Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | May 14, 2019 | |
Document And Entity Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q1 | |
Entity Registrant Name | Starwood Real Estate Income Trust, Inc. | |
Entity Central Index Key | 0001711929 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | true | |
Common Stock Class T | ||
Document And Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 466,188 | |
Common Stock Class S | ||
Document And Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 10,884,175 | |
Common Stock Class D | ||
Document And Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 494,298 | |
Common Stock Class I | ||
Document And Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 4,241,726 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Assets | ||
Investments in real estate, net | $ 410,065 | |
Investments in real estate-related securities | 107,195 | |
Investments in unconsolidated real estate ventures | 12,568 | |
Cash and cash equivalents | 31,038 | $ 164,021 |
Restricted cash | 55,515 | 900 |
Other assets | 8,634 | 42 |
Total assets | 625,015 | 164,963 |
Liabilities and Equity | ||
Mortgage notes, net | 257,791 | |
Repurchase agreements | 63,567 | |
Accounts payable, accrued expenses and other liabilities | 57,553 | 1,087 |
Due to affiliates | 21,119 | 16,754 |
Total liabilities | 400,030 | 17,841 |
Commitments and contingencies | ||
Equity | ||
Preferred stock, $0.01 par value per share, 100,000,000 shares authorized; none issued and outstanding as of March 31, 2019 and December 31, 2018 | ||
Additional paid-in capital | 230,689 | 148,770 |
Accumulated deficit and cumulative distributions | (5,828) | (1,729) |
Total equity | 224,985 | 147,122 |
Total liabilities and equity | 625,015 | 164,963 |
Common Stock Class T | ||
Equity | ||
Common stock value | 2 | |
Common Stock Class S | ||
Equity | ||
Common stock value | 83 | 66 |
Common Stock Class D | ||
Equity | ||
Common stock value | 3 | |
Common Stock Class I | ||
Equity | ||
Common stock value | $ 36 | $ 15 |
Consolidated Balance Sheets (_2
Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Mar. 31, 2019 | Dec. 31, 2018 |
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, authorized shares | 100,000,000 | 100,000,000 |
Preferred stock, issued | 0 | 0 |
Preferred stock, outstanding | 0 | 0 |
Common stock, shares issued | 12,460,453 | |
Common stock, shares outstanding | 12,460,453 | 8,198,838 |
Common Stock Class T | ||
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 250,000,000 | 250,000,000 |
Common stock, shares issued | 207,535 | 483 |
Common stock, shares outstanding | 207,535 | 483 |
Common Stock Class S | ||
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 250,000,000 | 250,000,000 |
Common stock, shares issued | 8,340,840 | 6,610,280 |
Common stock, shares outstanding | 8,340,840 | 6,610,280 |
Common Stock Class D | ||
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 250,000,000 | 250,000,000 |
Common stock, shares issued | 309,860 | 46,075 |
Common stock, shares outstanding | 309,860 | 46,075 |
Common Stock Class I | ||
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 250,000,000 | 250,000,000 |
Common stock, shares issued | 3,602,218 | 1,542,000 |
Common stock, shares outstanding | 3,602,218 | 1,542,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Revenues | ||
Total revenues | $ 15,415 | |
Expenses | ||
Operating expenses | 7,265 | |
General and administrative expenses | 912 | $ 16 |
Performance participation allocation | 857 | |
Depreciation and amortization | 5,358 | |
Total expenses | 14,392 | 16 |
Other income (expense) | ||
Earnings from unconsolidated real estate ventures | 43 | |
Income from real estate-related securities, net | 102 | |
Interest income | 58 | |
Interest expense | (3,598) | |
Other expense | (96) | |
Total other (expense) income | (3,491) | |
Net loss | $ (2,468) | $ (16) |
Net loss per share of common stock, basic and diluted | $ (0.24) | $ (1.55) |
Weighted-average shares of common stock outstanding, basic and diluted | 10,089,598 | 10,000 |
Rental revenue | ||
Revenues | ||
Total revenues | $ 4,310 | |
Hotel revenue | ||
Revenues | ||
Total revenues | 10,852 | |
Other revenue | ||
Revenues | ||
Total revenues | 253 | |
Rental property operating | ||
Expenses | ||
Operating expenses | 1,762 | |
Hotel operating | ||
Expenses | ||
Operating expenses | $ 5,503 |
Consolidated Statement of Chang
Consolidated Statement of Changes in Equity (Unaudited) - USD ($) $ in Thousands | Total | Common StockCommon Stock Class T | Common StockCommon Stock Class S | Common StockCommon Stock Class D | Common StockCommon Stock Class I | Additional Paid-In Capital | Accumulated Deficit and Cumulative Distributions |
Beginning Balance at Dec. 31, 2017 | $ 164 | $ 200 | $ (36) | ||||
Net loss | (16) | (16) | |||||
Ending Balance at Mar. 31, 2018 | 148 | 200 | (52) | ||||
Beginning Balance at Dec. 31, 2018 | 147,122 | $ 66 | $ 15 | 148,770 | (1,729) | ||
Common stock issued | 85,586 | $ 2 | 17 | $ 3 | 21 | 85,543 | |
Offering costs | (4,049) | (4,049) | |||||
Distribution reinvestments | 396 | 396 | |||||
Amortization of restricted stock grants | 29 | 29 | |||||
Net loss | (2,468) | (2,468) | |||||
Distributions declared on common stock (see note 9) | (1,631) | (1,631) | |||||
Ending Balance at Mar. 31, 2019 | $ 224,985 | $ 2 | $ 83 | $ 3 | $ 36 | $ 230,689 | $ (5,828) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Cash flows from operating activities | ||
Net loss | $ (2,468) | $ (16) |
Adjustments to reconcile net loss to net cash provided by operating activities | ||
Performance participation allocation | 857 | |
Depreciation and amortization | 5,358 | |
Amortization of deferred financing costs | 156 | |
Unrealized loss on changes in fair value of financial instruments | 130 | |
Amortization of restricted stock grants | 29 | |
Earnings from unconsolidated joint ventures | (43) | |
Change in assets and liabilities | ||
(Increase) / decrease in other assets | (10,302) | 16 |
Increase / (decrease) in due to affiliates | 189 | |
Increase / (decrease) in accounts payable, accrued expenses and other liabilities | 8,256 | |
Net cash provided by operating activities | 2,162 | 0 |
Cash flows from investing activities | ||
Acquisition of real estate | (205,980) | |
Capital improvements to real estate | (389) | |
Purchase of real estate-related securities | (107,325) | |
Net cash used in investing activities | (313,694) | 0 |
Cash flows from financing activities | ||
Proceeds from issuance of common stock | 85,586 | |
Offering costs paid | (730) | |
Subscriptions received in advance, net | 40,354 | |
Borrowings from mortgage notes | 47,948 | |
Repayments from mortgage notes | (363) | |
Borrowings under repurchase agreements | 68,362 | |
Settlement of repurchase agreements | (4,795) | |
Payment of deferred financing costs | (3,020) | |
Distributions | (178) | |
Net cash provided by financing activities | 233,164 | 0 |
Net change in cash and cash equivalents and restricted cash | (78,368) | |
Cash and cash equivalents at the beginning of the period | 164,921 | 200 |
Cash and cash equivalents at the end of the period | 86,553 | 200 |
Reconciliation of cash and cash equivalents and restricted cash to the consolidated balance sheets: | ||
Cash and cash equivalents | 31,038 | 200 |
Restricted cash | 55,515 | |
Cash and cash equivalents at the end of the period | 86,553 | $ 200 |
Non-cash financing activities: | ||
Assumption of mortgage notes in conjunction with acquisitions in real estate | 220,932 | |
Accrued stockholder servicing fee due to affiliate | 3,150 | |
Accrued offering costs due to affiliates | 159 | |
Accrued distributions | 1,058 | |
Distribution reinvestment | $ 396 |
Organization and Business Purpo
Organization and Business Purpose | 3 Months Ended |
Mar. 31, 2019 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Organization and Business Purpose | 1. Organization and Business Purpose Starwood Real Estate Income Trust, Inc. (the “Company”) was formed on June 22, 2017 as a Maryland corporation and intends to qualify as a real estate investment trust (“REIT”) for U.S. federal income tax purposes. The Company is the sole general partner of Starwood REIT Operating Partnership, L.P., a Delaware limited partnership (the “Operating Partnership”). Starwood REIT Special Limited Partner, L.L.C. (the “Special Limited Partner”), a wholly owned subsidiary of Starwood Capital Group Holdings, L.P. (the “Sponsor”), owns a special limited partner interest in the Operating Partnership. The Company was organized to invest primarily in stabilized, income-oriented commercial real estate and debt secured by commercial real estate. The Company’s portfolio principally is comprised of properties, and debt secured by properties, located in the United States but may also be diversified on a global basis through the acquisition of properties, and debt secured by properties, outside of the United States, with a focus on Europe. To a lesser extent, the Company invests in real estate-related securities. Substantially all of the Company’s business is conducted through the Operating Partnership. The Company and the Operating Partnership are externally managed by Starwood REIT Advisors, L.L.C. (the “Advisor”), an affiliate of the Sponsor. The Company has registered with the Securities and Exchange Commission (the “SEC”) an offering of up to $5.0 billion in shares of common stock, consisting of up to $4.0 billion in shares in its primary offering and up to $1.0 billion in shares pursuant to its distribution reinvestment plan (the “Offering”). The Company intends to sell any combination of four classes of shares of its common stock, with a dollar value up to the maximum aggregate amount of the Offering. The share classes have different upfront selling commissions, dealer manager fees and ongoing stockholder servicing fees. As of March 31, 2019, the Company had received net proceeds of $249.5 million from selling an aggregate of 12,460,453 shares of the Company’s common stock (consisting of 207,535 Class T shares, 8,340,840 Class S shares, 309,860 Class D shares and 3,602,218 Class I shares). The Company intends to continue selling shares on a monthly basis. As of March 31, 2019, the Company owned 15 investments in real estate and had 30 positions in real estate-related securities. The Company currently operates in three reportable segments: Multifamily, Hotel and Real Estate-Related Securities. Financial results by segment are reported in Note 12 – Segment Reporting. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Principles of Consolidation and Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. All significant intercompany balances and transactions have been eliminated in consolidation. The consolidated financial statements, including the notes thereto, are unaudited and exclude some of the disclosures required in audited financial statements. Management believes it has made all necessary adjustments, consisting of only normal recurring items, so that the consolidated financial statements are presented fairly and that estimates made in preparing its consolidated financial statements are reasonable and prudent. The accompanying unaudited consolidated interim financial statements should be read in conjunction with the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018 filed with the SEC. Certain amounts in the Company’s prior period consolidated financial statements have been reclassified to conform to the current period presentation. The Company has chosen to aggregate certain financial statement line items in the Company’s Consolidated Statements of Operations and Consolidated Statements of Cash Flows. Such reclassifications had no effect on net loss or previously reported totals or subtotals in the Consolidated Statements of Operations and the Consolidated Statements of Cash Flows. In determining whether the Company has a controlling financial interest in a partially owned entity and the requirement to consolidate the accounts of that entity, the Company considers whether the entity is a variable interest entity (“VIE”) and whether it is the primary beneficiary. The Company is the primary beneficiary of a VIE when it has (i) the power to direct the most significant activities impacting the economic performance of the VIE and (ii) the obligation to absorb losses or receive benefits significant to the VIE. The Operating Partnership and each of the Company’s joint ventures are considered to be a VIE. The Company consolidates the Operating Partnership because it has the ability to direct the most significant activities of the entities such as purchases, dispositions, financings, budgets, and overall operating plans. Where the Company does not have the power to direct the activities of the VIE that most significantly impact its economic performance, the Company's interest in partially owned entities are accounted for using the equity method of accounting. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the balance sheet. Actual results could differ from those estimates. Cash and Cash Equivalents Cash and cash equivalents represent cash held in banks, cash on hand, and liquid investments with original maturities of three months or less. The Company may have bank balances in excess of federally insured amounts; however, the Company deposits its cash and cash equivalents with high credit-quality institutions to minimize credit risk exposure. Restricted Cash As of March 31, 2019 and December 31, 2018, restricted cash primarily consists of $41.3 million and $0.9 million respectively, of cash received for subscriptions prior to the date in which the subscriptions are effective. The Company’s restricted cash is held primarily in a bank account controlled by the Company’s transfer agent but in the name of the Company. The remaining balance of restricted cash primarily consists of amounts in escrow related to real estate taxes and insurance in connection with mortgages at certain of our properties and tenant security deposits. Investments in Real Estate In accordance with the guidance for business combinations, the Company determines whether the acquisition of a property qualifies as a business combination, which requires that the assets acquired and liabilities assumed constitute a business. If the property acquired is not a business, the Company accounts for the transaction as an asset acquisition. All property acquisitions to date have been accounted for as asset acquisitions. The Company capitalizes acquisition-related costs associated with asset acquisitions. Upon acquisition of a property, the Company assesses the fair value of acquired tangible and intangible assets (including land, buildings, tenant improvements, “above-market” and “below-market” leases, acquired in-place leases, other identified intangible assets and assumed liabilities) and allocates the purchase price to the acquired assets and assumed liabilities. The Company assesses and considers fair value based on estimated cash flow projections that utilize discount and/or capitalization rates that it deems appropriate, as well as other available market information. Estimates of future cash flows are based on a number of factors including the historical operating results, known and anticipated trends, and market and economic conditions. The fair value of the tangible assets of an acquired property considers the value of the property as if it were vacant. The Company also considers an allocation of purchase price of other acquired intangibles, including acquired in-place leases that may have a customer relationship intangible value, including (but not limited to) the nature and extent of the existing relationship with the tenants, the tenants’ credit quality and