As of September 30, 2016, and unchanged through November 4, 2016, $4.9 million, or 100%March 31, 2017, our investment portfolio consisted of our assets were investedan approximately 1.0% unconsolidated non-controlling interest in a 1.8 million square foot Class-A office building located at 1285 Avenue of the Americas, (“or 1285 AoA”)AoA, in midtown Manhattan.

The remainder of the building is owned by institutional investors and funds affiliated with our Co-sponsor, RXR. As of September 30, 2016,March 31, 2017, 1285 AoA was 100% occupied with a weighted average lease term of 11.911.4 years.

In May 2017, we, through a subsidiary of September 30, 2016, we did not own any debt investments.

We willexpect to primarily generate revenue from rental income and interest income. Rental and escalation income will be generated from our operating real estate for the leasing of space to various tenants. The leases will be for fixed terms of varying length and generally provide for annual rentals and expense reimbursements to be paid in monthly installments. Rental income from leases will be recognized on a straight-line basis over the term of the respective leases. Interest income will be generated from our CRE debt and securities investments. Additionally, we will report our proportionate interest of revenues and expenses fromrecord equity in earnings for CRE investments which we may own through unconsolidated ventures.

We calculate Funds from Operations, or FFO, as defined by the National Association of Real Estate Investment Trusts, or NAREIT, and Modified Funds from Operations, or MFFO, as defined by the Investment Program Association, or IPA, to evaluate the profitability and performance of our business.

Domestically, President Donald Trump’s unexpected victory in November concluded a year of political uncertainty. While the markets initially appeared poised to react negatively to the outcome, by quarter-end, the S&P 500 was up 10.4%, the ten year Treasury note’s yield was up 25.8%, and the U.S. dollar had strengthened against the Eurozone’s euro by 3.7%. While difficult to know for certain, it appears the markets have concluded the combination of a Trump presidency and a Republican-controlled Congress will lead to higher growth and more government spending (primarily on infrastructure and defense), less regulation (particularly on financial services institutions) and lower taxation (particularly on corporations). With the President’s promises to curb or reverse Dodd-Frank and its associated capital requirements that have affected profitability on Wall Street over the last eight years, these corporations are now seeing a path to growth again. Rising short-term interest rates also increase bank profits as the spread between a bank’s cost of capital and the interest it earns on its loans widen. The banking and insurance industry employs approximately 467,000 people in New York City, representing approximately 10.7% of total non-farm employment and the City’s office market may benefit as these institutions are large users of office space (finance, insurance, securities and banking,

Although the initial negative reactions to the Brexit vote in June 2016 seemshave appeared to be dissipating. Initially there was a negative impact to London property stocks, however those stocks have already recovered some of their lost value. Wedissipate, we believe that over the next few years, the United Kingdom’s exit from the European Union will be finalized and during that time other cities around the world couldmay potentially see an uptickincrease in demand as a result.demand. The New York Metropolitan area represents one of the more robust real estate markets in the world given its size, density, and economic vitality and while we do not anticipate a massive outflow of capital from London, we believe New York City could be a beneficiary of any movement in capital seeking stability.

We believe the New York City office market is in a state of equilibrium and the New York metropolitan area will remain a strong market for commercial real estate investing in the United States. Investment sales activity continued its strong pacetotaled approximately $7.1 billion in 2016 with 346the first quarter, a significant decline from the first quarter of last year, though there are large transactions totaling $32.5in the pipeline that may accelerate activity, including Chinese conglomerate HNA Group’s $2.21 billion through the third quarter, according to Jones Lang LaSalle. While 2016 investment sales activity will likely fall below 2015’s record-breaking year totaling $60.3 billion, the market will outpace the previous five-year averageacquisition of $36 billion of annual investment activity.245 Park Avenue. New York City continues to attract strong international investment in real estate and a disproportionate share of foreign capital flows as compared to other major U.S. cities. ThroughIn the third quarterlast twelve months, 25.2% of 2016, 43% ofinternational capital investment in all property types across the United States was invested in New York City investment volume was attributable to foreign capital.City. By way of comparison, the next most heavily invested U.S. markets arewere San Francisco/San Jose, with 7.6%8.9% of total international capital and Los AngelesWashington D.C. at 5.1%6.9%.

