benefit computed at federal statutory rate $ 132,014 21.0 % $ 82,199 21.0 % Impact of REIT election (126,781 ) (20.2 )% (108,042 ) (27.6 )% State income tax expense (5,233 ) (0.8 )% (5,513 ) (1.4 )% Impact of change in deferred tax asset 90,245 14.4 % ― ― % Impact of change in valuation allowance (120,778 ) (19.2 )% ― ― % Income tax expense $ (30,533 ) (4.8 )% $ (31,356 ) (8.0 )% 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. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | 1 2 . Subsequent Events In May 2019, the Company completed the MOB Sale and received net sales proceeds of approximately $15.4 million, which were used to pay off the Mid America Surgery loan of approximately $5.6 million. The net sales proceeds exceeded the net carrying value of the property comprising the MOB Sale. The remaining proceeds were used to strategically pay down debt secured by one of the Company’s two remaining seniors housing properties. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Consolidation | Basis of Presentation and Consolidation — The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and note disclosures required by generally accepted accounting principles in the U.S. (“GAAP”). The unaudited condensed consolidated financial statements reflect all normal recurring adjustments, which, in the opinion of management, are necessary for the fair statement of the Company’s operating results for the interim period presented. Operating results for the three months ended March 31, 2019 may not be indicative of the results that may be expected for the year ending December 31, 2019. Amounts as of December 31, 2018 included in the unaudited condensed consolidated financial statements have been derived from audited consolidated financial statements as of that date but do not include all disclosures required by GAAP. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018. The accompanying unaudited condensed consolidated financial statements include the accounts of the Company, the Operating Partnership and its other subsidiaries. All material intercompany accounts and transactions have been eliminated in consolidation. |
Assets Held For Sale, net and Discontinued Operations | Assets Held For Sale, net and Discontinued Operations — The Company determines to classify a property as held for sale once management has the authority to approve and commits to a plan to sell the property, the property is available for immediate sale, there is an active program to locate a buyer, the sale of the property is probable and the transfer of the property is expected to occur within one year. Upon the determination to classify a property as held for sale, the Company ceases recording further depreciation and amortization relating to the associated assets and those assets are measured at the lower of its carrying amount or fair value less disposition costs and are presented separately in the consolidated balance sheets for all periods presented. In addition, the Company classifies assets held for sale as discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on the Company’s operations and financial results. For any disposal(s) qualifying as discontinued operations, the Company allocates interest expense and loan cost amortization that directly relates to any mortgage loan(s) collateralized by properties classified as discontinued operations. |
Reclassifications | Reclassifications – Certain amounts in the prior year’s condensed consolidated balance sheet, statement of operations and statement of cash flows have been reclassified to conform to the current year’s presentation, primarily related to the classification of the Company’s MOB property as held for sale and discontinued operations, with no effect on the other previously reported consolidated financial statements. |
Use of Estimates | Use of Estimates — The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts in the Company’s condensed consolidated financial statements and accompanying notes. Actual results could differ from those estimates. |
