Document and Entity Information
Document and Entity Information - USD ($) shares in Thousands, $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Mar. 16, 2020 | Jun. 28, 2019 | |
Entity Information [Line Items] | |||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2019 | ||
Entity Registrant Name | Cole Office & Industrial REIT (CCIT III), Inc. | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | true | ||
Entity Public Float | $ 25.3 | ||
Entity Central Index Key | 0001614976 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Shell Company | false | ||
Entity Ex Transition Period | true | ||
Class A Common Stock | |||
Entity Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 2,500 | ||
Class T Common Stock | |||
Entity Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 716 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Real estate assets: | ||
Land | $ 3,245,003 | $ 3,245,003 |
Buildings and improvements | 41,258,770 | 41,258,770 |
Intangible lease assets | 5,101,432 | 5,101,432 |
Total real estate assets, at cost | 49,605,205 | 49,605,205 |
Less: accumulated depreciation and amortization | (5,735,541) | (3,823,287) |
Total real estate assets, net | 43,869,664 | 45,781,918 |
Cash and cash equivalents | 1,206,262 | 635,959 |
Rents and tenant receivables | 1,112,208 | 943,287 |
Prepaid expenses and other assets | 54,716 | 79,198 |
Deferred costs, net | 56,689 | 407,029 |
Total assets | 46,299,539 | 47,847,391 |
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||
Credit facility | 24,175,000 | 24,175,000 |
Accrued expenses and accounts payable | 628,747 | 683,380 |
Due to affiliates | 110,872 | 188,461 |
Distributions payable | 132,145 | 155,111 |
Deferred rental income | 217,149 | 0 |
Total liabilities | 25,263,913 | 25,201,952 |
Commitments and contingencies | ||
Redeemable common stock | 0 | 182,158 |
STOCKHOLDERS’ EQUITY | ||
Preferred stock, $0.01 par value per share; 10,000,000 shares authorized, none issued and outstanding | 0 | 0 |
Capital in excess of par value | 28,707,032 | 28,016,307 |
Accumulated distributions in excess of earnings | (7,703,609) | (5,584,678) |
Total stockholders’ equity | 21,035,626 | 22,463,281 |
Total liabilities, redeemable common stock, and stockholders’ equity | 46,299,539 | 47,847,391 |
Class A Common Stock | ||
STOCKHOLDERS’ EQUITY | ||
Common stock | 24,974 | 24,179 |
Class T Common Stock | ||
STOCKHOLDERS’ EQUITY | ||
Common stock | $ 7,229 | $ 7,473 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2019 | Dec. 31, 2018 |
Preferred stock, par value (in usd per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in usd per share) | $ 0.01 | |
Common stock, shares authorized (in shares) | 490,000,000 | 490,000,000 |
Class A Common Stock | ||
Common stock, par value (in usd per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 245,000,000 | 245,000,000 |
Common stock, shares issued (in shares) | 2,504,629 | 2,424,682 |
Common stock, shares outstanding (in shares) | 2,504,629 | 2,424,682 |
Class T Common Stock | ||
Common stock, par value (in usd per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 245,000,000 | 245,000,000 |
Common stock, shares issued (in shares) | 722,873 | 747,316 |
Common stock, shares outstanding (in shares) | 722,873 | 747,316 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenues: | |||
Rental and other property income | $ 4,467,383 | $ 4,406,375 | $ 4,104,597 |
Operating expenses: | |||
General and administrative | 932,253 | 936,397 | 815,586 |
Property operating | 35,516 | 13,130 | 12,058 |
Real estate tax | 544,967 | 506,499 | 1,215,423 |
Advisory fees and expenses | 0 | 0 | 60,565 |
Transaction-related | 0 | 0 | 41,576 |
Depreciation and amortization | 1,912,254 | 1,912,254 | 1,493,033 |
Total operating expenses | 3,424,990 | 3,368,280 | 3,638,241 |
Operating income | 1,042,393 | 1,038,095 | 466,356 |
Other expense: | |||
Interest expense and other, net | (1,530,075) | (1,809,807) | (1,588,351) |
Net loss | (487,682) | (771,712) | (1,121,995) |
Common Class A | |||
Other expense: | |||
Net loss | $ (331,200) | $ (523,089) | $ (894,373) |
Basic and diluted weighted average number of common shares outstanding (in shares) | 2,479,876 | 1,977,654 | 993,758 |
Basic and diluted net loss per common share (in dollars per share) | $ (0.13) | $ (0.26) | $ (0.90) |
Class T Common Stock | |||
Other expense: | |||
Net loss | $ (156,482) | $ (248,623) | $ (227,622) |
Basic and diluted weighted average number of common shares outstanding (in shares) | 740,477 | 699,395 | 228,908 |
Basic and diluted net loss per common share (in dollars per share) | $ (0.21) | $ (0.36) | $ (0.99) |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY - USD ($) | Total | Capital in Excess of Par Value | Accumulated Distributions in Excess of Earnings | Class A Common Stock | Class A Common StockCommon Stock | Class T Common Stock | Class T Common StockCommon Stock |
Balance (in shares) at Dec. 31, 2016 | 334,618 | 5,225 | |||||
Balance at Dec. 31, 2016 | $ 1,629,907 | $ 3,068,672 | $ (1,442,163) | $ 3,346 | $ 52 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Issuance of common stock (in shares) | 1,102,237 | 626,121 | |||||
Issuance of common stock | 16,857,284 | 16,840,000 | $ 11,023 | $ 6,261 | |||
Distributions declared on common stock | (711,621) | (711,621) | |||||
Commissions on stock sales and related dealer manager fees | (1,129,983) | (1,129,983) | |||||
Other offering costs | (169,994) | (169,994) | |||||
Distribution and stockholder servicing fees | $ (237,105) | (237,105) | |||||
Redemptions of common stock (in shares) | 0 | ||||||
Changes in redeemable common stock | $ (87,337) | (87,337) | |||||
Net loss | (1,121,995) | (1,121,995) | $ (894,373) | $ (227,622) | |||
Balance (in share) at Dec. 31, 2017 | 1,436,855 | 631,346 | |||||
Balance at Dec. 31, 2017 | 15,029,156 | 18,284,253 | (3,275,779) | $ 14,369 | $ 6,313 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Issuance of common stock (in shares) | 984,096 | 115,970 | |||||
Issuance of common stock | 10,757,207 | 10,746,207 | $ 9,840 | $ 1,160 | |||
Equity-based compensation (in shares) | 9,066 | ||||||
Equity-based compensation | 20,625 | 20,602 | $ 23 | ||||
Distributions declared on common stock | (1,537,187) | (1,537,187) | |||||
Commissions on stock sales and related dealer manager fees | (747,395) | (747,395) | |||||
Other offering costs | (109,044) | (109,044) | |||||
Distribution and stockholder servicing fees | $ (35,533) | (35,533) | |||||
Redemptions of common stock (in shares) | (5,300) | (5,335) | |||||
Redemptions of common stock | $ (48,015) | (47,962) | $ (53) | ||||
Changes in redeemable common stock | (94,821) | (94,821) | |||||
Net loss | (771,712) | (771,712) | $ (523,089) | $ (248,623) | |||
Balance (in share) at Dec. 31, 2018 | 2,424,682 | 2,424,682 | 747,316 | 747,316 | |||
Balance at Dec. 31, 2018 | 22,463,281 | 28,016,307 | (5,584,678) | $ 24,179 | $ 7,473 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Issuance of common stock (in shares) | 86,168 | 24,638 | |||||
Issuance of common stock | 1,008,063 | 1,006,955 | $ 861 | $ 247 | |||
Equity-based compensation (in shares) | 9,593 | ||||||
Equity-based compensation | 82,500 | 82,408 | $ 92 | ||||
Distributions declared on common stock | (1,631,249) | (1,631,249) | |||||
Commissions on stock sales and related dealer manager fees | (30,501) | (30,501) | |||||
Other offering costs | (6,571) | (6,571) | |||||
Distribution and stockholder servicing fees | $ 15,884 | 15,884 | |||||
Redemptions of common stock (in shares) | (65,000) | (15,814) | (49,081) | ||||
Redemptions of common stock | $ (560,257) | (559,608) | $ (158) | $ (491) | |||
Changes in redeemable common stock | 182,158 | 182,158 | |||||
Net loss | (487,682) | (487,682) | $ (331,200) | $ (156,482) | |||
Balance (in share) at Dec. 31, 2019 | 2,504,629 | 2,504,629 | 722,873 | 722,873 | |||
Balance at Dec. 31, 2019 | $ 21,035,626 | $ 28,707,032 | $ (7,703,609) | $ 24,974 | $ 7,229 |
CONSOLIDATED STATEMENTS OF ST_2
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Parenthetical) - $ / shares | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Common Stock | |||
Distributions declared per common share (in dollars per share) | $ 0.525 | $ 0.60 | $ 0.6 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS | 12 Months Ended | ||
Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Cash flows from operating activities: | |||
Net loss | $ (487,682) | $ (771,712) | $ (1,121,995) |
Adjustments to reconcile net loss to net cash provided by operating activities: | |||
Depreciation and amortization, net | 1,912,254 | 1,912,254 | 1,493,033 |
Amortization of deferred financing costs | 244,673 | 561,711 | 501,250 |
Straight-line rental income | (79,302) | (147,731) | (210,776) |
Equity-based compensation | 82,500 | 20,625 | 0 |
Write-off of deferred financing costs | 183,850 | 0 | 0 |
Changes in assets and liabilities: | |||
Rent and tenant receivables | (89,619) | 223,269 | (494,449) |
Prepaid expenses and other assets | 24,482 | 37,598 | (110,396) |
Accrued expenses and accounts payable | (54,633) | (170,008) | 487,383 |
Deferred rental income | 217,149 | (208,716) | 4,092 |
Due to affiliates | (757) | (60,301) | (14,466) |
Net cash provided by operating activities | 1,952,915 | 1,396,989 | 533,676 |
Cash flows from investing activities: | |||
Investment in real estate assets | 0 | 0 | (16,855,205) |
Payment of property escrow deposits | 0 | 0 | (250,000) |
Refund of property escrow deposits | 0 | 0 | 250,000 |
Net cash used in investing activities | 0 | 0 | (16,855,205) |
Cash flows from financing activities: | |||
Proceeds from issuance of common stock | 350,001 | 10,187,281 | 16,677,720 |
Redemptions of common stock | (560,257) | (48,015) | 0 |
Offering costs on issuance of common stock | (37,072) | (856,439) | (1,299,977) |
Distribution and stockholder servicing fees paid | (60,948) | (65,165) | (21,753) |
Distributions to stockholders | (996,153) | (912,391) | (448,362) |
Proceeds from credit facility | 0 | 0 | 12,700,000 |
Repayments of credit facility | 0 | (7,800,000) | (2,725,000) |
Proceeds from subordinate promissory note | 0 | 2,200,000 | 16,488,631 |
Repayment of subordinate promissory note | 0 | (3,800,000) | (25,188,631) |
Deferred financing costs paid | (78,183) | (17,762) | (114,687) |
Net cash (used in) provided by financing activities | (1,382,612) | (1,112,491) | 16,067,941 |
Net increase (decrease) in cash and cash equivalents | 570,303 | 284,498 | (253,588) |
Cash and cash equivalents, beginning of period | 635,959 | 351,461 | 605,049 |
Cash and cash equivalents, end of period | 1,206,262 | 635,959 | 351,461 |
Supplemental disclosures of non-cash investing and financing activities: | |||
Distributions declared and unpaid | 132,145 | 155,111 | 100,241 |
Change in accrued distribution and stockholder servicing fees | (15,884) | 35,533 | 237,105 |
Common stock issued through distribution reinvestment plan | 658,062 | 569,926 | 179,564 |
Supplemental cash flow disclosures: | |||
Interest paid | 1,107,570 | 1,269,123 | 1,102,926 |
Cash paid for taxes | $ 7,048 | $ 6,467 | $ 2,491 |
ORGANIZATION AND BUSINESS
