UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended March 31,September 30, 2020
OR
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File Number 001-36663
NexPoint Residential Trust, Inc.
(Exact Name of Registrant as Specified in Its Charter)
Maryland |
| 47-1881359 |
(State or other Jurisdiction of Incorporation or Organization) |
| (I.R.S. Employer Identification No.) |
300 Crescent Court, Suite 700, Dallas, Texas (Address of Principal Executive Offices) |
| 75201 |
(Zip Code) |
(972) 628-4100
(Telephone Number, Including Area Code)
Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:
Title of each class |
| Trading Symbol |
| Name of each exchange on which registered |
Common Stock, par value $0.01 per share |
| NXRT |
| New York Stock Exchange |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large Accelerated Filer | ☒ |
| Accelerated Filer | ☐ |
Non-Accelerated Filer | ☐ |
| Smaller reporting company | ☐ |
Emerging growth company | ☐ |
|
|
|
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of May 8,October 28, 2020, the registrant had 24,299,45124,606,457 shares of its common stock, par value $0.01 per share, outstanding.
NEXPOINT RESIDENTIAL TRUST, INC.
Form 10-Q
Quarter Ended March 31,September 30, 2020
INDEX
|
| Page | ||
| ii | |||
|
|
|
|
|
| PART I—FINANCIAL INFORMATION | |||
|
|
|
| |
Item 1. |
| Financial Statements |
|
|
|
| Consolidated Balance Sheets as of |
| 1 |
|
|
| 2 | |
|
|
| 3 | |
|
|
|
| |
|
|
|
| |
Item 2. |
| Management’s Discussion and Analysis of Financial Condition and Results of Operations |
|
|
Item 3. |
|
|
| |
Item 4. |
|
|
| |
|
|
|
|
|
| PART II—OTHER INFORMATION | |||
|
|
|
| |
Item 1. |
|
|
| |
Item 1A. |
|
|
| |
Item 2. |
|
|
| |
Item 3. |
|
|
| |
Item 4. |
|
|
| |
Item 5. |
|
|
| |
Item 6. |
|
|
| |
|
|
|
|
i
Cautionary Statement Regarding Forward-Looking Statements
This quarterly report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are subject to risks and uncertainties. In particular, statements relating to our liquidity and capital resources, the performance of our properties and results of operations contain forward-looking statements. Furthermore, all of the statements regarding future financial performance (including market conditions and demographics) are forward-looking statements. We caution investors that any forward-looking statements presented in this quarterly report are based on management’s current beliefs and assumptions made by, and information currently available to, management. When used, the words “anticipate,” “believe,” “expect,” “intend,” “may,” “might,” “plan,” “estimate,” “project,” “should,” “will,” “would,” “result” and similar expressions that do not relate solely to historical matters are intended to identify forward-looking statements. You can also identify forward-looking statements by discussions of strategy, plans or intentions.
Forward-looking statements are subject to risks, uncertainties and assumptions and may be affected by known and unknown risks, trends, uncertainties and factors that are beyond our control. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated or projected. We caution you therefore against relying on any of these forward-looking statements.
Some of the risks and uncertainties that may cause our actual results, performance, liquidity or achievements to differ materially from those expressed or implied by forward-looking statements include, among others, the following:
| • | unfavorable changes in market and economic conditions in the United States and globally and in the specific markets where our properties are located; |
• | risks associated with the current COVID-19 pandemic and the future outbreak of other highly infectious or contagious diseases; |
| • | risks associated with ownership of real estate; |
| • | limited ability to dispose of assets because of the relative illiquidity of real estate investments; |
| • | our multifamily properties are concentrated in certain geographic markets in the Southeastern and Southwestern United States, which makes us more susceptible to adverse developments in those markets; |
| • | increased risks associated with our strategy of acquiring value-enhancement multifamily properties rather than more conservative investment strategies; |
| • | potential reforms to the Federal Home Loan Mortgage Corporation (“Freddie Mac”) and the Federal National Mortgage Association; |
| • | competition could limit our ability to acquire attractive investment opportunities, which could adversely affect our profitability and impede our growth; |
| • | competition and any increased affordability of residential homes could limit our ability to lease our apartments or increase or maintain rents; |
| • | the relatively low residential mortgage rates may result in potential renters purchasing residences rather than leasing them, and as a result, cause a decline in our occupancy rates; |
| • | the risk that we may fail to consummate future property acquisitions; |
| • | failure of acquisitions to yield anticipated results; |
| • | risks associated with increases in interest rates and our ability to issue additional debt or equity securities in the future; |
| • | risks associated with selling apartment communities, which could limit our operational and financial flexibility; |
| • | contingent or unknown liabilities related to properties or businesses that we have acquired or may acquire; |
| • | lack of or insufficient amounts of insurance; |
| • | the risk that our environmental assessments may not identify all potential environmental liabilities and our remediation actions may be insufficient; |
| • | high costs associated with the investigation or remediation of environmental contamination, including asbestos, lead-based paint, chemical vapor, subsurface contamination and mold growth; |
| • | high costs associated with the compliance with various accessibility, environmental, building and health and safety laws and regulations, such as the Americans with Disabilities Act of 1990 and the Fair Housing Act; |
| • | risks associated with limited warranties we may obtain when purchasing properties; |
| • | exposure to decreases in market rents due to our short-term leases; |
ii
| • | risks associated with operating through joint ventures and funds; |
| • | our dependence on information systems; |
ii
| • | risks associated with breaches of our data security; |
| • | costs associated with being a public company, including compliance with securities laws; |
| • | the risk that our business could be adversely impacted if there are deficiencies in our disclosure controls and procedures or internal control over financial reporting; |
| • | risks associated with our substantial current indebtedness and indebtedness we may incur in the future; |
| • | risks associated with derivatives or hedging activity; |
| • | loss of key personnel of NexPoint Advisors, L.P. (our “Sponsor”), NexPoint Real Estate Advisors, L.P. (our “Adviser”) and our property manager; |
| • | the risk that we may not replicate the historical results achieved by other entities managed or sponsored by affiliates of our Adviser, members of our Adviser’s management team or by our Sponsor or its affiliates; |
| • | risks associated with our Adviser’s ability to terminate the Advisory Agreement (as defined below); |
| • | our ability to change our major policies, operations and targeted investments without stockholder consent; |
| • | the substantial fees and expenses we pay to our Adviser and its affiliates; |
| • | risks associated with any potential internalization of our management functions; |
| • | conflicts of interest and competing demands for time faced by our Adviser, our Sponsor and their officers and employees; |
| • | the risk that we may compete with other entities affiliated with our Sponsor or property manager for properties and tenants; |
| • | failure to maintain our status as a REIT; |
| • | failure of our operating partnership to be taxable as a partnership for federal income tax purposes, possibly causing us to fail to qualify for or to maintain REIT status; |
| • | compliance with REIT requirements, which may limit our ability to hedge our liabilities effectively and cause us to forgo otherwise attractive opportunities, liquidate certain of our investments or incur tax liabilities; |
| • | risks associated with our ownership of interests in taxable REIT subsidiaries; |
| • | the recognition of taxable gains from the sale of properties as a result of the inability to complete certain like-kind exchanges in accordance with Section 1031 of the Internal Revenue Code of 1986, as amended (the “Code”); |
| • | the risk that the Internal Revenue Service may consider certain sales of properties to be prohibited transactions, resulting in a 100% penalty tax on any taxable gain; |
| • | the ineligibility of dividends payable by REITs for the reduced tax rates available for some dividends; |
| • | risks associated with the stock ownership restrictions of the Code for REITs and the stock ownership limit imposed by our charter; |
| • | the ability of our board of directors to revoke our REIT qualification without stockholder approval; |
| • | recent and potential legislative or regulatory tax changes or other actions affecting REITs; |
| • | risks associated with the market for our common stock and the general volatility of the capital and credit markets; |
| • | failure to generate sufficient cash flows to service our outstanding indebtedness or pay distributions at expected levels; |
| • | risks associated with limitations of liability for and our indemnification of our directors and officers; |
|
|
| • | any other risks included under Part I, Item 1A, “Risk Factors” of our Annual Report on Form 10-K, filed with the U.S. Securities and Exchange Commission (the “SEC”) on February 21, 2020, or under Part II, Item 1A, “Risk Factors” of this Quarterly Report on Form 10-Q. |
While forward-looking statements reflect our good faith beliefs, they are not guarantees of future performance. They are based on estimates and assumptions only as of the date of this quarterly report. We undertake no obligation to update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, new information, data or methods, future events or other changes, except as required by law.
iii
NEXPOINT RESIDENTIAL TRUST, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share amounts)
|
| March 31, 2020 |
|
| December 31, 2019 |
|
| September 30, 2020 |
|
| December 31, 2019 |
| |||||
|
| (Unaudited) |
|
|
|
|
|
| (Unaudited) |
|
|
|
|
| |||
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Operating Real Estate Investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Land |
| $ | 317,886 |
|
| $ | 317,886 |
|
| $ | 312,436 |
|
| $ | 317,886 |
| |
Buildings and improvements |
|
| 1,477,664 |
|
|
| 1,472,319 |
|
|
| 1,460,793 |
|
|
| 1,472,319 |
| |
Intangible lease assets |
|
| 4,211 |
|
|
| 12,414 |
|
|
| — |
|
|
| 12,414 |
| |
Construction in progress |
|
| 9,500 |
|
|
| 4,375 |
|
|
| 16,425 |
|
|
| 4,375 |
| |
Furniture, fixtures, and equipment |
|
| 84,947 |
|
|
| 81,038 |
|
|
| 91,304 |
|
|
| 81,038 |
| |
Total Gross Operating Real Estate Investments |
|
| 1,894,208 |
|
|
| 1,888,032 |
|
|
| 1,880,958 |
|
|
| 1,888,032 |
| |
Accumulated depreciation and amortization |
|
| (167,686 | ) |
|
| (152,552 | ) |
|
| (195,800 | ) |
|
| (152,552 | ) | |
Total Net Operating Real Estate Investments |
|
| 1,726,522 |
|
|
| 1,735,480 |
|
|
| 1,685,158 |
|
|
| 1,735,480 |
| |
Real estate held for sale, net of accumulated depreciation of $0 and $897, respectively |
|
| — |
|
|
| 46,330 |
| |||||||||
Real estate held for sale, net of accumulated depreciation of $0 and $7,859, respectively |
|
| — |
|
|
| 46,330 |
| |||||||||
Total Net Real Estate Investments |
|
| 1,726,522 |
|
|
| 1,781,810 |
|
|
| 1,685,158 |
|
|
| 1,781,810 |
| |
Cash and cash equivalents |
|
| 69,540 |
|
|
| 25,671 |
|
|
| 70,282 |
|
|
| 25,671 |
| |
Restricted cash |
|
| 36,041 |
|
|
| 45,511 |
|
|
| 38,334 |
|
|
| 45,511 |
| |
Accounts receivable |
|
| 3,095 |
|
|
| 6,285 |
|
|
| 10,770 |
|
|
| 6,285 |
| |
Prepaid and other assets |
|
| 3,695 |
|
|
| 2,336 |
|
|
| 9,751 |
|
|
| 2,336 |
| |
Fair market value of interest rate swaps |
|
| — |
|
|
| 4,376 |
|
|
| — |
|
|
| 4,376 |
| |
TOTAL ASSETS |
| $ | 1,838,893 |
|
| $ | 1,865,989 |
|
| $ | 1,814,295 |
|
| $ | 1,865,989 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Mortgages payable, net |
| $ | 1,145,508 |
|
| $ | 1,145,371 |
|
| $ | 1,116,573 |
|
| $ | 1,145,371 |
| |
Mortgages payable held for sale, net |
|
| — |
|
|
| 41,176 |
|
|
| — |
|
|
| 41,176 |
| |
Credit facility, net |
|
| 223,850 |
|
|
| 216,501 |
|
|
| 214,540 |
|
|
| 216,501 |
| |
Accounts payable and other accrued liabilities |
|
| 13,137 |
|
|
| 11,971 |
|
|
| 12,503 |
|
|
| 11,971 |
| |
Accrued real estate taxes payable |
|
| 7,119 |
|
|
| 12,206 |
|
|
| 19,049 |
|
|
| 12,206 |
| |
Accrued interest payable |
|
| 3,337 |
|
|
| 3,691 |
|
|
| 2,182 |
|
|
| 3,691 |
| |
Security deposit liability |
|
| 2,893 |
|
|
| 2,977 |
|
|
| 2,726 |
|
|
| 2,977 |
| |
Prepaid rents |
|
| 1,469 |
|
|
| 1,658 |
|
|
| 1,483 |
|
|
| 1,658 |
| |
Fair market value of interest rate swaps |
|
| 47,077 |
|
|
| 902 |
|
|
| 51,077 |
|
|
| 902 |
| |
Total Liabilities |
|
| 1,444,390 |
|
|
| 1,436,453 |
|
|
| 1,420,133 |
|
|
| 1,436,453 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Redeemable noncontrolling interests in the Operating Partnership |
|
| 2,332 |
|
|
| 3,295 |
|
|
| 3,248 |
|
|
| 3,295 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Stockholders' Equity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Preferred stock, $0.01 par value: 100,000,000 shares authorized; 0 shares issued |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
| |
Common stock, $0.01 par value: 500,000,000 shares authorized; 25,717,549 and 25,245,740 shares issued and 24,852,868 and 25,245,740 shares outstanding, respectively |
|
| 256 |
|
|
| 251 |
| |||||||||
Common stock, $0.01 par value: 500,000,000 shares authorized; 24,541,683 and 25,245,740 shares issued and outstanding, respectively |
|
| 244 |
|
|
| 251 |
| |||||||||
Additional paid-in capital |
|
| 378,943 |
|
|
| 359,748 |
|
|
| 354,530 |
|
|
| 359,748 |
| |
Accumulated earnings less dividends |
|
| 84,345 |
|
|
| 63,776 |
|
|
| 88,028 |
|
|
| 63,776 |
| |
Accumulated other comprehensive income (loss) |
|
| (47,922 | ) |
|
| 2,466 |
|
|
| (51,888 | ) |
|
| 2,466 |
| |
Common stock held in treasury at cost; 864,681 and 0 shares |
|
| (23,451 | ) |
|
| — |
| |||||||||
Total Stockholders' Equity |
|
| 392,171 |
|
|
| 426,241 |
|
|
| 390,914 |
|
|
| 426,241 |
| |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |
| $ | 1,838,893 |
|
| $ | 1,865,989 |
|
| $ | 1,814,295 |
|
| $ | 1,865,989 |
|
See Notes to Consolidated Financial Statements
NEXPOINT RESIDENTIAL TRUST, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE LOSSINCOME
(in thousands, except per share amounts)
(Unaudited)
|
| For the Three Months Ended March 31, |
|
| For the Three Months Ended September 30, |
|
| For the Nine Months Ended September 30, |
| |||||||||||||||
|
| 2020 |
|
| 2019 |
|
| 2020 |
|
| 2019 |
|
| 2020 |
|
| 2019 |
| ||||||
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental income |
| $ | 51,115 |
|
| $ | 40,451 |
|
| $ | 49,578 |
|
| $ | 45,854 |
|
| $ | 149,945 |
|
| $ | 128,270 |
|
Other income |
|
| 1,467 |
|
|
| 1,040 |
|
|
| 1,412 |
|
|
| 979 |
|
|
| 4,307 |
|
|
| 3,120 |
|
Total revenues |
|
| 52,582 |
|
|
| 41,491 |
|
|
| 50,990 |
|
|
| 46,833 |
|
|
| 154,252 |
|
|
| 131,390 |
|
Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property operating expenses |
|
| 11,721 |
|
|
| 9,639 |
|
|
| 11,906 |
|
|
| 11,456 |
|
|
| 35,591 |
|
|
| 31,256 |
|
Real estate taxes and insurance |
|
| 8,023 |
|
|
| 5,758 |
|
|
| 7,686 |
|
|
| 6,731 |
|
|
| 23,485 |
|
|
| 18,053 |
|
Property management fees (1) |
|
| 1,550 |
|
|
| 1,240 |
|
|
| 1,489 |
|
|
| 1,408 |
|
|
| 4,504 |
|
|
| 3,939 |
|
Advisory and administrative fees (2) |
|
| 1,865 |
|
|
| 1,850 |
|
|
| 1,976 |
|
|
| 1,891 |
|
|
| 5,777 |
|
|
| 5,613 |
|
Corporate general and administrative expenses |
|
| 2,701 |
|
|
| 2,233 |
|
|
| 2,807 |
|
|
| 2,339 |
|
|
| 8,440 |
|
|
| 7,313 |
|
Property general and administrative expenses |
|
| 1,832 |
|
|
| 1,658 |
|
|
| 1,559 |
|
|
| 1,547 |
|
|
| 4,924 |
|
|
| 4,973 |
|
Depreciation and amortization |
|
| 23,338 |
|
|
| 15,398 |
|
|
| 17,723 |
|
|
| 17,228 |
|
|
| 62,479 |
|
|
| 45,692 |
|
Total expenses |
|
| 51,030 |
|
|
| 37,776 |
|
|
| 45,146 |
|
|
| 42,600 |
|
|
| 145,200 |
|
|
| 116,839 |
|
Operating income before gain on sales of real estate |
|
| 1,552 |
|
|
| 3,715 |
|
|
| 5,844 |
|
|
| 4,233 |
|
|
| 9,052 |
|
|
| 14,551 |
|
Gain on sales of real estate |
|
| 38,972 |
|
|
| — |
|
|
| 30,160 |
|
|
| 127,700 |
|
|
| 69,151 |
|
|
| 127,700 |
|
Operating income |
|
| 40,524 |
|
|
| 3,715 |
|
|
| 36,004 |
|
|
| 131,933 |
|
|
| 78,203 |
|
|
| 142,251 |
|
Interest expense |
|
| (11,662 | ) |
|
| (8,088 | ) |
|
| (11,049 | ) |
|
| (9,960 | ) |
|
| (33,704 | ) |
|
| (26,638 | ) |
Loss on extinguishment of debt and modification costs |
|
| (874 | ) |
|
| — |
|
|
| (596 | ) |
|
| (2,869 | ) |
|
| (1,470 | ) |
|
| (2,869 | ) |
Casualty gains |
|
| 51 |
|
|
| — |
|
|
| 4,960 |
|
|
| — |
|
|
| 3,932 |
|
|
| — |
|
Net income (loss) |
|
| 28,039 |
|
|
| (4,373 | ) | ||||||||||||||||
Miscellaneous income |
|
| 322 |
|
|
| — |
|
|
| 1,401 |
|
|
| — |
| ||||||||
Net income |
|
| 29,641 |
|
|
| 119,104 |
|
|
| 48,362 |
|
|
| 112,744 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to redeemable noncontrolling interests in the Operating Partnership |
|
| 84 |
|
|
| (13 | ) | ||||||||||||||||
Net income (loss) attributable to common stockholders |
| $ | 27,955 |
|
| $ | (4,360 | ) | ||||||||||||||||
Other comprehensive loss |
|
|
|
|
|
|
|
| ||||||||||||||||
Unrealized losses on interest rate derivatives |
|
| (50,540 | ) |
|
| (5,665 | ) | ||||||||||||||||
Total comprehensive loss |
|
| (22,501 | ) |
|
| (10,038 | ) | ||||||||||||||||
Comprehensive loss attributable to redeemable noncontrolling interests in the Operating Partnership |
|
| (68 | ) |
|
| (30 | ) | ||||||||||||||||
Comprehensive loss attributable to common stockholders |
| $ | (22,433 | ) |
| $ | (10,008 | ) | ||||||||||||||||
Net income attributable to redeemable noncontrolling interests in the Operating Partnership |
|
| 89 |
|
|
| 357 |
|
|
| 145 |
|
|
| 338 |
| ||||||||
Net income attributable to common stockholders |
| $ | 29,552 |
|
| $ | 118,747 |
|
| $ | 48,217 |
|
| $ | 112,406 |
| ||||||||
Other comprehensive income (loss) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Unrealized gains (losses) on interest rate derivatives |
|
| 4,068 |
|
|
| (3,550 | ) |
|
| (54,518 | ) |
|
| (20,161 | ) | ||||||||
Total comprehensive income (loss) |
|
| 33,709 |
|
|
| 115,554 |
|
|
| (6,156 | ) |
|
| 92,583 |
| ||||||||
Comprehensive income (loss) attributable to redeemable noncontrolling interests in the Operating Partnership |
|
| 101 |
|
|
| 347 |
|
|
| (19 | ) |
|
| 278 |
| ||||||||
Comprehensive income (loss) attributable to common stockholders |
| $ | 33,608 |
|
| $ | 115,207 |
|
| $ | (6,137 | ) |