expectations of lease renewals. Based on its acquisitions to date, the Company’s allocation to customer relationship intangible assets has not been material. Intangible assets are recorded as a component of Other Assets on the Company’s Consolidated Balance Sheets. The cost of buildings and improvements includes the purchase price of the Company’s properties and any acquisition-related costs, along with any subsequent improvements to such properties. The Company’s investments in real estate are stated at cost and are generally depreciated on a straight-line basis over the estimated useful lives of the assets as follows: Description Depreciable Life Building 35 - 40 years Building and site improvements 5 - 15 years Furniture, fixtures and equipment 5 - 7 years Lease intangibles Over lease term Repairs and maintenance are expensed to operations as incurred and are included in Rental property operating and Hotel operating expenses on the Company’s Consolidated Statements of Operations. Significant improvements to properties are capitalized. When assets are sold or retired, their costs and related accumulated depreciation are removed from the accounts with the resulting gains or losses reflected in net income or loss for the period. The amortization of acquired above-market and below-market leases is recorded as an adjustment to rental revenue on the Consolidated Statements of Operations. The amortization of in-place leases is recorded as an adjustment to depreciation and amortization expense on the Consolidated Statements of Operations. The Company’s management reviews its real estate properties for impairment when there is an event or change in circumstances that indicates an impaired value. Since cash flows on real estate properties considered to be “long-lived assets to be held and used” are considered on an undiscounted basis to determine whether an asset has been impaired, the Company’s strategy of holding properties over the long term directly decreases the likelihood of recording an impairment loss. If the Company’s strategy changes or market conditions otherwise dictate an earlier sale date, an impairment loss may be recognized and such loss could be material to the Company’s results. If the Company determines that an impairment has occurred, the affected assets must be reduced to their fair value, less cost to sell. During the period presented, no such impairment occurred. Investments in Unconsolidated Real Estate Ventures Investments in unconsolidated joint ventures are recorded initially at cost, and subsequently adjusted for equity in earnings and cash contributions and distributions. Under the equity method of accounting, the net equity investment of the Company is reflected within the Consolidated Balance Sheets, and the Company’s share of net income or loss from the joint ventures is included within the Consolidated Statements of Operations. The joint venture agreements may designate different percentage allocations among investors for profits and losses; however, the Company’s recognition of joint venture income or loss generally follows the joint venture’s distribution priorities, which may change upon the achievement of certain investment return thresholds. The Company’s investments in unconsolidated joint ventures are reviewed for impairment periodically and the Company records impairment charges when events or circumstances change indicating that a decline in the fair values below the carrying values has occurred and such decline is other-than-temporary. The ultimate realization of the investment in unconsolidated joint ventures is dependent on a number of factors, including the performance of each investment and market conditions. The Company will record an impairment charge if it determines that a decline in the value below the carrying value of an investment in an unconsolidated joint venture is other-than-temporary. Investments in Real Estate-Related Securities The Company has elected to classify its investment in real estate-related securities as trading securities and carry such investments at estimated fair value. As such, the resulting gains and losses are recorded as a component of Income from real estate-related securities on the Consolidated Statements of Operations. The Company’s investments in real estate-related securities consist of residential mortgage-backed securities (“RMBS”) and collateralized debt obligations (“CDO”). Fair Value of Financial Instruments, Including Derivative Instruments The valuation of financial instruments requires the Company to make estimates and judgments that affect the fair value of the instruments. The Company, where possible, bases the fair values of its financial instruments, including its derivative instruments, on listed market prices and third party quotes. Where these are not available, the Company bases its estimates on current instruments with similar terms and maturities or on other factors relevant to the financial instruments. In the normal course of business, the Company is exposed to the effect of interest rate changes. The Company seeks to manage these risks by following established risk management policies and procedures including the use of derivatives to hedge interest rate risk on debt instruments. The Company recognizes all derivatives as either assets or liabilities in the consolidated balance sheets and measures those instruments at fair value. Any derivative instrument used for risk management that does not meet the hedging criteria is marked-to-market each period as a component of interest expense. Fair Value Measurement Under normal market conditions, the fair value of an investment is the amount that would be received to sell an asset or transfer a liability in an orderly transaction between market participants at the measurement date (i.e., the exit price). Additionally, there is a hierarchal framework that prioritizes and ranks the level of market price observability used in measuring investments at fair value. Market price observability is impacted by a number of factors, including the type of investment and the characteristics specific to the investment and the state of the market place, including the existence and transparency of transactions between market participants. Investments with readily available active quoted prices or for which fair value can be measured from actively quoted prices generally will have a higher degree of market price observability and a lesser degree of judgment used in measuring fair value. Investments measured and reported at fair value are classified and disclosed in one of the following levels within the fair value hierarchy: Level 1 — quoted prices are available in active markets for identical investments as of the measurement date. The Company does not adjust the quoted price for these investments. Level 2 — quoted prices are available in markets that are not active or model inputs are based on inputs that are either directly or indirectly observable as of the measurement date. Level 3 — pricing inputs are unobservable and include instances where there is minimal, if any, market activity for the investment. These inputs require significant judgment or estimation by management or third parties when determining fair value and generally represent anything that does not meet the criteria of Levels 1 and 2. Due to the inherent uncertainty of these estimates, these values may differ materially from the values that would have been used had a ready market for these investments existed. The fair values of the Company’s financial instruments (other than mortgage notes payable and derivative instruments), including cash and cash equivalents and other financial instruments, approximate their carrying or contract value. The following table provides a summary of the carrying and fair values for the Company’s mortgage notes payable, consolidated derivative instruments and investments in real estate-related securities at March 31, 2019 (amounts in thousands): Estimated Fair Value (Level 2) Estimated Fair Value (Level 3) Carrying Value Mortgage notes payable, net $ — $ 260,655 $ 261,717 Interest rate caps 740 — 740 Investments in real estate-related securities 107,195 — 107,195 The Company generally determines the fair value of its real estate-related securities by utilizing third-party pricing service providers. In determining the value of a particular investment, pricing service providers may use broker-dealer quotations, reported trades or valuation estimates from their internal pricing models to determine the reported price. The pricing service providers’ internal models for mortgage-related securities such as RMBS usually consider the attributes applicable to a particular class of security (e.g., credit rating, seniority), current market data, and estimated cash flows for each class and incorporate deal collateral performance such as prepayment speeds and default rates, as available. Fair value of the Company’s indebtedness is estimated by modeling the cash flows required by the Company’s debt agreements and discounting them back to the present value using the appropriate discount rate. Additionally, the Company considers current market rate and conditions by evaluating similar borrowing agreements with comparable loan-to-value ratios and credit profiles. The inputs used in determining the fair value of the Company’s indebtedness are considered Level 3. The Company’s derivative positions are valued using models developed by the respective counterparty as well as third party pricing service providers that use as their basis readily observable market parameters (such as forward yield curves and credit default swap data). The fair values disclosed for mortgage notes payable were calculated using indicative rates provided by lenders of similar loans in the case of mortgage notes payable . Deferred Charges The Company’s deferred charges include financing costs. Deferred financing costs include legal, structuring, and other loan costs incurred by the Company for its financing agreements. Deferred financing costs related to the Company’s mortgage notes and term loans are recorded as an offset to the related liability and amortized over the term of the applicable financing instruments as interest expense. Revenue Recognition The Company commences revenue recognition on its leases based on a number of factors, including the initial determination that the contract is or contains a lease. Generally, all of the Company’s contracts are, or contain leases, and therefore revenue is recognized when the lessee takes possession of or controls the physical use of the leased assets. In most instances this occurs on the lease commencement date. At the inception of a new lease, including new leases that arise from amendments, the Company assesses the terms and conditions of the lease to determine the proper lease classification. As described in recent Accounting Pronouncements elsewhere in Note 2, the Company adopted the provisions of Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842) and related ASUs subsequently issued (collectively, “ASC 842”) as of January 1, 2019. A lease is classified as an operating lease if none of the following criteria are met: (i) ownership transfers to the lessee at the end of the lease term, (ii) the lessee has a purchase option that is reasonably expected to be exercised, (iii) the lease term is for a major part of the economic life of the leased property, (iv) the present value of the future lease payments and any residual value guaranteed by the lessee that is not already reflected in the lease payments equals or exceeds substantially all of the fair value of the leased property, and (v) the leased property is of such a specialized nature that it is expected to have no future alternative use to the Company at the end of the lease term. If one or more of these criteria are met, the lease will generally be classified as a sales-type lease, unless the lease contains a residual value guarantee from a third party other than the lessee, in which case it would be classified as a direct financing lease under certain circumstances in accordance with ASC 842. The Company’s Rental revenue primarily consists of base rent arising from tenant leases at the Company’s multifamily properties under operating leases. Revenue under operating leases is recognized as revenue on a straight-line basis over the non-cancelable terms of the related leases. For leases that have fixed and measurable rent escalations, the difference between such rental income earned and the cash rent due under the provisions of the lease is recorded in the Consolidated Balance Sheets. The Company’s Hotel revenue consists of room revenue and food and beverage revenue. Room revenue is recognized when the related room is occupied and other hotel revenue is recognized when the service is rendered. Certain of the Company’s contracts contain nonlease components (e.g., charges for management fees, common area maintenance, and reimbursement of third-party maintenance expenses) in addition to lease components (i.e., monthly rental charges). Services related to nonlease components are provided over the same period of time as, and billed in the same manner as, monthly rental charges. The Company elected to apply the practical expedient available under ASC 842, for all classes of assets, not to segregate the lease components from the nonlease components when accounting for operating leases. Since the lease component is the predominant component under each of these leases, combined revenues from both the lease and nonlease components are accounted for in accordance with ASC 842 and reported as rental revenues in the accompanying Consolidated Statements of Operations. Other revenues and interest income are recorded on an accrual basis. Organization and Offering Expenses Organization expenses are expensed as incurred and recorded as a component of General and Administrative Expenses on the Company’s Consolidated Statements of Operations and offering costs are charged to equity as such amounts are incurred. The Advisor has agreed to advance organization and offering expenses on behalf of the Company (including legal, accounting, and other expenses attributable to the organization, but excluding upfront selling commissions, dealer manager fees and stockholder servicing fees) through the first anniversary of the date on which the proceeds from escrow are released. The Company will reimburse the Advisor for all such advanced expenses ratably over a 60 month period following December 21, 2019. These organization and offering costs are recorded as a component of Due to affiliates on the Company’s Consolidated Balance Sheets as of March 31, 2019 and December 31, 2018. Starwood Capital, L.L.C. (the “Dealer Manager”), a registered broker-dealer affiliated with the Advisor, serves as the dealer manager for the Offering. The Dealer Manager is entitled to receive selling commissions and dealer manager fees based on the transaction price of each applicable class of shares sold in the Offering. The Dealer Manager is also entitled to receive a stockholder servicing fee of 0.85%, 0.85% and 0.25% per annum of the aggregate net asset value (“NAV”) of the Company’s outstanding Class T shares, Class S shares and Class D shares, respectively. There is no stockholder servicing fee with respect to Class I shares. The following table details the selling commissions, dealer manager fees, and stockholder servicing fees for each applicable share class as of March 31, 2019: Common Stock Class T Common Stock Class S Common Stock Class D Common Stock Class I Selling commissions and dealer manager fees (% of transaction price) up to 3.5% up to 3.5% — — Stockholder servicing fee (% of NAV) 0.85% 0.85% 0.25% — For Class S shares