☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
FOR THE TRANSITION PERIOD FROM _________ TO _________ |
Maryland | 61-1805524 | |||||||||||||
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
None | N/A | N/A |
Large accelerated filer | ☐ | Accelerated filer | ☐ | |||||||||||
Non-Accelerated filer | ý | Smaller reporting company | ý | |||||||||||
Emerging growth company | ý | |||||||||||||
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. | ý | |||||||||||||
Cottonwood Communities, Inc. | |||||||||||
Table of Contents | |||||||||||
PART I | |||||||||||
Item 1. | |||||||||||
Item 2. | |||||||||||
Item 3. | |||||||||||
Item 4. | |||||||||||
PART II | |||||||||||
Item 1. | |||||||||||
Item | |||||||||||
Item | |||||||||||
Item 3. | |||||||||||
Item 4. | |||||||||||
Item 5. | |||||||||||
Item 6. | |||||||||||
Cottonwood Communities, Inc. | ||||||||||||||
Condensed Consolidated Balance Sheets | ||||||||||||||
(in thousands, except share and per share data) | ||||||||||||||
September 30, 2023 | December 31, 2022 | |||||||||||||
Assets | (Unaudited) | |||||||||||||
Real estate assets, net | $ | 1,743,038 | $ | 1,697,607 | ||||||||||
Investments in unconsolidated real estate entities | 161,848 | 133,207 | ||||||||||||
Investments in real estate-related loans, net | 7,127 | — | ||||||||||||
Cash and cash equivalents | 78,153 | 63,173 | ||||||||||||
Restricted cash | 32,371 | 32,351 | ||||||||||||
Other assets | 34,340 | 29,299 | ||||||||||||
Total assets | $ | 2,056,877 | $ | 1,955,637 | ||||||||||
Liabilities, Equity, and Noncontrolling Interests | ||||||||||||||
Liabilities | ||||||||||||||
Mortgage notes and revolving credit facility, net | $ | 1,084,093 | $ | 1,000,137 | ||||||||||
Construction loans, net | 123,000 | 95,327 | ||||||||||||
Preferred stock, net | 195,417 | 121,390 | ||||||||||||
Preferred interest liability | 15,300 | — | ||||||||||||
Unsecured promissory notes, net | 42,333 | 42,953 | ||||||||||||
Performance participation allocation due to affiliate | — | 20,320 | ||||||||||||
Accounts payable, accrued expenses and other liabilities | 90,244 | 65,611 | ||||||||||||
Total liabilities | 1,550,387 | 1,345,738 | ||||||||||||
Commitments and contingencies (Note 12) | ||||||||||||||
Equity and noncontrolling interests | ||||||||||||||
Stockholders' equity | ||||||||||||||
Common stock, Class T shares, $0.01 par value, 275,000,000 shares authorized; 4,575,531 and 4,815,122 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively. | 46 | 48 | ||||||||||||
Common stock, Class D shares, $0.01 par value, 275,000,000 shares authorized; 204,568 and 64,673 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively. | 2 | 1 | ||||||||||||
Common stock, Class I shares, $0.01 par value, 275,000,000 shares authorized; 4,210,179 and 3,861,049 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively. | 42 | 39 | ||||||||||||
Common stock, Class A shares, $0.01 par value, 125,000,000 shares authorized; 24,077,325 and 26,604,864 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively. | 234 | 266 | ||||||||||||
Additional paid-in capital | 391,141 | 414,140 | ||||||||||||
Accumulated distributions | (56,332) | (38,049) | ||||||||||||
Accumulated deficit | (94,708) | (71,513) | ||||||||||||
Total stockholders' equity | 240,425 | 304,932 | ||||||||||||
Noncontrolling interests | ||||||||||||||
Limited partners | 234,634 | 272,536 | ||||||||||||
Partially owned entities | 31,431 | 32,431 | ||||||||||||
Total noncontrolling interests | 266,065 | 304,967 | ||||||||||||
Total equity and noncontrolling interests | 506,490 | 609,899 | ||||||||||||
Total liabilities, equity and noncontrolling interests | $ | 2,056,877 | $ | 1,955,637 | ||||||||||
See accompanying notes to condensed consolidated financial statements |
Cottonwood Communities, Inc. | ||||||||
Consolidated Balance Sheets | ||||||||
June 30, 2018 | December 31, 2017 | |||||||
(Unaudited) | ||||||||
Assets | ||||||||
Cash and cash equivalents | $ | 200,000 | $ | 200,000 | ||||
Total assets | 200,000 | 200,000 | ||||||
Liabilities and equity | ||||||||
Liabilities | ||||||||
Accounts payable and accrued liabilities | $ | 2,072 | $ | — | ||||
Total liabilities | 2,072 | — | ||||||
Commitments and contingencies (Note 6) | ||||||||
Stockholder's equity | ||||||||
Preferred stock, $0.01 par value; 100,000,000 shares authorized | — | — | ||||||
Common stock, $0.01 par value, 1,000,000,000 shares authorized; 20,000 shares issued and outstanding at June 30, 2018 and December 31, 2017 | 200 | 200 | ||||||
Additional paid-in capital | 199,800 | 199,800 | ||||||
Accumulated deficit | (2,072 | ) | — | |||||
Total stockholder's equity | 197,928 | 200,000 | ||||||
Total liabilities and stockholder's equity | $ | 200,000 | $ | 200,000 | ||||
See accompanying notes to consolidated financial statements |
Cottonwood Communities, Inc. | |||||||||||||||||||||||
Condensed Consolidated Statements of Operations | |||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||
(in thousands, except share and per share data) | |||||||||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Revenues | |||||||||||||||||||||||
Rental and other property revenues | $ | 35,977 | $ | 32,959 | $ | 106,446 | $ | 88,382 | |||||||||||||||
Property management revenues | 2,133 | 2,829 | 7,744 | 8,655 | |||||||||||||||||||
Other revenues | 768 | 2,295 | 1,190 | 3,544 | |||||||||||||||||||
Total revenues | 38,878 | 38,083 | 115,380 | 100,581 | |||||||||||||||||||
Operating expenses | |||||||||||||||||||||||
Property operations expense | 13,579 | 12,444 | 39,572 | 32,705 | |||||||||||||||||||
Property management expense | 4,441 | 4,323 | 12,963 | 13,863 | |||||||||||||||||||
Asset management fee | 4,243 | 4,622 | 13,609 | 12,761 | |||||||||||||||||||
Performance participation allocation | — | 1,081 | — | 31,160 | |||||||||||||||||||
Depreciation and amortization | 14,646 | 14,289 | 43,635 | 37,549 | |||||||||||||||||||
General and administrative expenses | 2,288 | 3,938 | 7,935 | 10,513 | |||||||||||||||||||
Total operating expenses | 39,197 | 40,697 | 117,714 | 138,551 | |||||||||||||||||||
Loss from operations | (319) | (2,614) | (2,334) | (37,970) | |||||||||||||||||||
Equity in earnings of unconsolidated real estate entities | 1,438 | 1,982 | 5,067 | 8,705 | |||||||||||||||||||
Interest income | 517 | 23 | 1,412 | 47 | |||||||||||||||||||
Interest expense | (19,464) | (13,296) | (54,171) | (36,581) | |||||||||||||||||||
Gain on sale of real estate assets | — | — | 1,031 | — | |||||||||||||||||||
Gain on sale of unconsolidated real estate entities | — | 176 | — | 7,810 | |||||||||||||||||||
Gain on consolidation of development | 4,452 | — | 4,452 | — | |||||||||||||||||||
Promote from incentive allocation agreement | — | — | 119 | 30,309 | |||||||||||||||||||
Other (expense) income | (218) | 1,913 | (342) | 3,732 | |||||||||||||||||||
Loss before income taxes | (13,594) | (11,816) | (44,766) | (23,948) | |||||||||||||||||||
Income tax benefit (expense) | 31 | (511) | 338 | (8,261) | |||||||||||||||||||
Net loss | (13,563) | (12,327) | (44,428) | (32,209) | |||||||||||||||||||
Net loss attributable to noncontrolling interests: | |||||||||||||||||||||||
Limited partners | 6,593 | 6,198 | 21,304 | 16,778 | |||||||||||||||||||
Partially owned entities | 12 | 241 | (71) | 694 | |||||||||||||||||||
Net loss attributable to common stockholders | $ | (6,958) | $ | (5,888) | $ | (23,195) | $ | (14,737) | |||||||||||||||
Weighted-average common shares outstanding | 34,037,337 | 29,733,453 | 34,874,921 | 27,199,948 | |||||||||||||||||||
Net loss per common share - basic and diluted | $ | (0.20) | $ | (0.20) | $ | (0.67) | $ | (0.54) | |||||||||||||||
See accompanying notes to condensed consolidated financial statements |
Cottonwood Communities, Inc. | ||||||||||||||||
Consolidated Statements of Operations | ||||||||||||||||
(Unaudited) | ||||||||||||||||
For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Operating expenses | ||||||||||||||||
General and administrative expenses | $ | 1,109 | $ | — | $ | 2,072 | $ | — | ||||||||
Total operating expenses | 1,109 | — | 2,072 | — | ||||||||||||
Net loss | $ | (1,109 | ) | $ | — | $ | (2,072 | ) | $ | — | ||||||
Weighted-average shares outstanding | 20,000 | 20,000 | 20,000 | 20,000 | ||||||||||||
Net loss per common share - basic and diluted | $ | (0.06 | ) | $ | — | $ | (0.10 | ) | $ | — | ||||||
See accompanying notes to consolidated financial statements |
Cottonwood Communities, Inc. | |||||||||||||||||||||||||||||||||||||||||
Condensed Consolidated Statements of Stockholders' Equity | |||||||||||||||||||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||||||||||||||||
Cottonwood Communities, Inc. Stockholders' Equity | Noncontrolling interests | ||||||||||||||||||||||||||||||||||||||||
Par Value | Additional Paid-In Capital | Accumulated Distributions | Accumulated Deficit | Total Stockholders' Equity | Limited Partners | Partially Owned Entities | Total Equity and Noncontrolling Interests | ||||||||||||||||||||||||||||||||||