Adopted Accounting Pronouncements | Adopted Accounting Pronouncements — In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“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 also requires qualitative and quantitative disclosures designed to give financial statement users additional information on the amount, timing, and uncertainty of cash flows arising from leases. In July 2018, the FASB issued ASU 2018-11, “Leases (Topic 842): Targeted Improvements,” which includes a practical expedient for lessors that allows 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. The Company elected the practical expedient and applied the guidance to all of the leases that qualified under the established criteria. In December 2018, the FASB issued ASU 2018-20, “Leases (Topic 842): Narrow-Scope Improvements for Lessors,” which addressed challenges encountered in determining certain lessor costs paid by the lessee directly to third parties by allowing lessors to exclude these costs from its variable lease payments. This amendment did not have a material impact on the Company’s financial statements and related disclosures as it conformed Accounting Standard Codification (“ASC”) 842 to the Company’s historical accounting under ASC 840. In March 2019, the FASB issued ASU 2019-01, “Leases (Topic 842): Codification Improvements,” which clarified the transition guidance related to interim disclosure requirements in the year of adoption. All of the ASC 842 ASUs are effective for annual reporting periods, and interim periods within those annual periods, beginning after December 15, 2018. 2. Summary of Significant Accounting Policies (continued) The Company adopted these ASUs on January 1, 2019 using a modified retrospective approach, the adoption of these ASUs did not have a material impact on the Company’s consolidated results of operations or cash flows. However, the adoption of these ASUs did impact the Company’s consolidated financial position for arrangements such as ground or other leases in which the Company is the lessee. More specifically, the adoption of ASC 842 resulted in the Company recording operating lease assets and liabilities on January 1, 2019. The following table provides additional details by financial statement line item of the adjusted presentation in the Company’s consolidated financial position: As Presented Effect of As Adjusted December 31, ASC 842 January 1, 2018 Adoption 2019 Other assets $ 382,637 $ 32,500 $ 415,137 Total assets $ 67,289,375 $ 32,500 $ 67,321,875 Other liabilities $ (128,957 ) $ (32,500 ) $ (161,457 ) Total liabilities $ (25,624,140 ) $ (32,500 ) $ (25,656,640 ) In addition, the Company reclassified approximately $1.5 million of below-market ground lease intangibles related to the Company’s MOB, Mid America Surgery, to operating lease assets as a result of adopting these ASUs on January 1, 2019. However, as further described in Note 6. “Assets and Associated Liabilities Held For Sale and Discontinued Operations,” Mid America Surgery was subsequently classified as held for sale and, therefore, there was no impact to assets held for sale, net as of March 31, 2019 since both intangibles and operating lease assets are grouped in a single financial statement line item. In June 2018, the FASB issued ASU 2018-07, “Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting,” which expands the scope to include share-based payment transactions for acquiring goods and services from nonemployees. The amendments specify that Topic 718 applies to all share-based payment transactions in which a grantor acquires goods or services to be used or consumed in a grantor’s own operations by issuing share-based payments. The amendments also clarify that this ASU does not apply to share-based payments used to provide financing to the issuer or awards granted in conjunction with selling of goods or services to customers as a part of a contract accounted for under Revenue from Contracts with Customers (Topic 606). The ASU is effective for annual reporting periods, and interim periods within those annual periods, beginning after December 15, 2018. The Company adopted this ASU prospectively on January 1, 2019; the adoption of which did not have a material impact on the Company’s consolidated results of operations or cash flows. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
ASC 842 | |
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | |
Summary of Additional Details by Financial Statement Line Item Adjusted | The following table provides additional details by financial statement line item of the adjusted presentation in the Company’s consolidated financial position: As Presented Effect of As Adjusted December 31, ASC 842 January 1, 2018 Adoption 2019 Other assets $ 382,637 $ 32,500 $ 415,137 Total assets $ 67,289,375 $ 32,500 $ 67,321,875 Other liabilities $ (128,957 ) $ (32,500 ) $ (161,457 ) Total liabilities $ (25,624,140 ) $ (32,500 ) $ (25,656,640 ) |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Revenue From Contract With Customer [Abstract] | |