sold in the primary offering, investors will pay upfront selling commissions of up to 3.5% of the transaction price. For Class T shares sold in the primary offering, investors will pay upfront selling commissions of up to 3.0% of the transaction price and upfront dealer manager fees of 0.5% of the transaction price, however such amounts may vary at certain participating broker-dealers, provided that the sum will not exceed 3.5% of the transaction price. The Dealer Manager is entitled to receive stockholder servicing fees of 0.85% per annum of the aggregate NAV for Class S shares and Class T shares. For Class T shares such stockholder servicing fee includes, an advisor stockholder servicing fee of 0.65% per annum, and a dealer stockholder servicing fee of 0.20% per annum, of the aggregate NAV for the Class T shares, however, with respect to Class T shares sold through certain participating broker-dealers, the advisor stockholder servicing fee and the dealer stockholder servicing fee may be other amounts, provided that the sum of such fees will always equal 0.85% per annum of the NAV of such shares. The Class D shares will incur a stockholder servicing fee equal to 0.25% per annum of the aggregate NAV for the Class D shares. The Dealer Manager has entered into agreements with the selected dealers distributing the Company’s shares in the Offering, which provide, among other things, for the re-allowance of the full amount of the selling commissions and dealer manager fees received and all or a portion of the stockholder servicing fees to such selected dealers. The Company will cease paying the stockholder servicing fee with respect to any Class T share, Class S share or Class D share sold in the primary Offering at the end of the month in which the total selling commissions, dealer manager fees and stockholder servicing fees paid with respect to such share would exceed 8.75% (or, in the case of Class T shares sold through certain participating broker-dealers, a lower limit as set forth in any applicable agreement between the Dealer Manager and a participating broker-dealer) of the gross proceeds from the sale of such share (including the gross proceeds of any shares issued under the Company’s distribution reinvestment plan with respect thereto). The Company will accrue the full cost of the stockholder servicing fee as an offering cost at the time each Class T, Class S and Class D share is sold during the primary Offering. As of March 31, 2019 and December 31, 2018, the Company had accrued $14.0 million and $10.8 million respectively, of stockholder servicing fees related to shares sold and recorded such amount as a component of Due to affiliates on the Company’s consolidated balance sheets. Income Taxes The Company intends to make an election to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code commencing with its taxable year ending December 31, 2019. If the Company qualifies for taxation as a REIT, the Company generally will not be subject to federal corporate income tax to the extent it distributes 90% of its taxable income to its stockholders. REITs are subject to a number of other organizational and operational requirements. Even if the Company qualifies for taxation as a REIT, it may be subject to certain state and local taxes on its income and property, and federal income and excise taxes on its undistributed income. In anticipation of the Company’s REIT election, the Company has formed wholly-owned subsidiaries to function as taxable REIT subsidiaries (“TRSs”). In general, a TRS may perform additional services for the Company’s tenants and generally may engage in any real estate or non-real estate-related business other than management or operation or operation of a lodging facility or a health care facility. The TRSs will be subject to taxation at the federal, state and local levels, as applicable. The Company accounts for applicable income taxes by utilizing the asset and liability method. As such, the Company records deferred tax assets and liabilities for the future tax consequences resulting from the difference between the carrying value of existing assets and liabilities and their respective tax basis. A valuation allowance for deferred tax assets is provided if the Company believes all or some portion of the deferred tax asset may not be realized. The Company intends to file as taxable corporation for its tax year ended December 31, 2018. For the period ended March 31, 2019 and March 31, 2018, recognized an income tax provision of $0.1 million and $0.0 respectively. Net Loss per Share Basic net loss per share is computed by dividing net loss for the period by the weighted average number of common shares outstanding during the period. Diluted loss per share is computed by dividing net loss for the period by the weighted average number of common shares and common share equivalents outstanding (unless their effect is antidilutive) for the period. There are no common share equivalents outstanding that would have a dilutive effect as a result of the net loss, and accordingly, the weighted average number of common shares outstanding is identical for the periods ended March 31, 2019 and March 31, 2018, for both basic and diluted shares. Recent Accounting Pronouncements On August 2018, the Financial Accounting Standards Board (“FASB”) issued ASU 2018-13, “Fair Value Measurement (Topic 820) – Disclosure Framework,” which adds new disclosure requirements and modifies or eliminates existing disclosure requirements of ASC 820. This ASU is effective for annual periods, and interim periods therein, beginning after December 15, 2019. Early application is permitted. The Company does not expect the application of this ASU to materially impact the Company. |
Investments
Investments | 3 Months Ended |
Mar. 31, 2019 | |
Real Estate [Abstract] | |
Investments | 3. Investments Investments in Real Estate Investments in real estate, net consisted of the following ($ in thousands): March 31, 2019 Building and building improvements $ 307,242 Land and land improvements 81,030 Furniture, fixtures and equipment 25,442 Total 413,714 Accumulated depreciation (3,649 ) Investments in real estate, net $ 410,065 During the three months ended March 31, 2019, the Company acquired wholly owned interests in fourteen properties, which were comprised of six multifamily and eight hotel properties. As of December 31, 2018, the Company had not commenced its principal operations and had not acquired any real estate investment properties. The following table provides further details of the properties acquired during the three months ended March 31, 2019 ($ in thousands): Investment Ownership Interest Number of Properties Location Sector Acquisition Date Real Estate Acquisition Florida Multifamily Portfolio 100% 4 Jacksonville/Naples, FL Multifamily January 2019 $ 104,049 U.S. Select Service Portfolio 100% 8 FL, CO, TN, OH, AR Hotel January 2019 232,198 All other 100% 2 Various Multifamily January 2019 82,988 14 $ 419,235 The following table summarizes the purchase price allocation for the properties acquired during the three months ended March 31, 2019 ($ in thousands): Florida Multifamily Portfolio U.S. Select Service All Other Total Building and building improvements $ 71,054 $ 164,266 $ 65,974 $ 301,294 Land and land improvements 25,620 42,256 13,227 81,103 Furniture, fixtures and equipment 1,195 22,377 1,742 25,314 Other intangibles 1,756 101 1,066 2,923 Total purchase price (1) $ 99,625 $ 229,000 $ 82,009 $ 410,634 Assumed mortgage notes (2) (79,269 ) (84,013 ) (57,651 ) (220,933 ) Net purchase price $ 20,356 $ 144,987 $ 24,358 $ 189,701 (1) ( 2 ) Investments in unconsolidated real estate ventures On March 13, 2019, the Company entered into a joint venture (the "Joint Venture") to acquire a Fort Lauderdale Hotel. The Company owns a 43% interest in the Joint Venture. The Company does not have a controlling financial interest in the VIE and is not the VIE’s primary beneficiary. As a result, the Joint Venture is accounted for using the equity method of accounting and is included in investment in unconsolidated real estate venture in the Company’s consolidated balance sheets. The Company's investment in the Joint Venture totaled $12.6 million as of March 31, 2019. The Company’s earnings from its investment in the Joint Venture is presented in earnings from unconsolidated joint ventures on the Company’s Consolidated Statements of Operations and totaled $0.1 million for the three months ended March 31, 2019. |
Intangibles
Intangibles | 3 Months Ended |
Mar. 31, 2019 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Intangibles | 4. Intangibles The gross carrying amount and accumulated amortization of the Company’s intangible assets and liabilities consisted of the following ($ in thousands): March 31, 2019 Intangible assets: In-place lease intangibles $ 2,828 Other 1,200 Total intangible assets 4,028 Accumulated amortization: In-place lease amortization (1,690 ) Other (20 ) Total accumulated amortization (1,710 ) Intangible assets, net $ 2,318 The estimated future amortization on the Company’s intangibles for each of the next five years and thereafter as of March 31, 2019 is as follows ($ in thousands): In-place Lease Intangibles Other 2019 (remaining) $ 1,138 $ 60 2020 — 80 2021 — 80 2022 — 80 2023 — 80 Thereafter — 800 $ 1,138 $ 1,180 |
Investments in Real Estate-Rela
Investments in Real Estate-Related Securities | 3 Months Ended |
Mar. 31, 2019 | |
Investments Schedule [Abstract] | |
Investments in Real Estate-Related Securities | 5. Investments in Real Estate-Related Securities The following table details the Company’s investments in real estate-related debt securities, which are comprised of RMBS and CDO ($ in thousands): Instrument Number of Positions Credit Rating (1) Weighted Average Coupon Weighted Average Maturity Date Cost Basis Fair Value RMBS 22 Other 4.25% March 5, 2023 $ 86,985 $ 86,973 CDO 8 BBB 5.89% June 7, 2020 20,340 20,222 30 $ 107,325 $ 107,195 (1) BBB represents credit ratings of BBB+, BBB, and BBB-. Other consists of investments that, as of March 31, 2019, were either not ratable or have not been submitted to ratings agencies. During the three months ended March 31, 2019, the Company recorded an unrealized loss of $0.1 million on its investments in real estate-related securities and recorded such amount as a component of income from real estate-related securities on its Consolidated Statements of Operations. During the three months ended March 31, 2019, the Company did not sell any securities. |
Mortgage Notes
Mortgage Notes | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Mortgage Notes | 6. Mortgage Notes The following table is a summary of the mortgage notes secured by the Company’s properties ($ in thousands): Indebtedness Weighted Average Interest Rate (1) Weighted Average Maturity Date Principal Balance (2) Fixed rate loans Fixed rate mortgages 4.35% 12/11/2024 $ 156,118 Total fixed rate loans 156,118 Variable rate loans Variable rate mortgages L + 1.98% 6/30/2026 105,599 Total variable rate loans 105,599 Total loans secured by our properties 261,717 Deferred financing costs, net (2,864 ) Discount on assumed debt, net (1,062 ) Mortgage notes, net $ 257,791 ( 1) ( 2 ) The majority of the Company’s mortgages contain yield or spread maintenance provisions. The following table presents the future principal payments under the Company’s mortgage notes as of March 31, 2019 ($ in thousands): Year Amount 2019 (remaining) $ 1,061 2020 1,477 2021 49,502 2022 1,624 2023 1,697 Thereafter 206,356 Total $ 261,717 |
Repurchase Agreements
Repurchase Agreements | 3 Months Ended |
Mar. 31, 2019 | |
Repurchase Agreements [Abstract] | |
Repurchase Agreements | 7. Repurchase Agreements Repurchase agreements are treated as collateralized financing transactions and are carried at their contractual amounts, including accrued interest, as specified in the respective agreements. Although structured as a sale and repurchase obligation, a repurchase agreement operates as a financing under which securities are pledged as collateral to secure a short-term loan equal in value to a specified percentage of the market value of the pledged collateral. While used as collateral, the Company retains beneficial ownership of the pledged collateral, including the right to distributions. At the maturity of a repurchase agreement, the Company is required to repay the loan and concurrently receive the pledged collateral from the lender or, with the consent of the lender, renew such agreement at the then prevailing financing rate. The Company’s repurchase agreements typically have terms of up to one month at inception, with some having longer terms. For financial statement purposes, the Company does not offset its repurchase agreements and securities lending transactions because the conditions for netting as specified by GAAP are not met. Although not offset on the Consolidated Balance Sheets, these transactions are included in the following table ($ in thousands): March 31, 2019 Security Interest Collateral Assets (1) Outstanding Balance RMBS $ 57,778 $ 48,867 CDO 18,511 14,700 $ 76,289 $ 63,567 (1) Represents the fair value of the Company’s investments in real estate-related securities. |
Other Assets and Other Liabilit
Other Assets and Other Liabilities | 3 Months Ended |
Mar. 31, 2019 | |
Other Assets And Other Liabilities [Abstract] | |
Other Assets and Other Liabilities | 8 . Other Assets and Other Liabilities The following table summarizes the components of other assets ($ in thousands): March 31, 2019 December 31, 2018 Receivables $ 4,182 $ — Real estate intangibles, net 2,318 — Interest rate caps 740 — Interest receivable 662 8 Prepaid expenses 381 — Other 351 34 Total $ 8,634 $ 42 The following table summarizes the components of accounts payable, accrued expenses, and other liabilities ($ in thousands): March 31, 2019 December 31, 2018 Subscriptions received in advance $ 41,254 $ 900 Deferred income 7,289 — Accounts payable and accrued expenses 5,839 187 Distribution payable 1,058 — Tenant security deposits 652 — Accrued interest expense 464 — Real estate taxes payable 152 — Other 845 — Total $ 57,553 $ 1,087 |
Equity
Equity | 3 Months Ended |
Mar. 31, 2019 | |
Equity [Abstract] | |