| $ | 92,305 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding - basic |
|
| 25,388 |
|
|
| 23,550 |
|
|
| 24,372 |
|
|
| 24,088 |
|
|
| 24,688 |
|
|
| 23,793 |
|
Weighted average common shares outstanding - diluted |
|
| 25,851 |
|
|
| 24,044 |
|
|
| 24,926 |
|
|
| 24,557 |
|
|
| 25,194 |
|
|
| 24,280 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per share - basic |
| $ | 1.10 |
|
| $ | (0.19 | ) | ||||||||||||||||
Earnings (loss) per share - diluted |
| $ | 1.08 |
|
| $ | (0.19 | ) | ||||||||||||||||
Earnings per share - basic |
| $ | 1.21 |
|
| $ | 4.93 |
|
| $ | 1.95 |
|
| $ | 4.72 |
| ||||||||
Earnings per share - diluted |
| $ | 1.19 |
|
| $ | 4.84 |
|
| $ | 1.91 |
|
| $ | 4.63 |
|
(1) | Fees incurred to an unaffiliated third party that is an affiliate of the noncontrolling limited partner of the Company’s operating partnership, NexPoint Residential Trust Operating Partnership, L.P. (see Note 10). |
(2) | Fees incurred to the Adviser (see Note 11). |
See Notes to Consolidated Financial Statements
NEXPOINT RESIDENTIAL TRUST, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(dollars in thousands)
(Unaudited)
|
| Preferred Stock |
|
| Common Stock |
|
| Additional |
|
| Accumulated Earnings (Loss) |
|
| Accumulated Other |
|
| Common Stock Held in |
|
|
|
|
|
| Preferred Stock |
|
| Common Stock |
|
| Additional |
|
| Accumulated Earnings (Loss) |
|
| Accumulated Other |
|
| Common Stock Held in |
|
|
|
|
| ||||||||||||||||||||||||||||
|
| Number of Shares |
|
| Par Value |
|
| Number of Shares |
|
| Par Value |
|
| Paid-in Capital |
|
| Less Dividends |
|
| Comprehensive Income (Loss) |
|
| Treasury at Cost |
|
| Total |
| |||||||||||||||||||||||||||||||||||||||||||||
Balances, December 31, 2019 |
|
| — |
|
| $ | — |
|
|
| 25,245,740 |
|
| $ | 251 |
|
| $ | 359,748 |
|
| $ | 63,776 |
|
| $ | 2,466 |
|
| $ | — |
|
| $ | 426,241 |
| ||||||||||||||||||||||||||||||||||||
Three Months ended September 30, 2020 |
| Number of Shares |
|
| Par Value |
|
| Number of Shares |
|
| Par Value |
|
| Paid-in Capital |
|
| Less Dividends |
|
| Comprehensive Income (Loss) |
|
| Treasury at Cost |
|
| Total |
| |||||||||||||||||||||||||||||||||||||||||||||
Balances, June 30, 2020 |
|
| — |
|
| $ | — |
|
|
| 24,298,651 |
|
| $ | 242 |
|
| $ | 343,257 |
|
| $ | 66,860 |
|
| $ | (55,944 | ) |
| $ | — |
|
| $ | 354,415 |
| ||||||||||||||||||||||||||||||||||||
Net income attributable to common stockholders |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 27,955 |
|
|
| — |
|
|
| — |
|
|
| 27,955 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 29,552 |
|
|
| — |
|
|
| — |
|
|
| 29,552 |
|
Repurchase of common stock |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (30,999 | ) |
|
| (30,999 | ) | ||||||||||||||||||||||||||||||||||||
Retirement of common stock held in treasury |
|
| — |
|
|
| — |
|
|
| (225,799 | ) |
|
| (2 | ) |
|
| (7,546 | ) |
|
| — |
|
|
| — |
|
|
| 7,548 |
|
|
| — |
| ||||||||||||||||||||||||||||||||||||
Vesting of stock-based compensation |
|
| — |
|
|
| — |
|
|
| 137,608 |
|
|
| 1 |
|
|
| (433 | ) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| (432 | ) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 1,434 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 1,434 |
|
Issuance of common shares through at-the-market offering |
|
| — |
|
|
| — |
|
|
| 560,000 |
|
|
| 6 |
|
|
| 27,174 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 27,180 |
|
|
| — |
|
|
| — |
|
|
| 243,032 |
|
|
| 2 |
|
|
| 9,839 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 9,841 |
|
Common stock dividends declared ($0.3125 per share) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (8,206 | ) |
|
| — |
|
|
| — |
|
|
| (8,206 | ) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (7,798 | ) |
|
| — |
|
|
| — |
|
|
| (7,798 | ) |
Other comprehensive loss |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (50,388 | ) |
|
| — |
|
|
| (50,388 | ) | ||||||||||||||||||||||||||||||||||||
Other comprehensive income |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 4,056 |
|
|
| — |
|
|
| 4,056 |
| ||||||||||||||||||||||||||||||||||||
Adjustment to reflect redemption value of redeemable noncontrolling interests in the Operating Partnership |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 820 |
|
|
| — |
|
|
| — |
|
|
| 820 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (586 | ) |
|
| — |
|
|
| — |
|
|
| (586 | ) |
Balances, March 31, 2020 |
|
| — |
|
| $ | — |
|
|
| 25,717,549 |
|
| $ | 256 |
|
| $ | 378,943 |
|
| $ | 84,345 |
|
| $ | (47,922 | ) |
|
| (23,451 | ) |
| $ | 392,171 |
| ||||||||||||||||||||||||||||||||||||
Balances, September 30, 2020 |
|
| — |
|
| $ | — |
|
|
| 24,541,683 |
|
| $ | 244 |
|
| $ | 354,530 |
|
| $ | 88,028 |
|
| $ | (51,888 | ) |
| $ | — |
|
| $ | 390,914 |
|
|
| Preferred Stock |
|
| Common Stock |
|
| Additional |
|
| Accumulated Earnings (Loss) |
|
| Accumulated Other |
|
| Common Stock Held in |
|
|
|
|
|
| Preferred Stock |
|
| Common Stock |
|
| Additional |
|
| Accumulated Earnings (Loss) |
|
| Accumulated Other |
|
| Common Stock Held in |
|
|
|
|
| ||||||||||||||||||||||||||||
|
| Number of Shares |
|
| Par Value |
|
| Number of Shares |
|
| Par Value |
|
| Paid-in Capital |
|
| Less Dividends |
|
| Comprehensive Income |
|
| Treasury at Cost |
|
| Total |
| |||||||||||||||||||||||||||||||||||||||||||||
Balances, December 31, 2018 |
|
| — |
|
| $ | — |
|
|
| 23,499,635 |
|
| $ | 234 |
|
| $ | 285,511 |
|
| $ | (6,764 | ) |
| $ | 17,047 |
|
| $ | — |
|
| $ | 296,028 |
| ||||||||||||||||||||||||||||||||||||
Nine Months ended September 30, 2020 |
| Number of Shares |
|
| Par Value |
|
| Number of Shares |
|
| Par Value |
|
| Paid-in Capital |
|
| Less Dividends |
|
| Comprehensive Income (Loss) |
|
| Treasury at Cost |
|
| Total |
| |||||||||||||||||||||||||||||||||||||||||||||
Balances, December 31, 2019 |
|
| — |
|
| $ | — |
|
|
| 25,245,740 |
|
| $ | 251 |
|
| $ | 359,748 |
|
| $ | 63,776 |
|
| $ | 2,466 |
|
| $ | — |
|
| $ | 426,241 |
| ||||||||||||||||||||||||||||||||||||
Net income attributable to common stockholders |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (4,360 | ) |
|
| — |
|
|
| — |
|
|
| (4,360 | ) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 48,217 |
|
|
| — |
|
|
| — |
|
|
| 48,217 |
|
Repurchases of common stock |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (44,530 | ) |
|
| (44,530 | ) | ||||||||||||||||||||||||||||||||||||
Retirement of common stock held in treasury |
|
| — |
|
|
| — |
|
|
| (1,644,697 | ) |
|
| (16 | ) |
|
| (44,514 | ) |
|
| — |
|
|
| — |
|
|
| 44,530 |
|
|
| — |
| ||||||||||||||||||||||||||||||||||||
Vesting of stock-based compensation |
|
| — |
|
|
| — |
|
|
| 143,642 |
|
|
| 1 |
|
|
| 1,069 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 1,070 |
|
|
| — |
|
|
| — |
|
|
| 137,608 |
|
|
| 1 |
|
|
| 2,338 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 2,339 |
|
Issuance of common shares through at-the-market offering |
|
| — |
|
|
| — |
|
|
| 803,032 |
|
|
| 8 |
|
|
| 36,958 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 36,966 |
| ||||||||||||||||||||||||||||||||||||
Common stock dividends declared ($0.9375 per share) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (23,838 | ) |
|
| — |
|
|
| — |
|
|
| (23,838 | ) | ||||||||||||||||||||||||||||||||||||
Other comprehensive loss |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (5,648 | ) |
|
| — |
|
|
| (5,648 | ) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (54,354 | ) |
|
| — |
|
|
| (54,354 | ) |
Common stock dividends declared ($0.275 per share) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (6,641 | ) |
|
| — |
|
|
| — |
|
|
| (6,641 | ) | ||||||||||||||||||||||||||||||||||||
Adjustment to reflect redemption value of redeemable noncontrolling interests in the Operating Partnership |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (126 | ) |
|
| — |
|
|
| — |
|
|
| (126 | ) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (127 | ) |
|
| — |
|
|
| — |
|
|
| (127 | ) |
Balances, March 31, 2019 |
|
| — |
|
| $ | — |
|
|
| 23,643,277 |
|
| $ | 235 |
|
| $ | 286,580 |
|
| $ | (17,891 | ) |
| $ | 11,399 |
|
| $ | — |
|
| $ | 280,323 |
| ||||||||||||||||||||||||||||||||||||
Balances, September 30, 2020 |
|
| — |
|
| $ | — |
|
|
| 24,541,683 |
|
| $ | 244 |
|
| $ | 354,530 |
|
| $ | 88,028 |
|
| $ | (51,888 | ) |
| $ | — |
|
| $ | 390,914 |
|
See Notes to Consolidated Financial Statements
NEXPOINT RESIDENTIAL TRUST, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Continued)
(dollars in thousands)
(Unaudited)
|
| Preferred Stock |
|
| Common Stock |
|
| Additional |
|
| Accumulated Earnings (Loss) |
|
| Accumulated Other |
|
| Common Stock Held in |
|
|
|
|
| ||||||||||||||
Three Months ended September 30, 2019 |
| Number of Shares |
|
| Par Value |
|
| Number of Shares |
|
| Par Value |
|
| Paid-in Capital |
|
| Less Dividends |
|
| Comprehensive Income |
|
| Treasury at Cost |
|
| Total |
| |||||||||
Balances, June 30, 2019 |
|
| — |
|
| $ | — |
|
|
| 23,895,442 |
|
| $ | 238 |
|
| $ | 297,448 |
|
| $ | (26,824 | ) |
| $ | 486 |
|
| $ | — |
|
| $ | 271,348 |
|
Net income attributable to common stockholders |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 118,747 |
|
|
| — |
|
|
| — |
|
|
| 118,747 |
|
Vesting of stock-based compensation |
|
| — |
|
|
| — |
|
|
| 37,141 |
|
|
| — |
|
|
| 706 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 706 |
|
Issuance of common shares through at-the-market offering |
|
| — |
|
|
| — |
|
|
| 867,322 |
|
|
| 9 |
|
|
| 39,540 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 39,549 |
|
Common stock dividends declared ($0.275 per share) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (6,847 | ) |
|
| — |
|
|
| — |
|
|
| (6,847 | ) |
Other comprehensive loss |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (3,540 | ) |
|
| — |
|
|
| (3,540 | ) |
Adjustment to reflect redemption value of redeemable noncontrolling interests in the Operating Partnership |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (152 | ) |
|
| — |
|
|
| — |
|
|
| (152 | ) |
Balances, September 30, 2019 |
|
| — |
|
| $ | — |
|
|
| 24,799,905 |
|
| $ | 247 |
|
| $ | 337,694 |
|
| $ | 84,924 |
|
| $ | (3,054 | ) |
| $ | — |
|
| $ | 419,811 |
|
|
| Preferred Stock |
|
| Common Stock |
|
| Additional |
|
| Accumulated Earnings (Loss) |
|
| Accumulated Other |
|
| Common Stock Held in |
|
|
|
|
| ||||||||||||||
Nine Months ended September 30, 2019 |
| Number of Shares |
|
| Par Value |
|
| Number of Shares |
|
| Par Value |
|
| Paid-in Capital |
|
| Less Dividends |
|
| Comprehensive Income |
|
| Treasury at Cost |
|
| Total |
| |||||||||
Balances, December 31, 2018 |
|
| — |
|
| $ | — |
|
|
| 23,499,635 |
|
| $ | 234 |
|
| $ | 285,511 |
|
| $ | (6,764 | ) |
| $ | 17,047 |
|
| $ | — |
|
| $ | 296,028 |
|
Net income attributable to common stockholders |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 112,406 |
|
|
| — |
|
|
| — |
|
|
| 112,406 |
|
Vesting of stock-based compensation |
|
| — |
|
|
| — |
|
|
| 180,783 |
|
|
| 1 |
|
|
| 3,194 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 3,195 |
|
Issuance of common shares through at-the-market offering |
|
| — |
|
|
| — |
|
|
| 1,119,487 |
|
|
| 12 |
|
|
| 48,989 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 49,001 |
|
Common stock dividends declared ($0.825 per share) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (20,190 | ) |
|
| — |
|
|
| — |
|
|
| (20,190 | ) |
Other comprehensive loss |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (20,101 | ) |
|
| — |
|
|
| (20,101 | ) |
Adjustment to reflect redemption value of redeemable noncontrolling interests in the Operating Partnership |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (528 | ) |
|
| — |
|
|
| — |
|
|
| (528 | ) |
Balances, September 30, 2019 |
|
| — |
|
| $ | — |
|
|
| 24,799,905 |
|
| $ | 247 |
|
| $ | 337,694 |
|
| $ | 84,924 |
|
| $ | (3,054 | ) |
| $ | — |
|
| $ | 419,811 |
|
See Notes to Consolidated Financial Statements
NEXPOINT RESIDENTIAL TRUST, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)
|
| For the Three Months Ended March 31, |
|
| For the Nine Months Ended September 30, |
| ||||||||||
|
| 2020 |
|
| 2019 |
|
| 2020 |
|
| 2019 |
| ||||
Cash flows from operating activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
| $ | 28,039 |
|
| $ | (4,373 | ) | ||||||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
|
|
|
|
|
|
|
| ||||||||
Net income |
| $ | 48,362 |
|
| $ | 112,744 |
| ||||||||
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
|
| ||||||||
Gain on sales of real estate |
|
| (38,972 | ) |
|
| — |
|
|
| (69,151 | ) |
|
| (127,700 | ) |
Depreciation and amortization |
|
| 23,338 |
|
|
| 15,398 |
|
|
| 62,479 |
|
|
| 45,692 |
|
Amortization/write-off of deferred financing costs |
|
| 1,207 |
|
|
| 432 |
|
|
| 2,940 |
|
|
| 2,850 |
|
Change in fair value on derivative instruments included in interest expense |
|
| (648 | ) |
|
| (1,854 | ) |
|
| 5,651 |
|
|
| (5,410 | ) |
Net cash received on derivative settlements |
|
| 737 |
|
|
| 1,810 |
| ||||||||
Net cash received (paid) on derivative settlements |
|
| (4,192 | ) |
|
| 5,489 |
| ||||||||
Interest payable on derivative instruments |
|
| (62 | ) |
|
| — |
|
|
| (1,122 | ) |
|
| — |
|
Amortization/write-off of fair market value adjustment of assumed debt |
|
| (51 | ) |
|
| (24 | ) |
|
| (152 | ) |
|
| (98 | ) |
Vesting of stock-based compensation |
|
| 1,300 |
|
|
| 1,070 |
|
|
| 4,071 |
|
|
| 3,944 |
|
Insurance proceeds received for business interruption |
|
| 1,401 |
|
|
| — |
| ||||||||
Casualty gain |
|
| (51 | ) |
|
| — |
|
|
| (4,684 | ) |
|
| — |
|
Changes in operating assets and liabilities, net of effects of acquisitions: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating assets |
|
| 791 |
|
|
| (2,320 | ) |
|
| (3,373 | ) |
|
| (3,711 | ) |
Operating liabilities |
|
| (4,210 | ) |
|
| (6,416 | ) |
|
| 4,294 |
|
|
| 5,143 |
|
Net cash provided by operating activities |
|
| 11,418 |
|
|
| 3,723 |
|
|
| 46,524 |
|
|
| 38,943 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net proceeds from sales of real estate |
|
| 85,418 |
|
|
| — |
|
|
| 140,197 |
|
|
| 286,495 |
|
Prepaid acquisition costs |
|
| (2,025 | ) |
|
| — |
|
|
| (5,077 | ) |
|
| — |
|
Insurance proceeds paid for casualty losses |
|
| (549 | ) |
|
| — |
|
|
| (2,049 | ) |
|
| — |
|
Insurance proceeds received for casualty losses |
|
| 3,049 |
|
|
| — |
|
|
| 1,626 |
|
|
| — |
|
Additions to real estate investments |
|
| (13,604 | ) |
|
| (6,897 | ) |
|
| (35,298 | ) |
|
| (28,252 | ) |
Acquisitions of real estate investments |
|
| — |
|
|
| (124,829 | ) |
|
| — |
|
|
| (555,268 | ) |
Net cash provided by (used in) investing activities |
|
| 72,289 |
|
|
| (131,726 | ) |
|
| 99,399 |
|
|
| (297,025 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage proceeds received |
|
| — |
|
|
| 78,987 |
|
|
| — |
|
|
| 290,324 |
|
Mortgage payments |
|
| (41,845 | ) |
|
| (238 | ) |
|
| (71,723 | ) |
|
| (145,577 | ) |
Credit facilities proceeds received |
|
| 35,000 |
|
|
| 52,500 |
|
|
| 35,000 |
|
|
| 144,000 |
|
Credit facilities payments |
|
| (28,000 | ) |
|
| — |
|
|
| (38,000 | ) |
|
| (37,000 | ) |
Deferred financing costs paid |
|
| — |
|
|
| (1,355 | ) |
|
| — |
|
|
| (3,388 | ) |
Interest rate cap fees paid |
|
| — |
|
|
| (20 | ) |
|
| — |
|
|
| (20 | ) |
Prepayment penalties on extinguished debt |
|
| (416 | ) |
|
| — |
|
|
| (711 | ) |
|
| — |
|
Proceeds from the issuance of common shares through at-the-market offering, net of offering costs |
|
| 27,180 |
|
|
| — |
|
|
| 36,966 |
|
|
| 49,001 |
|
Payments for taxes related to net share settlement of stock-based compensation |
|
| (1,732 | ) |
|
| — |
|
|
| (1,732 | ) |
|
| (749 | ) |
Repurchase of common stock |
|
| (30,999 | ) |
|
| — |
|
|
| (44,530 | ) |
|
| — |
|
Dividends paid to common stockholders |
|
| (8,496 | ) |
|
| (6,717 | ) |
|
| (23,759 | ) |
|
| (20,157 | ) |
Net cash (used in) provided by financing activities |
|
| (49,308 | ) |
|
| 123,157 |
|
|
| (108,489 | ) |
|
| 276,434 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash, cash equivalents and restricted cash |
|
| 34,399 |
|
|
| (4,846 | ) | ||||||||
Net increase in cash, cash equivalents and restricted cash |
|
| 37,434 |
|
|
| 18,352 |
| ||||||||
Cash, cash equivalents and restricted cash, beginning of period |
|
| 71,182 |
|
|
| 43,129 |
|
|
| 71,182 |
|
|
| 43,129 |
|
Cash, cash equivalents and restricted cash, end of period |
| $ | 105,581 |
|
| $ | 38,283 |
|
| $ | 108,616 |
|
| $ | 61,481 |
|
See Notes to Consolidated Financial Statements
NEXPOINT RESIDENTIAL TRUST, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)
Supplemental Disclosure of Cash Flow Information |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest paid |
| $ | 11,981 |
|
| $ | 9,176 |
|
| $ | 27,573 |
|
| $ | 30,444 |
|
Prepayment penalties |
|
| 416 |
|
|
| — |
|
|
| 711 |
|
|
| 1,449 |
|
Supplemental Disclosure of Noncash Activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capitalized construction costs included in accounts payable and other accrued liabilities |
|
| 4,252 |
|
|
| 1,542 |
|
|
| 5,288 |
|
|
| 4,448 |
|
Change in fair value on derivative instruments designated as hedges |
|
| (50,540 | ) |
|
| (5,665 | ) |
|
| (54,518 | ) |
|
| (20,161 | ) |
Other assets acquired from acquisitions |
|
| — |
|
|
| 87 |
|
|
| — |
|
|
| 357 |
|
Liabilities assumed from acquisitions |
|
| — |
|
|
| 271 |
|
|
| — |
|
|
| 5,946 |
|
Decrease in dividends payable upon vesting of restricted stock units |
|
| (290 | ) |
|
| (76 | ) | ||||||||
Fair market value adjustment of assumed debt |
|
| — |
|
|
| 980 |
| ||||||||
Assumed debt on acquisitions |
|
| — |
|
|
| 70,486 |
| ||||||||
Increase in dividends payable upon vesting of restricted stock units |
|
| 79 |
|
|
| 33 |
| ||||||||
Write-off of fully amortized in-place leases |
|
| 8,203 |
|
|
| 3,049 |
|
|
| 12,414 |
|
|
| — |
|
Write-off of deferred financing costs |
|
| 455 |
|
|
| — |
|
|
| 757 |
|
|
| 1,420 |
|
See Notes to Consolidated Financial Statements
NEXPOINT RESIDENTIAL TRUST, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Organization and Description of Business
NexPoint Residential Trust, Inc. (the “Company”, “we”, “our”) was incorporated in Maryland on September 19, 2014, and has elected to be taxed as a real estate investment trust (“REIT”). The Company is focused on “value-add” multifamily investments primarily located in the Southeastern and Southwestern United States. Substantially all of the Company’s business is conducted through NexPoint Residential Trust Operating Partnership, L.P. (the “OP”), the Company’s operating partnership. The Company owns its properties (the “Portfolio”) through the OP and its wholly owned taxable REIT subsidiary (“TRS”). The OP owns approximately 99.9% of the Portfolio; the TRS owns approximately 0.1% of the Portfolio. The Company’s wholly owned subsidiary, NexPoint Residential Trust Operating Partnership GP, LLC (the “OP GP”), is the sole general partner of the OP. As of March 31,September 30, 2020, there were 23,819,402 common units in the OP (“OP Units”) outstanding, of which 23,746,169, or 99.7%, were owned by the Company and 73,233, or 0.3%, were owned by a noncontrolling limited partner (see Note 10).