Common Stock Class T | Common Stock Class D | Common Stock Class I | Common Stock Class A | Common Stock Class TX | |||||||||||||||||||||||||||||||||||||
Balance at January 1, 2023 | $ | 48 | $ | 1 | $ | 39 | $ | 266 | $ | — | $ | 414,140 | $ | (38,049) | $ | (71,513) | $ | 304,932 | $ | 272,536 | $ | 32,431 | $ | 609,899 | |||||||||||||||||
Issuance of common stock | 3 | 1 | 2 | — | — | 13,401 | — | — | 13,407 | — | — | 13,407 | |||||||||||||||||||||||||||||
Offering costs | — | — | — | — | — | (1,188) | — | — | (1,188) | — | — | (1,188) | |||||||||||||||||||||||||||||
Distribution reinvestment | — | — | — | — | — | 696 | — | — | 696 | — | — | 696 | |||||||||||||||||||||||||||||
Common stock/OP Units repurchased | — | — | (1) | (9) | — | (18,967) | — | — | (18,977) | (649) | — | (19,626) | |||||||||||||||||||||||||||||
Exchanges and transfers | — | — | 1 | — | — | 1,970 | — | — | 1,971 | (1,971) | — | — | |||||||||||||||||||||||||||||
OP Units issued for real estate interests | — | — | — | — | — | — | — | — | — | 19,829 | — | 19,829 | |||||||||||||||||||||||||||||
Share-based compensation | — | — | — | — | — | 55 | — | — | 55 | 1,105 | — | 1,160 | |||||||||||||||||||||||||||||
Distributions to investors | — | — | — | — | — | — | (6,230) | — | (6,230) | (5,757) | (126) | (12,113) | |||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | (9,419) | (9,419) | (8,397) | (44) | (17,860) | |||||||||||||||||||||||||||||
Reallocation of stockholders' equity and noncontrolling interests | — | — | — | — | — | 7,150 | — | — | 7,150 | (7,150) | — | — | |||||||||||||||||||||||||||||
Balance at March 31, 2023 | 51 | 2 | 41 | 257 | — | 417,257 | (44,279) | (80,932) | 292,397 | 269,546 | 32,261 | 594,204 | |||||||||||||||||||||||||||||
Issuance of common stock | 2 | — | 2 | — | — | 7,218 | — | — | 7,222 | — | — | 7,222 | |||||||||||||||||||||||||||||
Offering costs | — | — | — | — | — | (794) | — | — | (794) | — | — | (794) | |||||||||||||||||||||||||||||
Distribution reinvestment | — | — | — | — | — | 709 | — | — | 709 | — | — | 709 | |||||||||||||||||||||||||||||
Common stock/OP Units repurchased | (1) | — | (2) | (16) | — | (22,686) | — | — | (22,705) | (525) | — | (23,230) | |||||||||||||||||||||||||||||
Exchanges and transfers | — | — | 2 | — | — | 4,050 | — | — | 4,052 | (4,052) | — | — | |||||||||||||||||||||||||||||
Share-based compensation | — | — | — | — | — | 60 | — | — | 60 | 508 | — | 568 | |||||||||||||||||||||||||||||
Distributions to investors | — | — | — | — | — | — | (6,114) | — | (6,114) | (5,851) | (75) | (12,040) | |||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | (6,818) | (6,818) | (6,314) | 127 | (13,005) | |||||||||||||||||||||||||||||
Reallocation of stockholders' equity and noncontrolling interests | — | �� | — | — | — | 1,086 | — | — | 1,086 | (1,086) | — | — | |||||||||||||||||||||||||||||
Balance at June 30, 2023 | 52 | 2 | 43 | 241 | — | 406,900 | (50,393) | (87,750) | 269,095 | 252,226 | 32,313 | 553,634 | |||||||||||||||||||||||||||||
Issuance of common stock | 1 | — | 1 | — | — | 3,934 | — | — | 3,936 | — | — | 3,936 | |||||||||||||||||||||||||||||
Offering costs | — | — | — | — | — | 170 | — | — | 170 | — | — | 170 | |||||||||||||||||||||||||||||
Distribution reinvestment | — | — | — | — | — | 470 | — | — | 470 | — | — | 470 | |||||||||||||||||||||||||||||
Common stock/OP Units repurchased | (7) | — | (3) | (7) | — | (28,684) | — | — | (28,701) | (397) | — | (29,098) | |||||||||||||||||||||||||||||
Exchanges and transfers | — | — | 1 | — | — | 1,393 | — | — | 1,394 | (1,394) | — | — | |||||||||||||||||||||||||||||
OP Units issued for real estate interests | — | — | — | — | — | — | — | — | — | 3,110 | — | 3,110 | |||||||||||||||||||||||||||||
Share-based compensation | — | — | — | — | — | 38 | — | — | 38 | 446 | — | 484 | |||||||||||||||||||||||||||||
Distributions to investors | — | — | — | — | — | — | (5,939) | — | (5,939) | (5,844) | (870) | (12,653) | |||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | (6,958) | (6,958) | (6,593) | (12) | (13,563) | |||||||||||||||||||||||||||||
Reallocation of stockholders' equity and noncontrolling interests | — | — | — | — | — | 6,920 | — | — | 6,920 | (6,920) | — | — | |||||||||||||||||||||||||||||
Balance at September 30, 2023 | $ | 46 | $ | 2 | $ | 42 | $ | 234 | $ | — | $ | 391,141 | $ | (56,332) | $ | (94,708) | $ | 240,425 | $ | 234,634 | $ | 31,431 | $ | 506,490 |
Cottonwood Communities, Inc. | |||||||||||||||||||
Consolidated Statement of Stockholder's Equity | |||||||||||||||||||
(Unaudited) | |||||||||||||||||||
Stockholder's Equity | |||||||||||||||||||
Common Stock | Additional Paid-In Capital | Accumulated Deficit | |||||||||||||||||
Shares | Amount | Total Equity | |||||||||||||||||
Balance as of December 31, 2017 | 20,000 | $ | 200 | $ | 199,800 | $ | — | $ | 200,000 | ||||||||||
Net loss | — | — | — | (2,072 | ) | (2,072 | ) | ||||||||||||
Balance as of June 30, 2018 | 20,000 | $ | 200 | $ | 199,800 | $ | (2,072 | ) | $ | 197,928 | |||||||||
See accompanying notes to consolidated financial statements |
Cottonwood Communities, Inc. | |||||||||||||||||||||||||||||||||||||||||
Condensed Consolidated Statements of Stockholders' Equity (Continued) | |||||||||||||||||||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||||||||||||||||
Cottonwood Communities, Inc. Stockholders' Equity | Noncontrolling interests | ||||||||||||||||||||||||||||||||||||||||
Par Value | Additional Paid-In Capital | Accumulated Distributions | Accumulated Deficit | Total Stockholders' Equity | Limited Partners | Partially Owned Entities | Total Equity and Noncontrolling Interests | ||||||||||||||||||||||||||||||||||
Common Stock Class T | Common Stock Class D | Common Stock Class I | Common Stock Class A | Common Stock Class TX | |||||||||||||||||||||||||||||||||||||
Balance at January 1, 2022 | $ | — | $ | — | $ | 2 | $ | 234 | $ | — | $ | 275,821 | $ | (17,273) | $ | (55,864) | $ | 202,920 | $ | 267,472 | $ | 70,277 | $ | 540,669 | |||||||||||||||||
Issuance of common stock | 14 | — | 4 | — | — | 32,912 | — | — | 32,930 | — | — | 32,930 | |||||||||||||||||||||||||||||
Offering costs | — | — | — | — | — | (2,958) | — | — | (2,958) | — | — | (2,958) | |||||||||||||||||||||||||||||
Distribution reinvestment | — | — | — | — | — | 464 | — | — | 464 | — | — | 464 | |||||||||||||||||||||||||||||
Common stock/OP Units repurchased | — | — | — | (2) | — | (3,106) | — | — | (3,108) | (286) | — | (3,394) | |||||||||||||||||||||||||||||
Contributions from noncontrolling interests | — | — | — | — | — | — | — | — | — | — | 662 | 662 | |||||||||||||||||||||||||||||
Share-based compensation | — | — | — | — | — | — | — | — | — | 865 | — | 865 | |||||||||||||||||||||||||||||
Distributions to investors | — | — | — | — | — | — | (4,314) | — | (4,314) | (5,460) | (4,073) | (13,847) | |||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | (3,005) | (3,005) | (3,828) | (55) | (6,888) | |||||||||||||||||||||||||||||
Reallocation of stockholders' equity and noncontrolling interests | — | — | — | — | — | (8,008) | — | — | (8,008) | 8,008 | — | — | |||||||||||||||||||||||||||||
Balance at March 31, 2022 | 14 | — | 6 | 232 | — | 295,125 | (21,587) | (58,869) | 214,921 | 266,771 | 66,811 | 548,503 | |||||||||||||||||||||||||||||
Issuance of common stock | 15 | — | 12 | — | — | 53,522 | — | — | 53,549 | — | — | 53,549 | |||||||||||||||||||||||||||||
Offering costs | — | — | — | — | — | (4,211) | — | — | (4,211) | — | — | (4,211) | |||||||||||||||||||||||||||||
Distribution reinvestment | — | — | — | 1 | — | 656 | — | — | 657 | — | — | 657 | |||||||||||||||||||||||||||||
Common stock/OP Units repurchased | — | — | — | (3) | — | (5,591) | — | — | (5,594) | (445) | — | (6,039) | |||||||||||||||||||||||||||||
Contributions from noncontrolling interests | — | — | — | — | — | — | — | — | — | (210) | 15,444 | 15,234 | |||||||||||||||||||||||||||||
Share-based compensation | — | — | — | — | — | — | — | — | — | 941 | — | 941 | |||||||||||||||||||||||||||||
Distributions to investors | — | — | — | — | — | — | (4,765) | — | (4,765) | (5,558) | (122) | (10,445) | |||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | (5,843) | (5,843) | (6,752) | (398) | (12,993) | |||||||||||||||||||||||||||||
Reallocation of stockholders' equity and noncontrolling interests | — | — | — | — | — | (12,486) | — | — | (12,486) | 12,486 | — | — | |||||||||||||||||||||||||||||
Balance at June 30, 2022 | $ | 29 | $ | — | $ | 18 | $ | 230 | $ | — | $ | 327,015 | $ | (26,352) | $ | (64,712) | $ | 236,228 | $ | 267,233 | $ | 81,735 | $ | 585,196 | |||||||||||||||||
Issuance of common stock | 14 | — | 13 | — | — | 56,798 | — | — | 56,825 | — | — | 56,825 | |||||||||||||||||||||||||||||
Offering costs | — | — | — | — | — | (4,748) | — | — | (4,748) | — | — | (4,748) | |||||||||||||||||||||||||||||