Schedule of Disaggregated Revenue for Resident Fees and Services | The following table presents disaggregated revenue related to the Company’s resident fees and services during the three months ended March 31, 2019 and 2018: Three Months Ended March 31, Type of Investment Number of Units Revenues Percentage of Revenues Resident fees and services: 2019 2018 2019 2018 2019 2018 Assisted living 125 63 $ 1,520,053 $ 818,006 69.1 % 72.8 % Memory care 50 20 654,492 292,786 29.8 % 26.0 % Other revenues ― ― 23,805 13,733 1.1 % 1.2 % 175 83 $ 2,198,350 $ 1,124,525 100.0 % 100.0 % |
Real Estate Assets, net (Tables
Real Estate Assets, net (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Real Estate [Abstract] | |
Schedule of Real Estate Assets | The gross carrying amount and accumulated depreciation of the Company’s real estate assets as of March 31, 2019 and December 31, 2018, excluding assets held for sale, are as follows: March 31, December 31, 2019 2018 Land and land improvements $ 4,075,733 $ 4,075,733 Building and building improvements 38,700,052 38,700,052 Furniture, fixtures and equipment 1,923,587 1,872,959 Less: accumulated depreciation (2,092,804 ) (1,679,564 ) Real estate investment properties, net $ 42,606,568 $ 42,969,180 |
Intangibles, net (Tables)
Intangibles, net (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Schedule of Gross Carrying Amount and Accumulated Amortization of Intangibles Excluding Assets Held for Sale | The gross carrying amount and accumulated amortization of the Company’s intangibles as of March 31, 2019 and December 31, 2018, excluding assets held for sale, are as follows: March 31, December 31, 2019 2018 In-place resident agreement intangibles $ 2,569,419 $ 2,569,419 Less: accumulated amortization (1,328,552 ) (1,071,610 ) Intangible assets, net $ 1,240,867 $ 1,497,809 |
Assets and Associated Liabili_2
Assets and Associated Liabilities Held For Sale and Discontinued Operations (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Real Estate Liabilities Associated With Assets Held For Development And Sale [Abstract] | |
Schedule of Assets Classified as Held for Sale and Liabilities Associated with Those Assets Held for Sale | As of March 31, 2019 and December 31, 2018, the amounts classified as assets held for sale and the liabilities associated with those assets held for sale consisted of the following: March 31, December 31, 2019 2018 Real estate investment properties, net $ 10,579,020 $ 10,603,833 Intangibles, net 1,962,515 3,485,818 Operating lease asset, net 1,501,024 ― Other assets 129,777 112,551 Assets held for sale, net $ 14,172,336 $ 14,202,202 Mortgage loan, net $ 5,541,058 $ 5,532,346 Accounts payable and accrued liabilities 343,725 391,735 Other liabilities 325,382 323,106 Liabilities associated with assets held for sale $ 6,210,165 $ 6,247,187 |
Schedule of Disposal Groups Including Discontinued Operations Income Statement | The following table is a summary of the Company’s income from discontinued operations for the three months ended March 31, 2019 and 2018: Three Months Ended March 31, 2019 2018 Revenues: Rental income and related revenues $ 342,272 $ 408,816 Operating expenses: Property operating expenses 111,685 171,233 General and administrative 559 451 Property management fees 7,928 10,050 Depreciation and amortization 43,793 130,694 Total operating expenses 163,965 312,428 Operating income 178,307 96,388 Other expense: Interest expense and loan cost amortization (75,260 ) (63,848 ) Total other expense (75,260 ) (63,848 ) Income before income taxes 103,047 32,540 Income tax expense ― ― Income from discontinued operations $ 103,047 $ 32,540 |
Related Party Arrangements (Tab
Related Party Arrangements (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Related Party Arrangement, Fees and Expenses Incurred By, Reimbursable, Settled and Paid | The expenses incurred by and reimbursable to the Company’s related parties, including amounts included in income from discontinued operations, for the three months ended March 31, 2019 and 2018, and related amounts unpaid as of March 31, 2019 and December 31, 2018 are as follows: Three Months Ended Unpaid amounts as of (1) March 31, March 31, December 31, 2019 2018 2019 2018 Reimbursable expenses: Operating expenses (3) $ 230,823 $ 274,844 $ 129,278 $ 85,902 Acquisition fees and expenses ― 901 ― ― 230,823 275,745 129,278 85,902 Asset management fees (4) 99,417 70,800 ― ― $ 330,240 $ 346,545 $ 129,278 $ 85,902 FOOTNOTES: (1) Amounts are recorded as due to related parties in the accompanying condensed consolidated balance sheets. (2) Amounts are recorded as stock issuance and offering costs in the accompanying condensed consolidated statements of stockholders’ equity. (3) Amounts are recorded as general and administrative expenses in the accompanying condensed consolidated statements of operations unless such amounts