Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2024 | May 09, 2024 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2024 | |
Document Transition Report | false | |
Entity File Number | 000-56165 | |
Entity Registrant Name | Cottonwood Communities, Inc. | |
Entity Incorporation, State or Country Code | MD | |
Entity Tax Identification Number | 61-1805524 | |
Entity Address, Address Line One | 1245 E. Brickyard Road | |
Entity Address, Address Line Two | Suite 250 | |
Entity Address, City or Town | Salt Lake City | |
Entity Address, State or Province | UT | |
Entity Address, Postal Zip Code | 84106 | |
City Area Code | 801 | |
Local Phone Number | 278-0700 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Central Index Key | 0001692951 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Class T | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 4,053,907 | |
Class D | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 249,487 | |
Class I | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 5,071,476 | |
Class A | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 22,252,958 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Assets | ||
Real estate assets, net | $ 1,675,235 | $ 1,649,146 |
Investments in unconsolidated real estate entities | 149,737 | 185,716 |
Investments in real estate-related loans, net | 12,080 | 8,703 |
Cash and cash equivalents | 72,162 | 63,800 |
Restricted cash | 24,109 | 27,013 |
Other assets | 31,381 | 29,464 |
Total assets | 1,964,704 | 1,963,842 |
Liabilities | ||
Mortgage notes and revolving credit facility, net | 1,017,039 | 1,022,452 |
Construction loans, net | 138,212 | 129,991 |
Preferred stock, net | 206,038 | 201,621 |
Preferred interest liability | 15,300 | 15,300 |
Unsecured promissory notes, net | 41,358 | 41,883 |
Accounts payable, accrued expenses and other liabilities | 71,609 | 81,048 |
Total liabilities | 1,489,556 | 1,492,295 |
Commitments and contingencies (Note 11) | ||
Stockholders' equity | ||
Series A Convertible Preferred Stock, $0.01 par value, 15,000,000 shares authorized at $10.00 per share; 1,578,608 and 215,277 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively. | 13,464 | 1,569 |
Additional paid-in capital | 363,724 | 373,954 |
Accumulated deficit | (90,842) | (94,761) |
Total stockholders' equity | 218,725 | 218,944 |
Noncontrolling interests | ||
Limited partners | 226,188 | 221,617 |
Partially owned entities | 30,235 | 30,986 |
Total noncontrolling interests | 256,423 | 252,603 |
Total equity and noncontrolling interests | 475,148 | 471,547 |
Total liabilities, equity and noncontrolling interests | 1,964,704 | 1,963,842 |
Series A Convertible Preferred Stock | ||
Stockholders' equity | ||
Accumulated distributions | (157) | (14) |
Class T | ||
Stockholders' equity | ||
Common stock | 39 | 39 |
Class D | ||
Stockholders' equity | ||
Common stock | 2 | 2 |
Class I | ||
Stockholders' equity | ||
Common stock | 46 | 43 |
Class A | ||
Stockholders' equity | ||
Common stock | 219 | 226 |
Common Stock | ||
Stockholders' equity | ||
Accumulated distributions | $ (67,770) | $ (62,114) |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2024 | Dec. 31, 2023 |
Common stock, shares outstanding (in shares) | 31,211,357 | 31,648,281 |
Series A Convertible Preferred Stock | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 15,000,000 | 15,000,000 |
Preferred stock, rice per share (in dollars per share) | $ 10 | $ 10 |
Preferred stock, shares issued (in shares) | 1,578,608 | 215,277 |
Preferred stock, shares outstanding (in shares) | 1,578,608 | 215,277 |
Class T | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 275,000,000 | 275,000,000 |
Common stock, shares issued (in shares) | 3,902,943 | 3,917,218 |
Common stock, shares outstanding (in shares) | 3,902,943 | 3,917,218 |
Class D | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 275,000,000 | 275,000,000 |
Common stock, shares issued (in shares) | 205,489 | 202,743 |
Common stock, shares outstanding (in shares) | 205,489 | 202,743 |
Class I | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 275,000,000 | 275,000,000 |
Common stock, shares issued (in shares) | 4,578,931 | 4,296,443 |
Common stock, shares outstanding (in shares) | 4,578,931 | 4,296,443 |
Class A | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 125,000,000 | 125,000,000 |
Common stock, shares issued (in shares) | 22,523,994 | 23,231,877 |
Common stock, shares outstanding (in shares) | 22,523,994 | 23,231,877 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Revenues | ||
Rental and other property revenues | $ 34,355,000 | $ 35,581,000 |
Property management revenues | 2,339,000 | 3,106,000 |
Other revenues | 785,000 | 3,000 |
Total revenues | 37,479,000 | 38,690,000 |
Operating expenses | ||
Property operations expense | 13,901,000 | 13,109,000 |
Property management expense | 4,709,000 | 4,257,000 |
Asset management fee | 3,144,000 | 4,786,000 |
Depreciation and amortization | 14,954,000 | 15,412,000 |
General and administrative expenses | 1,767,000 | 3,299,000 |
Total operating expenses | 38,475,000 | 40,863,000 |
Loss from operations | (996,000) | (2,173,000) |
Equity in earnings of unconsolidated real estate entities | 1,368,000 | 1,647,000 |
Interest income | 473,000 | 403,000 |
Interest expense | (21,657,000) | (17,584,000) |
Gain on sale of real estate assets | 26,638,000 | 1,031,000 |
Other income (expense) | 1,222,000 | (1,418,000) |
Income (loss) before income taxes | 7,048,000 | (18,094,000) |
Income tax benefit | 15,000 | 234,000 |
Net income (loss) | 7,063,000 | (17,860,000) |
Net (income) loss attributable to noncontrolling interests: | ||
Limited partners | (3,856,000) | 8,397,000 |
Partially owned entities | 712,000 | 44,000 |
Net income (loss) attributable to controlling interests | 3,919,000 | (9,419,000) |
Less preferred stock dividends | 143,000 | 0 |
Numerator for net income (loss) per share - basic | 3,776,000 | (9,419,000) |
Numerator for net income (loss) per share - diluted | $ 3,776,000 | $ (9,419,000) |
Weighted-average common shares outstanding - basic | 31,581,072 | 35,603,420 |
Weighted-average common shares outstanding - diluted | 64,362,720 | 35,603,420 |
Net income (loss) per common share - basic (in dollars per share) | $ 0.12 | $ (0.26) |
Net income (loss) per common share -diluted (in dollars per share) | $ 0.12 | $ (0.26) |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders' Equity - USD ($) | Total | Series A Convertible Preferred Stock | Total Stockholders' Equity | Total Stockholders' Equity Series A Convertible Preferred Stock | Preferred Stock Series A Convertible Preferred Stock | Common Stock | Common Stock Class T | Common Stock Class D | Common Stock Class I | Common Stock Class A | Additional Paid-In Capital | Accumulated Distributions | Accumulated Distributions Series A Convertible Preferred Stock | Accumulated Deficit | Noncontrolling interests Limited Partners | Noncontrolling interests Partially Owned Entities |
Stockholders' equity, beginning balance at Dec. 31, 2022 | $ 609,899,000 | $ 304,932,000 | $ 0 | $ 48,000 | $ 1,000 | $ 39,000 | $ 266,000 | $ 414,140,000 | $ (38,049,000) | $ 0 | $ (71,513,000) | $ 272,536,000 | $ 32,431,000 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||
Issuance of common stock | 13,407,000 | 13,407,000 | 3,000 | 1,000 | 2,000 | 13,401,000 | ||||||||||
Offering costs - common stock | (1,188,000) | (1,188,000) | (1,188,000) | |||||||||||||
Distribution reinvestment | 696,000 | 696,000 | 696,000 | |||||||||||||
Common stock/OP Units repurchased | (19,626,000) | (18,977,000) | (1,000) | (9,000) | (18,967,000) | (649,000) | ||||||||||
Exchanges and transfers | 0 | 1,971,000 | 1,000 | 1,970,000 | (1,971,000) | |||||||||||
OP Units issued for real estate interests | 19,829,000 | 19,829,000 | ||||||||||||||
Share-based compensation | 1,160,000 | 55,000 | 55,000 | 1,105,000 | ||||||||||||
Distributions to investors | (6,230,000) | (6,230,000) | ||||||||||||||
Distributions to investors | (12,113,000) | (5,757,000) | (126,000) | |||||||||||||
Net income (loss) | (17,860,000) | (9,419,000) | (9,419,000) | (8,397,000) | (44,000) | |||||||||||
Net income (loss) | (9,419,000) | |||||||||||||||
Reallocation of stockholders' equity and noncontrolling interests | 0 | 7,150,000 | 7,150,000 | (7,150,000) | ||||||||||||
Stockholders' equity, ending balance at Mar. 31, 2023 | 594,204,000 | 292,397,000 | 0 | 51,000 | 2,000 | 41,000 | 257,000 | 417,257,000 | (44,279,000) | 0 | (80,932,000) | 269,546,000 | 32,261,000 | |||
Stockholders' equity, beginning balance at Dec. 31, 2023 | 471,547,000 | 218,944,000 | 1,569,000 | 39,000 | 2,000 | 43,000 | 226,000 | 373,954,000 | (62,114,000) | (14,000) | (94,761,000) | 221,617,000 | 30,986,000 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||
Issuance of common stock | 5,980,000 | $ 13,608,000 | 5,980,000 | $ 13,608,000 | 13,608,000 | 1,000 | 3,000 | 5,976,000 | ||||||||
Offering costs - common stock | $ (1,713,000) | (88,000) | $ (1,713,000) | (1,713,000) | $ (88,000) | (88,000) | ||||||||||
Distribution reinvestment | 724,000 | 724,000 | 724,000 | |||||||||||||
Distribution reinvestment | 724,000 | |||||||||||||||
Common stock/OP Units repurchased | (14,552,000) | (12,584,000) | (1,000) | (1,000) | (7,000) | (12,575,000) | (1,968,000) | |||||||||
Exchanges and transfers | 0 | 613,000 | 1,000 | 612,000 | (613,000) | |||||||||||
OP Units issued for real estate interests | 3,322,000 | 3,322,000 | ||||||||||||||
Share-based compensation | 982,000 | 53,000 | 53,000 | 929,000 | ||||||||||||
Distributions to investors | (5,799,000) | (5,656,000) | (143,000) | |||||||||||||
Distributions to investors | (11,725,000) | (5,887,000) | (39,000) | |||||||||||||
Net income (loss) | 7,063,000 | 3,919,000 | 3,919,000 | 3,856,000 | (712,000) | |||||||||||
Net income (loss) | 3,919,000 | |||||||||||||||
Reallocation of stockholders' equity and noncontrolling interests | 0 | (4,932,000) | (4,932,000) | 4,932,000 | ||||||||||||
Stockholders' equity, ending balance at Mar. 31, 2024 | $ 475,148,000 | $ 218,725,000 | $ 13,464,000 | $ 39,000 | $ 2,000 | $ 46,000 | $ 219,000 | $ 363,724,000 | $ (67,770,000) | $ (157,000) | $ (90,842,000) | $ 226,188,000 | $ 30,235,000 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 7,063,000 | $ (17,860,000) |
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||
Depreciation and amortization | 14,954,000 | 15,412,000 |
Gain on sale of real estate assets | (26,638,000) | (1,031,000) |
Share-based compensation | 982,000 | 1,160,000 |
Amortization of debt issuance costs, discounts and premiums | 1,413,000 | 1,925,000 |
Other operating | 1,057,000 | (134,000) |
Equity in earnings of unconsolidated real estate entities | (1,368,000) | (1,647,000) |
Distributions from unconsolidated real estate entities - return on capital | 695,000 | 1,188,000 |
Changes in operating assets and liabilities: | ||
Other assets | (2,295,000) | (1,092,000) |
Performance participation allocation payment | 0 | (20,320,000) |
Accounts payable, accrued expenses and other liabilities | 3,051,000 | 1,889,000 |
Net cash used in operating activities | (1,086,000) | (20,510,000) |
Cash flows from investing activities: | ||
