Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Nov. 10, 2017 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 | |
Entity Registrant Name | Rich Uncles Real Estate Investment Trust I | |
Entity Central Index Key | 1,672,754 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 8,340,712 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Real estate investments: | ||
Land | $ 29,896,957 | $ 27,738,010 |
Buildings and improvements | 97,837,513 | 72,141,786 |
Tenant origination and absorption costs | 12,699,134 | 9,380,693 |
Total real estate investments, cost | 140,433,604 | 109,260,489 |
Accumulated depreciation and amortization | (7,793,419) | (3,797,990) |
Total real estate investments, net | 132,640,185 | 105,462,499 |
Cash and cash equivalents | 6,088,327 | 12,341,682 |
Restricted cash | 462,140 | 1,123,470 |
Tenant receivables | 1,568,874 | 731,690 |
Above-market lease intangibles, net | 826,012 | 249,967 |
Due from affiliates | 17,269 | 48,950 |
Purchase and other deposits | 0 | 1,250,000 |
Interest rate swap derivatives | 192,659 | 180,759 |
Other assets | 33,070 | 18,553 |
TOTAL ASSETS | 141,828,536 | 121,407,570 |
LIABILITIES AND SHAREHOLDERS' EQUITY | ||
Mortgage note payable, net | 62,500,062 | 38,705,103 |
Accounts payable, accrued expenses and other liabilities | 1,421,901 | 923,249 |
Sales deposit liability (Note 4) | 1,000,000 | 1,000,000 |
Share repurchase payable | 953,289 | 592,511 |
Below-market leases, net | 4,184,747 | 4,841,757 |
Due to affiliates | 34,861 | 644,277 |
Interest rate swap derivatives | 71,462 | 106,840 |
TOTAL LIABILITIES | 70,166,322 | 46,813,737 |
Redeemable common stock | 591,783 | 1,229,644 |
Common stock $0.01 par value, 10,000,000 shares authorized, 8,325,594 shares issued and outstanding as of September 30, 2017 and 8,249,204 shares issued and outstanding as of December 31, 2016 | 83,256 | 82,492 |
Additional paid-in-capital | 81,677,265 | 80,637,051 |
Cumulative distributions and net losses | (10,690,090) | (7,355,354) |
TOTAL SHAREHOLDERS' EQUITY | 71,070,431 | 73,364,189 |
Commitments and contingencies (Note 10) | ||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ 141,828,536 | $ 121,407,570 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2017 | Dec. 31, 2016 |
Common Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 |
Common Stock, Shares Authorized | 10,000,000 | 10,000,000 |
Common Stock, Shares, Issued | 8,325,594 | 8,249,204 |
Common Stock, Shares, Outstanding | 8,325,594 | 8,249,204 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Revenues: | ||||
Rental income | $ 2,776,529 | $ 1,745,456 | $ 7,797,168 | $ 3,786,860 |
Tenant recoveries | 501,325 | 172,433 | 1,714,903 | 376,389 |
Total revenue | 3,277,854 | 1,917,889 | 9,512,071 | 4,163,249 |
Expenses: | ||||
Expense reimbursements/fees to affiliates (Note 9) | 234,585 | 385,260 | 590,178 | 1,078,886 |
General and administrative | 236,179 | 349,504 | 623,962 | 1,884,801 |
Depreciation and amortization | 1,481,521 | 945,335 | 4,151,949 | 2,093,966 |
Interest expense | 733,811 | 124,606 | 1,956,754 | 1,059,278 |
Property expenses | 602,584 | 174,528 | 1,616,988 | 432,484 |
Acquisition costs | 0 | 59,600 | 0 | 135,822 |
Total expenses | 3,288,680 | 2,038,833 | 8,939,831 | 6,685,237 |
Other income: | ||||
Interest income | 0 | 70 | 838 | 121 |
Gain on sale of real estate investment property, net (Note 5) | 0 | 0 | 747,957 | 0 |
Other non-operating income | 21,295 | 0 | 21,295 | 0 |
Total other income | 21,295 | 70 | 770,090 | 121 |
Net income (loss) | $ 10,469 | $ (120,874) | $ 1,342,330 | $ (2,521,867) |
Net income (loss) per share, basic and diluted | $ 0 | $ (0.21) | $ 0.16 | $ (0.41) |
Weighted-average number of common shares outstanding, basic and diluted | 8,365,137 | 8,123,880 | 8,354,141 | 6,166,637 |
Dividends declared per common share | $ 0.1875 | $ 0.1875 | $ 0.5625 | $ 0.5625 |
Condensed Consolidated Stateme5
Condensed Consolidated Statement of Shareholders' Equity - 9 months ended Sep. 30, 2017 - USD ($) | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Cumulative Distributions and Net Losses [Member] |
Balance at Dec. 31, 2016 | $ 73,364,189 | $ 82,492 | $ 80,637,051 | $ (7,355,354) |
Balance (in shares) at Dec. 31, 2016 | 8,249,204 | |||
Issuance of common stock | 3,278,324 | $ 3,278 | 3,275,046 | 0 |
Issuance of common stock (in shares) | 327,833 | |||
Dividends declared | (4,677,066) | $ 0 | 0 | (4,677,066) |
Common stock awarded for services | 106,000 | $ 106 | 105,894 | 0 |
Common stock awarded for services (in shares) | 10,600 | |||
Repurchase of common stock | (2,620,429) | $ (2,620) | (2,617,809) | 0 |
Repurchase of common stock (in shares) | (262,043) | |||
Net income | 1,342,330 | $ 0 | 0 | 1,342,330 |
Reclassification from redeemable common stock | 277,083 | 0 | 277,083 | 0 |
Balance at Sep. 30, 2017 | $ 71,070,431 | $ 83,256 | $ 81,677,265 | $ (10,690,090) |
Balance (in shares) at Sep. 30, 2017 | 8,325,594 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net income (loss) | $ 1,342,330 | $ (2,521,867) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation and amortization | 4,151,949 | 2,093,966 |
Common stock shares awarded for services | 106,000 | 57,431 |
Straight-line rents | (488,560) | (386,750) |
Amortization of deferred financing costs | 224,383 | 88,371 |
Amortization of above-market lease | 23,096 | 16,776 |
Amortization of below-market leases | (657,010) | (310,262) |
Distributions from earnings in limited partnerships | 0 | 21,193 |
Gain on sale of real estate investment, net | (747,957) | 0 |
Unrealized (losses) gain on interest rate swaps | (47,278) | 462,557 |
Expensed organization and offering costs | 98,349 | 1,562,602 |
Expensed acquisition fees and costs | 0 | 913,689 |
Changes in operating assets and liabilities: | ||
Tenant receivables | (368,834) | 136,510 |
Other assets | (14,904) | (24,533) |
Accounts payable, accrued expenses and other liabilities | 763,820 | 471,881 |
Due from affiliates | (17,269) | 0 |
Due to affiliates | (459,017) | (55,368) |
Net cash provided by operating activities | 3,909,098 | 2,302,242 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Acquisition of real estate investments | (30,699,222) | (39,231,597) |
Additions to real estate investments | (1,501,764) | 0 |
Payment of acquisition fees and costs | (622,319) | (880,766) |
Payment of buyer holdback | (250,000) | 0 |
Refundable purchase deposits | (250,000) | (5,655,250) |
Proceeds from sale of real estate investment property | 3,196,480 | 0 |
Distributions from sales proceeds in limited partnerships | 0 | 1,230,858 |
Net cash used in investing activities | (30,126,825) | (44,536,755) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from mortgage notes payable | 24,865,612 | 15,715,000 |
Cash held in escrow from mortgage financing | 0 | 4,296,000 |
Repayments of mortgage notes payable | (788,348) | (182,427) |
Refundable loan deposits | (85,380) | 0 |
Repayments of unsecured credit facility | 0 | (8,044,432) |
Payments of deferred financing costs | (558,723) | (665,046) |
Proceeds from sale of an interest in real property recorded as a financing transaction | 0 | 1,000,000 |
Proceeds from issuance of common stock | 0 | 47,599,714 |
Payment of offering costs | (110,948) | (1,444,407) |
Repurchase of common stock | (2,620,429) | (1,779,170) |
Dividends paid to common shareholders | (1,398,742) | (696,461) |
Net cash provided by financing activities | 19,303,042 | 55,798,771 |
NET (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | (6,914,685) | 13,564,258 |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF PERIOD | 13,465,152 | 2,102,868 |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD | 6,550,467 | 15,667,126 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||
Cash paid for interest | 1,661,822 | 431,859 |
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES: | ||
Reclassification from (to) redeemable common stock | 277,083 | (1,714,673) |
(Decrease)/increase in share redemptions payable | (360,778) | 596,588 |
Common stock issued through dividend reinvestment plan | 3,278,324 | 1,806,488 |
Purchase deposits applied to acquisition of real estate | 1,500,000 | 4,809,250 |
Security deposits assumed and prorations from acquisitions | $ 107,029 | $ 290,751 |
BUSINESS AND ORGANIZATION
BUSINESS AND ORGANIZATION | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Business Description and Basis of Presentation [Text Block] | NOTE 1. BUSINESS AND ORGANIZATION Rich Uncles Real Estate Investment Trust I (the “Company”) was formed on March 7, 2012. The Company is an unincorporated association under the laws of the State of California and is treated as a real estate investment trust (“REIT”). From April 2012 until July 20, 2016 (“Termination Date”), the Company was engaged in an offering of its shares of common stock. The Company continues to sell its shares to existing shareholders under the Company’s dividend reinvestment plan (the “Plan”). The number of shares authorized for issuance under the Company’s dividend reinvestment plan is 3,000,000 Additionally, no later than the 10 th On April 29, 2016, the Company filed a registration statement on Form 10 with the Securities and Exchange Commission (the “SEC”) to register its common stock under the Securities Exchange Act of 1934 (“Exchange Act”), as amended. The Form 10 registration statement became effective on May 29, 2016. The Company was formed to primarily invest, directly or indirectly through investments in real estate owning entities, in single-tenant income-producing corporate properties located 80% in California and 20% in other states, which are leased to creditworthy tenants under long-term net leases. The Company’s goal is to generate current income for investors and long-term capital appreciation in the value of its properties. The Company holds its investments directly and/or through special purpose wholly owned limited liability companies or other subsidiaries. The Company holds its 70.14 The Company is externally managed by its advisor and sponsor, Rich Uncles, LLC (the “Advisor” or the “Sponsor”) whose members include Harold Hofer, Howard Makler, and Ray Wirta. Rich Uncles, LLC is a Delaware limited liability company registered to do business in California. The Company has entered into an agreement (the “Advisory Agreement”) with the Advisor. The current term of the Advisory Agreement ends on March 8, 2018. The Advisory Agreement may be renewed for an unlimited number of successive one-year periods upon the mutual consent of the Company and the Advisor. The Advisor may terminate the Advisory Agreement for any reason and without penalty upon 60 days’ written notice; and we may terminate the Advisory Agreement for cause as defined in the Advisory Agreement. Upon termination of the Advisory Agreement, the Advisor may be entitled to a termination fee. This agreement entitles the Advisor to specified fees upon the provision of certain services with regard to the investment of funds in real estate investments, the management of those investments, among other services, and the disposition of investments, as well as entitles the Advisor to reimbursement of organization and offering costs incurred by the Advisor or Sponsor on behalf of the Company, such as expenses related to the offering, and certain costs incurred by the Advisor in providing services to the Company. In addition, the Advisor is entitled to certain other fees, including an incentive fee upon achieving certain performance goals, as detailed in the Advisory Agreement. The Advisor Agreement is terminable by a majority of the members of the Company’s independent Board of Trustees or the Advisor on 60 days’ written notice with or without cause. The Sponsor also serves as the sponsor for RW Holdings NNN REIT, Inc. The Company elected to be taxed as a REIT for U.S. federal income tax purposes under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended, beginning with the year ended December 31, 2014. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies [Text Block] | NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information as contained in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“Codification”), and in conjunction with rules and regulations of the SEC, including the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, the unaudited condensed consolidated financial statements do not include certain information and footnote disclosures required by GAAP for audited financial statements. In the opinion of management, the unaudited condensed consolidated financial statements reflect all adjustments which are of a normal and recurring nature, necessary for a fair and consistent presentation of the financial position and the results for the interim period presented. Operating results for the three and nine months ended September 30, 2017 are not necessarily indicative of the results that may be expected for the year ended December 31, 2017. The accompanying unaudited interim financial information should be read in conjunction with our December 31, 2016 audited consolidated financial statements included in our Annual Report on Form 10-K filed with the SEC on July 14, 2017. The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany balances and transactions are eliminated in consolidation. The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Cash equivalents may include cash and short-term investments. Cash, cash equivalents and restricted cash are stated at cost, which approximates fair value. The Company’s cash, cash equivalents and restricted cash balance may exceed federally insurable limits. The Company intends to mitigate this risk by depositing funds with major financial institutions; however these cash balances and restricted cash could be impacted if the underlying financial institutions fail or are subject to other adverse conditions in the financial markets. For all periods presented, other comprehensive income (loss) is the same as net income (loss). The Company enters into derivative instruments for risk management purposes to hedge its exposure to cash flow variability caused by changing interest rates on its variable rate mortgage notes payable. The Company records these derivative instruments at fair value in the accompanying consolidated balance sheets. The Company’s mortgage derivative instruments have not been designated as effective hedges and therefore the changes in fair value are recorded as gain or loss on derivative instruments in the accompanying consolidated statement of operations. The preparation of the unaudited condensed consolidated financial statements and the accompanying notes thereto in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the unaudited condensed consolidated financial statements and accompanying notes. Actual results may differ from those estimates. New Accounting Standards Issued and Adopted In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments In January 2017, the FASB issued Accounting Standards Update (“ASU”) No. 2017-01 , Business Combinations (Topic 805): Clarifying the Definition of a Business In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash New Accounting Standards Recently Issued and Not Yet Adopted In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) Revenue Recognition (Topic 605) Leases (Topic 840). Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) |
REAL ESTATE INVESTMENTS
REAL ESTATE INVESTMENTS | 9 Months Ended |
Sep. 30, 2017 | |
Real Estate [Abstract] | |
Real Estate Disclosure [Text Block] | NOTE 3. REAL ESTATE INVESTMENTS Tenant Origination Accumulated Total Real Land, and Depreciation Estate Acquisition Property Building and Absorption and Investments, Property Location Date Type Improvements Costs Amortization net Chase Bank & Great Clips Antioch, CA 8/22/2014 Retail $ 3,160,035 $ 668,200 $ (999,808) $ 2,828,427 Chevron Gas Station San Jose, CA 5/29/2015 Retail 2,775,000 - (92,061) 2,682,939 Levins Sacramento, CA 8/19/2015 Industrial 3,750,000 - (452,368) 3,297,632 Chevron Gas Station see Note 4) Roseville, CA 9/30/2015 Retail 2,800,000 - (195,112) 2,604,888 Island Pacific Supermarket Elk Grove, CA 10/1/2015 Retail 3,151,460 568,540 (335,584) 3,384,416 Dollar General Bakersfield, CA 11/11/2015 Retail 4,632,567 689,020 (360,074) 4,961,513 Rite Aid Lake Elsinore, CA 12/7/2015 Retail 6,663,446 968,286 (427,444) 7,204,288 PMI Preclinical San Carlos, CA 12/9/2015 Office 8,920,000 - (368,371) 8,551,629 EcoThrift Sacramento, CA 3/17/2016 Retail 4,486,993 541,729 (373,401) 4,655,321 GSA (MSHA) Vacaville, CA 4/5/2016 Office 2,998,232 456,645 (215,410) 3,239,467 PreK San Antonio San Antonio, TX 4/8/2016 Retail 11,851,540 1,593,451 (1,331,627) 12,113,364 Dollar Tree Morrow, GA 4/22/2016 Retail 1,295,879 206,844 (134,555) 1,368,168 Dinan Cars Morgan Hill, CA 6/21/2016 Industrial 4,651,845 654,155 (491,129) 4,814,871 Solar Turbines San Diego, CA 7/21/2016 Office 5,481,198 389,718 (331,607) 5,539,309 Amec Foster San Diego, CA 7/21/2016 Office 6,843,341 485,533 (228,572) 7,100,302 ITW Ripley El Dorado, CA 8/18/2016 Industrial 6,178,204 407,316 (239,018) 6,346,502 Dollar General Big Spring Big Spring, TX 11/4/2016 Retail 1,161,647 112,958 (26,577) 1,248,028 Gap Rocklin, CA 12/1/2016 Office 7,209,629 677,191 (252,877) 7,633,943 L-3 Communications San Diego, CA 12/23/2016 Office 10,799,500 961,107 (276,411) 11,484,196 Sutter Health Rancho Cordova, CA 3/15/2017 Office 24,256,632 2,870,258 (627,713) 26,499,177 Walgreens Santa Maria, CA 6/29/2017 Retail 4,667,322 448,183 (33,700) 5,081,805 $ 127,734,470 $ 12,699,134 $ (7,793,419) $ 132,640,185 Current Acquisitions Land, Building Tenant and Origination and Above- Property Acquisition Date Improvements Absorption Costs Market Leases Total Sutter Health 3/15/2017 $ 24,256,632 $ 2,870,258 $ 474,091 $ 27,600,981 Walgreens 6/29/2017 4,667,322 448,183 125,050 5,240,555 $ 28,923,954 $ 3,318,441 $ 599,141 $ 32,841,536 Purchase price $ 32,841,536 Purchase deposits applied (1,500,000) Acquisition fees and costs (642,314) Cash paid for acquisition of real estate investments $ 30,699,222 The purchase price allocations reflected in the accompanying unaudited Condensed Consolidated Financial Statements are based upon estimates and assumptions that are subject to change that may impact the fair value of the assets and liabilities above (including real estate investments, other assets and accrued liabilities). Property Lease Expirations Sutter Health 10/31/2025 Walgreens 3/31/2062 The Company recorded these acquisitions as asset acquisitions and capitalized $ 0 642,314 667,945 1,481,243 Operating Leases Net Carrying Percentage of Property and Location Value Total Assets Sutter Health $ 26,499,177 18.7 % The Company’s real estate properties are primarily leased to tenants under triple-net leases for which terms and expirations vary. The Company monitors the credit of all tenants to stay abreast of any material changes in credit quality. The Company monitors tenant credit by (1) reviewing the credit ratings of tenants (or their parent companies or lease guarantors) that are rated by national recognized rating agencies; (2) reviewing financial statements and related metrics and information that are publicly available or that are required to be provided pursuant to the lease; (3) monitoring new reports and press releases regarding the tenants (or their parent companies or lease guarantors), and their underlying business and industry; and (4) monitoring the timeliness of rent collections. At September 30, 2017 and December 31, 2016, tenant receivables included $ 1,013,624 545,274 October 1, 2017 through December 31, 2017 $ 2,576,996 2018 10,215,833 2019 10,412,042 2020 10,613,223 2021 9,645,095 2022 8,099,412 Thereafter 33,138,176 $ 84,700,777 Revenue Concentration Percentage of Annualized Annualized Property and Location Base Rent* Base Rent Sutter Health, CA $ 2,247,366 $ 21.90 % * Effective Annualized Base Rent is calculated based on the monthly base rent at September 30, 2017 for twelve months. As of September 30, 2017, no other tenant accounted for more than 10% of annualized base rent. Intangibles Tenant Origination and Absorption Above-Market Below-Market Costs Leases Leases Cost $ 12,699,134 $ 872,408 $ (5,349,908) Accumulated amortization (2,418,049) (46,396) 1,165,161 Net amount $ 10,281,085 $ 826,012 $ (4,184,747) Tenant Origination and Absorption Above-Market Below-Market Costs Leases Leases Remaining 2017 $ 438,274 $ 8,830 $ (218,739) 2018 1,567,392 35,320 (860,165) 2019 1,567,392 35,320 (860,165) 2022 1,567,392 35,320 (860,165) 2021 1,320,274 35,320 (667,541) 2022 1,239,699 35,320 (667,541) Thereafter 2,580,663 640,582 (50,431) $ 10,281,086 $ 826,012 $ (4,184,747) Weighted Average Remaining Amortization Period 8.60 years 35.77 years 5.66 years |
SALE OF INTEREST IN REAL ESTATE
SALE OF INTEREST IN REAL ESTATE INVESTMENT PROPERTY | 9 Months Ended |
Sep. 30, 2017 | |
Real Estate [Abstract] | |
Disposal Of Interest In Real Estate Property [Text Block] | NOTE 4. SALE OF INTEREST IN REAL ESTATE INVESTMENT PROPERTY In March 2016, the Company entered into a tenancy in common agreement and sold an undivided 29.86 1,000,000 13,751 41,252 13,751 31,779 29.86 |
SALE OF REAL ESATE INVESTMENT P
SALE OF REAL ESATE INVESTMENT PROPERTY | 9 Months Ended |
Sep. 30, 2017 | |
Real Estate [Abstract] | |
Sale Of Real Estate Investment Property Disclosure [Text Block] | NOTE 5. SALE OF REAL ESATE INVESTMENT PROPERTY On April 27, 2017, the Company sold the Chevron Gas Station property in Rancho Cordova, CA to a third party for $ 3,434,000 747,957 103,020 900,000 |
DEBT