ORGANIZATION AND BUSINESS | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND BUSINESS | NOTE 1 — ORGANIZATION AND BUSINESS Cole Office & Industrial REIT (CCIT III), Inc. (the “Company”) is a non-exchange traded real estate investment trust (“REIT”) formed as a Maryland corporation on May 22, 2014 , that elected to be taxed, and currently qualifies, as a REIT for U.S. federal income tax purposes commencing with its taxable year ended December 31, 2017. The Company primarily acquires and operates commercial real estate assets, primarily consisting of single-tenant, income-producing necessity office and industrial properties, which are leased to creditworthy tenants under long-term leases. As of December 31, 2019 , the Company owned two office and industrial properties, comprising 391,000 rentable square feet of commercial space located in two states. As of December 31, 2019 , the rentable square feet at these properties was 100% leased. Substantially all of the Company’s business is conducted through Cole Corporate Income Operating Partnership III, LP (“CCI III OP”), a Delaware limited partnership, of which the Company is the sole general partner and owns, directly or indirectly, 100% of the partnership interests. The Company is externally managed by Cole Corporate Income Management III, LLC, a Delaware limited liability company (“CCI III Management”), which is an affiliate of CIM Group, LLC (“CIM”). CIM is a community-focused real estate and infrastructure owner, operator, developer and lender with multi-disciplinary expertise, including acquisitions, management, development, leasing, research and capital markets. CIM is headquartered in Los Angeles, California and has offices in Oakland, California; Bethesda, Maryland; Dallas, Texas; New York, New York; Chicago, Illinois and Phoenix, Arizona. CCO Group, LLC owns and controls CCI III Management, the Company’s advisor, and is the indirect owner of CCO Capital, LLC (“CCO Capital”), the Company’s dealer manager, and CREI Advisors, LLC (“CREI Advisors”), the Company’s property manager. CCO Group, LLC and its subsidiaries (collectively, “CCO Group”) serve as the Company’s sponsor and as a sponsor to CIM Real Estate Finance Trust, Inc. (formerly known as Cole Credit Property Trust IV, Inc.) (“CMFT”), Cole Credit Property Trust V, Inc. (“CCPT V”), Cole Office & Industrial REIT (CCIT II), Inc. (“CCIT II”) and CIM Income NAV, Inc. (“CIM Income NAV”). On September 22, 2016 , the Company commenced its initial public offering on a “best efforts” basis, offering up to a maximum of $3.5 billion in shares of common stock (the “Offering”). Pursuant to the Offering, the Company offered up to $2.5 billion in shares of its common stock pursuant to the primary offering, consisting of two classes of shares: Class A common stock (“Class A Shares”) at a price of $10.00 per share (up to $1.25 billion in shares) and Class T common stock (“Class T Shares”) at a price of $9.57 per share (up to $1.25 billion in shares). Pursuant to the Offering, the Company also offered up to $1.0 billion in shares of its common stock pursuant to a distribution reinvestment plan (the “DRIP”) at a purchase price during the Offering equal to the per share primary offering prices net of selling commissions and dealer manager fees, or $9.10 per share for both Class A Shares and Class T Shares. Effective December 31, 2018, the primary portion of the Offering was terminated, but the Company continued to issue Class A Shares and Class T Shares pursuant to the DRIP portion of the Offering. On March 28, 2019, the Company registered an aggregate of $4,300,000 of Class A Shares and Class T Shares pursuant to a Registration Statement on Form S-3 (Registration No. 333-230565) filed with the U.S. Securities and Exchange Commission (the “SEC”), which was declared effective on April 5, 2019 (the “DRIP Offering” and collectively with the Offering, the “Offerings”). As of April 30, 2019, the Company ceased issuing shares in the Offering and had sold a total of $31.2 million of Class A Shares and Class T Shares pursuant to the Offering, including $30.2 million ( $23.3 million in Class A Shares and $6.9 million in Class T Shares) sold to the public pursuant to the primary portion of the Offering and $1.0 million ( $655,000 in Class A Shares and $350,000 in Class T Shares) sold pursuant to the DRIP portion of the Offering. The unsold Class A Shares and Class T Shares in the Offering of $3.5 billion in the aggregate were subsequently deregistered. The Company began to issue Class A Shares and Class T Shares under the DRIP Offering on May 1, 2019 and will continue to issue shares under the DRIP Offering. The Company’s board of directors (the “Board”) establishes an updated estimated per share net asset value (“NAV”) of the Company’s common stock on at least an annual basis for purposes of assisting broker-dealers that participated in the Offering in meeting their customer account reporting obligations under Financial Industry Regulatory Authority Rule 2231. Distributions are reinvested in shares of the Company’s common stock under the DRIP at the estimated per share NAV as determined by the Board. Additionally, the estimated per share NAV as determined by the Board serves as the per share NAV for purposes of the share redemption program. As of December 31, 2019 , the Company’s first estimated per share NAV was $8.60 per share for both Class A and Class T Shares, which was established on February 13, 2019 using a valuation date of December 31, 2018. On March 25, 2020 , the Board established an updated estimated per share NAV of the Company’s common stock, as of December 31, 2019 , of $7.60 per share for both Class A Shares and Class T Shares. As a result, commencing on March 30, 2020 , distributions are reinvested under the DRIP at a price of $7.60 per share for both Class A Shares and Class T Shares, the estimated per share NAV as of December 31, 2019 , as determined by the Board. Additionally, $7.60 per share will serve as the most recent estimated per share NAV for purposes of the share redemption program. The Company’s estimated per share NAVs are not audited or reviewed by its independent registered public accounting firm. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The summary of significant accounting policies presented below is designed to assist in understanding the Company’s consolidated financial statements. These accounting policies conform to accounting principles generally accepted in the United States of America (“GAAP”) in all material respects, and have been consistently applied in preparing the accompanying consolidated financial statements. Principles of Consolidation and Basis of Presentation The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Reclassifications Certain amounts in the Company’s prior period consolidated financial statements have been reclassified to conform to the current period presentation. The Company combined rental income of $3.9 million and tenant reimbursement income of $518,000 for the year ended December 31, 2018, and rental income of $2.9 million and tenant reimbursement income of $1.2 million for the year ended December 31, 2017, into a single financial statement line item, rental and other property income, in the consolidated statements of operations. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Real Estate Assets Real estate assets are stated at cost, less accumulated depreciation and amortization. The Company considers the period of future benefit of each respective asset to determine the appropriate useful life. The estimated useful lives of the Company’s real estate assets by class are generally as follows: Buildings 40 years Site improvements 15 years Tenant improvements Lesser of useful life or lease term Intangible lease assets Lease term Recoverability of Real Estate Assets The Company continually monitors events and changes in circumstances that could indicate that the carrying amounts of its real estate assets may not be recoverable. Impairment indicators that the Company considers include, but are not limited to: bankruptcy or other credit concerns of a property’s major tenant, such as a history of late payments, rental concessions and other factors; a significant decrease in a property’s revenues due to lease terminations; vacancies; co-tenancy clauses; reduced lease rates; changes in anticipated holding periods; or other circumstances. When indicators of potential impairment are present, the Company assesses the recoverability of the assets by determining whether the carrying amount of the assets will be recovered through the undiscounted future cash flows expected from the use of the assets and their eventual disposition. In the event that such expected undiscounted future cash flows do not exceed the carrying amount, the Company will adjust the real estate assets to their respective fair values and recognize an impairment loss. Generally, fair value will be determined using a discounted cash flow analysis and recent comparable sales transactions . No impairment indicators were identified and no impairment losses were recorded during the years ended December 31, 2019 , 2018 or 2017 . Assets Held for Sale When a real estate asset is identified by the Company as held for sale, the Company will cease recording depreciation and amortization of the assets related to the property and estimate its fair value, net of selling costs. If, in management’s opinion, the fair value, net of selling costs, of the asset is less than the carrying amount of the asset, an adjustment to the carrying amount is then recorded to reflect the estimated fair value of the property, net of selling costs. There were no assets identified as held for sale as of December 31, 2019 or 2018 . Allocation of Purchase Price of Real Estate Assets Upon the acquisition of real properties, the Company allocates the purchase price to acquired tangible assets, consisting of land, buildings and improvements, and to identified intangible assets and liabilities, consisting of the value of above- and below-market leases and the value of in-place leases and other intangibles, based in each case on their relative fair values. The Company utilizes independent appraisals to assist in the determination of the fair values of the tangible assets of an acquired property (which includes land and buildings). The information in the appraisal, along with any additional information available to the Company’s management, is used in estimating the amount of the purchase price that is allocated to land. Other information in the appraisal, such as building value and market rents, may be used by the Company’s management in estimating the allocation of purchase price to the building and to intangible lease assets and liabilities. The appraisal firm has no involvement in management’s allocation decisions other than providing this market information. The fair values of above- and below-market lease intangibles are recorded based on the present value (using a discount rate which reflects the risks associated with the leases acquired) of the difference between (1) the contractual amounts to be paid pursuant to the in-place leases and (2) an estimate of fair market lease rates for the corresponding in-place leases, which is generally obtained from independent appraisals, measured over a period equal to the remaining non-cancelable term of the lease including, for below-market leases, any bargain renewal periods. The above- and below-market lease intangibles are capitalized as intangible lease assets or liabilities, respectively. Above-market leases are amortized as a reduction to rental income over the remaining terms of the respective leases. Below-market leases are amortized as an increase to rental income over the remaining terms of the respective leases, including any bargain renewal periods. In considering whether or not the Company expects a tenant to execute a bargain renewal option, the Company