The Company is externally managed by NexPoint Real Estate Advisors, L.P. (the “Adviser”), through an agreement dated March 16, 2015, as amended, and renewed on February 17, 2020 for a one-year term (the “Advisory Agreement”), by and among the Company, the OP and the Adviser. The Adviser conducts substantially all of the Company’s operations and provides asset management services for its real estate investments. The Company expects it will only have accounting employees while the Advisory Agreement is in effect. All of the Company’s investment decisions are made by the Adviser, subject to general oversight by the Adviser’s investment committee and the Company’s board of directors (the “Board”). The Adviser is wholly owned by NexPoint Advisors, L.P. (the “Sponsor”). Our Sponsor is affiliated through common control with Highland Capital Management, L.P.
The Company’s investment objectives are to maximize the cash flow and value of properties owned, acquire properties with cash flow growth potential, provide quarterly cash distributions and achieve long-term capital appreciation for its stockholders through targeted management and a value-add program. Consistent with the Company’s policy to acquire assets for both income and capital gain, the Company intends to hold at least majority interests in its properties for long-term appreciation and to engage in the business of directly or indirectly acquiring, owning, and operating well-located multifamily properties with a value-add component in large cities and suburban submarkets of large cities primarily in the Southeastern and Southwestern United States consistent with its investment objectives. Economic and market conditions may influence the Company to hold properties for different periods of time. From time to time, the Company may sell a property if, among other deciding factors, the sale would be in the best interest of its stockholders.
2. Summary of Significant Accounting Policies
Basis of Accounting
The accompanying unaudited consolidated financial statements are presented in accordance with accounting principles generally accepted in the United States (“GAAP”). GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities at the dates of the unaudited consolidated financial statements and the amounts of revenues and expenses during the reporting periods. Actual amounts realized or paid could differ from those estimates. All significant intercompany accounts and transactions have been eliminated in consolidation. There have been no significant changes to the Company’s significant accounting policies during the threenine months ended March 31,September 30, 2020.
The accompanying unaudited consolidated financial statements have been prepared according to the rules and regulations of the SEC. Certain information and note disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted according to such rules and regulations, although management believes that the disclosures are adequate to make the information presented not misleading.
In the opinion of management, all adjustments and eliminations necessary for the fair presentation of the Company’s financial position as of MarchSeptember 30, 2020 and December 31, 20202019 and results of operations for the three and nine months ended March 31,September 30, 2020 and 2019 have been included. Such adjustments are normal and recurring in nature. The unaudited information included in this quarterly report on Form 10-Q should be read in conjunction with the Company’s audited consolidated financial statements for the year ended December 31, 2019 and notes thereto included in its Annual Report on Form 10-K filed with the SEC on February 21, 2020.
Principles of Consolidation
The Company accounts for subsidiary partnerships, joint ventures and other similar entities in which it holds an ownership interest in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 810, Consolidation. The Company first evaluates whether each entity is a variable interest entity (“VIE”). Under the VIE model, the Company consolidates an entity when it has control to direct the activities of the VIE and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE. Under the voting model, the Company consolidates an entity when it controls the entity through ownership of a majority voting interest. The unaudited consolidated financial statements include the accounts of the Company and its subsidiaries, including the OP and its subsidiaries.
Revenue Recognition
The Company’s primary operations consist of rental income earned from its residents under lease agreements typically with terms of one year or less. Rental income is recognized when earned. This policy effectively results in income recognition on the straight-line method over the related terms of the leases. Resident reimbursements and other income consist of charges billed to residents for utilities, carport and garage rental, and pets, administrative, application and other fees and are recognized when earned. The Company implemented the provisions of Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”) as of January 1, 2019 using the modified retrospective approach. The adoption of ASU 2014-09 did not have a material impact on the Company’s consolidated financial statements as a substantial portion of its revenue consists of rental income from leasing arrangements, which is specifically excluded from ASU 2014-09.
In February 2016, the FASB issued ASU 2016-02, Leases (“ASU 2016-02”), which supersedes the current accounting for leases and while retaining two distinct types of leases, finance and operating, (1) requires lessees to record a right of use asset and a related liability for the rights and obligations associated with a lease, regardless of lease classification, and recognize lease expense in a manner similar to current accounting, (2) eliminates most real estate specific lease provisions and (3) aligns many of the underlying lessor model principles with those in the new revenue standard. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases today. Entities are required to use a modified retrospective approach when transitioning to the ASU for leases that exist as of or are entered into after the beginning of the earliest comparative period presented in the financial statements. As lessors, substantially all of the Company’s agreements have a term of 12 months or less. For lessors, accounting for leases under the new standard is substantially the same as existing guidance for sales-type leases, direct financing leases, and operating leases, but eliminates current real estate specific provisions and changes the treatment of initial direct costs.
In July 2018, the FASB issued ASU 2018-11, Leases – Targeted Improvements (“ASU 2018-11”), which provides entities with relief from the costs of implementing certain aspects of ASU 2016-02. ASU 2018-11 provides a practical expedient that allows lessors to not separate lease and non-lease components in a contract and allocate the consideration in the contract to the separate components if both (i) the timing and pattern of revenue recognition for the non-lease component and the related lease component are the same and (ii) the combined single lease component would be classified as an operating lease. The Company elected the practical expedient to account for lease and non-lease components as a single component in lease contracts where the Company is the lessor. The Company implemented the provisions of ASU 2018-11 and 2016-02, collectively Topic 842 Leases (“ASC 842”), effective January 1, 2019, and elected the transition option that the ASU provides which permits entities to not recast the comparative periods presented when transitioning to the standard. The Company implemented changes to its business processes and controls related to accounting for and the presentation and disclosure of leases in the consolidated statements of operations and began presenting all rentals and reimbursements from tenants as a single line item within rental income on the consolidated statements of operations and comprehensive income.income (loss). The table below outlines the components of rental income and its other components which were previously classified as other income for the three and nine months ended March 31,September 30, 2020 and 2019:
|
| For the Three Months Ended March 31, |
|
| For the Three Months Ended September 30, |
|
| For the Nine Months Ended September 30, |
| |||||||||||||||
Lease Income Type |
| 2020 |
|
| 2019 |
|
| 2020 |
|
| 2019 |
|
| 2020 |
|
| 2019 |
| ||||||
Rental income |
| $ | 45,468 |
|
| $ | 36,322 |
|
| $ | 43,813 |
|
| $ | 40,828 |
|
| $ | 133,322 |
|
| $ | 114,861 |
|
Utility reimbursements (1) |
|
| 3,044 |
|
|
| 2,541 |
|
|
| 3,179 |
|
|
| 2,892 |
|
|
| 9,237 |
|
|
| 7,972 |
|
Late fees (1) |
|
| 484 |
|
|
| 379 |
|
|
| 192 |
|
|
| 417 |
|
|
| 652 |
|
|
| 1,147 |
|
Pet fees (1) |
|
| 237 |
|
|
| 180 |
|
|
| 230 |
|
|
| 213 |
|
|
| 708 |
|
|
| 600 |
|
Other fees (1) |
|
| 1,882 |
|
|
| 1,029 |
|
|
| 2,164 |
|
|
| 1,504 |
|
|
| 6,026 |
|
|
| 3,690 |
|
Total rental income |
| $ | 51,115 |
|
| $ | 40,451 |
|
| $ | 49,578 |
|
| $ | 45,854 |
|
| $ | 149,945 |
|
| $ | 128,270 |
|
(1) | Previously classified as other income prior to December 31, 2019. |
The table below quantifies the effects on rental and other income for the three and nine months ended March 31,September 30, 2020 and 2019 from the adoption ASC 842:
|
| For the Three Months Ended March 31, |
|
| For the Three Months Ended September 30, |
|
| For the Nine Months Ended September 30, |
| |||||||||||||||
|
| 2020 |
|
| 2019 |
|
| 2020 |
|
| 2019 |
|
| 2020 |
|
| 2019 |
| ||||||
Prior to adoption of ASC 842 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental income |
| $ | 45,468 |
|
| $ | 36,322 |
|
| $ | 43,813 |
|
| $ | 40,828 |
|
| $ | 133,322 |
|
| $ | 114,861 |
|
Other income |
|
| 7,114 |
|
|
| 5,169 |
|
|
| 7,177 |
|
|
| 6,005 |
|
|
| 20,930 |
|
|
| 16,529 |
|
Total revenue |
| $ | 52,582 |
|
| $ | 41,491 |
|
| $ | 50,990 |
|
| $ | 46,833 |
|
| $ | 154,252 |
|
| $ | 131,390 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Post adoption of ASC 842 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental income |
| $ | 51,115 |
|
| $ | 40,451 |
|
| $ | 49,578 |
|
| $ | 45,854 |
|
| $ | 149,945 |
|
| $ | 128,270 |
|
Other income |
|
| 1,467 |
|
|
| 1,040 |
|
|
| 1,412 |
|
|
| 979 |
|
|
| 4,307 |
|
|
| 3,120 |
|
Total revenue |
| $ | 52,582 |
|
| $ | 41,491 |
|
| $ | 50,990 |
|
| $ | 46,833 |
|
| $ | 154,252 |
|
| $ | 131,390 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Differences resulting in ASC 842 adoption |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental income difference |
| $ | 5,647 |
|
| $ | 4,129 |
|
| $ | 5,765 |
|
| $ | 5,026 |
|
| $ | 16,623 |
|
| $ | 13,409 |
|
Other income difference |
|
| (5,647 | ) |
|
| (4,129 | ) |
|
| (5,765 | ) |
|
| (5,026 | ) |
|
| (16,623 | ) |
|
| (13,409 | ) |
Total revenue difference |
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
Certain revenue streams such as service provider income and damage recoveries did not qualify for the practical expedient and therefore remained in other income and were subjected to ASU 2014-09.
In April 2020, the Financial Accounting Standards Board issued a Staff Q&A on accounting for leases during the COVID-19 pandemic, focused on the application of lease guidance in ASC 842, Leases. The Q&A states that some lease contracts may contain explicit or implicit enforceable rights and obligations that require lease concessions if certain circumstances arise that are beyond the control of the parties to the contract. Therefore, entities would need to perform a lease-by-lease analysis to determine whether contractual provisions in an existing lease agreement provide enforceable rights and obligations related to lease concessions. The FASB determined it would be acceptable for entities to not perform a lease-by-lease analysis regarding rent concessions resulting from COVID-19, and to instead make a policy election regarding rent concessions, which would give entities the option to account or not to account for these rent concessions as lease modifications if the total payments required by the modified contract are substantially the same or less than the total payments required by the original contract. Entities making the election to account for these rent concessions as lease modifications would recognize the effects of rent abatements and rent deferrals on a prospective straight-line basis over the remainder of the modified contract. We have made the election to not perform a lease-by-lease analysis to determine whether contractual provisions in an existing lease agreement provide enforceable rights and obligations related to payment plans. By electing the FASB relief, we have also made an accounting policy election to not account for rent deferrals provided to lessees due to the COVID-19 pandemic as lease modifications. Lessees are required to pay the full outstanding balance of the rent deferred over the period of the payment plan.
Purchase Price Allocation
Upon acquisition of a property, the purchase price and related acquisition costs (“total consideration”) are allocated to land, buildings, improvements, furniture, fixtures, and equipment, and intangible lease assets in accordance with FASB ASC 805, Business Combinations. Acquisition costs are capitalized in accordance with FASB ASC 805.
The allocation of total consideration, which is determined using inputs that are classified within Level 3 of the fair value hierarchy established by FASB ASC 820, Fair Value Measurement and Disclosures (“ASC 820”) (see Note 7), is based on management’s estimate of the property’s “as-if” vacant fair value and is calculated by using all available information such as the replacement cost of such asset, appraisals, property condition reports, market data and other related information. The allocation of the total consideration to intangible lease assets represents the value associated with the in-place leases, which may include lost rent, leasing commissions, legal and other related costs, which the Company, as buyer of the property, did not have to incur to obtain the residents. If any debt is assumed in an acquisition, the difference between the fair value, which is estimated using inputs that are classified within Level 2 of the fair value hierarchy, and the face value of debt is recorded as a premium or discount and amortized as interest expense over the life of the debt assumed.
Real estate assets, including land, buildings, improvements, furniture, fixtures and equipment, and intangible lease assets are stated at historical cost less accumulated depreciation and amortization. Costs incurred in making repairs and maintaining real estate assets are expensed as incurred. Expenditures for improvements, renovations, and replacements are capitalized at cost. Real estate-related depreciation and amortization are computed on a straight-line basis over the estimated useful lives as described in the following table:
Land |
| Not depreciated |
Buildings |
| 30 years |
Improvements |
| 15 years |
Furniture, fixtures, and equipment |
| 3 years |
Intangible lease assets |
| 6 months |
Construction in progress includes the cost of renovation projects being performed at the various properties. Once a project is complete, the historical cost of the renovation is placed into service in one of the categories above depending on the type of renovation project and is depreciated over the estimated useful lives as described in the table above.
Impairment
Real estate assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The key inputs into our impairment analysis include, but are not limited to, the holding period, net operating income, and capitalization rates. In such cases, the Company will evaluate the recoverability of such real estate assets based on estimated future cash flows and the estimated liquidation value of such real estate assets, and provide for impairment if such undiscounted cash flows are insufficient to recover the carrying amount of the real estate asset. If impaired, the real estate asset will be written down to its estimated fair value. The Company’s impairment analysis identifies and evaluates events or changes in circumstances that indicate the carrying amount of a real estate investment may not be recoverable, including determining the period the Company will hold the rental property, net operating income, and the estimated capitalization rate for each respective real estate investment. As of March 31,September 30, 2020, the Company has 0t recorded any impairment on its real estate assets. However, weWe continue to monitor the impact of COVID-19 on our real estate assets (see “–Coronavirus“Coronavirus (“COVID-19”)” for additional information, below).
Held for Sale
The Company periodically classifies real estate assets as held for sale when certain criteria are met in accordance with GAAP. At that time, the Company presents the net real estate assets and the net debt associated with the real estate held for sale separately in its consolidated balance sheet, and the Company ceases recording depreciation and amortization expense related to that property. Real estate held for sale is reported at the lower of its carrying amount or its estimated fair value less estimated costs to sell. As of March 31,September 30, 2020, there are 0 properties held for sale.
