Document and Entity Information
Document and Entity Information | 9 Months Ended |
Sep. 30, 2019shares | |
Document and Entity Information [Abstract] | |
Document Type | 10-Q |
Amendment Flag | false |
Document Period End Date | Sep. 30, 2019 |
Document Fiscal Year Focus | 2019 |
Document Fiscal Period Focus | Q3 |
Trading Symbol | CK0001713407 |
Entity Registrant Name | OAKTREE REAL ESTATE INCOME TRUST, INC. |
Entity Central Index Key | 0001713407 |
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 | false |
Entity Common Stock, Shares Outstanding | 27,000 |
Entity Current Reporting Status | Yes |
Balance Sheets
Balance Sheets - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Assets | ||
Cash and cash equivalents | $ 5,357,343 | $ 183,454 |
Restricted Cash, Current | 932,644 | 0 |
Accounts Receivable, Net, Current | 654,857 | 0 |
Real Estate Investments, Net | 145,870,775 | 0 |
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate | 49,098,314 | 0 |
Intangible Assets, Net (Excluding Goodwill) | 5,428,357 | 0 |
Other Assets, Current | 260,985 | 0 |
Total Assets | 207,603,275 | 183,454 |
Liabilities and Equity | ||
Accounts payable, accrued expenses and other liabilities | 2,732,592 | 102,930 |
Notes Payable | 105,729,159 | 0 |
Due to Affiliate | 99,226,119 | 198,181 |
Below Market Lease, Net | 67,046 | 0 |
Commitments and contingencies (Note 6) | 0 | 0 |
Total Liabilities | 207,754,916 | 301,111 |
Stockholders' Equity | ||
Preferred stock, $0.01 par value per share, 50,000,000 shares authorized; no shares issued nor outstanding at January 10, 2018 and June 30, 2018, respectively | 0 | 0 |
Common stock, $0.01 par value per share, 1,000,000,000 shares authorized; 20,000 shares issued and outstanding at January 10, 2018 and June 30, 2018, respectively | 270 | 200 |
Additional Paid in Capital, Common Stock | 306,536 | 250,038 |
Accumulated deficit | (3,025,544) | (367,895) |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | (2,718,738) | |
Noncontrolling Interest in Variable Interest Entity | (2,567,097) | 0 |
Total Stockholders' Equity | (151,641) | (117,657) |
Total Liabilities and Stockholders' Equity | $ 207,603,275 | $ 183,454 |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2018 | Jan. 10, 2018 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 50,000,000 | 50,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued (in shares) | 27,000 | |
Common stock, outstanding (in shares) | 27,000 |
Statement of Operations
Statement of Operations - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income Statement [Abstract] | ||||
Operating Leases, Income Statement, Lease Revenue | $ 2,298,740 | $ 3,540,440 | ||
Net Income (Loss), Non-Allocated | (1,535,932) | $ (80,052) | (2,822,664) | $ (193,054) |
Revenues | ||||
Total revenues | 2,472,826 | 0 | 3,701,548 | 0 |
Other Operating Income | 174,086 | 161,108 | ||
Interest Expense | (1,513,816) | 0 | (2,197,613) | 0 |
Other Nonoperating Income (Expense) | (603,624) | 523 | (1,146,033) | 754 |
Operating Expenses | 956,906 | 0 | 1,437,279 | 0 |
Expenses | ||||
General and administrative expenses | 649,722 | 80,575 | 1,099,118 | 193,808 |
Depreciation, Depletion and Amortization | 1,798,506 | 0 | 2,841,782 | 0 |
Total expenses | 3,405,134 | 80,575 | 5,378,179 | 193,808 |
Net Income (Loss) Attributable to Noncontrolling Interest | 93,481 | 0 | (165,016) | 0 |
Net Income (Loss) Available to Common Stockholders, Basic | 1,442,451 | 80,052 | (2,657,648) | 193,054 |
Interest and Other Income | $ 910,192 | $ 523 | $ 1,051,580 | $ 754 |
Loss per share (basic and diluted): | ||||
Net loss per share (in dollars per share) | $ (53.42) | $ (4) | $ (106.29) | $ (9.65) |
Weighted average number of shares outstanding (in shares) | 27,000 | 20,000 | 25,004 | 20,000 |
Statements of Changes in Stockh
Statements of Changes in Stockholders' Equity (Deficit) - USD ($) | Total | Preferred Stock Including Additional Paid in Capital [Member] | Common Stock | Common Stock Class I | Common Stock Class S | Common Stock Class T | Common Stock Class D |
Additional Paid in Capital, Common Stock | $ 199,800 | ||||||
Accumulated deficit | $ 0 | ||||||
Shares, Outstanding, Beginning Balance at Jan. 09, 2018 | 20,000 | ||||||
Stockholders' Equity, Beginning Balance at Jan. 09, 2018 | $ 200,000 | $ 0 | $ 200 | $ 0 | $ 0 | $ 0 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net loss | $ (24,930) | ||||||
Shares, Outstanding, Ending Balance at Mar. 31, 2018 | 20,000 | ||||||
Stockholders' Equity, Ending Balance at Mar. 31, 2018 | $ 175,070 | 0 | 200 | 0 | 0 | 0 | |
Net Income (Loss) Attributable to Noncontrolling Interest | 0 | ||||||
Distributions To Non Controlling Interests | 0 | ||||||
Net Income (Loss) Available to Common Stockholders, Basic | $ (193,054) | ||||||
Shares, Outstanding, Beginning Balance at Jan. 09, 2018 | 20,000 | ||||||
Stockholders' Equity, Beginning Balance at Jan. 09, 2018 | $ 200,000 | 0 | 200 | 0 | 0 | 0 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Restricted Stock or Unit Expense | $ 0 | ||||||
Shares, Outstanding, Ending Balance at Sep. 30, 2018 | 20,000 | ||||||
Stockholders' Equity, Ending Balance at Sep. 30, 2018 | $ 6,946 | 0 | 200 | 0 | 0 | 0 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net Income (Loss) Available to Common Stockholders, Basic | (193,054) | ||||||
Proceeds From Noncontrolling Interests | 0 | ||||||
Additional Paid in Capital, Common Stock | 199,800 | ||||||
Accumulated deficit | $ (24,930) | ||||||
Shares, Outstanding, Beginning Balance at Mar. 31, 2018 | 20,000 | ||||||
Stockholders' Equity, Beginning Balance at Mar. 31, 2018 | $ 175,070 | 0 | 200 | 0 | 0 | 0 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net loss | $ (88,072) | ||||||
Shares, Outstanding, Ending Balance at Jun. 30, 2018 | 20,000 | ||||||
Stockholders' Equity, Ending Balance at Jun. 30, 2018 | $ 86,998 | 0 | 200 | 0 | 0 | 0 | |
Additional Paid in Capital, Common Stock | 199,800 | ||||||
Accumulated deficit | (113,002) | ||||||
Net Income (Loss) Attributable to Noncontrolling Interest | 0 | ||||||
Net Income (Loss) Available to Common Stockholders, Basic | (80,052) | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net loss | $ (80,052) | ||||||
Shares, Outstanding, Ending Balance at Sep. 30, 2018 | 20,000 | ||||||
Stockholders' Equity, Ending Balance at Sep. 30, 2018 | $ 6,946 | 0 | 200 | 0 | 0 | 0 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net Income (Loss) Available to Common Stockholders, Basic | (80,052) | ||||||
Additional Paid in Capital, Common Stock | 199,800 | ||||||
Accumulated deficit | $ (193,054) | ||||||
Common Stock, Par or Stated Value Per Share | $ 0.01 | ||||||
Additional Paid in Capital, Common Stock | $ 250,038 | ||||||
Accumulated deficit | $ (367,895) | ||||||
Common Stock, Par or Stated Value Per Share | $ 200 | ||||||
Stockholders' Equity Attributable to Noncontrolling Interest | $ 0 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Net of Forfeitures | 7,000 | ||||||
Net Income (Loss) Attributable to Noncontrolling Interest | $ 0 | ||||||
Net Income (Loss) Available to Common Stockholders, Basic | $ (170,435) | ||||||
Shares, Outstanding, Beginning Balance at Dec. 31, 2018 | 20,000 | ||||||
Stockholders' Equity, Beginning Balance at Dec. 31, 2018 | $ (117,657) | 0 | 0 | 0 | 0 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net loss | (170,435) | ||||||
Restricted Stock or Unit Expense | 21,089 | $ 70 | |||||
Adjustments to Additional Paid in Capital, Share-based Compensation, Restricted Stock Unit or Restricted Stock Award, Requisite Service Period Recognition | $ 21,019 | ||||||
Shares, Outstanding, Ending Balance at Mar. 31, 2019 | 27,000 | ||||||
Stockholders' Equity, Ending Balance at Mar. 31, 2019 | $ (267,003) | 0 | 0 | 0 | 0 | ||
Shares, Outstanding, Beginning Balance at Dec. 31, 2018 | 20,000 | ||||||
Stockholders' Equity, Beginning Balance at Dec. 31, 2018 | $ (117,657) | 0 | 0 | 0 | 0 | ||
Shares, Outstanding, Ending Balance at Jun. 30, 2019 | 27,000 | ||||||
Stockholders' Equity, Ending Balance at Jun. 30, 2019 | $ 267,730 | 0 | 0 | 0 | 0 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Proceeds From Noncontrolling Interests | $ 1,657,500 | ||||||
Non Controlling Redeemable Interests In Consolidated Funds [Text Block] | Non-Controlling Interests Non-controlling interests of $ 2,567,097 as of September 30, 2019 represent interests held by TruAmerica and Hines, our joint venture partners in Anzio Apartments and Two Liberty Center, respectively. There were no non-controlling interests as of December 31, 2018. | ||||||
Net Income (Loss) Attributable to Noncontrolling Interest | $ 165,016 | ||||||
Distributions To Non Controlling Interests | (56,070) | ||||||
Net Income (Loss) Available to Common Stockholders, Basic | $ (2,822,664) | ||||||
Shares, Outstanding, Beginning Balance at Dec. 31, 2018 | 20,000 | ||||||
Stockholders' Equity, Beginning Balance at Dec. 31, 2018 | $ (117,657) | 0 | 0 | 0 | 0 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Restricted Stock or Unit Expense | $ 56,568 | ||||||
Shares, Outstanding, Ending Balance at Sep. 30, 2019 | 27,000 | ||||||
Stockholders' Equity, Ending Balance at Sep. 30, 2019 | $ (151,641) | 0 | 0 | 0 | 0 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net Income (Loss) Available to Common Stockholders, Basic | 2,657,648 | ||||||
Proceeds From Noncontrolling Interests | 2,788,182 | ||||||
Additional Paid in Capital, Common Stock | 271,057 | ||||||
Accumulated deficit | $ (538,330) | ||||||
Common Stock, Par or Stated Value Per Share | $ 270 | ||||||
Stockholders' Equity Attributable to Noncontrolling Interest | $ 0 | ||||||
Net Income (Loss) Attributable to Noncontrolling Interest | (71,534) | ||||||
General Partner Distributions | 0 | ||||||
Distributions To Non Controlling Interests | (24,114) | ||||||
Partners' Capital Account, Distributions | (24,114) | ||||||
Net Income (Loss) Available to Common Stockholders, Basic | $ (1,116,297) | ||||||
Shares, Outstanding, Beginning Balance at Mar. 31, 2019 | 27,000 | ||||||
Stockholders' Equity, Beginning Balance at Mar. 31, 2019 | $ (267,003) | 0 | 0 | 0 | 0 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Restricted Stock, Amortization of Stock Grants, Shares | 0 | ||||||
Restricted Stock or Unit Expense | $ 17,644 | 0 | |||||
Adjustments to Additional Paid in Capital, Share-based Compensation, Restricted Stock Unit or Restricted Stock Award, Requisite Service Period Recognition | $ 17,644 | ||||||
Shares, Outstanding, Ending Balance at Jun. 30, 2019 | 27,000 | ||||||
Stockholders' Equity, Ending Balance at Jun. 30, 2019 | $ 267,730 | 0 | 0 | 0 | 0 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net Income (Loss) Available to Common Stockholders, Basic | (1,044,763) | ||||||
Additional Paid in Capital, Common Stock | 288,701 | ||||||
Accumulated deficit | (1,583,093) | ||||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | $ (1,294,122) | ||||||
Common Stock, Par or Stated Value Per Share | $ 270 | ||||||
Stockholders' Equity Attributable to Noncontrolling Interest | $ 1,561,852 | ||||||
Net Income (Loss) Attributable to Noncontrolling Interest | (93,481) | ||||||
Distributions To Non Controlling Interests | (31,956) | ||||||
Partners' Capital Account, Distributions | (31,956) | ||||||
Net Income (Loss) Available to Common Stockholders, Basic | $ (1,535,932) | ||||||
Restricted Stock, Amortization of Stock Grants, Shares | 0 | ||||||
Restricted Stock or Unit Expense | $ 17,835 | $ 0 | |||||
Adjustments to Additional Paid in Capital, Share-based Compensation, Restricted Stock Unit or Restricted Stock Award, Requisite Service Period Recognition | $ 17,835 | ||||||
Shares, Outstanding, Ending Balance at Sep. 30, 2019 | 27,000 | ||||||
Stockholders' Equity, Ending Balance at Sep. 30, 2019 | $ (151,641) | $ 0 | $ 0 | $ 0 | $ 0 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net Income (Loss) Available to Common Stockholders, Basic | (1,442,451) | ||||||
Proceeds From Noncontrolling Interests | 1,130,682 | ||||||
Additional Paid in Capital, Common Stock | 306,536 | ||||||
Accumulated deficit | (3,025,544) | ||||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | $ (2,718,738) | ||||||
Shares Issued, Price Per Share | $ 10 | ||||||
Common Stock, Par or Stated Value Per Share | $ 270 | ||||||
Stockholders' Equity Attributable to Noncontrolling Interest | $ 2,567,097 |
Statement Cash Flow
Statement Cash Flow - USD ($) | 3 Months Ended | 6 Months Ended | 9 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | |
Restricted Cash, Current | $ 932,644 | $ 932,644 | $ 932,644 | |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | 6,289,987 | 6,289,987 | ||
Operating activities: | ||||
Net loss | (2,822,664) | $ (193,054) | ||
Depreciation | 1,392,072 | |||
Amortization of Intangible Assets | 1,404,349 | 0 | ||
Amortization of Deferred Leasing Fees | 45,361 | 0 | ||
Amortization of above and below Market Leases | (1,074) | |||
Restricted Stock or Unit Expense | 17,644 | 56,568 | 0 | |
Amortization of Other Deferred Charges | 22,999 | |||
Accretion (Amortization) of Discounts and Premiums, Investments | (217,154) | |||
Changes in assets and liabilities: | ||||
Increase in accounts payable, accrued expenses and other liabilities | 2,629,661 | 97,633 | ||
Increase (Decrease) in Due to Affiliates, Current | 453,714 | 130,585 | ||
Increase (Decrease) in Deferred Leasing Fees | (343,134) | |||
Increase (Decrease) in Other Operating Assets | (260,985) | 0 | ||
Increase (Decrease) in Accounts and Other Receivables | (654,857) | 0 | ||
Net cash used in operating activities | 1,704,856 | 35,164 | ||
Payments to Acquire Real Estate | (151,989,671) | 0 | ||
Payments to Acquire Loans Held-for-investment | (48,881,160) | 0 | ||
Payments for Tenant Improvements | (1,739,989) | |||
Net Cash Provided by (Used in) Investing Activities | (202,610,820) | 0 | ||
Proceeds from (Repayments of) First Mortgage Bond | 106,371,000 | 0 | ||
Proceeds from Lines of Credit | 105,399,717 | 0 | ||
Proceeds from (Repayments of) Related Party Debt | (6,825,493) | |||
Payments of Financing Costs | (664,839) | 0 | ||
Distributions To Non Controlling Interests | (24,114) | (56,070) | 0 | |
Proceeds From Noncontrolling Interests | 1,657,500 | 2,788,182 | 0 | |
Net Cash Provided by (Used in) Financing Activities | 207,012,497 | 0 | ||
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, Period Increase (Decrease), Including Exchange Rate Effect | 6,106,533 | |||
Total decrease in cash and cash-equivalents | 35,164 | |||
Cash and cash-equivalents at beginning of period | 183,454 | 183,454 | $ 200,000 | |
Cash and cash-equivalents at end of period | $ 5,357,343 | $ 5,357,343 | $ 5,357,343 |
Organization and Business Purpo
Organization and Business Purpose | 9 Months Ended |