Cash acquired on consolidation of real estate | 2,167,000 | 0 |
Proceeds from sale of real estate assets, net | 82,434,000 | 4,656,000 |
Capital expenditures and development activities | (13,183,000) | (10,230,000) |
Investments in unconsolidated real estate entities | (1,314,000) | (2,676,000) |
Distributions from unconsolidated real estate entities - return of capital | 0 | 18,106,000 |
Contributions to investments in real estate-related loans | (3,399,000) | 0 |
Net cash provided by investing activities | 66,705,000 | 9,856,000 |
Cash flows from financing activities: | ||
Principal payments on mortgage notes | (115,000) | (244,000) |
Borrowings from revolving credit facility | 28,600,000 | 31,500,000 |
Repayments on revolving credit facility | (35,000,000) | (50,000,000) |
Borrowings under mortgage notes | 0 | 265,513,000 |
Repayments of mortgage notes | (48,458,000) | (199,758,000) |
Deferred financing costs on mortgage notes | 0 | (3,221,000) |
Borrowings from construction loans | 7,138,000 | 8,042,000 |
Repayments of construction loans | 0 | (37,000,000) |
Repayments of related party notes assumed on acquisition | (1,332,000) | 0 |
Proceeds from issuance of preferred stock | 6,877,000 | 31,315,000 |
Redemption of preferred stock | (1,839,000) | (943,000) |
Offering costs paid on issuance of preferred stock | (888,000) | (3,029,000) |
Repurchase of unsecured promissory notes | (755,000) | (250,000) |
Proceeds from issuance of Series A Convertible Preferred Stock | 13,008,000 | 0 |
Proceeds from issuance of common stock | 5,980,000 | 14,103,000 |
Repurchase of common stock/OP Units | (20,234,000) | (19,626,000) |
Distributions to convertible preferred stockholders | (70,000) | 0 |
Distributions to common stockholders | (4,976,000) | (6,246,000) |
Distributions to noncontrolling interests - limited partners | (5,854,000) | (5,688,000) |
Distributions to noncontrolling interests - partially owned entities | (39,000) | (126,000) |
Net cash (used in) provided by financing activities | (60,161,000) | 23,154,000 |
Net increase in cash and cash equivalents and restricted cash | 5,458,000 | 12,500,000 |
Cash and cash equivalents and restricted cash, beginning of period | 90,813,000 | 95,524,000 |
Cash and cash equivalents and restricted cash, end of period | 96,271,000 | 108,024,000 |
Reconciliation of cash and cash equivalents and restricted cash to the condensed consolidated balance sheets: | ||
Cash and cash equivalents | 72,162,000 | 87,174,000 |
Restricted cash | 24,109,000 | 20,850,000 |
Total cash and cash equivalents and restricted cash | 96,271,000 | 108,024,000 |
Supplemental disclosure of non-cash investing and financing activities: | ||
(Decrease) increase in accrued deferred offering costs | (423,000) | 225,000 |
Distributions reinvested in common stock | 724,000 | 696,000 |
Changes in accrued capital expenditures | (6,240,000) | 771,000 |
Paid-in-kind interest related to construction | 1,083,000 | 1,059,000 |
Changes in accrued redemptions | (5,656,000) | 2,861,000 |
Value of OP Units issued for additional investment in unconsolidated real estate entity | 0 | 19,829,000 |
Preferred Stock | ||
Cash flows from financing activities: | ||
Offering costs paid on issuance of common stock | (1,647,000) | 0 |
Common Stock | ||
Cash flows from financing activities: | ||
Offering costs paid on issuance of common stock | (557,000) | (1,188,000) |
Repurchase of common stock/OP Units | (12,600,000) | |
Distributions to common stockholders | (700,000) | |
Cottonwood Lighthouse Point | ||
Supplemental disclosure of non-cash investing and financing activities: | ||
Real estate assets, net of cash acquired | 86,961,000 | 0 |
Mortgage note | 47,581,000 | 0 |
Other assets and liabilities assumed, net | (2,426,000) | 0 |
Value of OP Units issued for real estate assets | $ 3,322,000 | $ 0 |
Organization and Business
Organization and Business | 3 Months Ended |
Mar. 31, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Business | Organization and Business Cottonwood Communities, Inc. (the “Company,” “we,” “us,” or “our”) invests in a diverse portfolio of multifamily apartment communities and multifamily real estate-related assets throughout the United States. We are externally managed by our advisor, CC Advisors III, LLC (“CC Advisors III”), a wholly-owned subsidiary of our sponsor, Cottonwood Communities Advisors, LLC (“CCA”). We were incorporated in Maryland in 2016. We own all of our assets through our operating partnership, Cottonwood Residential O.P., LP (“CROP”), and its subsidiaries. We are the sole member of the sole general partner of CROP and own general partner interests in CROP alongside third party limited partners. We are a non-traded, perpetual-life, net asset value (“NAV”) real estate investment trust (“REIT”). We generally will not be subject to U.S. federal income taxes on our taxable income to the extent we annually distribute all of our net taxable income to stockholders and maintain our qualification as a REIT. We conducted our initial public offering of common stock (the “Initial Offering”) from August 13, 2018 to December 22, 2020, for which we raised gross proceeds of $122.0 million. The Initial Offering ended in December 2020. In November 2021, we registered with the SEC an offering of up to $1.0 billion of shares of common stock (the “Follow-on Offering”), consisting of up to $900.0 million in shares of common stock offered in a primary offering (the “Primary Offering”) and $100.0 million in shares under our distribution reinvestment plan (the “DRP Offering”). As of March 31, 2024, we have raised gross proceeds of $209.7 million from the Follow-on Offering, including $5.4 million proceeds from the DRP Offering. Since November 2019, we have periodically conducted private placement offerings exempt from registration under the Securities Act pursuant to which we have offered for sale to accredited investors preferred stock at a purchase price of $10.00 per share of preferred stock (the “Private Offerings”). As of March 31, 2024, we have raised gross proceeds of $235.9 million from the Private Offerings. Additional information about our preferred stock is included in Note 7 and Note 8 to these financial statements. We own and operate a diverse portfolio of investments in multifamily apartment communities located in targeted markets throughout the United States. As of March 31, 2024, our portfolio consists of ownership interests or structured investment interests in 36 multifamily apartment communities with a total of 10,371 units, including 1,868 units in six multifamily apartment communities in which we have a structured investment interest and another 987 units in four multifamily apartment communities under construction or in lease-up. In addition, we have an ownership interest in four land sites we plan to develop. We operate as one reportable segment comprised of multifamily real estate. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2024 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation The accompanying condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial information and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. The condensed consolidated financial statements, including the condensed notes thereto, are unaudited and exclude some of the disclosures required in audited financial statements. The condensed consolidated balance sheet as of December 31, 2023 has been derived from the Company’s audited financial statements as of that date, but does not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, the accompanying condensed consolidated financial statements contain all adjustments and eliminations, consisting only of normal recurring adjustments necessary for a fair presentation in conformity with GAAP. The accompanying condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in our Annual Report on Form 10-K for the period ending December 31, 2023 filed with the SEC. As our comprehensive income is equivalent to net income, our accompanying condensed consolidated financial statements do not include a Statement of Other Comprehensive Income. The accompanying condensed consolidated financial statements include the accounts of the Company and its subsidiaries for which we have a controlling interest. All intercompany balances and transactions have been eliminated in consolidation. Certain amounts in the prior year condensed consolidated financial statements and notes to the condensed consolidated financial statements have been reclassified to conform to the current year presentation. Such reclassifications did not impact previously reported net loss or accumulated deficit or change net cash provided by or used in operating, investing or financing activities. Investments in Real-Estate Related Loans Investments in Real-Estate Related Loans are mezzanine loans issued to entities pursuing apartment developments. Interest is recorded over the life of the mezzanine loan as other revenues on the statement of operations. Each mezzanine loan is analyzed to determine if it is impaired. A mezzanine loan is impaired if it is probable that we will not collect all contractually due principal and interest. As of March 31, 2024 and December 31, 2023, no mezzanine loans were impaired. |
Real Estate Assets, Net
Real Estate Assets, Net | 3 Months Ended |
Mar. 31, 2024 | |
Business Combination and Asset Acquisition [Abstract] | |
Real Estate Assets, Net | Real Estate Assets, Net The following table summarizes the carrying amounts of our consolidated real estate assets (in thousands): March 31, 2024 December 31, 2023 Land $ 260,329 $ 257,553 Buildings and improvements 1,449,242 1,429,689 Furniture, fixtures and equipment 62,155 63,015 Intangible assets 38,300 37,158 Construction in progress (1) 24,165 17,995 1,834,191 1,805,410 Less: Accumulated depreciation and amortization (158,956) (156,264) Real estate assets, net $ 1,675,235 $ 1,649,146 (1) Includes construction in progress for our development projects and capitalized costs for improvements not yet placed in service at our stabilized properties. Sale of Cottonwood West Palm On February 29, 2024, we sold Cottonwood West Palm for net proceeds of $34.0 million. We recorded a net gain on sale of $26.6 million. Asset Acquisitions The following table summarizes the purchase price allocation of the real estate assets acquired during the three months ended March 31, 2024 (in thousands): Allocated Amounts Property Location Date Consolidated Building Land Land Improvements Personal Property Lease Intangibles Total Cottonwood Lighthouse Point Pompano Beach, FL 3/28/24 $ 72,046 $ 12,156 $ 1,114 $ 1,167 $ 2,360 $ 88,843 |
Investments in Unconsolidated R
Investments in Unconsolidated Real Estate Entities | 3 Months Ended |
Mar. 31, 2024 | |
Real Estate [Abstract] | |