Equity | 9 . Equity Authorized Capital The Company is authorized to issue preferred stock and four classes of common stock consisting of Class T shares, Class S shares, Class D shares, and Class I shares. The Company’s board of directors has the ability to establish the preferences and rights of each class or series of preferred stock, without stockholder approval, and as such, it may afford the holders of any series or class of preferred stock preferences, powers and rights senior to the rights of holders of common stock. The differences among the common share classes relate to upfront selling commissions, dealer manager fees and ongoing stockholder servicing fees. See Note 2 for a further description of such items. Other than the differences in upfront selling commissions, dealer manager fees and ongoing stockholder servicing fees, each class of common stock is subject to the same economic and voting rights. As of March 31, 2019, the Company had the authority to issue 1,100,000,000 shares of capital stock, consisting of the following: Classification Number of Shares Par Value Preferred Stock 100,000,000 $ 0.01 Class T Shares 250,000,000 $ 0.01 Class S Shares 250,000,000 $ 0.01 Class D Shares 250,000,000 $ 0.01 Class I Shares 250,000,000 $ 0.01 Total 1,100,000,000 Common Stock As of March 31, 2019, the Company had sold 12,460,453 shares of its common stock in the Offering for aggregate net proceeds of $249.5 million. The following table details the movement in the Company’s outstanding shares of common stock: Three months ended March 31, 2019 Class T Class S Class D Class I Total December 31, 2018 483 6,610,280 46,075 1,542,000 8,198,838 Common stock issued 206,975 1,717,020 263,697 2,054,214 4,241,906 Distribution reinvestment 77 13,540 88 6,004 19,709 March 31, 2019 207,535 8,340,840 309,860 3,602,218 12,460,453 Distributions The Company intends to distribute substantially all of its taxable income to its stockholders each year to comply with the REIT provisions of the Internal Revenue Code. The following table details the aggregate distributions declared for each applicable class of common stock for the three months ended March 31, 2019: Class T Class S Class D Class I Gross distributions declared per share of common stock $ 0.1790 $ 0.1790 $ 0.1790 $ 0.1790 Stockholder servicing fee per share of common stock (0.0277 ) (0.0449 ) (0.0105 ) — Net distributions declared per share of common stock $ 0.1513 $ 0.1341 $ 0.1685 $ 0.1790 Share Repurchase Plan The Company has adopted a share repurchase plan, whereby on a monthly basis, stockholders may request that the Company repurchase all or any portion of their shares. The Company may choose to repurchase all, some or none of the shares that have been requested to be repurchased at the end of any particular month, in its discretion, subject to any limitations in the share repurchase plan. The total amount of aggregate repurchases of Class T, Class S, Class D, and Class I shares will be limited to 2% of the aggregate NAV per month and 5% of the aggregate NAV per calendar quarter. Shares are repurchased at a price equal to the transaction price on the applicable repurchase date, subject to any early repurchase deduction. Shares that have not been outstanding for at least one year would be repurchased at 95% of the transaction price. Due to the illiquid nature of investments in real estate, the Company may not have sufficient liquid resources to fund repurchase requests and may elect not to repurchase some or all of the shares submitted for repurchase in a given period. Further, the Company may modify, suspend or terminate the share repurchase plan. Distribution Reinvestment Plan The Company has adopted a distribution reinvestment plan whereby stockholders (other than clients of participating broker dealers and residents of certain states that do not permit automatic enrollment in the distribution reinvestment plan) will have their cash distributions automatically reinvested in additional shares of common stock unless they elect to receive their distributions in cash. Residents of Alabama, Arkansas, Idaho, Kansas, Kentucky, Maine, Maryland, Massachusetts, Nebraska, North Carolina, New Jersey, Ohio, Oregon and Washington and clients of participating broker-dealers that do not permit automatic enrollment in the distribution reinvestment plan will automatically receive their distributions in cash unless they elect to have their cash distributions reinvested in additional shares of our common stock. The per share purchase price for shares purchased pursuant to the distribution reinvestment plan will be equal to the transaction price before upfront selling commissions and dealer manager fees at the time the distribution is payable, which will generally be equal to the Company’s prior month’s NAV per share for that share class. Stockholders will not pay upfront selling commissions or dealer manager fees when purchasing shares pursuant to the distribution reinvestment plan. The stockholder servicing fees with respect to shares of the Company’s Class T shares, Class S shares and Class D shares are calculated based on the NAV for those shares and may reduce the NAV or, alternatively, the distributions payable with respect to shares of each such class, including shares issued in respect of distributions on such shares under the distribution reinvestment plan. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 10 . Related Party Transactions Acquisition of Initial Investments On January 3, 2019, the Company acquired a multifamily property portfolio (the “Florida Multifamily Portfolio”) from an affiliate of the Advisor, for approximately $100 million, excluding closing costs. The Florida Multifamily Portfolio is a garden style multifamily portfolio totaling 1,150 units and comprised of two properties located in Jacksonville, Florida and two properties located in Naples, Florida. The affiliate of the Advisor acquired the Florida Multifamily Portfolio on October 5, 2018 from an unaffiliated third party for approximately $100 million, excluding closing costs. On January 3, 2019, the Company acquired the Phoenix Property from an affiliate of the Advisor for approximately $46 million, excluding closing costs. The Phoenix Property is a garden style multifamily property totaling 256 units and located in Mesa, Arizona. An affiliate of the Advisor acquired the Phoenix Property on June 29, 2018 from an unaffiliated third party for approximately $46 million, excluding closing costs. On January 3, 2019, the Company acquired the Savannah Property from an affiliate of the Advisor for approximately $36 million, excluding closing costs. The Savannah Property is a new construction multifamily property located in Savannah, Georgia totaling 203 units. An affiliate of the Advisor acquired Savannah Property on July 19, 2018 from an unaffiliated third party for approximately $36 million, excluding closing costs. Management Fee and Performance Participation Allocation The Advisor is entitled to an annual management fee equal to 1.25% of the Company’s NAV, payable monthly as compensation for the services it provides to the Company. The management fee can be paid, at the Advisor’s election, in cash, shares of common stock, or Operating Partnership units. The Advisor has agreed to waive its management fee through March 31, 2019. Additionally, the Special Limited Partner, an affiliate of the Advisor, holds a performance participation interest in Operating Partnership that entitles it to receive an allocation of Operating Partnership’s total return to its capital account. Total return is defined as distributions paid or accrued plus the change in NAV. Under the Operating Partnership agreement, the annual total return will be allocated solely to the Special Limited Partner 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 annual distribution of the performance participation interest will be paid in cash or Class I units of Operating Partnership, at the election of the Special Limited Partner. During the period ended March 31, 2019, the Company recognized $0.9 million of Performance participation allocation in the Company’s Consolidated Statement of Operations. Due to Affiliate The following table details the components of Due to affiliates ($ in thousands): March 31, 2019 December 31, 2018 Accrued stockholder servicing fee $ 13,980 $ 10,830 Advanced organization and offering costs 5,992 5,822 Performance participation allocation 857 — Accrued affiliate service provider expenses 45 — Advanced expenses 245 102 Total $ 21,119 $ 16,754 Accrued stockholder servicing fee As described in Note 2, the Company accrues the full amount of the future stockholder servicing fees payable to the Dealer Manager for Class T, Class S, and Class D shares up to the 8.75% limit at the time such shares are sold. As of March 31, 2019 and December 31, 2018, the Company has accrued $14.0 million and $10.8 million, respectively, of stockholder servicing fees payable to the Dealer Manager related to the Class T, Class S shares and Class D shares sold. The Dealer Manager has entered into agreements with the selected dealers distributing the Company’s shares in the Offering, which provide, among other things, for the re-allowance of the full amount of the selling commissions and dealer manager fee and all or a portion of the stockholder servicing fees received by the Dealer Manager to such selected dealers. Advanced organization and offering costs As of March 31, 2019 and December 31, 2018, The Advisor and its affiliates has incurred $6.0 million and $5.8 million, respectively of organization and offering costs (excluding upfront selling commissions, dealer manager fees and stockholder servicing fees) on behalf of the Company through March 31, 2019. Such amounts will be reimbursed to the Advisor ratably over 60 months beginning after December 21, 2019. Advanced expenses As of March 31, 2019 and December 31, 2018, the Advisor had advanced approximately $0.2 million and $0.1 million respectively, of expenses on the Company’s behalf for general corporate expenses provided by unaffiliated third parties. Such amounts will be reimbursed to the Advisor ratably over a 60 month period following December 21, 2019 (the date the proceeds from the Offering were released from escrow). Accrued affiliate service provider expenses The Company has engaged and expects to continue to engage Highmark Residential (formerly Milestone Management), a portfolio company owned by an affiliate of Starwood Capital Group, to provide day-to-day operational and management services (including leasing, construction management, revenue management, accounting, legal and contract management, expense management, and capital expenditure projects and transaction support services) for the Company’s multifamily properties. The cost for such services are a percentage of the gross receipts and project costs respectively (which will be reviewed periodically and adjusted if appropriate), plus actual costs allocated for transaction support services. During the three months ended March 31, 2019, the Company has incurred approximately $0.1 million of expenses due to Highmark Residential services in connection with its investments and such amount is included in rental property operating expenses on the Company’s Consolidated Statement of Operations. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 1 1 . Commitments and Contingencies As of March 31, 2019 and December 31, 2018, the Company is not subject to any material litigation nor is the Company aware of any material litigation threatened against it. |
Segment Reporting
Segment Reporting | 3 Months Ended |
Mar. 31, 2019 | |
Segment Reporting [Abstract] | |
Segment Reporting | 1 2 . Segment Reporting The Company operates in three reportable segments: Multifamily properties, Hotel properties and Real Estate-Related Securities. The Company allocates resources and evaluates results based on the performance of each segment individually. The Company believes that Segment Net Operating Income is the key performance metric that captures the unique operating characteristics of each segment. The following table sets forth the financial results by segment for the three months ended March 31, 2019 ($ in thousands): Multifamily Hotel Real Estate- Related Securities Other (Corporate) (1) Total Total Assets $ 190,852 $ 258,519 $ 113,141 $ 62,503 $ 625,015 Revenue Rental revenue $ 4,310 $ — $ — $ — $ 4,310 Hotel revenue — 10,852 — — 10,852 Other revenue 199 54 — — 253 Total revenues 4,509 10,906 — — 15,415 Expenses Rental property operating 1,762 — — — 1,762 Hotel operating — 5,503 — — 5,503 Total segment expenses 1,762 5,503 — — 7,265 Income from real estate-related securities — — 102 — 102 Earnings from unconsolidated real estate ventures — 43 — — 43 Segment net operating income $ 2,747 $ 5,446 $ 102 $ — $ 8,295 Depreciation and amortization $ 3,304 $ 2,054 $ — $ — $ 5,358 Other income (expense): General and administrative (912 ) Management fee — Performance participation allocation (857 ) Interest income 58 Interest expense (3,598 ) Other expense (96 ) Net loss $ (2,468 ) (1) The Other (Corporate) segment captures cash and other item not directly identifiable with the other three reporting segments. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | 1 3 . Subsequent events Status of the Offering As of May 14, 2019, the Company had sold an aggregate of 16,086,387 shares of its common stock (consisting of 466,188 Class T shares, 10,884,175 Class S shares, 494,298 Class D shares, and 4,241,726 Class I shares) in the Offering resulting in net proceeds of approximately $322.1 million to the Company as payment for such shares. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Principles of Consolidation and Basis of Presentation | Principles of Consolidation and Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. All significant intercompany balances and transactions have been eliminated in consolidation. The consolidated financial statements, including the notes thereto, are unaudited and exclude some of the disclosures required in audited financial statements. Management believes it has made all necessary adjustments, consisting of only normal recurring items, so that the consolidated financial statements are presented fairly and that estimates made in preparing its consolidated financial statements are reasonable and prudent. The accompanying unaudited consolidated interim financial statements should be read in conjunction with the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018 filed with the SEC. Certain amounts in the Company’s prior period consolidated financial statements have been reclassified to conform to the current period presentation. The Company has chosen to aggregate certain financial statement line items in the Company’s Consolidated Statements of Operations and Consolidated Statements of Cash Flows. Such reclassifications had no effect on net loss or previously reported totals or subtotals in the Consolidated Statements of Operations and the Consolidated Statements of Cash Flows. In determining whether the Company has a controlling financial interest in a partially owned entity and the requirement to consolidate the accounts of that entity, the Company considers whether the entity is a variable interest entity (“VIE”) and whether it is the primary beneficiary. The Company is the primary beneficiary of a VIE when it has (i) the power to direct the most significant activities impacting the economic performance of the VIE and (ii) the obligation to absorb losses or receive benefits significant to the VIE. The Operating Partnership and each of the Company’s joint ventures are considered to be a VIE. The Company consolidates the Operating Partnership because it has the ability to direct the most significant activities of the entities such as purchases, dispositions, financings, budgets, and overall operating plans. Where the Company does not have the power to direct the activities of the VIE that most significantly impact its economic performance, the Company's interest in partially owned entities are accounted for using the equity method of accounting. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the balance sheet. Actual results could differ from those estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents represent cash held in banks, cash on hand, and liquid investments with original maturities of three months or less. The Company may have bank balances in excess of federally insured amounts; however, the Company deposits its cash and cash equivalents with high credit-quality institutions to minimize credit risk exposure. |
Restricted Cash | Restricted Cash As of March 31, 2019 and December 31, 2018, restricted cash primarily consists of $41.3 million and $0.9 million respectively, of cash received for subscriptions prior to the date in which the subscriptions are effective. The Company’s restricted cash is held primarily in a bank account controlled by the Company’s transfer agent but in the name of the Company. The remaining balance of restricted cash primarily consists of amounts in escrow related to real estate taxes and insurance in connection with mortgages at certain of our properties and tenant security deposits. |