Sep. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Business Purpose | Organization and Business Purpose Oaktree Real Estate Income Trust, Inc. (the “Company”) was formed on July 27, 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 was organized to invest primarily in well-located, high quality commercial real estate assets that generate strong current cash flow and could further appreciate in value through moderate leasing and repositioning strategies. Moreover, to a lesser extent, the Company plans to invest in real estate-related investments, including private loans and traded real estate-related securities that will help maintain liquidity. The Company anticipates that its investments will be geographically diversified across the top 50 markets in the United States. The Company is externally managed by Oaktree Fund Advisors, LLC (the “Adviser”), an affiliate of Oaktree Capital Management, L.P. ("Oaktree"). On January 9, 2018, the Company was capitalized with a $200,000 investment by an affiliate of the Adviser. On February 14, 2019, the Company began issuing and selling shares of common stock through the Company’s initial public offering. As of September 30, 2019 , the Company owned two property investments and two real estate-related loans secured by real estate assets. |
Capitalization
Capitalization | 9 Months Ended |
Sep. 30, 2019 | |
Capitalization, Long-term Debt and Equity [Abstract] | |
Capitalization | Capitalization As of September 30, 2019 , the Company was authorized to issue up to 1,000,000,000 shares of common stock. On April 11, 2018, the Company amended and restated its charter to authorize the following classes of common stock: Classification No. of Authorized Shares Par Value Per Share Preferred stock 50,000,000 $ 0.01 Class T common stock 250,000,000 $ 0.01 Class S common stock 250,000,000 $ 0.01 Class D common stock 250,000,000 $ 0.01 Class I common stock 250,000,000 $ 0.01 1,050,000,000 The Company has registered with the Securities and Exchange Commission an offering of up to $1,600,000,000 in shares in its primary offering and up to $400,000,000 in shares pursuant to its distribution reinvestment plan (the “Offering”). The Company intends to sell any combination of the four classes of shares of its common stock, Class T shares, Class S shares, Class D shares and Class I shares, with a dollar value up to the maximum offering amount. The share classes have different upfront selling commissions and ongoing stockholder servicing fees. Until the release of proceeds from escrow, the per share purchase price for shares of the Company’s common stock in its primary offering will be $ 10.00 per share plus applicable upfront selling commissions and dealer manager fees. Thereafter, the purchase price per share for each class of common stock will vary and will generally equal the Company’s prior month’s net asset value (“NAV”) per share, as determined monthly, plus applicable upfront selling commissions and dealer manager fees. The Company will accept proceeds and hold investors’ funds in an interest bearing escrow account until (i) the Company receives purchase orders for at least $150,000,000 , including shares purchased by the Company’s sponsor, its affiliates and its directors and officers, in any combination of classes of shares of our common stock, and (ii) the Company’s board of directors has authorized the release of funds in the escrow account. As of September 30, 2019 , the Company has not reached the required threshold from the Offering to release funds from escrow. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited interim financial statements have been prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all information and footnotes required by accounting principles generally accepted in the United States of America (“GAAP”) for complete financial statements. These statements reflect all normal and recurring adjustments which, in the opinion of management, are necessary to present fairly the financial position, results of operations and cash flows of the Company for the interim periods presented. However, the results of operations for the interim period presented are not necessarily indicative of the results that may be expected for the year ending December 31, 2019, or any other future period. The Company consolidates entities in which it retains a controlling financial interest or entities that meet the definition of a variable interest entity (“VIE”) for which it is deemed to be the primary beneficiary. In performing an analysis of whether it is the primary beneficiary, at initial investment and at each quarterly reporting period, the Company considers whether it individually has the power to direct the activities of the VIE that most significantly affect the entity’s economic performance and also has the obligation to absorb losses or the right to receive benefits of the VIE that could potentially be significant to the VIE. The determination of whether an entity is a VIE, and whether the Company is the primary beneficiary, involves significant judgments, including the determination of which activities most significantly affect the entity’s performance, estimates about the current and future fair values and performance of assets held by the entity and/or general market conditions. If an entity is determined to be a VIE, the Company evaluates whether it is the primary beneficiary. The primary beneficiary analysis is a qualitative analysis based on power and benefits. The Company consolidates a VIE if it has both power and benefits - that is, (i) the power to direct the activities of a VIE that most significantly influence the VIE’s economic performance, and (ii) the obligation to absorb losses of the VIE that could potentially be significant to the VIE, or the right to receive benefits from the VIE that potentially could be significant to the VIE. The Company consolidates all VIEs for which it is the primary beneficiary, including the Company’s joint ventures with TruAmerica Multifamily, LLC (“TruAmerica”) and Hines Interests Limited Partnership ("Hines") to hold the Anzio Apartments and Two Liberty Center properties (see Note 4). As of September 30, 2019, the total assets and liabilities of the Company's consolidated VIE, were $ 155.0 million and $ 108.1 million, respectively. Such amounts are included on the Company's Consolidated Balance Sheets. For each of our consolidated VIEs, certain assets are pledged as collateral for specific obligations of the VIE. There are no creditors or other partners of our consolidated VIEs that have recourse to our general credit. Our maximum exposure to our consolidated VIEs is limited to our variable interests in each VIE. If a legal entity fails to meet any of the three characteristics of a VIE (due to insufficiency of equity, existence of non-substantive voting rights, or lack of a controlling financial interest), the Company then evaluates such entity under the voting model. Under the voting model, the Company consolidates the entity if it determines that it, directly or indirectly, has greater than 50% of the voting rights and that other equity holders do not have substantive participating rights. If the Company has a variable interest in a VIE but is not the primary beneficiary, or if the Company has the ability to exercise significant influence over a voting interest entity but does not have control, it accounts for its investment using the equity method of accounting. Investments in Real Estate The Company evaluates each real estate acquisition to determine whether the integrated set of acquired assets and activities meets the definition of a business. Generally, acquisitions of real estate or in-substance real estate are not expected to meet the definition of a business because substantially all of the fair value is concentrated in a single identifiable asset or group of similar identifiable assets (i.e. land, buildings and related intangible assets) or because the acquisition does not include a substantive process in the form of an acquired workforce or an acquired contract that cannot be replaced without significant cost, effort or delay. When evaluating acquired service or management contracts, the Company considers the nature of the services performed, the terms of the contract relative to similar arm’s length contracts, and the availability of comparable service providers in evaluating whether the acquired contract constitutes a substantive process. The acquisitions of the Anzio Apartments and Two Liberty Center properties were accounted for as asset acquisitions because substantially all of the fair value was concentrated in the land, buildings and related intangible assets. For acquisitions of real estate and in-substance real estate that are accounted for as business combinations, the Company recognizes the assets acquired (including the intangible value of acquired above- or below-market leases, acquired in-place leases, tenant relationships and other intangible assets or liabilities), liabilities assumed, noncontrolling interests, and previously existing ownership interests, if any, at fair value as of the acquisition date. Any excess (deficit) of the consideration transferred relative to the fair value of the net assets acquired is recognized as goodwill (bargain purchase gain). In business combinations, the preliminary purchase price allocation may be subject to change based upon additional information about facts and circumstances that existed as of the acquisition date, with such measurement period extending no later than 12 months from the acquisition date. Acquisition costs related to business combinations are expensed as incurred. Acquisitions of real estate and in-substance real estate that do not meet the definition of a business are accounted for as asset acquisitions. The accounting model for asset acquisitions is similar to the accounting model for business combinations except that the consideration transferred (including acquisition costs) is allocated to the acquired assets and assumed liabilities on a relative fair value basis. As a result, asset acquisitions do not result in the recognition of goodwill or a bargain purchase gain. The results of operations of acquired properties are included in the Company’s results of operations from the respective dates of acquisition. Estimates of future cash flows used to estimate the fair values of identifiable assets acquired and liabilities assumed are based upon a number of factors including the property’s historical operating results, known and anticipated trends, and market and economic conditions. Values of buildings and improvements are determined on an as-if-vacant basis. The estimated fair value of acquired in-place leases include the costs the Company would have incurred to lease the properties to their occupancy levels at the date of acquisition. Such estimates include the fair value of leasing commissions, legal costs and other direct costs that would be incurred to lease the properties to such occupancy levels. The Company evaluates avoided costs over the time period over which occupancy levels at the date of acquisition would be achieved had the property been acquired vacant. Such evaluation includes an estimate of the net market-based rental revenues and net operating costs (primarily consisting of real estate taxes, insurance and utilities) that would be incurred during the lease-up period. Acquired in-place leases are amortized over the remaining lease terms as a component of depreciation and amortization expense. For acquired in-place leases, above- and below-market lease values are recorded based on the present value (using an interest rate that reflects the risks associated with the lease acquired) of the difference between the contractual amounts to be paid pursuant to the in-place leases and management’s estimate of fair market value lease rates for the corresponding in-place leases. The values of acquired above- and below-market leases are amortized over the terms of the related leases and recognized as either increases (for below-market leases) or decreases (for above-market leases) to rental revenue. Should a tenant terminate its lease, the unamortized portion of the in-place lease value is charged to amortization expense and the unamortized portion of the above- or below-market lease value is charged to rental revenue. Expenditures that improve or extend the life of an acquired property are capitalized and depreciated over their estimated useful life. Expenditures for ordinary maintenance and repairs are expensed as incurred. 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 30-40 years Building and improvements 5-10 years Furniture, fixtures and equipment 1-7 years Tenant improvements Shorter of estimated useful life or lease term In-place lease intangibles Over lease term Above and below market leases Over lease term Lease origination costs Over lease term The Company reviews its real estate portfolio on a periodic basis to ascertain if there are any indicators of impairment in the carrying values of any of its real estate assets, including deferred costs and intangibles, in order to determine if there is any need for an impairment charge. In reviewing the portfolio, the Company examines the type of asset, the economic situation in the area in which the asset is located, the economic situation in the industry in which the tenant is involved and the timeliness of the payments made by the tenant under its lease, as well as any current correspondence that may have been had with the tenant, including property inspection reports. For each real estate asset for which indicators of impairment are identified, the Company performs a recoverability analysis that compares future undiscounted cash flows expected to result from the use and eventual disposition of the asset to its carrying value. If the undiscounted cash flow analysis yields an amount which is less than the assets’ carrying amount, an impairment loss will be recorded equal to the amount by which the carrying value of the asset exceeds its estimated fair value. The estimated fair value is determined using a discounted cash flow model of the expected future cash flows through the useful life of the property. Real estate assets that are expected to be disposed of are valued at the lower of carrying amount or fair value less costs to sell on an individual asset basis. As of September 30, 2019, the Company had not identified any indicators of impairment with respect to its real estate portfolio. Investments in Real Estate-Related Loans Loans that the Company has the intent and ability to hold for the foreseeable future are classified as held for investment. Originated loans are recorded at amortized cost, or outstanding unpaid principal balance less net deferred loan fees. Net deferred loan fees include unamortized origination and other fees charged to the borrower less direct incremental loan origination costs incurred by the Company. Purchased loans are recorded at amortized cost, or unpaid principal balance plus purchase premium or less unamortized discount. Costs to purchase loans are expensed as incurred. Interest income is recognized based upon contractual interest rate and unpaid principal balance of the loans. Net deferred loan fees on originated loans are deferred and amortized as adjustments to interest income over the expected life of the loans using the effective yield method. Premium or discount on purchased loans are amortized as adjustments to interest income over the expected life of the loans using the effective yield method. When a loan is prepaid, prepayment fees and any excess of proceeds over the carrying amount of the loan are