Content analysis
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H.S. senior Avg
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New words:
Alongside, amidst, architecture, artificial, Beaver, Brown, Bulletin, calibration, CECL, CEO, certainty, CFO, chairperson, CISO, compromise, condo, contemporary, deadline, dedicated, destroyed, East, Eden, elevate, elevated, entrust, ERC, expedient, factor, instruction, Israel, leadership, leaseback, macro, magnitude, maker, Marshall, MC, Mexico, Middle, notably, notification, ourself, PDC, permeated, phishing, Prairie, precipitation, Pref, prevalence, Privacy, qualitative, quantitative, quotation, rebound, relieve, repurpose, retrospective, revert, sea, shortage, signaled, singular, softening, stemming, submission, tightening, Timberline, trend, Twelfth, unchanged, unfolded, Unitholder, unspent
Removed:
ARRC, Bandera, Blumberg, compelling, defensive, denominator, dhanda, discontinuance, discontinuation, discontinued, dramatically, DRP, Evan, FCA, gaming, hospitality, index, Interbank, Lastly, LIBOR, London, minimal, numerator, outbreak, perspective, phased, phasing, positioned, proved, rajat, reform, revolving, shift, shopping, steering, stop, unwinding, varied, York, Zucker
Financial report summary
?Risks
- There is no public trading market for the shares of our common stock and we do not anticipate that there will be a public trading market for our shares; therefore, our stockholders’ ability to dispose of their shares will likely be limited to redemption by us. If the stockholder does sell their shares to us, the stockholder may receive less than the price they paid.
- Our ability to redeem stockholder shares may be limited, and our board of directors may modify or suspend our share redemption program at any time.
- Our capacity to redeem shares may be further limited if we experience a concentration of investors.
- Purchases and redemptions of our common shares will not be made based on the current NAV per share of our common stock.
- Economic events that may cause our stockholders to request that we redeem their shares may materially adversely affect our cash flow and our results of operations and financial condition.
- A portion of the proceeds raised in our public offerings is expected to be used to satisfy redemption requests, and such portion of the proceeds may be substantial.
- We have experienced periods in the past in which redemption demand exceeded redemption capacity, and we could experience such situations again in the future.
- Historical returns may be presented over limited timeframes and are inherently limited in their applicability to the future.
- Stockholders will not have the opportunity to evaluate future investments we will make with the proceeds raised in our public offerings prior to purchasing shares of our common stock.
- We may raise significantly less than the maximum offering amount in our public offerings.
- Even if we are able to raise substantial funds in our public offerings, investors in our common stock are subject to the risk that our offering, business and operating plans may change.
- Valuations and appraisals of our properties, real estate-related assets and real estate-related liabilities are estimates of value and may not necessarily correspond to realizable value.
- In order to disclose a monthly NAV, we are reliant on the parties that we engage for that purpose, in particular the Independent Valuation Advisor and the other appraisers that we hire to value and appraise our real property portfolio.
- Our NAV is not subject to U.S. generally accepted accounting principles (“GAAP”), will not be independently audited and will involve subjective judgments by the Independent Valuation Advisor and other parties involved in valuing our assets and liabilities.
- No rule or regulation requires that we calculate our NAV in a certain way, and our board of directors, including a majority of our independent directors, may adopt changes to the valuation procedures.
- Our NAV per share may suddenly change if the valuations of our properties materially change from prior valuations.
- New acquisitions may be valued for purposes of our NAV at less than what we pay for them, which would dilute our NAV, or at more than what we pay for them, which would be accretive to our NAV.
- The NAV per share that we publish may not necessarily reflect changes in our NAV that are not immediately quantifiable.
- The realizable value of specific properties may change before the value is adjusted by the Independent Valuation Advisor and reflected in the calculation of our NAV.
- Our NAV and the NAV of stockholder shares may be diluted in connection with our public offerings and future securities offerings.
- Because we generally do not mark to market our property-level mortgages, corporate-level credit facilities and other secured and unsecured debt that are intended to be held to maturity, or our associated interest rate hedges that are intended to be held to maturity, the realizable value of our company or our assets that are encumbered by debt may be higher or lower than the value used in the calculation of our NAV.
- Stockholders do not have the benefit of an independent due diligence review in connection with our securities offerings which increases the risk of their investment.
- Our investors may be at a greater risk of loss than the Advisor and members of our management team.
- The availability and timing of cash distributions to stockholders is uncertain.