The combination of institutional and foreign investor interestcapital flows and expanding growth in the media and technology sectors continue to support robust transaction volume and valuations. The recovery of the Manhattan office market since the Great Recession has been driven largely by growth in the creative industries-tech, advertising, media and information, or TAMI, andas well as nonbanking financial services, including asset management and private equity. Manhattanequity (employment in the technology industry increased by 47% since the recession in 2008). Although recent political and economic uncertainty impacted leasing volume during the fourth quarter, overall TAMI leasing activity increased to 37.5% of total first quarter lease transactions, compared to 20.6% in the fourth quarter of last year.

Manhattan’s overall office asking rents have increased by 0.6% to $76.74almost 6.9% per annum since the trough of 2010, with office asking rents of $76.50 per square foot (PSF) inat the third quarterend of 2016, due to a 25% increase of renewal activity and large deal flow in Midtown. Askingthe first quarter. These rents were up from the second quarter of 2016 and ended the third quarter of 2016are still above the previous market peak of $72.17 PSFper square foot in 2008 according to Newmark Grubb Knight Frank.

In terms of square footage, the size of Manhattan’s office market is larger thanalmost the size of the next five U.S. office markets combined. Furthermore, weWe believe the three main office submarkets within Manhattan (Midtown, Midtown South and Downtown) are dynamic and may operate independently. In 2016, tenants that relocated in New York City generally sought the highest quality buildings with the most efficient layouts, up-to-date infrastructure, the best available amenities and the best access to public transportation. In Midtown, there are at least 12 previously built Class A office buildings that already are, or in the next five years will become more than 75% vacant due to relocations west and south. Companies such as Time Warner, Conde Nast, L’Oréal and KKR are relinquishing contiguous blocks of space in prestigious buildings throughout Midtown’s more traditional submarkets and decamping to new product. Large blocks of previously constructed space in Midtown South and Downtown have been backfilled by Midtown tenants. Tenants that have relocated Downtown now typically pay rent in the $40$50 to $60 PSF$70 per square foot range as opposed to $70 to $90 PSFper square foot in Midtown. Class A asking rents in Downtown Manhattan have increased 34.8%

Midtown South continued to show strength with its desirable loft-style buildings, historic character and large floor-plates. Although increasing by 1.0% in the past three years, but remain 24.7% below the Midtown average per Newmark Grubb Knight Frank.

We expect to see office inventory increase by approximately 15 million square feet over the next five years. Most of this supply will be concentrated in Hudson Yards on the far West Side of Manhattan, at the World Trade Center site in Lower Manhattan and in a handful of other locations in Midtown. We believe the growth of office-using jobs, as well as conversion of obsolete office buildings to other uses, will absorb this new supply. The TAMI sector accounted for 23.0%conversion of leasingobsolete office buildings in New York City has been a two-decade trend. As aging office space in New York City becomes competitively obsolete, it has been converted at a steady pace to alternative uses. Recent high-profile examples of the third quarter.conversion trend can be found at the Crown Building on 57th Street and 5th Avenue, the Woolworth Building in Lower Manhattan, and throughout the portfolio of co-living companies such as WeLive, which by way of example, took 110 Wall Street and partially converted it into a co-living space in 2016.

Still, weWe expect that buildings that are amenity-laden and have modern infrastructures and/or hold a certain cache will continue to catch the attention of tenants. In fact, eight ofFollowing the ten largest deals insame pattern as the last two quarters, Midtown once again led New York City occurred in Midtown, which experienced over 6.2leasing during the first quarter with 5.6 million square feet and 72.1%or 59.0% of all Manhattan deals intotal square footage leased during the thirdfirst quarter. This is a 5.7% increase from last quarter’s 5.3 million square feet. We believe that Midtown buildings seeking to attract tenants over the next several years will have tomust be flexible and creative; the buildings will have to adapt to a changing world. Employment space has increased in density as the amount of square feet per employee is dropping for tenants across industries. Certain industries reserve more usable square feet to provide amenities to employees as a means of motivation.

We have observed building owners planning to market large amounts of available space in the coming years begin taking measures to reposition assets, renaming buildings, seeking non-traditional office occupying tenants, offering distinctive amenities, approving lobby renovations and/or infrastructure changes, as well as completely reimagining their structures.

Urban Suburban Markets

RXR has traditionally been a significant player in the New York City suburbs, and we continue to expect to find two main types of attractive investment opportunities in these markets. First, we expect that traditional residential and commercial suburban assets within transit oriented downtowns may see increased demand, as the broader economy recovers and employment improves resulting in the growth of small- and medium-sized service businesses inherent to such suburban markets. In addition, we expect that demand may increase as individuals and companies find themselves priced out of core New York City markets (and, potentially, certain outer borough locations), but continue to desire proximity to the many strengths of the metropolitan region. We believe that this trend could create a new “suburban moment” after several years of retrenchment. This dynamic would be created by the very success of New York City in contrast to the last half-century when suburbs largely expanded as a result of urban dysfunction.