Investments in Unconsolidated Real Estate Entities | Investments in Unconsolidated Real Estate Entities Our investments in unconsolidated real estate entities consist of ownership interests in stabilized properties and preferred equity investments as follows as of March 31, 2024 and December 31, 2023 (in thousands): Balance at Property / Development Location % Owned March 31, 2024 December 31, 2023 Stabilized Properties Alpha Mill (1) Charlotte, NC 73.7% $ 29,142 $ 29,522 Cottonwood Bayview (1) St. Petersburg, FL 71.0% 11,391 11,817 Cottonwood Lighthouse Point (1) (2) Pompano Beach, FL 100.0% (2) — 38,852 Fox Point (1) Salt Lake City, UT 52.8% 13,183 13,533 Toscana at Valley Ridge (1) Lewisville, TX 58.6% 6,526 6,713 Preferred Equity Investments Lector85 Ybor City, FL 11,760 11,387 Astoria West Queens, NY 24,173 23,406 417 Callowhill Philadelphia, PA 40,618 38,028 Infield Kissimmee, FL 12,443 11,942 Other 501 516 Total $ 149,737 $ 185,716 (1) We account for our tenant-in-common interests in these properties as equity method investments. (2) On March 28, 2024, we issued 259,246 OP Units and assumed $1.3 million in related party notes and interest to acquire the remaining 13.2% tenant-in-common interests in Cottonwood Lighthouse Point, bringing our ownership to 100% and resulting in the consolidation of the property from that date onward. The value of the OP Units issued was $3.3 million. Equity in losses for our stabilized properties for the three months ended March 31, 2024 and 2023 were $1.5 million and $1.3 million, respectively. Our preferred equity investments, which are in development projects, have liquidation rights and priorities that are different from ownership percentages. As such, equity in earnings is determined using the hypothetical liquidation book value method. Equity in earnings for our preferred equity investments for both the three months ended March 31, 2024 and 2023 were $2.9 million. During the three months ended March 31, 2024, we funded $1.3 million towards the 417 Callowhill preferred equity investment, bringing our total funding to our committed amount of $33.4 million. As of March 31, 2024, we had fully funded our commitments on the Lector85, Astoria West, 417 Callowhill and Infield preferred equity investments. |
Debt
Debt | 3 Months Ended |
Mar. 31, 2024 | |
Debt Disclosure [Abstract] | |
Debt | Debt Mortgage Notes and Revolving Credit Facility The following table is a summary of the mortgage notes and revolving credit facility secured by our properties as of March 31, 2024 and December 31, 2023 ($ in thousands): Principal Balance Outstanding Indebtedness Weighted-Average Interest Rate Weighted-Average Remaining Term (1) March 31, 2024 December 31, 2023 Fixed rate loans Fixed rate mortgages 4.49% 4.8 Years $ 855,209 $ 891,319 Total fixed rate loans 855,209 891,319 Variable rate loans (2) Floating rate mortgages 5.43% (3) 7.0 Years 167,134 131,153 Variable rate revolving credit facility (4) 7.92% 3.7 Years 6,000 12,400 Total variable rate loans 173,134 143,553 Total secured loans 1,028,343 1,034,872 Unamortized debt issuance costs (5,746) (7,067) Premium on assumed debt, net (5,558) (5,353) Mortgage notes and revolving credit facility, net $ 1,017,039 $ 1,022,452 (1) For loans where we have the ability to exercise extension options at our own discretion, the maximum maturity date has been assumed. (2) The interest rates of our variable rate loans are based on 30-Day Average SOFR or one-month SOFR (CME Term). (3) Includes the impact of interest rate caps in effect on March 31, 2024. (4) Our variable rate revolving credit facility is secured by Parc Westborough with the option to add an additional property as collateral by December 14, 2024. We may obtain advances on the facility up to $100.0 million, as long as certain loan-to-value ratios and other requirements are maintained. At March 31, 2024, the amount on our variable rate revolving credit facility was capped at $41.3 million primarily due to the interest rate environment and the applicable debt-service coverage ratio. The fixed and variable rate mortgages as of March 31, 2024 no longer include the related debt for Cottonwood West Palm, which was sold in February 2024 and which previously included both a fixed and variable debt component. Floating rate mortgages as of March 31, 2024 include the variable rate mortgage of Cottonwood Lighthouse Point, which was consolidated from March 28, 2024 onward. See Note 3 and Note 4 above for additional discussion related to the Cottonwood West Palm and Cottonwood Lighthouse Point transactions. We are in compliance with all covenants associated with our mortgage notes and revolving credit facility as of March 31, 2024. Construction Loans Information on our construction loans are as follows ($ in thousands): Development Interest Rate Final Expiration Date Loan Amount Amount Drawn at March 31, 2024 Amount Drawn at December 31, 2023 Cottonwood Broadway One-Month BSBY (1) + 2.9% May 15, 2025 $ 44,625 $ 41,891 $ 41,891 Cottonwood Highland 30-Day Average SOFR + 2.55% May 1, 2029 44,250 42,675 39,790 805 Riverfront One-Month SOFR + 4.35% May 30, 2026 55,400 53,646 48,310 The Westerly One-Month SOFR + 3.0% July 12, 2028 42,000 — — $ 186,275 $ 138,212 $ 129,991 (1) The Bloomberg Short-Term Yield Index (“BSBY”) will cease as an index after November 15, 2024. We expect the Broadway loan will be refinanced in 2024 before the cessation of BSBY, although there are provisions in the Broadway loan documents for a conversion to Term SOFR if needed. Unsecured Promissory Notes, Net CROP issued notes to foreign investors outside of the United States. These notes are unsecured and subordinate to all of CROP's debt. Each note had or has extension options, at our discretion, during which the interest rate increases 0.25% each year. Information on our unsecured promissory notes are as follows ($ in thousands): Offering Size Interest Rate Maturity Date (1) (2) Maximum Extension Date March 31, 2024 December 31, 2023 2017 6% Notes (1) $ 35,000 6.50% December 31, 2024 (1) December 31, 2024 $ 20,008 $ 20,308 2019 6% Notes (2) 25,000 6.25% December 31, 2024 (2) December 31, 2025 21,350 21,575 $ 60,000 $ 41,358 $ 41,883 (1) We exercised our final option to extend the maturity date on our 2017 6% Notes for one additional year to December 31, 2024, which increased the interest rate to 6.5% for the period from January 1, 2024 to December 31, 2024. (2) We exercised the option to extend the maturity date on our 2019 6% Notes for one additional year to December 31, 2024, which increased the interest rate to 6.25% for the period from January 1, 2024 to December 31, 2024. The aggregate maturities, including amortizing principal payments on our debt for years subsequent to March 31, 2024 are as follows (in thousands): Year Mortgage Notes and Revolving Credit Facility Construction Loans Unsecured Total 2024 (1) $ 351 $ 95,537 $ 41,358 $ 137,246 2025 1,353 — — 1,353 2026 99,060 — — 99,060 2027 364,143 — — 364,143 2028 72,443 — — 72,443 Thereafter 490,993 42,675 — 533,668 $ 1,028,343 $ 138,212 $ 41,358 $ 1,207,913 (1) Of the amounts maturing in 2024, $21.4 million relates to our 2019 6% Unsecured Promissory Notes, which can be extended to December 31, 2025. An additional $41.9 million relates to the construction loan for Cottonwood Broadway, which can be extended to May 15, 2025, subject to the satisfaction of certain conditions, and $53.6 million relates to the construction loan for 805 Riverfront, which can be extended for two one |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 3 Months Ended |
Mar. 31, 2024 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments We estimate the fair value of our financial instruments using available market information and valuation methodologies we believe to be appropriate. As of March 31, 2024 and December 31, 2023, the fair values of cash and cash equivalents, restricted cash, other assets, related party payables, and accounts payable, accrued expenses and other liabilities approximate their carrying values due to the short-term nature of these instruments. Fair value measurements are determined based on the assumptions that market participants would use in pricing the asset or liability. Fair value measurements are categorized into one of three levels of the fair value hierarchy based on the lowest level of significant input used. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. Considerable judgment and a high degree of subjectivity are involved in developing these estimates. These estimates may differ from the actual amounts that we could realize upon settlement. The fair value hierarchy is as follows: Level 1 - Quoted (unadjusted) prices in active markets for identical assets or liabilities. Level 2 - Other observable inputs, either directly or indirectly, other than quoted prices included in Level 1, including: • Quoted prices for similar assets/liabilities in active markets; • Quoted prices for identical or similar assets/liabilities in non-active markets (e.g., few transactions, limited information, non-current prices, high variability over time); • Inputs other than quoted prices that are observable for the asset/liability (e.g., interest rates, yield curves, volatility, default rates); and • Inputs that are derived principally from or corroborated by other observable market data. Level 3 - Unobservable inputs that cannot be corroborated by observable market data. The table below includes the carrying value and fair value for our financial instruments for which it is practicable to estimate fair value (in thousands): March 31, 2024 December 31, 2023 Carrying Value Fair Value Carrying Value Fair Value Financial Asset: Investments in real estate-related loans $ 12,080 $ 12,176 $ 8,703 $ 8,777 Total $ 12,080 $ 12,176 $ 8,703 $ 8,777 Financial Liability: Fixed rate mortgages $ 855,209 $ 836,961 $ 891,319 $ 869,248 Floating rate mortgages $ 167,134 $ 165,385 $ 131,153 $ 129,540 Variable rate revolving credit facility $ 6,000 $ 6,000 $ 12,400 $ 12,400 Construction loans $ 138,212 $ 138,212 $ 129,991 $ 129,991 Series 2019 Preferred Stock $ 122,089 $ 122,089 $ 124,266 $ 124,266 Series 2023 Preferred Stock $ 90,253 $ 90,253 $ 83,567 $ 83,567 Series 2023-A Preferred Stock $ 2,950 $ 2,950 $ 2,850 $ 2,850 Preferred interest liability $ 15,300 $ 15,300 $ 15,300 $ 15,300 Unsecured promissory notes $ 41,358 $ 41,358 $ 41,883 $ 41,883 Total $ 1,438,505 $ 1,418,508 $ 1,432,729 $ 1,409,045 All financial instruments in the table above are categorized as Level 2 in the fair value hierarchy. |
Preferred Stock
Preferred Stock | 3 Months Ended |
Mar. 31, 2024 | |
Equity [Abstract] | |