- We have paid and may continue to pay distributions from sources other than our cash flow from operations, including, without limitation, the sale of assets, borrowings or offering proceeds, and we have no limits on the amounts we may pay from such sources.
- If we raise substantial offering proceeds in a short period of time, we may not be able to invest all of the net offering proceeds promptly, which may cause our distributions and the long-term returns to our investors to be lower than they otherwise would.
- The performance component of the advisory fee is calculated on the basis of the overall investment return provided to holders of Fund Interests over a calendar year, so it may not be consistent with the return on stockholders’ shares.
- Payment of fees and expenses to the Advisor and the Dealer Manager reduces the cash available for distribution and increases the risk that the stockholders will not be able to recover the amount of their investment in our shares.
- We are required to pay substantial compensation to the Advisor and its affiliates, which may be increased or decreased during our securities offerings or future offerings by a majority of our board of directors, including a majority of the independent directors.
- We are dependent upon the Advisor and its affiliates to conduct our operations and our securities offerings; thus, adverse changes in their financial health or our relationship with them could cause our operations to suffer.
- If we were to internalize our management or if another investment program, whether sponsored or advised by affiliates of the Sponsor or otherwise, conducts its own internalization transaction, we could incur significant costs and/or our business could be harmed.
- We have broad authority to incur debt, and high debt levels could hinder our ability to make distributions and could decrease the value of the stockholders’ investment in shares of our common stock.
- We are dependent on our customers for revenue, and our inability to lease our properties or to collect rent from our customers would adversely affect our results of operations, NAV and returns to our stockholders.
- We are active portfolio managers and will incur transaction and transition costs each time that we acquire or dispose of an asset.
- In order to maintain what we deem to be sufficient liquidity for our redemption program it may cause us to keep more of our assets in securities, cash, cash equivalents and other short-term investments than we would otherwise like which would affect returns.
- The Advisor faces a conflict of interest because the fees it receives for services performed are based on our NAV, the procedures for which the Advisor will assist our board of directors in developing, overseeing, implementing and coordinating.
- The Advisor’s fee may not create proper incentives or may induce the Advisor and its affiliates to make certain investments, including speculative investments, that increase the risk of our real property portfolio.
- The Advisor’s management personnel face conflicts of interest relating to time management and there can be no assurance that the Advisor’s management personnel will devote adequate time to our business activities or that the Advisor will be able to hire adequate additional employees.
- The Advisor and its affiliates, including our officers and two of our directors, face conflicts of interest caused by compensation arrangements with us and other entities sponsored or advised by affiliates of the Sponsor, which could result in actions that are not in our stockholders’ best interests.
- When considering whether to recommend investments through a joint venture or other co-ownership arrangement, the fee arrangements between the Advisor and the proposed joint venture partner may incentivize the Advisor to recommend investing a greater proportion of our resources in joint venture investments than may be in our stockholders’ best interests.
- The time and resources that entities sponsored or advised by affiliates of the Sponsor devote to us may be diverted and we may face additional competition due to the fact that these entities are not prohibited from raising money for another entity that makes the same types of investments that we target.
- The fees we pay to entities sponsored or advised by affiliates of the Sponsor in connection with our offerings of securities and in connection with the management of our investments were not determined on an arm’s-length basis, and therefore, we do not have the benefit of arm’s-length negotiations of the type normally conducted between unrelated parties.
- We compete with entities sponsored or advised by affiliates of the Sponsor, for whom affiliates of the Sponsor provide certain advisory or management services, for opportunities to acquire, lease, finance, or sell investments, and for customers, which may have an adverse impact on our operations.
- The Advisor may manage other investment vehicles (including public, non-listed REITs) that have investment objectives that compete or overlap with, and may from time to time invest in, our target asset classes.
- We may invest in, acquire, sell assets to or provide financing to investment vehicles managed by the Advisor or its affiliates.
- The Advisor is subject to extensive regulation as an investment adviser, which could adversely affect its ability to manage our business.
- We have purchased and may in the future purchase assets from third parties who have existing or previous business relationships with affiliates or other related entities of the Sponsor; as a result, in any such transaction, we may not have the benefit of arm’s-length negotiations of the type normally conducted between unrelated parties.
- Uncertainty and volatility in the credit markets could affect our ability to obtain debt financing on reasonable terms, or at all, which could reduce the number of properties we may be able to acquire and the amount of cash distributions we can make to our stockholders.