Distribution reinvestment | — | — | — | — | — | 583 | — | — | 583 | — | — | 583 | |||||||||||||||||||||||||||||
Exchanges and transfers | — | — | 2 | — | — | 3,382 | — | — | 3,384 | (3,384) | — | — | |||||||||||||||||||||||||||||
OP Units issued for real estate interests | — | — | — | — | — | — | — | — | — | 2,930 | — | 2,930 | |||||||||||||||||||||||||||||
CMOF Merger | — | — | — | 43 | — | 39,393 | — | — | 39,436 | 8,273 | (49,178) | (1,469) | |||||||||||||||||||||||||||||
Common stock/OP Units repurchased | — | — | (1) | (2) | — | (5,803) | — | — | (5,806) | (602) | — | (6,408) | |||||||||||||||||||||||||||||
Contributions from noncontrolling interests | — | — | — | — | — | — | — | — | — | — | 386 | 386 | |||||||||||||||||||||||||||||
Share-based compensation | — | — | — | — | — | — | — | — | — | 938 | — | 938 | |||||||||||||||||||||||||||||
Distributions to investors | — | — | — | — | — | — | (5,470) | — | (5,470) | (5,646) | (116) | (11,232) | |||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | (5,888) | (5,888) | (6,198) | (241) | (12,327) | |||||||||||||||||||||||||||||
Reallocation of stockholders' equity and noncontrolling interests | — | — | — | — | — | (12,686) | — | — | (12,686) | 12,686 | — | — | |||||||||||||||||||||||||||||
Balance at September 30, 2022 | $ | 43 | $ | — | $ | 32 | $ | 271 | $ | — | $ | 403,934 | $ | (31,822) | $ | (70,600) | $ | 301,858 | $ | 276,230 | $ | 32,586 | $ | 610,674 | |||||||||||||||||
See accompanying notes to condensed consolidated financial statements |
Cottonwood Communities, Inc. | ||||||||
Consolidated Statements of Cash Flows | ||||||||
(Unaudited) | ||||||||
For the Six Months Ended June 30, | ||||||||
2018 | 2017 | |||||||
Operating activities | ||||||||
Net loss | $ | (2,072 | ) | $ | — | |||
Changes in operating assets and liabilities | ||||||||
Accounts payable and accrued expenses | 2,072 | — | ||||||
Net cash used in operating activities | — | — | ||||||
Net change in cash | $ | — | $ | — | ||||
Cash and cash equivalents, at beginning of period | 200,000 | 200,000 | ||||||
Cash and cash equivalents, at end of period | $ | 200,000 | $ | 200,000 | ||||
See accompanying notes to consolidated financial statements |
Cottonwood Communities, Inc. | ||||||||||||||
Condensed Consolidated Statements of Cash Flows | ||||||||||||||
(Unaudited) | ||||||||||||||
(in thousands) | ||||||||||||||
Nine Months Ended September 30, | ||||||||||||||
2023 | 2022 | |||||||||||||
Cash flows from operating activities: | ||||||||||||||
Net loss | $ | (44,428) | $ | (32,209) | ||||||||||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||||||||
Depreciation and amortization | 43,635 | 37,549 | ||||||||||||
Gain on sale of real estate assets | (1,031) | — | ||||||||||||
Gain on sale of investments in unconsolidated real estate entities | — | (7,810) | ||||||||||||
Gain on consolidation of development | (4,452) | — | ||||||||||||
Share-based compensation | 2,212 | 2,743 | ||||||||||||
Deferred taxes | (150) | 7,262 | ||||||||||||
Other operating | 7,510 | 1,565 | ||||||||||||
Equity in earnings of unconsolidated real estate entities | (5,067) | (8,705) | ||||||||||||
Distributions from unconsolidated real estate entities - return on capital | 3,310 | 8,389 | ||||||||||||
Changes in operating assets and liabilities: | ||||||||||||||
Other assets | (7,588) | 821 | ||||||||||||
Performance participation allocation | — | 31,160 | ||||||||||||
Performance participation allocation payment | (20,320) | (51,761) | ||||||||||||
Accounts payable, accrued expenses and other liabilities | 8,791 | 9,644 | ||||||||||||
Net cash used in operating activities | (17,578) | (1,352) | ||||||||||||
Cash flows from investing activities: | ||||||||||||||
Acquisitions of real estate | — | (148,262) | ||||||||||||
Cash acquired on consolidation of real estate | 5,807 | 5,649 | ||||||||||||
Settlement of related party notes and liabilities assumed with the CMOF Merger | — | (1,469) | ||||||||||||
Capital expenditures and development activities | (32,805) | (79,218) | ||||||||||||
Investments in unconsolidated real estate entities | (17,604) | (197) | ||||||||||||
Proceeds from sale of investments in unconsolidated real estate entities | — | 28,910 | ||||||||||||
Distributions from unconsolidated real estate entities - return of capital | 18,106 | 38,769 | ||||||||||||
Proceeds from sale of real estate assets, net | 4,656 | — | ||||||||||||
Contributions to investments in real estate-related loans | (7,346) | — | ||||||||||||
Proceeds from settlement of investments in real estate-related loans | — | 13,000 | ||||||||||||
Net cash used in investing activities | (29,186) | (142,818) |
Cottonwood Communities, Inc. | ||||||||||||||
Condensed Consolidated Statements of Cash Flows (Continued) | ||||||||||||||
(Unaudited) | ||||||||||||||
(in thousands) | ||||||||||||||
Nine Months Ended September 30, | ||||||||||||||
2023 | 2022 | |||||||||||||
Cash flows from financing activities: | ||||||||||||||
Principal payments on mortgage notes | (862) | (1,186) | ||||||||||||
Borrowings from revolving credit facility | 70,000 | 168,000 | ||||||||||||
Repayments on revolving credit facility | (50,000) | (141,000) | ||||||||||||
Borrowings under mortgage notes | 366,963 | 473,534 | ||||||||||||
Repayments of mortgage notes | (284,702) | (240,338) | ||||||||||||
Deferred financing costs on mortgage notes | (4,053) | (5,067) | ||||||||||||
Borrowings from construction loans | 16,955 | 29,505 | ||||||||||||
Repayments of construction loans | (37,000) | (59,660) | ||||||||||||
Proceeds from issuance of preferred stock | 80,170 | 15,472 | ||||||||||||
Redemption of preferred stock | (1,438) | (142,700) | ||||||||||||
Offering costs paid on issuance of preferred stock | (9,247) | (1,708) | ||||||||||||
Repurchase of unsecured promissory notes | (1,014) | (96) | ||||||||||||
Proceeds from issuance of common stock | 24,567 | 143,445 | ||||||||||||
Repurchase of common stock/OP Units | (71,009) | (14,191) | ||||||||||||
Offering costs paid on issuance of common stock | (2,569) | (7,514) | ||||||||||||
Contributions from noncontrolling interests | — | 11,935 | ||||||||||||
Distributions to common stockholders | (16,531) | (12,279) | ||||||||||||
Distributions to noncontrolling interests - limited partners | (17,395) | (16,507) | ||||||||||||
Distributions to noncontrolling interests - partially owned entities | (1,071) | (4,311) | ||||||||||||
Net cash provided by financing activities | 61,764 | 195,334 | ||||||||||||
Net increase in cash and cash equivalents and restricted cash | 15,000 | 51,164 | ||||||||||||
Cash and cash equivalents and restricted cash, beginning of period | 95,524 | 45,390 | ||||||||||||
Cash and cash equivalents and restricted cash, end of period | $ | 110,524 | $ | 96,554 | ||||||||||
Reconciliation of cash and cash equivalents and restricted cash to the condensed consolidated balance sheets: | ||||||||||||||
Cash and cash equivalents | $ | 78,153 | $ | 63,045 | ||||||||||
Restricted cash | 32,371 | 33,509 | ||||||||||||
Total cash and cash equivalents and restricted cash | $ | 110,524 | $ | 96,554 | ||||||||||
Cottonwood Communities, Inc. | ||||||||||||||
Condensed Consolidated Statements of Cash Flows (Continued) | ||||||||||||||
(Unaudited) | ||||||||||||||
(in thousands) | ||||||||||||||
Nine Months Ended September 30, | ||||||||||||||
2023 | 2022 | |||||||||||||
Supplemental disclosure of non-cash investing and financing activities: | ||||||||||||||
(Decrease) increase in accrued deferred offering costs | $ | (756) | $ | 4,404 | ||||||||||
Distributions reinvested in common stock | $ | 1,877 | $ | 1,563 | ||||||||||
Changes in accrued capital expenditures | $ | (543) | $ | (3,050) | ||||||||||
Capitalized interest related to construction | $ | 2,413 | $ | 1,137 | ||||||||||
Changes in accrued redemptions | $ | 1,243 | $ | 1,669 | ||||||||||
Melrose Phase II Acquisition | ||||||||||||||
Real estate assets, net of cash acquired | $ | 39,582 | $ | — | ||||||||||
Mortgage note | $ | 31,387 | $ | — | ||||||||||
Other assets and liabilities assumed, net | $ | (280) | $ | — | ||||||||||
Value of OP Units issued for real estate assets | $ | 3,110 | $ | — | ||||||||||
805 Riverfront Consolidation | ||||||||||||||
Real estate assets, net of cash acquired | $ | 98,921 | $ | — | ||||||||||
Construction loan | $ | 45,306 | $ | — | ||||||||||
Preferred interest liability | $ | 15,300 | $ | — | ||||||||||
Other assets and liabilities assumed, net | $ | (14,668) | $ | — | ||||||||||
Alpha Mill acquisition of additional interests | ||||||||||||||
Value of OP Units issued for additional investment in unconsolidated real estate entity | $ | 19,829 | $ | — | ||||||||||
CMOF Merger | ||||||||||||||
CMOF related party notes assumed | $ | — | $ | 1,327 | ||||||||||
Net other liabilities assumed | $ | — | $ | 142 | ||||||||||
Cottonwood Ridgeview Acquisition | ||||||||||||||
Real estate assets, net of cash acquired | $ | — | $ | 68,167 | ||||||||||
