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New words:
attention, complexity, consummate, consummated, delete, expire, fraction, merge, merged, professional, proposed, provision, reinstated, retired, Revolution, RRE, succeeded, surviving, thereof, therewith
Removed:
backed, broad, contingency, diluting, incur, leading, pool, represent, satisfying
Financial report summary
?Risks
- There is no public trading market for your shares; therefore, it will be difficult for you to sell your shares.
- Disruptions in the financial markets or sluggish economic conditions nationally and globally could adversely impact our ability to implement our business strategy and generate returns to you.
- We raised substantially less than the maximum offering amount in our primary public offering. As a result, we are not be able to invest in as diverse a portfolio of assets as we otherwise would, which will cause the value of our stockholders’ investment to vary more widely with the performance of specific assets, and cause our general and administrative expenses to constitute a greater percentage of our revenue.
- Because we are dependent upon our advisor and its affiliates to conduct our operations, any adverse changes in the financial health of our advisor or its affiliates or our relationship with them could hinder our operating performance and the return on our stockholders’ investment.
- The loss of or the inability to hire additional or replacement key real estate and debt finance professionals by our Advisor or its affiliates could delay or hinder implementation of our investment strategies, which could limit our ability to make distributions and decrease the value of your investment.
- We have paid distributions in part with proceeds from our offering and expect that in the future we may not pay distributions solely from our cash flow from operating activities. To the extent we pay distributions from sources other than our cash flow from operations, your overall return may be reduced and the value of a share of our common stock will be diluted.
- Future interest rate increases in response to inflation may inhibit our ability to conduct our business and dispose of real property at attractive prices and your overall return may be reduced.
- Our rights and the rights of our stockholders to recover claims against our directors and officers are limited, which could reduce your and our recovery against them if they negligently cause us to incur losses.
- We may change our policies and our operations without stockholder consent.
- We face risks associated with security breaches through cyber-attacks, cyber intrusions or otherwise, as well as other significant disruptions of our information technology, or IT, networks and related systems.
- The outbreak of widespread contagious disease, such as the novel coronavirus, COVID-19, could adversely impact our operations and the value of our investments.
- Because we rely on affiliates of Resource Real Estate for the provision of advisory, property management, if Resource Real Estate and its affiliates are unable to meet their obligations we may be required to find alternative providers of these services, which could result in a significant and costly disruption of our business.
- Resource REIT Advisor and its affiliates, including all of our executive officers, some of our directors and other key real estate professionals will face conflicts of interest caused by their compensation arrangements with us, which could result in actions that are not in the long-term best interests of our stockholders.
- Our Advisor will face conflicts of interest relating to the disposition of assets and such conflicts may not be resolved in our favor, which could limit our ability to make distributions and reduce your overall investment return.
- Resource REIT Advisor, the real estate professionals assembled by our advisor, their affiliates and our officers will face competing demands relating to their time, and this may cause our operations and your investment to suffer.
- Our executive officers and some of our directors face conflicts of interest related to their positions in Resource REIT Advisor and its affiliates, which could hinder our ability to implement our business strategy and to generate returns to you.
- Resource REIT Advisor may assign its obligations under the advisory agreement to its affiliates, who may not have the same expertise or provide the same level of service as our advisor.
- Our charter limits the number of shares a person may own, which may discourage a takeover that could otherwise result in a premium price to our stockholders.
- Our charter permits our board of directors to issue stock with terms that may subordinate the rights of our common stockholders or discourage a third party from acquiring us in a manner that could result in a premium price to our stockholders.
- Your investment return may be reduced if we are required to register as an investment company under the Investment Company Act; if we or our subsidiaries become an unregistered investment company, we could not continue our business.
- Rapid changes in the values of our assets may make it more difficult for us to maintain our qualification as a REIT or our exception from the definition of an investment company under the Investment Company Act.
- You may not be able to sell your shares under our share redemption program and, if you are able to sell your shares under the program, you may not be able to recover the amount of your investment in our shares.
- The actual value of shares that we repurchase under our share redemption program may be substantially less than what we pay.
- The estimated NAV per share of our common stock may not reflect the value that stockholders will receive for their investment and does not take into account how developments subsequent to the valuation date related to individual assets, the financial or real estate markets or other events may have increased or decreased the value of our portfolio.
- Your interest in us will be diluted if we issue additional shares, which could reduce the overall value of your investment.
- Payment of substantial fees and expenses to Resource REIT Advisor and its affiliates reduce cash available for investment and distribution and increases the risk that you will not be able to recover the amount of your investment in our shares.
- If we are unable to obtain funding for future capital needs, cash distributions to our stockholders could be reduced and the value of our investments could decline.
- Our board of directors could opt into certain provisions of the Maryland General Corporation 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.
- If we internalize our management functions, we could incur significant costs associated with being self-managed and may not be able to retain or replace key personnel; and we may have increased exposure to litigation as a result of internalizing our management functions.
- Our charter designates 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.
- Economic and regulatory changes that impact the real estate market generally may decrease the value of our investments and weaken our operating results.