evaluates economic factors and certain qualitative factors at the time of acquisition, such as the financial strength of the tenant, the remaining lease term, the tenant mix of the leased property, the Company’s relationship with the tenant and the availability of competing tenant space. If a lease were to be terminated prior to its stated expiration, all unamortized amounts of above- or below-market lease intangibles relating to that lease would be recorded as an adjustment to rental income. The fair values of in-place leases include estimates of direct costs associated with obtaining a new tenant and opportunity costs associated with lost rental and other property income which are avoided by acquiring a property with an in-place lease. Direct costs associated with obtaining a new tenant include leasing commissions, legal and other related expenses, and are estimated in part by utilizing information obtained from independent appraisals and management’s consideration of current market costs to execute a similar lease. The intangible values of opportunity costs, which are calculated using the contractual amounts to be paid pursuant to the in-place leases over a market absorption period for a similar lease, are capitalized as intangible lease assets and are amortized to expense over the remaining term of the respective leases. If a lease were to be terminated prior to its stated expiration, all unamortized amounts of in-place lease assets relating to that lease would be expensed. The Company may acquire certain properties subject to contingent consideration arrangements that may obligate the Company to pay additional consideration to the seller based on the outcome of future events. Additionally, the Company may acquire certain properties for which it funds certain contingent consideration amounts into an escrow account pending the outcome of certain future events. The outcome may result in the release of all or a portion of the escrow funds to the Company or the seller or a combination thereof. Upon adoption of ASU 2017-01 (as defined below) in April 2017, contingent consideration arrangements for asset acquisitions are recognized when the contingency is resolved. The determination of the amount of contingent consideration arrangements is based on the probability of several possible outcomes as identified by management. The Company estimates the fair value of assumed mortgage notes payable based upon indications of current market pricing for similar types of debt financing with similar maturities. Assumed mortgage notes payable will initially be recorded at their estimated fair value as of the assumption date, and any difference between such estimated fair value and the mortgage note’s outstanding principal balance will be amortized or accreted to interest expense over the term of the respective mortgage note payable. The determination of the fair values of the real estate assets and liabilities acquired requires the use of significant assumptions with regard to the current market rental rates, rental growth rates, capitalization and discount rates, interest rates and other variables. The use of alternative estimates may result in a different allocation of the Company’s purchase price, which could materially impact the Company’s results of operations. In April 2017, the Company elected to early adopt Accounting Standards Update (“ASU”) No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business (“ASU 2017-01”), which clarifies the definition of a business by adding guidance to assist entities in evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. Beginning in April 2017, all real estate acquisitions qualified as asset acquisitions, and as such, acquisition-related fees and certain acquisition-related expenses related to these asset acquisitions are now capitalized and allocated to tangible and intangible assets and liabilities as described above. Other acquisition-related expenses, such as advisor reimbursements, continue to be expensed as incurred and are included in transaction-related expenses in the accompanying consolidated statements of operations. Prior to the adoption of ASU 2017-01 in April 2017, all of the Company’s real estate acquisitions were accounted for as business combinations, and as such, acquisition-related expenses related to these business combination acquisitions were expensed as incurred. Prior to April 2017, acquisition-related expenses included within transaction-related expenses in the Company’s consolidated statements of operations primarily consisted of legal, deed transfer and other costs related to real estate purchase transactions, including costs incurred for deals that were not consummated. The Company expects any future acquisitions to qualify as asset acquisitions and, as such, the Company will allocate the purchase price to acquired tangible assets and identified intangible assets and liabilities on a relative fair value basis. Cash and Cash Equivalents Cash and cash equivalents includes cash in bank accounts. The Company deposits cash with several high quality financial institutions. These deposits are guaranteed by the Federal Deposit Insurance Company (“FDIC”) up to an insurance limit of $250,000. At times, the Company’s cash and cash equivalents may exceed federally insured levels. Although the Company bears risk on amounts in excess of those insured by the FDIC, it has not experienced and does not anticipate any losses due to the high quality of the institutions where the deposits are held. Deferred Financing Costs Deferred financing costs represent commitment fees, legal fees and other costs associated with obtaining commitments for financing. These costs are amortized to interest expense over the terms of the respective financing agreements using the straight-line method, which approximates the effective interest method. Unamortized deferred financing costs are written off when the associated debt is extinguished or repaid prior to maturity. The presentation of all deferred financing costs, other than those associated with the revolving loan portion of the credit facility, are classified such that the debt issuance costs related to a recognized debt liability are presented on the consolidated balance sheets as a direct deduction from the carrying amount of the related debt liability rather than as an asset. Debt issuance costs related to securing the Company’s revolving line of credit are presented as an asset and amortized ratably over the term of the line of credit arrangement. The Company’s total deferred costs, net in the accompanying consolidated balance sheets relate only to the revolving loan portion of the Credit Facility (as defined in Note 6 — Credit Facility ). As of December 31, 2019 and 2018 , the Company had $57,000 and $407,000 , respectively, of deferred financing costs, net of accumulated amortization, related to the revolving loan portion of the Credit Facility. Costs incurred in seeking financing transactions that do not close are expensed in the period in which it is determined the financing will not close. Distribution and Stockholder Servicing Fees The Company pays CCO Capital a distribution and stockholder servicing fee for Class T Shares sold in the primary portion of the Offering which is calculated on a daily basis in an amount equal to 1/365th of 1.0% of the per share NAV. The aggregate distribution and stockholder servicing fee for Class T Shares will not exceed an amount equal to 4.0% of the total gross offering proceeds of Class T Shares sold in the primary portion of the Offering. The Company will cease paying the distribution and stockholder servicing fee with respect to Class T Shares sold in the Offering at the earliest of: (i) the end of the month in which the transfer agent, on the Company’s behalf, determines that total distribution and stockholder servicing fees paid by a stockholder within his or her individual account would be equal to 4.0% of the stockholder’s total gross investment amount at the time of the purchase of the primary Class T Shares held in such account, or a lower limit agreed upon between the Company’s dealer manager and the participating broker-dealer at the time such Class T Shares were sold; (ii) the date on which the aggregate underwriting compensation from all sources equals 10.0% of the gross offering proceeds (i.e., excluding proceeds from sales pursuant to the DRIP); (iii) the fourth anniversary of the last day of the month in which the Offering (excluding the offering of shares pursuant to the DRIP) terminates; (iv) the date such Class T Share is no longer outstanding; and (v) the date the Company effects a liquidity event (such as the sale of the Company, the sale of all or substantially all of the Company’s assets, a merger or similar transaction, the listing of the Company’s shares of common stock for trading on a national securities exchange or an alternative strategy that would result in a significant increase in the opportunities for stockholders to dispose of their shares). CCO Capital may, in its discretion, reallow to participating broker-dealers all or a portion of the distribution and stockholder servicing fee. At the time the Company ceases paying the distribution and stockholder servicing fee with respect to an outstanding Class T Share pursuant to the provisions above, such Class T Share will convert into a number of Class A Shares (including any fractional shares) with an equivalent net asset value as such share. The distribution and stockholder servicing fee is paid monthly in arrears. An estimated liability for future distribution and stockholder servicing fees payable to CCO Capital was recognized at the time each Class T Share was sold and included in due to affiliates in the consolidated balance sheets with a corresponding decrease to capital in excess of par value. Due to Affiliates Certain affiliates of CCI III Management received, and will continue to receive, fees, reimbursements and compensation in connection with services provided relating to the Offerings and the acquisition, management, financing and leasing of the Company’s assets. Redeemable Common Stock Under the Company’s share redemption program, the Company’s obligation to redeem shares of its outstanding common stock is limited, among other things, to the net proceeds received by the Company from the sale of shares under the DRIP during the quarter, net of shares redeemed. The Company records the maximum amount that is redeemable under the share redemption program as redeemable common stock outside of permanent equity in its consolidated balance sheets. Changes in the amount of redeemable common stock from period to period are recorded as an adjustment to capital in excess of par value. Leases The Company adopted ASU No. 2016-02, Leases (Topic 842) (“ASC 842”), on January 1, 2019 using the optional alternative transition method for financial information and related disclosures. The Company elected the “package of practical expedients,” which permits the Company to not reassess under the new standard prior conclusions about lease identification, lease classification and initial direct costs. The Company has lease agreements with lease and non-lease components. The Company has elected to not separate non-lease components from lease components for all classes of underlying assets (primarily real estate assets) and will account for the combined components as rental and other property income. Non-lease components included in rental and other property income include certain tenant reimbursements for