represent prepaid expenses, which are capitalized in the accompanying condensed consolidated balance sheets. For each of the three months ended March 31, 2019 and 2018, approximately $0.1 million of personnel expenses of affiliates of the Advisor have been or are expected to be settled in accordance with the terms of the Expense Support Agreement and as such our general and administrative expenses were reduced by approximately $0.1 million for each of the three months ended March 31, 2019 and 2018. (4) For each of the three months ended March 31, 2019 and 2018, the Company incurred asset management fees of approximately $0.1 million, all of which have been or are expected to be settled in accordance with the terms of the Expense Support Agreement and as such asset management fees were reduced by approximately $0.1 million. |
Dealer Manager | |
Related Party Arrangement, Fees and Expenses Incurred By, Reimbursable, Settled and Paid | 8. Related Party Arrangements (continued) The fees payable through the termination of the Offering in October 2018 to the Dealer Manager for the three months ended March 31, 2019 and 2018, and related amounts unpaid as of March 31, 2019 and December 31, 2018 are as follows: Three Months Ended Unpaid amounts as of (1) March 31, March 31, December 31, 2019 2018 2019 2018 Selling commissions (2) $ — $ 131,841 $ — $ — Dealer manager fees (2) ― 165,756 ― ― Distribution and stockholder servicing fees (2) ― 293,378 ― ― $ — $ 590,975 $ — $ — |
Expense Support Agreement | |
Related Party Arrangement, Fees and Expenses Incurred By, Reimbursable, Settled and Paid | The following fees for services rendered have been or are expected to be settled in the form of restricted stock pursuant to the Expense Support Agreement for the three months ended March 31, 2019 and 2018 and cumulatively as of March 31, 2019: Three Months Ended March 31, As of March 31, 2019 2018 2019 Fees for services rendered: Asset management fees $ 99,417 $ 70,800 $ 578,171 Advisor personnel expenses (1) 127,950 126,629 1,058,676 Total fees for services rendered $ 227,367 $ 197,429 $ 1,636,847 Then-current NAV $ 9.92 $ 10.06 $ 9.92 Restricted stock shares (2) 22,920 19,625 164,210 Cash distributions on restricted stock (3) $ 8,113 $ — $ 32,452 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 issued or expected to be issued to the Advisor as of March 31, 2019 pursuant to the Expense Support Agreement. No fair value was assigned to the restricted stock shares as the shares do not vest until a liquidity event is consummated and certain market conditions are achieved. In addition, the restricted stock shares will be treated as unissued for financial reporting purposes until the vesting criteria are met (3) The cash distributions on Restricted Stock shares issued have been recognized as compensation expense as declared and included in general and administrative expenses in the accompanying condensed consolidated statements of operations. |
Income Taxes (Tables)
Income Taxes (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Components of Income Tax Expense | The components of income tax expense for the three months ended March 31, 2019 and 2018 are as follows: Three Months Ended March 31, 2019 2018 Current: Federal $ — $ (25,250 ) State ― (5,150 ) Total current expense ― (30,400 ) Deferred: Federal (25,300 ) (593 ) State (5,233 ) (363 ) Total deferred expense (30,533 ) (956 ) Income tax expense $ (30,533 ) $ (31,356 ) |
Significant Components of Deferred Tax Assets | Significant components of the Company’s deferred tax assets as of March 31, 2019 and December 31, 2018 are as follows: March 31, 2019 December 31, 2018 Carryforwards of net operating loss $ 85,010 $ — Prepaid rent 35,768 30,533 Valuation allowance (120,778 ) ― Deferred tax assets, net $ — $ 30,533 |
Reconciliation of Income Tax Expense | A reconciliation of the income tax expense for the three months ended March 31, 2019 and 2018 computed at the statutory federal tax rate on income (loss) before income taxes is as follows: Three Months Ended March 31, 2019 2018 Tax benefit computed at federal statutory rate $ 132,014 21.0 % $ 82,199 21.0 % Impact of REIT election (126,781 ) (20.2 )% (108,042 ) (27.6 )% State income tax expense (5,233 ) (0.8 )% (5,513 ) (1.4 )% Impact of change in deferred tax asset 90,245 14.4 % ― ― % Impact of change in valuation allowance (120,778 ) (19.2 )% ― ― % Income tax expense $ (30,533 ) (4.8 )% $ (31,356 ) (8.0 )% |
Organization - Additional Infor
Organization - Additional Information (Details) | 1 Months Ended | 3 Months Ended | ||
Mar. 31, 2019USD ($)Property | Mar. 31, 2019USD ($)Propertyshares | Mar. 31, 2018USD ($)shares | Mar. 02, 2016USD ($) | |