Income Taxes
The Company has elected to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the “Code”), and expects to continue to qualify as a REIT. To qualify as a REIT, the Company must meet a number of organizational and operational requirements, including a requirement to distribute annually at least 90% of its “REIT taxable income,” as defined by the Code, to its stockholders. As a REIT, the Company will be subject to federal income tax on its undistributed REIT taxable income and net capital gain and to a 4% nondeductible excise tax on any amount by which distributions it pays with respect to any calendar year are less than the sum of (1) 85% of its ordinary income, (2) 95% of its capital gain net income and (3) 100% of its undistributed income from prior years. The Company intends to operate in such a manner so as to qualify as a REIT, but no assurance can be given that the Company will operate in a manner so as to qualify as a REIT. Taxable income from certain non-REIT activities is managed through a TRS and is subject to applicable federal, state, and local income and margin taxes. The Company had no significant taxes associated with its TRS for the threenine months ended March 31,September 30, 2020 and 2019.
If the Company fails to meet these requirements, it could be subject to federal income tax on all of the Company’s taxable income at regular corporate rates for that year. The Company would not be able to deduct distributions paid to stockholders in any year in which it fails to qualify as a REIT. Additionally, the Company will also be disqualified from electing to be taxed as a REIT for the four taxable years following the year during which qualification was lost unless the Company is entitled to relief under specific statutory provisions. As of March 31,September 30, 2020, the Company believes it is in compliance with all applicable REIT requirements.
The Company evaluates the accounting and disclosure of tax positions taken or expected to be taken in the course of preparing the Company’s tax returns to determine whether the tax positions are “more-likely-than-not” (greater than 50 percent probability) of being sustained by the applicable tax authority. Tax positions not deemed to meet the more-likely-than-not threshold would be recorded as a tax benefit or expense in the current year. The Company’s management is required to analyze all open tax years, as defined by the statute of limitations, for all major jurisdictions, which include federal and certain states. The Company has no examinations in progress and none are expected at this time.
The Company recognizes its tax positions and evaluates them using a two-step process. First, the Company determines whether a tax position is more likely than not to be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. Second, the Company will determine the amount of benefit to recognize and record the amount that is more likely than not to be realized upon ultimate settlement.
The Company had 0 material unrecognized tax benefit or expense, accrued interest or penalties as of March 31,September 30, 2020. The Company and its subsidiaries are subject to federal income tax as well as income tax of various state and local jurisdictions. The 2019, 2018 and 2017 tax years remain open to examination by tax jurisdictions to which the Company and its subsidiaries are subject. When applicable, the Company recognizes interest and/or penalties related to uncertain tax positions on its consolidated statements of operations and comprehensive income (loss).
Recent Accounting Pronouncements
In January 2016, the FASB issued ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU 2016-01”), which changes certain recognition, measurement, presentation, and disclosure requirements for financial instruments. The ASU requires all equity investments, except those accounted for under the equity method of accounting or resulting in consolidation, to be measured at fair value with changes in fair value recognized in net income. The ASU also simplifies the impairment assessment for equity investments without readily determinable fair values, amends the presentation requirements for changes in the fair value of financial liabilities, requires presentation of financial instruments by measurement category and form of financial asset, and eliminates the requirement to disclose the methods and significant assumptions used in estimating the fair value of financial instruments. The ASU is effective for annual and interim periods in fiscal years beginning after December 15, 2018. The Company implemented the provisions of ASU 2016-01 as of January 1, 2019, and it did not have a material impact on the Company’s consolidated financial statements as the Company does not, nor does it expect to, have a material amount of financial assets or financial liabilities that would be subject to the provisions of ASU 2016-01.
In August 2016, the FASB issued ASU 2016-15, Classification of Certain Cash Receipts and Cash Payments (Topic 230) (“ASU 2016-15) which amends the classification of cash payments for debt prepayment or debt extinguishment costs. Amendments to Topic 230 made by ASU 2016-15 require that any debt prepayment or debt extinguishment costs arebe classified as cash flows from financing activities. Debt extinguishment costs include third-party costs, premiums paid and other fees paid to creditors that are directly related to the debt prepayment or extinguishment. The Company adopted the provisions of ASU 2016-15 as of January 1, 2019 on a retrospective basis.basis and it did not have a material impact on the Company’s consolidated financial statements.
In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848) (“ASU 2020-04”). ASU 2020-04 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance in ASU 2020-04 is optional and may be elected over time as reference rate reform activities occur. During the first quarterhalf of 2020, the Company has elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients preserves the presentation of derivatives consistent with past presentation. The Company will continue to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur.
Reclassifications
Certain reclassifications have been made to conform the prior period consolidated financial statements and notes to the current period presentation.
Coronavirus (“COVID-19”)
Beginning in January 2020, reports came out of Wuhan, China regarding a new virus which was determined to be highly contagious, more aggressive than typical viruses and for which there is no cure or vaccination at this time. As reported cases and deaths of the COVID-19 virus began increasing in February and continuing through the date of this report, there has been a significant impact to the global economy generally. On March 11, 2020, the World Health Organization declared the COVID-19 outbreak a pandemic. On March 13, 2020, President Trump declared a national emergency in the United States. Over the ensuing weeks, the President and the task force that was set up to deal with preparations across the country, announced sweeping and unprecedented actions to help slow the spread of the virus.
The President’s task force recommended all citizens practice “social distancing” and other protocols to limit interaction between individuals for a period of 15 days, which was later expanded for 30 days and set to endultimately expired on April 30, 2020. Also, many cities and states canceled school or went to online classes, colleges were ordered closed and went to online learning protocols, non-essential businesses such as restaurants or bars closed voluntarily or were ordered closed by local governments, other businesses closed their offices with employees working from home, many businesses canceled non-essential travel, families canceled vacations and airlines reduced traffic. BansWhile many of these restrictions and forced closures were placedinitially lifted in varying degrees beginning in May, the recent spike in COVID-19 cases in the United States has caused many cities and states to reinstitute such restrictions and closures. In addition, the federal U.S. government has imposed restrictions on citizens fromthe entry of certain countries from enteringtravelers into the United States and the U.S./Mexican and U.S./Canadian borders wereremain temporarily closed for all non-essential travel to limit the spread of the virus across countries.
Collectively, these actions, while for the benefit of public health, have also essentially groundedhad a significant impact on the American economy to a halt. As reported on April 18, 2020 by the U.S. Labor Department, 26 million Americans had filed for unemployment in the past 5-weeks, shattering all prior records of unemployment claims during any 5-week period.economy. The U.S. stock market has seeninitially experienced historic declines over an extraordinarily short period of time. Certain industries such as airlines, lodging, entertainment, gaming, cruise ships, plus industries closely associated with these industries have seen, and continue to see, unprecedented declines in business.
The Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) imposed a moratorium on evictions and the charging of late fees, which expired on July 25, 2020. On September 4, 2020, the President issued an executive order, announcing a new moratorium that temporarily halts evictions through December 31, 2020.
As of March 31,September 30, 2020, 152,166 residents have been placedwere on payment plans for the month of March due to the COVID-19 crisis for a total of approximately $6,000$2.8 million in rent. The durations of the payment plans are determined on a case by case basis, in which time the tenant is expected to make rent payments in full. The Company has not granted any rent concessions to residents in response to the crisis as of March 31,September 30, 2020. The Company continues to monitor the impact on this pandemic and its effect on future rent collections, valuation of real estate investments, liquidity and the ability to refinance or repay debt.
3. Investments in Subsidiaries
The Company conducts its operations through the OP, which owns the properties through single asset limited liability companies that are special purpose entities (“SPEs”). The Company consolidates the SPEs that it controls as well as any VIEs where it is the primary beneficiary. In connection with its indirect equity investments in the properties acquired, the Company, through the OP and the TRS, directly or indirectly holds 100% of the membership interests in SPEs that directly own the properties. All of the properties the SPEs own are consolidated in the Company’s consolidated financial statements. The assets of each entity can only be used to settle obligations of that particular entity, and the creditors of each entity have no recourse to the assets of other entities or the Company.
Additionally, the Company has in the past and may in the future enter into purchase and sale transactions structured as reverse like-kind exchanges (“1031 Exchanges”) under Section 1031 of the Code. For a reverse 1031 Exchange in which the Company purchases a new property prior to selling the property to be matched in the like-kind exchange (the Company refers to the new property being acquired in the 1031 Exchange prior to the sale of the related property as a “Parked Asset”), legal title to the Parked Asset is held by an Exchange Accommodation Titleholder (“EAT”) engaged to execute the 1031 Exchange until the sale transaction and the 1031 Exchange are completed. The Company, through a wholly owned subsidiary, enters into a master lease agreement with the EAT whereby the EAT leases the acquired property and all other rights acquired in connection with the acquisition to the Company. The term of the master lease agreement is the earlier of the completion of the reverse 1031 Exchange or 180 days from the date that the property was acquired. The EAT is classified as a VIE as it does not have sufficient equity investment at risk to finance its activities without additional subordinated financial support. The Company consolidates the EAT as its primary beneficiary because it has the ability to control the activities that most significantly impact the EAT’s economic performance and the Company retains all of the legal and economic benefits and obligations related to the Parked Assets prior to completion of the 1031 Exchange. As such, the Parked Assets are included in the Company’s consolidated financial statements as VIEs until legal title is transferred to the Company upon either completion of the 1031 Exchange or termination of the master lease agreement, at which time they will be consolidated as wholly owned subsidiaries.
As of March 31,September 30, 2020, the Company, through the OP and the wholly owned TRS, owned 3736 properties through SPEs. The following table represents the Company’s ownership in each property by virtue of its 100% ownership of the SPEs that directly own the title to each property as of March 31,September 30, 2020 and December 31, 2019:
|
|
|
|
|
| Effective Ownership Percentage at |
|
|
|
|
|
|
| Effective Ownership Percentage at |
|
| ||||||||||
Property Name |
| Location |
| Year Acquired |
| March 31, 2020 |
|
| December 31, 2019 |
|
|
| Location |
| Year Acquired |