maintenance services (including common-area maintenance services or “CAM”), real estate taxes, insurance and utilities paid for by the lessor but consumed by the lessee. As a lessor, the Company has further determined that this policy will be effective only on a lease that has been classified as an operating lease and the revenue recognition pattern and timing is the same for both types of components. The Company is not a party to any material leases where it is the lessee. Significant judgments and assumptions are inherent in not only determining if a contract contains a lease, but also the lease classification, terms, payments, and, if needed, discount rates. Judgments include the nature of any options, including if they will be exercised, evaluation of implicit discount rates and the assessment and consideration of “fixed” payments for straight-line rent revenue calculations. Lease costs represent the initial direct costs incurred in the origination, negotiation and processing of a lease agreement. Such costs include outside broker commissions and other independent third-party costs and are amortized over the life of the lease on a straight-line basis. Costs related to salaries and benefits, supervision, administration, unsuccessful origination efforts and other activities not directly related to completed lease agreements are expensed as incurred. Leasing commissions subsequent to successful lease execution are capitalized. Revenue Recognition Rental and other property income is primarily derived from fixed contractual payments from operating leases and, therefore, is generally recognized on a straight-line basis over the term of the lease, which typically begins the date the tenant takes control of the space. When the Company acquires a property, the terms of existing leases are considered to commence as of the acquisition date for the purpose of this calculation. Variable rental and other property income consists primarily of tenant reimbursements for recoverable real estate taxes and operating expenses which are included in rental and other property income in the period when such costs are incurred, with offsetting expenses in real estate taxes and property operating expenses, respectively, within the consolidated statements of operations. The Company defers the recognition of variable rental and other property income, such as percentage rents, until the specific target that triggers the contingent rental income is achieved. The Company continually reviews whether collection of lease-related receivables, including any straight-line rent, and current and future operating expense reimbursements from tenants are probable. The determination of whether collectability is probable takes into consideration the tenant’s payment history, the financial condition of the tenant, business conditions in the industry in which the tenant operates and economic conditions in the area in which the property is located. Upon the determination that the collectability of a receivable is not probable, the Company will record a reduction to rental and other property income for amounts previously recorded and a decrease in the outstanding receivable. Revenue from leases where collection is deemed to be less than probable is recorded on a cash basis until collectability becomes probable. Management’s estimate of the collectability of lease-related receivables is based on the best information available to management. The Company does not use a general reserve approach and lease-related receivables are adjusted and taken against rental and other property income only when collectability becomes not probable. Income Taxes The Company elected to be taxed, and currently qualifies, as a REIT for federal income tax purposes under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), beginning with its taxable year ended December 31, 2017. The Company will generally not be subject to federal corporate income tax to the extent it distributes its taxable income to its stockholders, and so long as it, among other things, distributes at least 90% of its annual taxable income (computed without regard to the dividends paid deduction and excluding net capital gains). REITs are subject to a number of other organizational and operational requirements. Even if the Company maintains its qualification for taxation as a REIT, it or its subsidiaries may be subject to certain state and local taxes on its income and property, and federal income and excise taxes on its undistributed income. For the period from May 22, 2014 (date of inception) to December 31, 2016, the Company did not meet all of the criteria to qualify as a REIT under the Internal Revenue Code. Specifically, the Company did not have enough stockholders for a sufficient number of days in 2016. As such, the Company was taxable as a C Corporation for the taxable year ended December 31, 2016, and was subject to regular taxes on its income for such period. However, the Company incurred a taxable loss for the period ending December 31, 2016, and as such, there was no federal income tax liability for this period. Net Loss and Distributions Per Share The Company has two classes of common stock. Accordingly, the Company utilizes the two-class method to determine its earnings per share, which can result in different earnings per share for each of the classes. Under the two-class method, earnings per share of each class of common stock are computed by dividing the sum of the distributed earnings to common stockholders and undistributed earnings allocated to common stockholders by the weighted average number of shares for each class of common stock for the respective period. The distributed earnings to Class T Share common stockholders represents distributions declared less the distribution and stockholder servicing fees paid with respect to Class T Shares sold in the primary portion of the Offering. Diluted income per share, when applicable, considers the effect of any potentially dilutive share equivalents, of which the Company had none for each of the years ended December 31, 2019 , 2018 or 2017 . Distributions per share are calculated based on the authorized daily distribution rate. Offering and Related Costs CCI III Management funds all of the organization and offering costs on the Company’s behalf (excluding selling commissions, dealer manager fees and distribution and stockholder servicing fees) and may be reimbursed for such costs up to 1.0% of the gross proceeds from the Offering. As of December 31, 2019 , CCI III Management had paid organization and offering costs in excess of 1.0% of the gross proceeds from the Offering. These excess costs were not included in the financial statements of the Company because such costs were not a liability of the Company as they exceeded 1.0% of the aggregate gross proceeds from the Offering. The Company expenses organization costs as incurred and records offering costs, which include items such as legal and accounting fees, marketing, personnel, promotional and printing costs, as a reduction of capital in excess of par value along with selling commissions, and dealer manager fees in the period in which they become payable. Reportable Segment The Company’s commercial real estate assets consist primarily of single-tenant, income-producing necessity office and industrial properties, which are leased to creditworthy tenants under a long-term net leases. The commercial properties are geographically diversified throughout the United States and have similar economic characteristics. The Company’s management evaluates operating performance on an overall portfolio level; therefore, the Company’s properties are one reportable segment. Recent Accounting Pronouncements From time to time, new accounting pronouncements are issued by various standard setting bodies that may have an impact on the Company’s accounting and reporting. Except as otherwise stated below, the Company is currently evaluating the effect that certain new accounting requirements may have on the Company’s accounting and related reporting and disclosures in the Company’s consolidated financial statements. In June 2016, the Financial Accounting Standards Board (the “FASB”) issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326) (“ASU 2016-13”), which was subsequently amended by ASU No. 2018-19, Codification Improvements to Topic 326, Financial Instruments - Credit Losses (“ASU 2018-19”), in November 2018. Subsequently, the FASB issued ASU No. 2019-04, ASU No. 2019-05, ASU No. 2019-10 and ASU No. 2019-11 to provide additional guidance on the credit losses standard. ASU 2016-13 and the related updates are intended to improve financial reporting requiring more timely recognition of credit losses on loans and other financial instruments that are not accounted for at fair value through net income, including loans held for investment, held-to-maturity debt securities, net investment in leases and other such commitments. ASU 2016-13 requires that financial assets measured at amortized cost be presented at the net amount expected to be collected, through an allowance for credit losses that is deducted from the amortized cost basis. The amendments in ASU 2016-13 require the Company to measure all expected credit losses based upon historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the financial assets and eliminates the “incurred loss” methodology under current GAAP. ASU 2018-19 clarified that receivables arising from operating leases are not within the scope of Topic 326. Instead, impairment of receivables arising from operating leases should be accounted for in accordance with Topic 842, Leases. ASU 2016-13 and ASU 2018-19 are effective for fiscal years, and interim periods within those years, beginning after December 15, 2019. Early adoption is permitted for fiscal years, and interim periods within those years, beginning after December 15, 2018. The Company will adopt this ASU during the first quarter of fiscal year 2020 and does not expect it will have a material impact on its consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-13, Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”). This ASU amends and removes several disclosure requirements including the valuation processes for Level 3 fair value measurements. ASU 2018-13 also modifies some disclosure requirements and requires additional disclosures for changes in unrealized gains and losses included in other comprehensive income for recurring Level 3 fair value measurements and requires the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. The provisions of ASU 2018-13 are effective January 1, 2020 using a prospective transition method for amendments effecting changes in unrealized gains and losses, significant unobservable inputs used to develop Level 3 fair value measurements and narrative description on uncertainty of measurements. The remaining provisions of ASU 2018-13 are to be applied retrospectively, and early adoption is permitted. The Company will adopt this ASU during the first quarter of fiscal year 2020 and does not expect it will have a material impact on its consolidated financial statements. In October 2018, the FASB issued ASU 2018-17, Consolidation (Topic 810): Targeted Improvements to Related Party Guidance for Variable Interest Entities . The guidance changes the guidance for determining whether a decision-making fee is a variable interest. Under the new ASU, indirect interests held through related parties under common control will now be considered on a proportional basis when determining whether fees paid to decision makers and service providers are variable interests. Such indirect interests were previously treated the same as direct interests. This ASU is effective for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years. The Company is evaluating the impact of this ASU’s adoption, and does not believe this ASU will have a material impact on its consolidated financial statements. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | NOTE 3 — FAIR VALUE MEASUREMENTS GAAP defines fair value, establishes a framework for measuring fair value and requires disclosures about fair value measurements. GAAP emphasizes that fair value is intended to be a market-based measurement, as opposed to a transaction-specific measurement. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions. Depending on the nature of the asset or liability, various techniques and assumptions can be used to estimate the fair value. Assets and liabilities are measured using inputs from three levels of the fair value hierarchy, as follows: Level 1 — Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. An active market is defined as a market in which transactions for the assets or liabilities occur with sufficient frequency and volume to provide pricing information on an ongoing basis. Level 2 — Inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active (markets with few transactions), inputs other than quoted prices that are observable for the asset or liability (i.e., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data correlation or other means (market corroborated inputs). Level 3 — Unobservable inputs, which are only used to the extent that observable inputs are not available, reflect the Company’s assumptions about the pricing of an asset or liability. The following describes the methods the Company uses to estimate the fair value of the Company’s financial assets and liabilities: Credit facility — The fair value is estimated by discounting the expected cash flows based on estimated borrowing rates available to the Company as of the measurement date. These financial instruments are valued using Level 2 inputs. As of December 31, 2019 , the estimated fair value of the Company’s debt was $24.2 million , which approximated its carrying value. As of December 31, 2018 , the estimated fair value of the Company’s debt was $24.3 million , compared to a carrying value of $24.2 million . The carrying and fair values exclude net deferred financing costs. Other financial instruments — The Company considers the carrying values of its cash and cash equivalents, tenant receivables, accrued expenses and accounts payable, other liabilities, due to affiliates and distributions payable to approximate their fair values because of the short period of time between their origination and their expected realization as well as their highly-liquid nature. Due to the short-term maturities of these instruments, Level 1 inputs are utilized to estimate the fair value of these financial instruments. Considerable judgment is necessary to develop estimated fair values of financial assets and liabilities. Accordingly, the estimates presented herein are not necessarily indicative of the amounts the Company could realize, or be liable for, upon disposition of the financial assets and liabilities. As of December 31, 2019 and 2018 , there have been no transfers of financial assets or liabilities between fair value hierarchy levels. |
REAL ESTATE ASSETS
REAL ESTATE ASSETS | 12 Months Ended |
Dec. 31, 2019 | |
Real Estate [Abstract] | |
REAL ESTATE ASSETS | NOTE 4 — REAL ESTATE ASSETS 2019 and 2018 Property Acquisitions During the years ended December 31, 2019 and 2018 , the Company did not acquire any properties. 2017 Property Acquisition During the year ended December 31, 2017, the Company acquired one industrial property, leased to Actuant Corporation, for a purchase price of $16.9 million (the “2017 Acquisition”), which includes $355,000 of external acquisition-related expenses that were capitalized in accordance with ASU 2017-01. Prior to the Company’s adoption of ASU 2017-01, costs related to the property acquisitions were expensed as incurred. The Company purchased the 2017 Acquisition with net proceeds from the Offering and available borrowings. The Company allocated the purchase price of this property to the fair value of the assets acquired. The following table summarizes the purchase price allocation for the 2017 Acquisition: December 31, 2017 Land $ 937,691 Buildings and improvements 14,287,443 Acquired in-place lease (1) 1,630,071 Total purchase price $ 16,855,205 ______________________ (1) The weighted average amortization period for the acquired in-place lease was 16.2 years for the 2017 Acquisition. Asset Concentration As of December 31, 2019 , the Company had two tenants that constitute significant asset concentrations. The tenant of the 2017 Acquisition, Enerpac, is a significant tenant and is a subsidiary of Actuant Corporation. The audited financial statements for Actuant Corporation, for the fiscal year ended August 31, 2019, are publicly available on the SEC’s website, http://www.sec.gov. The tenant of the Company’s second property, Siemens Corporation, is a significant tenant and is a subsidiary of Siemens AG. The audited financial statements for Siemens AG, for the fiscal year ended September 30, 2019, can be found on their website at https://assets.new.siemens.com/siemens/assets/api/uuid:f224a87a-6265-4e40-a3f5-003257f08a11/siemens-sag2019-e.pdf. |
INTANGIBLE LEASE ASSETS
INTANGIBLE LEASE ASSETS | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE LEASE ASSETS | NOTE 5 — INTANGIBLE LEASE ASSETS The Company’s intangible lease assets consisted of the following as of December 31, 2019 and 2018 : As of December 31, 2019 2018 In-place leases, net of accumulated amortization of $1,406,599 and $943,541, respectively (with a weighted average life remaining of 8.8 years and 9.8 years, respectively) $ 3,694,833 $ 4,157,891 Amortization expense for the in-place leases is included in depreciation and amortization in the accompanying consolidated statements of operations. The following table summarizes the amortization related to the in-place lease assets for the years ended December 31, 2019 , 2018 and 2017 : Year Ended December 31, 2019 2018 2017 In-place lease amortization $ 463,058 $ 463,058 $ 374,832 The following table summarizes the estimated amortization relating to the intangible lease assets subsequent to December 31, 2019 : Amortization Year ending December 31, In-Place Leases 2020 $ 463,058 2021 463,058 2022 463,058 2023 463,058 2024 463,058 Thereafter 1,379,543 Total $ 3,694,833 |
CREDIT FACILITY
CREDIT FACILITY | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
CREDIT FACILITY | NOTE 6 — CREDIT FACILITY As of December 31, 2019 , the Company had $24.2 million of debt outstanding, with a weighted average interest rate of 4.0% and a weighted average term to maturity of nine months . The following table summarizes the debt balances as of December 31, 2019 and 2018 , respectively, and the debt activity for the year ended December 31, 2019 : During the Year Ended December 31, 2019 Balance as of Debt Issuance Repayments Balance as of Credit facility $ 24,175,000 $ — $ — $ 24,175,000 Total debt $ 24,175,000 $ — $ — $ 24,175,000 Credit Facility As of December 31, 2019 , the Company had $24.2 million of debt outstanding under its secured credit facility (the “Credit Facility”) with JPMorgan Chase Bank, N.A. (“JPMorgan Chase”), as administrative agent, and the lenders under the credit agreement (as amended, the “Credit Agreement”), that previously provided for borrowings of up to $100.0 million in revolving loans (the “Revolving Loans”). On September 20, 2019, the Credit Agreement was modified to extend the maturity date of such loans to September 23, 2020 and reduced the borrowing commitment to $29.3 million (the “First Modification”). The First Modification also amended the definition of asset value, in part, by removing certain tenant concentration limits, and removed the option to further extend the maturity date. Depending upon the type of loan specified and overall leverage ratio, the Credit Facility bears interest at (i) the one-month, two-month, three-month or six-month London Interbank Offered Rate (“LIBOR”) multiplied by the statutory reserve rate plus an interest rate spread of 2.20% ; or (ii) a base rate of 1.20% , plus the greater of: (a) JPMorgan Chase’s Prime Rate (as defined in the Credit Agreement); (b) the Federal Funds Effective Rate (as defined in the Credit Agreement) plus 0.50% ; or (c) the one-month LIBOR multiplied by the statutory reserve rate plus 1.0% . As of December 31, 2019 , the Revolving Loans outstanding totaled $24.2 million at a weighted average interest rate of 4.0% . The Company had $5.1 million in unused capacity, subject to borrowing availability, as of December 31, 2019 . The Credit Agreement contains provisions with respect to covenants, events of default and remedies customary for facilities of this nature. In particular, the Credit Agreement requires the Company to maintain a minimum consolidated net worth greater than or equal to 75% of the equity issued from the date of the Credit Agreement, a leverage ratio no greater than 60% , and a fixed charge coverage ratio equal to or greater than 1.50 . The Company believes it was in compliance with the financial covenants of the Credit Agreement as of December 31, 2019 . Maturities Liquidity and Financial Condition — As of December 31, 2019 , the Company had $24.2 million of debt outstanding under the Credit Facility maturing on September 23, 2020. The Company expects to enter into new financing arrangements to meet its obligations as they become due, which management believes is probable based on the current loan-to-value ratios, the occupancy of the Company’s properties and assessment of the current lending environment. The Company believes cash on hand, net cash provided by operations, and the entry into new financing arrangements will be sufficient to meet its obligations as they become due in the ordinary course of business for at least 12 months following the date these financial statements are issued. The following table summarizes the scheduled aggregate principal repayments for the Company’s outstanding debt subsequent to December 31, 2019 : Principal Repayments 2020 $ 24,175,000 2021 — 2022 — 2023 — 2024 — Thereafter — Total $ 24,175,000 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 7 — COMMITMENTS AND CONTINGENCIES Litigation In the ordinary course of business, the Company may become subject to litigation and claims. The Company is not aware of any material pending legal proceedings, other than ordinary routine litigation incidental to the Company’s business, to which the Company is a party or of which the Company’s properties are the subject. Environmental Matters In connection with the ownership and operation of real estate, the Company may potentially be liable for costs and damages related to environmental matters. In addition, the Company may own or acquire certain properties that are subject to environmental remediation. Generally, the seller of the property, the tenant of the property and/or another third party is responsible for environmental remediation costs related to a property. Additionally, in connection with the purchase of certain properties, the respective sellers and/or tenants may agree to indemnify the Company against future remediation costs. The Company also carries environmental liability insurance on its properties that provides limited coverage for any remediation liability and/or pollution liability for third-party bodily injury and/or property damage claims for which the Company may be liable. The Company is not aware of any environmental matters which it believes are reasonably likely to have a material effect on its results of operations, financial condition or liquidity. |