DEBT | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Debt Disclosure [Text Block] | NOTE 6. DEBT Mortgage Notes Payable Deferred Effective Principal Financing Contractual Interest Loan Collateral Amount Costs Net Balance Interest Rate Rate (1) Maturity Chase Bank & Great Clips $ 1,897,567 $ (25,290) $ 1,872,277 4.37% fixed 4.37 % 2/5/2019 Levins 2,180,755 (39,923) $ 2,140,832 One-month LIBOR + 1.93% 3.74 % 1/5/2021 Island Pacific Supermarket 1,983,034 (41,601) $ 1,941,433 One-month LIBOR + 1.93% 3.74 % 1/5/2021 Dollar General Bakersfield 2,442,835 (62,791) $ 2,380,044 One-month LIBOR + 1.48% 3.38 % 3/5/2021 Rite Aid 3,848,087 (116,305) $ 3,731,782 One-month LIBOR + 1.50% 3.25 % 5/5/2021 PMI Preclinical 4,328,584 (144,132) $ 4,184,452 One-month LIBOR + 1.48% 3.38 % 3/5/2021 EcoThrift 2,780,646 (93,470) $ 2,687,176 One-month LIBOR + 1.21% 2.96 % 7/5/2021 GSA 1,891,549 (74,481) $ 1,817,068 One-month LIBOR + 1.25% 3.00 % 8/5/2021 PreK San Antonio 5,356,905 (172,589) $ 5,184,316 4.25% fixed 4.25 % 12/1/2021 Dinan Cars 2,829,619 (85,723) $ 2,743,896 One-month LIBOR + 2.27% 4.02 % 1/5/2022 ITW Sky Park 9,905,359 (267,420) $ 9,637,939 3.35% fixed 3.35 % 11/1/2026 L-3 Communications 5,493,320 (133,276) $ 5,360,044 4.5% fixed 4.50 % 4/1/2022 Gap 3,799,400 (95,600) $ 3,703,800 4.15% fixed 4.15 % 8/1/2023 Dollar General Big Spring (2) 634,046 (26,715) $ 607,331 4.69% fixed 4.69 % 3/13/2022 Sutter Health 14,724,205 (216,533) $ 14,507,672 4.5% fixed 4.50 % 3/9/2024 $ 64,095,911 $ (1,595,849) $ 62,500,062 (1) Contractual interest rate represents the interest rate in effect under the mortgage note payable as of September 30, 2017. Effective interest rate is calculated as the actual interest rate in effect as of September 30, 2017 (consisting of the contractual interest rate and the effect of the interest rate swap, if applicable). For further information regarding the Company’s derivative instruments, see Note 7. (2) The loan is cross-collateralized with the six Dollar General properties owned by RW Holdings NNN REIT, Inc. The deed of trust for the Company’s Dollar General Big Spring property and the deeds of trust for the RW Holdings NNN REIT, Inc.’s six Dollar General properties contain cross collateralization and cross default provisions. At September 30, 2017, the outstanding principal balance of the loans on RW Holdings NNN REIT, Inc.’s six Dollar General properties was $ 3,962,211 The mortgage notes payable provide for monthly payments of principal and interest. The mortgage loans payable have balloon payments that are due at loan maturity. Pursuant to the terms of the mortgage notes payable agreements, the Company is subject to certain financial loan covenants. The Company was in compliance with all terms and conditions of the mortgage loan agreements. October 1, 2017 through December 31, 2017 $ 302,025 2018 1,233,437 2019 3,092,776 2020 1,287,242 2021 23,879,817 2022 25,550,753 Thereafter 8,749,861 Total principal $ 64,095,911 Unsecured Credit Facility On January 13, 2015, the Company, entered into a credit agreement (the “Unsecured Credit Agreement”) with Pacific Mercantile Bank (“Lender”). The line of credit was paid off in January 2016 and no amounts were drawn on the line after January 2016. The Company canceled its line of credit with Pacific Mercantile Bank in June 2016. Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Mortgage Payable Interest expense incurred (1) $ 665,366 $ 183,948 $ 1,745,924 $ 422,506 Amortization of deferred financing costs 78,607 38,813 224,383 76,123 Unrealized loss (gain) on interest rate swaps (see Note 7) (23,913) (111,906) (54,805) 476,841 Unsecured Credit Facility Interest expense incurred - - - 39,779 Amortization of deferred financing costs - - - 12,250 Sales deposit liability (see Note 4) 13,751 13,751 41,252 31,779 Total interest expense $ 733,811 $ 124,606 $ 1,956,754 $ 1,059,278 (1) Includes $ 24,899 108,293 47,621 96,174 6,182 14,284 |
INTEREST RATE SWAP DERIVATIVES
INTEREST RATE SWAP DERIVATIVES | 9 Months Ended |
Sep. 30, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments and Hedging Activities Disclosure [Text Block] | NOTE 7. INTEREST RATE SWAP DERIVATIVES The primary goal of the Company’s risk management practices related to interest rate risk is to prevent changes in interest rates from adversely impacting the Company’s ability to achieve its investment return objectives. The Company does not enter into derivatives for speculative purposes. The Company enters into interest rate swaps as a fixed rate payer to mitigate its exposure to rising interest rates on its variable rate mortgage notes payable. The value of interest rate swaps is primarily impacted by interest rates, market expectations about interest rates, and the remaining life of the instrument. In general, increases in interest rates, or anticipated increases in interest rates, will increase the value of the fixed rate payer position and decrease the value of the variable rate payer position. As the remaining life of the interest rate swap decreases, the value of both positions will generally move towards zero. During 2016, the Company (or wholly owned LLCs) entered into interest rate swap agreements with amortizing notational amounts relating to eight of its mortgage notes payable. The following table summarizes the notional amount and other information related to the Company’s interest rate swaps as of September 30, 2017. September 30, 2017 December 31, 2016 Number Weighted Weighted Number Weighted Weighted of Reference Average Average of Reference Average Average Derivative Instru- Notional Rate as Fixed Remaining Instru- Notional Rate as Fixed Remaining Instruments ments Amount (1) of 6/30/2017 pay rate Term ments Amount (1) of 12/31/2016 pay rate Term Interest Rate Swap Derivatives 8 $ 22,285,109 One-month LIBOR/Fixed at 3.42% 4.09 years 8 $ 22,871,000 One-month LIBOR/Fixed at 3.28 % 4.17 years (1) The notional amount of the Company’s swaps decreases each month to correspond to the outstanding principal balance on the related mortgage. The minimum notional amount (outstanding principal balance at the maturity date) is $ 20,552,875 September 30, 2017 December 31, 2016 Number of Number of Derivative Instrument Balance Sheet Location Instruments Fair Value Instruments Fair Value Interest Rate Swaps Asset - Interest rate swap derivatives, at fair value 5 $ 190,705 5 $ 180,759 Interest Rate Swaps Liability Interest rate swap derivatives, at fair value 3 $ (75,690) 3 $ (106,840) The change in fair value of a derivative instrument that is not designated as a cash flow hedge is recorded as interest expense in the accompanying consolidated statements of operations. None of the Company’s derivatives at September 30, 2017 or December 31, 2016 were designated as hedging instruments, therefore the net realized (loss) gain recognized on interest rate swaps of $ (23,913) (54,805) (111,906) 476,841 |
FAIR VALUE DISCLOSURES
FAIR VALUE DISCLOSURES | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Disclosures [Text Block] | NOTE 8. FAIR VALUE DISCLOSURES The fair value for certain financial instruments is derived using a combination of market quotes, pricing models, and other valuation techniques that involve significant management judgment. The price transparency of financial instruments is a key determinant of the degree of judgment involved in determining the fair value of the Company’s financial instruments. Financial instruments for which actively quoted prices or pricing parameters are available and for which markets contain orderly transactions will generally have a higher degree of price transparency than financial instruments for which markets are inactive or consist of non-orderly trades. The Company evaluates several factors when determining if a market is inactive or when market transactions are not orderly. The following is a summary of the methods and assumptions used by management in estimating the fair value of each class of financial instrument for which it is practicable to estimate the fair value: Cash and cash equivalents, restricted cash, tenant receivables, due from affiliates, purchase and other deposits, other assets, accounts payable, accrued expenses and other liabilities, sales deposit liability, share repurchase payable, and due to affiliates: These balances approximate their fair values due to the short maturities of these items. Derivative Instruments : The Company’s derivative instruments are presented at fair value in the accompanying consolidated balance sheet. The valuation of these instruments is determined using a proprietary model that utilizes observable inputs. As such, the Company classifies these inputs as Level 2 inputs. The proprietary model uses the contractual terms of the derivatives, including the period to maturity, as well as observable market-based inputs, including interest rate curves and volatility. The fair value of interest rate swaps are estimated using the market standard methodology of netting the discounted fixed cash payments and the discounted expected variable cash receipts. The variable cash receipts are based on an expectation of interest rates (forward curves) derived from observable market interest rate curves. In addition, credit valuation adjustments, which consider the impact of any credit risks to the contracts, are incorporated in the fair values to account for potential nonperformance risk. Mortgage Notes Payable: The fair value of the Company’s mortgage notes payable is estimated using a discounted cash flow analysis based on management’s estimates of current market interest rates for instruments with similar characteristics, including remaining loan term, loan-to-value ratio. Additionally, when determining the fair value of liabilities in circumstances in which a quoted price in an active market for an identical liability is not available, the Company measures fair value using (i) a valuation technique that uses the quoted price of the identical liability when traded as an asset or quoted prices for similar liabilities or similar liabilities when traded as assets or (ii) another valuation technique that is consistent with the principles of fair value measurement, such as the income approach or the market approach. The Company classifies these inputs as Level 3 inputs. September 30, 2017 December 31, 2016 Face value Carrying value Fair value Face Value Carrying Value Fair Value $ 64,095,911 $ 62,500,062 $ 63,158,986 $ 40,018,648 $ 38,705,103 $ 38,153,219 Disclosures of the fair values of financial instruments are based on pertinent information available to the Company as of September 30, 2017 and December 31, 2016 and require a significant amount of judgment. Low levels of transaction volume for certain financial instruments have made the estimation of fair values difficult and, therefore, both the actual results and the Company’s estimate of value at a future date could be materially different. The actual value could be materially different from the Company’s estimate of value. Recurring Basis Total Quoted Prices in Significant Other Significant September 30, 2017: $ 192,659 $ - $ 192,659 $ - Liability Interest rate swap derivatives $ (71,462) $ - $ (71,462) - December 31, 2016: $ 180,759 $ - $ 180,759 $ - Liabilities Interest rate swap derivatives $ (106,840) $ - (106,840) $ - |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Sep. 30, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions Disclosure [Text Block] | NOTE 9. RELATED PARTY TRANSACTIONS Summarized below are the related party costs incurred by the Company including those incurred pursuant to the Advisory Agreement for the three and nine months ended September 30, 2017 and 2016 as well as the related amounts payable or receivable as of September 30, 2017 and December 31, 2016 are included in the table below. Three Nine Three Nine September 30, 2017 September 30, 2017 September 30, 2016 December 31,2016 Incurred Incurred Receivable Payable Incurred Incurred Receivable Payable Expensed: Acquisition fees $ - $ - $ - $ - $ 267,147 $ 777,867 $ - $ - Asset management fees 199,724 555,317 - - 118,113 271,019 - 43,993 Disposition fees 34,861 34,861 - 34,861 - 30,000 - - Expense reimbursements/fees to affiliates 234,585 590,178 385,260 1,078,886 Property management fees * 24,776 67,419 - - 5,964 8,090 - 21,267 Disposition fees** - 103,020 - - - - - - Reimbursable organizational and offering expenses 33,108 98,349 - - 280,468 1,483,033 - 41,797 Capitalized: Acquisition fees 28,956 671,270 - - - - 48,950 - Financing coordination fees - 100,156 - - 19,350 200,110 - 137,800 Other: Due to advisor for costs - - - - - 317,154 - 270,372 Due to other - SSLFO (1) - - - - - - - 100,477 Due to NNN (2) - - - - 95,730 - 28,571 Due from NNN (3) 17,269 17,269 17,269 - - - - $ 17,269 $ 34,861 $ 48,950 $ 644,277 * Property management fees are presented as “property expenses” in the condensed consolidated statement of operations ** Disposition fees for the three and nine months ended September 30, 2017 are presented as a reduction of gain on sale of real estate investment property (see Note 5). (1) These costs were incurred by SSLFO, an affiliate of the