| September 30, 2020 |
|
| December 31, 2019 |
|
| ||||
Arbors on Forest Ridge |
| Bedford, Texas |
| 2014 |
|
| 100 | % |
|
| 100 | % |
|
| Bedford, Texas |
| 2014 |
|
| 100 | % |
|
| 100 | % |
|
Cutter's Point |
| Richardson, Texas |
| 2014 |
|
| 100 | % |
|
| 100 | % |
|
| Richardson, Texas |
| 2014 |
|
| 100 | % |
|
| 100 | % |
|
Eagle Crest |
| Irving, Texas |
| 2014 |
|
| 100 | % |
|
| 100 | % |
| (1) | Irving, Texas |
| 2014 |
|
| — |
|
|
| 100 | % |
|
Silverbrook |
| Grand Prairie, Texas |
| 2014 |
|
| 100 | % |
|
| 100 | % |
|
| Grand Prairie, Texas |
| 2014 |
|
| 100 | % |
|
| 100 | % |
|
Beechwood Terrace |
| Antioch, Tennessee |
| 2014 |
|
| 100 | % |
|
| 100 | % |
|
| Antioch, Tennessee |
| 2014 |
|
| 100 | % |
|
| 100 | % |
|
Willow Grove | (1) | Nashville, Tennessee |
| 2014 |
|
| — |
|
|
| 100 | % |
| (1) | Nashville, Tennessee |
| 2014 |
|
| — |
|
|
| 100 | % |
|
Woodbridge | (1) | Nashville, Tennessee |
| 2014 |
|
| — |
|
|
| 100 | % |
| (1) | Nashville, Tennessee |
| 2014 |
|
| — |
|
|
| 100 | % |
|
The Summit at Sabal Park |
| Tampa, Florida |
| 2014 |
|
| 100 | % |
|
| 100 | % |
|
| Tampa, Florida |
| 2014 |
|
| 100 | % |
|
| 100 | % |
|
Courtney Cove |
| Tampa, Florida |
| 2014 |
|
| 100 | % |
|
| 100 | % |
|
| Tampa, Florida |
| 2014 |
|
| 100 | % |
|
| 100 | % |
|
Radbourne Lake |
| Charlotte, North Carolina |
| 2014 |
|
| 100 | % |
|
| 100 | % |
|
| Charlotte, North Carolina |
| 2014 |
|
| 100 | % |
|
| 100 | % |
|
Timber Creek |
| Charlotte, North Carolina |
| 2014 |
|
| 100 | % |
|
| 100 | % |
|
| Charlotte, North Carolina |
| 2014 |
|
| 100 | % |
|
| 100 | % |
|
Sabal Palm at Lake Buena Vista |
| Orlando, Florida |
| 2014 |
|
| 100 | % |
|
| 100 | % |
|
| Orlando, Florida |
| 2014 |
|
| 100 | % |
|
| 100 | % |
|
Southpoint Reserve at Stoney Creek | (1) | Fredericksburg, Virginia |
| 2014 |
|
| — |
|
|
| 100 | % |
| (1) | Fredericksburg, Virginia |
| 2014 |
|
| — |
|
|
| 100 | % |
|
Cornerstone |
| Orlando, Florida |
| 2015 |
|
| 100 | % |
|
| 100 | % |
|
| Orlando, Florida |
| 2015 |
|
| 100 | % |
|
| 100 | % |
|
The Preserve at Terrell Mill |
| Marietta, Georgia |
| 2015 |
|
| 100 | % |
|
| 100 | % |
|
| Marietta, Georgia |
| 2015 |
|
| 100 | % |
|
| 100 | % |
|
Versailles |
| Dallas, Texas |
| 2015 |
|
| 100 | % |
|
| 100 | % |
|
| Dallas, Texas |
| 2015 |
|
| 100 | % |
|
| 100 | % |
|
Seasons 704 Apartments |
| West Palm Beach, Florida |
| 2015 |
|
| 100 | % |
|
| 100 | % |
|
| West Palm Beach, Florida |
| 2015 |
|
| 100 | % |
|
| 100 | % |
|
Madera Point |
| Mesa, Arizona |
| 2015 |
|
| 100 | % |
|
| 100 | % |
|
| Mesa, Arizona |
| 2015 |
|
| 100 | % |
|
| 100 | % |
|
Venue at 8651 |
| Fort Worth, Texas |
| 2015 |
|
| 100 | % |
|
| 100 | % |
|
| Fort Worth, Texas |
| 2015 |
|
| 100 | % |
|
| 100 | % |
|
Parc500 |
| West Palm Beach, Florida |
| 2016 |
|
| 100 | % |
|
| 100 | % |
|
| West Palm Beach, Florida |
| 2016 |
|
| 100 | % |
|
| 100 | % |
|
The Venue on Camelback | (2) | Phoenix, Arizona |
| 2016 |
|
| 100 | % |
|
| 100 | % |
| (2) | Phoenix, Arizona |
| 2016 |
|
| 100 | % |
|
| 100 | % |
|
Old Farm |
| Houston, Texas |
| 2016 |
|
| 100 | % |
|
| 100 | % |
|
| Houston, Texas |
| 2016 |
|
| 100 | % |
|
| 100 | % |
|
Stone Creek at Old Farm |
| Houston, Texas |
| 2016 |
|
| 100 | % |
|
| 100 | % |
|
| Houston, Texas |
| 2016 |
|
| 100 | % |
|
| 100 | % |
|
Hollister Place |
| Houston, Texas |
| 2017 |
|
| 100 | % |
|
| 100 | % |
|
| Houston, Texas |
| 2017 |
|
| 100 | % |
|
| 100 | % |
|
Rockledge Apartments |
| Marietta, Georgia |
| 2017 |
|
| 100 | % |
|
| 100 | % |
|
| Marietta, Georgia |
| 2017 |
|
| 100 | % |
|
| 100 | % |
|
Atera Apartments |
| Dallas, Texas |
| 2017 |
|
| 100 | % |
|
| 100 | % |
|
| Dallas, Texas |
| 2017 |
|
| 100 | % |
|
| 100 | % |
|
Cedar Pointe | (3) | Antioch, Tennessee |
| 2018 |
|
| 100 | % |
|
| 100 | % |
| (3) | Antioch, Tennessee |
| 2018 |
|
| 100 | % |
|
| 100 | % |
|
Crestmont Reserve |
| Dallas, Texas |
| 2018 |
|
| 100 | % |
|
| 100 | % |
|
| Dallas, Texas |
| 2018 |
|
| 100 | % |
|
| 100 | % |
|
Brandywine I & II |
| Nashville, Tennessee |
| 2018 |
|
| 100 | % |
|
| 100 | % |
|
| Nashville, Tennessee |
| 2018 |
|
| 100 | % |
|
| 100 | % |
|
Bella Vista | (4) | Phoenix, Arizona |
| 2019 |
|
| 100 | % |
|
| 100 | % |
| (4) | Phoenix, Arizona |
| 2019 |
|
| 100 | % |
|
| 100 | % |
|
The Enclave | (4) | Tempe, Arizona |
| 2019 |
|
| 100 | % |
|
| 100 | % |
| (4) | Tempe, Arizona |
| 2019 |
|
| 100 | % |
|
| 100 | % |
|
The Heritage | (4) | Phoenix, Arizona |
| 2019 |
|
| 100 | % |
|
| 100 | % |
| (4) | Phoenix, Arizona |
| 2019 |
|
| 100 | % |
|
| 100 | % |
|
Summers Landing |
| Fort Worth, Texas |
| 2019 |
|
| 100 | % |
|
| 100 | % |
|
| Fort Worth, Texas |
| 2019 |
|
| 100 | % |
|
| 100 | % |
|
Residences at Glenview Reserve | (5) | Nashville, Tennessee |
| 2019 |
|
| 100 | % |
|
| 100 | % |
| (5) | Nashville, Tennessee |
| 2019 |
|
| 100 | % |
|
| 100 | % |
|
Residences at West Place | (5) | Orlando, Florida |
| 2019 |
|
| 100 | % |
|
| 100 | % |
| (5) | Orlando, Florida |
| 2019 |
|
| 100 | % |
|
| 100 | % |
|
Avant at Pembroke Pines |
| Pembroke Pines, Florida |
| 2019 |
|
| 100 | % |
|
| 100 | % |
|
| Pembroke Pines, Florida |
| 2019 |
|
| 100 | % |
|
| 100 | % |
|
Arbors of Brentwood |
| Nashville, Tennessee |
| 2019 |
|
| 100 | % |
|
| 100 | % |
|
| Nashville, Tennessee |
| 2019 |
|
| 100 | % |
|
| 100 | % |
|
Torreyana Apartments | (6) | Las Vegas, Nevada |
| 2019 |
|
| 100 | % |
|
| 100 | % |
| (6) | Las Vegas, Nevada |
| 2019 |
|
| 100 | % |
|
| 100 | % |
|
Bloom | (6) | Las Vegas, Nevada |
| 2019 |
|
| 100 | % |
|
| 100 | % |
| (6) | Las Vegas, Nevada |
| 2019 |
|
| 100 | % |
|
| 100 | % |
|
Bella Solara | (6) | Las Vegas, Nevada |
| 2019 |
|
| 100 | % |
|
| 100 | % |
| (6) | Las Vegas, Nevada |
| 2019 |
|
| 100 | % |
|
| 100 | % |
|
(1) | Properties were disposed in 2020. |
(2) | Formerly known as The Colonnade. |
(3) | The EAT that directly owned Cedar Pointe was consolidated as a VIE at December 31, 2018. The master lease agreement with the EAT that directly owned Cedar Pointe terminated on February 20, 2019, at which time legal title to Cedar Pointe transferred to the Company. Upon the transfer of title, the entity that directly owned Cedar Pointe was no longer considered a VIE. |
(4) | The EAT that directly owned Bella Vista, The Enclave and The Heritage was consolidated as a VIE at March 31, 2019. The master lease agreement with the EAT that directly owned these properties terminated on July 27, 2019, at which time legal title transferred to the Company. Upon the transfer of title, the EAT that directly owned these properties was no longer considered a VIE. |
(5) | The Company acquired 2 multifamily properties, the Residences at Glenview Reserve and the Residences at West Place (the “Residences”) on July 17, 2019. The master lease agreement with the EAT that directly owned these properties terminated on September 3, 2019, at which time legal title transferred to the Company. Upon the transfer of title, the EAT that directly owned these properties was no longer considered a VIE. |
(6) | The EAT that directly owned Torreyana, Bloom and Bella Solara was consolidated as a VIE at December 31, 2019. The |
4. Real Estate Investments Statistics
As of March 31,September 30, 2020, the Company was invested in a total of 3736 multifamily properties, as listed below:
|
|
|
|
|
|
|
|
|
|
|
| Average Effective Monthly Rent Per Unit *(1) as of |
|
| % Occupied *(2) as of |
|
|
|
|
|
|
|
|
|
|
|
|
| Average Effective Monthly Rent Per Unit *(1) as of |
|
| % Occupied *(2) as of |
|
| ||||||||||||||||||||
Property Name |
| Rentable Square Footage (in thousands)* |
|
| Number of Units* |
|
| Date Acquired |
| March 31, 2020 |
|
| December 31, 2019 |
|
| March 31, 2020 |
|
| December 31, 2019 |
|
|
| Rentable Square Footage (in thousands) |
|
| Number of Units |
|
| Date Acquired |
| September 30, 2020 |
|
| December 31, 2019 |
|
| September 30, 2020 |
|
| December 31, 2019 |
|
| ||||||||||||
Arbors on Forest Ridge |
|
| 155 |
|
| 210 |
|
| 1/31/2014 |
| $ | 899 |
|
| $ | 894 |
|
|
| 91.9 | % |
|
| 95.7 | % |
|
|
| 155 |
|
|
| 210 |
|
| 1/31/2014 |
| $ | 911 |
|
| $ | 894 |
|
|
| 95.2 | % |
|
| 95.7 | % |
| |
Cutter's Point | (3) |
| 198 |
|
| 0 |
|
| 1/31/2014 |
|
| - |
|
|
| - |
|
|
| 0.0 | % |
|
| 0.0 | % |
| (3) |
| 198 |
|
|
| — |
|
| 1/31/2014 |
|
| — |
|
|
| — |
|
|
| 0.0 | % |
|
| 0.0 | % |
| |
Eagle Crest |
|
| 396 |
|
| 447 |
|
| 1/31/2014 |
|
| 974 |
|
|
| 969 |
|
|
| 94.4 | % |
|
| 96.6 | % |
| ||||||||||||||||||||||||||||
Silverbrook |
|
| 526 |
|
| 642 |
|
| 1/31/2014 |
|
| 889 |
|
|
| 870 |
|
|
| 94.9 | % |
|
| 95.5 | % |
|
|
| 526 |
|
|
| 642 |
|
| 1/31/2014 |
|
| 909 |
|
|
| 870 |
|
|
| 98.1 | % |
|
| 95.5 | % |
| |
Beechwood Terrace |
|
| 272 |
|
| 300 |
|
| 7/21/2014 |
|
| 943 |
|
|
| 937 |
|
|
| 94.0 | % |
|
| 91.3 | % |
|
|
| 272 |
|
|
| 300 |
|
| 7/21/2014 |
|
| 955 |
|
|
| 937 |
|
|
| 94.7 | % |
|
| 91.3 | % |
| |
The Summit at Sabal Park |
|
| 205 |
|
| 252 |
|
| 8/20/2014 |
|
| 1,011 |
|
|
| 1,010 |
|
|
| 95.6 | % |
|
| 97.2 | % |
|
|
| 205 |
|
|
| 252 |
|
| 8/20/2014 |
|
| 1,019 |
|
|
| 1,010 |
|
|
| 96.4 | % |
|
| 97.2 | % |
| |
Courtney Cove |
|
| 225 |
|
| 324 |
|
| 8/20/2014 |
|
| 928 |
|
|
| 927 |
|
|
| 94.1 | % |
|
| 94.8 | % |
|
|
| 225 |
|
|
| 324 |
|
| 8/20/2014 |
|
| 960 |
|
|
| 927 |
|
|
| 95.1 | % |
|
| 94.8 | % |
| |
Radbourne Lake |
|
| 247 |
|
| 225 |
|
| 9/30/2014 |
|
| 1,125 |
|
|
| 1,118 |
|
|
| 93.8 | % |
|
| 90.7 | % |
|
|
| 247 |
|
|
| 225 |
|
| 9/30/2014 |
|
| 1,124 |
|
|
| 1,118 |
|
|
| 97.3 | % |
|
| 90.7 | % |
| |
Timber Creek |
|
| 248 |
|
| 352 |
|
| 9/30/2014 |
|
| 918 |
|
|
| 916 |
|
|
| 94.0 | % |
|
| 94.9 | % |
|
|
| 248 |
|
|
| 352 |
|
| 9/30/2014 |
|
| 946 |
|
|
| 916 |
|
|
| 96.0 | % |
|
| 94.9 | % |
| |
Sabal Palm at Lake Buena Vista |
|
| 371 |
|
| 400 |
|
| 11/5/2014 |
|
| 1,291 |
|
|
| 1,270 |
|
|
| 95.3 | % |
|
| 93.8 | % |
|
|
| 371 |
|
|
| 400 |
|
| 11/5/2014 |
|
| 1,275 |
|
|
| 1,270 |
|
|
| 88.5 | % |
|
| 93.8 | % |
| |
Cornerstone |
|
| 318 |
|
| 430 |
|
| 1/15/2015 |
|
| 1,056 |
|
|
| 1,053 |
|
|
| 93.7 | % |
|
| 95.6 | % |
|
|
| 318 |
|
|
| 430 |
|
| 1/15/2015 |
|
| 1,051 |
|
|
| 1,053 |
|
|
| 94.9 | % |
|
| 95.6 | % |
| |
The Preserve at Terrell Mill |
|
| 692 |
|
| 752 |
|
| 2/6/2015 |
|
| 980 |
|
|
| 969 |
|
|
| 94.7 | % |
|
| 94.9 | % |
|
|
| 692 |
|
|
| 752 |
|
| 2/6/2015 |
|
| 983 |
|
|
| 969 |
|
|
| 96.1 | % |
|
| 94.9 | % |
| |
Versailles |
|
| 301 |
|
| 388 |
|
| 2/26/2015 |
|
| 923 |
|
|
| 923 |
|
|
| 92.8 | % |
|
| 93.0 | % |
|
|
| 301 |
|
|
| 388 |
|
| 2/26/2015 |
|
| 915 |
|
|
| 923 |
|
|
| 95.6 | % |
|
| 93.0 | % |
| |
Seasons 704 Apartments |
|
| 217 |
|
| 222 |
|
| 4/15/2015 |
|
| 1,175 |
|
|
| 1,155 |
|
|
| 98.2 | % |
|
| 94.6 | % |
|
|
| 217 |
|
|
| 222 |
|
| 4/15/2015 |
|
| 1,189 |
|
|
| 1,155 |
|
|
| 97.7 | % |
|
| 94.6 | % |
| |
Madera Point |
|
| 193 |
|
| 256 |
|
| 8/5/2015 |
|
| 946 |
|
|
| 924 |
|
|
| 97.7 | % |
|
| 96.1 | % |
|
|
| 193 |
|
|
| 256 |
|
| 8/5/2015 |
|
| 972 |
|
|
| 924 |
|
|
| 95.7 | % |
|
| 96.1 | % |
| |
Venue at 8651 |
|
| 289 |
|
| 333 |
|
| 10/30/2015 |
|
| 922 |
|
|
| 924 |
|
|
| 95.5 | % |
|
| 96.1 | % |
|
|
| 289 |
|
|
| 333 |
|
| 10/30/2015 |
|
| 935 |
|
|
| 924 |
|
|
| 94.9 | % |
|
| 96.1 | % |
| |
Parc500 |
|
| 266 |
|
| 217 |
|
| 7/27/2016 |
|
| 1,295 |
|
|
| 1,304 |
|
|
| 92.6 | % |
|
| 93.1 | % |
|
|
| 266 |
|
|
| 217 |
|
| 7/27/2016 |
|
| 1,322 |
|
|
| 1,304 |
|
|
| 97.2 | % |
|
| 93.1 | % |
| |
The Venue on Camelback |
|
| 256 |
|
| 415 |
|
| 10/11/2016 |
|
| 799 |
|
|
| 777 |
|
|
| 94.9 | % |
|
| 94.2 | % |
|
|
| 256 |
|
|
| 415 |
|
| 10/11/2016 |
|
| 810 |
|
|
| 777 |
|
|
| 94.0 | % |
|
| 94.2 | % |
| |
Old Farm |
|
| 697 |
|
| 734 |
|
| 12/29/2016 |
|
| 1,148 |
|
|
| 1,162 |
|
|
| 95.2 | % |
|
| 92.8 | % |
|
|
| 697 |
|
|
| 734 |
|
| 12/29/2016 |
|
| 1,134 |
|
|
| 1,162 |
|
|
| 95.0 | % |
|
| 92.8 | % |
| |
Stone Creek at Old Farm |
|
| 186 |
|
| 190 |
|
| 12/29/2016 |
|
| 1,185 |
|
|
| 1,194 |
|
|
| 96.3 | % |
|
| 95.8 | % |
|
|
| 186 |
|
|
| 190 |
|
| 12/29/2016 |
|
| 1,195 |
|
|
| 1,194 |
|
|
| 92.1 | % |
|
| 95.8 | % |
| |
Hollister Place |
|
| 246 |
|
| 260 |
|
| 2/1/2017 |
|
| 1,008 |
|
|
| 995 |
|
|
| 96.5 | % |
|
| 93.1 | % |
|
|
| 246 |
|
|
| 260 |
|
| 2/1/2017 |
|
| 971 |
|
|
| 995 |
|
|
| 95.4 | % |
|
| 93.1 | % |
| |
Rockledge Apartments |
|
| 802 |
|
| 708 |
|
| 6/30/2017 |
|
| 1,267 |
|
|
| 1,260 |
|
|
| 93.9 | % |
|
| 95.3 | % |
|
|
| 802 |
|
|
| 708 |
|
| 6/30/2017 |
|
| 1,255 |
|
|
| 1,260 |
|
|
| 94.6 | % |
|
| 95.3 | % |
| |
Atera Apartments |
|
| 334 |
|
| 380 |
|
| 10/25/2017 |
|
| 1,246 |
|
|
| 1,256 |
|
|
| 93.2 | % |
|
| 93.4 | % |
|
|
| 334 |
|
|
| 380 |
|
| 10/25/2017 |
|
| 1,275 |
|
|
| 1,256 |
|
|
| 92.4 | % |
|
| 93.4 | % |
| |
Cedar Pointe |
|
| 224 |
|
| 210 |
|
| 8/24/2018 |
|
| 1,069 |
|
|
| 1,066 |
|
|
| 92.4 | % |
|
| 91.4 | % |
|
|
| 224 |
|
|
| 210 |
|
| 8/24/2018 |
|
| 1,080 |
|
|
| 1,066 |
|
|
| 96.2 | % |
|
| 91.4 | % |
| |
Crestmont Reserve |
|
| 199 |
|
| 242 |
|
| 9/26/2018 |
|
| 899 |
|
|
| 902 |
|
|
| 94.2 | % |
|
| 94.2 | % |
|
|
| 199 |
|
|
| 242 |
|
| 9/26/2018 |
|
| 895 |
|
|
| 902 |
|
|
| 94.6 | % |
|
| 94.2 | % |
| |
Brandywine I & II |
|
| 414 |
|
| 632 |
|
| 9/26/2018 |
|
| 977 |
|
|
| 978 |
|
|
| 94.0 | % |
|
| 93.7 | % |
|
|
| 414 |
|
|
| 632 |
|
| 9/26/2018 |
|
| 970 |
|
|
| 978 |