Mortgage note | $ | — | $ | 63,795 | ||||||||||
Other assets and liabilities assumed, net | $ | — | $ | 642 | ||||||||||
Value of OP Units issued for real estate assets | $ | — | $ | 2,930 | ||||||||||
Cottonwood Clermont Acquisition | ||||||||||||||
Assumption of mortgage note | $ | — | $ | 35,521 | ||||||||||
See accompanying notes to condensed consolidated financial statements |
Adjustments | ||||||||||||||||||||
As Previously Reported | Inter Activity Items (1) | Accrued Capital Expenditures (2) | Capitalized Interest (3) | Accrued Redemptions (4) | As Corrected | |||||||||||||||
Cash flows from operating activities: | ||||||||||||||||||||
Adjustments to reconcile net loss to net cash used on operating activities | ||||||||||||||||||||
Other operating (5) | $ | 5,283 | $ | (3,718) | $ | — | $ | — | $ | — | $ | 1,565 | ||||||||
Changes in operating assets and liabilities | ||||||||||||||||||||
Other assets | $ | (2,647) | $ | 3,468 | $ | — | $ | — | $ | — | $ | 821 | ||||||||
Accounts payable and accrued liabilities | $ | 7,943 | $ | 250 | $ | 3,050 | $ | 70 | $ | (1,669) | $ | 9,644 | ||||||||
Net cash used in operating activities | $ | (2,803) | $ | — | $ | 3,050 | $ | 70 | $ | (1,669) | $ | (1,352) | ||||||||
Cash flows from investing activities: | ||||||||||||||||||||
Capital expenditures and development activities | $ | (77,235) | $ | — | $ | (3,050) | $ | 1,067 | $ | — | $ | (79,218) | ||||||||
Net cash used in investing activities | $ | (140,835) | $ | — | $ | (3,050) | $ | 1,067 | $ | — | $ | (142,818) | ||||||||
Cash flows from investing activities: | ||||||||||||||||||||
Borrowings under mortgage notes and term loans | $ | 464,373 | $ | 9,161 | $ | — | $ | — | $ | — | $ | 473,534 | ||||||||
Repayments of mortgage notes and term loans | $ | (231,177) | $ | (9,161) | $ | — | $ | — | $ | — | $ | (240,338) | ||||||||
Borrowings under construction loans | $ | 30,642 | $ | — | $ | — | $ | (1,137) | $ | — | $ | 29,505 | ||||||||
Redemption of preferred stock | $ | (142,720) | $ | — | $ | — | $ | — | $ | 20 | $ | (142,700) | ||||||||
Issuance of common stock | $ | 145,008 | $ | (1,563) | $ | — | $ | — | $ | — | $ | 143,445 | ||||||||
Repurchase of common stock/OP Units | $ | (15,840) | $ | — | $ | — | $ | — | $ | 1,649 | $ | (14,191) | ||||||||
Distributions to common stockholders | $ | (13,842) | $ | 1,563 | $ | — | $ | — | $ | — | $ | (12,279) | ||||||||
Net cash provided by financing activities | $ | 194,802 | $ | — | $ | — | $ | (1,137) | $ | 1,669 | $ | 195,334 | ||||||||
Supplemental disclosure of non-cash investing and financing activities: | ||||||||||||||||||||
Distributions reinvested in common stock | $ | — | $ | 1,563 | $ | — | $ | — | $ | — | $ | 1,563 | ||||||||
Changes in accrued capital expenditures | $ | — | $ | — | $ | (3,050) | $ | — | $ | — | $ | (3,050) | ||||||||
Capitalized interest related to construction | $ | — | $ | — | $ | — | $ | 1,137 | $ | — | $ | 1,137 | ||||||||
Changes in accrued redemptions | $ | — | $ | — | $ | — | $ | — | $ | 1,669 | $ | 1,669 | ||||||||
(1) These items do not impact total cash flows from operating, investing and financing activities. They include separating the fair value of derivatives from other assets, separating the amortization of below market leases from other assets, correcting the improper netting between borrowings and repayments for one financing transaction, and reducing cash from issuance of common stock and distributions to common stockholders for distributions from our distribution reinvestment plan. | ||||||||||||||||||||
(2) Noncash accruals for capitalized development costs were not properly excluded from cash outflows for capital expenditures and development activities within investing activities and also was not properly excluded from changes in accounts payable and accrued liabilities. | ||||||||||||||||||||
(3) Noncash accrued capitalized interest on development projects was not properly excluded from cash outflows for capital expenditures and development activities in investing activities and borrowings from construction loans in financing activities. | ||||||||||||||||||||
(4) Noncash accruals for redemptions were not properly excluded from cash outflows paid for redemptions within financing activities and also were not properly excluded from changes in accounts payable and accrued liabilities. | ||||||||||||||||||||
(5) The as previously reported amount in the table above for other operating within operating cash flow includes a $0.5 million reclassification related to loss on debt extinguishment in order to match the current year presentation. |
September 30, 2023 | December 31, 2022 | ||||||||||
Land | $ | 272,067 | $ | 267,876 | |||||||
Buildings and improvements | 1,370,573 | 1,348,019 | |||||||||
Furniture, fixtures and equipment | 58,396 | 54,067 | |||||||||
Intangible assets | 39,464 | 40,692 | |||||||||
Construction in progress (1) | 158,806 | 106,223 | |||||||||
1,899,306 | 1,816,877 | ||||||||||
Less: Accumulated depreciation and amortization | (156,268) | (119,270) | |||||||||
Real estate assets, net | $ | 1,743,038 | $ | 1,697,607 | |||||||
(1) Includes construction in progress for our development projects and capitalized costs for improvements not yet placed in service at our stabilized properties. |
Description | Amounts | ||||
Reported amount of previous interest | |||||
Equity method investment (1) | $ | 28,679 | |||
Real estate assets | $ | 103,373 | |||
Restricted cash | 5,032 | ||||
Other assets | 400 | ||||
Accounts payable, accrued expenses and other liabilities | (15,068) | ||||
Preferred equity (2) | (15,300) | ||||
Construction loans, net | (45,306) | ||||
Total net fair value of identifiable assets and liabilities of the VIE | 33,131 | ||||
Gain on consolidation | $ | 4,452 | |||
(1) We provided an additional investor capital contribution of $6.0 million for the Riverfront Project with the change of control. | |||||
(2) The preferred equity in the Riverfront Project is an investment by a third party. It is mandatorily redeemable and accounted for as a liability. |
Allocated Amounts | |||||||||||||||||||||||||||||
Property | Location | Date Consolidated | Building | Land | Land Improvements | Personal Property | Lease Intangibles | Debt Fair Value Adjustment | Total | ||||||||||||||||||||
Melrose Phase II | Nashville, TN | 8/2/23 | $ | 32,115 | $ | 5,156 | $ | 248 | $ | 1,021 | $ | 1,043 | $ | 1,013 | $ | 40,596 |
Allocated Amounts | |||||||||||||||||||||||||||||
Property | Location | Date Consolidated | Building | Land | Land Improvements | Personal Property | Lease Intangibles | Debt Fair Value Adjustment | Total | ||||||||||||||||||||
Cottonwood Lighthouse Point | Pompano Beach, FL | 6/22/22 | $ | 76,322 | $ | 13,647 | $ | 1,843 | $ | 2,011 | $ | 1,783 | $ | — | $ | 95,606 | |||||||||||||
Cottonwood Ridgeview | Plano, TX | 9/19/22 | 54,337 | 9,275 | 2,548 | 835 | 1,603 | 1,504 | 70,102 | ||||||||||||||||||||
Cottonwood Clermont | Clermont, FL | 9/21/22 | 67,400 | 5,705 | 5,744 | 1,817 | 1,792 | 3,428 | 85,886 | ||||||||||||||||||||
$ | 198,059 | $ | 28,627 | $ | 10,135 | $ | 4,663 | $ | 5,178 | $ | 4,932 | $ | 251,594 |
2022 Consideration | CMOF Merger | |||||||
Common stock issued and outstanding | 5,001,000 | |||||||
Exchange ratio | 0.8669 | |||||||
CCI common stock issued as consideration | 4,335,367 | |||||||
Per share value of CCI Common Stock | $ | 20.7007 | ||||||
Fair value of CCI Common Stock issued | $ | 89,745 | ||||||
Fair value of OP Units issued | 8,273 | |||||||
Settlement of CMOF related party notes and interest | 1,327 | |||||||
Settlement of net other liabilities of CMOF | 142 | |||||||
Total consideration | $ | 99,487 | ||||||
2022 Change in equity | CMOF Merger | |||||||
Carrying amount of noncontrolling interest | $ | 49,178 | ||||||
Total consideration | 99,487 | |||||||
Additional paid in capital adjustment | $ | (50,309) | ||||||
Fair value of CCI Common Stock issued | $ | 89,745 | ||||||
Additional paid in capital adjustment | (50,309) | |||||||
Total change in equity | $ | 39,436 |
Balance at | ||||||||||||||||||||
Property / Development | Location | % Owned | September 30, 2023 | December 31, 2022 | ||||||||||||||||
Stabilized Assets | ||||||||||||||||||||
Alpha Mill (1) (2) | Charlotte, NC | 73.7% (2) | $ | 29,941 | $ | 10,470 | ||||||||||||||
Cottonwood Bayview (1) | St. Petersburg, FL | 71.0% | 12,191 | 30,792 | ||||||||||||||||
Cottonwood Lighthouse Point (1) (3) | Pompano Beach, FL | 86.8% (3) | 39,840 | — | ||||||||||||||||
Fox Point (1) | Salt Lake City, UT | 52.8% | 13,872 | 14,794 | ||||||||||||||||
Toscana at Valley Ridge (1) | Lewisville, TX | 58.6% | 6,916 | 9,382 | ||||||||||||||||
Melrose Phase II (1) (4) | Nashville, TN | 100.0% (4) | — | 6,185 | ||||||||||||||||
Preferred Equity Investments | ||||||||||||||||||||
Lector85 | Ybor City, FL | 11,022 | 10,006 | |||||||||||||||||
Astoria West (formerly Vernon) | Queens, NY | 22,656 | 20,567 | |||||||||||||||||