recognized as additional interest income. Loans that are past due 90 days or more as to principal or interest, or where reasonable doubt exists as to timely collection, are generally considered nonperforming and placed on nonaccrual. Interest receivable is reversed against interest income when loans are placed on nonaccrual status. Interest collected on a nonaccrual loan is either recognized as income on a cash basis or applied as a reduction to the loan’s carrying value, depending on the ultimate collectability of the loan. Loans may be restored to accrual status when all principal and interest are current and full repayment of the remaining contractual principal and interest are reasonably assured. Loans are considered to be impaired when it is probable that the Company will not be able to collect all amounts due in accordance with contractual terms, including consideration of the underlying collateral value. As of September 30, 2019, each of the Company’s real-estate related loans was performing in accordance with its contractual terms and management has not established an allowance for loan losses. Use of Estimates The preparation of the 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 and accrued expenses at the date of the balance sheet. Actual results could differ from those estimates. Revenue Recognition The Company’s sources of revenue and the related revenue recognition policies are as follows: Rental revenue primarily consists of base rent arising from tenant leases at the Company’s properties. Rental revenue is recognized on a straight-line basis over the life of the lease, including any rent steps or abatement provisions. The Company begins to recognize revenue upon the acquisition of the related property or when a tenant takes possession of the leased space. Other rental revenues include amounts due from tenants for costs related to common area maintenance, real estate taxes, and other recoverable costs included in lease agreements. The Company recognizes the reimbursement of such costs incurred as tenant reimbursement income. The Company periodically reviews tenant receivables and unbilled rent receivables to determine whether they are collectible. In making this determination, the Company considers each tenant’s payment history and financial condition. If a receivable is deemed to be uncollectible, the Company will either reserve for the receivable through an allowance, or write-off the receivable. As of September 30, 2019, the Company did not have any allowances for doubtful accounts. 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. The Company did not hold cash equivalents as of September 30, 2019 or December 31, 2018 . Restricted Cash Restricted cash of $ 932,644 as of September 30, 2019 consisted of tax impounds of $ 289,076 , tenant security deposits of $ 134,040 , cash reserved for interest payments of $ 67,795 and cash reserved for capital expenditures of $ 441,733 . There were no restricted cash balances as of December 31, 2018. Non-Controlling Interests Non-controlling interests of $ 2,567,097 as of September 30, 2019 represent interests held by TruAmerica and Hines, our joint venture partners in Anzio Apartments and Two Liberty Center, respectively. There were no non-controlling interests as of December 31, 2018. 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 marketplace, 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 carrying values of cash and cash equivalents, restricted cash, accounts receivable and other receivables, accounts payable, accrued liabilities and other liabilities approximate fair value because of the short-term nature of these instruments and falls under the Level 2 hierarchy. The estimated fair values of the Company's real estate-related loan, mortgage loan and line of credit approximate their fair values since they bear interest at floating rates and were recently originated and falls under the Level 2 hierarchy. The Company uses significant judgement to estimate fair values of investments in real estate, and other intangible assets. In estimating their values, we consider significant unobservable inputs such as estimated cash flow projections that utilize appropriate discount and capitalization rates and available comparable 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/economic conditions that may affect the property. These inputs are Level 3 inputs. 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 of 1986, as amended, commencing with its taxable year ending December 31 for the year in which the Offering proceeds are released from escrow. 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. Any deferred tax assets arising from the Company's taxable loss carryforwards during periods prior to making a REIT election have been fully reserved, since it is unlikely such benefits will be realized. 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. Organization and Offering Expenses The Adviser 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 escrow for the Offering is released. The Company will reimburse the Adviser for all such advanced expenses ratably over a 60 month period following the first anniversary of the date escrow for the Offering is released. As of September 30, 2019 and December 31, 2018 , the Adviser and its affiliates had incurred organization and offering expenses on the Company’s behalf of approximately $ 4.7 million and $ 4.3 million, respectively. These organization and offering expenses are not recorded in the accompanying financial statements because such costs are not the Company’s liability until the date on which the escrow is released. When recorded by the Company, organizational expenses will be expensed as incurred, and offering expenses will be reflected as a reduction of additional paid-in capital as such amounts will be reimbursed to the Adviser or its affiliates from the gross proceeds of the Offering. Any amount due to the Adviser but not paid will be recognized as a liability on the balance sheet. Earnings Per Share Nonvested share-based payment awards that contain non-forfeitable rights to dividends are participating securities and, therefore, are included in the computation of basic EPS pursuant to the two-class method. The two-class method determines EPS for each class of common stock and participating securities according to dividends declared (or accumulated) and their respective participation rights in undistributed earnings. Basic EPS is calculated by dividing the net income (loss) attributable to common stockholders by the weighted average number of shares of common stock outstanding for the period. Diluted EPS is calculated by dividing the net income (loss) attributable to common stockholders by the weighted average number of shares of common stock outstanding determined for the basic EPS computation plus the effect of any dilutive securities. We include unvested shares of restricted stock in the computation of diluted EPS by using the more dilutive of the two-class method or treasury stock method. Any anti-dilutive securities are excluded from the diluted EPS calculation. For the three months ended September 30, 2019 and 2018, the nine months ended September 30, 2019 and the period from January 10, 2018 through September 30, 2018, there were no dilutive common stock equivalents as the Company incurred net losses for each period. Segment Reporting The Company currently operates as a single reportable segment based upon its method of internal reporting and its allocation of capital and resources. Share-Based Compensation Equity-classified stock awards granted to employees and non-employees that have a service condition are measured at fair value at date of grant and re-measured at fair value only upon a modification of the award. The Company recognizes compensation expense on a straight-line basis over the requisite service period of each award, with the amount of compensation expense recognized at the end of a reporting period at least equal the portion of fair value of the respective award at grant date or modification date, as applicable, that has vested through that date. Compensation expense, which is adjusted for actual forfeitures upon occurrence, is included as a component of general and administrative expense on the statements of operations. Recent Accounting Pronouncements In May 2014, the FASB issued a new revenue recognition standard which will supersede nearly all existing revenue recognition guidance. The new standard’s core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. Companies will likely need to use more judgment and make more estimates than under previous revenue recognition guidance, including identifying performance obligations in the contract, estimating the amount of variable consideration, if any, to include in the transaction price and allocating the transaction price to each separate performance obligation. The new standard may be applied retrospectively to each prior period presented or prospectively with the cumulative effect, if any, recognized as of the date of adoption. We adopted the new standard effective January 1, 2019, the effective date for private companies. While we expect that the majority of our revenues will be derived from leasing activities, to the extent there are nonlease components that are within the scope of the new revenue recognition standard, we expect that the pattern of revenue recognition under the new standard will be substantially similar to the pattern of revenue recognition under existing accounting standards. In February 2016, the FASB issued a new leasing standard which requires lessees to clarify leases as either finance or operating leases based on certain criteria and record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. The new standard requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales-type leases, direct financing leases and operating leases. The standard also eliminates current real estate-specific provisions and changes of initial direct costs and lease executory costs for all entities. The new guidance will require lessees and lessors to capitalize, as initial direct costs, only those costs that are incurred due to the execution of a lease, with any other costs incurred, including allocated indirect costs, expensed as incurred. In addition, the new standard requires that lease and nonlease components of a contract be bifurcated, with nonlease components (including reimbursements for real estate taxes, utilities, insurance and other common area maintenance and other executory costs) subject to the new revenue recognition standard effective upon adoption of the new leasing standard. In July 2018, the FASB issued an amendment to the leasing standard that allows lessors to elect, as a practical expedient, not to allocate the total consideration in a contract to lease and non-lease components based on their relative standalone selling prices. Rather, this practical expedient allows lessors to elect to account for the combined component as an operating lease if (i) the timing and pattern of transfer of the lease component and nonlease component(s) are the same; (ii) the lease component would be classified as an operating lease if accounted for separately; and (iii) the lease component is the predominant component of the arrangement. If we elect this practical expedient subsequent to adoption, tenant recoveries and other components that would otherwise quality as non-lease components would be accounted for as lease components and recognized in rental revenues. The amendment also provided an optional transition method to make the initial application date of the new lease standard the date of adoption, with a cumulative-effect adjustment recognized to the opening balance of retained earnings. Consequently, for an entity that elects the optional transition method, the entity’s reporting and disclosures for comparative historical periods presented in the financial statements will continue to be in accordance with current GAAP. In August 2018, the FASB proposed a narrow-scope amendment that would preclude a lessor from having to recognize lessor costs paid by a lessee directly to a third-party when the lessor cannot reasonably estimate such costs. The FASB has not yet finalized the amendment as of the date of this filing. We expect to adopt the new leasing standard effective January 1, 2020, the effective date for private companies. We are still evaluating the effects of adoption, including whether to elect the practical expedients or optional transition method, but do not expect the new standard to have a significant effect on our total revenues. In June 2016, the FASB issued guidance on the measurement of credit losses on financial instruments. The standard will replace the incurred loss impairment methodology pursuant to GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. We expect to adopt the new standard effective December 31, 2020, the effective date for private companies. The guidance is required to be applied using a modified-retrospective approach to all periods presented. We are still evaluating the effects of adopting this standard on our financial statements.. In August 2016, the FASB issued guidance on the classification of certain cash receipts and payments in the statement of cash flows. The amendments add to or clarify guidance on a number of cash flow issues, including debt prepayment or debt extinguishment costs, contingent consideration payments made after a business combination, distributions received from equity-method investees and beneficial interests in securitization transactions. We adopted the new standard effective January 1, 2019, the effective date for private companies. The adoption of the new standard did not have any impact on the financial statements. In November 2016, the FASB issued guidance on the presentation of restricted cash in the statement of cash flows. The amendments in this update require that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. We adopted the new standard effective January 1, 2019, the effective date for private companies. As a result, the Company no longer presents transfers between cash and restricted cash in the consolidated cash flow statements. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions The Company has entered into an advisory agreement with the Adviser. Pursuant to the advisory agreement between the Company and the Adviser, the Adviser is responsible for sourcing, evaluating and monitoring the Company’s investment opportunities and making decisions related to the acquisition, management, financing and disposition of the Company’s assets, in accordance with the Company’s investment objectives, guidelines, policies and limitations, subject to oversight by the Company’s board of directors. Certain affiliates of the Company, including the Adviser, will receive fees and compensation in connection with the offering and ongoing management of the assets of the Company. The Adviser will be paid a management fee equal to 1.00% of NAV per annum, payable monthly. The management fee will be paid, at the Adviser’s election, in cash or Class I shares. The Adviser has agreed to waive its management fee for the first six months following the date on which the initial proceeds from the Offering are released from escrow. The Company may retain certain of the Adviser’s affiliates for necessary services relating to the Company’s investments or its operations, including any administrative services, construction, special servicing, leasing, development, property oversight and other property management services, as well as services related to mortgage servicing, group purchasing, healthcare, consulting/brokerage, capital markets/credit origination, loan servicing, property, title and/or other types of insurance, management consulting and other similar operational matters. Any such arrangements will be at market terms and rates. As of September 30, 2019, the Company had not retained an affiliate of the Adviser for any such services. The Company will pay the Adviser a performance fee equal to 12.5% of the annual Total Return, subject to a 5% annual Hurdle Amount (each term as defined in the advisory agreement) and a high water mark, with a catch-up. Such performance fee will be made annually and accrue monthly. No performance fees were earned by the Adviser during the three or nine months ended September 30, 2019 or for the period from January 10, 2018 through September 30, 2018. The Company will be dependent on the Adviser and its affiliates for certain services that are essential to it, including acquisition and disposition decisions, and certain other responsibilities. In the event that the Adviser and its affiliates are unable to provide such services, the Company would be required to find alternative service providers. On April 11, 2019, the Company entered into the Line of Credit with an affiliate of Oaktree, providing for an unsecured, uncommitted credit facility in a maximum aggregate principal amount of $ 150 million. On June 14, 2019, the Company acquired a the Atlantis Mezzanine Loan by assuming ownership of a special purpose vehicle from an affiliate of Oaktree and contemporaneously borrowed under the Company’s Line of Credit with an affiliate of Oaktree to finance the investment. On August 20, 2019, the Company entered into an amendment (the "Amendment") to the Line of Credit with an affiliate of Oaktree. The Amendment reduces the rate at which borrowings under the Line of Credit bear interest from LIBOR plus 3.25% per annum to LIBOR plus 2.50% per annum. The reduction reflects a review of the existing interest rate in light of current interest rates offered in the market. No other material terms of the Line of Credit were changed as a result of the Amendment. However, the Lender waived interest otherwise due under the Line of Credit such that the interest rate between April 11, 2019 and the date of the Amendment will effectively be LIBOR plus 2.50%. On September 4, 2019, the Company acquired the IMC/AMC Bond Investment by assuming ownership of a special purpose vehicle from an affiliate of Oaktree and contemporaneously borrowed under the Company’s Line of Credit with an affiliate of Oaktree to finance the investment. Repurchase Arrangement for Oaktree Investor On September 11, 2019, the board of directors of the Company, including a majority of the independent directors, adopted an arrangement to repurchase any shares of the Company’s Class I common stock that Oaktree Fund GP I, L.P. (the “Oaktree Investor”), an affiliate of the Company’s sponsor, acquires prior to the breaking of escrow in the Company’s initial public offering. The board of directors approved the repurchase arrangement in recognition of the Oaktree Investor’s intent to subscribe for shares of the Company’s Class I common stock in an amount such that, together with all other subscriptions for the Company’s common stock, the escrow minimum offering amount will be satisfied. If the other subscriptions for the Company’s common stock already meet or exceed the escrow minimum offering amount, the Oaktree Investor does not intend to subscribe for any shares of the Company’s common stock. The Company currently expects to satisfy its escrow minimum offering amount on or about December 6, 2019, although there can be no assurance that the escrow break will occur by that date or at all. Investors that have submitted purchase orders in good order prior to the escrow break will be admitted as stockholders upon any escrow break. Under the repurchase arrangement, after the Company breaks escrow for its initial public offering, subject to certain limitations, on the last calendar day of each month the Company will offer to repurchase shares of its common stock from the Oaktree Investor in an aggregate dollar amount (the “Monthly Repurchase Amount”) equal to (i) the net proceeds from new subscriptions that month less (ii) the aggregate repurchase price (excluding any amount of the aggregate repurchase price paid using cash flow from operations not used to pay distributions) of shares repurchased by the Company that month from investors pursuant to the Company’s existing share repurchase plan. In addition to the Monthly Repurchase Amount for the applicable month, the Company will offer to repurchase any Monthly Repurchase Amounts from prior months that have not yet been repurchased. The price per share for each repurchase from the Oaktree Investor will be the lesser of (a) the $10.00 per share initial cost of the shares and (b) the transaction price in effect for the Class I shares at the time of repurchase. The repurchase arrangement is not subject to any time limit and will continue until the Company has repurchased all of the Oaktree Investor’s shares. Other than the Monthly Repurchase Amount limitation, the share repurchase arrangement for the Oaktree Investor is not subject to any volume limitations, including those in the Company’s existing share repurchase plan. Notwithstanding the foregoing, no repurchase offer will be made to the Oaktree Investor for any month in which (1) the 2% monthly or 5% quarterly repurchase limitations in the Company’s existing share repurchase plan have been decreased or (2) the full amount of all shares requested to be repurchased under the Company’s existing share repurchase plan is not repurchased. Additionally, the Company may elect not to offer to repurchase shares from the Oaktree Investor, or may offer to purchase less than the Monthly Repurchase Amount, if, in its judgment, the Company determines that offering to repurchase the full Monthly Repurchase Amount would place an undue burden on its liquidity, adversely affect its operations or risk having an adverse impact on the Company as a whole. Further, the Company’s board of directors may modify, suspend or terminate this share repurchase arrangement if it deems such action to be in the Company’s best interests and the best interests of the Company’s stockholders. The Oaktree Investor will not request that its shares be repurchased under the Company’s existing share repurchase plan. Under the Company’s charter, the Oaktree Investor may not vote on the removal of any of its affiliates (including the Adviser), and may not vote regarding any transaction between the Company and Oaktree or any of its affiliates. |
Stockholder's Equity
Stockholder's Equity | 9 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
Stockholder's Equity | Stockholders' Equity Repurchase Arrangement for Oaktree Investor On September 11, 2019, the board of directors of the Company adopted an arrangement to repurchase any shares of the Company’s Class I common stock that the Oaktree Investor acquires prior to the breaking of escrow in the Company’s initial public offering. The board of directors approved the repurchase arrangement in recognition of the Oaktree Investor’s intent to subscribe for shares of the Company’s Class I common stock in an amount such that, together with all other subscriptions for the Company’s common stock, the escrow minimum offering amount will be satisfied. Please refer to Note 9, "Related Party Transactions" for a more detailed discussion of the repurchase agreement. Restricted stock awards In March 2018, the Company granted 7,000 shares of restricted stock to its non-employee directors at a fair value of $ 10.00 per share, which vested on March 20, 2019. In March 2019, the Company granted 7,000 shares of restricted stock to its non-employee directors at a fair value of $10.00 per share, which vest on March 20, 2020. For the three and nine months ended September 30, 2019, the Company recognized compensation expense of $ 17,835 and $ 56,568 , respectively, related to the restricted stock awards, which is included in general and administrative expense. For the period from January 10, 2018 through September 30, 2018, the Company's compensation expense related to the restricted stock awards was $32,403. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies From time to time, the Company may be involved in various claims and legal actions arising in the ordinary course of business. As of September 30, 2019 , the Company was not subject to any material litigation nor was the Company aware of any material litigation threatened against it. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events The Company’s management has evaluated subsequent events from September 30, 2019 through the filing date of this Form 10-Q. There have been no subsequent events during such period that would require recognition or disclosure in the interim financial statements as of and for the three months ended September 30, 2019 . |
Investments in Real Estate (Not
Investments in Real Estate (Notes) | 9 Months Ended |
Sep. 30, 2019 | |
Real Estate Properties [Line Items] | |
Real Estate Owned [Text Block] | Investments in Real Estate As of September 30, 2019, investments in real estate, net, consisted of the following: Building and building improvements $ 132,865,904 Land 9,180,070 Tenant improvements 3,811,716 Furniture, fixtures and equipment 1,405,157 Total 147,262,847 Accumulated depreciation (1,392,072 ) Investments in real estate, net $ 145,870,775 On April 11, 2019, the Company partnered with TruAmerica, through a joint venture (the “Anzio Joint Venture”) to acquire a fee simple interest in Anzio Apartments (the "Anzio Apartments"), a multifamily asset located in Lawrenceville, Georgia, for $59.2 million (excluding transaction costs). The Anzio Joint Venture acquired the property through a combination of $44.4 million of property-level debt from the Federal Home Loan Mortgage Corporation, $14.9 million of borrowings under a Line of Credit with an affiliate of Oaktree (the "Line of Credit") which were funded as an equity contribution into the Anzio Joint Venture and $1.7 million funded by TruAmerica. The Company owns a 90% interest in the Anzio Joint Venture and TruAmerica owns a 10% interest in the Anzio Joint Venture. The Company has control of the Anzio Joint Venture and TruAmerica acts as the day-to-day property manager. On August 20, 2019, the Company partnered with Hines Interests Limited Partnership (“Hines”) through a joint venture (the “Liberty Joint Venture”) to acquire a fee simple interest in Two Liberty Center (the “Two Liberty Center”), a class “A” office asset located in Ballston, Virginia, for $91.2 million (excluding transaction costs). The Liberty Joint Venture acquired Two Liberty Center through a combination of $62.0 million of property-level debt from Bank of America Merrill Lynch and equity of $33.5 million funded from the Liberty Joint Venture (consisting of $32.3 million funded by the Company using borrowings under the Line of Credit and $1.1 million funded by Hines). The Company owns 96.5% interest in the Liberty Joint Venture and Hines owns a 3.5% interest in the Liberty Joint Venture. The Company has control of the Liberty Joint Venture and Hines acts as the day-to-day property manager. The following table provides detail of the Company's properties: Investment Location Type Acquisition Date Purchase Price (1) Anzio Apartments Lawrenceville, Georgia Multifamily April 2019 $ 59,785,956 Two Liberty Center Ballston, Virginia Office August 2019 $ 92,203,715 (1) Purchase price is inclusive of closing costs. The following table summarizes the purchase price allocations of Anzio Apartments and Two Liberty Center: Anzio Apartments Two Liberty Center Building and building improvements $ 50,820,175 $ 80,305,740 Land 6,105,370 3,074,700 Tenant improvements — 3,811,716 Furniture, fixtures and equipment 1,405,157 — In-place lease intangibles 1,455,254 5,024,572 Above-market lease intangibles — 58,585 Below-market lease intangibles — (71,598 ) Total $ 59,785,956 $ 92,203,715 |
Investments in Real Estate Purc
Investments in Real Estate Purchase Price Allocation Table (Notes) | 9 Months Ended |
Sep. 30, 2019 | |
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block] | The following table summarizes the purchase price allocations of Anzio Apartments and Two Liberty Center: Anzio Apartments Two Liberty Center Building and building improvements $ 50,820,175 $ 80,305,740 Land 6,105,370 3,074,700 Tenant improvements — 3,811,716 Furniture, fixtures and equipment 1,405,157 — In-place lease intangibles 1,455,254 5,024,572 Above-market lease intangibles — 58,585 Below-market lease intangibles — (71,598 ) Total $ 59,785,956 $ 92,203,715 |
Intangibles (Notes)
Intangibles (Notes) | 9 Months Ended |
Sep. 30, 2019 | |
Finite-Lived Intangible Assets [Line Items] | |
Intangible Assets Disclosure [Text Block] | Intangibles The Company recorded in-place lease and above and below market lease intangibles as a result of the Anzio Apartment and Two Liberty Center acquisitions. The gross carrying amount and accumulated amortization of the Company's intangible assets consisted of the following as of September 30, 2019 : Intangible assets: In-place lease intangibles $ 4,978,397 Lease origination costs 1,844,563 Above-market lease intangibles 58,585 Total intangible assets 6,881,545 Accumulated amortization: In-place lease intangibles (1,404,349 ) Lease origination costs (45,361 ) Above-market lease intangibles (3,478 ) Total accumulated amortization (1,453,188 ) Intangible assets, net $ 5,428,357 Intangible liabilities: Below-market lease intangibles $ (71,598 ) Accumulated amortization 4,552 Intangible liabilities, net $ (67,046 ) The weighted average amortization periods of the acquired in-place lease intangibles, above-market lease intangibles and below-market lease intangibles is 54 months. The following table details the Company's future amortization of intangible assets and liabilities: Amortization For the year ended: 2019 (remaining) $ 740,959 2020 1,395,968 2021 820,018 2022 799,574 2023 651,574 Thereafter 953,218 Total $ 5,361,311 |
Investment in Real Estate-Relat
Investment in Real Estate-Related Loan (Notes) | 9 Months Ended |
Sep. 30, 2019 | |