Investments in Real Estate | Investments in Real Estate In accordance with the guidance for business combinations, the Company determines whether the acquisition of a property qualifies as a business combination, which requires that the assets acquired and liabilities assumed constitute a business. If the property acquired is not a business, the Company accounts for the transaction as an asset acquisition. All property acquisitions to date have been accounted for as asset acquisitions. The Company capitalizes acquisition-related costs associated with asset acquisitions. Upon acquisition of a property, the Company assesses the fair value of acquired tangible and intangible assets (including land, buildings, tenant improvements, “above-market” and “below-market” leases, acquired in-place leases, other identified intangible assets and assumed liabilities) and allocates the purchase price to the acquired assets and assumed liabilities. The Company assesses and considers fair value based on estimated cash flow projections that utilize discount and/or capitalization rates that it deems appropriate, as well as other available market information. Estimates of future cash flows are based on a number of factors including the historical operating results, known and anticipated trends, and market and economic conditions. The fair value of the tangible assets of an acquired property considers the value of the property as if it were vacant. The Company also considers an allocation of purchase price of other acquired intangibles, including acquired in-place leases that may have a customer relationship intangible value, including (but not limited to) the nature and extent of the existing relationship with the tenants, the tenants’ credit quality and expectations of lease renewals. Based on its acquisitions to date, the Company’s allocation to customer relationship intangible assets has not been material. Intangible assets are recorded as a component of Other Assets on the Company’s Consolidated Balance Sheets. The cost of buildings and improvements includes the purchase price of the Company’s properties and any acquisition-related costs, along with any subsequent improvements to such properties. The Company’s investments in real estate are stated at cost and are generally depreciated on a straight-line basis over the estimated useful lives of the assets as follows: Description Depreciable Life Building 35 - 40 years Building and site improvements 5 - 15 years Furniture, fixtures and equipment 5 - 7 years Lease intangibles Over lease term Repairs and maintenance are expensed to operations as incurred and are included in Rental property operating and Hotel operating expenses on the Company’s Consolidated Statements of Operations. Significant improvements to properties are capitalized. When assets are sold or retired, their costs and related accumulated depreciation are removed from the accounts with the resulting gains or losses reflected in net income or loss for the period. The amortization of acquired above-market and below-market leases is recorded as an adjustment to rental revenue on the Consolidated Statements of Operations. The amortization of in-place leases is recorded as an adjustment to depreciation and amortization expense on the Consolidated Statements of Operations. The Company’s management reviews its real estate properties for impairment when there is an event or change in circumstances that indicates an impaired value. Since cash flows on real estate properties considered to be “long-lived assets to be held and used” are considered on an undiscounted basis to determine whether an asset has been impaired, the Company’s strategy of holding properties over the long term directly decreases the likelihood of recording an impairment loss. If the Company’s strategy changes or market conditions otherwise dictate an earlier sale date, an impairment loss may be recognized and such loss could be material to the Company’s results. If the Company determines that an impairment has occurred, the affected assets must be reduced to their fair value, less cost to sell. During the period presented, no such impairment occurred. |
Investments in Unconsolidated Real Estate Ventures | Investments in Unconsolidated Real Estate Ventures Investments in unconsolidated joint ventures are recorded initially at cost, and subsequently adjusted for equity in earnings and cash contributions and distributions. Under the equity method of accounting, the net equity investment of the Company is reflected within the Consolidated Balance Sheets, and the Company’s share of net income or loss from the joint ventures is included within the Consolidated Statements of Operations. The joint venture agreements may designate different percentage allocations among investors for profits and losses; however, the Company’s recognition of joint venture income or loss generally follows the joint venture’s distribution priorities, which may change upon the achievement of certain investment return thresholds. The Company’s investments in unconsolidated joint ventures are reviewed for impairment periodically and the Company records impairment charges when events or circumstances change indicating that a decline in the fair values below the carrying values has occurred and such decline is other-than-temporary. The ultimate realization of the investment in unconsolidated joint ventures is dependent on a number of factors, including the performance of each investment and market conditions. The Company will record an impairment charge if it determines that a decline in the value below the carrying value of an investment in an unconsolidated joint venture is other-than-temporary. |
Investments in Real Estate-Related Securities | Investments in Real Estate-Related Securities The Company has elected to classify its investment in real estate-related securities as trading securities and carry such investments at estimated fair value. As such, the resulting gains and losses are recorded as a component of Income from real estate-related securities on the Consolidated Statements of Operations. The Company’s investments in real estate-related securities consist of residential mortgage-backed securities (“RMBS”) and collateralized debt obligations (“CDO”). |
Fair Value of Financial Instruments, Including Derivative Instruments | Fair Value of Financial Instruments, Including Derivative Instruments The valuation of financial instruments requires the Company to make estimates and judgments that affect the fair value of the instruments. The Company, where possible, bases the fair values of its financial instruments, including its derivative instruments, on listed market prices and third party quotes. Where these are not available, the Company bases its estimates on current instruments with similar terms and maturities or on other factors relevant to the financial instruments. In the normal course of business, the Company is exposed to the effect of interest rate changes. The Company seeks to manage these risks by following established risk management policies and procedures including the use of derivatives to hedge interest rate risk on debt instruments. The Company recognizes all derivatives as either assets or liabilities in the consolidated balance sheets and measures those instruments at fair value. Any derivative instrument used for risk management that does not meet the hedging criteria is marked-to-market each period as a component of interest expense. |
Fair Value Measurement | Fair Value Measurement Under normal market conditions, the fair value of an investment is the amount that would be received to sell an asset or transfer a liability in an orderly transaction between market participants at the measurement date (i.e., the exit price). Additionally, there is a hierarchal framework that prioritizes and ranks the level of market price observability used in measuring investments at fair value. Market price observability is impacted by a number of factors, including the type of investment and the characteristics specific to the investment and the state of the market place, including the existence and transparency of transactions between market participants. Investments with readily available active quoted prices or for which fair value can be measured from actively quoted prices generally will have a higher degree of market price observability and a lesser degree of judgment used in measuring fair value. Investments measured and reported at fair value are classified and disclosed in one of the following levels within the fair value hierarchy: Level 1 — quoted prices are available in active markets for identical investments as of the measurement date. The Company does not adjust the quoted price for these investments. Level 2 — quoted prices are available in markets that are not active or model inputs are based on inputs that are either directly or indirectly observable as of the measurement date. Level 3 — pricing inputs are unobservable and include instances where there is minimal, if any, market activity for the investment. These inputs require significant judgment or estimation by management or third parties when determining fair value and generally represent anything that does not meet the criteria of Levels 1 and 2. Due to the inherent uncertainty of these estimates, these values may differ materially from the values that would have been used had a ready market for these investments existed. The fair values of the Company’s financial instruments (other than mortgage notes payable and derivative instruments), including cash and cash equivalents and other financial instruments, approximate their carrying or contract value. The following table provides a summary of the carrying and fair values for the Company’s mortgage notes payable, consolidated derivative instruments and investments in real estate-related securities at March 31, 2019 (amounts in thousands): Estimated Fair Value (Level 2) Estimated Fair Value (Level 3) Carrying Value Mortgage notes payable, net $ — $ 260,655 $ 261,717 Interest rate caps 740 — 740 Investments in real estate-related securities 107,195 — 107,195 The Company generally determines the fair value of its real estate-related securities by utilizing third-party pricing service providers. In determining the value of a particular investment, pricing service providers may use broker-dealer quotations, reported trades or valuation estimates from their internal pricing models to determine the reported price. The pricing service providers’ internal models for mortgage-related securities such as RMBS usually consider the attributes applicable to a particular class of security (e.g., credit rating, seniority), current market data, and estimated cash flows for each class and incorporate deal collateral performance such as prepayment speeds and default rates, as available. Fair value of the Company’s indebtedness is estimated by modeling the cash flows required by the Company’s debt agreements and discounting them back to the present value using the appropriate discount rate. Additionally, the Company considers current market rate and conditions by evaluating similar borrowing agreements with comparable loan-to-value ratios and credit profiles. The inputs used in determining the fair value of the Company’s indebtedness are considered Level 3. The Company’s derivative positions are valued using models developed by the respective counterparty as well as third party pricing service providers that use as their basis readily observable market parameters (such as forward yield curves and credit default swap data). The fair values disclosed for mortgage notes payable were calculated using indicative rates provided by lenders of similar loans in the case of mortgage notes payable . |
Deferred Charges | Deferred Charges The Company’s deferred charges include financing costs. Deferred financing costs include legal, structuring, and other loan costs incurred by the Company for its financing agreements. Deferred financing costs related to the Company’s mortgage notes and term loans are recorded as an offset to the related liability and amortized over the term of the applicable financing instruments as interest expense. |
Revenue Recognition | Revenue Recognition The Company commences revenue recognition on its leases based on a number of factors, including the initial determination that the contract is or contains a lease. Generally, all of the Company’s contracts are, or contain leases, and therefore revenue is recognized when the lessee takes possession of or controls the physical use of the leased assets. In most instances this occurs on the lease commencement date. At the inception of a new lease, including new leases that arise from amendments, the Company assesses the terms and conditions of the lease to determine the proper lease classification. As described in recent Accounting Pronouncements elsewhere in Note 2, the Company adopted the provisions of Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842) and related ASUs subsequently issued (collectively, “ASC 842”) as of January 1, 2019. A lease is classified as an operating lease if none of the following criteria are met: (i) ownership transfers to the lessee at the end of the lease term, (ii) the lessee has a purchase option that is reasonably expected to be exercised, (iii) the lease term is for a major part of the economic life of the leased property, (iv) the present value of the future lease payments and any residual value guaranteed by the lessee that is not already reflected in the lease payments equals or exceeds substantially all of the fair value of the leased property, and (v) the leased property is of such a specialized nature that it is expected to have no future alternative use to the Company at the end of the lease term. If one or more of these criteria are met, the lease will generally be classified as a sales-type lease, unless the lease contains a residual value guarantee from a third party other than the lessee, in which case it would be classified as a direct financing lease under certain circumstances in accordance with ASC 842. The Company’s Rental revenue primarily consists of base rent arising from tenant leases at the Company’s multifamily properties under operating leases. Revenue under operating leases is recognized as revenue on a straight-line basis over the non-cancelable terms of the related leases. For leases that have fixed and measurable rent escalations, the difference between such rental income earned and the cash rent due under the provisions of the lease is recorded in the Consolidated Balance Sheets. The Company’s Hotel revenue consists of room revenue and food and beverage revenue. Room revenue is recognized when the related room is occupied and other hotel revenue is recognized when the service is rendered. Certain of the Company’s contracts contain nonlease components (e.g., charges for management fees, common area maintenance, and reimbursement of third-party maintenance expenses) in addition to lease components (i.e., monthly rental charges). Services related to nonlease components are provided over the same period of time as, and billed in the same manner as, monthly rental charges. The Company elected to apply the practical expedient available under ASC 842, for all classes of assets, not to segregate the lease components from the nonlease components when accounting for operating leases. Since the lease component is the predominant component under each of these leases, combined revenues from both the lease and nonlease components are accounted for in accordance with ASC 842 and reported as rental revenues in the accompanying Consolidated Statements of Operations. Other revenues and interest income are recorded on an accrual basis. |