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | ||||
Aggregate offering proceeds | $ 6,962,029 | |||
Common stock, shares sold | shares | 0 | 700,000 | ||
Number of properties owned | Property | 3 | 3 | ||
Seniors Housing Communities | ||||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | ||||
Number of properties owned | Property | 2 | 2 | ||
MOB | ||||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | ||||
Number of properties owned | Property | 1 | 1 | ||
Expense Support Agreement | ||||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | ||||
Agreement effective termination date | Apr. 1, 2019 | |||
Medical Office Building, Mid America Surgery Institute | Discontinued Operations, Held-for-sale | Sale Agreement | HCP Medical Office Buildings, LLC | ||||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | ||||
Gross sales price of properties | $ 15,400,000 | |||
Initial Public Offering | ||||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | ||||
Common stock, value authorized | $ 1,750,000,000 | |||
Aggregate offering proceeds | $ 51,200,000 | |||
Common stock, shares sold | shares | 4,900,000 | |||
Reinvestment Plan | ||||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | ||||
Common stock, value authorized | $ 250,000,000 | |||
Aggregate offering proceeds | $ 1,200,000 | |||
Common stock, shares sold | shares | 100,000 |
Summary of Siginificant Account
Summary of Siginificant Accounting Policies - Summary of Additional Details by Financial Statement Line Item Adjusted (Details) - USD ($) | Mar. 31, 2019 | Jan. 01, 2019 | Dec. 31, 2018 |
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | |||
Other assets | $ 289,453 | $ 382,637 | |
Total assets | 66,216,771 | 67,289,375 | |
Other liabilities | (146,759) | (128,957) | |
Total liabilities | $ (25,813,132) | $ (25,624,140) | |
ASC 842 | |||
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | |||
Other assets | $ 415,137 | ||
Total assets | 67,321,875 | ||
Other liabilities | (161,457) | ||
Total liabilities | (25,656,640) | ||
ASC 842 | Effect of ASC 842 Adoption | |||
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | |||
Other assets | 32,500 | ||
Total assets | 32,500 | ||
Other liabilities | (32,500) | ||
Total liabilities | $ (32,500) |
Summary of Siginificant Accou_2
Summary of Siginificant Accounting Policies - Additional Information (Details) $ in Millions | Jan. 01, 2019USD ($) |
Below-Market Ground Lease | ASC 842 | |
Summary Of Significant Accounting Policies [Line Items] | |
Reclassification to operating lease assets | $ 1.5 |
Revenue - Schedule of Disaggreg
Revenue - Schedule of Disaggregated Revenue for Resident Fees and Services (Details) | 3 Months Ended | |
Mar. 31, 2019USD ($)ResidentialUnit | Mar. 31, 2018USD ($)ResidentialUnit | |
Disaggregation Of Revenue [Line Items] | ||
Resident fees and services: Number of Units | ResidentialUnit | 175 | 83 |
Resident fees and services: Revenues | $ 2,198,350 | $ 1,124,525 |
Resident fees and services: Percentage of Revenues | 100.00% | 100.00% |
Assisted Living | ||
Disaggregation Of Revenue [Line Items] | ||
Resident fees and services: Number of Units | ResidentialUnit | 125 | 63 |
Resident fees and services: Revenues | $ 1,520,053 | $ 818,006 |
Resident fees and services: Percentage of Revenues | 69.10% | 72.80% |
Memory Care | ||
Disaggregation Of Revenue [Line Items] | ||
Resident fees and services: Number of Units | ResidentialUnit | 50 | 20 |
Resident fees and services: Revenues | $ 654,492 | $ 292,786 |
Resident fees and services: Percentage of Revenues | 29.80% | 26.00% |
Other Revenues | ||
Disaggregation Of Revenue [Line Items] | ||
Resident fees and services: Revenues | $ 23,805 | $ 13,733 |
Resident fees and services: Percentage of Revenues | 1.10% | 1.20% |
Real Estate Assets, net - Sched
Real Estate Assets, net - Schedule of Real Estate Assets (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Real Estate [Abstract] | ||
Land and land improvements | $ 4,075,733 | $ 4,075,733 |
Building and building improvements | 38,700,052 | 38,700,052 |
Furniture, fixtures and equipment | 1,923,587 | 1,872,959 |
Less: accumulated depreciation | (2,092,804) | (1,679,564) |
Real estate investment properties, net | $ 42,606,568 | $ 42,969,180 |
Real Estate Assets, net - Addit
Real Estate Assets, net - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Real Estate Investment Properties | ||
Real Estate Properties [Line Items] | ||
Depreciation expense | $ 0.4 | $ 0.2 |
Intangibles, net - Schedule of