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Text Block] | Investments in Real Estate-Related Loans Loans that the Company has the intent and ability to hold for the foreseeable future are classified as held for investment. Originated loans are recorded at amortized cost, or outstanding unpaid principal balance less net deferred loan fees. Net deferred loan fees include unamortized origination and other fees charged to the borrower less direct incremental loan origination costs incurred by the Company. Purchased loans are recorded at amortized cost, or unpaid principal balance plus purchase premium or less unamortized discount. Costs to purchase loans are expensed as incurred. Interest income is recognized based upon contractual interest rate and unpaid principal balance of the loans. Net deferred loan fees on originated loans are deferred and amortized as adjustments to interest income over the expected life of the loans using the effective yield method. Premium or discount on purchased loans are amortized as adjustments to interest income over the expected life of the loans using the effective yield method. When a loan is prepaid, prepayment fees and any excess of proceeds over the carrying amount of the loan are recognized as additional interest income. Loans that are past due 90 days or more as to principal or interest, or where reasonable doubt exists as to timely collection, are generally considered nonperforming and placed on nonaccrual. Interest receivable is reversed against interest income when loans are placed on nonaccrual status. Interest collected on a nonaccrual loan is either recognized as income on a cash basis or applied as a reduction to the loan’s carrying value, depending on the ultimate collectability of the loan. Loans may be restored to accrual status when all principal and interest are current and full repayment of the remaining contractual principal and interest are reasonably assured. Loans are considered to be impaired when it is probable that the Company will not be able to collect all amounts due in accordance with contractual terms, including consideration of the underlying collateral value. As of September 30, 2019, each of the Company’s real-estate related loans was performing in accordance with its contractual terms and management has not established an allowance for loan losses. Investments in Real Estate-Related Loans On June 14, 2019 , the Company acquired a $ 25 million principal amount of a second loss mezzanine loan (the “Atlantis Mezzanine Loan”) by assuming ownership of a special purpose vehicle from an affiliate of Oaktree and contemporaneously borrowed under the Company’s Line of Credit to finance the investment. The Atlantis Mezzanine Loan is secured by the equity interests of the entity owning Atlantis Paradise Island Resort, a 2,917 room oceanfront resort located on Paradise Island in the Bahamas. The Atlantis Mezzanine Loan matures in July 2020 with five 12-month extension options for the borrower, provided there has not been an event of default. The Atlantis Mezzanine Loan bears interest at a floating rate of 6.67% over the one-month London Interbank Offered Rate, subject to an interest rate increase in the event the borrower exercises its fourth 12-month extension. On September 4, 2019, the Company acquired a $ 25 million principal amount of bonds (the “IMC/AMC Bond Investment”) collateralized by a term loan (the “Term Loan”) by assuming ownership of a special purpose vehicle from an affiliate of Oaktree and contemporaneously borrowed $25 million under the Company’s Line of Credit to finance the investment. The Term Loan is cross-collateralized by and senior to equity interests of the owners in International Markets Center (“IMC”) and AmericasMart Atlanta (“AMC”). IMC and AMC are two of the leading national furniture showroom companies with a combined 14.4 million square feet of showroom space located in Las Vegas, Nevada, High Point, North Carolina and Atlanta, Georgia. The Term Loan matures in December 2023. The IMC/AMC Bond Investment bears interest at a floating rate of 6.15% over the one-month London Interbank Offered Rate. The following table details the Company's real estate-related loan investments: Collateral Interest Rate (1) Maturity Date Face Amount Amortized Cost Basis Atlantis Paradise Island Resort L + 6.67% July 2020 $ 25,000,000 $ 24,454,538 International Markets Center AmericasMart Atlanta L + 6.15% December 2023 25,000,000 24,643,776 $ 50,000,000 $ 49,098,314 (1) The term "L" refers to the one-month US dollar-denominated London Interbank Offer Rate ("LIBOR"). As of September 30, 2019 and December 31, 2018, one-month LIBOR was equal to 2.02% and 2.50%, respectively. The following table summarizes the Company's real estate-related loan investments as of September 30, 2019: Atlantis Mezzanine Loan $ 25,000,000 IMC/AMC Bond Investment 25,000,000 Unamortized Discount (901,686 ) Investments in real estate-related loans, net $ 49,098,314 |
Mortgage Loan (Notes)
Mortgage Loan (Notes) | 9 Months Ended |
Sep. 30, 2019 | |
Participating Mortgage Loans [Line Items] | |
Mortgage Notes Payable Disclosure [Text Block] | Mortgage Loans In connection with the acquisition of the Anzio Apartments, the Anzio Joint Venture obtained a $44.4 million mortgage loan from the Federal Home Loan Mortgage Corporation ("Freddie Mac"). The mortgage loan is secured by the Anzio Apartments and bears interest at a rate of LIBOR plus a spread of 159 basis points, payable as interest-only for the first 60 months, then principal and interest payable for the remaining term based on a 360 month amortization period. The term of the mortgage loan is 120 months. Amounts prepaid under the mortgage loan are subject to a 1% penalty following a one year lockout period. The mortgage loan is subject to customary terms and conditions. In connection with the acquisition of Two Liberty Center, the Liberty Joint Venture obtained a $62.0 million mortgage loan from Bank of America Merrill Lynch ("BAML"). The mortgage loan is secured by Two Liberty Center and bears interest at a rate of LIBOR plus a spread of 150 basis points, payable as interest-only for the initial term of 60 months. The term of the mortgage loan is 60 months with two one-year extension options. The mortgage loan is subject to customary terms and conditions, and the Liberty Joint Venture was in compliance with all financial covenants it is subject to under the mortgage loan as of September 30, 2019. The following table summarizes the Company's mortgage loans: Principal Balance Outstanding Indebtedness Interest Rate (1) Maturity Date Deferred Financing Costs, net September 30, 2019 December 31, 2018 Anzio Apartments mortgage loan L + 1.59% April 2029 $ 303,869 $ 44,400,000 $ — Two Liberty Center mortgage loan L + 1.50% August 2024 337,972 61,971,000 $ — $ 641,841 $ 106,371,000 (1) The term "L" refers to the one-month US dollar-denominated LIBOR. As of September 30, 2019 and December 31, 2018, one-month LIBOR was equal to 2.02% and 2.50%, respectively. The following table presents the future principal payments due under the Company's mortgage loan as of September 30, 2019: Year Amount 2019 (remaining) $ — 2020 — 2021 — 2022 — 2023 — Thereafter 106,371,000 Total $ 106,371,000 |
Due to Affiliates (Notes)
Due to Affiliates (Notes) | 9 Months Ended |
Sep. 30, 2019 | |
Due to Affiliates [Line Items] | |
Due to Affiliates [Table Text Block] | Due to Affiliates Due to affiliates of $ 99,226,119 as of September 30, 2019 consisted of $ 98,574,224 of principal due under the Company's Line of Credit with Oaktree, $ 188,482 of interest payable related to the Line of Credit and $ 463,413 due to Oaktree for reimbursement of operating expenses. As of December 31, 2018, due to affiliates consisted of $ 198,181 due to Oaktree for reimbursement of operating expenses. Line of Credit On April 11, 2019, the Company entered into the Line of Credit with Oaktree Fund GP I, L.P. (“Lender”), an affiliate of Oaktree, providing for an unsecured, uncommitted credit facility in a maximum aggregate principal amount of $ 150 million. The Line of Credit expires on the earlier of: (i) 10 business days following the date the Company breaks escrow for the Offering and (ii) April 10, 2020, subject to three-month extension options requiring Lender approval. Borrowings under the Line of Credit will bear interest at a rate of LIBOR plus 2.50% per annum, compounded quarterly, which may be paid in kind at the Company’s election. The Company may request drawdowns of amounts under the Line of Credit periodically and in sizes determined by the Company. Requests for drawdowns will be funded at the discretion of Lender based on, among other factors, details of the purpose of the drawdowns and the property features of investments towards which the proceeds will be used. Amounts due under the Line of Credit (inclusive of accrued interest) are freely pre-payable without penalty. The following table is a summary of the Company's Line of Credit: Maximum Principal Outstanding Balance Indebtedness Interest Rate (1) Maturity Date Facility Size September 30, 2019 (2) December 31, 2018 Line of Credit L + 2.50% April 10, 2020 $ 150,000,000 $ 98,574,224 $ — (1) The term "L" refers to the one-month US dollar-denominated LIBOR. As of September 30, 2019 and December 31, 2018, one-month LIBOR was equal to 2.02% and 2.50%, respectively. (2) Principal outstanding balance as of September 30, 2019 is inclusive of $887,759 in paid-in-kind interest. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Consolidation, Variable Interest Entity, Policy [Policy Text Block] | The Company consolidates entities in which it retains a controlling financial interest or entities that meet the definition of a variable interest entity (“VIE”) for which it is deemed to be the primary beneficiary. In performing an analysis of whether it is the primary beneficiary, at initial investment and at each quarterly reporting period, the Company considers whether it individually has the power to direct the activities of the VIE that most significantly affect the entity’s economic performance and also has the obligation to absorb losses or the right to receive benefits of the VIE that could potentially be significant to the VIE. The determination of whether an entity is a VIE, and whether the Company is the primary beneficiary, involves significant judgments, including the determination of which activities most significantly affect the entity’s performance, estimates about the current and future fair values and performance of assets held by the entity and/or general market conditions. If an entity is determined to be a VIE, the Company evaluates whether it is the primary beneficiary. The primary beneficiary analysis is a qualitative analysis based on power and benefits. The Company consolidates a VIE if it has both power and benefits - that is, (i) the power to direct the activities of a VIE that most significantly influence the VIE’s economic performance, and (ii) the obligation to absorb losses of the VIE that could potentially be significant to the VIE, or the right to receive benefits from the VIE that potentially could be significant to the VIE. The Company consolidates all VIEs for which it is the primary beneficiary, including the Company’s joint ventures with TruAmerica Multifamily, LLC (“TruAmerica”) and Hines Interests Limited Partnership ("Hines") to hold the Anzio Apartments and Two Liberty Center properties (see Note 4). As of September 30, 2019, the total assets and liabilities of the Company's consolidated VIE, were $ 155.0 million and $ 108.1 million, respectively. Such amounts are included on the Company's Consolidated Balance Sheets. For each of our consolidated VIEs, certain assets are pledged as collateral for specific obligations of the VIE. There are no creditors or other partners of our consolidated VIEs that have recourse to our general credit. Our maximum exposure to our consolidated VIEs is limited to our variable interests in each VIE. If a legal entity fails to meet any of the three characteristics of a VIE (due to insufficiency of equity, existence of non-substantive voting rights, or lack of a controlling financial interest), the Company then evaluates such entity under the voting model. Under the voting model, the Company consolidates the entity if it determines that it, directly or indirectly, has greater than 50% of the voting rights and that other equity holders do not have substantive participating rights. If the Company has a variable interest in a VIE but is not the primary beneficiary, or if the Company has the ability to exercise significant influence over a voting interest entity but does not have control, it accounts for its investment using the equity method of accounting. |
Basis of Presentation | Basis of Presentation The accompanying unaudited interim financial statements have been prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all information and footnotes required by accounting principles generally accepted in the United States of America (“GAAP”) for complete financial statements. These statements reflect all normal and recurring adjustments which, in the opinion of management, are necessary to present fairly the financial position, results of operations and cash flows of the Company for the interim periods presented. However, the results of operations for the interim period presented are not necessarily indicative of the results that may be expected for the year ending December 31, 2019, or any other future period. The Company consolidates entities in which it retains a controlling financial interest or entities that meet the definition of a variable interest entity (“VIE”) for which it is deemed to be the primary beneficiary. In performing an analysis of whether it is the primary beneficiary, at initial investment and at each quarterly reporting period, the Company considers whether it individually has the power to direct the activities of the VIE that most significantly affect the entity’s economic performance and also has the obligation to absorb losses or the right to receive benefits of the VIE that could potentially be significant to the VIE. The determination of whether an entity is a VIE, and whether the Company is the primary beneficiary, involves significant judgments, including the determination of which activities most significantly affect the entity’s performance, estimates about the current and future fair values and performance of assets held by the entity and/or general market conditions. If an entity is determined to be a VIE, the Company evaluates whether it is the primary beneficiary. The primary beneficiary analysis is a qualitative analysis based on power and benefits. The Company consolidates a VIE if it has both power and benefits - that is, (i) the power to direct the activities of a VIE that most significantly influence the VIE’s economic performance, and (ii) the obligation to absorb losses of the VIE that could potentially be significant to the VIE, or the right to receive benefits from the VIE that potentially could be significant to the VIE. The Company consolidates all VIEs for which it is the primary beneficiary, including the Company’s joint ventures with TruAmerica Multifamily, LLC (“TruAmerica”) and Hines Interests Limited Partnership ("Hines") to hold the Anzio Apartments and Two Liberty Center properties (see Note 4). As of September 30, 2019, the total assets and liabilities of the Company's consolidated VIE, were $ 155.0 million and $ 108.1 million, respectively. Such amounts are included on the Company's Consolidated Balance Sheets. For each of our consolidated VIEs, certain assets are pledged as collateral for specific obligations of the VIE. There are no creditors or other partners of our consolidated VIEs that have recourse to our general credit. Our maximum exposure to our consolidated VIEs is limited to our variable interests in each VIE. If a legal entity fails to meet any of the three characteristics of a VIE (due to insufficiency of equity, existence of non-substantive voting rights, or lack of a controlling financial interest), the Company then evaluates such entity under the voting model. Under the voting model, the Company consolidates the entity if it determines that it, directly or indirectly, has greater than 50% of the voting rights and that other equity holders do not have substantive participating rights. If the Company has a variable interest in a VIE but is not the primary beneficiary, or if the Company has the ability to exercise significant influence over a voting interest entity but does not have control, it accounts for its investment using the equity method of accounting. |