805 Riverfront (5) | West Sacramento, CA | (5) | — | 20,259 | ||||||||||||||||
417 Callowhill | Philadelphia, PA | 24,898 | 9,949 | |||||||||||||||||
Other | 512 | 803 | ||||||||||||||||||
Total | $ | 161,848 | $ | 133,207 | ||||||||||||||||
(1) We account for our tenant-in-common interests in these properties as equity method investments. | ||||||||||||||||||||
(2) On March 31, 2023, we issued 1,063,293 OP Units for an additional 45.4% tenant-in-common interests in Alpha Mill, increasing our ownership to 73.7%. The value of the OP Units on the close date was $19.8 million based on the net asset value of OP Units as of February 28, 2023. All of the tenant-in-common interests were purchased at the same price. One of the sellers was a related party. | ||||||||||||||||||||
(3) On February 14, 2023, we sold 13.2% of our ownership interest in Cottonwood Lighthouse Point for $13.6 million and we recorded a gain on sale of $1.0 million related to the transaction, which reduced our remaining ownership in Cottonwood Lighthouse Point to 86.8%. As a result of this transaction, Cottonwood Lighthouse Point was deconsolidated and is recorded as an investment in unconsolidated real estate from February 14, 2023. | ||||||||||||||||||||
(4) On August 2, 2023, we issued 175,077 OP Units to acquire the remaining 20.2% tenant-in-common interests in Melrose Phase II, bringing our ownership to 100% and resulting in the consolidation of the property from that date onward. The value of the OP Units issued was $3.1 million. | ||||||||||||||||||||
Principal Balance Outstanding | ||||||||||||||
Indebtedness | Weighted-Average Interest Rate | Weighted-Average Remaining Term (1) | September 30, 2023 | December 31, 2022 | ||||||||||
Fixed rate loans | ||||||||||||||
Fixed rate mortgages | 4.46% | 5.3 Years | $ | 891,433 | $ | 528,308 | ||||||||
Total fixed rate loans | 891,433 | 528,308 | ||||||||||||
Variable rate loans (2) | ||||||||||||||
Floating rate mortgages | 5.45% (3) | 7.2 Years | 131,153 | 426,130 | ||||||||||
Variable rate revolving credit facility (4) | 6.98% | 1.5 Years | 74,000 | 54,000 | ||||||||||
Total variable rate loans | 205,153 | 480,130 | ||||||||||||
Total secured loans | 1,096,586 | 1,008,438 | ||||||||||||
Unamortized debt issuance costs | (6,961) | (4,878) | ||||||||||||
Premium on assumed debt, net | (5,532) | (3,423) | ||||||||||||
Mortgage notes and revolving credit facility, net | $ | 1,084,093 | $ | 1,000,137 | ||||||||||
(1) For loans where we have the ability to exercise extension options at our own discretion, the maximum maturity date has been assumed. | ||||||||||||||
(2) The interest rates of our variable rate loans are based on 30-Day Average SOFR or one-month SOFR (CME Term). | ||||||||||||||
(3) Includes the impact of interest rate caps in effect on September 30, 2023. | ||||||||||||||
(4) We may obtain advances secured against Cottonwood One Upland and Parc Westborough up to $125.0 million on our variable rate revolving credit facility, as long as certain loan-to-value ratios and other requirements are maintained. At September 30, 2023, the amount on our variable rate revolving credit facility was capped at $115.2 million primarily due to the current interest rate environment. |
Development | Interest Rate | Final Expiration Date | Loan Amount | Amount Drawn at September 30, 2023 | Amount Drawn at December 31, 2022 | ||||||||||||
Park Avenue | (1) | (1) | (1) | $ | — | $ | 37,000 | ||||||||||
Cottonwood Broadway | One-Month BSBY (2) + 2.9% | May 15, 2025 | 44,625 | 41,856 | 39,728 | ||||||||||||
Cottonwood Highland | 30-Day Average SOFR + 2.55% | May 1, 2029 | 44,250 | 35,838 | 18,599 | ||||||||||||
805 Riverfront (3) | One-Month SOFR + 4.35% | May 30, 2026 | 55,400 | 45,306 | N/A (3) | ||||||||||||
The Westerly (4) | One-Month SOFR + 3.0% | July 12, 2028 | 42,000 | — | N/A (4) | ||||||||||||
$ | 186,275 | $ | 123,000 | $ | 95,327 | ||||||||||||
(1) The Park Avenue construction loan was refinanced in March 2023 with a $43.5 million fixed rate mortgage which matures in 2028 and is included in mortgage notes above. | |||||||||||||||||
(2) BSBY refers to the Bloomberg Short-Term Bank Yield Index. | |||||||||||||||||
(4) In July 2023, we entered into a construction loan agreement for The Westerly, a development project in Millcreek, UT. Construction is expected to be completed in 2026. No amounts have been drawn on the construction loan as of September 30, 2023. |
Offering Size | Interest Rate | Maturity Date (2) | Maximum Extension Date | September 30, 2023 | December 31, 2022 | |||||||||||||||
2017 6% Notes (1) | $ | 35,000 | 6.25% | December 31, 2023 | December 31, 2024 | $ | 20,558 | $ | 20,718 | |||||||||||
2019 6% Notes | 25,000 | 6.00% | December 31, 2023 | December 31, 2025 | 21,775 | 22,235 | ||||||||||||||
$ | 60,000 | $ | 42,333 | $ | 42,953 | |||||||||||||||
(1) We exercised the option to extend the maturity date on our 2017 6% Notes for one additional year to December 31, 2023, which increased the interest rate from 6.00% to 6.25% for the period from January 1, 2023 to December 31, 2023. | ||||||||||||||||||||
(2) We plan to exercise our extension options on the 2017 6% Notes and the 2019 6% Notes. |
Year | Mortgage Notes and Revolving Credit Facility | Construction Loans | Unsecured Promissory Notes | Total | ||||||||||||||||
2023 (1) | $ | 114 | $ | — | $ | 42,333 | $ | 42,447 | ||||||||||||
2024 (2) | 74,466 | 87,162 | — | 161,628 | ||||||||||||||||
2025 | 1,380 | — | — | 1,380 | ||||||||||||||||
2026 | 93,088 | — | — | 93,088 | ||||||||||||||||
2027 | 364,157 | — | — | 364,157 | ||||||||||||||||
Thereafter | 563,381 | 35,838 | — | 599,219 | ||||||||||||||||
$ | 1,096,586 | $ | 123,000 | $ | 42,333 | $ | 1,261,919 | |||||||||||||
(1) Of the amounts maturing in 2023, $20.6 million relates to our 2017 6% Unsecured Promissory Notes which can be extended to December 31, 2024, and $21.8 million relates to our 2019 6% Unsecured Promissory Notes which can be extended for two one-year periods to December 31, 2025. | ||||||||||||||||||||
(2) Of the amounts maturing in 2024, $74.0 million relates to our variable rate revolving credit facility, which can be extended to March 19, 2025, subject to the satisfaction of certain conditions. An additional $41.9 million relates to the construction loan for Cottonwood Broadway, which can be extended to May 15, 2025 if we exercise the option to convert the construction loan to a Mini Perm Loan, subject to the satisfaction of certain conditions, and $45.3 million relates to the construction loan for 805 Riverfront, which can be extended for two one-year periods to May 30, 2026, subject to the satisfaction of certain conditions. |
September 30, 2023 | December 31, 2022 | |||||||||||||||||||||||||
Carrying Value | Fair Value | Carrying Value | Fair Value | |||||||||||||||||||||||
Financial Asset: | ||||||||||||||||||||||||||
Investments in real estate-related loans | $ | 7,127 | $ | 7,346 | $ | — | $ | — | ||||||||||||||||||
Financial Liability: | ||||||||||||||||||||||||||
Fixed rate mortgages | $ | 891,433 | $ | 865,856 | $ | 528,308 | $ | 509,134 | ||||||||||||||||||
Floating rate mortgages | $ | 131,153 | $ | 129,463 | $ | 426,130 | $ | 421,189 | ||||||||||||||||||
Variable rate revolving credit facility | $ | 74,000 | $ | 74,000 | $ | 54,000 | $ | 54,000 | ||||||||||||||||||
Construction loans | $ | 123,000 | $ | 123,000 | $ | 95,327 | $ | 95,327 | ||||||||||||||||||
Series 2019 Preferred Stock | $ | 124,728 | $ | 124,728 | $ | 127,065 | $ | 127,065 | ||||||||||||||||||
Series 2023 Preferred Stock | $ | 78,443 | $ | 78,443 | $ | — | $ | — | ||||||||||||||||||
Series 2023-A Preferred Stock | $ | 2,170 | $ | 2,170 | $ | — | $ | — | ||||||||||||||||||
Preferred interest liability | $ | 15,300 | $ | 15,300 | $ | — | $ | — | ||||||||||||||||||
Unsecured promissory notes | $ | 42,333 | $ | 42,333 | $ | 42,953 | $ | 42,953 |
Shares Outstanding at | ||||||||||||||||||||
Dividend Rate | Extension Dividend Rate | Redemption Date | Maximum Extension Date | September 30, 2023 | December 31, 2022 | |||||||||||||||
Series 2019 Preferred Stock | 5.5% | 6.0% | December 31, 2023(2) | December 31, 2025 | 12,472,787 | 12,706,485 | ||||||||||||||
Series 2023 Preferred Stock | 6.0% | 6.5% (1) | June 30, 2027 | June 30, 2029 | 7,844,277 | — | ||||||||||||||
Series 2023-A Preferred Stock | 7.0% | N/A | December 31, 2027 | N/A | 217,000 | — | ||||||||||||||
(1) Represents the fully extended dividend rate. During the first-year extension, the dividend rate is 6.25%. | ||||||||||||||||||||
(2) We plan to exercise our extension option for the Series 2019 Preferred Stock. |
Nine Months Ended September 30, 2023 | |||||||||||||||||||||||||||||
Class T | Class D | Class I | Class A | Total | |||||||||||||||||||||||||
December 31, 2022 | 4,815,122 | 64,673 | 3,861,049 | 26,604,864 | 35,345,708 | ||||||||||||||||||||||||