Organization and Offering Expenses | Organization and Offering Expenses Organization expenses are expensed as incurred and recorded as a component of General and Administrative Expenses on the Company’s Consolidated Statements of Operations and offering costs are charged to equity as such amounts are incurred. The Advisor has agreed to advance organization and offering expenses on behalf of the Company (including legal, accounting, and other expenses attributable to the organization, but excluding upfront selling commissions, dealer manager fees and stockholder servicing fees) through the first anniversary of the date on which the proceeds from escrow are released. The Company will reimburse the Advisor for all such advanced expenses ratably over a 60 month period following December 21, 2019. These organization and offering costs are recorded as a component of Due to affiliates on the Company’s Consolidated Balance Sheets as of March 31, 2019 and December 31, 2018. Starwood Capital, L.L.C. (the “Dealer Manager”), a registered broker-dealer affiliated with the Advisor, serves as the dealer manager for the Offering. The Dealer Manager is entitled to receive selling commissions and dealer manager fees based on the transaction price of each applicable class of shares sold in the Offering. The Dealer Manager is also entitled to receive a stockholder servicing fee of 0.85%, 0.85% and 0.25% per annum of the aggregate net asset value (“NAV”) of the Company’s outstanding Class T shares, Class S shares and Class D shares, respectively. There is no stockholder servicing fee with respect to Class I shares. The following table details the selling commissions, dealer manager fees, and stockholder servicing fees for each applicable share class as of March 31, 2019: Common Stock Class T Common Stock Class S Common Stock Class D Common Stock Class I Selling commissions and dealer manager fees (% of transaction price) up to 3.5% up to 3.5% — — Stockholder servicing fee (% of NAV) 0.85% 0.85% 0.25% — For Class S shares sold in the primary offering, investors will pay upfront selling commissions of up to 3.5% of the transaction price. For Class T shares sold in the primary offering, investors will pay upfront selling commissions of up to 3.0% of the transaction price and upfront dealer manager fees of 0.5% of the transaction price, however such amounts may vary at certain participating broker-dealers, provided that the sum will not exceed 3.5% of the transaction price. The Dealer Manager is entitled to receive stockholder servicing fees of 0.85% per annum of the aggregate NAV for Class S shares and Class T shares. For Class T shares such stockholder servicing fee includes, an advisor stockholder servicing fee of 0.65% per annum, and a dealer stockholder servicing fee of 0.20% per annum, of the aggregate NAV for the Class T shares, however, with respect to Class T shares sold through certain participating broker-dealers, the advisor stockholder servicing fee and the dealer stockholder servicing fee may be other amounts, provided that the sum of such fees will always equal 0.85% per annum of the NAV of such shares. The Class D shares will incur a stockholder servicing fee equal to 0.25% per annum of the aggregate NAV for the Class D shares. The Dealer Manager has entered into agreements with the selected dealers distributing the Company’s shares in the Offering, which provide, among other things, for the re-allowance of the full amount of the selling commissions and dealer manager fees received and all or a portion of the stockholder servicing fees to such selected dealers. The Company will cease paying the stockholder servicing fee with respect to any Class T share, Class S share or Class D share sold in the primary Offering at the end of the month in which the total selling commissions, dealer manager fees and stockholder servicing fees paid with respect to such share would exceed 8.75% (or, in the case of Class T shares sold through certain participating broker-dealers, a lower limit as set forth in any applicable agreement between the Dealer Manager and a participating broker-dealer) of the gross proceeds from the sale of such share (including the gross proceeds of any shares issued under the Company’s distribution reinvestment plan with respect thereto). The Company will accrue the full cost of the stockholder servicing fee as an offering cost at the time each Class T, Class S and Class D share is sold during the primary Offering. As of March 31, 2019 and December 31, 2018, the Company had accrued $14.0 million and $10.8 million respectively, of stockholder servicing fees related to shares sold and recorded such amount as a component of Due to affiliates on the Company’s consolidated balance sheets. |
Income Taxes | Income Taxes The Company intends to make an election to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code commencing with its taxable year ending December 31, 2019. If the Company qualifies for taxation as a REIT, the Company generally will not be subject to federal corporate income tax to the extent it distributes 90% of its taxable income to its stockholders. REITs are subject to a number of other organizational and operational requirements. Even if the Company qualifies for taxation as a REIT, it may be subject to certain state and local taxes on its income and property, and federal income and excise taxes on its undistributed income. In anticipation of the Company’s REIT election, the Company has formed wholly-owned subsidiaries to function as taxable REIT subsidiaries (“TRSs”). In general, a TRS may perform additional services for the Company’s tenants and generally may engage in any real estate or non-real estate-related business other than management or operation or operation of a lodging facility or a health care facility. The TRSs will be subject to taxation at the federal, state and local levels, as applicable. The Company accounts for applicable income taxes by utilizing the asset and liability method. As such, the Company records deferred tax assets and liabilities for the future tax consequences resulting from the difference between the carrying value of existing assets and liabilities and their respective tax basis. A valuation allowance for deferred tax assets is provided if the Company believes all or some portion of the deferred tax asset may not be realized. The Company intends to file as taxable corporation for its tax year ended December 31, 2018. For the period ended March 31, 2019 and March 31, 2018, recognized an income tax provision of $0.1 million and $0.0 respectively. |
Net Loss per Share | Net Loss per Share Basic net loss per share is computed by dividing net loss for the period by the weighted average number of common shares outstanding during the period. Diluted loss per share is computed by dividing net loss for the period by the weighted average number of common shares and common share equivalents outstanding (unless their effect is antidilutive) for the period. There are no common share equivalents outstanding that would have a dilutive effect as a result of the net loss, and accordingly, the weighted average number of common shares outstanding is identical for the periods ended March 31, 2019 and March 31, 2018, for both basic and diluted shares. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements On August 2018, the Financial Accounting Standards Board (“FASB”) issued ASU 2018-13, “Fair Value Measurement (Topic 820) – Disclosure Framework,” which adds new disclosure requirements and modifies or eliminates existing disclosure requirements of ASC 820. This ASU is effective for annual periods, and interim periods therein, beginning after December 15, 2019. Early application is permitted. The Company does not expect the application of this ASU to materially impact the Company. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Summary of Estimated Useful Life of Assets | The Company’s investments in real estate are stated at cost and are generally depreciated on a straight-line basis over the estimated useful lives of the assets as follows: Description Depreciable Life Building 35 - 40 years Building and site improvements 5 - 15 years Furniture, fixtures and equipment 5 - 7 years Lease intangibles Over lease term |
Summary of Carrying and Fair Values for Mortgage Notes Payable, Consolidated Derivative Instruments and Investments in Real Estate-Related Securities | The following table provides a summary of the carrying and fair values for the Company’s mortgage notes payable, consolidated derivative instruments and investments in real estate-related securities at March 31, 2019 (amounts in thousands): Estimated Fair Value (Level 2) Estimated Fair Value (Level 3) Carrying Value Mortgage notes payable, net $ — $ 260,655 $ 261,717 Interest rate caps 740 — 740 Investments in real estate-related securities 107,195 — 107,195 |
Schedule of Selling Commissions, Dealer Manager Fees And Stockholder Servicing | The following table details the selling commissions, dealer manager fees, and stockholder servicing fees for each applicable share class as of March 31, 2019: Common Stock Class T Common Stock Class S Common Stock Class D Common Stock Class I Selling commissions and dealer manager fees (% of transaction price) up to 3.5% up to 3.5% — — Stockholder servicing fee (% of NAV) 0.85% 0.85% 0.25% — |
Investments (Tables)
Investments (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Real Estate [Abstract] | |
Schedule of Investments in Real Estate, Net | Investments in real estate, net consisted of the following ($ in thousands): March 31, 2019 Building and building improvements $ 307,242 Land and land improvements 81,030 Furniture, fixtures and equipment 25,442 Total 413,714 Accumulated depreciation (3,649 ) Investments in real estate, net $ 410,065 |
Schedule of Details of Properties Acquired | The following table provides further details of the properties acquired during the three months ended March 31, 2019 ($ in thousands): Investment Ownership Interest Number of Properties Location Sector Acquisition Date Real Estate Acquisition Florida Multifamily Portfolio 100% 4 Jacksonville/Naples, FL Multifamily January 2019 $ 104,049 U.S. Select Service Portfolio 100% 8 FL, CO, TN, OH, AR Hotel January 2019 232,198 All other 100% 2 Various Multifamily January 2019 82,988 14 $ 419,235 |
Schedule of Purchase Price Allocation of Properties | The following table summarizes the purchase price allocation for the properties acquired during the three months ended March 31, 2019 ($ in thousands): Florida Multifamily Portfolio U.S. Select Service All Other Total Building and building improvements $ 71,054 $ 164,266 $ 65,974 $ 301,294 Land and land improvements 25,620 42,256 13,227 81,103 Furniture, fixtures and equipment 1,195 22,377 1,742 25,314 Other intangibles 1,756 101 1,066 2,923 Total purchase price (1) $ 99,625 $ 229,000 $ 82,009 $ 410,634 Assumed mortgage notes (2) (79,269 ) (84,013 ) (57,651 ) (220,933 ) Net purchase price $ 20,356 $ 144,987 $ 24,358 $ 189,701 (1) ( 2 ) |
Intangibles (Tables)
Intangibles (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Summary of Gross Carrying Amount and Accumulated Amortization of Intangible Assets and Liabilities | The gross carrying amount and accumulated amortization of the Company’s intangible assets and liabilities consisted of the following ($ in thousands): March 31, 2019 Intangible assets: In-place lease intangibles $ 2,828 Other 1,200 Total intangible assets 4,028 Accumulated amortization: In-place lease amortization (1,690 ) Other (20 ) Total accumulated amortization (1,710 ) Intangible assets, net $ 2,318 |
Summary of Estimated Future Amortization on Intangibles | The estimated future amortization on the Company’s intangibles for each of the next five years and thereafter as of March 31, 2019 is as follows ($ in thousands): In-place Lease Intangibles Other 2019 (remaining) $ 1,138 $ 60 2020 — 80 2021 — 80 2022 — 80 2023 — 80 Thereafter — 800 $ 1,138 $ 1,180 |
Investments in real Estate-Re_2
Investments in real Estate-Related Securities (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Investments Schedule [Abstract] | |
Summary of Investments in Real Estate-Related Debt Securities | The following table details the Company’s investments in real estate-related debt securities, which are comprised of RMBS and CDO ($ in thousands): Instrument Number of Positions Credit Rating (1) Weighted Average Coupon Weighted Average Maturity Date Cost Basis Fair Value RMBS 22 Other 4.25% March 5, 2023 $ 86,985 $ 86,973 CDO 8 BBB 5.89% June 7, 2020 20,340 20,222 30 $ 107,325 $ 107,195 (1) BBB represents credit ratings of BBB+, BBB, and BBB-. Other consists of investments that, as of March 31, 2019, were either not ratable or have not been submitted to ratings agencies. |
Mortgage Notes (Tables)
Mortgage Notes (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Summary of Mortgage Notes Secured by Company's Properties | The following table is a summary of the mortgage notes secured by the Company’s properties ($ in thousands): Indebtedness Weighted Average Interest Rate (1) Weighted Average Maturity Date Principal Balance (2) Fixed rate loans Fixed rate mortgages 4.35% 12/11/2024 $ 156,118 Total fixed rate loans 156,118 Variable rate loans Variable rate mortgages L + 1.98% 6/30/2026 105,599 Total variable rate loans 105,599 Total loans secured by our properties 261,717 Deferred financing costs, net (2,864 ) Discount on assumed debt, net (1,062 ) Mortgage notes, net $ 257,791 ( 1) ( 2 ) The majority of the Company’s mortgages contain yield or spread maintenance provisions. |
Summary of Future Principal Payment Under Company's Mortgage Notes | The following table presents the future principal payments under the Company’s mortgage notes as of March 31, 2019 ($ in thousands): Year Amount 2019 (remaining) $ 1,061 2020 1,477 2021 49,502 2022 1,624 2023 1,697 Thereafter 206,356 Total $ 261,717 |
Repurchase Agreements (Tables)
Repurchase Agreements (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Repurchase Agreements [Abstract] | |
Summary of Repurchase Agreements And Securities Lending Transactions | For financial statement purposes, the Company does not offset its repurchase agreements and securities lending transactions because the conditions for netting as specified by GAAP are not met. Although not offset on the Consolidated Balance Sheets, these transactions are included in the following table ($ in thousands): March 31, 2019 Security Interest Collateral Assets (1) Outstanding Balance RMBS $ 57,778 $ 48,867 CDO 18,511 14,700 $ 76,289 $ 63,567 (1) Represents the fair value of the Company’s investments in real estate-related securities. |
Other Assets and Other Liabil_2
Other Assets and Other Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Other Assets And Other Liabilities [Abstract] | |
Schedule of Components of Other Assets | The following table summarizes the components of other assets ($ in thousands): March 31, 2019 December 31, 2018 Receivables $ 4,182 $ — Real estate intangibles, net 2,318 — Interest rate caps 740 — Interest receivable 662 8 Prepaid expenses 381 — Other 351 34 Total $ 8,634 $ 42 |
Schedule of Components of Accounts Payable, Accrued Expenses and Other Liabilities | The following table summarizes the components of accounts payable, accrued expenses, and other liabilities ($ in thousands): March 31, 2019 December 31, 2018 Subscriptions received in advance $ 41,254 $ 900 Deferred income 7,289 — Accounts payable and accrued expenses 5,839 187 Distribution payable 1,058 — Tenant security deposits 652 — Accrued interest expense 464 — Real estate taxes payable 152 — Other 845 — Total $ 57,553 $ 1,087 |
Equity (Tables)