Use of Estimates | Use of Estimates The preparation of the 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 and accrued expenses at the date of the balance sheet. Actual results could differ from those estimates. |
Revenue Recognition, Policy [Policy Text Block] | Revenue Recognition The Company’s sources of revenue and the related revenue recognition policies are as follows: Rental revenue primarily consists of base rent arising from tenant leases at the Company’s properties. Rental revenue is recognized on a straight-line basis over the life of the lease, including any rent steps or abatement provisions. The Company begins to recognize revenue upon the acquisition of the related property or when a tenant takes possession of the leased space. Other rental revenues include amounts due from tenants for costs related to common area maintenance, real estate taxes, and other recoverable costs included in lease agreements. The Company recognizes the reimbursement of such costs incurred as tenant reimbursement income. The Company periodically reviews tenant receivables and unbilled rent receivables to determine whether they are collectible. In making this determination, the Company considers each tenant’s payment history and financial condition. If a receivable is deemed to be uncollectible, the Company will either reserve for the receivable through an allowance, or write-off the receivable. As of September 30, 2019, the Company did not have any allowances for doubtful accounts. |
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. The Company did not hold cash equivalents as of September 30, 2019 or December 31, 2018 . |
Cash and Cash Equivalents, Restricted Cash and Cash Equivalents, Policy [Policy Text Block] | Restricted Cash Restricted cash of $ 932,644 as of September 30, 2019 consisted of tax impounds of $ 289,076 , tenant security deposits of $ 134,040 , cash reserved for interest payments of $ 67,795 and cash reserved for capital expenditures of $ 441,733 . There were no restricted cash balances as of December 31, 2018. |
Non Controlling Redeemable Interests In Consolidated Funds [Text Block] | Non-Controlling Interests Non-controlling interests of $ 2,567,097 as of September 30, 2019 represent interests held by TruAmerica and Hines, our joint venture partners in Anzio Apartments and Two Liberty Center, respectively. There were no non-controlling interests as of December 31, 2018. |
Fair Value Measurement, Policy [Policy Text Block] | 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 marketplace, 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 carrying values of cash and cash equivalents, restricted cash, accounts receivable and other receivables, accounts payable, accrued liabilities and other liabilities approximate fair value because of the short-term nature of these instruments and falls under the Level 2 hierarchy. The estimated fair values of the Company's real estate-related loan, mortgage loan and line of credit approximate their fair values since they bear interest at floating rates and were recently originated and falls under the Level 2 hierarchy. The Company uses significant judgement to estimate fair values of investments in real estate, and other intangible assets. In estimating their values, we consider significant unobservable inputs such as estimated cash flow projections that utilize appropriate discount and capitalization rates and available comparable 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/economic conditions that may affect the property. These inputs are Level 3 inputs. |
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 of 1986, as amended, commencing with its taxable year ending December 31 for the year in which the Offering proceeds are released from escrow. 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. Any deferred tax assets arising from the Company's taxable loss carryforwards during periods prior to making a REIT election have been fully reserved, since it is unlikely such benefits will be realized. 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. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the FASB issued a new revenue recognition standard which will supersede nearly all existing revenue recognition guidance. The new standard’s core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. Companies will likely need to use more judgment and make more estimates than under previous revenue recognition guidance, including identifying performance obligations in the contract, estimating the amount of variable consideration, if any, to include in the transaction price and allocating the transaction price to each separate performance obligation. The new standard may be applied retrospectively to each prior period presented or prospectively with the cumulative effect, if any, recognized as of the date of adoption. We adopted the new standard effective January 1, 2019, the effective date for private companies. While we expect that the majority of our revenues will be derived from leasing activities, to the extent there are nonlease components that are within the scope of the new revenue recognition standard, we expect that the pattern of revenue recognition under the new standard will be substantially similar to the pattern of revenue recognition under existing accounting standards. In February 2016, the FASB issued a new leasing standard which requires lessees to clarify leases as either finance or operating leases based on certain criteria and record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. The new standard requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales-type leases, direct financing leases and operating leases. The standard also eliminates current real estate-specific provisions and changes of initial direct costs and lease executory costs for all entities. The new guidance will require lessees and lessors to capitalize, as initial direct costs, only those costs that are incurred due to the execution of a lease, with any other costs incurred, including allocated indirect costs, expensed as incurred. In addition, the new standard requires that lease and nonlease components of a contract be bifurcated, with nonlease components (including reimbursements for real estate taxes, utilities, insurance and other common area maintenance and other executory costs) subject to the new revenue recognition standard effective upon adoption of the new leasing standard. In July 2018, the FASB issued an amendment to the leasing standard that allows lessors to elect, as a practical expedient, not to allocate the total consideration in a contract to lease and non-lease components based on their relative standalone selling prices. Rather, this practical expedient allows lessors to elect to account for the combined component as an operating lease if (i) the timing and pattern of transfer of the lease component and nonlease component(s) are the same; (ii) the lease component would be classified as an operating lease if accounted for separately; and (iii) the lease component is the predominant component of the arrangement. If we elect this practical expedient subsequent to adoption, tenant recoveries and other components that would otherwise quality as non-lease components would be accounted for as lease components and recognized in rental revenues. The amendment also provided an optional transition method to make the initial application date of the new lease standard the date of adoption, with a cumulative-effect adjustment recognized to the opening balance of retained earnings. Consequently, for an entity that elects the optional transition method, the entity’s reporting and disclosures for comparative historical periods presented in the financial statements will continue to be in accordance with current GAAP. In August 2018, the FASB proposed a narrow-scope amendment that would preclude a lessor from having to recognize lessor costs paid by a lessee directly to a third-party when the lessor cannot reasonably estimate such costs. The FASB has not yet finalized the amendment as of the date of this filing. We expect to adopt the new leasing standard effective January 1, 2020, the effective date for private companies. We are still evaluating the effects of adoption, including whether to elect the practical expedients or optional transition method, but do not expect the new standard to have a significant effect on our total revenues. In June 2016, the FASB issued guidance on the measurement of credit losses on financial instruments. The standard will replace the incurred loss impairment methodology pursuant to GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. We expect to adopt the new standard effective December 31, 2020, the effective date for private companies. The guidance is required to be applied using a modified-retrospective approach to all periods presented. We are still evaluating the effects of adopting this standard on our financial statements.. In August 2016, the FASB issued guidance on the classification of certain cash receipts and payments in the statement of cash flows. The amendments add to or clarify guidance on a number of cash flow issues, including debt prepayment or debt extinguishment costs, contingent consideration payments made after a business combination, distributions received from equity-method investees and beneficial interests in securitization transactions. We adopted the new standard effective January 1, 2019, the effective date for private companies. The adoption of the new standard did not have any impact on the financial statements. In November 2016, the FASB issued guidance on the presentation of restricted cash in the statement of cash flows. The amendments in this update require that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. We adopted the new standard effective January 1, 2019, the effective date for private companies. As a result, the Company no longer presents transfers between cash and restricted cash in the consolidated cash flow statements. |
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Text Block] | Investments in Real Estate-Related Loans Loans that the Company has the intent and ability to hold for the foreseeable future are classified as held for investment. Originated loans are recorded at amortized cost, or outstanding unpaid principal balance less net deferred loan fees. Net deferred loan fees include unamortized origination and other fees charged to the borrower less direct incremental loan origination costs incurred by the Company. Purchased loans are recorded at amortized cost, or unpaid principal balance plus purchase premium or less unamortized discount. Costs to purchase loans are expensed as incurred. Interest income is recognized based upon contractual interest rate and unpaid principal balance of the loans. Net deferred loan fees on originated loans are deferred and amortized as adjustments to interest income over the expected life of the loans using the effective yield method. Premium or discount on purchased loans are amortized as adjustments to interest income over the expected life of the loans using the effective yield method. When a loan is prepaid, prepayment fees and any excess of proceeds over the carrying amount of the loan are recognized as additional interest income. Loans that are past due 90 days or more as to principal or interest, or where reasonable doubt exists as to timely collection, are generally considered nonperforming and placed on nonaccrual. Interest receivable is reversed against interest income when loans are placed on nonaccrual status. Interest collected on a nonaccrual loan is either recognized as income on a cash basis or applied as a reduction to the loan’s carrying value, depending on the ultimate collectability of the loan. Loans may be restored to accrual status when all principal and interest are current and full repayment of the remaining contractual principal and interest are reasonably assured. Loans are considered to be impaired when it is probable that the Company will not be able to collect all amounts due in accordance with contractual terms, including consideration of the underlying collateral value. As of September 30, 2019, each of the Company’s real-estate related loans was performing in accordance with its contractual terms and management has not established an allowance for loan losses. Investments in Real Estate-Related Loans On June 14, 2019 , the Company acquired a $ 25 million principal amount of a second loss mezzanine loan (the “Atlantis Mezzanine Loan”) by assuming ownership of a special purpose vehicle from an affiliate of Oaktree and contemporaneously borrowed under the Company’s Line of Credit to finance the investment. The Atlantis Mezzanine Loan is secured by the equity interests of the entity owning Atlantis Paradise Island Resort, a 2,917 room oceanfront resort located on Paradise Island in the Bahamas. The Atlantis Mezzanine Loan matures in July 2020 with five 12-month extension options for the borrower, provided there has not been an event of default. The Atlantis Mezzanine Loan bears interest at a floating rate of 6.67% over the one-month London Interbank Offered Rate, subject to an interest rate increase in the event the borrower exercises its fourth 12-month extension. On September 4, 2019, the Company acquired a $ 25 million principal amount of bonds (the “IMC/AMC Bond Investment”) collateralized by a term loan (the “Term Loan”) by assuming ownership of a special purpose vehicle from an affiliate of Oaktree and contemporaneously borrowed $25 million under the Company’s Line of Credit to finance the investment. The Term Loan is cross-collateralized by and senior to equity interests of the owners in International Markets Center (“IMC”) and AmericasMart Atlanta (“AMC”). IMC and AMC are two of the leading national furniture showroom companies with a combined 14.4 million square feet of showroom space located in Las Vegas, Nevada, High Point, North Carolina and Atlanta, Georgia. The Term Loan matures in December 2023. The IMC/AMC Bond Investment bears interest at a floating rate of 6.15% over the one-month London Interbank Offered Rate. The following table details the Company's real estate-related loan investments: Collateral Interest Rate (1) Maturity Date Face Amount Amortized Cost Basis Atlantis Paradise Island Resort L + 6.67% July 2020 $ 25,000,000 $ 24,454,538 International Markets Center AmericasMart Atlanta L + 6.15% December 2023 25,000,000 24,643,776 $ 50,000,000 $ 49,098,314 (1) The term "L" refers to the one-month US dollar-denominated London Interbank Offer Rate ("LIBOR"). As of September 30, 2019 and December 31, 2018, one-month LIBOR was equal to 2.02% and 2.50%, respectively. The following table summarizes the Company's real estate-related loan investments as of September 30, 2019: Atlantis Mezzanine Loan $ 25,000,000 IMC/AMC Bond Investment 25,000,000 Unamortized Discount (901,686 ) Investments in real estate-related loans, net $ 49,098,314 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies Organization and Offering Expense (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Organization and offering expenses [Line Items] | |