Sponsor, in connection with the organization and offering of the Company’s shares. (2) These costs were incurred in connection with the potential acquisition of a property by the Company. The property was acquired by RW Holdings NNN REIT, Inc.; therefore, the Company has a receivable from RW Holdings NNN REIT, Inc. (3) This amount was the result of a bank error. The monthly interest payment that was due on RW Holdings NNN REIT’s unsecured line of credit was withdrawn from the Company’s bank account rather than from RW Holdings NNN REIT’s bank account. Organizational and Offering Expenses During the offering, pursuant to the Advisory Agreement, the Company is obligated to reimburse the Sponsor or its affiliates for organizational and offering expenses paid by the Sponsor on behalf of the Company. The Company will reimburse the Sponsor for organizational and offering expenses up to 3.0% of gross offering proceeds. The Sponsor and affiliates will be responsible for any organizational and offering expenses related to the offering to the extent they exceed 3.0% of gross offering proceeds from the offering. As of September 30, 2017, the Sponsor has incurred organizational and offering expenses of $ 2,825,716 As of September 30, 2017 and December 31, 2016, the Company has reimbursed the Sponsor $ 2,654,216 2,514,070 2,654,216 2,555,866 0 41,797 Acquisition Fees The Company shall pay the Advisor a fee in an amount equal 3.0 6.0 Asset Management Fee The Company shall pay to the Advisor as compensation for the advisory services rendered to the Company, a monthly fee in an amount equal to 0.05 Financing Coordination Fee Other than with respect to any mortgage or other financing related to a property concurrent with its acquisition, if the Advisor or an affiliate provides a substantial amount of the services (as determined by a majority of the Company’s independent trust managers) in connection with the post-acquisition financing or refinancing of any debt that the Company obtains relative to a property, then the Company shall pay to the Advisor or such affiliate a financing coordination fee equal to 1.0 Property Management Fees If the Advisor or any of its affiliates provides a substantial amount of the property management services (as determined by a majority of the Company’s independent trust managers) for the Company’s properties, then the Company shall pay to the Advisor or such affiliate a property management fee equal to 1.5 Disposition Fees For substantial assistance in connection with the sale of properties, the Company shall pay to its Advisor or one of its affiliates 3.0 6 Leasing Commission Fees If the Advisor or any of its affiliates provides a substantial amount of the services (as determined by a majority of the Company’s independent trust managers) in connection with the Company’s leasing of its properties to unaffiliated third parties, then the Company shall pay to the Advisor or such affiliate leasing commissions equal to 6.0 3.0 Other Operating Expense Reimbursement Under the prospectus, total operating expenses of the Company are limited to the greater of 2 25 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies Disclosure [Text Block] | NOTE 10. COMMITMENTS AND CONTINGENCIES Economic Dependency The Company depends on its Sponsor and its Advisor for certain services that are essential to the Company, including the sale of the Company’s shares of common stock under the Plan, the identification, evaluation, negotiation, origination, acquisition and disposition of investments; management of the daily operations of the Company’s investment portfolio; and other general and administrative responsibilities. In the event that these companies are unable to provide the respective services, the Company will be required to obtain such services from other sources. Environmental As an owner of real estate, the Company is subject to various environmental laws of federal, state and local governments. Although there can be no assurance, the Company is not aware of any environmental liability that could have a material adverse effect on its financial condition or results of operations. However, changes in applicable environmental laws and regulations, the uses and conditions of properties in the vicinity of the Company’s properties, the activities of its tenants and other environmental conditions of which the Company is unaware with respect to the property could result in future environmental liabilities. Legal Matters From time to time, the Company may become party to legal proceedings that arise in the ordinary course of its business. The Company is not a party to any legal proceeding, nor is the Company aware of any pending or threatened litigation that could have a material adverse effect on the Company’s business, operating results, cash flows, or financial condition should such litigation be resolved unfavorably. The U.S. Securities and Exchange Commission (the “SEC”) is conducting an investigation related to the advertising and sale of securities by the Company in connection with the offering. The investigation is a non-public fact finding inquiry. It is neither an allegation of wrongdoing nor a finding that violations of law have occurred. In connection with the investigation, the Company and certain affiliates have received and responded to subpoenas from the SEC requesting documents and other information related to the Company and the offering. The SEC’s investigation is ongoing. The Company has cooperated and intends to continue to cooperate with the SEC in this matter. The Company is unable to predict the likely outcome of the investigation or determine its potential impact, if any, on the Company. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | NOTE 11. SUBSEQUENT EVENTS The Company evaluates subsequent events up until the date the unaudited condensed consolidated financial statements are issued. Distributions On October 20, 2017, the Company’s board of trust managers declared dividends based on daily record dates for the period July 1, 2017 through September 30, 2017 at a rate of $ 0.0020604 1,563,430 October 20, 2017 1,104,493 Repurchase of Common Stock For the period from October 1, 2017 through November 10, 2017, the Company repurchased 95,330 953,295 |
SUMMARY OF SIGNIFICANT ACCOUN18
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Consolidation, Policy [Policy Text Block] | Basis of Presentation and Principles of Consolidation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information as contained in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“Codification”), and in conjunction with rules and regulations of the SEC, including the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, the unaudited condensed consolidated financial statements do not include certain information and footnote disclosures required by GAAP for audited financial statements. In the opinion of management, the unaudited condensed consolidated financial statements reflect all adjustments which are of a normal and recurring nature, necessary for a fair and consistent presentation of the financial position and the results for the interim period presented. Operating results for the three and nine months ended September 30, 2017 are not necessarily indicative of the results that may be expected for the year ended December 31, 2017. The accompanying unaudited interim financial information should be read in conjunction with our December 31, 2016 audited consolidated financial statements included in our Annual Report on Form 10-K filed with the SEC on July 14, 2017. The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany balances and transactions are eliminated in consolidation. |
Cash and Cash Equivalents, Restricted Cash and Cash Equivalents, Policy [Policy Text Block] | Cash, Cash Equivalents and Restricted Cash The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Cash equivalents may include cash and short-term investments. Cash, cash equivalents and restricted cash are stated at cost, which approximates fair value. The Company’s cash, cash equivalents and restricted cash balance may exceed federally insurable limits. The Company intends to mitigate this risk by depositing funds with major financial institutions; however these cash balances and restricted cash could be impacted if the underlying financial institutions fail or are subject to other adverse conditions in the financial markets. |
Comprehensive Income, Policy [Policy Text Block] | Other Comprehensive Income (Loss) For all periods presented, other comprehensive income (loss) is the same as net income (loss). |
Fair Value of Financial Instruments, Policy [Policy Text Block] | Derivative Instruments The Company enters into derivative instruments for risk management purposes to hedge its exposure to cash flow variability caused by changing interest rates on its variable rate mortgage notes payable. The Company records these derivative instruments at fair value in the accompanying consolidated balance sheets. The Company’s mortgage derivative instruments have not been designated as effective hedges and therefore the changes in fair value are recorded as gain or loss on derivative instruments in the accompanying consolidated statement of operations. |
Use of Estimates, Policy [Policy Text Block] | Use of Estimates The preparation of the unaudited condensed consolidated financial statements and the accompanying notes thereto in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the unaudited condensed consolidated financial statements and accompanying notes. Actual results may differ from those estimates. |
New Accounting Pronouncements, Policy [Policy Text Block] | Recent Accounting Pronouncements New Accounting Standards Issued and Adopted In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments In January 2017, the FASB issued Accounting Standards Update (“ASU”) No. 2017-01 , Business Combinations (Topic 805): Clarifying the Definition of a Business In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash New Accounting Standards Recently Issued and Not Yet Adopted In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) Revenue Recognition (Topic 605) Leases (Topic 840). Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) |
REAL ESTATE INVESTMENTS (Tables
REAL ESTATE INVESTMENTS (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Real Estate [Abstract] | |
Schedule of Real Estate Properties [Table Text Block] | As of September 30, 2017, the Company’s real estate portfolio consisted of twenty-one properties in three states consisting of eleven retail, seven office and three industrial properties. The following table provides summary information regarding the Company’s properties as of September 30, 2017: Tenant Origination Accumulated Total Real Land, and Depreciation Estate Acquisition Property Building and Absorption and Investments, Property Location Date Type Improvements Costs Amortization net Chase Bank & Great Clips Antioch, CA 8/22/2014 Retail $ 3,160,035 $ 668,200 $ (999,808) $ 2,828,427 Chevron Gas Station San Jose, CA 5/29/2015 Retail 2,775,000 - (92,061) 2,682,939 Levins Sacramento, CA 8/19/2015 Industrial 3,750,000 - (452,368) 3,297,632 Chevron Gas Station see Note 4) Roseville, CA 9/30/2015 Retail 2,800,000 - (195,112) 2,604,888 Island Pacific Supermarket Elk Grove, CA 10/1/2015 Retail 3,151,460 568,540 (335,584) 3,384,416 Dollar General Bakersfield, CA 11/11/2015 Retail 4,632,567 689,020 (360,074) 4,961,513 Rite Aid Lake Elsinore, CA 12/7/2015 Retail 6,663,446 968,286 (427,444) 7,204,288 PMI Preclinical San Carlos, CA 12/9/2015 Office 8,920,000 - (368,371) 8,551,629 EcoThrift Sacramento, CA 3/17/2016 Retail 4,486,993 541,729 (373,401) 4,655,321 GSA (MSHA) Vacaville, CA 4/5/2016 Office 2,998,232 456,645 (215,410) 3,239,467 PreK San Antonio San Antonio, TX 4/8/2016 Retail 11,851,540 1,593,451 (1,331,627) 12,113,364 Dollar Tree Morrow, GA 4/22/2016 Retail 1,295,879 206,844 (134,555) 1,368,168 Dinan Cars Morgan Hill, CA 6/21/2016 Industrial 4,651,845 654,155 (491,129) 4,814,871 Solar Turbines San Diego, CA 7/21/2016 Office 5,481,198 389,718 (331,607) 5,539,309 Amec Foster San Diego, CA 7/21/2016 Office 6,843,341 485,533 (228,572) 7,100,302 ITW Ripley El Dorado, CA 8/18/2016 Industrial 6,178,204 407,316 (239,018) 6,346,502 Dollar General Big Spring Big Spring, TX 11/4/2016 Retail 1,161,647 112,958 (26,577) 1,248,028 Gap Rocklin, CA 12/1/2016 Office 7,209,629 677,191 (252,877) 7,633,943 L-3 Communications San Diego, CA 12/23/2016 Office 10,799,500 961,107 (276,411) 11,484,196 Sutter Health Rancho Cordova, CA 3/15/2017 Office 24,256,632 2,870,258 (627,713) 26,499,177 Walgreens Santa Maria, CA 6/29/2017 Retail 4,667,322 448,183 (33,700) 5,081,805 $ 127,734,470 $ 12,699,134 $ (7,793,419) $ 132,640,185 |