- Economic events that may cause our stockholders to request that we redeem their shares may materially adversely affect our cash flow and our ability to achieve our investment objectives.
- Inflation, rising interest rates or deflation may adversely affect our financial condition and results of operations.
- Our business is dependent on the bank relationships and strain from the banking system may severely impact us. Similarly, the failure of any banking institution in which we deposit our funds could have an adverse effect on our results of operations, financial condition and ability to pay distributions to our stockholders.
- We intend to disclose funds from operations (“FFO”) and adjusted funds from operations (“AFFO”), each a non-GAAP financial measure, in future communications with investors, including documents filed with the SEC. However, FFO and AFFO are not equivalent to our net income or loss as determined under GAAP, and do not represent a complete measure of our financial position and results of operations.
- A global economic slowdown, a recession or declines in real estate values could impair our investments and have a significant adverse effect on our business, financial condition and results of operations.
- We depend on the Advisor and its key personnel; if any of such key personnel were to cease employment with the Advisor, our business could suffer.
- Our board of directors determines our major policies and operations, which increases the uncertainties faced by our stockholders.
- Our UPREIT structure may result in potential conflicts of interest with limited partners in the Operating Partnership whose interests may not be aligned with those of our stockholders.
- We may assume unknown liabilities in connection with acquisitions which could result in unexpected liabilities and expenses.
- Tax protection agreements could limit our ability to sell or otherwise dispose of property contributed to the Operating Partnership.
- Tax protection agreements may require the Operating Partnership to maintain certain debt levels that otherwise would not be required to operate our business.
- Certain provisions in the partnership agreement of the Operating Partnership may delay or defer an unsolicited acquisition of us or a change of our control.
- The Operating Partnership’s private placements of beneficial interests in specific Delaware statutory trusts under our DST Program could cause our leverage ratio to increase or subject us to liabilities from litigation or otherwise.
- The Operating Partnership’s private placements of DST Interests under our DST Program will not shield us from risks related to the performance of the real properties held through such structures.
- We may own DST Interests in DSTs owning real property that will be subject to the agreements under our DST Program, which may have an adverse effect on our results of operations, relative to if the DST Program agreements did not exist.
- Properties that are placed into the DST Program and later reacquired may be less liquid than other assets, which could impair our ability to utilize cash proceeds from sales of such properties for other purposes such as paying down debt, distributions, or additional investments.
- Cash redemptions to holders of OP Units will reduce cash available for distribution to our stockholders or to honor their redemption requests under our share redemption program.
- We may be limited or restricted in engaging in like-kind exchanges.
- Maryland law and our organizational documents limit our stockholders’ right to bring claims against our officers and directors.
- Our bylaws designate the Circuit Court for Baltimore City, Maryland as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.
- Stockholders’ interest will be diluted if we or the Operating Partnership issue additional securities.
- We may issue preferred stock or new classes of OP Units, which issuance could adversely affect those stockholders who purchased shares of our common stock in our securities offerings.
- We are not limited to making acquisitions with cash or borrowings.
- The limit on the percentage of shares of our common stock that any person may own may discourage a takeover or business combination that may have benefited our stockholders.
- Although we are not currently afforded the full protection of the Maryland General Corporation Law relating to deterring or defending hostile takeovers, our board of directors could opt into these provisions of Maryland law in the future, which may discourage others from trying to acquire control of us and may prevent our stockholders from receiving a premium price for their stock in connection with a business combination.
- Our charter includes a provision regarding tender offers that may discourage a stockholder from launching a tender offer for our shares.
- We depend on our relationships with lenders, joint venture partners, and property managers to conduct our business. If we fail to honor any of our contractual obligations, there could be a material and adverse impact on our ability to raise capital or manage our portfolio.
- Cybersecurity risks and cyber incidents may adversely affect our business by causing a disruption to our operations or the operations of the Advisor, the Dealer Manager, our transfer agent or any other party that provides us with services essential to our operations, a compromise or corruption of our confidential, personal or other sensitive information and/or damage to our business relationships or reputation or the business relationships or reputations of the Advisor, the Dealer Manager, our transfer agent or any other party that provides us with essential services, which could negatively impact our business, financial condition and operating results.
- The termination or replacement of the Advisor could trigger a repayment event under our mortgage loans for some of our properties and the credit agreement governing any line of credit or other form of unsecured debt that we obtain, or a default under other agreements.