|
|
| 92.4 | % |
|
| 93.7 | % |
| |
Bella Vista |
|
| 243 |
|
| 248 |
|
| 1/28/2019 |
|
| 1,272 |
|
|
| 1,265 |
|
|
| 97.2 | % |
|
| 97.2 | % |
|
|
| 243 |
|
|
| 248 |
|
| 1/28/2019 |
|
| 1,291 |
|
|
| 1,265 |
|
|
| 97.6 | % |
|
| 97.2 | % |
| |
The Enclave |
|
| 194 |
|
| 204 |
|
| 1/28/2019 |
|
| 1,308 |
|
|
| 1,295 |
|
|
| 95.6 | % |
|
| 93.6 | % |
|
|
| 194 |
|
|
| 204 |
|
| 1/28/2019 |
|
| 1,373 |
|
|
| 1,295 |
|
|
| 95.6 | % |
|
| 93.6 | % |
| |
The Heritage |
|
| 199 |
|
| 204 |
|
| 1/28/2019 |
|
| 1,262 |
|
|
| 1,265 |
|
|
| 95.1 | % |
|
| 96.6 | % |
|
|
| 199 |
|
|
| 204 |
|
| 1/28/2019 |
|
| 1,285 |
|
|
| 1,265 |
|
|
| 97.1 | % |
|
| 96.6 | % |
| |
Summers Landing |
|
| 139 |
|
| 196 |
|
| 6/7/2019 |
|
| 934 |
|
|
| 920 |
|
|
| 93.4 | % |
|
| 91.8 | % |
|
|
| 139 |
|
|
| 196 |
|
| 6/7/2019 |
|
| 932 |
|
|
| 920 |
|
|
| 96.4 | % |
|
| 91.8 | % |
| |
Residences at Glenview Reserve |
|
| 344 |
|
| 360 |
|
| 7/17/2019 |
|
| 979 |
|
|
| 977 |
|
|
| 94.7 | % |
|
| 94.4 | % |
|
|
| 344 |
|
|
| 360 |
|
| 7/17/2019 |
|
| 989 |
|
|
| 977 |
|
|
| 94.7 | % |
|
| 94.4 | % |
| |
Residences at West Place |
|
| 345 |
|
| 342 |
|
| 7/17/2019 |
|
| 1,219 |
|
|
| 1,211 |
|
|
| 93.3 | % |
|
| 92.7 | % |
|
|
| 345 |
|
|
| 342 |
|
| 7/17/2019 |
|
| 1,252 |
|
|
| 1,211 |
|
|
| 90.1 | % |
|
| 92.7 | % |
| |
Avant at Pembroke Pines |
|
| 1,442 |
|
| 1520 |
|
| 8/30/2019 |
|
| 1,497 |
|
|
| 1,498 |
|
|
| 95.1 | % |
|
| 93.7 | % |
|
|
| 1,442 |
|
|
| 1,520 |
|
| 8/30/2019 |
|
| 1,523 |
|
|
| 1,498 |
|
|
| 95.9 | % |
|
| 93.7 | % |
| |
Arbors of Brentwood |
|
| 325 |
|
| 346 |
|
| 9/10/2019 |
|
| 1,192 |
|
|
| 1,192 |
|
|
| 95.1 | % |
|
| 96.2 | % |
|
|
| 325 |
|
|
| 346 |
|
| 9/10/2019 |
|
| 1,200 |
|
|
| 1,192 |
|
|
| 93.9 | % |
|
| 96.2 | % |
| |
Torreyana Apartments |
|
| 309 |
|
| 315 |
|
| 11/22/2019 |
|
| 1,182 |
|
|
| 1,171 |
|
|
| 94.0 | % |
|
| 95.6 | % |
|
|
| 309 |
|
|
| 315 |
|
| 11/22/2019 |
|
| 1,189 |
|
|
| 1,171 |
|
|
| 95.9 | % |
|
| 95.6 | % |
| |
Bloom |
|
| 498 |
|
| 528 |
|
| 11/22/2019 |
|
| 1,097 |
|
|
| 1,105 |
|
|
| 87.7 | % |
|
| 90.9 | % |
|
|
| 498 |
|
|
| 528 |
|
| 11/22/2019 |
|
| 1,103 |
|
|
| 1,105 |
|
|
| 93.9 | % |
|
| 90.9 | % |
| |
Bella Solara |
|
| 271 |
|
| 320 |
|
| 11/22/2019 |
|
| 1,118 |
|
|
| 1,136 |
|
|
| 86.9 | % |
|
| 91.9 | % |
|
|
| 271 |
|
|
| 320 |
|
| 11/22/2019 |
|
| 1,091 |
|
|
| 1,136 |
|
|
| 95.0 | % |
|
| 91.9 | % |
| |
|
|
| 12,786 |
|
|
| 14,104 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 12,390 |
|
|
| 13,657 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* | Information is |
(1) | Average effective monthly rent per unit is equal to the average of the contractual rent for commenced leases as of |
(2) | Percent occupied is calculated as the number of units occupied as of |
(3) | Cutter’s Point incurred significant tornado damage on October 20, 2019 which resulted in the property ceasing operations in order to start reconstruction (see Note 5). |
5. Real Estate Investments
As of March 31,September 30, 2020, the major components of the Company’s investments in multifamily properties were as follows (in thousands):
Operating Properties |
|
| Land |
|
| Buildings and Improvements |
|
| Intangible Lease Assets |
|
| Construction in Progress |
|
| Furniture, Fixtures and Equipment |
|
| Totals |
|
|
| Land |
|
| Buildings and Improvements |
|
| Intangible Lease Assets |
|
| Construction in Progress |
|
| Furniture, Fixtures and Equipment |
|
| Totals |
| ||||||||||||
Arbors on Forest Ridge |
|
| $ | 2,330 |
|
| $ | 11,590 |
|
| $ | — |
|
| $ | — |
|
| $ | 1,570 |
|
| $ | 15,490 |
|
|
| $ | 2,330 |
|
| $ | 11,681 |
|
| $ | — |
|
| $ | — |
|
| $ | 1,629 |
|
| $ | 15,640 |
|
Cutter's Point |
|
|
| 3,330 |
|
|
| 2,568 |
|
|
| — |
|
|
| 4,738 |
|
|
| 1,878 |
|
|
| 12,514 |
|
|
|
| 3,330 |
|
|
| 2,623 |
|
|
| — |
|
|
| 8,647 |
|
|
| 1,897 |
|
|
| 16,497 |
|
Eagle Crest |
|
|
| 5,450 |
|
|
| 23,847 |
|
|
| — |
|
|
| 3 |
|
|
| 1,888 |
|
|
| 31,188 |
| |||||||||||||||||||||||||
Silverbrook |
|
|
| 4,860 |
|
|
| 27,131 |
|
|
| — |
|
|
| 1 |
|
|
| 4,773 |
|
|
| 36,765 |
|
|
|
| 4,860 |
|
|
| 27,240 |
|
|
| — |
|
|
| — |
|
|
| 4,958 |
|
|
| 37,058 |
|
Beechwood Terrace |
|
|
| 1,390 |
|
|
| 22,200 |
|
|
| — |
|
|
| 32 |
|
|
| 2,613 |
|
|
| 26,235 |
|
|
|
| 1,390 |
|
|
| 22,214 |
|
|
| — |
|
|
| 32 |
|
|
| 2,745 |
|
|
| 26,381 |
|
The Summit at Sabal Park |
|
|
| 5,770 |
|
|
| 13,617 |
|
|
| — |
|
|
| — |
|
|
| 1,643 |
|
|
| 21,030 |
|
|
|
| 5,770 |
|
|
| 13,709 |
|
|
| — |
|
|
| — |
|
|
| 1,781 |
|
|
| 21,260 |
|
Courtney Cove |
|
|
| 5,880 |
|
|
| 13,425 |
|
|
| — |
|
|
| 2 |
|
|
| 2,040 |
|
|
| 21,347 |
|
|
|
| 5,880 |
|
|
| 13,674 |
|
|
| — |
|
|
| 31 |
|
|
| 2,124 |
|
|
| 21,709 |
|
Radbourne Lake |
|
|
| 2,440 |
|
|
| 22,512 |
|
|
| — |
|
|
| — |
|
|
| 2,049 |
|
|
| 27,001 |
|
|
|
| 2,440 |
|
|
| 22,580 |
|
|
| — |
|
|
| — |
|
|
| 2,112 |
|
|
| 27,132 |
|
Timber Creek |
|
|
| 11,260 |
|
|
| 14,015 |
|
|
| — |
|
|
| 8 |
|
|
| 3,036 |
|
|
| 28,319 |
|
|
|
| 11,260 |
|
|
| 14,123 |
|
|
| — |
|
|
| — |
|
|
| 3,373 |
|
|
| 28,756 |
|
Sabal Palm at Lake Buena Vista |
|
|
| 7,580 |
|
|
| 42,375 |
|
|
| — |
|
|
| — |
|
|
| 2,196 |
|
|
| 52,151 |
|
|
|
| 7,580 |
|
|
| 42,393 |
|
|
| — |
|
|
| — |
|
|
| 2,320 |
|
|
| 52,293 |
|
Cornerstone |
|
|
| 1,500 |
|
|
| 30,672 |
|
|
| — |
|
|
| 30 |
|
|
| 3,133 |
|
|
| 35,335 |
|
|
|
| 1,500 |
|
|
| 30,769 |
|
|
| — |
|
|
| — |
|
|
| 3,278 |
|
|
| 35,547 |
|
The Preserve at Terrell Mill |
|
|
| 10,170 |
|
|
| 49,564 |
|
|
| — |
|
|
| 109 |
|
|
| 6,414 |
|
|
| 66,257 |
|
|
|
| 10,170 |
|
|
| 49,934 |
|
|
| — |
|
|
| 1,008 |
|
|
| 6,993 |
|
|
| 68,105 |
|
Versailles |
|
|
| 6,720 |
|
|
| 21,715 |
|
|
| — |
|
|
| — |
|
|
| 3,761 |
|
|
| 32,196 |
|
|
|
| 6,720 |
|
|
| 21,758 |
|
|
| — |
|
|
| — |
|
|
| 3,835 |
|
|
| 32,313 |
|
Seasons 704 Apartments |
|
|
| 7,480 |
|
|
| 14,340 |
|
|
| — |
|
|
| — |
|
|
| 1,568 |
|
|
| 23,388 |
|
|
|
| 7,480 |
|
|
| 14,392 |
|
|
| — |
|
|
| — |
|
|
| 1,686 |
|
|
| 23,558 |
|
Madera Point |
|
|
| 4,920 |
|
|
| 17,635 |
|
|
| — |
|
|
| 1 |
|
|
| 2,071 |
|
|
| 24,627 |
|
|
|
| 4,920 |
|
|
| 17,901 |
|
|
| — |
|
|
| 15 |
|
|
| 2,236 |
|
|
| 25,072 |
|
Venue at 8651 |
|
|
| 2,350 |
|
|
| 18,227 |
|
|
| — |
|
|
| — |
|
|
| 3,387 |
|
|
| 23,964 |
|
|
|
| 2,350 |
|
|
| 17,465 |
|
|
| — |
|
|
| 16 |
|
|
| 3,477 |
|
|
| 23,308 |
|
Parc500 |
|
|
| 3,860 |
|
|
| 20,834 |
|
|
| — |
|
|
| — |
|
|
| 3,520 |
|
|
| 28,214 |
|
|
|
| 3,860 |
|
|
| 20,887 |
|
|
| — |
|
|
| 1 |
|
|
| 3,735 |
|
|
| 28,483 |
|
The Venue on Camelback |
|
|
| 8,340 |
|
|
| 38,021 |
|
|
| — |
|
|
| — |
|
|
| 2,151 |
|
|
| 48,512 |
|
|
|
| 8,340 |
|
|
| 38,075 |
|
|
| — |
|
|
| 41 |
|
|
| 2,385 |
|
|
| 48,841 |
|
Old Farm |
|
|
| 11,078 |
|
|
| 70,764 |
|
|
| — |
|
|
| 19 |
|
|
| 3,133 |
|
|
| 84,994 |
|
|
|
| 11,078 |
|
|
| 70,827 |
|
|
| — |
|
|
| 9 |
|
|
| 3,304 |
|
|
| 85,218 |
|
Stone Creek at Old Farm |
|
|
| 3,493 |
|
|
| 19,454 |
|
|
| — |
|
|
| 1 |
|
|
| 744 |
|
|
| 23,692 |
|
|
|
| 3,493 |
|
|
| 19,462 |
|
|
| — |
|
|
| — |
|
|
| 774 |
|
|
| 23,729 |
|
Hollister Place |
|
|
| 2,782 |
|
|
| 21,814 |
|
|
| — |
|
|
| 23 |
|
|
| 2,285 |
|
|
| 26,904 |
|
|
|
| 2,782 |
|
|
| 21,843 |
|
|
| — |
|
|
| — |
|
|
| 2,482 |
|
|
| 27,107 |
|
Rockledge Apartments |
|
|
| 17,451 |
|
|
| 96,397 |
|
|
| — |
|
|
| 11 |
|
|
| 5,010 |
|
|
| 118,869 |
|
|
|
| 17,451 |
|
|
| 96,511 |
|
|
| — |
|
|
| 123 |
|
|
| 5,255 |
|
|
| 119,340 |
|
Atera Apartments |
|
|
| 22,371 |
|
|
| 37,461 |
|
|
| — |
|
|
| 6 |
|
|
| 2,097 |
|
|
| 61,935 |
|
|
|
| 22,371 |
|
|
| 37,514 |
|
|
| — |
|
|
| 6 |
|
|
| 2,164 |
|
|
| 62,055 |
|
Cedar Pointe |
|
|
| 2,372 |
|
|
| 24,228 |
|
|
| — |
|
|
| — |
|
|
| 1,409 |
|
|
| 28,009 |
|
|
|
| 2,371 |
|
|
| 24,268 |
|
|
| — |
|
|
| 2 |
|
|
| 1,529 |
|
|
| 28,170 |
|
Crestmont Reserve |
|
|
| 4,124 |
|
|
| 20,639 |
|
|
| — |
|
|
| 127 |
|
|
| 1,289 |
|
|
| 26,179 |
|
|
|
| 4,124 |
|
|
| 20,933 |
|
|
| — |
|
|
| 1 |
|
|
| 1,384 |
|
|
| 26,442 |
|
Brandywine I & II |
|
|
| 6,237 |
|
|
| 73,230 |
|
|
| — |
|
|
| 102 |
|
|
| 3,414 |
|
|
| 82,983 |
|
|
|
| 6,237 |
|
|
| 73,532 |
|
|
| — |
|
|
| 7 |
|
|
| 3,929 |
|
|
| 83,705 |
|
Bella Vista |
|
|
| 10,942 |
|
|
| 36,711 |
|
|
| — |
|
|
| — |
|
|
| 1,632 |
|
|
| 49,285 |
|
|
|
| 10,942 |
|
|
| 36,759 |
|
|
| — |
|
|
| — |
|
|
| 2,006 |
|
|
| 49,707 |
|
The Enclave |
|
|
| 11,046 |
|
|
| 30,261 |
|
|
| — |
|
|
| — |
|
|
| 1,293 |
|
|
| 42,600 |
|
|
|
| 11,046 |
|
|
| 30,289 |
|
|
| — |
|
|
| — |
|
|
| 1,683 |
|
|
| 43,018 |
|
The Heritage |
|
|
| 6,835 |
|
|
| 34,624 |
|
|
| — |
|
|
| 25 |
|
|
| 1,364 |
|
|
| 42,848 |
|
|
|
| 6,835 |
|
|
| 34,746 |
|
|
| — |
|
|
| — |
|
|
| 1,693 |
|
|
| 43,274 |
|
Summers Landing |
|
|
| 1,798 |
|
|
| 17,232 |
|
|
| — |
|
|
| 277 |
|
|
| 557 |
|
|
| 19,864 |
|
|
|
| 1,798 |
|
|
| 17,884 |
|
|
| — |
|
|
| 4 |
|
|
| 644 |
|
|
| 20,330 |
|
Residences at Glenview Reserve |
|
|
| 3,367 |
|
|
| 40,465 |
|
|
| — |
|
|
| 574 |
|
|
| 924 |
|
|
| 45,330 |
|
|
|
| 3,367 |
|
|
| 41,732 |
|
|
| — |
|
|
| 68 |
|
|
| 1,279 |
|
|
| 46,446 |
|
Residences at West Place |
|
|
| 3,345 |
|
|
| 51,249 |
|
|
| — |
|
|
| 252 |
|
|
| 873 |
|
|
| 55,719 |
|
|
|
| 3,345 |
|
|
| 51,642 |
|
|
| — |
|
|
| 53 |
|
|
| 997 |
|
|
| 56,037 |
|
Avant at Pembroke Pines |
|
|
| 48,435 |
|
|
| 267,802 |
|
|
| — |
|
|
| 2,325 |
|
|
| 5,679 |
|
|
| 324,241 |
|
|
|
| 48,436 |
|
|
| 268,417 |
|
|
| — |
|
|
| 5,173 |
|
|
| 6,944 |
|
|
| 328,970 |
|
Arbors of Brentwood |
|
|
| 6,346 |
|
|
| 55,092 |
|
|
| — |
|
|
| 287 |
|
|
| 844 |
|
|
| 62,569 |
|
|
|
| 6,346 |
|
|
| 55,717 |
|
|
| — |
|
|
| 26 |
|
|
| 1,054 |
|
|
| 63,143 |
|
Torreyana Apartments |
|
|
| 23,824 |
|
|
| 42,850 |
|
|
| 1,201 |
|
|
| 178 |
|
|
| 785 |
|
|
| 68,838 |
|
|
|
| 23,824 |
|
|
| 43,236 |
|
|
| — |
|
|
| 248 |
|
|
| 1,006 |
|
|
| 68,314 |
|
Bloom |
|
|
| 23,805 |
|
|
| 80,576 |
|
|
| 1,851 |
|
|
| 218 |
|
|
| 1,200 |
|
|
| 107,650 |
|
|
|
| 23,805 |
|
|
| 81,208 |
|
|
| — |
|
|
| 721 |
|
|
| 1,614 |
|
|
| 107,348 |
|
Bella Solara |
|
|
| 12,605 |
|
|
| 52,527 |
|
|
| 1,159 |
|
|
| 151 |
|
|
| 724 |
|
|
| 67,166 |
|
|
|
| 12,605 |
|
|
| 52,855 |
|
|
| — |
|
|
| 193 |
|
|
| 999 |
|
|
| 66,652 |
|
|
|
|
| 317,886 |
|
|
| 1,477,664 |
|
|
| 4,211 |
|
|
| 9,500 |
|
|
| 84,947 |
|
|
| 1,894,208 |
|
|
|
| 312,436 |
|
|
| 1,460,793 |
|
|
| — |
|
|
| 16,425 |
|
|
| 91,304 |
|
|
| 1,880,958 |
|
Accumulated depreciation and amortization |
|
|
| — |
|
|
| (118,888 | ) |
|
| (2,807 | ) |
|
| — |
|
|
| (45,991 | ) |
|
| (167,686 | ) |
|
|
| — |
|
|
| (139,598 | ) |
|
| — |
|
|
| — |
|
|
| (56,202 | ) |
|
| (195,800 | ) |
Total Operating Properties |
|
| $ | 317,886 |
|
| $ | 1,358,776 |
|
| $ | 1,404 |
|
| $ | 9,500 |
|
| $ | 38,956 |
|
| $ | 1,726,522 |
|
|
| $ | 312,436 |
|
| $ | 1,321,195 |
|
| $ | — |
|
| $ | 16,425 |
|
| $ | 35,102 |
|
| $ | 1,685,158 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Total |
|
| $ | 317,886 |
|
| $ | 1,358,776 |
|
| $ | 1,404 |
|
| $ | 9,500 |
|
| $ | 38,956 |
|
| $ | 1,726,522 |
|
As of December 31, 2019, the major components of the Company’s investments in multifamily properties were as follows (in thousands):
Operating Properties |
|
| Land |
|
| Buildings and Improvements |
|
| Intangible Lease Assets |
|
| Construction in Progress |
|
| Furniture, Fixtures and Equipment |
|
| Totals |
|
|
| Land |
|
| Buildings and Improvements |
|
| Intangible Lease Assets |
|
| Construction in Progress |
|
| Furniture, Fixtures and Equipment |
|
| Totals |
| ||||||||||||
Arbors on Forest Ridge |
|
| $ | 2,330 |
|
| $ | 11,585 |
|
| $ | — |
|
| $ | — |
|
| $ | 1,520 |
|
| $ | 15,435 |
|
|
| $ | 2,330 |
|
| $ | 11,585 |
|
| $ | — |
|
| $ | — |
|
| $ | 1,520 |
|
| $ | 15,435 |
|
Cutter's Point |
|
|
| 3,330 |
|
|
| 2,563 |
|
|
| — |
|
|
| 2,648 |
|
|
| 1,878 |
|
|
| 10,419 |
|
|
|
| 3,330 |
|
|
| 2,563 |
|
|
| — |
|
|
| 2,648 |
|
|
| 1,878 |
|
|
| 10,419 |
|
Eagle Crest |
|
|
| 5,450 |
|
|
| 23,830 |
|
|
| — |
|
|
| — |
|
|
| 1,832 |
|
|
| 31,112 |
|
|
|
| 5,450 |
|
|
| 23,830 |
|
|
| — |
|
|
| — |
|
|
| 1,832 |
|
|
| 31,112 |
|
Silverbrook |
|
|
| 4,860 |
|
|
| 27,091 |
|
|
| — |
|
|
| — |
|
|
| 4,630 |
|
|
| 36,581 |
|
|
|
| 4,860 |
|
|
| 27,091 |
|
|
| — |
|
|
| — |
|
|
| 4,630 |
|
|
| 36,581 |
|
Beechwood Terrace |
|
|
| 1,390 |
|
|
| 22,000 |
|
|
| — |
|
|
| 70 |
|
|
| 2,535 |
|
|
| 25,995 |
|
|
|
| 1,390 |
|
|
| 22,000 |
|
|
| — |
|
|
| 70 |
|
|
| 2,535 |
|
|
| 25,995 |
|
The Summit at Sabal Park |
|
|
| 5,770 |
|
|
| 13,600 |
|
|
| — |
|
|
| — |
|
|
| 1,598 |
|
|
| 20,968 |
|
|
|
| 5,770 |
|
|
| 13,600 |
|
|
| — |
|
|
| — |
|
|
| 1,598 |
|
|
| 20,968 |
|
Courtney Cove |
|
|
| 5,880 |
|
|
| 13,413 |
|
|
| — |
|
|
| 2 |
|
|
| 1,982 |
|
|
| 21,277 |
|
|
|
| 5,880 |
|
|
| 13,413 |
|
|
| — |
|
|
| 2 |
|
|
| 1,982 |
|
|
| 21,277 |
|
Radbourne Lake |
|
|
| 2,440 |
|
|
| 22,465 |
|
|
| — |
|
|
| — |
|
|
| 1,997 |
|
|
| 26,902 |
|
|
|
| 2,440 |
|
|
| 22,465 |
|
|
| — |
|
|
| — |
|
|
| 1,997 |
|
|
| 26,902 |
|
Timber Creek |
|
|
| 11,260 |
|
|
| 13,993 |
|
|
| — |
|
|
| — |
|
|
| 2,939 |
|
|
| 28,192 |
|
|
|
| 11,260 |
|
|
| 13,993 |
|
|
| — |
|
|
| — |
|
|
| 2,939 |
|
|
| 28,192 |
|
Sabal Palm at Lake Buena Vista |
|
|
| 7,580 |
|
|
| 41,841 |
|
|
| — |
|
|
| 492 |
|
|
| 2,108 |
|
|
| 52,021 |
|
|
|
| 7,580 |
|
|
| 41,841 |
|
|
| — |
|
|
| 492 |
|
|
| 2,108 |
|
|
| 52,021 |
|
Cornerstone |
|
|
| 1,500 |
|
|
| 30,653 |
|
|
| — |
|
|
| — |
|
|