Schedule of Real Estate Property Acquisitions [Table Text Block] | During the nine months ended September 30, 2017, the Company acquired the following properties: Land, Building Tenant and Origination and Above- Property Acquisition Date Improvements Absorption Costs Market Leases Total Sutter Health 3/15/2017 $ 24,256,632 $ 2,870,258 $ 474,091 $ 27,600,981 Walgreens 6/29/2017 4,667,322 448,183 125,050 5,240,555 $ 28,923,954 $ 3,318,441 $ 599,141 $ 32,841,536 |
Schedule Of Real Estate Investment Property Purchase Price [Table Text Block] | Purchase price $ 32,841,536 Purchase deposits applied (1,500,000) Acquisition fees and costs (642,314) Cash paid for acquisition of real estate investments $ 30,699,222 |
Schedule Of Lease Expiration Date [Table Text Block] | The noncancelable lease terms of the properties acquired during the three and nine months ended September 30, 2017 are as follows: Property Lease Expirations Sutter Health 10/31/2025 Walgreens 3/31/2062 |
Schedule of Asset Portfolio Concentration [Table Text Block] | As of September 30, 2017, our portfolio’s asset concentration (greater than 10% of total assets) was as follows: Net Carrying Percentage of Property and Location Value Total Assets Sutter Health $ 26,499,177 18.7 % |
Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block] | As of September 30, 2017, the future minimum contractual rent payments due under the Company’s non-cancelable operating leases are as follows: October 1, 2017 through December 31, 2017 $ 2,576,996 2018 10,215,833 2019 10,412,042 2020 10,613,223 2021 9,645,095 2022 8,099,412 Thereafter 33,138,176 $ 84,700,777 |
Schedule of Revenue Concentration [Table Text Block] | As of September 30, 2017, our portfolio’s tenant concentration (greater than 10% of annualized base rent) was as follows: Percentage of Annualized Annualized Property and Location Base Rent* Base Rent Sutter Health, CA $ 2,247,366 $ 21.90 % * Effective Annualized Base Rent is calculated based on the monthly base rent at September 30, 2017 for twelve months. |
Schedule of Finite-Lived Intangible Assets [Table Text Block] | As of September 30, 2017, the Company’s intangibles were as follows: Tenant Origination and Absorption Above-Market Below-Market Costs Leases Leases Cost $ 12,699,134 $ 872,408 $ (5,349,908) Accumulated amortization (2,418,049) (46,396) 1,165,161 Net amount $ 10,281,085 $ 826,012 $ (4,184,747) |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block] | Amortization of intangible assets over the next five years is expected to be as follows: Tenant Origination and Absorption Above-Market Below-Market Costs Leases Leases Remaining 2017 $ 438,274 $ 8,830 $ (218,739) 2018 1,567,392 35,320 (860,165) 2019 1,567,392 35,320 (860,165) 2022 1,567,392 35,320 (860,165) 2021 1,320,274 35,320 (667,541) 2022 1,239,699 35,320 (667,541) Thereafter 2,580,663 640,582 (50,431) $ 10,281,086 $ 826,012 $ (4,184,747) Weighted Average Remaining Amortization Period 8.60 years 35.77 years 5.66 years |
DEBT (Tables)
DEBT (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments [Table Text Block] | As of September 30, 2017, the Company’s mortgage notes payable consisted of the following: Deferred Effective Principal Financing Contractual Interest Loan Collateral Amount Costs Net Balance Interest Rate Rate (1) Maturity Chase Bank & Great Clips $ 1,897,567 $ (25,290) $ 1,872,277 4.37% fixed 4.37 % 2/5/2019 Levins 2,180,755 (39,923) $ 2,140,832 One-month LIBOR + 1.93% 3.74 % 1/5/2021 Island Pacific Supermarket 1,983,034 (41,601) $ 1,941,433 One-month LIBOR + 1.93% 3.74 % 1/5/2021 Dollar General Bakersfield 2,442,835 (62,791) $ 2,380,044 One-month LIBOR + 1.48% 3.38 % 3/5/2021 Rite Aid 3,848,087 (116,305) $ 3,731,782 One-month LIBOR + 1.50% 3.25 % 5/5/2021 PMI Preclinical 4,328,584 (144,132) $ 4,184,452 One-month LIBOR + 1.48% 3.38 % 3/5/2021 EcoThrift 2,780,646 (93,470) $ 2,687,176 One-month LIBOR + 1.21% 2.96 % 7/5/2021 GSA 1,891,549 (74,481) $ 1,817,068 One-month LIBOR + 1.25% 3.00 % 8/5/2021 PreK San Antonio 5,356,905 (172,589) $ 5,184,316 4.25% fixed 4.25 % 12/1/2021 Dinan Cars 2,829,619 (85,723) $ 2,743,896 One-month LIBOR + 2.27% 4.02 % 1/5/2022 ITW Sky Park 9,905,359 (267,420) $ 9,637,939 3.35% fixed 3.35 % 11/1/2026 L-3 Communications 5,493,320 (133,276) $ 5,360,044 4.5% fixed 4.50 % 4/1/2022 Gap 3,799,400 (95,600) $ 3,703,800 4.15% fixed 4.15 % 8/1/2023 Dollar General Big Spring (2) 634,046 (26,715) $ 607,331 4.69% fixed 4.69 % 3/13/2022 Sutter Health 14,724,205 (216,533) $ 14,507,672 4.5% fixed 4.50 % 3/9/2024 $ 64,095,911 $ (1,595,849) $ 62,500,062 (1) Contractual interest rate represents the interest rate in effect under the mortgage note payable as of September 30, 2017. Effective interest rate is calculated as the actual interest rate in effect as of September 30, 2017 (consisting of the contractual interest rate and the effect of the interest rate swap, if applicable). For further information regarding the Company’s derivative instruments, see Note 7. (2) The loan is cross-collateralized with the six Dollar General properties owned by RW Holdings NNN REIT, Inc. The deed of trust for the Company’s Dollar General Big Spring property and the deeds of trust for the RW Holdings NNN REIT, Inc.’s six Dollar General properties contain cross collateralization and cross default provisions. At September 30, 2017, the outstanding principal balance of the loans on RW Holdings NNN REIT, Inc.’s six Dollar General properties was $ 3,962,211 |
Schedule of Maturities of Long-term Debt [Table Text Block] | The following summarizes the future principal payments on the Company’s mortgage notes payable as of September 30, 2017: October 1, 2017 through December 31, 2017 $ 302,025 2018 1,233,437 2019 3,092,776 2020 1,287,242 2021 23,879,817 2022 25,550,753 Thereafter 8,749,861 Total principal $ 64,095,911 |
Schedule Of Interest Expenses Reconciliation [Table Text Block] | The following is a reconciliation of the components of interest expense for the three and nine months ended September 30, 2017 and 2016: Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Mortgage Payable Interest expense incurred (1) $ 665,366 $ 183,948 $ 1,745,924 $ 422,506 Amortization of deferred financing costs 78,607 38,813 224,383 76,123 Unrealized loss (gain) on interest rate swaps (see Note 7) (23,913) (111,906) (54,805) 476,841 Unsecured Credit Facility Interest expense incurred - - - 39,779 Amortization of deferred financing costs - - - 12,250 Sales deposit liability (see Note 4) 13,751 13,751 41,252 31,779 Total interest expense $ 733,811 $ 124,606 $ 1,956,754 $ 1,059,278 (1) Includes $ 24,899 108,293 47,621 96,174 6,182 14,284 |
INTEREST RATE SWAP DERIVATIVES
INTEREST RATE SWAP DERIVATIVES (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments [Table Text Block] | The notional amount is an indication of the extent of the Company’s involvement in each instrument at that time, but does not represent exposure to credit, interest rate or market risks: September 30, 2017 December 31, 2016 Number Weighted Weighted Number Weighted Weighted of Reference Average Average of Reference Average Average Derivative Instru- Notional Rate as Fixed Remaining Instru- Notional Rate as Fixed Remaining Instruments ments Amount (1) of 6/30/2017 pay rate Term ments Amount (1) of 12/31/2016 pay rate Term Interest Rate Swap Derivatives 8 $ 22,285,109 One-month LIBOR/Fixed at 3.42% 4.09 years 8 $ 22,871,000 One-month LIBOR/Fixed at 3.28 % 4.17 years (1) The notional amount of the Company’s swaps decreases each month to correspond to the outstanding principal balance on the related mortgage. The minimum notional amount (outstanding principal balance at the maturity date) is $ 20,552,875 |
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value [Table Text Block] | The following table sets forth the fair value of the Company’s derivative instruments as well as their classification in the consolidated balance sheets as of September 30, 2017 and 2016, respectively. September 30, 2017 December 31, 2016 Number of Number of Derivative Instrument Balance Sheet Location Instruments Fair Value Instruments Fair Value Interest Rate Swaps Asset - Interest rate swap derivatives, at fair value 5 $ 190,705 5 $ 180,759 Interest Rate Swaps Liability Interest rate swap derivatives, at fair value 3 $ (75,690) 3 $ (106,840) |
FAIR VALUE DISCLOSURES (Tables)
FAIR VALUE DISCLOSURES (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value, by Balance Sheet Grouping [Table Text Block] | The following were the face value, carrying amount and fair value of the Company’s mortgage notes payable as of September 30, 2017 and December 31, 2016: September 30, 2017 December 31, 2016 Face value Carrying value Fair value Face Value Carrying Value Fair Value $ 64,095,911 $ 62,500,062 $ 63,158,986 $ 40,018,648 $ 38,705,103 $ 38,153,219 |
Fair Value, Liabilities Measured on Recurring Basis [Table Text Block] | During the nine months ended September 30, 2017 and year ended December 31, 2016, the Company measured the following assets and liabilities at fair value: Recurring Basis Total Quoted Prices in Significant Other Significant September 30, 2017: $ 192,659 $ - $ 192,659 $ - Liability Interest rate swap derivatives $ (71,462) $ - $ (71,462) - December 31, 2016: $ 180,759 $ - $ 180,759 $ - Liabilities Interest rate swap derivatives $ (106,840) $ - (106,840) $ - |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions [Table Text Block] | Three Nine Three Nine September 30, 2017 September 30, 2017 September 30, 2016 December 31,2016 Incurred Incurred Receivable Payable Incurred Incurred Receivable Payable Expensed: Acquisition fees $ - $ - $ - $ - $ 267,147 $ 777,867 $ - $ - Asset management fees 199,724 555,317 - - 118,113 271,019 - 43,993 Disposition fees 34,861 34,861 - 34,861 - 30,000 - - Expense reimbursements/fees to affiliates 234,585 590,178 385,260 1,078,886 Property management fees * 24,776 67,419 - - 5,964 8,090 - 21,267 Disposition fees** - 103,020 - - - - - - Reimbursable organizational and offering expenses 33,108 98,349 - - 280,468 1,483,033 - 41,797 Capitalized: Acquisition fees 28,956 671,270 - - - - 48,950 - Financing coordination fees - 100,156 - - 19,350 200,110 - 137,800 Other: Due to advisor for costs - - - - - 317,154 - 270,372 Due to other - SSLFO (1) - - - - - - - 100,477 Due to NNN (2) - - - - 95,730 - 28,571 Due from NNN (3) 17,269 17,269 17,269 - - - - $ 17,269 $ 34,861 $ 48,950 $ 644,277 * Property management fees are presented as “property expenses” in the condensed consolidated statement of operations ** Disposition fees for the three and nine months ended September 30, 2017 are presented as a reduction of gain on sale of real estate investment property (see Note 5). (1) These costs were incurred by SSLFO, an affiliate of the Sponsor, in connection with the organization and offering of the Company’s shares. (2) These costs were incurred in connection with the potential acquisition of a property by the Company. The property was acquired by RW Holdings NNN REIT, Inc.; therefore, the Company has a receivable from RW Holdings NNN REIT, Inc. (3) This amount was the result of a bank error. The monthly interest payment that was due on RW Holdings NNN REIT’s unsecured line of credit was withdrawn from the Company’s bank account rather than from RW Holdings NNN REIT’s bank account. |