Second, we believe that a new type low-density suburban product may prove increasingly desirable to both young people, who seek an urban lifestyle yet appreciate the benefits of the suburbs, and retiring baby boomers, who no longer have the financial and physical wherewithal to maintain large suburban residences and who likely find car-dependent lifestyles more challenging. This product may additionally address a challenge RXR has observed is facing many suburban communities in a need to grow their tax bases to cover increasing legacy costs with limited land available for development.

New York Metropolitan Area Residential Market

According to Douglas Elliman’s thirdfirst quarter 20162017 Manhattan Sales and February 2017 Manhattan, Brooklyn, and Queens Rentals report,Rental reports, the Manhattan housing prices pushed higher, reaching a new record with re-sale inventory and a heavy volumemarket showed more signs of closingsimprovement, driven by increased resale activity from the release of luxury new developmentpent-up demand accumulated before the U.S. election last November. The median sales that went into contract 12 to 18 months ago. Manhattan median rental prices year to dateprice for existing properties declinedincreased 5.6% from the fourth quarter, while the median sales price for new development decreased 7.3% from the fourth quarter. The resale market, which accounts for 84% of co-op and condo sales, was a better indicator of the state of the market as legacy contracts for new developments reflected the conditions of several years ago. The median rental price for existing properties decreased slightly by 1.2% but increased 48.9%0.6% from the fourth quarter and there was a 13.1% increase in the number of new leases. Listing inventory expanded for newly developed properties as demand for new inventory strengthened. The new development metric was skewed by the Q3 saleseventeenth consecutive month and has forced landlords to expand their use of nearly 80 luxury condos/co-ops (sales greater than $10 million). Key market drivers include employment gains,concessions to protect their asking rents. As a booming tech sector, tight credit conditions and low inventory and mortgage rates.result, net effective median rents decreased a nominal 1.7% in the first quarter.

We believe the combination of our co-sponsors’Co-sponsors’ strengths will contribute to our performance. Our Advisor Entities will utilize the personnel, resources and capital of our co-sponsorsCo-sponsors to select our investments and manage our day-to-day operations. We believe that we will benefit from our advisor’sAdvisor’s and sub-advisor’sSub-advisor’s affiliation with our co-sponsorsCo-sponsors given each co-sponsor’sCo-sponsor’s corporate, investment and operating platforms are well established with significant experience in CRE investing (including management of multiple public companies), allowing us to achieve our investment objectives and create stockholder value. In addition, we believe that our advisor’s and its affiliates’ capabilities will be strengthened and enhanced as a result of the pending mergers of our co-sponsor, NSAM, with Colony and NorthStar Realty, as discussed above.

Although we will have a limitation on the maximum leverage for our portfolio, which approximates 75% of the aggregate cost of our assets (excluding(including cash and cash equivalents and excluding indirect leverage held through our unconsolidated joint venture investments), other than intangibles, before deducting loan loss reserves, other non-cash reserves and depreciation, we do not have a targeted debt-to-equity ratio on an asset-by-asset basis, as we believe the appropriate leverage for the particular assets we finance depends on the specific credit characteristics of each asset. We will use leverage for the sole purpose of financing our investments and diversifying our equity and we will not employ leverage to speculate on changes in interest rates. We also will seek assignable financing when available. Once we have fully invested the proceeds of our Offering, we expect that our financing may approximate

50% of the cost of our investments, excluding indirect leverage held through our unconsolidated joint venture investments, although it may exceed this level during our organization and offering stage. As of March 31, 2017, we had not incurred any leverage.

Our financing strategy for our debt and securities investments will be dependent on our ability to obtain match-funded borrowings at rates that provide a positive net spread, generally using credit facilities and securitization financing transactions.