Intangibles, net - Schedule of Gross Carrying Amount and Accumulated Amortization of Intangibles Excluding Assets Held for Sale (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Goodwill And Intangible Assets Disclosure [Abstract] | ||
In-place resident agreement intangibles | $ 2,569,419 | $ 2,569,419 |
Less: accumulated amortization | (1,328,552) | (1,071,610) |
Intangible assets, net | $ 1,240,867 | $ 1,497,809 |
Intangibles, net - Additional I
Intangibles, net - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Depreciation And Amortization | ||
Finite Lived Intangible Assets And Liabilities [Line Items] | ||
Amortization expense on intangible assets | $ 0.3 | $ 0.1 |
Assets and Associated Liabili_3
Assets and Associated Liabilities Held for Sale and Discontinued Operations - Schedule of Assets Classified as Held for Sale and Liabilities Associated with Those Assets Held for Sale (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Long Lived Assets Held For Sale [Line Items] | ||
Assets held for sale, net | $ 14,172,336 | $ 14,202,202 |
Liabilities associated with assets held for sale | 6,210,165 | 6,247,187 |
Medical Office Building, Mid America Surgery Institute | Discontinued Operations, Held-for-sale | ||
Long Lived Assets Held For Sale [Line Items] | ||
Real estate investment properties, net | 10,579,020 | 10,603,833 |
Intangibles, net | 1,962,515 | 3,485,818 |
Operating lease asset, net | 1,501,024 | |
Other assets | 129,777 | 112,551 |
Assets held for sale, net | 14,172,336 | 14,202,202 |
Mortgage loan, net | 5,541,058 | 5,532,346 |
Accounts payable and accrued liabilities | 343,725 | 391,735 |
Other liabilities | 325,382 | 323,106 |
Liabilities associated with assets held for sale | $ 6,210,165 | $ 6,247,187 |
Assets and Associated Liabili_4
Assets and Associated Liabilities Held For Sale And Discontinued Operations - Schedule of Disposal Groups Including Discontinued Operations Income Statement (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Other expense: | ||
Income from discontinued operations | $ 103,047 | $ 32,540 |
Medical Office Building, Mid America Surgery Institute | Discontinued Operations, Held-for-sale | ||
Revenues: | ||
Rental income and related revenues | 342,272 | 408,816 |
Operating expenses: | ||
Property operating expenses | 111,685 | 171,233 |
General and administrative | 559 | 451 |
Property management fees | 7,928 | 10,050 |
Depreciation and amortization | 43,793 | 130,694 |
Total operating expenses | 163,965 | 312,428 |
Operating income | 178,307 | 96,388 |
Other expense: | ||
Interest expense and loan cost amortization | (75,260) | (63,848) |
Total other expense | (75,260) | (63,848) |
Income before income taxes | 103,047 | 32,540 |
Income from discontinued operations | $ 103,047 | $ 32,540 |
Indebtedness - Additional Infor
Indebtedness - Additional Information (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
Debt Instrument [Line Items] | ||
Mortgage loans, excluding indebtedness associated with assets held for sale | $ 18.7 | $ 18.7 |
Level 3 | ||
Debt Instrument [Line Items] | ||
Mortgage loans excluding assets held for sale, fair market value | $ 18.9 | $ 18.9 |
Related Party Arrangements - Ad
Related Party Arrangements - Additional Information (Details) | 1 Months Ended | 3 Months Ended | |||
Mar. 31, 2019USD ($) | Oct. 31, 2018 | Mar. 31, 2019USD ($)Quarter$ / sharesshares | Mar. 31, 2018USD ($)$ / sharesshares | Mar. 20, 2019 | |
Related Party Transaction [Line Items] | |||||
Conversion of stock, description | The Class T and Class I shares converted into Class A shares on a one-for-one basis because the then-current estimated net asset value (“NAV”) per share of $10.06 was the same for all share classes. | ||||
Then-current estimated NAV per share | $ / shares | $ 10.06 | ||||
Distribution and stockholder servicing fees liability | $ 1,400,000 | $ 1,400,000 | |||
Percentage of AUM fee equal to advisor asset management fees, paid | 0.80% | ||||
Reduction in AUM fee percentage of average invested assets | 0.40% | ||||
Operating expenses reimbursement percentage of average invested assets | 2.00% | ||||
Operating expenses reimbursement percentage of net income | 25.00% | ||||
No. of consecutive fiscal quarters of net income calculation for operating expensess reimbursement | Quarter | 4 | ||||
Operating expenses in excess of limitation | $ 28,000 | ||||
Operating expenses in excess of limitation approved | 900,000 | ||||
Cash distributions paid | $ 705,473 | $ 176,860 | |||
Expense Support Agreement | |||||
Related Party Transaction [Line Items] | |||||
Then-current estimated NAV per share | $ / shares | $ 9.92 | $ 10.06 | |||
Agreement effective termination date | Apr. 1, 2019 | ||||
Advisor | |||||
Related Party Transaction [Line Items] | |||||