Preferred Stock | Preferred Stock We have three classes of preferred stock outstanding as of March 31, 2024: Series 2019, Series 2023, and Series 2023-A that are accounted for as liabilities on the condensed consolidated balance sheets as they are mandatorily redeemable. Information on these classes of preferred stock as of March 31, 2024 and December 31, 2023 is as follows: Shares Outstanding at Dividend Rate Extension Dividend Rate Redemption Date Maximum Extension Date March 31, 2024 December 31, 2023 Series 2019 Preferred Stock 5.5% 6.0% December 31, 2024 (1) December 31, 2025 12,208,896 12,426,596 Series 2023 Preferred Stock 6.0% 6.5% (2) June 30, 2027 June 30, 2029 9,025,289 8,356,724 Series 2023-A Preferred Stock 7.0% N/A December 31, 2027 N/A 295,000 285,000 (1) Prior to the original December 31, 2023 redemption date, we exercised our first extension option for the Series 2019 Preferred Stock, which increased the dividend rate to 6.0% and extended the redemption date to December 31, 2024. (2) Represents the fully extended dividend rate. During the first-year extension, the dividend rate is 6.25%. Our Series 2019 Preferred Stock was fully subscribed and terminated in March 2022. The offering of Series 2023 Preferred Stock commenced in December 2022 and is ongoing, with our first shares issued in early 2023. The offering of Series 2023-A Preferred Stock commenced in July 2023, and is ongoing, with our first shares issued in August 2023. During the three months ended March 31, 2024, we issued $6.7 million of Series 2023 Preferred Stock and we issued $0.1 million of Series 2023-A Preferred Stock. During the three months ended March 31, 2024 and 2023, we incurred $1.8 million and $1.7 million in dividends on our Series 2019 Preferred Stock, respectively, and we incurred $1.3 million and $0.2 million in dividends on our Series 2023 Preferred Stock, respectively. During the three months ended March 31, 2024, we incurred $0.1 million in dividends on our Series 2023-A Preferred Stock. Dividends on preferred stock accounted for as liabilities are recorded through interest expense. During the three months ended March 31, 2024 and 2023, we repurchased 217,700 shares of Series 2019 Preferred Stock for $2.1 million and 96,319 shares of Series 2019 Preferred Stock for $0.9 million, respectively. No shares of our Series 2023 Preferred Stock or our Series 2023-A Preferred Stock were repurchased during the three months ended March 31, 2024 or 2023. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2024 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders' Equity Convertible Preferred Stock As of March 31, 2024, there were 1,578,608 shares of the Convertible Preferred Stock issued and outstanding. For the three months ended March 31, 2024, we paid aggregate dividends on our Convertible Preferred Stock of $0.1 million. Common Stock The following table details the movement in the Company's outstanding shares for each class of common stock: Three Months Ended March 31, 2024 Class T Class D Class I Class A Total December 31, 2023 3,917,218 202,743 4,296,443 23,231,877 31,648,281 Issuance of common stock 141,143 2,496 302,137 — 445,776 Distribution reinvestment 14,575 250 10,605 27,758 53,188 Exchanges and transfers (1) — — 42,853 — 42,853 Repurchases of common stock (169,993) — (73,107) (735,641) (978,741) March 31, 2024 3,902,943 205,489 4,578,931 22,523,994 31,211,357 (1) Exchanges represent the number of shares OP Unit holders have exchanged for Class I shares during the period. Transfers represent Class T shares that were converted to Class I shares during the period, of which there were none during the three months ended March 31, 2024. Common Stock Distributions Distributions on our common stock are determined by the board of directors based on our financial condition and other relevant factors. Common stockholders may choose to receive cash distributions or purchase additional shares through our distribution reinvestment plan. For the three months ended March 31, 2024, we paid aggregate distributions of $5.7 million, including $0.7 million of distributions reinvested through our distribution reinvestment plan. We declared the following monthly distributions for each share of our common stock as shown in the table below: Shareholder Record Date Monthly Rate Annually January 31, 2024 $ 0.06083333 $ 0.73 February 29, 2024 $ 0.06083333 $ 0.73 March 31, 2024 $ 0.06083333 $ 0.73 Repurchases During the three months ended March 31, 2024, we repurchased 978,741 shares of common stock pursuant to our share repurchase program for $12.6 million, at an average repurchase price of $12.80. We had no unfulfilled repurchase requests during the three months ended March 31, 2024. |
Related-Party Transactions
Related-Party Transactions | 3 Months Ended |
Mar. 31, 2024 | |
Related Party Transactions [Abstract] | |
Related-Party Transactions | Related-Party Transactions Advisor Compensation CC Advisors III manages our business as our external advisor and, under the terms of our advisory agreement, performs certain services for us, including the identification, evaluation, negotiation, origination, acquisition and disposition of investments; and the management of our business. These activities are all subject to oversight by our board of directors. Our advisor is entitled to receive fees and compensation for services provided as mentioned below. Management Fee. CROP pays our advisor a monthly management fee equal to 0.0625% of GAV (gross asset value of CROP, calculated pursuant to our valuation guidelines and reflective of the ownership interest held by CROP in such gross assets), subject to a cap. Through September 19, 2023, the cap was equal to 0.125% of net asset value of CROP. Effective September 19, 2023, the cap was amended to be based on “adjusted net asset value”, which is defined to include the value attributable to preferred stock that is convertible into common equity in the calculation of net asset value of CROP. Management fees to our advisor for the three months ended March 31, 2024 and 2023 were $3.1 million and $4.8 million, respectively. Acquisition Expense Reimbursement. We will reimburse our advisor for out-of-pocket expenses in connection with the selection, evaluation, structuring, acquisition, financing and development of investments, whether or not such investments are acquired, and make payments to third parties or possibly certain of our advisor’s affiliates in connection with providing services to us. There were no acquisition expense reimbursements for the three months ended March 31, 2024 and 2023. Performance Participation Allocation. In addition to the fees paid to our advisor for services provided pursuant to our advisory agreement, CC Advisors - SLP, LLC, an affiliate of our advisor and the Special Limited Partner at CROP, holds a performance participation interest in CROP that entitles it to receive an allocation of CROP's total return to its capital account. The performance participation allocation is an incentive fee indirectly paid to our advisor and receipt of the allocation is subject to the ongoing effectiveness of the advisory agreement. As the performance participation allocation is associated with the performance of a service by the advisor, it is expensed in our condensed consolidated statements of operations. Total return is defined as all distributions accrued or paid (without duplication) on Participating Partnership units (all units in CROP with the exception of preferred units and the Special Limited Partner Interest) plus the change in the aggregate net asset value of such Participating Partnership units. The annual total return will be allocated solely to the Special Limited Partner only after the other unit holders have received a total return of 5% (after recouping any loss carryforward amount) and such allocation will continue until the allocation between the Special Limited Partner and all other unit holders is equal to 12.5% and 87.5%, respectively. Thereafter, the Special Limited Partner will receive an allocation of 12.5% of the annual total return. The performance participation allocation is ultimately determined at the end of each calendar year, accrues monthly and will be paid in cash or Class I units at the election of the Special Limited Partner after the completion of each calendar year. Due to the decrease in the value of our net assets, no performance participation allocation was incurred during the three months ended March 31, 2024 or during 2023. In March 2023, the $20.3 million performance participation allocation incurred as a result of the increase in the value of our net assets and dividends paid to stockholders during the year ended December 31, 2022 was paid in cash. Block C We, through our indirect subsidiaries, have a joint venture investment in Block C for the purpose of developing three multifamily development projects near Salt Lake City, Utah: The Westerly, Millcreek North and The Archer. As of March 31, 2024, entities affiliated with us and our advisor (the “Affiliated Members”) have made aggregate capital contributions of $10.9 million towards the joint venture. The Affiliated Members are owned directly or indirectly by our officers or directors, as well as certain employees of CROP and our advisor or its affiliates. The Affiliated Members participate in the economics of Block C on the same terms and conditions as us. The development projects are located in an Opportunity Zone, which provides tax benefits for development programs located in designated areas as established by Congress in the Tax Cuts and Jobs act of 2017. As of March 31, 2024, our ownership in the Block C joint venture was 82.4%. Assumption of Related Party Notes and Interest On March 28, 2024, we acquired all of the outstanding tenant-in-common interests in Cottonwood Lighthouse Point from an unaffiliated third party. As part of the transaction, we assumed $1.3 million of notes and accrued interest held by an affiliate of the seller of the tenant-in-common interests in favor, directly and indirectly, of nine of our executive officers. Subsequent to the transaction, we paid the amount outstanding under the notes to the executive officers. |
Noncontrolling Interests
Noncontrolling Interests | 3 Months Ended |
Mar. 31, 2024 | |
Noncontrolling Interest [Abstract] | |
Noncontrolling Interests | Noncontrolling Interests Noncontrolling Interests - Limited Partners OP Units and LTIP Units are units in CROP not owned by us and collectively referred to as “Noncontrolling Interests – Limited Partners.” OP Units - During the three months ended March 31, 2024 and 2023, we paid aggregate distributions to noncontrolling OP Unit holders of $5.9 million and $5.7 million, respectively. LTIP Units - As of March 31, 2024, there were 866,022 unvested time LTIP awards and 521,753 unvested performance LTIP awards outstanding. LTIP Unit award share-based compensation, included within share-based compensation in the condensed consolidated statement of stockholders’ equity, was $0.9 million and $1.1 million for the three months ended March 31, 2024 and 2023, respectively. Total unrecognized compensation expense for LTIP Units at March 31, 2024 is $6.4 million and is expected to be recognized on a straight-line basis through December 2027. Noncontrolling Interests - Partially Owned Entities As of March 31, 2024, noncontrolling interests in consolidated entities not wholly owned by us ranged from 1% to 63%, with the average being 11%. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies 2215 Hollywood As of March 31, 2024, we had funded $2.0 million and had a remaining commitment of $8.0 million on the 2215 Hollywood Mezzanine Loan. Monrovia Station As of March 31, 2024, we had funded $10.2 million and had a remaining commitment of $10.0 million on the Monrovia Station Junior Mezzanine Loan. Litigation We are subject to a variety of legal actions in the ordinary course of our business, most of which are covered by liability insurance. While the resolution of these matters cannot be predicted with certainty, as of March 31, 2024, we believe the final outcome of such legal proceedings and claims will not have a material adverse effect on our liquidity, financial position or results of operations. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2024 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share The following table sets forth the computation of our net income (loss) per share - basic and net income (loss) per share - diluted (in thousands except per share amounts): Three Months Ended March 31, 2024 2023 Numerator for net income (loss) per share - basic: Net income (loss) $ 7,063 $ (17,860) Net (income) loss attributable to noncontrolling interests - limited partners (3,856) 8,397 Net loss attributable to noncontrolling interests - partially owned entities 712 44 Preferred distributions (143) — Numerator for net income (loss) per share - basic $ 3,776 $ (9,419) Numerator for net income (loss) per share - diluted: Net income (loss) $ 7,063 $ (17,860) Net loss attributable to noncontrolling interests - limited partners — 8,397 Net loss attributable to noncontrolling interests - partially owned entities 712 44 Preferred distributions (143) — Numerator for net income (loss) per share - diluted $ 7,632 $ (9,419) Denominator for net income (loss) per share - basic and diluted: Denominator for net income (loss) per share - basic 31,581,072 35,603,420 Effect of dilutive securities: Convertible Preferred Shares 693,605 — OP Units 29,477,235 — Long term compensation shares/units 2,610,808 — Denominator for net income (loss) per share - diluted 64,362,720 35,603,420 Net income (loss) per common share - basic $ 0.12 $ (0.26) Net income (loss) per common share - diluted $ 0.12 $ (0.26) |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2024 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events We evaluate subsequent events up until the date the condensed consolidated financial statements are issued and have determined there are none to be reported or disclosed in the condensed consolidated financial statements other than those mentioned below. Alpha Mill Tenant In Common Acquisition On April 26, 2024, we acquired all of the outstanding tenant-in-common interests in Alpha Mill from an unaffiliated third party in exchange for 858,158 OP Units, increasing our ownership from 73.7% to 100%. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2024 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial information and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. The condensed consolidated financial statements, including the condensed notes thereto, are unaudited and exclude some of the disclosures required in audited financial statements. The condensed consolidated balance sheet as of December 31, 2023 has been derived from the Company’s audited financial statements as of that date, but does not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, the accompanying condensed consolidated financial statements contain all adjustments and eliminations, consisting only of normal recurring adjustments necessary for a fair presentation in conformity with GAAP. The accompanying condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in our Annual Report on Form 10-K for the period ending December 31, 2023 filed with the SEC. As our comprehensive income is equivalent to net income, our accompanying condensed consolidated financial statements do not include a Statement of Other Comprehensive Income. |
Principles of Consolidation | The accompanying condensed consolidated financial statements include the accounts of the Company and its subsidiaries for which we have a controlling interest. All intercompany balances and transactions have been eliminated in consolidation. Certain amounts in the prior year condensed consolidated financial statements and notes to the condensed consolidated financial statements have been reclassified to conform to the current year presentation. Such reclassifications did not impact previously reported net loss or accumulated deficit or change net cash provided by or used in operating, investing or financing activities. |
Investments in Real-Estate Related Loans | Investments in Real-Estate Related Loans Investments in Real-Estate Related Loans are mezzanine loans issued to entities pursuing apartment developments. Interest is recorded over the life of the mezzanine loan as other revenues on the statement of operations. Each mezzanine loan is analyzed to determine if it is impaired. A mezzanine loan is impaired if it is probable that we will not collect all contractually due principal and interest. As of March 31, 2024 and December 31, 2023, no mezzanine loans were impaired. |
Fair Value of Financial Instruments | Fair value measurements are determined based on the assumptions that market participants would use in pricing the asset or liability. Fair value measurements are categorized into one of three levels of the fair value hierarchy based on the lowest level of significant input used. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. Considerable judgment and a high degree of subjectivity are involved in developing these estimates. These estimates may differ from the actual amounts that we could realize upon settlement. The fair value hierarchy is as follows: Level 1 - Quoted (unadjusted) prices in active markets for identical assets or liabilities. Level 2 - Other observable inputs, either directly or indirectly, other than quoted prices included in Level 1, including: • Quoted prices for similar assets/liabilities in active markets; • Quoted prices for identical or similar assets/liabilities in non-active markets (e.g., few transactions, limited information, non-current prices, high variability over time); • Inputs other than quoted prices that are observable for the asset/liability (e.g., interest rates, yield curves, volatility, default rates); and • Inputs that are derived principally from or corroborated by other observable market data. Level 3 - Unobservable inputs that cannot be corroborated by observable market data. |
Real Estate Assets, Net (Tables
Real Estate Assets, Net (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Carrying Amounts of Consolidated Real Estate Assets | The following table summarizes the carrying amounts of our consolidated real estate assets (in thousands): March 31, 2024 December 31, 2023 Land $ 260,329 $ 257,553 Buildings and improvements 1,449,242 1,429,689 Furniture, fixtures and equipment 62,155 63,015 Intangible assets 38,300 37,158 Construction in progress (1) 24,165 17,995 1,834,191 1,805,410 Less: Accumulated depreciation and amortization (158,956) (156,264) Real estate assets, net $ 1,675,235 $ 1,649,146 (1) Includes construction in progress for our development projects and capitalized costs for improvements not yet placed in service at our stabilized properties. |
Schedule of Purchase Price Allocation | The following table summarizes the purchase price allocation of the real estate assets acquired during the three months ended March 31, 2024 (in thousands): Allocated Amounts Property Location Date Consolidated Building Land Land Improvements Personal Property Lease Intangibles Total Cottonwood Lighthouse Point Pompano Beach, FL 3/28/24 $ 72,046 $ 12,156 $ 1,114 $ 1,167 $ 2,360 $ 88,843 |
Investments in Unconsolidated_2
Investments in Unconsolidated Real Estate Entities (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Real Estate [Abstract] | |
Schedule of Equity Method Investments | Our investments in unconsolidated real estate entities consist of ownership interests in stabilized properties and preferred equity investments as follows as of March 31, 2024 and December 31, 2023 (in thousands): Balance at Property / Development Location % Owned March 31, 2024 December 31, 2023 Stabilized Properties Alpha Mill (1) Charlotte, NC 73.7% $ 29,142 $ 29,522 Cottonwood Bayview (1) St. Petersburg, FL 71.0% 11,391 11,817 Cottonwood Lighthouse Point (1) (2) Pompano Beach, FL 100.0% (2) — 38,852 Fox Point (1) Salt Lake City, UT 52.8% 13,183 13,533 Toscana at Valley Ridge (1) Lewisville, TX 58.6% 6,526 6,713 Preferred Equity Investments Lector85 Ybor City, FL 11,760 11,387 Astoria West Queens, NY 24,173 23,406 417 Callowhill Philadelphia, PA 40,618 38,028 Infield Kissimmee, FL 12,443 11,942 Other 501 516 Total $ 149,737 $ 185,716 (1) We account for our tenant-in-common interests in these properties as equity method investments. (2) On March 28, 2024, we issued 259,246 OP Units and assumed $1.3 million in related party notes and interest to acquire the remaining 13.2% tenant-in-common interests in Cottonwood Lighthouse Point, bringing our ownership to 100% and resulting in the consolidation of the property from that date onward. The value of the OP Units issued was $3.3 million. |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Debt Disclosure [Abstract] | |
Schedule of Mortgage Notes And Revolving Credit Facility | The following table is a summary of the mortgage notes and revolving credit facility secured by our properties as of March 31, 2024 and December 31, 2023 ($ in thousands): Principal Balance Outstanding Indebtedness Weighted-Average Interest Rate Weighted-Average Remaining Term (1) March 31, 2024 December 31, 2023 Fixed rate loans Fixed rate mortgages 4.49% 4.8 Years $ 855,209 $ 891,319 Total fixed rate loans 855,209 891,319 Variable rate loans (2) Floating rate mortgages 5.43% (3) 7.0 Years 167,134 131,153 Variable rate revolving credit facility (4) 7.92% 3.7 Years 6,000 12,400 Total variable rate loans 173,134 143,553 Total secured loans 1,028,343 1,034,872 Unamortized debt issuance costs (5,746) (7,067) Premium on assumed debt, net (5,558) (5,353) Mortgage notes and revolving credit facility, net $ 1,017,039 $ 1,022,452 (1) For loans where we have the ability to exercise extension options at our own discretion, the maximum maturity date has been assumed. (2) The interest rates of our variable rate loans are based on 30-Day Average SOFR or one-month SOFR (CME Term). (3) Includes the impact of interest rate caps in effect on March 31, 2024. (4) Our variable rate revolving credit facility is secured by Parc Westborough with the option to add an additional property as collateral by December 14, 2024. We may obtain advances on the facility up to $100.0 million, as long as certain loan-to-value ratios and other requirements are maintained. At March 31, 2024, the amount on our variable rate revolving credit facility was capped at $41.3 million primarily due to the interest rate environment and the applicable debt-service coverage ratio. |
Schedule of Construction Loans | Information on our construction loans are as follows ($ in thousands): Development Interest Rate Final Expiration Date Loan Amount Amount Drawn at March 31, 2024 Amount Drawn at December 31, 2023 Cottonwood Broadway One-Month BSBY (1) + 2.9% May 15, 2025 $ 44,625 $ 41,891 $ 41,891 Cottonwood Highland 30-Day Average SOFR + 2.55% May 1, 2029 44,250 42,675 39,790 805 Riverfront One-Month SOFR + 4.35% May 30, 2026 55,400 53,646 48,310 The Westerly One-Month SOFR + 3.0% July 12, 2028 42,000 — — $ 186,275 $ 138,212 $ 129,991 (1) The Bloomberg Short-Term Yield Index (“BSBY”) will cease as an index after November 15, 2024. We expect the Broadway loan will be refinanced in 2024 before the cessation of BSBY, although there are provisions in the Broadway loan documents for a conversion to Term SOFR if needed. |