RELATED-PARTY TRANSACTIONS AND
RELATED-PARTY TRANSACTIONS AND ARRANGEMENTS | 12 Months Ended |
Dec. 31, 2019 | |
Related Party Transactions [Abstract] | |
RELATED-PARTY TRANSACTIONS AND ARRANGEMENTS | NOTE 8 — RELATED-PARTY TRANSACTIONS AND ARRANGEMENTS The Company has incurred, and will continue to incur, commissions, fees and expenses payable to CCI III Management and certain of its affiliates in connection with the Offerings and the acquisition, management and disposition of its assets. Selling commissions and dealer manager fees In connection with the primary portion of the Offering, which was terminated on December 31, 2018 , CCO Capital, the Company’s dealer manager, which is affiliated with CCI III Management, received selling commissions of up to 7.0% and 3.0% of gross offering proceeds from the primary portion of the Offering for Class A Shares and Class T Shares, respectively. CCO Capital reallowed 100% of selling commissions earned to participating broker-dealers. In addition, 2.0% of gross offering proceeds from the primary portion of the Offering for both Class A Shares and Class T Shares was paid to CCO Capital as a dealer manager fee. CCO Capital, in its sole discretion, reallowed all or a portion of its dealer manager fee to participating broker-dealers. No selling commissions or dealer manager fees are paid to CCO Capital or other participating broker-dealers with respect to shares sold pursuant to the DRIP. Organization and offering expenses All other organization and offering expenses associated with the sale of the Company’s common stock (excluding selling commissions, dealer manager fees and distribution and stockholder servicing fees) were paid by CCI III Management or its affiliates and were reimbursed by the Company up to 1.0% of aggregate gross offering proceeds, including proceeds from sales of shares under the DRIP. As of December 31, 2019 , CCI III Management had paid organization and offering expenses in excess of the 1.0% of aggregate gross offering proceeds in connection with the Offering. These excess amounts were not included in the consolidated financial statements of the Company because such amounts were not a liability of the Company as they exceeded 1.0% of gross proceeds from the Offering. Since the Offering has been terminated, these excess amounts will not be paid. Distribution and stockholder servicing fees The Company pays CCO Capital a distribution and stockholder servicing fee for Class T Shares that, prior to the Board’s determination of an estimated per share NAV, was calculated on a daily basis in an amount equal to 1/365th of 1.0% of the purchase price per share of the Class T Shares sold in the primary portion of the Offering. Commencing on February 19, 2019, the distribution and stockholder servicing fee for Class T Shares is calculated on a daily basis in an amount equal to 1/365th of 1.0% of the per share NAV. The distribution and stockholder servicing fee is paid monthly in arrears from cash flows from operations or, if the Company’s cash flows from operations are not sufficient to pay the distribution and stockholder servicing fee, from borrowings in anticipation of future cash flows. An estimated liability for future distribution and stockholder servicing fees payable to CCO Capital was recognized at the time each Class T Share was sold and included in due to affiliates in the consolidated balance sheets with a corresponding decrease to capital in excess of par value. The Company will cease paying the distribution and stockholder servicing fee with respect to Class T Shares at the earliest of (i) the end of the month in which the total distribution and stockholder servicing fees paid by a stockholder within his or her individual account would be equal to 4.0% of the stockholder’s total gross investment amount at the time of the purchase of the primary Class T Shares held in such account, or a lower limit agreed upon between the Company’s dealer manager and the participating broker-dealer at the time such Class T Shares were sold; (ii) the date on which the aggregate underwriting compensation from all sources equals 10.0% of the gross proceeds from the aggregate sale of the Class A Shares and Class T Shares in the Offering, excluding proceeds from sales pursuant to the DRIP; (iii) the fourth anniversary of the last day of the month in which the Offering (excluding the offering of shares pursuant to the DRIP) terminates; (iv) the date such Class T Share is no longer outstanding; and (v) the date the Company effects a liquidity event. CCO Capital may, in its discretion, reallow to participating broker-dealers all or a portion of the distribution and stockholder servicing fee for services that such participating broker-dealers perform in connection with the distribution of Class T Shares. At the time the Company ceases paying the distribution and stockholder servicing fee with respect to an outstanding Class T Share pursuant to the provisions above, such Class T Share will convert into a number of Class A Shares (including any fractional shares) with an equivalent net asset value as such Class T Share. The Company cannot predict when this will occur. No distribution and stockholder servicing fees are paid to CCO Capital or other participating broker-dealers with respect to shares sold pursuant to the DRIP. Acquisition fees and expenses The Company pays CCI III Management or its affiliates acquisition fees of up to 2.0% of: (i) the contract purchase price of each property or asset the Company acquires; (ii) the amount paid in respect of the development, construction or improvement of each asset the Company acquires; (iii) the purchase price of any loan the Company acquires; and (iv) the principal amount of any loan the Company originates. In addition, the Company reimburses CCI III Management or its affiliates for acquisition-related expenses incurred in the process of acquiring a property or the origination or acquisition of a loan, so long as the total acquisition fees and expenses relating to the transaction do not exceed 6.0% of the contract purchase price, unless otherwise approved by a majority of the Board, including a majority of the independent directors, as commercially competitive, fair and reasonable to the Company. Advisory fees and expenses Pursuant to the advisory agreement, the Company pays CCI III Management a monthly advisory fee based upon the Company’s monthly average asset value, which is equal to the following amounts: (i) an annualized rate of 0.75% paid on the Company’s average asset value that is between $0 and $2.0 billion ; (ii) an annualized rate of 0.70% paid on the Company’s average asset value that is between $2.0 billion and $4.0 billion ; and (iii) an annualized rate of 0.65% paid on the Company’s average asset value that is over $4.0 billion . During the year ended December 31, 2018 , these advisory fees exceeded the expense limit of the greater of 2.0% of the average invested assets or 25.0% of net income (see operating expenses below) and were not recognized in the consolidated financial statements of the Company because such amounts were not contractually payable by the Company. As of December 31, 2018 , $576,000 of advisory fees exceeded such expense limit. Subsequent to December 31, 2018 , CCI III Management waived its right to receive these amounts, even if future operating expenses are below the expense limits. Additionally, CCI III Management waived its right to receive a monthly advisory fee during the full year ending December 31, 2019 . As such, during the year ended December 31, 2019 , the advisor waived advisory fees of $385,000 , which was not recognized in the consolidated financial statements of the Company because such amounts were not contractually payable by the Company. As of December 31, 2019 , $961,000 of advisory fees have been waived since inception. Operating expenses The Company reimburses CCI III Management or its affiliates for the operating expenses they paid or incurred in connection with advisory and administrative services provided to the Company, subject to the limitation that the Company will not reimburse CCI III Management or its affiliates for any amount by which the operating expenses (including the advisory fee) at the end of the four preceding fiscal quarters exceed the greater of (i) 2.0% of average invested assets, or (ii) 25.0% of net income, excluding any additions to reserves for depreciation or other similar non-cash reserves and excluding any gain from the sale of assets for that period. The Company will not reimburse CCI III Management or its affiliates for compensation paid to the Company’s executive officers or employees of CCI III Management in connection with the services for which CCI III Management or its affiliates receive an acquisition fee, financing coordination fee or disposition fee. During the year ended December 31, 2019 , $567,000 of operating expense reimbursements were deferred by the advisor, which were not recognized in the consolidated financial statements of the Company because such amounts were not contractually payable by the Company. However, these amounts may become payable if the advisor recoups expense reimbursements as capacity becomes available under the greater of 2.0% of average invested assets or 25.0% of net income limitations through reimbursements in a subsequent period. Financing coordination fees If CCI III Management provides services in connection with the origination, assumption or refinancing of any debt to acquire properties or to make other permitted investments, the Company will pay CCI III Management a financing coordination fee equal to 1.0% of the amount available and/or outstanding under such financing. However, CCI III Management will not be entitled to a financing coordination fee on any debt where CCI III Management previously received a fee unless (i) the maturity date of the refinanced debt was scheduled to occur less than one year after the date of the refinancing and the new loan has a term of at least five years or (ii) the new loan is approved by a majority of the independent directors; and provided, further, that no financing coordination fee will be paid in connection with loans advanced by an affiliate of CCI III Management. Disposition fees If CCI III Management or its affiliates provide a substantial amount of services (as determined by a majority of the Company’s independent directors) in connection with the sale of one or more properties (or the Company’s entire portfolio), the Company will pay CCI III Management or its affiliates a disposition fee in an amount equal to up to one-half of the real estate or brokerage commission paid by the Company to third parties on the sale of such properties, not to exceed 1.0% of the contract price of the properties sold; provided, however, in no event may the total disposition fees paid to CCI III Management, its affiliates, and unaffiliated third parties, exceed the lesser of the customary competitive real estate commission or an amount equal to 6.0% of the contract sales price. In addition, if CCI III Management or its affiliates provides a substantial amount of services (as determined by a majority of the Company’s independent directors) in connection with the sale of one or more assets other than properties, the Company may separately compensate CCI III Management or its affiliates at such rates and in such amounts as the Board, including a majority of the independent directors, and CCI III Management agree upon, not to exceed an amount equal to 1.0% of the contract price of the assets sold. During the years ended December 31, 2019 , 2018 and 2017 , no disposition fees were incurred for any such services provided by CCI III Management or its affiliates. Subordinated performance fees The Company will pay a subordinated performance fee in connection with one of the following alternative events: (1) if the Company’s shares are listed on a national securities exchange, CCI III Management, or its affiliates, will be entitled to a subordinated performance fee equal to 15.0% of the amount, if any, by which (i) the market value of the Company’s outstanding stock plus distributions paid by the Company prior to listing, exceeds (ii) the sum of the total amount of capital raised from stockholders and the amount of distributions necessary to generate a 6.0% annual cumulative, non-compounded return to stockholders; (2) if the Company is sold or its assets are liquidated, CCI III Management will be entitled to a subordinated performance fee equal to 15.0% of the net sale proceeds remaining after stockholders have received, from regular distributions plus special distributions paid from proceeds of such sale, a return of their net capital invested and a 6.0% annual cumulative, non-compounded return; or (3) upon termination of the advisory agreement, CCI III Management may be entitled to a subordinated performance fee similar to the fee to which it would have been entitled had the portfolio been liquidated (based on an independent appraised value of the portfolio) on the date of termination. During the years ended December 31, 2019 , 2018 and 2017 , no subordinated performance fees were incurred related to any such events. The Company incurred commissions, fees and expense reimbursements as shown in the table below for services provided by CCI III Management and its affiliates related to the services described above during the periods indicated: Year Ended December 31, 2019 2018 2017 Selling commissions $ 23,501 $ 540,706 $ 798,184 Dealer manager fees $ 7,000 $ 206,689 $ 331,799 Distribution and stockholder servicing fees (1) $ 60,948 $ 65,165 $ 21,753 Organization and offering costs $ 6,571 $ 109,044 $ 169,944 Acquisition fees and expenses $ — $ — $ 330,000 Advisory fees $ — $ — $ 60,565 Operating expenses $ — $ — $ 50,000 Financing coordination fees $ — $ — $ 99,750 ______________________ (1) Amounts are calculated for the respective periods in accordance with the dealer manager agreement and exclude the estimated liability for future distribution and stockholder servicing fees payable to CCO Capital of $111,000 and $188,000 for the years ended December 31, 2019 and 2018 , respectively, which is included in due to affiliates in the consolidated balance sheets with a corresponding decrease to capital in excess of par value, as described in Note 2 — Summary of Significant Accounting Policies . Due to Affiliates As of December 31, 2019 and 2018 , $111,000 and $188,000 , respectively, was recorded for services and expenses incurred, but not yet reimbursed to CCI III Management, or its affiliates. The amounts are primarily for future distribution and stockholder servicing fees. |
ECONOMIC DEPENDENCY
ECONOMIC DEPENDENCY | 12 Months Ended |
Dec. 31, 2019 | |
Economic Dependency [Abstract] | |
ECONOMIC DEPENDENCY | NOTE 9 — ECONOMIC DEPENDENCY Under various agreements, the Company has engaged and may in the future engage CCI III Management or its affiliates to provide certain services that are essential to the Company, including asset management services, supervision of the management and leasing of properties owned by the Company, asset acquisition and disposition decisions, the sale of shares of the Company’s common stock available for issuance, as well as other administrative responsibilities for the Company including accounting services and stockholder relations. As a result of these relationships, the Company is dependent upon CCI III Management or its affiliates. In the event that these companies are unable to provide the Company with these services, the Company would be required to find alternative providers of these services. |
STOCKHOLDERS_ EQUITY
STOCKHOLDERS’ EQUITY | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
STOCKHOLDERS' EQUITY | NOTE 10 — STOCKHOLDERS’ EQUITY As of December 31, 2019 , 2018 , and 2017 , the Company was authorized to issue 490.0 million shares of common stock pursuant to the primary offering, consisting of two classes of shares ( 245.0 million in Class A Shares and 245.0 million in Class T Shares) and 10.0 million shares of preferred stock. All shares of such stock have a par value of $0.01 per share. On July 14, 2014 , VEREIT Operating Partnership, L.P. (“VEREIT OP”) acquired 8,000 shares of common stock, at $25.00 per share. Effective December 30, 2015, the Company effected a stock split, whereby every one share of their common stock issued and outstanding was split into two and one-half shares of common stock, resulting in 20,000 Class A Shares of common stock issued and outstanding. On February 1, 2018, VEREIT OP transferred these 20,000 shares to CCI III Management and pursuant to the Company’s charter, CCI III Management is prohibited from selling the 20,000 shares of the common stock that represents the initial investment in the Company for so long as CCO Group remains the Company’s sponsor; provided, however, that CCI III Management may transfer ownership of all or a portion of these 20,000 shares of the Company’s common stock to other affiliates of the Company’s sponsor. Distribution Reinvestment Plan Pursuant to the DRIP, the Company allows stockholders to elect to have their distributions reinvested in additional shares of the Company’s common stock at the most recent estimated per share NAV. Distributions on Class A Shares are reinvested in Class A Shares and distributions on Class T Shares are reinvested in Class T Shares. The Board may terminate or amend the DRIP at the Company’s discretion at any time upon ten days’ prior written notice to the stockholders. During the years ended December 31, 2019 , 2018 and 2017 , approximately 76,000 , 63,000 and 20,000 shares, respectively, were purchased under the DRIP for $658,000 , $570,000 , and $180,000 , respectively, which were recorded as redeemable common stock on the consolidated balance sheets. Share Redemption Program The Company’s share redemption program permits its stockholders to sell their shares back to the Company after they have held them for at least one year, subject to the significant conditions and limitations described below. The share redemption program provides that the Company will redeem shares of its common stock from requesting stockholders, subject to the terms and conditions of the share redemption program. The Company will limit the number of shares redeemed pursuant to the share redemption program as follows: (1) the Company will not redeem in excess of 5% of the weighted average number of shares outstanding during the trailing 12 months prior to the end of the fiscal quarter for which the redemptions are being paid; and (2) funding for the redemption of shares will be limited, among other things to the net proceeds the Company receives from the sale of shares under the DRIP, net of shares redeemed to date. In an effort to accommodate redemption requests throughout the calendar year, the Company intends to limit quarterly redemptions to approximately 1.25% of the weighted average number of shares outstanding during the trailing 12-month period ending on the last day of the fiscal quarter, and funding for redemptions for each quarter generally will be limited to the net proceeds the Company receives from the sale of shares in the respective quarter under the DRIP. Except for redemptions due to a stockholder’s death, bankruptcy or other exigent circumstances, the redemption price per share will equal the per share value shown on the stockholder’s most recent customer account statement. The redemption price will be adjusted for any stock dividends, combinations, splits, recapitalizations and the like with respect to the Company’s common stock if any such event is not already reflected in the per share value shown on the stockholder’s most recent customer account statement. As a result of the Board’s determination of an estimated value of the Company’s shares of common stock, the estimated per share NAV of $7.60 for both Class A Shares and Class T Shares, as of December 31, 2019, will serve as the most recent estimated per share NAV for purposes of the share redemption program, effective March 30, 2020 , until such time as the Board determines a new estimated per share NAV. See the discussion of the estimated per share NAV of the Company’s common stock effective March 30, 2020 in Note 14 — Subsequent Events. Upon receipt of a request for redemption, the Company may conduct a Uniform Commercial Code search to ensure that no liens are held against the shares. If the Company cannot purchase all shares presented for redemption in any fiscal quarter, based upon insufficient cash available and/or the limit on the number of shares the Company may redeem during any quarter or year, the Company will give priority to the redemption of deceased stockholders’ shares. The Company next will give priority to requests for full redemption of accounts with a balance of 250 shares or less at the time the Company receives the request, in order to reduce the expense of maintaining small accounts. Thereafter, the Company will honor the remaining quarterly redemption requests on a pro rata basis. Following such quarterly redemption period, the unsatisfied portion of the prior redemption request must be resubmitted, prior to the last day of the new quarter. Unfulfilled requests for redemption will not be carried over automatically to subsequent redemption periods. The Company redeems shares no later than the end of the month following the end of each fiscal quarter. Requests for redemption must be received on or prior to the end of the fiscal quarter in order for the Company to repurchase the shares in the month following the end of that fiscal quarter. The Board may amend, suspend or terminate the share redemption program at any time upon 30 days’ notice to the stockholders. During the year ended December 31, 2019 and 2018 , the Company redeemed approximately 65,000 and 5,300 shares under the share redemption program for $560,000 and $48,000 , respectively. The Company did not redeem any shares during the years ended December 31, 2017 . Distributions Payable and Distribution Policy The Board authorized a daily distribution, based on 365 days in the calendar year, of $0.001369863 per Class A Share for stockholders of record as of the close of business on each day of the period commencing on April 1, 2019 and ending on December 31, 2019 . The Board authorized a daily distribution on Class T Shares for stockholders of record of such class of shares as of the close of business on each day commencing on April 1, 2019 and ending on December 31, 2019 , equal to $0.001369863 per Class T Share, less the per share distribution and stockholder servicing fees that are payable with respect to the