Our Advisor Entities maintain a comprehensive portfolio management process that generally includes day-to-day oversight by the portfolio management and servicing team, regular management meetings and an exhaustive quarterly credit review process. These processes are designed to enable management to evaluate and proactively identify asset-specific credit issues and trends on a portfolio-wide basis. For our joint venture investments, we intend to rely on affiliates of our Sub-AdvisorSub-advisor to provide certain asset management, property management and/or other services in managing our joint investments. Nevertheless, we cannot be certain that our Advisor EntitiesEntities’ review will identify all issues within our portfolio due to, among other things, adverse economic conditions or events adversely affecting specific assets; therefore, potential future losses may also stem from investments that are not identified during these credit reviews. Our Advisor Entities, under the direction of the investment committee, use many methods to actively manage our asset base to preserve our income and capital. Credit risk management is the ability of our Advisor Entities to manage our assets in a manner that preserves principal/cost and income and minimizes credit losses that could decrease income and portfolio value. For real estate equity and CRE debt investments, frequent re-underwriting and dialogue with borrowers/partners and regular inspections of our collateral and owned properties have proven to be an effective process for identifying issues early. During the quarterly credit review, or more frequently as necessary, investments are put on highly-monitored status and identified for possible loan loss reserves/asset impairment, as appropriate, based upon several factors, including missed or late contractual payments, significant declines in collateral performance and other data which may indicate a potential issue in our ability to recover our invested capital from an investment. Our Advisor Entities use an experienced portfolio management and servicing team that monitors these factors on our behalf.

Our investments will beare reviewed on a quarterly basis, or more frequently as necessary, to assess whether there are any indicators that the value of our investments may be impaired or that its carrying value may not be recoverable. In conducting these reviews, we consider macroeconomic factors, including real estate sector conditions, together with asset and market specific circumstances among other factors.

Each of our CRE debt investments will be secured by commercial real estate collateral and requires customized portfolio management and servicing strategies for dealing with potential credit situations. The business plan may necessitate a lease reserve or interest or other reserves, whether through proceeds from our loans, borrowings, offering proceeds or otherwise, to support lease payments or debt service and capital expenditures during the implementation of the business plan. There may also be a requirement for the borrower, tenant/operator, guarantor or us, to refill these reserves should they become deficient during the applicable period for any reason.

For recent accounting pronouncements, refer to Note 2, “Significant Accounting Policies” in our consolidation.accompanying consolidated financial statements included in Part I Item 1. “Financial Statements.”

Asset management and other fees - related party compriseconsist of asset management fees for the investment in an unconsolidated venture.

General and administrative expenses are principally incurred by our Operating Partnership. General and administrative expenses include operating expenses and the amortization of equity basedequity-based compensation for shares of restricted stock granted to our board of directors. The reimbursable operating expenses increased in the first quarter of 2017 because of higher average invested assets from the investment in 1285 AoA in May and December 2016.

Equity in earnings (losses) of unconsolidated venture reflects therepresents dividends received of approximately $48,000 and changesan increase in the fair value of our unconsolidated investment of approximately $357,000 as a result of an early tenant lease extension.

Other income is earned from cash invested in an unconsolidated venture.highly-liquid investments with a maturity of three months or less.

If we are unable to raise substantially more funds in our Offering than the minimum offering requirement, we will make fewer investments resulting in less diversification in terms of the type, number and size of investments we make and the value of an investment in us will fluctuate with the performance of the specific assets we acquire. Further, we have certain fixed direct and indirect operating expenses, including certain expenses as a publicly offered REIT, regardless of whether we are able to raise substantial funds in our Offering. Our inability to raise substantial funds would increase our fixed operating expenses as a percentage of gross income, reducing our net income and limiting our ability to make distributions.

We currently have no outstanding borrowings and no commitments from any lender to provide us with financing. Our charter limits us from incurring borrowings that would exceed 300% of our net assets. We cannot exceed this limit unless any excess in borrowing over such level is approved by a majority of our independent directors. We would need to disclose any such approval to our stockholders in our next quarterly report along with the justification for such excess. An approximation of this leverage calculation, excluding indirect leverage held through our unconsolidated joint venture investments, is 75% of our assets, other than intangibles, before deducting loan loss reserves, other non-cash reserves and depreciation. Once we have fully invested the proceeds of our Offering, we expect that our financing will not exceed 50% of the greater of the cost or fair value of our investments, excluding indirect leverage held through our unconsolidated joint venture investments, although it may exceed this level during our organization and offering stage.

In addition to making investments in accordance with our investment objectives, we use our capital resources to make certain payments to our Advisor Entities and our Dealer Manager. During our organization and offering stage, these payments include payments to our Dealer Manager for selling commissions, dealer manager fees and distribution fees and payments to our Dealer Manager and our Advisor Entities, or their affiliates, as applicable, for reimbursement of certain organization and offering costs.