Issuance of common stock | 616,618 | 144,204 | 521,348 | — | 1,282,170 | ||||||||||||||||||||||||
Distribution reinvestment | 23,361 | 552 | 18,193 | 57,861 | 99,967 | ||||||||||||||||||||||||
Exchanges and transfers (1) | (1,112) | — | 399,969 | — | 398,857 | ||||||||||||||||||||||||
Repurchases of common stock | (878,458) | (4,861) | (590,380) | (2,585,400) | (4,059,099) | ||||||||||||||||||||||||
September 30, 2023 | 4,575,531 | 204,568 | 4,210,179 | 24,077,325 | 33,067,603 | ||||||||||||||||||||||||
(1) Exchanges represent the number of shares OP Unit holders have exchanged for Class I shares during the period. Transfers represent Class T shares that were converted to Class I shares during the period. |
Shareholder Record Date | Monthly Rate | Annually | ||||||
January 31, 2023 | $ | 0.06083333 | $ | 0.73 | ||||
February 28, 2023 | $ | 0.06083333 | $ | 0.73 | ||||
March 31, 2023 | $ | 0.06083333 | $ | 0.73 | ||||
April 30, 2023 | $ | 0.06083333 | $ | 0.73 | ||||
May 31, 2023 | $ | 0.06083333 | $ | 0.73 | ||||
June 30, 2023 | $ | 0.06083333 | $ | 0.73 | ||||
July 31, 2023 | $ | 0.06083333 | $ | 0.73 | ||||
August 31, 2023 | $ | 0.06083333 | $ | 0.73 | ||||
September 30, 2023 | $ | 0.06083333 | $ | 0.73 |
Property Name | Market | Number of Units | Average Unit Size (Sq Ft) | Purchase Date | Purchase Price | Mortgage Debt Outstanding (1) | Net Effective Rent | Physical Occupancy Rate | Percentage Owned by CROP | |||||||||||||||||||||||
Alpha Mill | Charlotte, NC | 267 | 830 | May 2021 | $ | 69,500 | $ | 39,044 | $ | 1,715 | 95.51% | 73.71% | ||||||||||||||||||||
Cason Estates | Murfreesboro, TN | 262 | 1,078 | May 2021 | 51,400 | 37,462 | 1,515 | 94.27% | 100.00% | |||||||||||||||||||||||
Cottonwood Apartments | Salt Lake City, UT | 264 | 834 | May 2021 | 47,300 | 35,430 | 1,407 | 93.94% | 100.00% | |||||||||||||||||||||||
Cottonwood Bayview | St. Petersburg, FL | 309 | 805 | May 2021 | 95,900 | 71,417 | 2,495 | 94.50% | 71.00% | |||||||||||||||||||||||
Cottonwood Clermont | Clermont, FL | 230 | 1,111 | Sept 2022 | 85,000 | 35,075 | 2,077 | 90.43% | 100.00% | |||||||||||||||||||||||
Cottonwood Lighthouse Point | Pompano Beach, FL | 243 | 996 | June 2022 | 95,500 | 47,964 | 2,260 | 91.77% | 86.77% | |||||||||||||||||||||||
Cottonwood One Upland | Boston, MA | 262 | 1,160 | Mar 2020 | 103,600 | 44,400 | 2,899 | 91.60% | 100.00% | |||||||||||||||||||||||
Cottonwood Reserve | Charlotte, NC | 352 | 1,021 | May 2021 | 77,500 | 48,049 | 1,497 | 95.00% | 91.14% | |||||||||||||||||||||||
Cottonwood Ridgeview | Plano, TX | 322 | 1,156 | May 2021 | 72,930 | 65,300 | 1,897 | 96.27% | 100.00% | |||||||||||||||||||||||
Cottonwood West Palm | West Palm Beach, FL | 245 | 1,122 | May 2019 | 66,900 | 47,978 | 2,406 | 93.47% | 100.00% | |||||||||||||||||||||||
Cottonwood Westside | Atlanta, GA | 197 | 860 | May 2021 | 47,900 | 26,986 | 1,745 | 95.43% | 100.00% | |||||||||||||||||||||||
Enclave on Golden Triangle | Keller, TX | 273 | 1,048 | May 2021 | 51,600 | 48,400 | 1,715 | 95.24% | 98.93% | |||||||||||||||||||||||
Fox Point | Salt Lake City, UT | 398 | 841 | May 2021 | 79,400 | 46,000 | 1,475 | 93.97% | 52.75% | |||||||||||||||||||||||
Heights at Meridian | Durham, NC | 339 | 997 | May 2021 | 79,900 | 53,401 | 1,630 | 93.81% | 100.00% | |||||||||||||||||||||||
Melrose | Nashville, TN | 220 | 951 | May 2021 | 67,400 | 56,600 | 1,881 | 90.00% | 100.00% | |||||||||||||||||||||||
Melrose Phase II | Nashville, TN | 139 | 675 | May 2021 | 40,350 | 32,400 | 1,623 | 92.81% | 100.00% | |||||||||||||||||||||||
Parc Westborough | Boston, MA | 249 | 1,008 | May 2021 | 74,000 | 29,600 | 2,358 | 97.19% | 100.00% | |||||||||||||||||||||||
Park Avenue | Salt Lake City, UT | 234 | 714 | May 2021 | 67,524 | (2) | 43,453 | 1,875 | 96.15% | 100.00% | ||||||||||||||||||||||
Pavilions | Albuquerque, NM | 240 | 1,162 | May 2021 | 61,100 | 58,500 | 1,835 | 92.08% | 96.35% | |||||||||||||||||||||||
Raveneaux | Houston, TX | 382 | 1,065 | May 2021 | 57,500 | 47,400 | 1,398 | 94.50% | 96.97% | |||||||||||||||||||||||
Regatta | Houston, TX | 490 | 862 | May 2021 | 48,100 | 35,367 | 1,083 | 91.41% | 100.00% | |||||||||||||||||||||||
Retreat at Peachtree City | Peachtree City, GA | 312 | 980 | May 2021 | 72,500 | 58,412 | 1,732 | 92.95% | 100.00% | |||||||||||||||||||||||
Scott Mountain | Portland, OR | 262 | 927 | May 2021 | 70,700 | 48,373 | 1,688 | 92.37% | 95.80% | |||||||||||||||||||||||
Stonebriar of Frisco | Frisco, TX | 306 | 963 | May 2021 | 59,200 | 53,600 | 1,576 | 92.16% | 84.19% | |||||||||||||||||||||||
Sugarmont | Salt Lake City, UT | 341 | 904 | May 2021 | 139,704 | (2) | 91,200 | 2,262 | 91.18% | 99.00% (3) | ||||||||||||||||||||||
Summer Park | Buford, GA | 358 | 1,064 | May 2021 | 75,500 | 52,398 | 1,580 | 92.46% | 98.68% | |||||||||||||||||||||||
The Marq Highland Park (4) | Tampa, FL | 239 | 999 | May 2021 | 65,700 | 46,802 | 2,155 | 95.40% | 100.00% | |||||||||||||||||||||||
Toscana at Valley Ridge | Lewisville, TX | 288 | 738 | May 2021 | 47,700 | 32,571 | 1,323 | 97.22% | 58.60% | |||||||||||||||||||||||
Total / Weighted-Average | 8,023 | 963 | $ | 1,971,308 | $ | 1,333,582 | $ | 1,786 | 93.66% | |||||||||||||||||||||||
(1) Mortgage debt outstanding is shown as if CROP owned 100% of the property. | ||||||||||||||||||||||||||||||||
(2) These purchase price amounts represent the acquisition date fair value plus subsequent capitalized costs on the projects placed in service. | ||||||||||||||||||||||||||||||||
(3) The one percent interest not owned by us has limited rights, including the right to control on behalf of the joint venture the prosecution and resolution of all litigation, claims, or causes of action that the joint venture has or may have against certain third parties associated with the design and construction of Sugarmont, as well as the obligation to defend any cross claims resulting from these actions. | ||||||||||||||||||||||||||||||||
(4) Data from commercial retail units are excluded from number of units and physical occupancy. |
Property Name | Market | Units to be Built | Average Unit Size (Sq Ft) | Purchase Date | Completion Date | Total Project Investment | Construction Debt Outstanding (1) | Percentage Owned by CROP | ||||||||||||||||||
Cottonwood Broadway | Salt Lake City, UT | 254 | 817 | May 2021 | 4Q2023 | $ | 77,103 | $ | 41,856 | 100.00 | ||||||||||||||||
Cottonwood Highland (2) | Salt Lake City, UT | 250 | 757 | May 2021 | 4Q2023 | 61,132 | 35,838 | 36.93% (2) | ||||||||||||||||||
805 Riverfront (3) | West Sacramento, CA | 285 | 746 | September 2023 | 4Q2023 | 92,830 | 45,306 | (3) | ||||||||||||||||||
The Westerly (4) | Salt Lake City, UT | 198 | 808 | May 2021 (4) | 1Q2026 | 12,552 | — | 82.16% | ||||||||||||||||||
Total | 987 | $ | 243,617 | $ | 123,000 | |||||||||||||||||||||
(1) Construction debt outstanding is shown as if CROP owned 100% of the development property. | ||||||||||||||||||||||||||
(2) Intended to qualify as a qualified opportunity zone investment. Excludes the commercial retail units in unit count. CROP’s percentage ownership is not proportionate to the total amount CROP invested in the project. | ||||||||||||||||||||||||||
(3) We have a preferred equity investment in this project. Total project investment for 805 Riverfront represents amounts funded plus accrued interest as of September 8, 2023, the date we took control, and includes the construction debt outstanding and the preferred interest liability. Refer to Note 3 of the condensed consolidated financial statements. | ||||||||||||||||||||||||||
(4) Construction on The Westerly began in July 2023. The amount above includes contributions from the Block C Joint Venture to The Westerly to date. Refer to the land held for development table below for additional information on the Block C Joint Venture. |
Property Name | Market | Investment Type | Date of Initial Investment | Number of Units | Funding Commitment | Amount Funded to Date | ||||||||||||||
Lector85 | Ybor City, FL | Preferred Equity | August 2019 | 254 | $ | 9,900 | $ | 9,900 | ||||||||||||
Astoria West (formerly Vernon) | Queens, NY | Preferred Equity | July 2020 | 534 | 15,000 | 15,000 | ||||||||||||||
417 Callowhill | Philadelphia, PA | Preferred Equity | November 2022 | 220 | 33,413 | 20,217 | ||||||||||||||
2215 Hollywood | Hollywood, FL | Mezzanine Loan | April 2023 | 180 | 10,045 | 2,000 | ||||||||||||||
Monrovia Station | Monrovia, CA | Mezzanine Loan | July 2023 | 296 | 20,150 | 5,346 | ||||||||||||||
Total | 1,484 | $ | 88,508 | $ | 52,463 |
Property Name / Joint Venture | Market | Acreage | Purchase Date | Total Investment Amount | Percentage Owned by CROP | ||||||||||||
Block C Joint Venture (1) | Salt Lake City, UT | 1.69 acres | May 2021 | $ | 45,875 | 82.16% | |||||||||||
3300 Cottonwood | Salt Lake City, UT | 1.76 acres | October 2021 | 7,521 | 100.00% | ||||||||||||
Galleria | Salt Lake City, UT | 26.07 acres | September 2022 | 29,289 | 100.00% | ||||||||||||
Total | $ | 82,685 | |||||||||||||||