Schedule of Unsecured Promissory Notes | Information on our unsecured promissory notes are as follows ($ in thousands): Offering Size Interest Rate Maturity Date (1) (2) Maximum Extension Date March 31, 2024 December 31, 2023 2017 6% Notes (1) $ 35,000 6.50% December 31, 2024 (1) December 31, 2024 $ 20,008 $ 20,308 2019 6% Notes (2) 25,000 6.25% December 31, 2024 (2) December 31, 2025 21,350 21,575 $ 60,000 $ 41,358 $ 41,883 (1) We exercised our final option to extend the maturity date on our 2017 6% Notes for one additional year to December 31, 2024, which increased the interest rate to 6.5% for the period from January 1, 2024 to December 31, 2024. (2) We exercised the option to extend the maturity date on our 2019 6% Notes for one additional year to December 31, 2024, which increased the interest rate to 6.25% for the period from January 1, 2024 to December 31, 2024. |
Schedule of Amortizing Principal Payments | The aggregate maturities, including amortizing principal payments on our debt for years subsequent to March 31, 2024 are as follows (in thousands): Year Mortgage Notes and Revolving Credit Facility Construction Loans Unsecured Total 2024 (1) $ 351 $ 95,537 $ 41,358 $ 137,246 2025 1,353 — — 1,353 2026 99,060 — — 99,060 2027 364,143 — — 364,143 2028 72,443 — — 72,443 Thereafter 490,993 42,675 — 533,668 $ 1,028,343 $ 138,212 $ 41,358 $ 1,207,913 (1) Of the amounts maturing in 2024, $21.4 million relates to our 2019 6% Unsecured Promissory Notes, which can be extended to December 31, 2025. An additional $41.9 million relates to the construction loan for Cottonwood Broadway, which can be extended to May 15, 2025, subject to the satisfaction of certain conditions, and $53.6 million relates to the construction loan for 805 Riverfront, which can be extended for two one |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The table below includes the carrying value and fair value for our financial instruments for which it is practicable to estimate fair value (in thousands): March 31, 2024 December 31, 2023 Carrying Value Fair Value Carrying Value Fair Value Financial Asset: Investments in real estate-related loans $ 12,080 $ 12,176 $ 8,703 $ 8,777 Total $ 12,080 $ 12,176 $ 8,703 $ 8,777 Financial Liability: Fixed rate mortgages $ 855,209 $ 836,961 $ 891,319 $ 869,248 Floating rate mortgages $ 167,134 $ 165,385 $ 131,153 $ 129,540 Variable rate revolving credit facility $ 6,000 $ 6,000 $ 12,400 $ 12,400 Construction loans $ 138,212 $ 138,212 $ 129,991 $ 129,991 Series 2019 Preferred Stock $ 122,089 $ 122,089 $ 124,266 $ 124,266 Series 2023 Preferred Stock $ 90,253 $ 90,253 $ 83,567 $ 83,567 Series 2023-A Preferred Stock $ 2,950 $ 2,950 $ 2,850 $ 2,850 Preferred interest liability $ 15,300 $ 15,300 $ 15,300 $ 15,300 Unsecured promissory notes $ 41,358 $ 41,358 $ 41,883 $ 41,883 Total $ 1,438,505 $ 1,418,508 $ 1,432,729 $ 1,409,045 |
Preferred Stock (Tables)
Preferred Stock (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Equity [Abstract] | |
Schedule of Preferred Stock | Information on these classes of preferred stock as of March 31, 2024 and December 31, 2023 is as follows: Shares Outstanding at Dividend Rate Extension Dividend Rate Redemption Date Maximum Extension Date March 31, 2024 December 31, 2023 Series 2019 Preferred Stock 5.5% 6.0% December 31, 2024 (1) December 31, 2025 12,208,896 12,426,596 Series 2023 Preferred Stock 6.0% 6.5% (2) June 30, 2027 June 30, 2029 9,025,289 8,356,724 Series 2023-A Preferred Stock 7.0% N/A December 31, 2027 N/A 295,000 285,000 (1) Prior to the original December 31, 2023 redemption date, we exercised our first extension option for the Series 2019 Preferred Stock, which increased the dividend rate to 6.0% and extended the redemption date to December 31, 2024. (2) Represents the fully extended dividend rate. During the first-year extension, the dividend rate is 6.25%. |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Equity [Abstract] | |
Schedule of Common Stock Outstanding | The following table details the movement in the Company's outstanding shares for each class of common stock: Three Months Ended March 31, 2024 Class T Class D Class I Class A Total December 31, 2023 3,917,218 202,743 4,296,443 23,231,877 31,648,281 Issuance of common stock 141,143 2,496 302,137 — 445,776 Distribution reinvestment 14,575 250 10,605 27,758 53,188 Exchanges and transfers (1) — — 42,853 — 42,853 Repurchases of common stock (169,993) — (73,107) (735,641) (978,741) March 31, 2024 3,902,943 205,489 4,578,931 22,523,994 31,211,357 (1) Exchanges represent the number of shares OP Unit holders have exchanged for Class I shares during the period. Transfers represent Class T shares that were converted to Class I shares during the period, of which there were none during the three months ended March 31, 2024. |
Schedule of Common Stock Distributions | We declared the following monthly distributions for each share of our common stock as shown in the table below: Shareholder Record Date Monthly Rate Annually January 31, 2024 $ 0.06083333 $ 0.73 February 29, 2024 $ 0.06083333 $ 0.73 March 31, 2024 $ 0.06083333 $ 0.73 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table sets forth the computation of our net income (loss) per share - basic and net income (loss) per share - diluted (in thousands except per share amounts): Three Months Ended March 31, 2024 2023 Numerator for net income (loss) per share - basic: Net income (loss) $ 7,063 $ (17,860) Net (income) loss attributable to noncontrolling interests - limited partners (3,856) 8,397 Net loss attributable to noncontrolling interests - partially owned entities 712 44 Preferred distributions (143) — Numerator for net income (loss) per share - basic $ 3,776 $ (9,419) Numerator for net income (loss) per share - diluted: Net income (loss) $ 7,063 $ (17,860) Net loss attributable to noncontrolling interests - limited partners — 8,397 Net loss attributable to noncontrolling interests - partially owned entities 712 44 Preferred distributions (143) — Numerator for net income (loss) per share - diluted $ 7,632 $ (9,419) Denominator for net income (loss) per share - basic and diluted: Denominator for net income (loss) per share - basic 31,581,072 35,603,420 Effect of dilutive securities: Convertible Preferred Shares 693,605 — OP Units 29,477,235 — Long term compensation shares/units 2,610,808 — Denominator for net income (loss) per share - diluted 64,362,720 35,603,420 Net income (loss) per common share - basic $ 0.12 $ (0.26) Net income (loss) per common share - diluted $ 0.12 $ (0.26) |
Organization and Business (Deta
Organization and Business (Details) | 3 Months Ended | 28 Months Ended | |||
Mar. 31, 2024 USD ($) realEstateUnit segment apartmentCommunity land_parcel | Mar. 31, 2024 USD ($) realEstateUnit apartmentCommunity land_parcel | Dec. 22, 2020 USD ($) | Nov. 30, 2021 USD ($) | Nov. 30, 2019 $ / shares | |
Subsidiary, Sale of Stock [Line Items] | |||||
Number of reportable segments | segment | 1 | ||||
Owned Interest | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Number of multifamily apartment communities | apartmentCommunity | 36 | 36 | |||
Number of real estate units | realEstateUnit | 10,371 | 10,371 | |||
Number of real estate properties | land_parcel | 4 | 4 | |||
Structured Investment Interest | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Number of multifamily apartment communities | apartmentCommunity | 6 | 6 | |||
Number of real estate units | realEstateUnit | 1,868 | 1,868 | |||
Structured Investment Interest | Under Construction | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Number of multifamily apartment communities | apartmentCommunity | 4 | 4 | |||
Number of real estate units | realEstateUnit | 987 | 987 | |||
Follow on Offering | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Stock offered, value | $ 1,000,000,000 | ||||
Proceeds from issuance of follow-on offering | $ 209,700,000 | ||||
Primary Offering | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Stock offered, value | 900,000,000 | ||||
Distribution Reinvestment Plan | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Stock offered, value | $ 100,000,000 | ||||
Proceeds from issuance of follow-on offering | $ 5,400,000 | ||||
Class A and Class TX Common Stock | IPO | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Proceeds from offering including dividend reinvestment plan offering | $ 122,000,000 | ||||
Series 2019 Preferred Stock | Private Placement | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Share price (in dollars per share) | $ / shares | $ 10 | ||||
Proceeds from private offering | $ 235,900,000 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) - loan | Mar. 31, 2024 | Dec. 31, 2023 |
Accounting Policies [Abstract] | ||
Number of mezzanine loans impaired | 0 | 0 |
Real Estate Assets, Net - Sched
Real Estate Assets, Net - Schedule of Carrying Amounts of Consolidated Real Estate Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Business Combination and Asset Acquisition [Abstract] | ||
Land | $ 260,329 | $ 257,553 |
Buildings and improvements | 1,449,242 | 1,429,689 |
Furniture, fixtures and equipment | 62,155 | 63,015 |
Intangible assets | 38,300 | 37,158 |
Construction in progress | 24,165 | 17,995 |
Real estate investment property, at cost | 1,834,191 | 1,805,410 |
Less: Accumulated depreciation and amortization | (158,956) | (156,264) |
Real estate assets, net | $ 1,675,235 | $ 1,649,146 |
Real Estate Assets, Net - Narra
Real Estate Assets, Net - Narrative (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | ||||
Mar. 28, 2024 | Feb. 29, 2024 | Mar. 31, 2024 | Mar. 31, 2024 | Mar. 31, 2023 | Dec. 28, 2021 | |
Business Acquisition [Line Items] | ||||||
Issuance of common stock (in shares) | 445,776 | |||||
Repayments of related party debt | $ 1,300 | $ 1,332 | $ 0 | |||
OP Units | ||||||
Business Acquisition [Line Items] | ||||||
Issuance of common stock (in shares) | 259,246 | |||||
Cottonwood West Palm | ||||||
Business Acquisition [Line Items] | ||||||
Proceeds from sale | $ 34,000 | |||||
Gain on transaction cost | $ 26,600 | |||||
Cottonwood Lighthouse Point | ||||||
Business Acquisition [Line Items] | ||||||
Additional interests acquired | 13.23% | |||||
Payment for additional interest | $ 3,300 |
Real Estate Assets, Net - Sch_2
Real Estate Assets, Net - Schedule of Purchase Price Allocation (Details) - Cottonwood Lighthouse Point $ in Thousands | Mar. 28, 2024 USD ($) |
Asset Acquisition [Line Items] | |
Building | $ 72,046 |
Land | 12,156 |
Land Improvements | 1,114 |
Personal Property | 1,167 |
Lease Intangibles | 2,360 |
Total | $ 88,843 |
Investments in Unconsolidated_3
Investments in Unconsolidated Real Estate Entities - Schedule of Equity Method Investments (Details) $ in Thousands | 3 Months Ended | |||
Mar. 28, 2024 USD ($) shares | Mar. 31, 2024 USD ($) | Mar. 31, 2023 USD ($) | Dec. 31, 2023 USD ($) | |
Schedule of Equity Method Investments [Line Items] | ||||
Repayments of related party debt | $ 1,300 | $ 1,332 | $ 0 | |
Unconsolidated Properties | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Equity method investment | 149,737 | $ 185,716 | ||