- The success of our securities offerings is dependent, in part, on the ability of the Dealer Manager to retain key employees and to successfully build and maintain a network of licensed broker-dealers.
- Real properties are illiquid investments, and we may be unable to adjust our portfolio in response to changes in economic or other conditions or sell a property if or when we decide to do so.
- We are dependent on customers for revenue, and our inability to lease our real properties or to collect rent from our customers may adversely affect our results of operations, NAV and returns to our stockholders.
- If the market for commercial real estate experiences increased vacancy rates, particularly in certain large metropolitan areas, it could result in lower revenues for us.
- A real property that incurs a vacancy could be difficult to sell or re-lease.
- Adverse economic and other conditions in the regions where our assets are located may have a significant adverse impact on our financial results.
- We may be adversely affected by trends in the office real estate industry.
- Properties that have significant vacancies, especially value-add or other types of discounted real estate assets, may experience delays in leasing up or could be difficult to sell, which could diminish our return on these properties and the return on the stockholders’ investments.
- Changes in supply of or demand for similar real properties in a particular area may increase the price of real properties we seek to purchase or adversely affect the value of the real properties that we own.
- Actions of our joint venture partners could adversely impact our performance.
- We compete with numerous other parties or entities for real property investments and customers, and we may not compete successfully.
- Delays in the selection, acquisition, development and construction of real properties or debt investments may have adverse effects on portfolio diversification, results of operations and returns to our stockholders.
- We may be unable to achieve our diversification goals or to realize benefits from diversification.
- We may alter our exposure to various real property sectors and we may not always own properties in each sector.
- We are subject to the risk that, with respect to assets that we have acquired and may acquire based on growth potential, such growth potential is not realized.
- Our real properties are subject to property and other taxes that may increase in the future, which could adversely affect our cash flow.
- Potential changes to the U.S. tax laws could have a significant negative impact on our business operations, financial condition and earnings.
- We are subject to litigation that could adversely affect our results of operations.
- Uninsured losses or premiums for insurance coverage relating to real property may adversely affect our operating results.
- The real estate industry is subject to extensive regulation, which may result in higher expenses or other negative consequences that could adversely affect us.
- The sale and disposition of real properties carry certain litigation risks at the property level that may reduce our profitability and the return on stockholders’ investments.
- The costs associated with complying with the Americans with Disabilities Act and the Fair Housing Amendment Act may reduce the amount of cash available for distribution to our stockholders.
- We may not have funding for future tenant improvements, which may adversely affect the value of our assets, our results of operations and returns to our stockholders.
- Lease agreements may have specific provisions that create risks to our business and may adversely affect us.
- We depend on the availability of public utilities and services, especially for water and electric power. Any reduction, interruption or cancellation of these services may adversely affect us.
- Acquiring or attempting to acquire multiple properties in a single transaction may adversely affect our operations.
- In the event we obtain options to acquire properties, we may lose the amount paid for such options whether or not the underlying property is purchased.
- We will rely on property managers to operate our properties and leasing agents to lease vacancies in our properties.
- Our properties may be leased at below-market rates under long-term leases.
- Retail properties depend on anchor customers to attract shoppers and could be adversely affected by the loss of a key anchor customer.
- The mortgage loans in which we invest, either directly or indirectly through real estate-related debt securities, will be subject to the risk of delinquency, foreclosure and loss, which could result in losses to us.
- The preferred equity, mezzanine loans and B-notes in which we invest involve greater risks of loss than senior loans secured by income-producing real properties.
- A portion of our debt-related investments may be considered illiquid, and we may not be able to adjust our portfolio in response to changes in economic and other conditions.
- Bridge loans may involve a greater risk of loss than conventional mortgage loans.
- Interest rate and related risks may cause the value of our real estate-related securities investments to be reduced.
- Investments in real estate-related securities are subject to specific risks relating to the particular issuer of the securities and may be subject to the general risks of investing in subordinated real estate-related securities.
- We may make investments in non-U.S. dollar denominated securities, which will be subject to currency rate exposure and risks associated with the uncertainty of foreign laws and markets.
- Investments in real estate-related debt securities are subject to risks including various creditor risks and early redemption features which may materially adversely affect our results of operations and financial condition.
- We incur mortgage indebtedness and other borrowings, which may increase our business risks, and could hinder our ability to make distributions to our stockholders.
- Increases in interest rates could increase the amount of our debt service payments and therefore adversely impact our operating results.