We entered into advisory and sub-advisory agreements with our Advisor Entities, which have a one-year term but may be renewed for an unlimited number of successive one-year periods upon the mutual consent of our Advisor Entities and our board of directors, including a majority of our independent directors. In February 2017, we entered into an amended and restated advisory agreement with our Advisor for a term ending June 30, 2017, which eliminates the acquisition fees payable to our Advisor Entities, eliminates the disposition fees payable to our Advisor Entities and reduces the monthly asset management fee payable to our Advisor Entities from one-twelfth of 1.25% to one-twelfth of 1.0%. On March 17, 2017, we entered into a second amended and restated sub-advisory agreement with our Sub-advisor for a term ending June 30, 2017, which reflected the amendments to the fees in the Amended Advisory Agreement.

We intend to elect to be taxed as a REIT and to operate as a REIT commencing with our taxable year endingended December 31, 2016. To maintain our qualification as a REIT, we will be required to make aggregate annual distributions to our stockholders of at least 90% of our REIT taxable income (computed without regard to the dividends paid deduction and excluding net capital gain). Our board of directors may authorize distributions in excess of those required for us to maintain REIT status depending on our financial condition and such other factors as our board of directors deems relevant. Provided we have sufficient available cash flow, we intend to authorize and declare daily distributions and pay distributions on a monthly basis. We have not established a minimum distribution level.

Net cash used in operating activities was $147,268approximately $43,000 for the ninethree months ended September 30, 2016,March 31, 2017, primarily related to asset management fees and acquisition fees incurred as a result of our investment inother operating expenses, partially offset by distributions received from 1285 AoA as well as other operating expenses.

Net cash provided by financing activities was $1,803,527 for the ninethree months ended September 30, 2016,March 31, 2017 was $5.6 million, related to proceeds from the issuance of common stock, partially offset by dividendsdistributions paid on our common stock. There was no net cash provided by financing activities for the three months ended March 31, 2016.

We have certain arrangements which doAs of March 31, 2017, we are not meetdependent on the definitionuse of any off-balance sheet financing arrangements but do have some of the characteristics of off-balance sheet arrangements.for liquidity. We have made an investment in an unconsolidated venture. Refer to Note 3 “Investment in Unconsolidated Venture” in Item 1.2. “Financial Statements” for a discussion of such unconsolidated venture in our consolidated financial statements. Our exposure to loss is limited to the carrying value of our investment.

Subject to certain restrictions and limitations, our Advisor Entities are responsible for managing our affairs on a day-to-day basis and for identifying, acquiring, originating and asset managing investments on our behalf. Our Advisor Entities may delegate certain of their obligations to affiliated entities, which may be organized under the laws of the United States or foreign jurisdictions. References to the Advisor Entities include the Advisor Entities and any such affiliated entities. For such services, to the extent permitted by law and regulations, our Advisor Entities receive fees and reimbursements from us, of which our Sub-AdvisorSub-advisor generally receives 50% of all fees and up to 25% of all reimbursements.

We pay our Sub-Advisor,Sub-advisor, or its affiliates, development, leasing, property management and construction related service fees that are usual and customary for owners and operators in the geographic area of the property. Below is a description and table of the fees and reimbursements in effect from February 7, 2017 through March 31, 2017 incurred to our Advisor Entities.

Our Advisor Entities receive aIn February 2017, the Amended Advisory Agreement reduced the monthly asset management fee equalpayable to one-twelfth of 1.25%1.0% of the cost of investment or sum of the amount funded or allocated for CRE investments, including expenses and any financing attributable to such investments, less any principal received on debt and securities investments (or our proportionate share thereof in the case of an investment made through a joint venture). Prior to that date, our Advisor Entities received a monthly asset management fee equal to one-twelfth of 1.25% of the cost of investments.

Our Advisor, or its affiliates, is entitled to receive distributions equal to 15.0% of our net cash flows, whether from continuing operations, repayment of loans, disposition of assets or otherwise, but only after stockholders have received, in the aggregate, cumulative distributions equal to their invested capital plus a 6.0% cumulative, non-compounded annual pre-tax return on such invested capital.