Organization and offering [Policy Text Block] | Organization and Offering Expenses The Adviser 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 escrow for the Offering is released. The Company will reimburse the Adviser for all such advanced expenses ratably over a 60 month period following the first anniversary of the date escrow for the Offering is released. As of September 30, 2019 and December 31, 2018 , the Adviser and its affiliates had incurred organization and offering expenses on the Company’s behalf of approximately $ 4.7 million and $ 4.3 million, respectively. These organization and offering expenses are not recorded in the accompanying financial statements because such costs are not the Company’s liability until the date on which the escrow is released. When recorded by the Company, organizational expenses will be expensed as incurred, and offering expenses will be reflected as a reduction of additional paid-in capital as such amounts will be reimbursed to the Adviser or its affiliates from the gross proceeds of the Offering. Any amount due to the Adviser but not paid will be recognized as a liability on the balance sheet. |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies Share-Based Compensation (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Share-based Compensation, Forfeitures [Policy Text Block] | Share-Based Compensation Equity-classified stock awards granted to employees and non-employees that have a service condition are measured at fair value at date of grant and re-measured at fair value only upon a modification of the award. The Company recognizes compensation expense on a straight-line basis over the requisite service period of each award, with the amount of compensation expense recognized at the end of a reporting period at least equal the portion of fair value of the respective award at grant date or modification date, as applicable, that has vested through that date. Compensation expense, which is adjusted for actual forfeitures upon occurrence, is included as a component of general and administrative expense on the statements of operations. |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies Investments in Real Estate (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items] | |
Real Estate, Policy [Policy Text Block] | Investments in Real Estate The Company evaluates each real estate acquisition to determine whether the integrated set of acquired assets and activities meets the definition of a business. Generally, acquisitions of real estate or in-substance real estate are not expected to meet the definition of a business because substantially all of the fair value is concentrated in a single identifiable asset or group of similar identifiable assets (i.e. land, buildings and related intangible assets) or because the acquisition does not include a substantive process in the form of an acquired workforce or an acquired contract that cannot be replaced without significant cost, effort or delay. When evaluating acquired service or management contracts, the Company considers the nature of the services performed, the terms of the contract relative to similar arm’s length contracts, and the availability of comparable service providers in evaluating whether the acquired contract constitutes a substantive process. The acquisitions of the Anzio Apartments and Two Liberty Center properties were accounted for as asset acquisitions because substantially all of the fair value was concentrated in the land, buildings and related intangible assets. For acquisitions of real estate and in-substance real estate that are accounted for as business combinations, the Company recognizes the assets acquired (including the intangible value of acquired above- or below-market leases, acquired in-place leases, tenant relationships and other intangible assets or liabilities), liabilities assumed, noncontrolling interests, and previously existing ownership interests, if any, at fair value as of the acquisition date. Any excess (deficit) of the consideration transferred relative to the fair value of the net assets acquired is recognized as goodwill (bargain purchase gain). In business combinations, the preliminary purchase price allocation may be subject to change based upon additional information about facts and circumstances that existed as of the acquisition date, with such measurement period extending no later than 12 months from the acquisition date. Acquisition costs related to business combinations are expensed as incurred. Acquisitions of real estate and in-substance real estate that do not meet the definition of a business are accounted for as asset acquisitions. The accounting model for asset acquisitions is similar to the accounting model for business combinations except that the consideration transferred (including acquisition costs) is allocated to the acquired assets and assumed liabilities on a relative fair value basis. As a result, asset acquisitions do not result in the recognition of goodwill or a bargain purchase gain. The results of operations of acquired properties are included in the Company’s results of operations from the respective dates of acquisition. Estimates of future cash flows used to estimate the fair values of identifiable assets acquired and liabilities assumed are based upon a number of factors including the property’s historical operating results, known and anticipated trends, and market and economic conditions. Values of buildings and improvements are determined on an as-if-vacant basis. The estimated fair value of acquired in-place leases include the costs the Company would have incurred to lease the properties to their occupancy levels at the date of acquisition. Such estimates include the fair value of leasing commissions, legal costs and other direct costs that would be incurred to lease the properties to such occupancy levels. The Company evaluates avoided costs over the time period over which occupancy levels at the date of acquisition would be achieved had the property been acquired vacant. Such evaluation includes an estimate of the net market-based rental revenues and net operating costs (primarily consisting of real estate taxes, insurance and utilities) that would be incurred during the lease-up period. Acquired in-place leases are amortized over the remaining lease terms as a component of depreciation and amortization expense. For acquired in-place leases, above- and below-market lease values are recorded based on the present value (using an interest rate that reflects the risks associated with the lease acquired) of the difference between the contractual amounts to be paid pursuant to the in-place leases and management’s estimate of fair market value lease rates for the corresponding in-place leases. The values of acquired above- and below-market leases are amortized over the terms of the related leases and recognized as either increases (for below-market leases) or decreases (for above-market leases) to rental revenue. Should a tenant terminate its lease, the unamortized portion of the in-place lease value is charged to amortization expense and the unamortized portion of the above- or below-market lease value is charged to rental revenue. Expenditures that improve or extend the life of an acquired property are capitalized and depreciated over their estimated useful life. Expenditures for ordinary maintenance and repairs are expensed as incurred. 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 30-40 years Building and improvements 5-10 years Furniture, fixtures and equipment 1-7 years Tenant improvements Shorter of estimated useful life or lease term In-place lease intangibles Over lease term Above and below market leases Over lease term Lease origination costs Over lease term The Company reviews its real estate portfolio on a periodic basis to ascertain if there are any indicators of impairment in the carrying values of any of its real estate assets, including deferred costs and intangibles, in order to determine if there is any need for an impairment charge. In reviewing the portfolio, the Company examines the type of asset, the economic situation in the area in which the asset is located, the economic situation in the industry in which the tenant is involved and the timeliness of the payments made by the tenant under its lease, as well as any current correspondence that may have been had with the tenant, including property inspection reports. For each real estate asset for which indicators of impairment are identified, the Company performs a recoverability analysis that compares future undiscounted cash flows expected to result from the use and eventual disposition of the asset to its carrying value. If the undiscounted cash flow analysis yields an amount which is less than the assets’ carrying amount, an impairment loss will be recorded equal to the amount by which the carrying value of the asset exceeds its estimated fair value. The estimated fair value is determined using a discounted cash flow model of the expected future cash flows through the useful life of the property. Real estate assets that are expected to be disposed of are valued at the lower of carrying amount or fair value less costs to sell on an individual asset basis. As of September 30, 2019, the Company had not identified any indicators of impairment with respect to its real estate portfolio. |
Stockholder's Equity Restricted
Stockholder's Equity Restricted stock awards (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Class of Stock [Line Items] | |
Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity [Table Text Block] | Restricted stock awards In March 2018, the Company granted 7,000 shares of restricted stock to its non-employee directors at a fair value of $ 10.00 per share, which vested on March 20, 2019. In March 2019, the Company granted 7,000 shares of restricted stock to its non-employee directors at a fair value of $10.00 per share, which vest on March 20, 2020. For the three and nine months ended September 30, 2019, the Company recognized compensation expense of $ 17,835 and $ 56,568 , respectively, related to the restricted stock awards, which is included in general and administrative expense. For the period from January 10, 2018 through September 30, 2018, the Company's compensation expense related to the restricted stock awards was $32,403. |
Investment in Real Estate-Rel_2
Investment in Real Estate-Related Loan Investment in Real Estate Loan (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Text Block] | Investments in Real Estate-Related Loans Loans that the Company has the intent and ability to hold for the foreseeable future are classified as held for investment. Originated loans are recorded at amortized cost, or outstanding unpaid principal balance less net deferred loan fees. Net deferred loan fees include unamortized origination and other fees charged to the borrower less direct incremental loan origination costs incurred by the Company. Purchased loans are recorded at amortized cost, or unpaid principal balance plus purchase premium or less unamortized discount. Costs to purchase loans are expensed as incurred. Interest income is recognized based upon contractual interest rate and unpaid principal balance of the loans. Net deferred loan fees on originated loans are deferred and amortized as adjustments to interest income over the expected life of the loans using the effective yield method. Premium or discount on purchased loans are amortized as adjustments to interest income over the expected life of the loans using the effective yield method. When a loan is prepaid, prepayment fees and any excess of proceeds over the carrying amount of the loan are recognized as additional interest income. Loans that are past due 90 days or more as to principal or interest, or where reasonable doubt exists as to timely collection, are generally considered nonperforming and placed on nonaccrual. Interest receivable is reversed against interest income when loans are placed on nonaccrual status. Interest collected on a nonaccrual loan is either recognized as income on a cash basis or applied as a reduction to the loan’s carrying value, depending on the ultimate collectability of the loan. Loans may be restored to accrual status when all principal and interest are current and full repayment of the remaining contractual principal and interest are reasonably assured. Loans are considered to be impaired when it is probable that the Company will not be able to collect all amounts due in accordance with contractual terms, including consideration of the underlying collateral value. As of September 30, 2019, each of the Company’s real-estate related loans was performing in accordance with its contractual terms and management has not established an allowance for loan losses. Investments in Real Estate-Related Loans On June 14, 2019 , the Company acquired a $ 25 million principal amount of a second loss mezzanine loan (the “Atlantis Mezzanine Loan”) by assuming ownership of a special purpose vehicle from an affiliate of Oaktree and contemporaneously borrowed under the Company’s Line of Credit to finance the investment. The Atlantis Mezzanine Loan is secured by the equity interests of the entity owning Atlantis Paradise Island Resort, a 2,917 room oceanfront resort located on Paradise Island in the Bahamas. The Atlantis Mezzanine Loan matures in July 2020 with five 12-month extension options for the borrower, provided there has not been an event of default. The Atlantis Mezzanine Loan bears interest at a floating rate of 6.67% over the one-month London Interbank Offered Rate, subject to an interest rate increase in the event the borrower exercises its fourth 12-month extension. On September 4, 2019, the Company acquired a $ 25 million principal amount of bonds (the “IMC/AMC Bond Investment”) collateralized by a term loan (the “Term Loan”) by assuming ownership of a special purpose vehicle from an affiliate of Oaktree and contemporaneously borrowed $25 million under the Company’s Line of Credit to finance the investment. The Term Loan is cross-collateralized by and senior to equity interests of the owners in International Markets Center (“IMC”) and AmericasMart Atlanta (“AMC”). IMC and AMC are two of the leading national furniture showroom companies with a combined 14.4 million square feet of showroom space located in Las Vegas, Nevada, High Point, North Carolina and Atlanta, Georgia. The Term Loan matures in December 2023. The IMC/AMC Bond Investment bears interest at a floating rate of 6.15% over the one-month London Interbank Offered Rate. The following table details the Company's real estate-related loan investments: Collateral Interest Rate (1) Maturity Date Face Amount Amortized Cost Basis Atlantis Paradise Island Resort L + 6.67% July 2020 $ 25,000,000 $ 24,454,538 International Markets Center AmericasMart Atlanta L + 6.15% December 2023 25,000,000 24,643,776 $ 50,000,000 $ 49,098,314 (1) The term "L" refers to the one-month US dollar-denominated London Interbank Offer Rate ("LIBOR"). As of September 30, 2019 and December 31, 2018, one-month LIBOR was equal to 2.02% and 2.50%, respectively. The following table summarizes the Company's real estate-related loan investments as of September 30, 2019: Atlantis Mezzanine Loan $ 25,000,000 IMC/AMC Bond Investment 25,000,000 Unamortized Discount (901,686 ) Investments in real estate-related loans, net $ 49,098,314 |