Stock dividends issued (in shares) | shares | 0 | 7,400 | |||
Class A Common Stock | |||||
Related Party Transaction [Line Items] | |||||
Stock dividends issued (in shares) | shares | 2,444 | ||||
Class A Common Stock | Advisor | |||||
Related Party Transaction [Line Items] | |||||
Cash distributions paid | $ 38,000 | $ 38,000 | |||
Class T Common Stock | |||||
Related Party Transaction [Line Items] | |||||
Distribution and stockholder servicing fee | 1.00% | ||||
Stock dividends issued (in shares) | shares | 6,662 | ||||
Class I Common Stock | |||||
Related Party Transaction [Line Items] | |||||
Distribution and stockholder servicing fee | 0.50% | ||||
Stock dividends issued (in shares) | shares | 586 | ||||
Maximum | Class A Common Stock | |||||
Related Party Transaction [Line Items] | |||||
Selling commission and dealer manager fee | 8.50% | ||||
Maximum | Class T Common Stock | |||||
Related Party Transaction [Line Items] | |||||
Selling commission and dealer manager fee | 4.75% | ||||
Selling commission | 3.00% |
Related Party Arrangements - Su
Related Party Arrangements - Summary of Fees for Services Rendered Expected to be Settled in Restricted Stock (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | ||
Fees for services rendered: | |||
Asset management fees | [1] | $ 99,417 | $ 70,800 |
Then-current NAV | $ 10.06 | ||
Expense Support Agreement | |||
Fees for services rendered: | |||
Asset management fees | $ 578,171 | ||
Advisor personnel expenses | [2] | 1,058,676 | |
Total fees for services rendered | 1,636,847 | ||
Asset management fees | 99,417 | 70,800 | |
Advisor personnel expenses | [2] | 127,950 | 126,629 |
Total fees for services rendered | $ 227,367 | $ 197,429 | |
Then-current NAV | $ 9.92 | ||
Then-current NAV | $ 9.92 | $ 10.06 | |
Expense Support Agreement | Restricted Stock | |||
Fees for services rendered: | |||
Restricted stock shares | [3] | 164,210 | |
Cash distributions on restricted stock | [4] | $ 32,452 | |
Restricted stock shares | [3] | 22,920 | 19,625 |
Cash distributions on restricted stock | [4] | $ 8,113 | |
[1] | For each of the three months ended March 31, 2019 and 2018, the Company incurred asset management fees of approximately $0.1 million, all of which have been or are expected to be settled in accordance with the terms of the Expense Support Agreement and as such asset management fees were reduced by approximately $0.1 million. | ||
[2] | Amounts consist of personnel and related overhead costs of the Advisor or its affiliates (which, in general, are those expenses relating to the Company’s administration on an on-going basis) that are reimbursable by the Company. | ||
[3] | Represents restricted stock shares issued or expected to be issued to the Advisor as of March 31, 2019 pursuant to the Expense Support Agreement. No fair value was assigned to the restricted stock shares as the shares do not vest until a liquidity event is consummated and certain market conditions are achieved. In addition, the restricted stock shares will be treated as unissued for financial reporting purposes until the vesting criteria are met. | ||
[4] | The cash distributions on Restricted Stock shares issued have been recognized as compensation expense as declared and included in general and administrative expenses in the accompanying condensed consolidated statements of operations. |
Related Party Arrangements - _2
Related Party Arrangements - Summary of Fees for Services Rendered Expected to be Settled in Restricted Stock (Parenthetical) (Details) | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Related Party Transactions [Abstract] | |
Restricted stock fair value | $ 0 |
Related Party Arrangements - Fe
Related Party Arrangements - Fees and Expenses Incurred and Reimbursable to Affiliates and Related Parties (Details) - USD ($) | 3 Months Ended | |||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | ||
Related Party Transaction [Line Items] | ||||
Distribution and stockholder servicing fees | $ 1,031,613 | |||
Acquisition fees and expenses | 818 | |||
Total reimbursable expenses | $ 230,823 | 275,745 | ||
Asset management fees | [1] | 99,417 | 70,800 | |
Total reimbursable expenses, net | 330,240 | 346,545 | ||
Operating expenses, Unpaid amount | [2],[3] | 129,278 | $ 85,902 | |
Total reimbursable expenses due | [2] | 129,278 | 85,902 | |
Related parties, Unpaid amount | [2] | 129,278 | $ 85,902 | |
Reimbursable Expense | ||||
Related Party Transaction [Line Items] | ||||
Operating expenses | [3] | $ 230,823 | 274,844 | |
Acquisition fees and expenses | 901 | |||
Dealer Manager | ||||
Related Party Transaction [Line Items] | ||||