Equity (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Equity [Abstract] | |
Schedule of Company's Authorized Capital | As of March 31, 2019, the Company had the authority to issue 1,100,000,000 shares of capital stock, consisting of the following: Classification Number of Shares Par Value Preferred Stock 100,000,000 $ 0.01 Class T Shares 250,000,000 $ 0.01 Class S Shares 250,000,000 $ 0.01 Class D Shares 250,000,000 $ 0.01 Class I Shares 250,000,000 $ 0.01 Total 1,100,000,000 |
Schedule of Common Stock Outstanding shares | The following table details the movement in the Company’s outstanding shares of common stock Three months ended March 31, 2019 Class T Class S Class D Class I Total December 31, 2018 483 6,610,280 46,075 1,542,000 8,198,838 Common stock issued 206,975 1,717,020 263,697 2,054,214 4,241,906 Distribution reinvestment 77 13,540 88 6,004 19,709 March 31, 2019 207,535 8,340,840 309,860 3,602,218 12,460,453 |
Schedule of Aggregate Distributions Declared for Each Class of Common Stock | The following table details the aggregate distributions declared for each applicable class of common stock for the three months ended March 31, 2019: Class T Class S Class D Class I Gross distributions declared per share of common stock $ 0.1790 $ 0.1790 $ 0.1790 $ 0.1790 Stockholder servicing fee per share of common stock (0.0277 ) (0.0449 ) (0.0105 ) — Net distributions declared per share of common stock $ 0.1513 $ 0.1341 $ 0.1685 $ 0.1790 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Related Party Transactions [Abstract] | |
Summary of Components of Due to Affiliates | The following table details the components of Due to affiliates ($ in thousands): March 31, 2019 December 31, 2018 Accrued stockholder servicing fee $ 13,980 $ 10,830 Advanced organization and offering costs 5,992 5,822 Performance participation allocation 857 — Accrued affiliate service provider expenses 45 — Advanced expenses 245 102 Total $ 21,119 $ 16,754 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Segment Reporting [Abstract] | |
Summary of Financial Results by Segment | The following table sets forth the financial results by segment for the three months ended March 31, 2019 ($ in thousands): Multifamily Hotel Real Estate- Related Securities Other (Corporate) (1) Total Total Assets $ 190,852 $ 258,519 $ 113,141 $ 62,503 $ 625,015 Revenue Rental revenue $ 4,310 $ — $ — $ — $ 4,310 Hotel revenue — 10,852 — — 10,852 Other revenue 199 54 — — 253 Total revenues 4,509 10,906 — — 15,415 Expenses Rental property operating 1,762 — — — 1,762 Hotel operating — 5,503 — — 5,503 Total segment expenses 1,762 5,503 — — 7,265 Income from real estate-related securities — — 102 — 102 Earnings from unconsolidated real estate ventures — 43 — — 43 Segment net operating income $ 2,747 $ 5,446 $ 102 $ — $ 8,295 Depreciation and amortization $ 3,304 $ 2,054 $ — $ — $ 5,358 Other income (expense): General and administrative (912 ) Management fee — Performance participation allocation (857 ) Interest income 58 Interest expense (3,598 ) Other expense (96 ) Net loss $ (2,468 ) (1) The Other (Corporate) segment captures cash and other item not directly identifiable with the other three reporting segments. |
Organization and Business Pur_2
Organization and Business Purpose - Additional Information (Details) | 3 Months Ended | |
Mar. 31, 2019USD ($)ClassInvestmentPositionSegmentshares | Dec. 31, 2018shares | |
Organization And Business Activities [Line Items] | ||
Common stock, shares registered, amount | $ | $ 5,000,000,000 | |
Number of classes of common stock | Class | 4 | |
Net proceeds from issuance of common stock | $ | $ 249,500,000 | |
Common stock, shares issued | 12,460,453 | |
Number of investments owned | Investment | 15 | |
Number of real estate related securities position | Position | 30 | |
Number of reportable segments | Segment | 3 | |
Common Stock Class T | ||
Organization And Business Activities [Line Items] | ||
Common stock, shares issued | 207,535 | 483 |
Common Stock Class S | ||
Organization And Business Activities [Line Items] | ||
Common stock, shares issued | 8,340,840 | 6,610,280 |
Common Stock Class D | ||
Organization And Business Activities [Line Items] | ||
Common stock, shares issued | 309,860 | 46,075 |
Common Stock Class I | ||
Organization And Business Activities [Line Items] | ||
Common stock, shares issued | 3,602,218 | 1,542,000 |
Primary Offering | ||
Organization And Business Activities [Line Items] | ||
Common stock, shares authorized, amount | $ | $ 4,000,000,000 | |
Distribution Reinvestment Plan | ||
Organization And Business Activities [Line Items] | ||
Common stock, shares authorized, amount | $ | $ 1,000,000,000 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Significant Accounting Policies [Line Items] | |||
Cash received for subscriptions in advance | $ 41.3 | $ 0.9 | |
Minimum REIT distribution percentage | 90.00% | ||
Income tax provision | $ 0.1 | $ 0 | |
Class T Shares (Member) | |||
Significant Accounting Policies [Line Items] | |||
Annual stockholder servicing fee percentage | 0.85% | ||
Class T Shares (Member) | Maximum | |||
Significant Accounting Policies [Line Items] | |||
Upfront selling commissions and dealer manager fee percentage | 3.50% | ||
Class S Shares (Member) | |||
Significant Accounting Policies [Line Items] | |||
Annual stockholder servicing fee percentage | 0.85% | ||
Class S Shares (Member) | Maximum | |||
Significant Accounting Policies [Line Items] | |||
Upfront selling commissions and dealer manager fee percentage | 3.50% | ||
Class D Shares (Member) | |||
Significant Accounting Policies [Line Items] | |||
Annual stockholder servicing fee percentage | 0.25% | ||
Common Stock Class T, Class S and Class D | Due To Affiliates | |||
Significant Accounting Policies [Line Items] | |||
Stockholder servicing fees accrued | $ 14 | $ 10.8 | |
Advisor | |||
Significant Accounting Policies [Line Items] | |||
Period to reimburse the advisor for all organization and offering expenses | 60 months | 60 months | |
Advisor | Class T Shares (Member) | |||
Significant Accounting Policies [Line Items] | |||
Advisor Percentage of stockholder servicing fee on NAV per annum | 0.65% | ||
Dealer Manager | |||
Significant Accounting Policies [Line Items] | |||
Annual stockholder servicing fee percentage | 0.85% | ||
Annual stockholder servicing fee percentage of gross proceeds limit | 8.75% | ||
Dealer Manager | Class T Shares (Member) | |||
Significant Accounting Policies [Line Items] | |||
Annual stockholder servicing fee percentage | 0.85% | ||
Upfront dealer manager fee percentage | 0.50% | ||
Dealer stockholder servicing fee percentage | 0.20% | ||
Dealer Manager | Class T Shares (Member) | Maximum | |||
Significant Accounting Policies [Line Items] | |||
Upfront selling commissions percentage | 3.00% | ||
Upfront selling commissions and dealer manager fee percentage | 3.50% | ||
Dealer Manager | Class S Shares (Member) | |||
Significant Accounting Policies [Line Items] | |||
Annual stockholder servicing fee percentage | 0.85% | ||
Dealer Manager | Class S Shares (Member) | Maximum | |||
Significant Accounting Policies [Line Items] | |||
Upfront selling commissions percentage | 3.50% | ||
Dealer Manager | Class D Shares (Member) | |||
Significant Accounting Policies [Line Items] | |||
Annual stockholder servicing fee percentage | 0.25% | ||
Dealer Manager | Class I Shares (Member) | |||
Significant Accounting Policies [Line Items] | |||
Annual stockholder servicing fee percentage | 0.00% |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Summary of Estimated Useful Life of Assets (Details) | 3 Months Ended |
Mar. 31, 2019 | |
Property Plant And Equipment [Line Items] | |
Lease intangibles | Over lease term |
Building | Minimum [Member] | |
Property Plant And Equipment [Line Items] | |
Estimated useful lives of assets | 35 years |
Building | Maximum | |
Property Plant And Equipment [Line Items] | |
Estimated useful lives of assets | 40 years |
Building and Site Improvements | Minimum [Member] | |
Property Plant And Equipment [Line Items] | |
Estimated useful lives of assets | 5 years |
Building and Site Improvements | Maximum | |
Property Plant And Equipment [Line Items] | |
Estimated useful lives of assets | 15 years |
Furniture, Fixtures and Equipment | Minimum [Member] | |
Property Plant And Equipment [Line Items] | |
Estimated useful lives of assets | 5 years |
Furniture, Fixtures and Equipment | Maximum | |
Property Plant And Equipment [Line Items] | |
Estimated useful lives of assets | 7 years |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Summary of Carrying and Fair Values for Mortgage Notes Payable, Consolidated Derivative Instruments and Investments in Real Estate-Related Securities (Details) $ in Thousands | Mar. 31, 2019USD ($) |
Significant Accounting Policies [Line Items] | |
Investments in real estate-related securities | $ 107,195 |
Estimated Fair Value | Level 2 | |
Significant Accounting Policies [Line Items] | |
Investments in real estate-related securities | 107,195 |
Estimated Fair Value | Level 3 | |
Significant Accounting Policies [Line Items] | |
Mortgage notes payable, net | 260,655 |
Estimated Fair Value | Interest Rate Cap [Member] | Level 2 | |
Significant Accounting Policies [Line Items] | |
Interest rate caps | 740 |
Carrying Value | |
Significant Accounting Policies [Line Items] | |
Mortgage notes payable, net | 261,717 |
Investments in real estate-related securities | 107,195 |
Carrying Value | Interest Rate Cap [Member] | |
Significant Accounting Policies [Line Items] | |
Interest rate caps | $ 740 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Schedule of Selling Commissions, Dealer Manager Fees And Stockholder Servicing (Details) | Mar. 31, 2019 |
Class T Shares (Member) | |
Significant Accounting Policies [Line Items] | |
Stockholder servicing fee (% of NAV) | 0.85% |
Class T Shares (Member) | Maximum | |
Significant Accounting Policies [Line Items] | |
Selling commissions and dealer manager fees (% of transaction price) | 3.50% |
Class S Shares (Member) | |
Significant Accounting Policies [Line Items] | |
Stockholder servicing fee (% of NAV) | 0.85% |
Class S Shares (Member) | Maximum | |
Significant Accounting Policies [Line Items] | |
Selling commissions and dealer manager fees (% of transaction price) | 3.50% |
Class D Shares (Member) | |
Significant Accounting Policies [Line Items] | |
Stockholder servicing fee (% of NAV) | 0.25% |
Investments - Schedule of Inves
Investments - Schedule of Investments in Real Estate, Net (Details) $ in Thousands | Mar. 31, 2019USD ($) |
Real Estate Investment Property Net [Abstract] | |
Building and building improvements | $ 307,242 |
Land and land improvements | 81,030 |
Furniture, fixtures and equipment | 25,442 |
Total | 413,714 |
Accumulated depreciation | (3,649) |
Investments in real estate, net | $ 410,065 |
Investments - Additional Inform
Investments - Additional Information (Details) $ in Thousands | Mar. 13, 2019 | Mar. 31, 2019USD ($)Property | Dec. 31, 2018Investment |
Real Estate Properties [Line Items] | |||
Number of acquired real estate properties | 14 | ||
Number of acquired real estate investments | Investment | 0 | ||
Percentage of ownership interest in joint venture | 43.00% | ||
Investment in joint venture | $ | $ 12,568 | ||
Earnings from unconsolidated joint ventures | $ | $ 43 | ||
Multifamily | |||
Real Estate Properties [Line Items] | |||
Number of acquired real estate properties | 6 | ||
Hotel | |||
Real Estate Properties [Line Items] | |||
Number of acquired real estate properties | 8 |
Investments - Schedule of Detai
Investments - Schedule of Details of Properties Acquired (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($)Property | |
Real Estate Properties [Line Items] | |
Number of Properties | 14 |
Real Estate Acquisition | $ | $ 419,235 |
Multifamily | |
Real Estate Properties [Line Items] | |
Number of Properties | 6 |
Hotel | |
Real Estate Properties [Line Items] | |
Number of Properties | 8 |
Jacksonville/Naples, FL | Florida Multifamily Portfolio | Multifamily | |
Real Estate Properties [Line Items] | |
Ownership Interest | 100.00% |
Number of Properties | 4 |
Acquisition Date | Jan. 31, 2019 |
Real Estate Acquisition | $ | $ 104,049 |
FL, CO, TN, OH, AR | U.S. Select Service Portfolio | Hotel | |
Real Estate Properties [Line Items] | |
Ownership Interest | 100.00% |
Number of Properties | 8 |
Acquisition Date | Jan. 31, 2019 |
Real Estate Acquisition | $ | $ 232,198 |
Various | All Other | Multifamily | |
Real Estate Properties [Line Items] | |
Ownership Interest | 100.00% |
Number of Properties | 2 |
Acquisition Date | Jan. 31, 2019 |
Real Estate Acquisition | $ | $ 82,988 |
Investments - Schedule of Purch
Investments - Schedule of Purchase Price Allocation of Properties (Details) $ in Thousands | Mar. 31, 2019USD ($) | |
Real Estate Properties [Line Items] | ||
Building and building improvements | $ 301,294 | |
Land and land improvements | 81,103 | |
Furniture, fixtures and equipment | 25,314 | |
Other intangibles | 2,923 | |
Total purchase price | 410,634 | [1] |
Assumed mortgage notes | (220,933) | [2] |
Net purchase price | 189,701 | |
Florida Multifamily Portfolio | ||
Real Estate Properties [Line Items] | ||
Building and building improvements | 71,054 | |
Land and land improvements | 25,620 | |
Furniture, fixtures and equipment | 1,195 | |
Other intangibles | 1,756 | |
Total purchase price | 99,625 | [1] |
Assumed mortgage notes | (79,269) | [2] |
Net purchase price | 20,356 | |
U.S. Select Service Portfolio | ||
Real Estate Properties [Line Items] | ||
Building and building improvements | 164,266 | |
Land and land improvements | 42,256 | |
Furniture, fixtures and equipment | 22,377 | |
Other intangibles | 101 | |
Total purchase price | 229,000 | [1] |
Assumed mortgage notes | (84,013) | [2] |
Net purchase price | 144,987 | |
All Other | ||
Real Estate Properties [Line Items] | ||
Building and building improvements | 65,974 | |
Land and land improvements | 13,227 | |
Furniture, fixtures and equipment | 1,742 | |
Other intangibles | 1,066 | |
Total purchase price | 82,009 | [1] |
Assumed mortgage notes | (57,651) | [2] |
Net purchase price | $ 24,358 | |
[1] | Purchase price does not include acquisition related costs and acquired working capital of $8,600. | |
[2] | See Note 6 for additional details on the Company’s mortgage notes. |
Investments - Schedule of Pur_2
Investments - Schedule of Purchase Price Allocation of Properties (Details) (Parenthetical) | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Real Estate Investment Property Net [Abstract] | |
Acquisition related costs and acquired working capital | $ 8,600 |
Intangibles - Summary of Gross
Intangibles - Summary of Gross Carrying Amount and Accumulated Amortization of Intangible Assets and Liabilities (Details) $ in Thousands | Mar. 31, 2019USD ($) |
Intangible assets: | |
Total intangible assets, gross | $ 4,028 |
Total accumulated amortization | (1,710) |
Intangible assets, net | 2,318 |
In-place lease intangibles | |
Intangible assets: | |
Total intangible assets, gross | 2,828 |
Total accumulated amortization | (1,690) |
Intangible assets, net | 1,138 |
Other | |
Intangible assets: | |
Total intangible assets, gross | 1,200 |
Total accumulated amortization | (20) |
Intangible assets, net | $ 1,180 |
Intangibles - Summary of Estima
Intangibles - Summary of Estimated Future Amortization on Intangibles (Details) $ in Thousands | Mar. 31, 2019USD ($) |
Finite Lived Intangible Assets [Line Items] | |
Intangible assets, net | $ 2,318 |
In-place lease intangibles | |
Finite Lived Intangible Assets [Line Items] | |
2019 (remaining) | 1,138 |
Intangible assets, net | 1,138 |
Other | |
Finite Lived Intangible Assets [Line Items] | |
2019 (remaining) | 60 |
2020 | 80 |
2021 | 80 |