Earnings per share (Policies)
Earnings per share (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Line Items] | |
Earnings Per Share, Policy [Policy Text Block] | Earnings Per Share Nonvested share-based payment awards that contain non-forfeitable rights to dividends are participating securities and, therefore, are included in the computation of basic EPS pursuant to the two-class method. The two-class method determines EPS for each class of common stock and participating securities according to dividends declared (or accumulated) and their respective participation rights in undistributed earnings. Basic EPS is calculated by dividing the net income (loss) attributable to common stockholders by the weighted average number of shares of common stock outstanding for the period. Diluted EPS is calculated by dividing the net income (loss) attributable to common stockholders by the weighted average number of shares of common stock outstanding determined for the basic EPS computation plus the effect of any dilutive securities. We include unvested shares of restricted stock in the computation of diluted EPS by using the more dilutive of the two-class method or treasury stock method. Any anti-dilutive securities are excluded from the diluted EPS calculation. For the three months ended September 30, 2019 and 2018, the nine months ended September 30, 2019 and the period from January 10, 2018 through September 30, 2018, there were no dilutive common stock equivalents as the Company incurred net losses for each period. |
segment reporting (Policies)
segment reporting (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Segment Reporting Information [Line Items] | |
Segment Reporting, Policy [Policy Text Block] | Segment Reporting The Company currently operates as a single reportable segment based upon its method of internal reporting and its allocation of capital and resources. |
Capitalization (Tables)
Capitalization (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Capitalization, Long-term Debt and Equity [Abstract] | |
Summary of Classes of Common Stock Authorized | On April 11, 2018, the Company amended and restated its charter to authorize the following classes of common stock: Classification No. of Authorized Shares Par Value Per Share Preferred stock 50,000,000 $ 0.01 Class T common stock 250,000,000 $ 0.01 Class S common stock 250,000,000 $ 0.01 Class D common stock 250,000,000 $ 0.01 Class I common stock 250,000,000 $ 0.01 1,050,000,000 |
Investments in Real Estate (Tab
Investments in Real Estate (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items] | |
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation Disclosure [Text Block] | As of September 30, 2019, investments in real estate, net, consisted of the following: Building and building improvements $ 132,865,904 Land 9,180,070 Tenant improvements 3,811,716 Furniture, fixtures and equipment 1,405,157 Total 147,262,847 Accumulated depreciation (1,392,072 ) Investments in real estate, net $ 145,870,775 |
Investment in Real Estate-Rel_3
Investment in Real Estate-Related Loan (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Text Block] | Investments in Real Estate-Related Loans Loans that the Company has the intent and ability to hold for the foreseeable future are classified as held for investment. Originated loans are recorded at amortized cost, or outstanding unpaid principal balance less net deferred loan fees. Net deferred loan fees include unamortized origination and other fees charged to the borrower less direct incremental loan origination costs incurred by the Company. Purchased loans are recorded at amortized cost, or unpaid principal balance plus purchase premium or less unamortized discount. Costs to purchase loans are expensed as incurred. Interest income is recognized based upon contractual interest rate and unpaid principal balance of the loans. Net deferred loan fees on originated loans are deferred and amortized as adjustments to interest income over the expected life of the loans using the effective yield method. Premium or discount on purchased loans are amortized as adjustments to interest income over the expected life of the loans using the effective yield method. When a loan is prepaid, prepayment fees and any excess of proceeds over the carrying amount of the loan are recognized as additional interest income. Loans that are past due 90 days or more as to principal or interest, or where reasonable doubt exists as to timely collection, are generally considered nonperforming and placed on nonaccrual. Interest receivable is reversed against interest income when loans are placed on nonaccrual status. Interest collected on a nonaccrual loan is either recognized as income on a cash basis or applied as a reduction to the loan’s carrying value, depending on the ultimate collectability of the loan. Loans may be restored to accrual status when all principal and interest are current and full repayment of the remaining contractual principal and interest are reasonably assured. Loans are considered to be impaired when it is probable that the Company will not be able to collect all amounts due in accordance with contractual terms, including consideration of the underlying collateral value. As of September 30, 2019, each of the Company’s real-estate related loans was performing in accordance with its contractual terms and management has not established an allowance for loan losses. Investments in Real Estate-Related Loans On June 14, 2019 , the Company acquired a $ 25 million principal amount of a second loss mezzanine loan (the “Atlantis Mezzanine Loan”) by assuming ownership of a special purpose vehicle from an affiliate of Oaktree and contemporaneously borrowed under the Company’s Line of Credit to finance the investment. The Atlantis Mezzanine Loan is secured by the equity interests of the entity owning Atlantis Paradise Island Resort, a 2,917 room oceanfront resort located on Paradise Island in the Bahamas. The Atlantis Mezzanine Loan matures in July 2020 with five 12-month extension options for the borrower, provided there has not been an event of default. The Atlantis Mezzanine Loan bears interest at a floating rate of 6.67% over the one-month London Interbank Offered Rate, subject to an interest rate increase in the event the borrower exercises its fourth 12-month extension. On September 4, 2019, the Company acquired a $ 25 million principal amount of bonds (the “IMC/AMC Bond Investment”) collateralized by a term loan (the “Term Loan”) by assuming ownership of a special purpose vehicle from an affiliate of Oaktree and contemporaneously borrowed $25 million under the Company’s Line of Credit to finance the investment. The Term Loan is cross-collateralized by and senior to equity interests of the owners in International Markets Center (“IMC”) and AmericasMart Atlanta (“AMC”). IMC and AMC are two of the leading national furniture showroom companies with a combined 14.4 million square feet of showroom space located in Las Vegas, Nevada, High Point, North Carolina and Atlanta, Georgia. The Term Loan matures in December 2023. The IMC/AMC Bond Investment bears interest at a floating rate of 6.15% over the one-month London Interbank Offered Rate. The following table details the Company's real estate-related loan investments: Collateral Interest Rate (1) Maturity Date Face Amount Amortized Cost Basis Atlantis Paradise Island Resort L + 6.67% July 2020 $ 25,000,000 $ 24,454,538 International Markets Center AmericasMart Atlanta L + 6.15% December 2023 25,000,000 24,643,776 $ 50,000,000 $ 49,098,314 (1) The term "L" refers to the one-month US dollar-denominated London Interbank Offer Rate ("LIBOR"). As of September 30, 2019 and December 31, 2018, one-month LIBOR was equal to 2.02% and 2.50%, respectively. The following table summarizes the Company's real estate-related loan investments as of September 30, 2019: Atlantis Mezzanine Loan $ 25,000,000 IMC/AMC Bond Investment 25,000,000 Unamortized Discount (901,686 ) Investments in real estate-related loans, net $ 49,098,314 |
Organization and Business Pur_2
Organization and Business Purpose - Additional Information (Detail) | Jan. 09, 2018USD ($) |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Capitalized investment by affiliate | $ 200,000 |
Capitalization - Additional Inf
Capitalization - Additional Information (Detail) - USD ($) | Apr. 11, 2018 | Jun. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Jan. 10, 2018 |
Schedule of Capitalization, Equity [Line Items] | |||||
Common stock, shares authorized (in shares) | 1,050,000,000 | 1,000,000,000 | 1,000,000,000 | 1,000,000,000 | |
Purchase price of shares (in dollars per share) | $ 10 | ||||
Proceeds and holding of investors' funds in interest bearing escrow account until amount of purchase order received | $ 150,000,000 | ||||
Purchase orders or investor funds from Offering | $ 0 | ||||
Primary Offering [Member] | |||||
Schedule of Capitalization, Equity [Line Items] | |||||
Purchase price of shares (in dollars per share) | $ 10 | ||||
Primary Offering [Member] | Maximum [Member] | |||||
Schedule of Capitalization, Equity [Line Items] | |||||
Offering of common stock | $ 1,600,000,000 | ||||
Distribution Reinvestment Plan [Member] | Maximum [Member] | |||||
Schedule of Capitalization, Equity [Line Items] | |||||
Offering of common stock | $ 400,000,000 |
Capitalization - Summary of Cla
Capitalization - Summary of Classes of Common Stock Authorized (Detail) - $ / shares | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Apr. 11, 2018 | Jan. 10, 2018 |
Schedule of Capitalization, Equity [Line Items] | |||||||
Preferred stock, shares authorized (in shares) | 50,000,000 | 50,000,000 | |||||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | |||||
Common stock, shares authorized (in shares) | 1,000,000,000 | 1,000,000,000 | 1,050,000,000 | 1,000,000,000 | |||
Common stock, par value (in dollars per share) | $ 270 | $ 270 | $ 270 | $ 200 | $ 0.01 | $ 0.01 | |
Preferred Stock [Member] | |||||||
Schedule of Capitalization, Equity [Line Items] | |||||||
Preferred stock, shares authorized (in shares) | 50,000,000 | ||||||
Preferred stock, par value (in dollars per share) | $ 0.01 | ||||||
Common Class T- [Member] | |||||||
Schedule of Capitalization, Equity [Line Items] | |||||||
Common stock, shares authorized (in shares) | 250,000,000 | ||||||
Common stock, par value (in dollars per share) | $ 0.01 | ||||||
Common Class S- [Member] | |||||||
Schedule of Capitalization, Equity [Line Items] | |||||||
Common stock, shares authorized (in shares) | 250,000,000 | ||||||
Common stock, par value (in dollars per share) | $ 0.01 | ||||||
Common Class D [Member] | |||||||
Schedule of Capitalization, Equity [Line Items] | |||||||
Common stock, shares authorized (in shares) | 250,000,000 | ||||||
Common stock, par value (in dollars per share) | $ 0.01 | ||||||
Common Class I- [Member] | |||||||
Schedule of Capitalization, Equity [Line Items] | |||||||
Common stock, shares authorized (in shares) | 250,000,000 | ||||||
Common stock, par value (in dollars per share) | $ 0.01 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Additional Information (Detail) - USD ($) | 9 Months Ended | |
Sep. 30, 2019 | Dec. 31, 2018 | |
Organization and offering expenses [Line Items] | ||
Percentage of taxable income not subject to federal corporate income tax to the extent it distributes if qualifies for taxation as a REIT | 90.00% | |
Organization and offering expenses, term of reimbursement to Adviser | 60 months | |
Organization and offering expenses incurred by Adviser and its affiliates on company's behalf | $ 4.7 | $ 4.3 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies VIE (Details) | Sep. 30, 2019USD ($) |
Variable Interest Entity [Line Items] | |
Variable Interest Entity, Consolidated, Carrying Amount, Assets | $ 155 |
Variable Interest Entity, Consolidated, Carrying Amount, Liabilities | $ 108.1 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies Restricted cash (Details) - USD ($) | Sep. 30, 2019 | Jun. 30, 2019 | Dec. 31, 2018 | Jun. 30, 2018 |
Restricted Cash and Cash Equivalents Items [Line Items] | ||||
Restricted Cash, Current | $ 932,644 | $ 932,644 | $ 0 | $ 0 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Detail) - USD ($) | 9 Months Ended | |
Sep. 30, 2019 | Dec. 31, 2018 | |
Related Party Transactions [Abstract] | ||
Percentage of management fee to NAV payable to adviser per annum, payable monthly | 1.00% | |
Percentage of performance participation interest to annual total return held by adviser | 12.50% | |
Annual hurdle amount, percentage | 5.00% | |
Due to Affiliate | $ 99,226,119 | $ 198,181 |
Stockholder's Equity - Addition
Stockholder's Equity - Additional Information (Detail) | 9 Months Ended |
Sep. 30, 2019shares | |
Class of Stock [Line Items] | |
Restricted Stock, Shares Issued Net of Shares for Tax Withholdings | 7,000 |
Investments in Real Estate Inve
Investments in Real Estate Investments in Real Estate (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Real Estate [Line Items] | ||
Proceeds from Lines of Credit | $ 105,399,717 | $ 0 |
Investment in Real Estate-Rel_4
Investment in Real Estate-Related Loan (Details) | 9 Months Ended |
Sep. 30, 2019USD ($) | |
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate, New Mortgage Loan | $ 25 |
Document Period End Date | Sep. 30, 2019 |
Due to Affiliates (Details)
Due to Affiliates (Details) - USD ($) | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Jun. 30, 2019 | Dec. 31, 2018 | |
Due to Affiliates [Line Items] | ||||
Due to Affiliate | $ 99,226,119 | $ 198,181 | ||
Line of Credit, Current | 150 | |||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | (2,718,738) | $ (1,294,122) | ||
Proceeds from Lines of Credit | 105,399,717 | $ 0 | ||
Interest Payable | 188,482 | |||
Operating Expenses | $ 463,413 | |||
Debt Instrument, Interest Rate Terms | 0.025 |
Uncategorized Items - oak-20190
Label | Element | Value |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | us-gaap_CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalents | $ 235,164 |