Selling commissions | [4] | 131,841 | ||
Dealer manager fees | [4] | 165,756 | ||
Distribution and stockholder servicing fees | [4] | 293,378 | ||
Total offering expenses | $ 590,975 | |||
[1] | For each of the three months ended March 31, 2019 and 2018, the Company incurred asset management fees of approximately $0.1 million, all of which have been or are expected to be settled in accordance with the terms of the Expense Support Agreement and as such asset management fees were reduced by approximately $0.1 million. | |||
[2] | Amounts are recorded as due to related parties in the accompanying condensed consolidated balance sheets. | |||
[3] | Amounts are recorded as general and administrative expenses in the accompanying condensed consolidated statements of operations unless such amounts represent prepaid expenses, which are capitalized in the accompanying condensed consolidated balance sheets. For each of the three months ended March 31, 2019 and 2018, approximately $0.1 million of personnel expenses of affiliates of the Advisor have been or are expected to be settled in accordance with the terms of the Expense Support Agreement and as such our general and administrative expenses were reduced by approximately $0.1 million for each of the three months ended March 31, 2019 and 2018. | |||
[4] | Amounts are recorded as stock issuance and offering costs in the accompanying condensed consolidated statements of stockholders’ equity. |
Related Party Arrangements - _3
Related Party Arrangements - Fees and Expenses Incurred and Reimbursable to Affiliates and Related Parties (Parenthetical) (Details) - Expense Support Agreement - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Related Party Transaction [Line Items] | ||
Advisor personnel expenses | $ 0.1 | $ 0.1 |
Reduction in general and administrative expenses | 0.1 | 0.1 |
Asset management fees | 0.1 | $ 0.1 |
Reduction in asset management fees | $ 0.1 |
Equity - Additional Information
Equity - Additional Information (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Stockholders Equity Note [Abstract] | ||
Subscription proceeds pursuant to the Reinvestment Plan | $ 0 | $ 200,000 |
Subscription proceeds pursuant to the Reinvestment Plan, shares | 0 | 20,000 |
Proceeds from public offering | $ 0 | $ 7,000,000 |
Common stock, shares sold | 0 | 700,000 |
Cash distributions declared | $ 705,473 | $ 402,305 |
Cash distributions paid | 705,473 | 176,860 |
Redemptions of common stock | $ 0 | $ 25,382 |
Redemption of common stock, per share | $ 10 |
Income Taxes - Components of In
Income Taxes - Components of Income Tax Expense (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Current: | ||
Federal | $ (25,250) | |
State | (5,150) | |
Total current expense | (30,400) | |
Deferred: | ||
Federal | $ (25,300) | (593) |
State | (5,233) | (363) |
Total deferred expense | (30,533) | (956) |
Income tax expense | $ (30,533) | $ (31,356) |
Income Taxes - Significant Comp
Income Taxes - Significant Components of Deferred Tax Assets (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Income Tax Disclosure [Abstract] | ||
Carryforwards of net operating loss | $ 85,010 | |
Prepaid rent | 35,768 | $ 30,533 |
Valuation allowance | $ (120,778) | |
Deferred tax assets, net | $ 30,533 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Income Tax Expense (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
Tax benefit computed at federal statutory rate | $ 132,014 | $ 82,199 |
Impact of REIT election | (126,781) | (108,042) |
State income tax expense | (5,233) | (5,513) |
Impact of change in deferred tax asset | 90,245 | |
Impact of change in valuation allowance | (120,778) | |
Income tax expense | $ (30,533) | $ (31,356) |
Tax benefit computed at federal statutory rate | 21.00% | 21.00% |
Impact of REIT election | (20.20%) | (27.60%) |
State income tax expense | (0.80%) | (1.40%) |
Impact of change in deferred tax asset | 14.40% | |
Impact of change in valuation allowance | (19.20%) | |
Income tax expense | (4.80%) | (8.00%) |
Subsequent Events - Additional
Subsequent Events - Additional Information (Detail) $ in Millions | May 10, 2019USD ($)Property | Mar. 31, 2019Property |
Subsequent Event [Line Items] | ||
Number of properties owned | Property | 3 | |
Subsequent Event | ||
Subsequent Event [Line Items] | ||
Repayment of debt | $ | $ 5.6 | |
Subsequent Event | Seniors Housing Properties | ||
Subsequent Event [Line Items] | ||
Number of properties owned | Property | 2 | |
Medical Office Building, Mid America Surgery Institute | Subsequent Event | Discontinued Operations, Held-for-sale | ||
Subsequent Event [Line Items] | ||
Net sales proceeds | $ | $ 15.4 |