- Residents of apartment properties who have experienced personal financial problems or a downturn in their business may delay enforcement of our rights, and we may incur substantial costs attempting to protect our investment.
- The operating costs of our properties will not necessarily decrease if our income decreases.
- Properties that have significant vacancies may experience delays in leasing up or could be difficult to sell, which could diminish our return on these properties.
- Because we rely on Resource Apartment Manager III, its affiliates and third parties to manage the day-to-day affairs of our properties, should the staff of a particular property perform poorly, our operating results for that property will similarly be hindered and our net income may be reduced.
- If we are unable to sell a property for the price, on the terms, or within the time frame we desire, it could limit our ability to pay cash distributions to you.
- Costs of responding to both known and previously undetected environmental contamination and hazardous conditions may decrease our cash flows and limit our ability to make distributions.
- Properties acquired by us may have toxic mold that could result in substantial liabilities to us.
- Uninsured losses relating to real property or excessively expensive premiums for insurance coverage could reduce our cash flows and the return on your investment.
- Our costs associated with and the risk of failing to comply with the Americans with Disabilities Act, the Fair Housing Act and other tax credit programs may adversely affect cash available for distributions.
- A high concentration of our properties in a particular geographic area would magnify the effects of downturns in that geographic area.
- Newly constructed and existing multifamily rental properties or other properties that compete with any properties we own in any particular location could adversely affect the operating results of our properties and our cash available for distribution.
- Our efforts to upgrade multifamily rental properties to increase occupancy and raise rental rates through redevelopment and repositioning may fail, which may reduce our net income and the cash available for distributions to you.
- Renovation risks could affect our profitability.
- Increased competition and the increased affordability of single-family and multifamily homes and condominiums for sale or rent could limit our ability to retain residents, lease apartment units or increase or maintain rents.
- Short-term multifamily leases expose us to the effects of declining market rent, which could adversely impact our ability to make cash distributions.
- We have incurred mortgage indebtedness and may incur additional borrowings in the future, which increases our risk of loss due to foreclosure.
- High mortgage interest rates may make it difficult for us to refinance properties, which could reduce our net income and the amount of cash distributions we can make.
- We may not be able to access financing sources on attractive terms, which could adversely affect our ability to execute our business plan.
- We could be negatively impacted by the condition of Fannie Mae or Freddie Mac and by changes in government support for multifamily housing.
- Lenders may require us to enter into restrictive covenants relating to our operations, which could limit our ability to make distributions to our stockholders.
- We have broad authority to incur debt, and high debt levels could hinder our ability to make distributions and decrease the value of your investment.
- Failure to qualify as a REIT would reduce our net earnings available for investment or distribution.
- You may have current tax liability on distributions you elect to reinvest in our common stock.
- Failure to qualify as a REIT would subject us to federal income tax, which would reduce the cash available for distribution to you.
- Even if we qualify as a REIT for federal income tax purposes, we may be subject to other tax liabilities that reduce our cash flow and our ability to make distributions to you.
- Our investments in debt instruments may cause us to recognize taxable income for which cash has not been received.
- REIT distribution requirements could adversely affect our ability to execute our business plan.
- To maintain our REIT status, we may be forced to forego otherwise attractive opportunities, which may delay or hinder our ability to meet our investment objectives and reduce your overall return.
- The “taxable mortgage pool” rules may increase the taxes that we or our stockholders incur and may limit the manner in which we conduct securitizations.
- Potential characterization of distributions or gain on sale may be treated as unrelated business taxable income to tax-exempt investors.
- Classification of a securitization or financing arrangement we enter into as a taxable mortgage pool could subject us or certain of you to increased taxation.
- The tax on prohibited transactions will limit our ability to engage in transactions, including certain methods of securitizing mortgage loans that would be treated as sales for federal income tax purposes.
- Complying with REIT requirements may force us to liquidate otherwise attractive investments.
- Liquidation of assets may jeopardize our REIT qualification.
- Characterization of any repurchase agreements we enter into to finance our investments as sales for tax purposes rather than as secured lending transactions would adversely affect our ability to qualify as a REIT.
- Complying with REIT requirements may limit our ability to hedge effectively.
- Ownership limitations may restrict change of control or business combination opportunities in which you might receive a premium for your shares.
- Our ownership of and relationship with our taxable REIT subsidiaries will be limited and a failure to comply with the limits would jeopardize our REIT status and may result in the application of a 100% excise tax.
- The IRS may challenge our characterization of certain income from offshore taxable REIT subsidiaries.
- Legislative or regulatory tax changes could adversely affect us or stockholders.
- Distributions paid by REITs do not qualify for the reduced tax rates that apply to other corporate distributions.
- If you fail to meet the fiduciary and other standards under ERISA or the Internal Revenue Code as a result of an investment in our stock, you could be subject to criminal and civil penalties.
Management Discussion
- Our management is not aware of any material trends or uncertainties, favorable or unfavorable, other than national economic conditions affecting our targeted portfolio or the U.S. apartment community industry, which may reasonably be expected to have a material impact on either capital resources or the revenues or incomes to be derived from the operation of such assets.