- Our derivative instruments used to hedge against interest rate fluctuations may not be successful in mitigating our risks associated with interest rates and could reduce the overall returns on our investments.
- We assume the credit risk of our counterparties with respect to derivative transactions.
- We assume the risk that our derivative counterparty may terminate transactions early.
- We may be required to collateralize our derivative transactions.
- We may default on our derivative obligations if we default on the indebtedness underlying such obligations.
- We have entered into loan agreements that contain restrictive covenants relating to our operations, which could limit our ability to make distributions to our stockholders.
- We assume the risk that our credit facility lenders may not honor their commitments to us.
- We have entered into, and may continue to enter into, financing arrangements involving balloon payment obligations, which may adversely affect our ability to refinance or sell properties on favorable terms, and to make distributions to our stockholders.
- Risks related to variable-rate indebtedness could increase the amount of our debt payments and therefore negatively impact our operating results.
- Failure to qualify as a REIT could adversely affect our operations and our ability to make distributions.
- Failure of the Operating Partnership to be taxable as a partnership could cause us to fail to qualify as a REIT and we could suffer other adverse tax consequences.
- To continue to qualify as a REIT, we must meet annual distribution requirements, which may result in us distributing amounts that may otherwise be used for our operations.
- Recharacterization of sale-leaseback transactions may cause us to lose our REIT status.
- Our stockholders may have current tax liability on distributions if our stockholders elect to reinvest in shares of our common stock.
- Distributions payable by REITs do not qualify for the reduced tax rates that apply to other corporate distributions.
- If we were considered to have actually or constructively paid a “preferential dividend” to certain of our stockholders, our status as a REIT could be adversely affected.
- In certain circumstances, we may be subject to federal and state income taxes as a REIT, which would reduce our cash available for distribution to our stockholders.
- If any Subsidiary REIT failed to qualify as a REIT, we could fail to remain qualified as a REIT.
- Our board of directors is authorized to revoke our REIT election without stockholder approval, which may cause adverse consequences to our stockholders.
- Distributions to tax-exempt investors may be classified as unrelated business taxable income.
- The stock ownership limit imposed by the Code for REITs and our charter may restrict our business combination opportunities and stockholders may be restricted from acquiring or transferring certain amounts of our capital stock.
- The tax on prohibited transactions will limit our ability to engage in transactions, including certain methods of syndicating and securitizing mortgage loans, that would be treated as sales for U.S. federal income tax purposes.
- Recharacterization of transactions under the Operating Partnership’s private placements could result in a 100% tax on income from prohibited transactions, which would diminish our cash distributions to our stockholders.
- Legislative or regulatory action could adversely affect investors.
- Qualifying as a REIT involves highly technical and complex provisions of the Code.
- Certain foreign investors may be subject to the Foreign Investment in Real Property Tax Act of 1980 (“FIRPTA”) on the sale of common shares if we are unable to qualify as a “domestically controlled qualified investment entity.”
- Compliance with REIT requirements may force us to liquidate otherwise attractive investments.
- The failure of a mezzanine loan to qualify as a real estate asset could adversely affect our ability to qualify as a REIT.
- Avoiding registration as an investment company imposes limits on our operations, and failure to avoid registration reduces the value of the stockholders’ investment.
- If the stockholders fail to meet the fiduciary and other standards under the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) or the Code as a result of an investment in our stock, the stockholders could be subject to penalties.
- If our assets are deemed to be plan assets, the Advisor and we may be exposed to liabilities under Title I of ERISA and the Code.
Management Discussion
- Property net operating income (“NOI”) is a supplemental non-GAAP measure of our property operating results. We define property NOI as rental revenues less operating expenses. While we believe our net income (loss), as defined by GAAP, to be the most appropriate measure to evaluate our overall performance, we consider property NOI to be an appropriate supplemental performance measure. We believe property NOI provides useful information to our investors regarding our results of operations because property NOI reflects the operating performance of our properties and excludes certain items that are not considered to be controllable in connection with the management of properties, such as real estate-related depreciation and amortization, general and administrative expenses, advisory fees, impairment charges, interest expense, gains on sale of properties, other income and expenses, gains and losses on the extinguishment of debt and noncontrolling interests. However, property NOI should not be viewed as an alternative measure of our financial performance since it excludes such items, which could materially impact our results of operations. Further, our property NOI may not be comparable to that of other real estate companies, as they may use different methodologies for calculating property NOI, therefore, our investors should consider net income (loss) as the primary indicator of our overall financial performance.