(1) The Block C Joint Venture includes land held for development for Millcreek North and The Archer multifamily development projects as well as cash held at the joint venture for future investment. The Block C joint venture also includes The Westerly, which is reflected in the separate development property table above. |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||
2023 | 2022 | Change | 2023 | 2022 | Change | ||||||||||||||||||||||||||||||
Revenues | |||||||||||||||||||||||||||||||||||
Rental and other property revenues | $ | 35,977 | $ | 32,959 | $ | 3,018 | $ | 106,446 | $ | 88,382 | $ | 18,064 | |||||||||||||||||||||||
Property management revenues | 2,133 | 2,829 | (696) | 7,744 | 8,655 | (911) | |||||||||||||||||||||||||||||
Other revenues | 768 | 2,295 | (1,527) | 1,190 | 3,544 | (2,354) | |||||||||||||||||||||||||||||
Total revenues | 38,878 | 38,083 | 795 | 115,380 | 100,581 | 14,799 | |||||||||||||||||||||||||||||
Operating expenses | |||||||||||||||||||||||||||||||||||
Property operations expense | 13,579 | 12,444 | 1,135 | 39,572 | 32,705 | 6,867 | |||||||||||||||||||||||||||||
Property management expense | 4,441 | 4,323 | 118 | 12,963 | 13,863 | (900) | |||||||||||||||||||||||||||||
Asset management fee | 4,243 | 4,622 | (379) | 13,609 | 12,761 | 848 | |||||||||||||||||||||||||||||
Performance participation allocation | — | 1,081 | (1,081) | — | 31,160 | (31,160) | |||||||||||||||||||||||||||||
Depreciation and amortization | 14,646 | 14,289 | 357 | 43,635 | 37,549 | 6,086 | |||||||||||||||||||||||||||||
General and administrative expenses | 2,288 | 3,938 | (1,650) | 7,935 | 10,513 | (2,578) | |||||||||||||||||||||||||||||
Total operating expenses | 39,197 | 40,697 | (1,500) | 117,714 | 138,551 | (20,837) | |||||||||||||||||||||||||||||
Loss from operations | (319) | (2,614) | 2,295 | (2,334) | (37,970) | 35,636 | |||||||||||||||||||||||||||||
Equity in earnings of unconsolidated real estate entities | 1,438 | 1,982 | (544) | 5,067 | 8,705 | (3,638) | |||||||||||||||||||||||||||||
Interest income | 517 | 23 | 494 | 1,412 | 47 | 1,365 | |||||||||||||||||||||||||||||
Interest expense | (19,464) | (13,296) | (6,168) | (54,171) | (36,581) | (17,590) | |||||||||||||||||||||||||||||
Gain on sale of real estate assets | — | — | — | 1,031 | — | 1,031 | |||||||||||||||||||||||||||||
Gain on sale of unconsolidated real estate entities | — | 176 | (176) | — | 7,810 | (7,810) | |||||||||||||||||||||||||||||
Gain on consolidation of development | 4,452 | — | 4,452 | 4,452 | — | 4,452 | |||||||||||||||||||||||||||||
Promote from incentive allocation agreement | — | — | — | 119 | 30,309 | (30,190) | |||||||||||||||||||||||||||||
Other (expense) income | (218) | 1,913 | (2,131) | (342) | 3,732 | (4,074) | |||||||||||||||||||||||||||||
Loss before income taxes | (13,594) | (11,816) | (1,778) | (44,766) | (23,948) | (20,818) | |||||||||||||||||||||||||||||
Income tax benefit (expense) | 31 | (511) | 542 | 338 | (8,261) | 8,599 | |||||||||||||||||||||||||||||
Net loss | (13,563) | (12,327) | (1,236) | (44,428) | (32,209) | (12,219) | |||||||||||||||||||||||||||||
Net loss attributable to noncontrolling interests: | — | — | |||||||||||||||||||||||||||||||||
Limited partners | 6,593 | 6,198 | 395 | 21,304 | 16,778 | 4,526 | |||||||||||||||||||||||||||||
Partially owned entities | 12 | 241 | (229) | (71) | 694 | (765) | |||||||||||||||||||||||||||||
Net loss attributable to common stockholders | $ | (6,958) | $ | (5,888) | $ | (1,070) | $ | (23,195) | $ | (14,737) | $ | (8,458) | |||||||||||||||||||||||
Weighted-average common shares outstanding | 34,037,337 | 29,733,453 | 4,303,884 | 34,874,921 | 27,199,948 | 7,674,973 | |||||||||||||||||||||||||||||
Net loss per common share - basic and diluted | $ | (0.20) | $ | (0.20) | $ | — | $ | (0.67) | $ | (0.54) | $ | (0.13) |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Reconciliation of Consolidated Property NOI to Same Store NOI | |||||||||||||||||||||||
Rental and other property revenues | $ | 35,977 | $ | 32,959 | $ | 106,446 | $ | 88,382 | |||||||||||||||
Property operations expense | 13,579 | 12,444 | 39,572 | 32,705 | |||||||||||||||||||
Consolidated Property NOI | 22,398 | 20,515 | 66,874 | 55,677 | |||||||||||||||||||
Less: Non-same store NOI | |||||||||||||||||||||||
Lease up properties | (2,749) | (2,350) | (8,283) | (4,394) | |||||||||||||||||||
Acquisitions | (724) | (1,179) | (2,530) | (1,276) | |||||||||||||||||||
Same store NOI - consolidated properties | 18,925 | 16,986 | 56,061 | 50,007 | |||||||||||||||||||
Non-core property expenses, net | 142 | 193 | 612 | 129 | |||||||||||||||||||
Same store NOI attributable to noncontrolling interests | (340) | (325) | (1,034) | (983) | |||||||||||||||||||
Same store NOI - unconsolidated properties | 2,930 | 3,930 | 9,454 | 12,110 | |||||||||||||||||||
Cottonwood share of same store NOI | $ | 21,657 | $ | 20,784 | $ | 65,093 | $ | 61,263 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Equity in earnings of unconsolidated real estate entities | $ | 1,438 | $ | 1,982 | $ | 5,067 | $ | 8,705 | |||||||||||||||
Adjustments to arrive at same store net operating income | |||||||||||||||||||||||
Equity in earnings from preferred equity investments | (2,970) | (1,849) | (8,948) | (5,292) | |||||||||||||||||||
Equity in losses from depreciation and amortization | 2,318 | 1,804 | 6,532 | 6,303 | |||||||||||||||||||
Non-same store property equity in earnings (losses) | 870 | (74) | 1,987 | (2,801) | |||||||||||||||||||
Equity in losses on non-core property expense and other adjustments (1) | 1,274 | 2,067 | 4,816 | 5,195 | |||||||||||||||||||
Same store NOI - unconsolidated properties (2) | $ | 2,930 | $ | 3,930 | $ | 9,454 | $ | 12,110 | |||||||||||||||
(1) Property management expenses and other expenses charged by us to our consolidated properties are eliminated. For consistency with consolidated property NOI, same store NOI - unconsolidated properties has been adjusted to remove property management expenses and other expenses at unconsolidated properties that are eliminated with consolidated properties. We apply our ownership percentage at September 30, 2023 for all periods presented. Since equity in earnings is calculated using our ownership percentage throughout the year (which may change as interests are acquired or sold), adjustments have also been made to apply the ownership percentage at September 30, 2023 throughout the reporting period to be consistent with consolidated property NOI. | |||||||||||||||||||||||
(2) Same store NOI - unconsolidated properties had decreased due to the consolidation of properties that were previously equity method investments. |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2023 | 2022 (1) | 2023 | 2022 (1) | ||||||||||||||||||||
Net loss attributable to common stockholders | $ | (6,958) | $ | (5,888) | $ | (23,195) | $ | (14,737) | |||||||||||||||
Adjustments to arrive at FFO: | |||||||||||||||||||||||
Real estate-related depreciation and amortization | 13,854 | 12,182 | 41,265 | 33,762 | |||||||||||||||||||
Depreciation and amortization from unconsolidated real estate entities | 2,318 | 1,804 | 6,532 | 6,303 | |||||||||||||||||||
Gain on sale of real estate assets | — | — | (1,031) | — | |||||||||||||||||||
Gain on sale of investments in unconsolidated real estate entities | — | (176) | — | (7,810) | |||||||||||||||||||
Gain on consolidation of development | (4,452) | (4,452) | |||||||||||||||||||||
Loss allocated to noncontrolling interests - limited partners | (6,593) | (6,198) | (21,304) | (16,778) | |||||||||||||||||||
Amount attributable to above from noncontrolling interests - partially owned entities | (1,170) | (1,184) | (1,644) | (719) | |||||||||||||||||||
Funds from operations attributable to common stockholders and unit holders | (3,001) | 540 | (3,829) | 21 | |||||||||||||||||||
Adjustments: | |||||||||||||||||||||||
Amortization of intangible assets | 792 | 2,108 | 2,370 | 3,786 | |||||||||||||||||||
Accretion of discount on preferred stock | 1,983�� | 1,377 | 5,120 | 4,031 | |||||||||||||||||||
Share-based compensation (2) | 484 | 938 | 2,212 | 2,743 | |||||||||||||||||||
Promote from incentive allocation agreement (tax effected) | (29) | — | (119) | (23,047) | |||||||||||||||||||
Loss on debt extinguishment | (98) | — | 1,037 | 481 | |||||||||||||||||||
Legal costs and settlements, net (2) | 252 | 767 | 1,298 | 1,713 | |||||||||||||||||||
Gains on derivatives | (194) | (1,997) | (389) | (3,820) | |||||||||||||||||||
Other adjustments (3) | 959 | 1,297 | 2,265 | (105) | |||||||||||||||||||
Amount attributable to above from unconsolidated real estate entities | 268 | 249 | 1,076 | (1,408) | |||||||||||||||||||
Amount attributable to above from noncontrolling interests - partially owned entities | 1,009 | 50 | 994 | 126 | |||||||||||||||||||
Core funds from operations attributable to common stockholders and unit holders | $ | 2,425 | $ | 5,329 | $ | 12,035 | $ | (15,479) | |||||||||||||||