BUSINESS AND ORGANIZATION (Deta
BUSINESS AND ORGANIZATION (Details Textual) | Sep. 30, 2017USD ($) |
Common Stock, Value, Subscriptions | $ 3,000,000 |
Noncontrolling Interest, Ownership Percentage by Parent | 70.14% |
REAL ESTATE INVESTMENTS (Detail
REAL ESTATE INVESTMENTS (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2016 | |
Land building and improvements | $ 127,734,470 | |
Tenant origination and absorption costs | 12,699,134 | $ 9,380,693 |
Accumulated depreciation and amortization | (7,793,419) | (3,797,990) |
Total real estate investments, net | $ 132,640,185 | $ 105,462,499 |
Chase Bank Great Clips [Member] | Antioch, CA [Member] | Retail Site [Member] | ||
Acquisition Date | Aug. 22, 2014 | |
Land building and improvements | $ 3,160,035 | |
Tenant origination and absorption costs | 668,200 | |
Accumulated depreciation and amortization | (999,808) | |
Total real estate investments, net | $ 2,828,427 | |
Chevron Gas Station [Member] | San Jose, CA [Member] | Retail Site [Member] | ||
Acquisition Date | May 29, 2015 | |
Land building and improvements | $ 2,775,000 | |
Tenant origination and absorption costs | 0 | |
Accumulated depreciation and amortization | (92,061) | |
Total real estate investments, net | $ 2,682,939 | |
Chevron Gas Station [Member] | Roseville, CA [Member] | Retail Site [Member] | ||
Acquisition Date | Sep. 30, 2015 | |
Land building and improvements | $ 2,800,000 | |
Tenant origination and absorption costs | 0 | |
Accumulated depreciation and amortization | (195,112) | |
Total real estate investments, net | $ 2,604,888 | |
Levins [Member] | Sacramento, CA [Member] | Industrial Property [Member] | ||
Acquisition Date | Aug. 19, 2015 | |
Land building and improvements | $ 3,750,000 | |
Tenant origination and absorption costs | 0 | |
Accumulated depreciation and amortization | (452,368) | |
Total real estate investments, net | $ 3,297,632 | |
Island Pacific Supermarket [Member] | Elk Grove, CA [Member] | Retail Site [Member] | ||
Acquisition Date | Oct. 1, 2015 | |
Land building and improvements | $ 3,151,460 | |
Tenant origination and absorption costs | 568,540 | |
Accumulated depreciation and amortization | (335,584) | |
Total real estate investments, net | $ 3,384,416 | |
Dollar General Bakersfield [Member] | Bakersfield, CA [Member] | Retail Site [Member] | ||
Acquisition Date | Nov. 11, 2015 | |
Land building and improvements | $ 4,632,567 | |
Tenant origination and absorption costs | 689,020 | |
Accumulated depreciation and amortization | (360,074) | |
Total real estate investments, net | $ 4,961,513 | |
Rite Aid [Member] | Lake Elsinore, CA [Member] | Retail Site [Member] | ||
Acquisition Date | Dec. 7, 2015 | |
Land building and improvements | $ 6,663,446 | |
Tenant origination and absorption costs | 968,286 | |
Accumulated depreciation and amortization | (427,444) | |
Total real estate investments, net | $ 7,204,288 | |
PMI Preclinical [Member] | San Carlos, CA [Member] | Office Building [Member] | ||
Acquisition Date | Dec. 9, 2015 | |
Land building and improvements | $ 8,920,000 | |
Tenant origination and absorption costs | 0 | |
Accumulated depreciation and amortization | (368,371) | |
Total real estate investments, net | $ 8,551,629 | |
EcoThrift [Member] | Sacramento, CA [Member] | Retail Site [Member] | ||
Acquisition Date | Mar. 17, 2016 | |
Land building and improvements | $ 4,486,993 | |
Tenant origination and absorption costs | 541,729 | |
Accumulated depreciation and amortization | (373,401) | |
Total real estate investments, net | $ 4,655,321 | |
GSA MSHA [Member] | Vacaville, CA [Member] | Office Building [Member] | ||
Acquisition Date | Apr. 5, 2016 | |
Land building and improvements | $ 2,998,232 | |
Tenant origination and absorption costs | 456,645 | |
Accumulated depreciation and amortization | (215,410) | |
Total real estate investments, net | $ 3,239,467 | |
PreK San Antonio [Member] | San Antonio, TX [Member] | Retail Site [Member] | ||
Acquisition Date | Apr. 8, 2016 | |
Land building and improvements | $ 11,851,540 | |
Tenant origination and absorption costs | 1,593,451 | |
Accumulated depreciation and amortization | (1,331,627) | |
Total real estate investments, net | $ 12,113,364 | |
Dollar Tree [Member] | Morrow, GA [Member] | Retail Site [Member] | ||
Acquisition Date | Apr. 22, 2016 | |
Land building and improvements | $ 1,295,879 | |
Tenant origination and absorption costs | 206,844 | |
Accumulated depreciation and amortization | (134,555) | |
Total real estate investments, net | $ 1,368,168 | |
Dinan Cars [Member] | Morgan Hill, CA [Member] | Industrial Property [Member] | ||
Acquisition Date | Jun. 21, 2016 | |
Land building and improvements | $ 4,651,845 | |
Tenant origination and absorption costs | 654,155 | |
Accumulated depreciation and amortization | (491,129) | |
Total real estate investments, net | $ 4,814,871 | |
ITW Ripley [Member] | El Dorado, CA [Member] | Industrial Property [Member] | ||
Acquisition Date | Aug. 18, 2016 | |
Land building and improvements | $ 6,178,204 | |
Tenant origination and absorption costs | 407,316 | |
Accumulated depreciation and amortization | (239,018) | |
Total real estate investments, net | $ 6,346,502 | |
Solar Turbines [Member] | San Diego, CA [Member] | Office Building [Member] | ||
Acquisition Date | Jul. 21, 2016 | |
Land building and improvements | $ 5,481,198 | |
Tenant origination and absorption costs | 389,718 | |
Accumulated depreciation and amortization | (331,607) | |
Total real estate investments, net | $ 5,539,309 | |
Amec Foster [Member] | San Diego, CA [Member] | Office Building [Member] | ||
Acquisition Date | Jul. 21, 2016 | |
Land building and improvements | $ 6,843,341 | |
Tenant origination and absorption costs | 485,533 | |
Accumulated depreciation and amortization | (228,572) | |
Total real estate investments, net | $ 7,100,302 | |
Dollar General Big Spring [Member] | Big Spring, TX [Member] | Retail Site [Member] | ||
Acquisition Date | Nov. 4, 2016 | |
Land building and improvements | $ 1,161,647 | |
Tenant origination and absorption costs | 112,958 | |
Accumulated depreciation and amortization | (26,577) | |
Total real estate investments, net | $ 1,248,028 | |
Gap [Member] | Rocklin, CA [Member] | Office Building [Member] | ||
Acquisition Date | Dec. 1, 2016 | |
Land building and improvements | $ 7,209,629 | |
Tenant origination and absorption costs | 677,191 | |
Accumulated depreciation and amortization | (252,877) | |
Total real estate investments, net | $ 7,633,943 | |
L-3 Communications | San Diego, CA [Member] | Office Building [Member] | ||
Acquisition Date | Dec. 23, 2016 | |
Land building and improvements | $ 10,799,500 | |
Tenant origination and absorption costs | 961,107 | |
Accumulated depreciation and amortization | (276,411) | |
Total real estate investments, net | $ 11,484,196 | |
Sutter Health [Member] | ||
Acquisition Date | Mar. 15, 2017 | |
Total real estate investments, net | $ 26,499,177 | |
Sutter Health [Member] | Rancho Cordova, CA [Member] | Office Building [Member] | ||
Acquisition Date | Mar. 15, 2017 | |
Land building and improvements | $ 24,256,632 | |
Tenant origination and absorption costs | 2,870,258 | |
Accumulated depreciation and amortization | (627,713) | |
Total real estate investments, net | $ 26,499,177 | |
Walgreens [Member] | ||
Acquisition Date | Jun. 29, 2017 | |
Walgreens [Member] | Santa Maria, CA [Member] | Retail Site [Member] | ||
Acquisition Date | Jun. 29, 2017 | |
Land building and improvements | $ 4,667,322 | |
Tenant origination and absorption costs | 448,183 | |
Accumulated depreciation and amortization | (33,700) | |
Total real estate investments, net | $ 5,081,805 |
REAL ESTATE INVESTMENTS (Deta26
REAL ESTATE INVESTMENTS (Details 1) | 9 Months Ended |
Sep. 30, 2017USD ($) | |
Land, Buildings and Improvements | $ 28,923,954 |
Tenant origination and absorption costs | 3,318,441 |
Purchase Price | 32,841,536 |
Above Market Lease, Net | 599,141 |
Sutter Health [Member] | |
Land, Buildings and Improvements | 24,256,632 |
Tenant origination and absorption costs | 2,870,258 |
Purchase Price | 27,600,981 |
Above Market Lease, Net | $ 474,091 |
Acquisition Date | Mar. 15, 2017 |
Walgreens [Member] | |
Land, Buildings and Improvements | $ 4,667,322 |
Tenant origination and absorption costs | 448,183 |
Purchase Price | 5,240,555 |
Above Market Lease, Net | $ 125,050 |
Acquisition Date | Jun. 29, 2017 |
REAL ESTATE INVESTMENTS (Deta27
REAL ESTATE INVESTMENTS (Details 2) - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Purchase price | $ 32,841,536 | |
Purchase deposits applied | 1,500,000 | $ 4,809,250 |
Acquisition fees and costs | 0 | (913,689) |
Cash paid for acquisition of real estate investments | 30,699,222 | $ 39,231,597 |
Real Estate Investment [Member] | ||
Purchase deposits applied | (1,500,000) | |
Acquisition fees and costs | (642,314) | |
Cash paid for acquisition of real estate investments | $ 30,699,222 |
REAL ESTATE INVESTMENTS (Deta28
REAL ESTATE INVESTMENTS (Details 3) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2017 | Sep. 30, 2017 | |
Sutter Health [Member] | ||
Lease Expiration Date | Oct. 31, 2025 | Oct. 31, 2025 |
Walgreens [Member] | ||
Lease Expiration Date | Mar. 31, 2062 | Mar. 31, 2062 |
REAL ESTATE INVESTMENTS (Deta29
REAL ESTATE INVESTMENTS (Details 4) - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2016 | |
Real Estate Investment Property, Net | $ 132,640,185 | $ 105,462,499 |
Sutter Health [Member] | ||
Real Estate Investment Property, Net | $ 26,499,177 | |
Assets, Total [Member] | Sutter Health [Member] | ||
Concentration Risk, Percentage | 18.70% |
REAL ESTATE INVESTMENTS (Deta30
REAL ESTATE INVESTMENTS (Details 5) | Sep. 30, 2017USD ($) |
October 1, 2017 through December 31, 2017 | $ 2,576,996 |
2,018 | 10,215,833 |
2,019 | 10,412,042 |
2,020 | 10,613,223 |
2,021 | 9,645,095 |
2,022 | 8,099,412 |
Thereafter | 33,138,176 |
Operating Leases, Future Minimum Payments Receivable | $ 84,700,777 |
REAL ESTATE INVESTMENTS (Deta31
REAL ESTATE INVESTMENTS (Details 6) - Sutter Health, CA [Member] | 9 Months Ended | |
Sep. 30, 2017USD ($) | ||
Effective Annualized Base Rent | $ 2,247,366 | [1] |
Percentage of Annualized Base Rent | 21.90% | |
[1] | Effective Annualized Base Rent is calculated based on the monthly base rent at September 30, 2017 for twelve months. |
REAL ESTATE INVESTMENTS (Deta32
REAL ESTATE INVESTMENTS (Details 7) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Below-Market Leases, Cost | $ (5,349,908) | |
Below-Market Leases, Accumulated amortization | 1,165,161 | |
Below-Market Leases, Net Amount | (4,184,747) | $ (4,841,757) |