| 2,977 |
|
|
| 35,130 |
|
|
|
| 1,500 |
|
|
| 30,653 |
|
|
| — |
|
|
| — |
|
|
| 2,977 |
|
|
| 35,130 |
|
The Preserve at Terrell Mill |
|
|
| 10,170 |
|
|
| 49,216 |
|
|
| — |
|
|
| 8 |
|
|
| 6,183 |
|
|
| 65,577 |
|
|
|
| 10,170 |
|
|
| 49,216 |
|
|
| — |
|
|
| 8 |
|
|
| 6,183 |
|
|
| 65,577 |
|
Versailles |
|
|
| 6,720 |
|
|
| 21,688 |
|
|
| — |
|
|
| 8 |
|
|
| 3,736 |
|
|
| 32,152 |
|
|
|
| 6,720 |
|
|
| 21,688 |
|
|
| — |
|
|
| 8 |
|
|
| 3,736 |
|
|
| 32,152 |
|
Seasons 704 Apartments |
|
|
| 7,480 |
|
|
| 14,336 |
|
|
| — |
|
|
| — |
|
|
| 1,482 |
|
|
| 23,298 |
|
|
|
| 7,480 |
|
|
| 14,336 |
|
|
| — |
|
|
| — |
|
|
| 1,482 |
|
|
| 23,298 |
|
Madera Point |
|
|
| 4,920 |
|
|
| 17,615 |
|
|
| — |
|
|
| — |
|
|
| 2,042 |
|
|
| 24,577 |
|
|
|
| 4,920 |
|
|
| 17,615 |
|
|
| — |
|
|
| — |
|
|
| 2,042 |
|
|
| 24,577 |
|
Venue at 8651 |
|
|
| 2,350 |
|
|
| 18,192 |
|
|
| — |
|
|
| 21 |
|
|
| 3,330 |
|
|
| 23,893 |
|
|
|
| 2,350 |
|
|
| 18,192 |
|
|
| — |
|
|
| 21 |
|
|
| 3,330 |
|
|
| 23,893 |
|
Parc500 |
|
|
| 3,860 |
|
|
| 20,821 |
|
|
| — |
|
|
| 193 |
|
|
| 3,202 |
|
|
| 28,076 |
|
|
|
| 3,860 |
|
|
| 20,821 |
|
|
| — |
|
|
| 193 |
|
|
| 3,202 |
|
|
| 28,076 |
|
The Venue on Camelback |
|
|
| 8,340 |
|
|
| 37,992 |
|
|
| — |
|
|
| — |
|
|
| 2,086 |
|
|
| 48,418 |
|
|
|
| 8,340 |
|
|
| 37,992 |
|
|
| — |
|
|
| — |
|
|
| 2,086 |
|
|
| 48,418 |
|
Old Farm |
|
|
| 11,078 |
|
|
| 70,670 |
|
|
| — |
|
|
| 40 |
|
|
| 2,950 |
|
|
| 84,738 |
|
|
|
| 11,078 |
|
|
| 70,670 |
|
|
| — |
|
|
| 40 |
|
|
| 2,950 |
|
|
| 84,738 |
|
Stone Creek at Old Farm |
|
|
| 3,493 |
|
|
| 19,436 |
|
|
| — |
|
|
| 1 |
|
|
| 716 |
|
|
| 23,646 |
|
|
|
| 3,493 |
|
|
| 19,436 |
|
|
| — |
|
|
| 1 |
|
|
| 716 |
|
|
| 23,646 |
|
Hollister Place |
|
|
| 2,782 |
|
|
| 21,788 |
|
|
| — |
|
|
| — |
|
|
| 2,159 |
|
|
| 26,729 |
|
|
|
| 2,782 |
|
|
| 21,788 |
|
|
| — |
|
|
| — |
|
|
| 2,159 |
|
|
| 26,729 |
|
Rockledge Apartments |
|
|
| 17,451 |
|
|
| 96,108 |
|
|
| — |
|
|
| 134 |
|
|
| 4,759 |
|
|
| 118,452 |
|
|
|
| 17,451 |
|
|
| 96,108 |
|
|
| — |
|
|
| 134 |
|
|
| 4,759 |
|
|
| 118,452 |
|
Atera Apartments |
|
|
| 22,371 |
|
|
| 37,442 |
|
|
| — |
|
|
| 8 |
|
|
| 2,044 |
|
|
| 61,865 |
|
|
|
| 22,371 |
|
|
| 37,442 |
|
|
| — |
|
|
| 8 |
|
|
| 2,044 |
|
|
| 61,865 |
|
Cedar Pointe |
|
|
| 2,372 |
|
|
| 24,193 |
|
|
| — |
|
|
| 24 |
|
|
| 1,268 |
|
|
| 27,857 |
|
|
|
| 2,372 |
|
|
| 24,193 |
|
|
| — |
|
|
| 24 |
|
|
| 1,268 |
|
|
| 27,857 |
|
Crestmont Reserve |
|
|
| 4,124 |
|
|
| 20,613 |
|
|
| — |
|
|
| — |
|
|
| 1,272 |
|
|
| 26,009 |
|
|
|
| 4,124 |
|
|
| 20,613 |
|
|
| — |
|
|
| — |
|
|
| 1,272 |
|
|
| 26,009 |
|
Brandywine I & II |
|
|
| 6,237 |
|
|
| 73,004 |
|
|
| — |
|
|
| 58 |
|
|
| 3,148 |
|
|
| 82,447 |
|
|
|
| 6,237 |
|
|
| 73,004 |
|
|
| — |
|
|
| 58 |
|
|
| 3,148 |
|
|
| 82,447 |
|
Bella Vista |
|
|
| 10,942 |
|
|
| 36,690 |
|
|
| — |
|
|
| — |
|
|
| 1,500 |
|
|
| 49,132 |
|
|
|
| 10,942 |
|
|
| 36,690 |
|
|
| — |
|
|
| — |
|
|
| 1,500 |
|
|
| 49,132 |
|
The Enclave |
|
|
| 11,046 |
|
|
| 30,224 |
|
|
| — |
|
|
| 24 |
|
|
| 1,176 |
|
|
| 42,470 |
|
|
|
| 11,046 |
|
|
| 30,224 |
|
|
| — |
|
|
| 24 |
|
|
| 1,176 |
|
|
| 42,470 |
|
The Heritage |
|
|
| 6,835 |
|
|
| 34,580 |
|
|
| — |
|
|
| — |
|
|
| 1,246 |
|
|
| 42,661 |
|
|
|
| 6,835 |
|
|
| 34,580 |
|
|
| — |
|
|
| — |
|
|
| 1,246 |
|
|
| 42,661 |
|
Summers Landing |
|
|
| 1,798 |
|
|
| 16,958 |
|
|
| — |
|
|
| 35 |
|
|
| 528 |
|
|
| 19,319 |
|
|
|
| 1,798 |
|
|
| 16,958 |
|
|
| — |
|
|
| 35 |
|
|
| 528 |
|
|
| 19,319 |
|
Residences at Glenview Reserve |
|
|
| 3,367 |
|
|
| 40,202 |
|
|
| — |
|
|
| 11 |
|
|
| 837 |
|
|
| 44,417 |
|
|
|
| 3,367 |
|
|
| 40,202 |
|
|
| — |
|
|
| 11 |
|
|
| 837 |
|
|
| 44,417 |
|
Residences at West Place |
|
|
| 3,345 |
|
|
| 50,884 |
|
|
| — |
|
|
| 244 |
|
|
| 810 |
|
|
| 55,283 |
|
|
|
| 3,345 |
|
|
| 50,884 |
|
|
| — |
|
|
| 244 |
|
|
| 810 |
|
|
| 55,283 |
|
Avant at Pembroke Pines |
|
|
| 48,436 |
|
|
| 266,103 |
|
|
| 6,989 |
|
|
| 217 |
|
|
| 5,376 |
|
|
| 327,121 |
|
|
|
| 48,436 |
|
|
| 266,103 |
|
|
| 6,989 |
|
|
| 217 |
|
|
| 5,376 |
|
|
| 327,121 |
|
Arbors of Brentwood |
|
|
| 6,346 |
|
|
| 54,995 |
|
|
| 1,215 |
|
|
| 137 |
|
|
| 779 |
|
|
| 63,472 |
|
|
|
| 6,346 |
|
|
| 54,995 |
|
|
| 1,215 |
|
|
| 137 |
|
|
| 779 |
|
|
| 63,472 |
|
Torreyana Apartments |
|
|
| 23,823 |
|
|
| 42,721 |
|
|
| 1,201 |
|
|
| — |
|
|
| 655 |
|
|
| 68,400 |
|
|
|
| 23,823 |
|
|
| 42,721 |
|
|
| 1,201 |
|
|
| — |
|
|
| 655 |
|
|
| 68,400 |
|
Bloom |
|
|
| 23,805 |
|
|
| 80,365 |
|
|
| 1,851 |
|
|
| — |
|
|
| 1,095 |
|
|
| 107,116 |
|
|
|
| 23,805 |
|
|
| 80,365 |
|
|
| 1,851 |
|
|
| — |
|
|
| 1,095 |
|
|
| 107,116 |
|
Bella Solara |
|
|
| 12,605 |
|
|
| 52,449 |
|
|
| 1,158 |
|
|
| — |
|
|
| 663 |
|
|
| 66,875 |
|
|
|
| 12,605 |
|
|
| 52,449 |
|
|
| 1,158 |
|
|
| — |
|
|
| 663 |
|
|
| 66,875 |
|
|
|
|
| 317,886 |
|
|
| 1,472,319 |
|
|
| 12,414 |
|
|
| 4,375 |
|
|
| 81,038 |
|
|
| 1,888,032 |
|
|
|
| 317,886 |
|
|
| 1,472,319 |
|
|
| 12,414 |
|
|
| 4,375 |
|
|
| 81,038 |
|
|
| 1,888,032 |
|
Accumulated depreciation and amortization |
|
|
| — |
|
|
| (105,335 | ) |
|
| (6,171 | ) |
|
| — |
|
|
| (41,046 | ) |
|
| (152,552 | ) |
|
|
| — |
|
|
| (105,335 | ) |
|
| (6,171 | ) |
|
| — |
|
|
| (41,046 | ) |
|
| (152,552 | ) |
Total Operating Properties |
|
| $ | 317,886 |
|
| $ | 1,366,984 |
|
| $ | 6,243 |
|
| $ | 4,375 |
|
| $ | 39,992 |
|
| $ | 1,735,480 |
|
|
| $ | 317,886 |
|
| $ | 1,366,984 |
|
| $ | 6,243 |
|
| $ | 4,375 |
|
| $ | 39,992 |
|
| $ | 1,735,480 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Held For Sale Property |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Held For Sale Properties |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Southpoint Reserve at Stoney Creek |
|
|
| 6,120 |
|
|
| 11,502 |
|
|
| — |
|
|
| 1 |
|
|
| 968 |
|
|
| 18,591 |
|
|
|
| 6,120 |
|
|
| 11,502 |
|
|
| — |
|
|
| 1 |
|
|
| 968 |
|
|
| 18,591 |
|
Woodbridge |
|
|
| 3,650 |
|
|
| 13,296 |
|
|
| — |
|
|
| — |
|
|
| 1,934 |
|
|
| 18,880 |
|
|
|
| 3,650 |
|
|
| 13,296 |
|
|
| — |
|
|
| — |
|
|
| 1,934 |
|
|
| 18,880 |
|
Willow Grove |
|
|
| 3,940 |
|
|
| 10,946 |
|
|
| — |
|
|
| — |
|
|
| 1,832 |
|
|
| 16,718 |
|
|
|
| 3,940 |
|
|
| 10,946 |
|
|
| — |
|
|
| — |
|
|
| 1,832 |
|
|
| 16,718 |
|
|
|
|
| 13,710 |
|
|
| 35,744 |
|
|
| — |
|
|
| 1 |
|
|
| 4,734 |
|
|
| 54,189 |
| |||||||||||||||||||||||||
Accumulated depreciation and amortization |
|
|
| — |
|
|
| (5,390 | ) |
|
| — |
|
|
| — |
|
|
| (2,469 | ) |
|
| (7,859 | ) |
|
|
| — |
|
|
| (5,390 | ) |
|
| — |
|
|
| — |
|
|
| (2,469 | ) |
|
| (7,859 | ) |
Total Held For Sale Property |
|
| $ | 13,710 |
|
| $ | 30,354 |
|
| $ | — |
|
| $ | 1 |
|
| $ | 2,265 |
|
| $ | 46,330 |
| |||||||||||||||||||||||||
Total Held For Sale Properties |
|
| $ | 13,710 |
|
| $ | 30,354 |
|
| $ | — |
|
| $ | 1 |
|
| $ | 2,265 |
|
| $ | 46,330 |
| |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
| $ | 331,596 |
|
| $ | 1,397,338 |
|
| $ | 6,243 |
|
| $ | 4,376 |
|
| $ | 42,257 |
|
| $ | 1,781,810 |
|
|
| $ | 331,596 |
|
| $ | 1,397,338 |
|
| $ | 6,243 |
|
| $ | 4,376 |
|
| $ | 42,257 |
|
| $ | 1,781,810 |
|
Depreciation expense was $18.5$17.7 million and $13.2$14.1 million for the three months ended March 31,September 30, 2020 and 2019, respectively. Depreciation expense was $56.2 million and $39.0 million for the nine months ended September 30, 2020 and 2019, respectively.
Amortization expense related to the Company’s intangible lease assets was $4.8$0.0 million and $2.2$3.1 million for the three months ended March 31,September 30, 2020 and 2019, respectively. Amortization expense related to the Company’s intangible lease assets was $6.2 million and $6.7 million for the nine months ended September 30, 2020 and 2019, respectively. Amortization expense related to the Company’s intangible lease assets for all acquisitions completed through March 31,September 30, 2020 is expected to be $1.4$0.0 million for the remainder of the year ended December 31, 2020. Due to the six-month useful life attributable to intangible lease assets, the value of intangible lease assets on any acquisition prior to September 30, 2019March 31, 2020 has been fully amortized and the assets and related accumulated amortization have been written off as of March 31,September 30, 2020.
Acquisitions
There were 0 acquisitions of real estate during the threenine months ended March 31,September 30, 2020. The Company acquired 38 properties for approximately $635.7 million during the threenine months ended March 31, 2019 for $132.1 million. In connection with the acquisitions made during the three months ended March 31, 2019, the Company paid earnest money deposits of $7.7 million prior to December 31, 2018. Management has determined that these deposits should have been presented as a decrease to the cash outflow associated with the acquisition of real estate investments in the accompanying consolidated statement of cash flow. The Company has corrected the overstatement of operating activities and investing activities to $3.7M and ($131.7M), respectively, for the three months ended March 31,September 30, 2019. This correction did not change any amounts on the consolidated balance sheet or statement of operations and comprehensive loss. Management believes that the effect of these corrections is not material to the Company’s financial position, results of operations, or liquidity for any period presented.
Dispositions
The Company sold 34 properties during the threenine months ended March 31,September 30, 2020, as detailed in the table below (dollars in thousands). There were 0 sales of real estateThe Company sold 6 properties for approximately $289.9 million during the threenine months ended March 31,September 30, 2019.
Property Name |
| Location |
| Date of Sale |
| Sales Price |
|
| Net Cash Proceeds (1) |
|
| Gain on Sale of Real Estate |
|
| Location |
| Date of Sale |
| Sales Price |
|
| Net Cash Proceeds (1) |
|
| Gain on Sale of Real Estate |
| ||||||
Southpoint Reserve at Stoney Creek |
| Fredericksburg, Virginia |
| March 20, 2020 |
| $ | 23,500 |
|
|
| 23,176 |
|
| $ | 5,469 |
|
| Fredericksburg, Virginia |
| March 20, 2020 |
| $ | 23,500 |
|
| $ | 23,176 |
|
| $ | 5,469 |
|
Willow Grove |
| Nashville, Tennessee |
| March 26, 2020 |
|
| 31,300 |
|
|
| 31,005 |
|
|
| 17,513 |
|
| Nashville, Tennessee |
| March 26, 2020 |
|
| 31,300 |
|
|
| 31,005 |
|
|
| 17,513 |
|
Woodbridge |
| Nashville, Tennessee |
| March 26, 2020 |
|
| 31,700 |
|
|
| 31,237 |
|
|
| 15,990 |
|
| Nashville, Tennessee |
| March 26, 2020 |
|
| 31,700 |
|
|
| 31,237 |
|
|
| 15,990 |
|
Eagle Crest |
| Irving, Texas |
| September 30, 2020 |
|
| 55,500 |
|
|
| 54,779 |
|
|
| 30,160 |
| ||||||||||||||||
|
|
|
|
|
| $ | 86,500 |
|
| $ | 85,418 |
|
| $ | 38,972 |
|
|
|
|
|
| $ | 142,000 |
|
| $ | 140,197 |
|
| $ | 69,132 |
|
(1) | Represents sales price, net of closing costs. |
Cutter’s Point Casualty Losses
On October 20, 2019, as a result of a tornado, the Cutter’s Point property suffered significant property damage. The damage incurred rendered the property inoperable; therefore, the Company has ceased operations at the property as it is under reconstruction. In relation to this event, the Company wrote down the carrying value of Cutter’s Point by approximately $7.8 million, and, in accordance with ASC 610 Other Income, the Company recognized approximately $3.5 million in casualty losses on the consolidated statementstatements of operations and comprehensive income during the year ended December 31, 2019. Also, the Company filed a business interruption insurance claim and recognized approximately $0.6 million for the lost rent, which is included in miscellaneous income on the consolidated statementstatements of operations and comprehensive income for the year ended December 31, 2019. For the three and nine months ended September 30, 2020, the Company recognized approximately $0.3 million and $1.4 million for lost rents, which is included in miscellaneous income on the consolidated statements of operations and comprehensive income (loss). Lost rental income is insured and the Company expects any operating losses resulting from the damage to be immaterial while the property undergoes reconstruction. Starting November 1, 2019, the Company began capitalizing insurance expense, real estate taxes, interest expense and debt issuance costs to construction in progress and stopped depreciation due to Cutter’s Point being under development.reconstruction. As of March 31,September 30, 2020, approximately $0.3$0.8 million of these costs have been capitalized. As of March 31,September 30, 2020, Cutter’s Point was excluded from the portfolio’s total unit count and all same store pools due to the property temporarily ceasing operations while it under goes reconstruction which is estimated to be completed in 2021.
Venue 8651 Casualty Losses
On June 10, 2020, as a result of a fire, the Venue 8651 property suffered property damage. In relation to this event, the Company wrote down the carrying value of Venue 8651 by approximately $0.6 million, and, in accordance with ASC 610 Other Income, the Company recognized approximately $0.4 million in net casualty gains which is included in property operating expense on the consolidated statements of operations and comprehensive income (loss) during the nine months ended September 30, 2020.