FFO per common share and unit - diluted | $ | (0.05) | $ | 0.01 | $ | (0.06) | $ | 0.00 | |||||||||||||||
Core FFO per common share and unit - diluted | $ | 0.04 | $ | 0.09 | $ | 0.18 | $ | (0.26) | |||||||||||||||
Weighted-average common shares and units outstanding | 66,287,718 | 61,029,554 | 66,967,782 | 58,561,620 | |||||||||||||||||||
(1) We included the performance participation allocation in Core FFO beginning June 30, 2023. Core FFO for the three and nine months ended September 30, 2022 was adjusted to include $1,081 and $31,160 of performance participation allocation expense, respectively. No performance participation allocation expense was incurred in 2023. | |||||||||||||||||||||||
(2) Beginning September 30 2022 we adjusted Core FFO for share-based compensation and litigation costs. Prior year Core FFO was also adjusted by these items for comparability. | |||||||||||||||||||||||
(3) Other adjustments include acquisition fees and expenses, accretion of below market leases, amortization of debt issuance costs, insurance losses, and other miscellaneous non-cash or non-recurring items. |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Weighted-average common shares | 34,037,337 | 29,733,453 | 34,874,921 | 27,199,948 | |||||||||||||||||||
Weighted-average limited partnership unit | 32,250,381 | 31,296,101 | 32,092,861 | 31,361,672 | |||||||||||||||||||
Weighted-average common shares and units outstanding | 66,287,718 | 61,029,554 | 66,967,782 | 58,561,620 |
Components of NAV* | As of 9/30/2023 | ||||
Investments in Multifamily Operating Properties | $ | 2,229,713 | |||
Investments in Multifamily Development Properties | 161,146 | ||||
Investments in Real Estate Related Structured Investments | 92,688 | ||||
Investments in Land Held for Development | 42,979 | ||||
Operating Company and Other Net Current Assets | 5,442 | ||||
Cash and Cash Equivalents | 17,430 | ||||
Secured Real Estate Financing | (1,266,769) | ||||
Subordinated Unsecured Notes | (42,333) | ||||
Preferred Equity | (205,341) | ||||
Accrued Performance Participation Allocation | — | ||||
Net Asset Value | $ | 1,034,955 | |||
Fully-diluted Shares/Units Outstanding | 65,422,888 | ||||
* Presented as adjusted for the Company's economic ownership percentage in each asset. |
Class | |||||||||||||||||||||||||||||||||||
T | D | I | A | OP(1) | Total | ||||||||||||||||||||||||||||||
As of September 30, 2023 | |||||||||||||||||||||||||||||||||||
Monthly NAV | $ | 72,383 | $ | 3,236 | $ | 67,053 | $ | 380,890 | $ | 511,393 | $ | 1,034,955 | |||||||||||||||||||||||
Fully-diluted Outstanding Shares/Units | 4,575,531 | 204,568 | 4,238,648 | 24,077,325 | 32,326,816 | 65,422,888 | |||||||||||||||||||||||||||||
NAV per Fully-diluted Share/Unit | $ | 15.8195 | $ | 15.8195 | $ | 15.8195 | $ | 15.8195 | $ | 15.8195 | |||||||||||||||||||||||||
(1) Includes the partnership interests of CROP held by High Traverse Holdings, an entity beneficially owned by Daniel Shaeffer, Chad Christensen, Gregg Christensen and Eric Marlin and other CROP interests, including LTIP Units as described above, held by parties other than us. |
Discount Rate | Exit Capitalization Rate | ||||||||||
Operating Assets | 6.48% | 5.26% | |||||||||
Development Assets | 6.34% | 5.10% | |||||||||
* Presented as adjusted for the Company's economic ownership percentage in each asset, weighted by gross value. The weighted averages were calculated by our advisor based on the information provided by the Independent Appraisal Firms. |
Sensitivities | Change | Operating Asset Values | Development Asset Values | ||||||||
Discount Rate | 0.25% decrease | 2.4% | 2.1% | ||||||||
0.25% increase | (2.3)% | (2.0)% | |||||||||
Exit Capitalization Rate | 0.25% decrease | 3.6% | 3.5% | ||||||||
0.25% increase | (3.2)% | (3.1)% | |||||||||
* Presented as adjusted for the Company's economic ownership percentage in each asset. |
September 30, 2023 | |||||
Stockholders’ equity | $ | 240,425 | |||
Non-controlling interests attributable to limited partners | 234,634 | ||||
475,059 | |||||
Adjustments at share: | |||||
Accumulated depreciation and amortization, consolidated and unconsolidated entities | 187,514 | ||||
Goodwill | (439) | ||||
Deferred tax liability | 1,585 | ||||
Discount on preferred stock | (7,754) | ||||
Derivative valuations | (6,044) | ||||
Unrealized net real estate and debt appreciation | 385,034 | ||||
NAV | $ | 1,034,955 |
Nine Months Ended September 30, | ||||||||||||||
2023 | 2022 | |||||||||||||
Net cash used in operating activities | $ | (17,578) | $ | (1,352) | ||||||||||
Net cash used in investing activities | (29,186) | (142,818) | ||||||||||||
Net cash provided by financing activities | 61,764 | 195,334 | ||||||||||||
Net increase in cash and cash equivalents and restricted cash | $ | 15,000 | $ | 51,164 |
Nine Months Ended September 30, 2023 | Year Ended December 31, 2022 | |||||||||||||
Distributions paid in cash - common stockholders | $ | 16,531 | $ | 17,813 | (3) | |||||||||
Distributions paid in cash to noncontrolling interests - limited partners | 17,395 | 22,198 | ||||||||||||
Distributions of DRP (reinvested) | 1,877 | 2,219 | ||||||||||||
Total distributions (1) | $ | 35,803 | $ | 42,230 | ||||||||||
Source of distributions (2) | ||||||||||||||
Paid from cash flows provided by operations | $ | 4,693 | $ | 23,031 | (3) | |||||||||
Paid from additional borrowings | 29,233 | 7,899 | (3) | |||||||||||
Paid from offering proceeds | — | 9,081 | (3) | |||||||||||
Offering proceeds from issuance of common stock pursuant to the DRP | 1,877 | 2,219 | ||||||||||||
Total sources | $ | 35,803 | $ | 42,230 | ||||||||||
Net cash (used in) provided by operating activities (2) | $ | (17,578) | $ | 1,730 | (3) | |||||||||
(1) Distributions are paid on a monthly basis. In general, distributions for all record dates of a given month are paid on or about the fifth business day of the following month. | ||||||||||||||
(2) The allocation of total sources are calculated on a quarterly basis. Generally, for purposes of determining the source of our distributions paid, we assume first that we use positive cash flow from operating activities from the relevant or prior quarter to fund distribution payments. As such, amounts reflected above as distributions paid from cash flows provided by operations may be from prior quarters which had positive cash flow from operations. | ||||||||||||||
(3) The cash flows provided by operations used to fund distributions have been revised to adjust for the immaterial adjustments to the statement of cash flows for all quarterly periods. Due to the immaterial nature of the adjustments, we have not separately provided adjusted quarterly information. The immaterial adjustments for the nine months ended September 30, 2022 are described in Note 2. |
Month of: | Total Number of Shares Repurchased(1) | Repurchases as a Percentage of NAV(2) | Average Price Paid per Share | Maximum Number of Shares Pending Repurchase Pursuant to Publicly Announced Plans or Programs(3) | ||||||||||||||||||||||
July 2023 | 661,249 | 1.8737305 | % | $17.0649 | — | |||||||||||||||||||||
August 2023 | 642,366 | 1.8574461 | % | $16.8033 | — | |||||||||||||||||||||
September 2023 | 410,944 | 1.1887102 | % | $16.1109 | — | |||||||||||||||||||||
Total | 1,714,559 | |||||||||||||||||||||||||
(1) All shares have been repurchased pursuant to our share purchase program. | ||||||||||||||||||||||||||
(2) Represents aggregate NAV of the shares repurchased under our share repurchase plan over aggregate NAV of all shares of our common stock outstanding, in each case, based on our NAV as of the last calendar day of the prior month. Pursuant to our share repurchase program, we may repurchase up to 2% of the aggregate NAV of our common stock outstanding per month and 5% of the aggregate NAV of our common stock outstanding per calendar quarter. | ||||||||||||||||||||||||||
(3) All repurchase requests under our share repurchase plan were satisfied. We funded our repurchases with cash available from operations, financing activities and capital raising activities. |
Exhibit Description | |||||
2.1 | |||||
3.1 | |||||
3.2 | |||||
3.4 | |||||
3.5 | |||||
3.6 | |||||
3.7 | |||||
3.8 | |||||
3.9 | |||||
3.10 | |||||
3.11 | |||||
3.13 | |||||
3.14 | |||||
3.15 | |||||
3.16 | |||||
3.17 | |||||
3.18 | |||||
4.1 | |||||
4.3 |
4.4 | |||||
10.3 | |||||
10.4 | |||||
10.5 | |||||
10.6 | |||||
10.7 | |||||
31.2* | |||||
32.1* | |||||
32.2* | |||||
101.INS* | (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document) | ||||
101.SCH* | Document | ||||
101.CAL* | Document | ||||
101.DEF* | Document | ||||
101.LAB* | Document | ||||
101.PRE* | Document | ||||
104* | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
COTTONWOOD COMMUNITIES, INC. | ||||||||
By: | ||||||||
/s/ Daniel Shaeffer | ||||||||
Daniel Shaeffer, Chief Executive Officer | ||||||||
By: | /s/ | |||||||