Tenant Origination and Absorption Costs [Member] | ||
Finite-Lived Intangible Assets, Cost | 12,699,134 | |
Finite-Lived Intangible Assets, Accumulated Amortization | (2,418,049) | |
Finite-Lived Intangible Assets, Net Amount | 10,281,085 | |
Above-Market Leases [Member] | ||
Finite-Lived Intangible Assets, Cost | 872,408 | |
Finite-Lived Intangible Assets, Accumulated Amortization | (46,396) | |
Finite-Lived Intangible Assets, Net Amount | $ 826,012 |
REAL ESTATE INVESTMENTS (Deta33
REAL ESTATE INVESTMENTS (Details 8) - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2016 | |
Remaining 2,017 | $ (218,739) | |
2,018 | (860,165) | |
2,019 | (860,165) | |
2,022 | (860,165) | |
2,021 | (667,541) | |
2,022 | (667,541) | |
Thereafter | (50,431) | |
Below-Market Leases, Net Amount | (4,184,747) | $ (4,841,757) |
Tenant Origination and Absorption Costs [Member] | ||
Remaining 2,017 | 438,274 | |
2,018 | 1,567,392 | |
2,019 | 1,567,392 | |
2,022 | 1,567,392 | |
2,021 | 1,320,274 | |
2,022 | 1,239,699 | |
Thereafter | 2,580,663 | |
Finite-Lived Intangible Assets, Net Amount | $ 10,281,085 | |
Weighted average remaining amortization period | 8 years 7 months 6 days | |
Above-Market Leases [Member] | ||
Remaining 2,017 | $ 8,830 | |
2,018 | 35,320 | |
2,019 | 35,320 | |
2,022 | 35,320 | |
2,021 | 35,320 | |
2,022 | 35,320 | |
Thereafter | 640,582 | |
Finite-Lived Intangible Assets, Net Amount | $ 826,012 | |
Weighted average remaining amortization period | 35 years 9 months 7 days | |
Below-Market Leases [Member] | ||
Weighted average remaining amortization period | 5 years 7 months 28 days |
REAL ESTATE INVESTMENTS (Deta34
REAL ESTATE INVESTMENTS (Details Textual) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Business Combination, Acquisition Related Costs | $ 0 | $ 913,689 | ||
Accounts Receivable, Net | $ 1,013,624 | 1,013,624 | $ 545,274 | |
Real Estate Investment [Member] | ||||
Business Combination, Acquisition Related Costs | 642,314 | |||
Payments for Acquisition Fee Addition To Real Estate Investments | 28,956 | 28,956 | ||
Sutter Health and Walgreens [Member] | ||||
Business Combination, Acquisition Related Costs | 0 | 642,314 | ||
Advisory Agreement [Member] | ||||
Business Combination, Pro Forma Information, Revenue of Acquiree since Acquisition Date, Actual | $ 667,945 | $ 1,481,243 |
SALE OF INTEREST IN REAL ESTA35
SALE OF INTEREST IN REAL ESTATE INVESTMENT PROPERTY (Details Textual) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Proceeds from Sale of Real Estate | $ 1,000,000 | ||||
Interest Expense, Customer Deposits | $ 13,751 | $ 41,252 | $ 13,751 | $ 31,779 | |
Chevron Gas Station [Member] | |||||
Equity Method Investment, Ownership Percentage | 29.86% | 29.86% | 29.86% |
SALE OF REAL ESATE INVESTMENT36
SALE OF REAL ESATE INVESTMENT PROPERTY (Details Textual) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Apr. 27, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | ||
Proceeds from Sale of Real Estate Held-for-investment | $ 3,196,480 | $ 0 | ||||
Gains (Losses) on Sales of Investment Real Estate | $ 0 | $ 0 | $ 747,957 | $ 0 | ||
Related Party Transaction, Expenses from Transactions with Related Party | [1] | $ 17,269 | ||||
Deferred Taxable Gain On Sale Of Real Estate | $ 900,000 | |||||
Chevron Gas Station [Member] | ||||||
Proceeds from Sale of Real Estate Held-for-investment | 3,434,000 | |||||
Gains (Losses) on Sales of Investment Real Estate | 747,957 | |||||
Related Party Transaction, Expenses from Transactions with Related Party | $ 103,020 | |||||
[1] | This amount was the result of a bank error. The monthly interest payment that was due on RW Holdings NNN REIT’s unsecured line of credit was withdrawn from the Company’s bank account rather than from RW Holdings NNN REIT’s bank account. |
DEBT (Details)
DEBT (Details) - USD ($) | 9 Months Ended | ||
Sep. 30, 2017 | Dec. 31, 2016 | ||
Principal Amount | $ 62,500,062 | $ 38,705,103 | |
Mortgages [Member] | |||
Principal Amount | 64,095,911 | ||
Deferred Financing Costs | (1,595,849) | ||
Net Balance | 62,500,062 | ||
Mortgages [Member] | Chase Bank Great Clips [Member] | |||
Principal Amount | 1,897,567 | ||
Deferred Financing Costs | (25,290) | ||
Net Balance | $ 1,872,277 | ||
Contractual Interest Rate | 4.37% fixed | ||
Effective Interest Rate | [1] | 4.37% | |
Loan Maturity | Feb. 5, 2019 | ||
Mortgages [Member] | Levins [Member] | |||
Principal Amount | $ 2,180,755 | ||
Deferred Financing Costs | (39,923) | ||
Net Balance | $ 2,140,832 | ||
Contractual Interest Rate | One-month LIBOR + 1.93% | ||
Effective Interest Rate | [1] | 3.74% | |
Loan Maturity | Jan. 5, 2021 | ||
Mortgages [Member] | Island Pacific Supermarket [Member] | |||
Principal Amount | $ 1,983,034 | ||
Deferred Financing Costs | (41,601) | ||
Net Balance | $ 1,941,433 | ||
Contractual Interest Rate | One-month LIBOR + 1.93% | ||
Effective Interest Rate | [1] | 3.74% | |
Loan Maturity | Jan. 5, 2021 | ||
Mortgages [Member] | Dollar General Bakersfield [Member] | |||
Principal Amount | $ 2,442,835 | ||
Deferred Financing Costs | (62,791) | ||
Net Balance | $ 2,380,044 | ||
Contractual Interest Rate | One-month LIBOR + 1.48% | ||
Effective Interest Rate | [1] | 3.38% | |
Loan Maturity | Mar. 5, 2021 | ||
Mortgages [Member] | Rite Aid [Member] | |||
Principal Amount | $ 3,848,087 | ||
Deferred Financing Costs | (116,305) | ||
Net Balance | $ 3,731,782 | ||
Contractual Interest Rate | One-month LIBOR + 1.50% | ||
Effective Interest Rate | [1] | 3.25% | |
Loan Maturity | May 5, 2021 | ||
Mortgages [Member] | PMI Preclinical [Member] | |||
Principal Amount | $ 4,328,584 | ||
Deferred Financing Costs | (144,132) | ||
Net Balance | $ 4,184,452 | ||
Contractual Interest Rate | One-month LIBOR + 1.48% | ||
Effective Interest Rate | [1] | 3.38% | |
Loan Maturity | Mar. 5, 2021 | ||
Mortgages [Member] | EcoThrift [Member] | |||
Principal Amount | $ 2,780,646 | ||
Deferred Financing Costs | (93,470) | ||
Net Balance | $ 2,687,176 | ||
Contractual Interest Rate | One-month LIBOR + 1.21% | ||
Effective Interest Rate | [1] | 2.96% | |
Loan Maturity | Jul. 5, 2021 | ||
Mortgages [Member] | PreK San Antonio [Member] | |||
Principal Amount | $ 5,356,905 | ||
Deferred Financing Costs | (172,589) | ||
Net Balance | $ 5,184,316 | ||
Contractual Interest Rate | 4.25% fixed | ||
Effective Interest Rate | [1] | 4.25% | |
Loan Maturity | Dec. 1, 2021 | ||
Mortgages [Member] | GSA [Member] | |||
Principal Amount | $ 1,891,549 | ||
Deferred Financing Costs | (74,481) | ||
Net Balance | $ 1,817,068 | ||
Contractual Interest Rate | One-month LIBOR + 1.25% | ||
Effective Interest Rate | [1] | 3.00% | |
Loan Maturity | Aug. 5, 2021 | ||
Mortgages [Member] | Dinan Cars [Member] | |||
Principal Amount | $ 2,829,619 | ||
Deferred Financing Costs | (85,723) | ||
Net Balance | $ 2,743,896 | ||
Contractual Interest Rate | One-month LIBOR + 2.27% | ||
Effective Interest Rate | [1] | 4.02% | |
Loan Maturity | Jan. 5, 2022 | ||
Mortgages [Member] | ITW Sky Park [Member] | |||
Principal Amount | $ 9,905,359 | ||
Deferred Financing Costs | (267,420) | ||
Net Balance | $ 9,637,939 | ||
Contractual Interest Rate | 3.35% fixed | ||
Effective Interest Rate | [1] | 3.35% | |
Loan Maturity | Nov. 1, 2026 | ||
Mortgages [Member] | Dollar General Big Spring [Member] | |||
Principal Amount | [2] | $ 634,046 | |
Deferred Financing Costs | [2] | (26,715) | |
Net Balance | [2] | $ 607,331 | |
Contractual Interest Rate | [2] | 4.69% fixed | |
Effective Interest Rate | [1],[2] | 4.69% | |
Loan Maturity | Mar. 13, 2022 | ||
Mortgages [Member] | L-3 Communications | |||
Principal Amount | $ 5,493,320 | ||
Deferred Financing Costs | (133,276) | ||
Net Balance | $ 5,360,044 | ||
Contractual Interest Rate | 4.5% fixed | ||
Effective Interest Rate | [1] | 4.50% | |
Loan Maturity | Apr. 1, 2022 | ||
Mortgages [Member] | Sutter Health [Member] | |||
Principal Amount | $ 14,724,205 | ||
Deferred Financing Costs | (216,533) | ||
Net Balance | $ 14,507,672 | ||
Contractual Interest Rate | 4.5% fixed | ||
Effective Interest Rate | [1] | 4.50% | |
Loan Maturity | Mar. 9, 2024 | ||
Mortgages [Member] | Gap [Member] | |||
Principal Amount | $ 3,799,400 | ||
Deferred Financing Costs | (95,600) | ||
Net Balance | $ 3,703,800 | ||
Contractual Interest Rate | 4.15% fixed | ||
Effective Interest Rate | [1] | 4.15% | |
Loan Maturity | Aug. 1, 2023 | ||
[1] | Contractual interest rate represents the interest rate in effect under the mortgage note payable as of September 30, 2017. Effective interest rate is calculated as the actual interest rate in effect as of September 30, 2017 (consisting of the contractual interest rate and the effect of the interest rate swap, if applicable). For further information regarding the Company’s derivative instruments, see Note 7. | ||
[2] | The loan is cross-collateralized with the six Dollar General properties owned by RW Holdings NNN REIT, Inc. The deed of trust for the Company’s Dollar General Big Spring property and the deeds of trust for the RW Holdings NNN REIT, Inc.’s six Dollar General properties contain cross collateralization and cross default provisions. At September 30, 2017, the outstanding principal balance of the loans on RW Holdings NNN REIT, Inc.’s six Dollar General properties was $3,962,211. The cross-collateralization and cross default provisions were removed on October 13, 2017. |
DEBT (Details 1)
DEBT (Details 1) - Secured Debt [Member] | Sep. 30, 2017USD ($) |
October 1, 2017 through December 31, 2017 | $ 302,025 |
2,018 | 1,233,437 |
2,019 | 3,092,776 |
2,020 | 1,287,242 |
2,021 | 23,879,817 |
2,022 | 25,550,753 |
Thereafter | 8,749,861 |
Total principal | $ 64,095,911 |
DEBT (Details 2)
DEBT (Details 2) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | ||
Unrealized loss (gain) on interest rate swaps (see Note 7) | $ 47,278 | $ (462,557) | |||
Sales deposit liability (See Note 4) | $ 13,751 | $ 41,252 | 13,751 | 31,779 | |
Total interest expense | 733,811 | 124,606 | 1,956,754 | 1,059,278 | |
Unsecured Debt [Member] | |||||
Interest expense incurred | 0 | 0 | 0 | 39,779 | |
Amortization of deferred financing costs | 0 | 0 | 0 | 12,250 | |
Sales deposit liability (See Note 4) | 13,751 | 13,751 | 41,252 | 31,779 | |
Total interest expense | 733,811 | 124,606 | 1,956,754 | 1,059,278 | |
Secured Debt [Member] | |||||
Interest expense incurred | [1] | 665,366 | 183,948 | 1,745,924 | 422,506 |
Amortization of deferred financing costs | 78,607 | 38,813 | 224,383 | 76,123 | |
Unrealized loss (gain) on interest rate swaps (see Note 7) | $ (23,913) | $ (111,906) | $ (54,805) | $ 476,841 | |
[1] | Includes $24,899 and $108,293 for the three and nine months ended September 30, 2017, respectively, and $47,621 and $96,174 for the three and nine months ended September 30, 2016, respectively, of monthly payments to settle the Company’s interest rate swaps and $6,182 and $14,284 of accrued interest payable at September 30, 2017 and 2016, respectively, representing the unsettled portion of the interest rate swaps for the period from the most recent settlement date through September 30, 2017 and 2016, respectively. |
DEBT (Details Textual)
DEBT (Details Textual) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Interest Expenses, Interest Rate Swap | $ 24,899 | $ 47,621 | $ 108,293 | $ 96,174 | |
Interest Payable | 6,182 | $ 14,284 | 6,182 | $ 14,284 | |
Debt Instrument, Face Amount | 64,095,911 | 64,095,911 | $ 40,018,648 | ||
Mortgages [Member] | |||||
Debt Instrument, Face Amount | $ 3,962,211 | $ 3,962,211 |
INTEREST RATE SWAP DERIVATIVE41