2022 | 80 |
2023 | 80 |
Thereafter | 800 |
Intangible assets, net | $ 1,180 |
Investments in Real Estate Rela
Investments in Real Estate Related Securities - Summary of Investments in Real Estate-Related Debt Securities (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($)Position | |
Schedule Of Trading Securities And Other Trading Assets [Line Items] | |
Number of Positions | Position | 30 |
Cost Basis | $ 107,325 |
Fair Value | $ 107,195 |
RMBS | |
Schedule Of Trading Securities And Other Trading Assets [Line Items] | |
Number of Positions | Position | 22 |
Credit Rating | Other |
Weighted Average Coupon | 4.25% |
Weighted Average Maturity Date | Mar. 5, 2023 |
Cost Basis | $ 86,985 |
Fair Value | $ 86,973 |
CDO | |
Schedule Of Trading Securities And Other Trading Assets [Line Items] | |
Number of Positions | Position | 8 |
Credit Rating | BBB |
Weighted Average Coupon | 5.89% |
Weighted Average Maturity Date | Jun. 7, 2020 |
Cost Basis | $ 20,340 |
Fair Value | $ 20,222 |
Investments in Real Estate Re_2
Investments in Real Estate Related Securities - Additional Information (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Investments Schedule [Abstract] | |
Unrealized loss on investments in real estate-related securities | $ 0.1 |
Mortgage Notes - Summary of Mor
Mortgage Notes - Summary of Mortgage Notes Secured by Company's Properties (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Debt Instrument [Line Items] | |
Principal Balance | $ 261,717 |
Deferred financing costs, net | (2,864) |
Discount on assumed debt, net | (1,062) |
Mortgage notes, net | 257,791 |
Fixed Rate Loans | |
Debt Instrument [Line Items] | |
Principal Balance | 156,118 |
Variable Rate Loans | |
Debt Instrument [Line Items] | |
Principal Balance | $ 105,599 |
Fixed Rate Mortgages | Fixed Rate Loans | |
Debt Instrument [Line Items] | |
Weighted Average Interest Rate | 4.35% |
Principal Balance | $ 156,118 |
Fixed Rate Mortgages | Fixed Rate Loans | Weighted Average | |
Debt Instrument [Line Items] | |
Weighted Average Maturity Date | Dec. 11, 2024 |
Variable Rate Mortgages | Variable Rate Loans | |
Debt Instrument [Line Items] | |
Principal Balance | $ 105,599 |
Variable Rate Mortgages | Variable Rate Loans | Weighted Average | |
Debt Instrument [Line Items] | |
Weighted Average Maturity Date | Jun. 30, 2026 |
Variable Rate Mortgages | Variable Rate Loans | One-Month LIBOR | |
Debt Instrument [Line Items] | |
Weighted Average Interest Rate | 1.98% |
Mortgage Notes - Summary of M_2
Mortgage Notes - Summary of Mortgage Notes Secured by Company's Properties (Parenthetical) (Details) | Mar. 31, 2019 |
One-Month LIBOR | |
Debt Instrument [Line Items] | |
Debt instrument, Interest rate | 2.50% |
Mortgage Notes - Summary of Fut
Mortgage Notes - Summary of Future Principal Payment Under Company's Mortgage Notes (Details) $ in Thousands | Mar. 31, 2019USD ($) |
Debt Disclosure [Abstract] | |
2019 (remaining) | $ 1,061 |
2020 | 1,477 |
2021 | 49,502 |
2022 | 1,624 |
2023 | 1,697 |
Thereafter | 206,356 |
Total | $ 261,717 |
Repurchase Agreements - Summary
Repurchase Agreements - Summary of Repurchase Agreements And Securities Lending Transactions (Details) $ in Thousands | Mar. 31, 2019USD ($) |
Repurchase Agreements [Line Items] | |
Collateral Assets | $ 76,289 |
Outstanding Balance | 63,567 |
RMBS | |
Repurchase Agreements [Line Items] | |
Collateral Assets | 57,778 |
Outstanding Balance | 48,867 |
CDO | |
Repurchase Agreements [Line Items] | |
Collateral Assets | 18,511 |
Outstanding Balance | $ 14,700 |
Other Assets and Other Liabil_3
Other Assets and Other Liabilities - Schedule of Components of Other Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Other Assets [Abstract] | ||
Receivables | $ 4,182 | |
Real estate intangibles, net | 2,318 | |
Interest rate caps | 740 | |
Interest receivable | 662 | $ 8 |
Prepaid expenses | 381 | |
Other | 351 | 34 |
Total | $ 8,634 | $ 42 |
Other Assets and Other Liabil_4
Other Assets and Other Liabilities - Schedule of Components of Accounts Payable, Accrued Expenses and Other Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Other Liabilities Disclosure [Abstract] | ||
Subscriptions received in advance | $ 41,254 | $ 900 |
Deferred income | 7,289 | |
Accounts payable and accrued expenses | 5,839 | 187 |
Distribution payable | 1,058 | |
Tenant security deposits | 652 | |
Accrued interest expense | 464 | |
Real estate taxes payable | 152 | |
Other | 845 | |
Total | $ 57,553 | $ 1,087 |
Equity - Additional Information
Equity - Additional Information (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2019USD ($)Classshares | |
Equity [Abstract] | |
Number of classes of common stock | Class | 4 |
Number of shares authorized | 1,100,000,000 |
Common stock, shares issued | 12,460,453 |
Net proceeds from issuance of common stock | $ | $ 249.5 |
Common stock repurchase limitations of aggregate NAV per month percentage | 2.00% |
Common stock repurchase limitations of aggregate NAV per calendar quarter percentage | 5.00% |
Minimum hold period for repurchases without a discount | 1 year |
Repurchase percentage within one year at a discount | 95.00% |
Equity - Schedule of Company's
Equity - Schedule of Company's Authorized Capital (Details) - $ / shares | Mar. 31, 2019 | Dec. 31, 2018 |
Class Of Stock [Line Items] | ||
Preferred stock, authorized shares | 100,000,000 | 100,000,000 |
Total Number of Shares | 1,100,000,000 | |
Preferred stock, par value | $ 0.01 | $ 0.01 |
Common Stock Class T | ||
Class Of Stock [Line Items] | ||
Number of Shares | 250,000,000 | 250,000,000 |
Par value | $ 0.01 | $ 0.01 |
Common Stock Class S | ||
Class Of Stock [Line Items] | ||
Number of Shares | 250,000,000 | 250,000,000 |
Par value | $ 0.01 | $ 0.01 |
Common Stock Class D | ||
Class Of Stock [Line Items] | ||
Number of Shares | 250,000,000 | 250,000,000 |
Par value | $ 0.01 | $ 0.01 |
Common Stock Class I | ||
Class Of Stock [Line Items] | ||
Number of Shares | 250,000,000 | 250,000,000 |
Par value | $ 0.01 | $ 0.01 |
Equity - Schedule of Common Sto
Equity - Schedule of Common Stock Outstanding shares (Details) | 3 Months Ended |
Mar. 31, 2019shares | |
Class Of Stock [Line Items] | |
December 31, 2018 | 8,198,838 |
Common stock issued | 4,241,906 |
Distribution reinvestment | 19,709 |
March 31, 2019 | 12,460,453 |
Common Stock Class T | |
Class Of Stock [Line Items] | |
December 31, 2018 | 483 |
Common stock issued | 206,975 |
Distribution reinvestment | 77 |
March 31, 2019 | 207,535 |
Common Stock Class S | |
Class Of Stock [Line Items] | |
December 31, 2018 | 6,610,280 |
Common stock issued | 1,717,020 |
Distribution reinvestment | 13,540 |
March 31, 2019 | 8,340,840 |
Common Stock Class D | |
Class Of Stock [Line Items] | |
December 31, 2018 | 46,075 |
Common stock issued | 263,697 |
Distribution reinvestment | 88 |
March 31, 2019 | 309,860 |
Common Stock Class I | |
Class Of Stock [Line Items] | |
December 31, 2018 | 1,542,000 |
Common stock issued | 2,054,214 |
Distribution reinvestment | 6,004 |
March 31, 2019 | 3,602,218 |
Equity - Schedule of Aggregate
Equity - Schedule of Aggregate Distributions Declared for Each Class of Common Stock (Details) | 3 Months Ended |
Mar. 31, 2019$ / shares | |
Common Stock Class T | |
Class Of Stock [Line Items] | |
Gross distributions declared per share of common stock | $ 0.1790 |
Stockholder servicing fee per share of common stock | (0.0277) |
Net distributions declared per share of common stock | 0.1513 |
Common Stock Class S | |
Class Of Stock [Line Items] | |
Gross distributions declared per share of common stock | 0.1790 |
Stockholder servicing fee per share of common stock | (0.0449) |
Net distributions declared per share of common stock | 0.1341 |
Common Stock Class D | |
Class Of Stock [Line Items] | |
Gross distributions declared per share of common stock | 0.1790 |
Stockholder servicing fee per share of common stock | (0.0105) |
Net distributions declared per share of common stock | 0.1685 |
Common Stock Class I | |
Class Of Stock [Line Items] | |
Gross distributions declared per share of common stock | 0.1790 |
Net distributions declared per share of common stock | $ 0.1790 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) $ in Thousands | Jan. 03, 2019USD ($)PropertyUnit | Mar. 31, 2019USD ($)Property | Dec. 31, 2018USD ($) |
Related Party Transaction [Line Items] | |||
Number of Properties | Property | 14 | ||
Percentage of management fee on NAV per annum | 1.25% | ||
Annual hurdle percentage | 5.00% | ||
Recognized liabilities for Performance Participation expense | $ 857 | ||
Due to affiliates | 21,119 | $ 16,754 | |
Accrued Stockholder Servicing Fee | |||
Related Party Transaction [Line Items] | |||
Due to affiliates | 13,980 | 10,830 | |
Advanced Organization And Offering Costs | |||
Related Party Transaction [Line Items] | |||
Due to affiliates | 5,992 | 5,822 | |
Advanced Expenses | |||
Related Party Transaction [Line Items] | |||
Due to affiliates | 245 | 102 | |
Accrued Affiliate Service Provider Expenses | |||
Related Party Transaction [Line Items] | |||
Due to affiliates | $ 45 | ||
Special Limited Partner | |||
Related Party Transaction [Line Items] | |||
Related party allocation percentage of annual total return | 12.50% | ||
All Other Unit Holders [Member] | |||
Related Party Transaction [Line Items] | |||
Related party allocation percentage of annual total return | 87.50% | ||
Dealer Manager | |||
Related Party Transaction [Line Items] | |||
Annual stockholder servicing fee percentage | 0.85% | ||
Dealer Manager | Common Stock Class T, Class S and Class D | Accrued Stockholder Servicing Fee | |||
Related Party Transaction [Line Items] | |||
Annual stockholder servicing fee percentage | 8.75% | ||
Due to affiliates | $ 14,000 | 10,800 | |
Advisor | Advanced Organization And Offering Costs | |||
Related Party Transaction [Line Items] | |||
Due to affiliates | 6,000 | 5,800 | |
Advisor | Advanced Expenses | |||
Related Party Transaction [Line Items] | |||
Due to affiliates | $ 200 | $ 100 | |
Florida Multifamily Portfolio | |||
Related Party Transaction [Line Items] | |||
Purchase Price | $ 100,000 | ||
Number of units in portfolio | Unit | 1,150 | ||
Phoenix Property | |||
Related Party Transaction [Line Items] | |||
Purchase Price | $ 46,000 | ||
Savannah Property | |||
Related Party Transaction [Line Items] | |||
Purchase Price | $ 36,000 | ||
Jacksonville, Florida | Florida Multifamily Portfolio | |||
Related Party Transaction [Line Items] | |||
Number of Properties | Property | 2 | ||
Naples, Florida | Florida Multifamily Portfolio | |||
Related Party Transaction [Line Items] | |||
Number of Properties | Property | 2 | ||
Mesa, Arizona | Phoenix Property | |||
Related Party Transaction [Line Items] | |||
Number of units in portfolio | Unit | 256 | ||
Savannah, Georgia | Savannah Property | |||
Related Party Transaction [Line Items] | |||
Number of units in portfolio | Unit | 203 |
Related Party Transactions - Su
Related Party Transactions - Summary of Components of Due to Affiliates (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Related Party Transaction [Line Items] | ||
Due to affiliates | $ 21,119 | $ 16,754 |
Accrued Stockholder Servicing Fee | ||
Related Party Transaction [Line Items] | ||
Due to affiliates | 13,980 | 10,830 |
Advanced Organization And Offering Costs | ||
Related Party Transaction [Line Items] | ||
Due to affiliates | 5,992 | 5,822 |
Performance Participation Allocation | ||
Related Party Transaction [Line Items] | ||
Due to affiliates | 857 | |
Accrued Affiliate Service Provider Expenses | ||
Related Party Transaction [Line Items] | ||
Due to affiliates | 45 | |
Advanced Expenses | ||
Related Party Transaction [Line Items] | ||
Due to affiliates | $ 245 | $ 102 |
Segment Reporting - Additional
Segment Reporting - Additional Information (Details) | 3 Months Ended |
Mar. 31, 2019Segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 3 |
Segment Reporting - Summary of
Segment Reporting - Summary of Financial Results by Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Segment Reporting Information [Line Items] | |||
Total Assets | $ 625,015 | $ 164,963 | |
Revenue | |||
Total revenues | 15,415 | ||
Expenses | |||
Operating expenses | 7,265 | ||
Income from real estate-related securities, net | 102 | ||
Earnings from unconsolidated real estate ventures | 43 | ||
Segment net operating income | 8,295 | ||
Depreciation and amortization | 5,358 | ||
Other income (expense) | |||
General and administrative | (912) | $ (16) | |
Performance participation allocation | (857) | ||
Interest income | 58 | ||
Interest expense | (3,598) | ||
Other expense | (96) | ||
Net loss | (2,468) | $ (16) | |
Rental | |||
Revenue | |||
Total revenues | 4,310 | ||
Expenses | |||
Operating expenses | 1,762 | ||
Hotel Revenue / Expenses | |||
Revenue | |||
Total revenues | 10,852 | ||
Expenses | |||
Operating expenses | 5,503 | ||
Other revenue | |||
Revenue | |||
Total revenues | 253 | ||
Operating Segments | Multifamily | |||
Segment Reporting Information [Line Items] | |||
Total Assets | 190,852 | ||
Revenue | |||
Total revenues | 4,509 | ||
Expenses | |||
Operating expenses | 1,762 | ||
Segment net operating income | 2,747 | ||
Depreciation and amortization | 3,304 | ||
Operating Segments | Hotel | |||
Segment Reporting Information [Line Items] | |||
Total Assets | 258,519 | ||
Revenue | |||
Total revenues | 10,906 | ||
Expenses | |||
Operating expenses | 5,503 | ||
Earnings from unconsolidated real estate ventures | 43 | ||
Segment net operating income | 5,446 | ||
Depreciation and amortization | 2,054 | ||
Operating Segments | Real Estate-Related Securities | |||
Segment Reporting Information [Line Items] | |||
Total Assets | 113,141 | ||
Expenses | |||
Income from real estate-related securities, net | 102 | ||
Segment net operating income | 102 | ||
Operating Segments | Rental | Multifamily | |||
Revenue | |||
Total revenues | 4,310 | ||
Expenses | |||
Operating expenses | 1,762 | ||
Operating Segments | Hotel Revenue / Expenses | Hotel | |||
Revenue | |||
Total revenues | 10,852 | ||
Expenses | |||
Operating expenses | 5,503 | ||
Operating Segments | Other revenue | Multifamily | |||
Revenue | |||
Total revenues | 199 | ||
Operating Segments | Other revenue | Hotel | |||
Revenue | |||
Total revenues | 54 | ||
Other (Corporate) | |||
Segment Reporting Information [Line Items] | |||
Total Assets | $ 62,503 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) - USD ($) $ in Thousands | May 14, 2019 | Mar. 31, 2019 | Dec. 31, 2018 |
Subsequent Event [Line Items] | |||
Common stock, shares issued | 12,460,453 | ||
Proceeds from issuance of common stock | $ 85,586 | ||
Scenario, Forecast | |||
Subsequent Event [Line Items] | |||
Common stock, shares issued | 16,086,387 | ||
Proceeds from issuance of common stock | $ 322,100 | ||
Common Stock Class T | |||
Subsequent Event [Line Items] | |||
Common stock, shares issued | 207,535 | 483 | |
Common Stock Class T | Scenario, Forecast | |||
Subsequent Event [Line Items] | |||
Common stock, shares issued | 466,188 | ||
Common Stock Class S | |||
Subsequent Event [Line Items] | |||
Common stock, shares issued | 8,340,840 | 6,610,280 | |
Common Stock Class S | Scenario, Forecast | |||
Subsequent Event [Line Items] | |||
Common stock, shares issued | 10,884,175 | ||
Common Stock Class D | |||
Subsequent Event [Line Items] | |||
Common stock, shares issued | 309,860 | 46,075 | |
Common Stock Class D | Scenario, Forecast | |||
Subsequent Event [Line Items] | |||
Common stock, shares issued | 494,298 | ||
Common Stock Class I | |||
Subsequent Event [Line Items] | |||
Common stock, shares issued | 3,602,218 | 1,542,000 | |
Common Stock Class I | Scenario, Forecast | |||
Subsequent Event [Line Items] | |||
Common stock, shares issued | 4,241,726 |