Unconsolidated Properties | Cottonwood Lighthouse Point | Pompano Beach, FL | ||||
Schedule of Equity Method Investments [Line Items] | ||||
% Owned | 100% | |||
Tenant-in-common interest in property | 0.132 | |||
Unconsolidated Properties | Cottonwood Lighthouse Point | Pompano Beach, FL | OP Units | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Stock issued during period shares acquisition (in shares) | shares | 259,246 | |||
Shares issued in acquisition | $ 3,300 | |||
Unconsolidated Properties | Other | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Equity method investment | $ 501 | 516 | ||
Unconsolidated Properties | Stabilized Properties | Alpha Mill | Charlotte, NC | ||||
Schedule of Equity Method Investments [Line Items] | ||||
% Owned | 73.70% | |||
Equity method investment | $ 29,142 | 29,522 | ||
Unconsolidated Properties | Stabilized Properties | Cottonwood Bayview | St. Petersburg, FL | ||||
Schedule of Equity Method Investments [Line Items] | ||||
% Owned | 71% | |||
Equity method investment | $ 11,391 | 11,817 | ||
Unconsolidated Properties | Stabilized Properties | Cottonwood Lighthouse Point | Pompano Beach, FL | ||||
Schedule of Equity Method Investments [Line Items] | ||||
% Owned | 100% | |||
Equity method investment | $ 0 | 38,852 | ||
Unconsolidated Properties | Stabilized Properties | Fox Point | Salt Lake City, UT | ||||
Schedule of Equity Method Investments [Line Items] | ||||
% Owned | 52.80% | |||
Equity method investment | $ 13,183 | 13,533 | ||
Unconsolidated Properties | Stabilized Properties | Toscana At Valley Ridge | Lewisville, TX | ||||
Schedule of Equity Method Investments [Line Items] | ||||
% Owned | 58.60% | |||
Equity method investment | $ 6,526 | 6,713 | ||
Unconsolidated Properties | Preferred Equity Investments | Lector85 | Ybor City, FL | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Equity method investment | 11,760 | 11,387 | ||
Unconsolidated Properties | Preferred Equity Investments | Astoria West | Queens, NY | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Equity method investment | 24,173 | 23,406 | ||
Unconsolidated Properties | Preferred Equity Investments | 417 Callowhill | Philadelphia, PA | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Equity method investment | 40,618 | 38,028 | ||
Unconsolidated Properties | Preferred Equity Investments | Infield | Kissimmee, FL | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Equity method investment | $ 12,443 | $ 11,942 |
Investments in Unconsolidated_4
Investments in Unconsolidated Real Estate Entities - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Schedule of Equity Method Investments [Line Items] | ||
Equity in earnings (losses) of unconsolidated real estate entities | $ 1,368 | $ 1,647 |
Stabilized Properties | ||
Schedule of Equity Method Investments [Line Items] | ||
Equity in earnings (losses) of unconsolidated real estate entities | (1,500) | (1,300) |
Preferred Equity Investments | ||
Schedule of Equity Method Investments [Line Items] | ||
Equity in earnings (losses) of unconsolidated real estate entities | 2,900 | $ 2,900 |
Preferred Equity Investments | 417 Callowhill | ||
Schedule of Equity Method Investments [Line Items] | ||
Funded amount | 1,300 | |
Payments to acquire investment | $ 33,400 |
Debt - Schedule of Mortgage Not
Debt - Schedule of Mortgage Notes And Revolving Credit Facility (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Dec. 31, 2023 | |
Debt Instrument [Line Items] | ||
Total secured loans | $ 1,028,343,000 | $ 1,034,872,000 |
Unamortized debt issuance costs | (5,746,000) | (7,067,000) |
Premium on assumed debt, net | (5,558,000) | (5,353,000) |
Mortgage notes and revolving credit facility, net | 1,017,039,000 | 1,022,452,000 |
Future Acquisition Financing | ||
Debt Instrument [Line Items] | ||
Line of credit maximum borrowing capacity | 100,000,000 | |
Line of credit facility, current borrowing capacity | $ 41,300,000 | |
Fixed rate loans | ||
Debt Instrument [Line Items] | ||
Weighted average fixed interest rate | 4.49% | |
Weighted average remaining term | 4 years 9 months 18 days | |
Total secured loans | $ 855,209,000 | 891,319,000 |
Variable rate loans | ||
Debt Instrument [Line Items] | ||
Total secured loans | $ 173,134,000 | 143,553,000 |
Variable rate loans | Floating rate mortgages | ||
Debt Instrument [Line Items] | ||
Weighted average variable rate | 5.43% | |
Weighted average remaining term | 7 years | |
Total secured loans | $ 167,134,000 | 131,153,000 |
Variable rate loans | Variable rate revolving credit facility | Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Weighted average variable rate | 7.92% | |
Weighted average remaining term | 3 years 8 months 12 days | |
Total secured loans | $ 6,000,000 | $ 12,400,000 |
Debt - Schedule of Construction
Debt - Schedule of Construction Loans (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Dec. 31, 2023 | |
Debt Instrument [Line Items] | ||
Amount drawn | $ 138,212 | $ 129,991 |
Construction Loan Payable | ||
Debt Instrument [Line Items] | ||
Loan Amount | 186,275 | |
Amount drawn | 138,212 | 129,991 |
Construction Loan Payable | Cottonwood Broadway | ||
Debt Instrument [Line Items] | ||
Loan Amount | 44,625 | |
Amount drawn | $ 41,891 | 41,891 |
Construction Loan Payable | Cottonwood Broadway | BSBY | ||
Debt Instrument [Line Items] | ||
Interest Rate | 2.90% | |
Construction Loan Payable | Cottonwood Highland | ||
Debt Instrument [Line Items] | ||
Loan Amount | $ 44,250 | |
Amount drawn | $ 42,675 | 39,790 |
Construction Loan Payable | Cottonwood Highland | SOFR | ||
Debt Instrument [Line Items] | ||
Interest Rate | 2.55% | |
Construction Loan Payable | 805 Riverfront | ||
Debt Instrument [Line Items] | ||
Loan Amount | $ 55,400 | |
Amount drawn | $ 53,646 | 48,310 |
Construction Loan Payable | 805 Riverfront | SOFR | ||
Debt Instrument [Line Items] | ||
Interest Rate | 4.35% | |
Construction Loan Payable | The Westerly | ||
Debt Instrument [Line Items] | ||
Loan Amount | $ 42,000 | |
Amount drawn | $ 0 | $ 0 |
Construction Loan Payable | The Westerly | SOFR | ||
Debt Instrument [Line Items] | ||
Interest Rate | 3% |
Debt - Narrative (Details)
Debt - Narrative (Details) | 3 Months Ended |
Mar. 31, 2024 | |
Unsecured Debt | |
Debt Instrument [Line Items] | |
Increase in interest rate | 0.25% |
Debt - Schedule of Unsecured Pr
Debt - Schedule of Unsecured Promissory Notes (Details) - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 | Dec. 31, 2019 | Dec. 31, 2017 |
Debt Instrument [Line Items] | ||||
Unsecured promissory notes, net | $ 41,358,000 | $ 41,883,000 | ||
Unsecured Debt | ||||
Debt Instrument [Line Items] | ||||
Offering Size | 60,000 | |||
Unsecured promissory notes, net | 41,358,000 | 41,883,000 | ||
Unsecured Debt | 2017 6% Notes | ||||
Debt Instrument [Line Items] | ||||
Offering Size | $ 35,000 | |||
Interest Rate | 6.50% | 6% | ||
Unsecured promissory notes, net | $ 20,008,000 | 20,308,000 | ||
Unsecured Debt | 2017 6% Notes | Fiscal Year 2024 | ||||
Debt Instrument [Line Items] | ||||
Interest Rate | 6.50% | |||
Unsecured Debt | 2019 6% Notes | ||||
Debt Instrument [Line Items] | ||||
Offering Size | $ 25,000 | |||
Interest Rate | 6.25% | 6% | ||
Unsecured promissory notes, net | $ 21,350,000 | $ 21,575,000 | ||
Unsecured Debt | 2019 6% Notes | Fiscal Year 2024 | ||||
Debt Instrument [Line Items] | ||||
Interest Rate | 6.25% |
Debt - Schedule of Amortizing P
Debt - Schedule of Amortizing Principal Payments (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 USD ($) extension | Dec. 31, 2023 USD ($) | Dec. 31, 2019 | |
Debt Instrument [Line Items] | |||
2024 | $ 137,246 | ||
2025 | 1,353 | ||
2026 | 99,060 | ||
2027 | 364,143 | ||
2028 | 72,443 | ||
Thereafter | 533,668 | ||
Principal payment on mortgage loans | 1,207,913 | ||
Mortgage notes and revolving credit facility, net | 1,017,039 | $ 1,022,452 | |
Cottonwood Broadway | |||
Debt Instrument [Line Items] | |||
Mortgage notes and revolving credit facility, net | 41,900 | ||
805 Riverfront | |||
Debt Instrument [Line Items] | |||
Mortgage notes and revolving credit facility, net | 53,600 | ||
Construction Loans | |||
Debt Instrument [Line Items] | |||
2024 | 95,537 | ||
2025 | 0 | ||
2026 | 0 | ||
2027 | 0 | ||
2028 | 0 | ||
Thereafter | 42,675 | ||
Principal payment on mortgage loans | 138,212 | ||
Mortgage Notes and Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
2024 | 351 | ||
2025 | 1,353 | ||
2026 | 99,060 | ||
2027 | 364,143 | ||
2028 | 72,443 | ||
Thereafter | 490,993 | ||
Principal payment on mortgage loans | 1,028,343 | ||
Unsecured Promissory Notes | |||
Debt Instrument [Line Items] | |||
2024 | 41,358 | ||
2025 | 0 | ||
2026 | 0 | ||
2027 | 0 | ||
2028 | 0 | ||
Thereafter | 0 | ||
Principal payment on mortgage loans | 41,358 | ||
Unsecured Promissory Notes | 2019 6% Notes | |||
Debt Instrument [Line Items] | |||
Mortgage notes and revolving credit facility, net | $ 21,400 | ||
Interest rate | 6.25% | 6% | |
Unsecured Promissory Notes | 805 Riverfront | |||
Debt Instrument [Line Items] | |||
Number of extensions | extension | 2 | ||
Term of extension | 1 year |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments (Details) - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments in real estate-related loans, net | $ 12,080,000 | $ 8,703,000 |
Preferred interest liability | 15,300,000 | 15,300,000 |
Level 2 | Carrying Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments in real estate-related loans, net | 12,080,000 | 8,703,000 |
Preferred interest liability | 15,300,000 | 15,300,000 |
Unsecured promissory notes | 41,358,000 | 41,883,000 |
Total | 1,438,505,000 | 1,432,729,000 |
Level 2 | Carrying Value | Series 2019 Preferred Stock | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Preferred stock series | 122,089,000 | 124,266,000 |
Level 2 | Carrying Value | Series 2023 Preferred Stock | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Preferred stock series | 90,253,000 | 83,567,000 |
Level 2 | Carrying Value | Series 2023-A Preferred Stock | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Preferred stock series | 2,950,000 | 2,850,000 |
Level 2 | Carrying Value | Variable rate revolving credit facility | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Variable rate revolving credit facility | 6,000,000 | 12,400,000 |
Level 2 | Carrying Value | Investments in real estate-related loans | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments in real estate-related loans | 12,080,000 | 8,703,000 |
Level 2 | Carrying Value | Fixed rate mortgages | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Mortgages | 855,209,000 | 891,319,000 |
Level 2 | Carrying Value | Floating rate mortgages | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Mortgages | 167,134,000 | 131,153,000 |
Level 2 | Carrying Value | Construction loans | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Mortgages | 138,212,000 | 129,991,000 |
Level 2 | Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments in real estate-related loans, net | 12,176,000 | 8,777,000 |
Preferred interest liability | 15,300,000 | 15,300,000 |
Unsecured promissory notes | 41,358,000 | 41,883,000 |