INTEREST RATE SWAP DERIVATIVES (Details) - Interest Rate Swap [Member] | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2017USD ($)Numbers | Dec. 31, 2016USD ($)Numbers | ||
Derivative Instruments, Number of Instruments | Numbers | 8 | 8 | |
Derivative Instruments, Notional Amount | $ | [1] | $ 22,285,109 | $ 22,871,000 |
Derivative Instruments, Reference Rate | 1.21%-2.27% | 1.21%-2.27% | |
Derivative Instruments, Weighted Average Fixed Pay Rate | 3.42% | 3.28% | |
Derivative Instruments, Weighted Average Remaining Term | 4 years 1 month 2 days | 4 years 2 months 1 day | |
[1] | The notional amount of the Company’s swaps decreases each month to correspond to the outstanding principal balance on the related mortgage. The minimum notional amount (outstanding principal balance at the maturity date) is $20,552,875. |
INTEREST RATE SWAP DERIVATIVE42
INTEREST RATE SWAP DERIVATIVES (Details 1) | 9 Months Ended | |
Sep. 30, 2017USD ($)Numbers | Dec. 31, 2016USD ($)Numbers | |
Derivative Instrument, Fair Value | $ | $ 71,462 | $ 106,840 |
Interest Rate Swap [Member] | ||
Derivative Instruments, Number of Instruments | Numbers | 8 | 8 |
Interest Rate Swap [Member] | Liability [Member] | ||
Derivative Instrument, Balance Sheet Location | Liability – Interest rate swap derivatives, at fair value | |
Derivative Instruments, Number of Instruments | Numbers | 3 | 3 |
Derivative Instrument, Fair Value | $ | $ (75,690) | $ (106,840) |
Interest Rate Swap [Member] | Assets [Member] | ||
Derivative Instrument, Balance Sheet Location | Asset - Interest rate swap derivatives, at fair value | |
Derivative Instruments, Number of Instruments | Numbers | 5 | 5 |
Derivative Instrument, Fair Value | $ | $ 190,705 | $ 180,759 |
INTEREST RATE SWAP DERIVATIVE43
INTEREST RATE SWAP DERIVATIVES (Details Textual) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | ||
Unrealized (Gain) Loss on Derivatives | $ 47,278 | $ (462,557) | ||||
Interest Rate Swap [Member] | ||||||
Derivative, Notional Amount | [1] | $ 22,285,109 | 22,285,109 | $ 22,871,000 | ||
Unrealized (Gain) Loss on Derivatives | (23,913) | $ (54,805) | (111,906) | $ 476,841 | ||
Maximum [Member] | ||||||
Derivative, Notional Amount | $ 20,552,875 | $ 20,552,875 | ||||
[1] | The notional amount of the Company’s swaps decreases each month to correspond to the outstanding principal balance on the related mortgage. The minimum notional amount (outstanding principal balance at the maturity date) is $20,552,875. |
FAIR VALUE DISCLOSURES (Details
FAIR VALUE DISCLOSURES (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Debt Instrument, Face Value | $ 64,095,911 | $ 40,018,648 |
Debt Instrument, Carrying Value | 62,500,062 | 38,705,103 |
Debt Instrument, Fair Value | $ 63,158,986 | $ 38,153,219 |
FAIR VALUE DISCLOSURES (Detai45
FAIR VALUE DISCLOSURES (Details 1) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Asset - Interest rate swap derivatives | $ 192,659 | $ 180,759 |
Liability - Interest rate swap derivatives | (71,462) | (106,840) |
Fair Value, Measurements, Recurring [Member] | ||
Asset - Interest rate swap derivatives | 192,659 | 180,759 |
Liability - Interest rate swap derivatives | (71,462) | (106,840) |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Asset - Interest rate swap derivatives | 0 | 0 |
Liability - Interest rate swap derivatives | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Asset - Interest rate swap derivatives | 192,659 | 180,759 |
Liability - Interest rate swap derivatives | (71,462) | (106,840) |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Asset - Interest rate swap derivatives | 0 | 0 |
Liability - Interest rate swap derivatives | $ 0 | $ 0 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||||||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |||||
Related Party Transaction, Expenses from Transactions with Related Party | [1] | $ 17,269 | |||||||
Due to Related Parties | 34,861 | $ 34,861 | $ 644,277 | ||||||
Due from Related Parties | 17,269 | 17,269 | 48,950 | ||||||
Advisor fees, Acquisition fees [Member] | |||||||||
Related Party Transaction, Expenses from Transactions with Related Party | 0 | $ 267,147 | 0 | $ 777,867 | |||||
Due to Related Parties | 0 | 0 | 0 | ||||||
Due from Related Parties | 0 | 0 | 0 | ||||||
Advisor fees, Asset management fees [Member] | |||||||||
Related Party Transaction, Expenses from Transactions with Related Party | 199,724 | 118,113 | 555,317 | 271,019 | |||||
Due to Related Parties | 0 | 0 | 43,993 | ||||||
Due from Related Parties | 0 | 0 | 0 | ||||||
Advisor fees, Property management fees [Member] | |||||||||
Related Party Transaction, Expenses from Transactions with Related Party | [2] | 24,776 | 5,964 | 67,419 | 8,090 | ||||
Due to Related Parties | [2] | 0 | 0 | 21,267 | |||||
Due from Related Parties | [2] | 0 | 0 | 0 | |||||
Advisor fees, Disposition fees [Member] | |||||||||
Related Party Transaction, Expenses from Transactions with Related Party | [3] | 0 | 0 | 103,020 | 0 | ||||
Due to Related Parties | 0 | [3] | 0 | [3] | 0 | ||||
Due from Related Parties | 0 | [3] | 0 | [3] | 0 | ||||
Reimbursable organizational and offering expenses [Member] | |||||||||
Related Party Transaction, Expenses from Transactions with Related Party | 33,108 | 280,468 | 98,349 | 1,483,033 | |||||
Due to Related Parties | 0 | 0 | 41,797 | ||||||
Due from Related Parties | 0 | 0 | 0 | ||||||
Fees To Affliates [Member] | |||||||||
Related Party Transaction, Expenses from Transactions with Related Party | 234,585 | 385,260 | 590,178 | 1,078,886 | |||||
Capitalized Acquisition Fees [Member] | |||||||||
Related Party Transaction, Expenses from Transactions with Related Party | 28,956 | 0 | 671,270 | 0 | |||||
Due to Related Parties | 0 | 0 | 0 | ||||||
Due from Related Parties | 0 | 0 | 48,950 | ||||||
Financing Coordination Fees [Member] | |||||||||
Related Party Transaction, Expenses from Transactions with Related Party | 0 | 19,350 | 100,156 | 200,110 | |||||
Due to Related Parties | 0 | 0 | 137,800 | ||||||
Due from Related Parties | 0 | 0 | 0 | ||||||
Due to advisor [Member] | |||||||||
Related Party Transaction, Expenses from Transactions with Related Party | 0 | 0 | 0 | 317,154 | |||||
Due to Related Parties | 0 | 0 | 270,372 | ||||||
Due from Related Parties | 0 | 0 | 0 | ||||||
Due to other SSLFO [Member] | |||||||||
Related Party Transaction, Expenses from Transactions with Related Party | [4] | 0 | 0 | 0 | 0 | ||||
Due to Related Parties | [4] | 0 | 0 | 100,477 | |||||
Due from Related Parties | [4] | 0 | 0 | 0 | |||||
Due From NNN [Member] | |||||||||
Related Party Transaction, Expenses from Transactions with Related Party | [1] | 0 | 17,269 | 0 | |||||
Due to Related Parties | [1] | 0 | 0 | ||||||
Due from Related Parties | [1] | 17,269 | 17,269 | 0 | |||||
Due to NNN [Member] | |||||||||
Related Party Transaction, Expenses from Transactions with Related Party | [5] | 0 | 0 | 0 | 95,730 | ||||
Due to Related Parties | [5] | 0 | 0 | 28,571 | |||||
Due from Related Parties | [5] | 0 | |||||||
Advisor Fees, Reimbursable operating expenses [Member] | |||||||||
Related Party Transaction, Expenses from Transactions with Related Party | 34,861 | $ 0 | 34,861 | $ 30,000 | |||||
Due to Related Parties | 34,861 | 34,861 | 0 | [3] | |||||
Due from Related Parties | $ 0 | $ 0 | $ 0 | [3] | |||||
[1] | This amount was the result of a bank error. The monthly interest payment that was due on RW Holdings NNN REIT’s unsecured line of credit was withdrawn from the Company’s bank account rather than from RW Holdings NNN REIT’s bank account. | ||||||||
[2] | Property management fees are presented as “property expenses” in the condensed consolidated statement of operations | ||||||||
[3] | Disposition fees for the three and nine months ended September 30, 2017 are presented as a reduction of gain on sale of real estate investment property (see Note 5). | ||||||||
[4] | These costs were incurred by SSLFO, an affiliate of the Sponsor, in connection with the organization and offering of the Company’s shares. | ||||||||
[5] | These costs were incurred in connection with the potential acquisition of a property by the Company. The property was acquired by RW Holdings NNN REIT, Inc.; therefore, the Company has a receivable from RW Holdings NNN REIT, Inc. |
RELATED PARTY TRANSACTIONS (D47
RELATED PARTY TRANSACTIONS (Details Textual) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | ||
Related Party Transaction, Expenses from Transactions with Related Party | [1] | $ 17,269 | ||||
Organization and Offering Expenses | 2,825,716 | $ 2,825,716 | ||||
Organization and Offering Expenses [Member] | ||||||
Related Party Transaction, Expenses from Transactions with Related Party | 2,654,216 | $ 2,555,866 | ||||
Organization and Offering Expenses Payable | 0 | 0 | ||||
Organization and Offering Expenses Receivable | 41,797 | |||||
Advisor fees, Acquisition fees [Member] | ||||||
Related Party Transaction, Expenses from Transactions with Related Party | 0 | $ 267,147 | $ 0 | $ 777,867 | ||
Related Party Transaction, Rate | 3.00% | |||||
Advisor fees, Acquisition fees [Member] | Maximum [Member] | ||||||
Related Party Transaction, Rate | 6.00% | |||||
Advisor fees, Asset management fees [Member] | ||||||
Related Party Transaction, Expenses from Transactions with Related Party | 199,724 | 118,113 | $ 555,317 | 271,019 | ||
Related Party Transaction, Rate | 0.05% | |||||
Advisor fees, Financing fee [Member] | ||||||
Related Party Transaction, Rate | 1.00% | |||||
Advisor fees, Property management fees [Member] | ||||||
Related Party Transaction, Expenses from Transactions with Related Party | [2] | 24,776 | 5,964 | $ 67,419 | 8,090 | |
Related Party Transaction, Rate | 1.50% | |||||
Advisor fees, Disposition fees [Member] | ||||||
Related Party Transaction, Expenses from Transactions with Related Party | [3] | $ 0 | $ 0 | $ 103,020 | $ 0 | |
Related Party Transaction, Rate | 6.00% | |||||
Leasing Commission Fees [Member] | ||||||
Related Party Transaction, Rate | 3.00% | |||||
Operating Expenses [Member] | ||||||
Related Party Transaction, Expense Reimbursement Percentage to Average Invested Assets | 2.00% | |||||
Related Party Transaction, Expense Reimbursement Percentage to Net Income | 25.00% | |||||
Rich Uncles, LLC [Member] | ||||||
Repayments of Related Party Debt | $ 2,654,216 | $ 2,514,070 | ||||
Advisor or Affiliates [Member] | Advisor fees, Disposition fees [Member] | ||||||
Related Party Transaction, Rate | 3.00% | |||||
Advisor or Affiliates [Member] | Leasing Commission Fees [Member] | ||||||
Related Party Transaction, Rate | 6.00% | |||||
[1] | This amount was the result of a bank error. The monthly interest payment that was due on RW Holdings NNN REIT’s unsecured line of credit was withdrawn from the Company’s bank account rather than from RW Holdings NNN REIT’s bank account. | |||||
[2] | Property management fees are presented as “property expenses” in the condensed consolidated statement of operations | |||||
[3] | Disposition fees for the three and nine months ended September 30, 2017 are presented as a reduction of gain on sale of real estate investment property (see Note 5). |
SUBSEQUENT EVENTS (Details Text
SUBSEQUENT EVENTS (Details Textual) - Subsequent Event [Member] - USD ($) | 1 Months Ended | |
Nov. 10, 2017 | Oct. 20, 2017 | |
Dividends Payable, Date Declared | Oct. 20, 2017 | |
Dividends Payable, Amount Per Share | $ 0.0020604 | |
Dividends Payable | $ 1,563,430 | |
Dividends Payable, Date to be Paid | Oct. 20, 2017 | |
Dividend Reinvested | $ 1,104,493 | |
Stock Repurchased During Period, Value | $ 953,295 | |
Mortgages [Member] | ||
Stock Repurchased During Period, Shares | 95,330 |