6. Debt
Mortgage Debt
The following table contains summary information concerning the mortgage debt of the Company as of March 31,September 30, 2020 (dollars in thousands):
Operating Properties |
| Type |
| Term (months) |
|
| Outstanding Principal (1) |
|
| Interest Rate (2) |
|
| Maturity Date |
| Type |
| Term (months) |
|
| Outstanding Principal (1) |
|
| Interest Rate (2) |
|
| Maturity Date | ||||||
Arbors on Forest Ridge | (3) | Floating |
|
| 84 |
|
| $ | 13,130 |
|
| 2.67% |
|
| 7/1/2024 | (3) | Floating |
|
| 84 |
|
| $ | 13,130 |
|
| 1.83% |
|
| 7/1/2024 | ||
Cutter's Point | (3) | Floating |
|
| 84 |
|
|
| 16,640 |
|
| 2.67% |
|
| 7/1/2024 | (3) | Floating |
|
| 84 |
|
|
| 16,640 |
|
| 1.83% |
|
| 7/1/2024 | ||
Eagle Crest | (3) | Floating |
|
| 84 |
|
|
| 29,510 |
|
| 2.67% |
|
| 7/1/2024 | |||||||||||||||||
Silverbrook | (3) | Floating |
|
| 84 |
|
|
| 30,590 |
|
| 2.67% |
|
| 7/1/2024 | (3) | Floating |
|
| 84 |
|
|
| 30,590 |
|
| 1.83% |
|
| 7/1/2024 | ||
Beechwood Terrace | (3) | Floating |
|
| 84 |
|
|
| 23,365 |
|
| 2.43% |
|
| 9/1/2025 | (3) | Floating |
|
| 84 |
|
|
| 23,365 |
|
| 1.59% |
|
| 9/1/2025 | ||
The Summit at Sabal Park | (3) | Floating |
|
| 84 |
|
|
| 13,560 |
|
| 2.61% |
|
| 7/1/2024 | (3) | Floating |
|
| 84 |
|
|
| 13,560 |
|
| 1.77% |
|
| 7/1/2024 | ||
Courtney Cove | (3) | Floating |
|
| 84 |
|
|
| 13,680 |
|
| 2.61% |
|
| 7/1/2024 | (3) | Floating |
|
| 84 |
|
|
| 13,680 |
|
| 1.77% |
|
| 7/1/2024 | ||
The Preserve at Terrell Mill | (3) | Floating |
|
| 84 |
|
|
| 42,480 |
|
| 2.61% |
|
| 7/1/2024 | (3) | Floating |
|
| 84 |
|
|
| 42,480 |
|
| 1.77% |
|
| 7/1/2024 | ||
Versailles | (3) | Floating |
|
| 84 |
|
|
| 23,880 |
|
| 2.61% |
|
| 7/1/2024 | (3) | Floating |
|
| 84 |
|
|
| 23,880 |
|
| 1.77% |
|
| 7/1/2024 | ||
Seasons 704 Apartments | (3) | Floating |
|
| 84 |
|
|
| 17,460 |
|
| 2.61% |
|
| 7/1/2024 | (3) | Floating |
|
| 84 |
|
|
| 17,460 |
|
| 1.77% |
|
| 7/1/2024 | ||
Madera Point | (3) | Floating |
|
| 84 |
|
|
| 15,150 |
|
| 2.61% |
|
| 7/1/2024 | (3) | Floating |
|
| 84 |
|
|
| 15,150 |
|
| 1.77% |
|
| 7/1/2024 | ||
Venue at 8651 | (3) | Floating |
|
| 84 |
|
|
| 13,734 |
|
| 2.77% |
|
| 7/1/2024 | (3) | Floating |
|
| 84 |
|
|
| 13,734 |
|
| 1.93% |
|
| 7/1/2024 | ||
The Venue on Camelback | (3) | Floating |
|
| 84 |
|
|
| 28,093 |
|
| 2.67% |
|
| 7/1/2024 | (3) | Floating |
|
| 84 |
|
|
| 28,093 |
|
| 1.83% |
|
| 7/1/2024 | ||
Old Farm | (3) | Floating |
|
| 84 |
|
|
| 52,886 |
|
| 2.67% |
|
| 7/1/2024 | (3) | Floating |
|
| 84 |
|
|
| 52,886 |
|
| 1.83% |
|
| 7/1/2024 | ||
Stone Creek at Old Farm | (3) | Floating |
|
| 84 |
|
|
| 15,274 |
|
| 2.67% |
|
| 7/1/2024 | (3) | Floating |
|
| 84 |
|
|
| 15,274 |
|
| 1.83% |
|
| 7/1/2024 | ||
Timber Creek | (3) | Floating |
|
| 84 |
|
|
| 24,100 |
|
| 2.25% |
|
| 10/1/2025 | (3) | Floating |
|
| 84 |
|
|
| 24,100 |
|
| 1.41% |
|
| 10/1/2025 | ||
Radbourne Lake | (3) | Floating |
|
| 84 |
|
|
| 20,000 |
|
| 2.28% |
|
| 10/1/2025 | (3) | Floating |
|
| 84 |
|
|
| 20,000 |
|
| 1.44% |
|
| 10/1/2025 | ||
Sabal Palm at Lake Buena Vista | (3) | Floating |
|
| 84 |
|
|
| 42,100 |
|
| 2.29% |
|
| 9/1/2025 | (3) | Floating |
|
| 84 |
|
|
| 42,100 |
|
| 1.45% |
|
| 9/1/2025 | ||
Cornerstone | (4) | Fixed |
|
| 120 |
|
|
| 21,654 |
|
| 4.24% |
|
| 3/1/2023 | (4) | Fixed |
|
| 120 |
|
|
| 21,420 |
|
| 4.24% |
|
| 3/1/2023 | ||
Parc500 | (5) | Fixed |
|
| 120 |
|
|
| 15,154 |
|
| 4.49% |
|
| 8/1/2025 | (5) | Fixed |
|
| 120 |
|
|
| 15,021 |
|
| 4.49% |
|
| 8/1/2025 | ||
Hollister Place | (3) | Floating |
|
| 84 |
|
|
| 14,811 |
|
| 2.33% |
|
| 10/1/2025 | (3) | Floating |
|
| 84 |
|
|
| 14,811 |
|
| 1.49% |
|
| 10/1/2025 | ||
Rockledge Apartments | (3) | Floating |
|
| 84 |
|
|
| 68,100 |
|
| 2.56% |
|
| 7/1/2024 | (3) | Floating |
|
| 84 |
|
|
| 68,100 |
|
| 1.72% |
|
| 7/1/2024 | ||
Atera Apartments | (3) | Floating |
|
| 84 |
|
|
| 29,500 |
|
| 2.47% |
|
| 11/1/2024 | (3) | Floating |
|
| 84 |
|
|
| 29,500 |
|
| 1.63% |
|
| 11/1/2024 | ||
Cedar Pointe | (6) | Floating |
|
| 84 |
|
|
| 17,300 |
|
| 2.34% |
|
| 9/1/2025 | (6) | Floating |
|
| 84 |
|
|
| 17,300 |
|
| 1.50% |
|
| 9/1/2025 | ||
Crestmont Reserve | (3) | Floating |
|
| 84 |
|
|
| 12,061 |
|
| 2.17% |
|
| 10/1/2025 | (3) | Floating |
|
| 84 |
|
|
| 12,061 |
|
| 1.33% |
|
| 10/1/2025 | ||
Brandywine I & II | (3) | Floating |
|
| 84 |
|
|
| 43,835 |
|
| 2.17% |
|
| 10/1/2025 | (3) | Floating |
|
| 84 |
|
|
| 43,835 |
|
| 1.33% |
|
| 10/1/2025 | ||
Bella Vista | (6) | Floating |
|
| 84 |
|
|
| 29,040 |
|
| 2.31% |
|
| 2/1/2026 | (6) | Floating |
|
| 84 |
|
|
| 29,040 |
|
| 1.47% |
|
| 2/1/2026 | ||
The Enclave | (6) | Floating |
|
| 84 |
|
|
| 25,322 |
|
| 2.31% |
|
| 2/1/2026 | (6) | Floating |
|
| 84 |
|
|
| 25,322 |
|
| 1.47% |
|
| 2/1/2026 | ||
The Heritage | (6) | Floating |
|
| 84 |
|
|
| 24,625 |
|
| 2.31% |
|
| 2/1/2026 | (6) | Floating |
|
| 84 |
|
|
| 24,625 |
|
| 1.47% |
|
| 2/1/2026 | ||
Summers Landing | (7) | Floating |
|
| 84 |
|
|
| 10,109 |
|
| 2.17% |
|
| 10/1/2025 | (7) | Floating |
|
| 84 |
|
|
| 10,109 |
|
| 1.33% |
|
| 10/1/2025 | ||
Residences at Glenview Reserve | (8) | Floating |
|
| 84 |
|
|
| 26,560 |
|
| 2.43% |
|
| 10/1/2025 | (8) | Floating |
|
| 84 |
|
|
| 26,560 |
|
| 1.59% |
|
| 10/1/2025 | ||
Residences at West Place | (8) | Fixed |
|
| 120 |
|
|
| 33,817 |
|
| 4.24% |
|
| 10/1/2028 | (8) | Fixed |
|
| 120 |
|
|
| 33,817 |
|
| 4.24% |
|
| 10/1/2028 | ||
Avant at Pembroke Pines | (3) | Floating |
|
| 84 |
|
|
| 177,100 |
|
| 2.42% |
|
| 9/1/2026 | (3) | Floating |
|
| 84 |
|
|
| 177,100 |
|
| 1.58% |
|
| 9/1/2026 | ||
Arbors of Brentwood | (3) | Floating |
|
| 84 |
|
|
| 34,237 |
|
| 2.42% |
|
| 10/1/2026 | (3) | Floating |
|
| 84 |
|
|
| 34,237 |
|
| 1.58% |
|
| 10/1/2026 | ||
Torreyana Apartments | (6) | Floating |
|
| 84 |
|
|
| 37,400 |
|
| 2.69% |
|
| 12/1/2026 | (6) | Floating |
|
| 84 |
|
|
| 37,400 |
|
| 1.85% |
|
| 12/1/2026 | ||
Bloom | (6) | Floating |
|
| 84 |
|
|
| 58,850 |
|
| 2.69% |
|
| 12/1/2026 | (6) | Floating |
|
| 84 |
|
|
| 58,850 |
|
| 1.85% |
|
| 12/1/2026 | ||
Bella Solara | (6) | Floating |
|
| 84 |
|
|
| 36,576 |
|
| 2.69% |
|
| 12/1/2026 | (6) | Floating |
|
| 84 |
|
|
| 36,575 |
|
| 1.85% |
|
| 12/1/2026 | ||
|
|
|
|
|
|
|
| $ | 1,151,683 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 1,121,805 |
|
|
|
|
|
|
|
Fair market value adjustment |
|
|
|
|
|
|
|
| 1,413 |
| (9) |
|
|
|
|
|
|
|
|
|
|
|
|
| 1,312 |
| (9) |
|
|
|
|
|
Deferred financing costs, net of accumulated amortization of $2,867 |
|
|
|
|
|
|
|
| (7,588 | ) |
|
|
|
|
|
| ||||||||||||||||
Deferred financing costs, net of accumulated amortization of $3,348 |
|
|
|
|
|
|
|
| (6,544 | ) |
|
|
|
|
|
| ||||||||||||||||
|
|
|
|
|
|
|
| $ | 1,145,508 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 1,116,573 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) | Mortgage debt that is non-recourse to the Company and encumbers the multifamily properties. |
(2) | Interest rate is based on one-month LIBOR plus an applicable margin, except for fixed rate mortgage debt. One-month LIBOR as of |
(3) | Loan can be pre-paid in the first 12 months of the term in certain circumstances at par plus 5.00%. Starting in the 13th month of the term through the 81st month of the term, the loan can be pre-paid at par plus 1.00% of the unpaid principal balance and at par during the last three months of the term. |
(4) | Debt in the amount of $18.0 million was assumed upon acquisition of this property and recorded at approximated fair value. The assumed debt carries a 4.09% fixed rate, was originally issued in March 2013, and had a term of 120 months with an initial 24 months of interest only. At the time of acquisition, the principal balance of the first mortgage remained unchanged and had a remaining term of 98 months with 2 months of interest only. The first mortgage is pre-payable and subject to yield maintenance from the 13th month through August 31, 2022 and is pre-payable at par September 1, 2022 until maturity. Concurrently with the acquisition of the property, the Company placed a supplemental second mortgage on the property with a principal amount of approximately $5.8 million, a fixed rate of 4.70%, and with a maturity date that is the same time as the first mortgage. The supplemental second mortgage is pre-payable and subject to yield maintenance from the date of issuance through August 31, 2022 and is pre-payable at par September 1, 2022 until maturity. As of |
(5) | Debt was assumed upon acquisition of this property and recorded at approximated fair value. The loan is open to pre-payment in the last four months of the term. |
(6) | Loan can be pre-paid in the first 12 months of the term in certain circumstances at par plus 5.00%. Starting in the 13th month of the term through the 81st month of the term, the loan can be pre-paid at par plus 1.00% of the unpaid principal balance and at par during the last three months of the term. |
(7) | Debt was assumed upon acquisition of this property and recorded at approximated fair value. It can be pre-paid in the first 12 months of the term in certain circumstances at par plus 5.00%. Starting in the 13th month of the term through the 81st month of the term, the loan can be pre-paid at par plus 1.00% of the unpaid principal balance and at par during the last three months of the term. |
(8) | Debt was assumed upon acquisition of this property and recorded at approximated fair value. The loan can be prepaid at the greater of par plus 1.00% of the unpaid principal balance or the product obtained by multiplying the present value of the principal being prepaid by the excess of the monthly fixed interest rate of the loan over a daily discount rate. The loan is open to pre-payment in the last three months of the term. |
(9) | The Company reflected a valuation adjustment on its fixed rate debt for Parc500 and Residences at West Place to adjust it to fair market value on their respective dates of acquisition for the difference between the fair value and the assumed principal amount of debt. The difference is amortized into interest expense over the remaining terms of the mortgages. |
During the threenine months ended March 31,September 30, 2020, the Company sold 34 properties and repaid the related mortgage loans that encumbered the properties, as detailed in the table below (in thousands); there were 0 sales of real estatethe Company sold 6 properties and repaid $144.9 million in related mortgage loans during the threenine months ended March 31,September 30, 2019.
Property Name |
| Date of Sale |
| Type |
| Outstanding Principal (1) |
|
| Date of Sale |
| Type |
| Outstanding Principal (1) |
| ||
Southpoint Reserve |
| March 20, 2020 |
| Floating |
|
| 13,101 |
| ||||||||
Southpoint Reserve at Stoney Creek |
| March 20, 2020 |
| Floating |
| $ | 13,101 |
| ||||||||
Willow Grove |
| March 26, 2020 |
| Floating |
|
| 14,818 |
|
| March 26, 2020 |
| Floating |
|
| 14,818 |
|
Woodbridge |
| March 26, 2020 |
| Floating |
|
| 13,677 |
|
| March 26, 2020 |
| Floating |
|
| 13,677 |
|
Eagle Crest |
| September 30, 2020 |
| Floating |
|
| 29,510 |
| ||||||||
|
|
|
|
|
| $ | 41,596 |
|
|
|
|
|
| $ | 71,106 |
|
(1) | Represents the outstanding principal balance when the loan was repaid. |
The weighted average interest rate of the Company’s mortgage indebtedness was 2.61%1.82% as of March 31,September 30, 2020 and 3.34% as of December 31, 2019. The decrease between the periods is primarily related to a decrease in one-month LIBOR of approximately 77161 basis points to 0.9929%0.1483% as of March 31,September 30, 2020 from 1.7625% as of December 31, 2019. As of March 31,September 30, 2020, the adjusted weighted average interest rate of the Company’s mortgage indebtedness was 3.00%3.10%. For purposes of calculating the adjusted weighted average interest rate of the outstanding mortgage indebtedness, the Company has included the weighted average fixed rate of 1.3792% for one-month LIBOR on its combined $1.2 billion notional amount of interest rate swap agreements, which effectively fix the interest rate on $1.2 billion of the Company’s floating rate indebtedness (see Note 7).
Each of the Company’s mortgages is a non-recourse obligation subject to customary provisions. The loan agreements contain customary events of default, including defaults in the payment of principal or interest, defaults in compliance with the covenants contained in the documents evidencing the loan, defaults in payments under any other security instrument covering any part of the property, whether junior or senior to the loan, and bankruptcy or other insolvency events. As of March 31,September 30, 2020, the Company believes it is in compliance with all provisions.
Freddie Mac Multifamily Green Advantage. In order to obtain more favorable pricing on the Company’s mortgage debt financing with Freddie Mac, the Company has decided to participate in Freddie Mac’s new Multifamily Green Advantage program (the “Green Program”). In the second quarter of 2017, the Company escrowed approximately $4.2 million to finance smarter, greener property improvements at 18 of its properties. In connection with the 3 acquisitions and 7 refinancings the Company completed in 2018, the Company escrowed approximately $1.2 million related to the Green Program. Since the start of the Green Program, we have spent approximately $6.2 million of green improvements and completed 34 Green Programs. As of March 31,September 30, 2020, the Company had completed its Green Program improvements on all but 1 property. We will complete the green improvements on this propertythese properties during 2020. We expect to reduce water/sewer costs at each property where the Green Program is implemented by at least 15% through the replacement of showerheads, plumbing fixtures and toilets with modern energy efficient upgrades. Due to changes in Freddie Mac’s requirements to participate in the Green Program, the Company is not implementing this on acquisitions going forward.
Credit Facility
The following table contains summary information concerning the Company’s credit facility as of September 30, 2020 (dollars in thousands):
|
| Type |
| Term (months) |
|
| Outstanding Principal |
|
| Interest Rate (1) |
|
| Maturity Date | |||
Corporate Credit Facility |
| Floating |
|
| 24 |
|
| $ | 215,000 |
|
| 2.65% |
|
| 1/28/2021 | |
Deferred financing costs, net of accumulated amortization of $1,592 |
|
|
|
|
|
|
|
| (460 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 214,540 |
|
|
|
|
|
|
|
(1) | Interest rate is based on one-month LIBOR plus an applicable margin. One-month LIBOR as of September 30, 2020 was 0.1483%. |
Corporate Credit Facility.On January 28, 2019, the Company, through the OP, entered into a $75.0 million credit facility (the “Corporate Credit Facility”) with Truist Bank (f/k/a SunTrust Bank), as administrative agent and the lenders party thereto, and immediately drew $52.5 million to fund a portion of the purchase price of Bella Vista, The Enclave, and The Heritage. The Corporate Credit Facility is a full-term, interest-only facility with an initial 24-month term, that can be extended 12-months at the option of the Company for a minimal fee provided that the Company is not in default. The Company meets the conditions and expects to meet them going forward. The Company has the right to request an increase in the facility amount up to $150 million (the “Accordion Feature”). The facility bears interest at a rate of one-month LIBOR plus a range from 2.00% to 2.50%, depending on the Company’s leverage level as determined under the Corporate Credit Facility agreement, and is guaranteed by the Company. On June 29, 2019, the Company, through the OP, exercised its option under the Accordion Feature of the Corporate Credit Facility and increased the amount of the facility from $75 million to $125 million. In conjunction with the increase in the facility, the Company incurred costs of $0.5 million in obtaining the additional financing through the Accordion Feature (see “Deferred Financing Costs” below). On August 28, 2019, the Company, through the OP, increased the amount of the Corporate Credit Facility by $25 million, resulting in incurred costs of $0.2 million of deferred financing costs. On November 20, 2019, the Company, through the OP, increased the amount of the Corporate Credit Facility by $75 million, resulting in aggregate commitments of $225 million as of December 31, 2019. In conjunction with the increase in the facility, the Company incurred costs of $0.8 million of deferred financing costs. As of September 30, 2020, there was $215 million in aggregate principal outstanding on the Corporate Credit Facility.
The Corporate Credit Facility is a non-recourse obligation and contains customary events of default, including defaults in the payment of principal or interest, defaults in compliance with the covenants contained in the document evidencing the loan, defaults in payments under any other security instrument, and bankruptcy or other insolvency events. As of September 30, 2020, the Company believes it is in compliance with all provisions.
Deferred Financing Costs
The Company defers costs incurred in obtaining financing and amortizes the costs over the terms of the related loans using the straight-line method, which approximates the effective interest method. Deferred financing costs, net of amortization, are recorded as a reduction from the related debt on the Company’s consolidated balance sheets. Upon repayment of or in conjunction with a material change in the terms of the underlying debt agreement, any unamortized costs are charged to loss on extinguishment of debt and modification costs (see “Loss on Extinguishment of Debt and Modification Costs” below). For the three months ended September 30, 2020 and 2019, the Company wrote-off deferred financing costs of approximately $0.3 million and $1.4 million, respectively, which is included in loss on extinguishment of debt and modification costs on the consolidated statements of operations and comprehensive income (loss). For the nine months ended September 30, 2020 and 2019, the Company wrote-off deferred financing costs of approximately $0.8 million and $1.4 million, respectively, which is included in loss on extinguishment of debt and modification costs on the consolidated statements of operations and comprehensive income (loss). For the three months ended September 30, 2020 and 2019, amortization of deferred financing costs of approximately $0.7 million and $0.5 million, respectively, is included in interest expense on the consolidated statements of operations and comprehensive income (loss). For the nine months ended September 30, 2020 and 2019, amortization of deferred financing costs of approximately $2.1 million and $1.4 million, respectively, is included in interest expense on the consolidated statements of operations and comprehensive income (loss).
Loss on Extinguishment of Debt and Modification Costs
Loss on extinguishment of debt and modification costs includes prepayment penalties and defeasance costs incurred on the early repayment of debt, costs incurred in a debt modification that are not capitalized as deferred financing costs and other costs incurred in a debt extinguishment.
Schedule of Debt Maturities
The aggregate scheduled maturities, including amortizing principal payments, of total debt for the next five calendar years subsequent to September 30, 2020 are as follows (in thousands):
|
| Operating Properties |
|
|
The
|