Total | 1,418,508,000 | 1,409,045,000 |
Level 2 | Fair Value | Series 2019 Preferred Stock | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Preferred stock series | 122,089,000 | 124,266,000 |
Level 2 | Fair Value | Series 2023 Preferred Stock | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Preferred stock series | 90,253,000 | 83,567,000 |
Level 2 | Fair Value | Series 2023-A Preferred Stock | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Preferred stock series | 2,950,000 | 2,850,000 |
Level 2 | Fair Value | Variable rate revolving credit facility | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Variable rate revolving credit facility | 6,000,000 | 12,400,000 |
Level 2 | Fair Value | Investments in real estate-related loans | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments in real estate-related loans | 12,176,000 | 8,777,000 |
Level 2 | Fair Value | Fixed rate mortgages | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Mortgages | 836,961,000 | 869,248,000 |
Level 2 | Fair Value | Floating rate mortgages | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Mortgages | 165,385,000 | 129,540,000 |
Level 2 | Fair Value | Construction loans | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Mortgages | $ 138,212,000 | $ 129,991,000 |
Preferred Stock - Narrative (De
Preferred Stock - Narrative (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 USD ($) classesOfPreferredStock shares | Mar. 31, 2023 USD ($) shares | |
Subsidiary, Sale of Stock [Line Items] | ||
Proceeds from issuance of preferred stock | $ 6,877 | $ 31,315 |
Number of shares redeemed (in shares) | shares | 978,741 | |
Common stock/OP Units repurchased | $ 14,552 | 19,626 |
Preferred Stock | Series 2023 Preferred Stock | ||
Subsidiary, Sale of Stock [Line Items] | ||
Number of classes of preferred stock outstanding | classesOfPreferredStock | 3 | |
Proceeds from issuance of preferred stock | $ 6,700 | |
Preferred dividend value incurred | $ 1,300 | $ 200 |
Number of shares redeemed (in shares) | shares | 0 | |
Preferred Stock | Series 2023-A Preferred Stock | ||
Subsidiary, Sale of Stock [Line Items] | ||
Number of classes of preferred stock outstanding | classesOfPreferredStock | 3 | |
Proceeds from issuance of preferred stock | $ 100 | |
Preferred dividend value incurred | $ 100 | |
Number of shares redeemed (in shares) | shares | 0 | |
Preferred Stock | Series 2019 Preferred Stock | ||
Subsidiary, Sale of Stock [Line Items] | ||
Number of classes of preferred stock outstanding | classesOfPreferredStock | 3 | |
Preferred dividend value incurred | $ 1,800 | $ 1,700 |
Number of shares redeemed (in shares) | shares | 217,700 | 96,319 |
Common stock/OP Units repurchased | $ 2,100 | $ 900 |
Preferred Stock - Schedule of P
Preferred Stock - Schedule of Preferred Stock (Details) - shares | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Dec. 31, 2023 | |
Series 2019 Preferred Stock | ||
Subsidiary, Sale of Stock [Line Items] | ||
Dividend Rate | 5.50% | |
Extension Dividend Rate | 6% | 6% |
Preferred stock, shares outstanding (in shares) | 12,208,896 | 12,426,596 |
Series 2023 Preferred Stock | ||
Subsidiary, Sale of Stock [Line Items] | ||
Dividend Rate | 6% | |
Extension Dividend Rate | 6.50% | |
Preferred stock, shares outstanding (in shares) | 9,025,289 | 8,356,724 |
Series 2023 Preferred Stock | During First-Year Extension | ||
Subsidiary, Sale of Stock [Line Items] | ||
Extension Dividend Rate | 6.25% | |
Series 2023-A Preferred Stock | ||
Subsidiary, Sale of Stock [Line Items] | ||
Dividend Rate | 7% | |
Preferred stock, shares outstanding (in shares) | 295,000 | 285,000 |
Stockholders' Equity - Narrativ
Stockholders' Equity - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Subsidiary, Sale of Stock [Line Items] | |||
Aggregate distributions paid | $ 5,700 | ||
Distributions paid in cash | $ 4,976 | $ 6,246 | |
Number of shares redeemed (in shares) | 978,741 | ||
Repurchase of common stock/OP Units | $ 20,234 | $ 19,626 | |
Common Stock | |||
Subsidiary, Sale of Stock [Line Items] | |||
Distributions paid in cash | $ 700 | ||
Number of shares redeemed (in shares) | 978,741 | ||
Repurchase of common stock/OP Units | $ 12,600 | ||
Average repurchase price (in dollars per share) | $ 12.80 | ||
Series A Convertible Preferred Stock | |||
Subsidiary, Sale of Stock [Line Items] | |||
Preferred stock, shares outstanding (in shares) | 1,578,608 | 215,277 | |
Preferred stock, shares issued (in shares) | 1,578,608 | 215,277 | |
Convertible preferred dividends | $ 100 |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Common Stock Outstanding (Details) | 3 Months Ended |
Mar. 31, 2024 shares | |
Common Stock Outstanding [Roll Forward] | |
Shares outstanding, beginning balance (in shares) | 31,648,281 |
Issuance of common stock (in shares) | 445,776 |
Distribution reinvestment (in shares) | 53,188 |
Exchanges and transfers (in shares) | 42,853 |
Repurchases of common stock (in shares) | (978,741) |
Shares outstanding, ending balance (in shares) | 31,211,357 |
Class T | |
Common Stock Outstanding [Roll Forward] | |
Shares outstanding, beginning balance (in shares) | 3,917,218 |
Issuance of common stock (in shares) | 141,143 |
Distribution reinvestment (in shares) | 14,575 |
Exchanges and transfers (in shares) | 0 |
Repurchases of common stock (in shares) | (169,993) |
Shares outstanding, ending balance (in shares) | 3,902,943 |
Stock converted during period (in shares) | 0 |
Class D | |
Common Stock Outstanding [Roll Forward] | |
Shares outstanding, beginning balance (in shares) | 202,743 |
Issuance of common stock (in shares) | 2,496 |
Distribution reinvestment (in shares) | 250 |
Exchanges and transfers (in shares) | 0 |
Repurchases of common stock (in shares) | 0 |
Shares outstanding, ending balance (in shares) | 205,489 |
Class I | |
Common Stock Outstanding [Roll Forward] | |
Shares outstanding, beginning balance (in shares) | 4,296,443 |
Issuance of common stock (in shares) | 302,137 |
Distribution reinvestment (in shares) | 10,605 |
Exchanges and transfers (in shares) | 42,853 |
Repurchases of common stock (in shares) | (73,107) |
Shares outstanding, ending balance (in shares) | 4,578,931 |
Class A | |
Common Stock Outstanding [Roll Forward] | |
Shares outstanding, beginning balance (in shares) | 23,231,877 |
Issuance of common stock (in shares) | 0 |
Distribution reinvestment (in shares) | 27,758 |
Exchanges and transfers (in shares) | 0 |
Repurchases of common stock (in shares) | (735,641) |
Shares outstanding, ending balance (in shares) | 22,523,994 |
Stockholders' Equity - Schedu_2
Stockholders' Equity - Schedule of Common Stock Distributions (Details) - $ / shares | Mar. 31, 2024 | Feb. 29, 2024 | Jan. 31, 2024 |
Equity [Abstract] | |||
Monthly rate (in dollars per share) | $ 0.06083333 | $ 0.06083333 | $ 0.06083333 |
Annually (in dollars per share) | $ 0.73 | $ 0.73 | $ 0.73 |
Related-Party Transactions (Det
Related-Party Transactions (Details) - USD ($) | 3 Months Ended | 28 Months Ended | ||
Mar. 28, 2024 | Mar. 31, 2024 | Mar. 31, 2023 | Sep. 19, 2023 | |
Related Party Transaction [Line Items] | ||||
Repayments of related party debt | $ 1,300,000 | $ 1,332,000 | $ 0 | |
Affiliated Entity | ||||
Related Party Transaction [Line Items] | ||||
Acquisition expense reimbursements | $ 0 | 0 | ||
Co-venturer | CW Block C, LLC | ||||
Related Party Transaction [Line Items] | ||||
Percent of development project owned | 82.40% | |||
Co-venturer | Affiliated Members | CW Block C, LLC | ||||
Related Party Transaction [Line Items] | ||||
Capital contribution | $ 10,900,000 | |||
Independent Director Compensation | Affiliated Entity | ||||
Related Party Transaction [Line Items] | ||||
Gross asset value of CROP percentage | 0.0625% | |||
Net asset value of CROP percentage | 0.125% | |||
Asset management fees | $ 3,100,000 | 4,800,000 | ||
Percentage of total return | 5% | |||
Percentage of annual total return | 12.50% | |||
Independent Director Compensation | Affiliated Entity | Limited Partners | ||||
Related Party Transaction [Line Items] | ||||
Percentage of total return | 12.50% | |||
Performance participation allocation | $ 0 | $ 20,300,000 | ||
Independent Director Compensation | Affiliated Entity | Other Ownership Interest | ||||
Related Party Transaction [Line Items] | ||||
Percentage of total return | 87.50% |
Noncontrolling Interests (Detai
Noncontrolling Interests (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Noncontrolling Interest [Line Items] | ||
Distributions to investors | $ 11,725 | $ 12,113 |
Not Wholly Owned | Minimum | ||
Noncontrolling Interest [Line Items] | ||
Noncontrolling interest, ownership percentage by noncontrolling owners | 1% | |
Not Wholly Owned | Maximum | ||
Noncontrolling Interest [Line Items] | ||
Noncontrolling interest, ownership percentage by noncontrolling owners | 63% | |
Not Wholly Owned | Weighted Average | ||
Noncontrolling Interest [Line Items] | ||
Noncontrolling interest, ownership percentage by noncontrolling owners | 11% | |
OP Units | ||
Noncontrolling Interest [Line Items] | ||
Distributions to investors | $ 5,900 | 5,700 |
LTIP Units | ||
Noncontrolling Interest [Line Items] | ||
Number of unvested awards outstanding (in shares) | 866,022 | |
Cost recognition | $ 900 | $ 1,100 |
Unrecognized compensation expense | $ 6,400 | |
Performance LTIP | ||
Noncontrolling Interest [Line Items] | ||
Number of unvested awards outstanding (in shares) | 521,753 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2024 USD ($) | |
417 Callowhill | |
Subsidiary, Sale of Stock [Line Items] | |
Payments to acquire investment | $ 2 |
Investment-related liabilities | 8 |
2215 Hollywood Mezzanine | |
Subsidiary, Sale of Stock [Line Items] | |
Payments to acquire investment | 10.2 |
Investment-related liabilities | $ 10 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Numerator | ||
Net income (loss) | $ 7,063,000 | $ (17,860,000) |
Limited partners | (3,856,000) | 8,397,000 |
Limited partners | 0 | 8,397,000 |
Partially owned entities | 712,000 | 44,000 |
Preferred distributions | (143,000) | 0 |
Numerator for net income (loss) per share - basic | 3,776,000 | (9,419,000) |
Numerator for net income (loss) per share - diluted | 3,776,000 | $ (9,419,000) |
Net Income (Loss) Available to Common Stockholders, Diluted, Undistributed | $ 7,632,000 | |
Denominator | ||
Denominator for net income (loss) per share - basic (in shares) | 31,581,072 | 35,603,420 |
Convertible Preferred Shares (in shares) | 693,605 | 0 |
OP Units (in shares) | 29,477,235 | 0 |
Long term compensation shares/units (in shares) | 2,610,808 | 0 |
Denominator for net income (loss) per share - diluted (in shares) | 64,362,720 | 35,603,420 |
Net income (loss) per common share - basic (in dollars per share) | $ 0.12 | $ (0.26) |
Net income (loss) per common share -diluted (in dollars per share) | $ 0.12 | $ (0.26) |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event - Cottonwood Lighthouse Point - shares | Apr. 26, 2024 | Apr. 25, 2024 |
Subsequent Event [Line Items] | ||
% Owned | 100% | 73.70% |
OP Units | ||
Subsequent Event [Line Items] | ||
Stock issued during period shares acquisition (in shares) | 858,158 |