For substantial assistance in connection withIn February 2017, the sale of investments and based onAmended Advisory Agreement eliminated the services provided, as determined by our independent directors,disposition fees payable to our Advisor Entities. Prior to that date, our Advisor Entities were entitled to receive a disposition fee equal to 2.0% of the contract sales price of each property sold and 1.0% of the contract sales price of each CRE debt investment sold or syndicated. We do not pay a disposition fee upon the maturity, prepayment, workout, modification or extension of a CRE debt investment unless there is a corresponding fee paid by our borrower, in which case the disposition fee is the lesser of: (i) 1.0% of the principal amount of the CRE debt investment prior to such transaction; or (ii) the amount of the fee paid by our borrowersyndicated for substantial assistance in connection with such transaction. If we take ownership of a property as a result of a workout or foreclosure of a CRE debt investment, we will pay a disposition fee upon the sale of such property. A disposition fee frominvestments and based on the sale of an investment is generally expensed and included in asset management and other fees - related party inservices provided, as determined by our consolidated statements of operations. A disposition fee for a CRE debt investment incurred in a transaction other than a sale is included in CRE debt investments, net on our consolidated balance sheets and is amortized to interest income over the life of the investment using the effective interest method.independent directors.

Our Advisor Entities are entitled to receive reimbursement for direct and indirect operating costs incurred by our Advisor Entities in connection with administrative services provided to us. Our Advisor Entities allocate, in good faith, indirect costs to us related to our Advisor Entities and their affiliates’ employees, occupancy and other general and administrative costs and expenses in accordance with the terms of, and subject to the limitations contained in, the advisory agreement with our Advisor Entities. The

indirect costs include our allocable share of our Advisor Entities compensation and benefit costs associated with dedicated or partially dedicated personnel who spend all or a portion of their time managing our affairs, based upon the percentage of time devoted by such personnel to our affairs. The indirect costs also include rental and occupancy, technology, office supplies, travel

Our Advisor Entities are entitled to receive reimbursement for organization and offering costs paid on our behalf in connection with our Offering. We are obligated to reimburse our Advisor Entities, as applicable, for organization and offering costs to the extent the aggregate of selling commissions, dealer manager fees, distribution fees and other organization and offering costs do not exceed 15% of gross proceeds from our Offering. Our Advisor Entities do not expect reimbursable organization and offering costs, excluding selling commissions, dealer manager fees and distribution fees, to exceed $18.0 million, or approximately 1.0% of the total proceeds available to be raised from our Offering. We will not reimburse our Advisor Entities for any organization and offering costs that our independent directors determine are not fair and commercially reasonable to us. We record organization and offering costs each period based on an allocation of expected total organization and offering costs to be reimbursed. Organization costs are recorded in general and administrative expenses in our consolidated statements of operations and offering costs were recorded as a reduction to equity.

Pursuant to a dealer manager agreement, we pay our Dealer Manager selling commissions of up to 7.0% of gross proceeds from the sale of Class A Shares and up to 2.0% of the gross proceeds from the sale of Class T Shares issued in our Primary Offering, all of which are reallowed to participating broker-dealers. We pay our Dealer Manager a dealer manager fee of up to 3.0% of gross proceeds from the sale of Class A Shares and up to 2.75% of the gross proceeds from the sale of Class T Shares issued in our Primary Offering, a portion of which is typically reallowed to participating broker-dealers and paid to certain employees of our Dealer Manager. No selling commissions or dealer manager fees are paid for the sale of Class I Shares. Our Dealer Manager may enter into participating dealer agreements that provide for our Dealer Manager to pay a distribution fee of up to 2.0% over a maximum eight-year period in connection with the sale of Class I Shares in the Primary Offering. We will not reimburse the Dealer Manager for its payment of these fees and such fees will be subject to the limitations on underwriting compensation under applicable FINRA rules.

In addition, we pay our Dealer Manager a distribution fee of up to 1.0% annually of gross proceeds from the sale of Class T Shares issued in our Primary Offering, all of which are reallowed to participating broker-dealers. Our Dealer Manager will cease receiving distribution fees with respect to each Class T Share upon the earliest of the following to occur: (i) a listing of our shares of common stock on a national securities exchange; (ii) such Class T Share is no longer being outstanding; (iii) our Dealer Manager’s determination that total underwriting compensation with respect to all Class A Shares, Class T Shares, and Class I Shares would be in excess of 10% of the gross proceeds of our Primary Offering; or (iv) the end of the month in which total underwriting compensation, with respect to Class T Shares issued in connection with the Primary Offering held by a stockholder within his or her particular account would be in excess of 10% of the stockholder’s total gross investment amount at the time of purchase of the primary Class T Shares held in such account.

No selling commissions or dealer manager fees are paid for sales pursuant to our DRP or our distribution support agreement, or our Distribution Support Agreement.