Class T Shares (as calculated on a daily basis). In addition, the Board authorized a daily distribution, based on 366 days in the calendar year, of $0.001366120 per Class A Share for stockholders of record of such class of shares as of the close of business on each day of the period commencing on January 1, 2020 and ending on March 31, 2020. The Board authorized a daily distribution on Class T Shares to our stockholders of record of such class of shares as of the close of business on each day of the period commencing on January 1, 202 0 and ending on March 31, 2020, equal to $0.001366120 per Class T Share, less the per share distribution and stockholder servicing fees that are payable with respect to the Class T Shares (as calculated on a daily basis). As of December 31, 2019 , the Company had distributions payable of $132,000 . Subsequent to December 31, 2019 , the Board reaffirmed the declaration and payment of distributions for the month of March 2020 at the rate previously declared on November 6, 2019, which distributions will be paid on or around April 1, 2020. Given the impact of the novel strain of coronavirus (“COVID-19”) outbreak, the Board has decided to defer making a determination as to the amount and timing of distributions for the second quarter of 2020 until such time that the Company has greater visibility into the impact that the COVID-19 outbreak will have on the Company’s tenants’ ability to continue to pay rent on their leases on a timely basis or at all, the degree to which federal, state or local governmental authorities grant rent relief or other relief or amnesty programs applicable to the Company’s tenants, the Company’s ability to access the capital markets, and on the United States and worldwide financial markets and economy. Equity Based Compensation On August 9, 2018, the Board approved the adoption of the Cole Office & Industrial REIT (CCIT III), Inc. 2018 Equity Incentive Plan (the “Plan”), under which 400,000 of the Company’s common shares were reserved for issuance and share awards of 381,000 are available for future grant as of December 31, 2019 . As of December 31, 2019 , the Company has granted awards of approximately 6,000 restricted Class A Shares to each of the independent members of the Board (approximately 19,000 restricted shares in aggregate) under the Plan. As of December 31, 2019 , 9,000 of the restricted Class A Shares had vested based on one year of continuous service. The remaining 10,000 sha res issued had not vested or been forfeited as of December 31, 2019 . The fair value of the Company’s share awards is determined using the Company’s NAV per share on the date of grant. Compensation expense related to these restricted Class A Shares is recognized over the vesting period. The Company recorded compensation expense of $82,000 and $21,000 for the years ended December 31, 2019 and 2018 , respectively related to these restricted Class A Shares, which is included in general and administrative expenses in the accompanying consolidated statements of operations. As of December 31, 2019 , there was $62,000 of total unrecognized compensation expense related to the restricted Class A Shares issued in 2019, which will be recognized ratably over the remaining period of service prior to October 1, 2020. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 11 — INCOME TAXES For federal income tax purposes, distributions to stockholders are characterized as ordinary dividends, capital gain distributions, or nondividend distributions. Nondividend distributions will reduce U.S stockholders’ basis (but not below zero) in their shares. The following table shows the character of the distributions paid on a percentage basis for the years ended December 31, 2019 , 2018 and 2017 : Year Ended December 31, Character of Distributions: 2019 2018 2017 Ordinary dividends 28 % — % — % Nondividend distributions 72 % 100 % 100 % Total 100 % 100 % 100 % During the years ended December 31, 2019 , 2018 and 2017 , the Company incurred state and local income and franchise taxes of $9,700 , $6,500 and $2,500 , respectively, which were recorded in general and administrative expenses in the consolidated statements of operations. The Company had no unrecognized tax benefits as of or during the years ended December 31, 2019 , 2018 and 2017 . Any interest and penalties related to unrecognized tax benefits would be recognized within the provision for income taxes in the accompanying consolidated statements of operations. The Company files income tax returns in the U.S. federal jurisdiction, as well as various state and local jurisdictions, and is subject to routine examinations by the respective tax authorities. |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
LEASES | NOTE 12 — LEASES The Company’s real estate assets are leased to tenants under operating leases for which the terms, expirations and extension options vary. The Company’s operating leases do not convey to the lessee the right to purchase the underlying asset upon expiration of the lease period. To determine whether a contract contains a lease, the Company reviews contracts to determine if the agreement conveys the right to control the use of an asset. The Company adopted ASC 842 using the optional alternative transition method and used the effective date as the date of initial application. Consequently, financial information was not updated and the disclosures required under the new standard are not provided for dates and periods before January 1, 2019. The Company elected the “package of practical expedients,” which permits the Company to not reassess under the new standard prior conclusions about lease identification, lease classification and initial direct costs. The Company elected to apply the practical expedient for all of the Company’s leases to account for the lease and non-lease components as a single, combined operating lease component under ASC 842. Non-lease components primarily consist of maintenance services, including CAM, real estate taxes, insurance and utilities paid for by the lessor but consumed by the lessee. Non-lease components are considered to be variable rental and other property income and are recognized in the period incurred. As of December 31, 2019 , the leases had a weighted-average remaining term of 8.7 years . Certain leases include provisions to extend the lease agreements, options for early termination after paying a specified penalty, rights of first refusal to purchase the property at competitive market rates, and other negotiated terms and conditions. The Company retains substantially all of the risks and benefits of ownership of the real estate assets leased to tenants. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. As of December 31, 2019 , the future minimum rental income from the Company’s real estate assets under non-cancelable operating leases, assuming no exercise of renewal options, for the succeeding five fiscal years and thereafter, was as follows: Year Ending December 31, Future Minimum Rental Income 2020 $ 3,878,462 2021 3,756,969 2022 3,829,450 2023 3,903,333 2024 3,978,647 Thereafter 14,902,467 Total $ 34,249,328 As previously disclosed in our 2018 Annual Report on Form 10-K and under the previous lease accounting standard, Topic 840, the following table summarizes the future minimum rental income from the Company’s real estate assets under non-cancelable operating leases, assuming no exercise of renewal options for the succeeding five fiscal years and thereafter, as of December 31, 2018: Year Ending December 31, Future Minimum Rental Income 2019 $ 3,808,708 2020 3,878,462 2021 3,756,969 2022 3,829,450 2023 3,903,333 Thereafter 18,881,112 Total $ 38,058,034 Rental and other property income during the years ended December 31, 2019, 2018 and 2017 consisted of the following: Year Ended December 31, 2019 2018 2017 Fixed rental and other property income (1) $ 3,888,009 $ 3,888,009 $ 2,880,032 Variable rental and other property income (2) 579,374 518,366 1,224,565 Total rental and other property income $ 4,467,383 $ 4,406,375 $ 4,104,597 ______________________ (1) Consists primarily of fixed contractual payments from operating leases with tenants recognized on a straight-line basis over the lease term, including amortization of acquired above-market leases. (2) Consists primarily of tenant reimbursements for recoverable real estate taxes and property operating expenses. |
QUARTERLY RESULTS (UNAUDITED)
QUARTERLY RESULTS (UNAUDITED) | 12 Months Ended |
Dec. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
QUARTERLY RESULTS (UNAUDITED) | NOTE 13 — QUARTERLY RESULTS (UNAUDITED) Presented below is a summary of the unaudited quarterly financial information for the years ended December 31, 2019 and 2018 . In the opinion of management, the information for the interim periods presented includes all adjustments, which are of a normal and recurring nature, necessary to present a fair presentation of the results for each period. December 31, 2019 First Quarter Second Quarter Third Quarter Fourth Quarter Revenues $ 1,135,875 $ 1,104,195 $ 1,113,311 $ 1,114,002 Net (loss) income $ (209,262 ) $ (140,946 ) $ (157,856 ) $ 20,382 Basic and diluted net (loss) income per share - Class A common stock (1) $ (0.06 ) $ (0.04 ) $ (0.04 ) $ 0.03 Basic and diluted net loss per share - Class T common stock (1) $ (0.08 ) $ (0.06 ) $ (0.06 ) $ (0.07 ) ____________________________________ (1) The Company calculates net loss per share based on the weighted-average number of outstanding shares of common stock during the reporting period. The average number of shares fluctuates throughout the year and can therefore produce a full year result that does not agree to the sum of the individual quarters. December 31, 2018 First Quarter Second Quarter Third Quarter Fourth Quarter Revenues $ 1,101,694 $ 1,101,667 $ 1,101,666 $ 1,101,348 Net loss $ (192,338 ) $ (206,504 ) $ (183,344 ) $ (189,526 ) Basic and diluted net loss per share - Class A common stock (1) $ (0.08 ) $ (0.08 ) $ (0.06 ) $ (0.06 ) Basic and diluted net loss per share - Class T common stock (1) $ (0.10 ) $ (0.10 ) $ (0.08 ) $ (0.08 ) ____________________________________ (1) The Company calculates net loss per share based on the weighted-average number of outstanding shares of common stock during the reporting period. The average number of shares fluctuates throughout the year and can therefore produce a full year result that does not agree to the sum of the individual quarters. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2019 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 14 — SUBSEQUENT EVENTS Subsequent to December 31, 2019, there was a global outbreak of COVID-19. The global and domestic response to the COVID-19 outbreak continues to rapidly evolve. Thus far, certain responses to the COVID-19 outbreak have included mandates from federal, state and/or local authorities that required temporary closure of or imposed limitations on the operations of certain non-essential businesses. The COVID-19 outbreak and associated responses could negatively impact future tenant sales and operations at the Company’s properties, which could result in material impact to the Company’s future results of operations, cash flows and financial condition. The Company is unable to estimate the impact the novel coronavirus will have on its financial results at this time. Redemption of Shares of Common Stock Subsequent to December 31, 2019 , the Company redeemed approximately 17,000 shares pursuant to the Company’s share redemption program for $142,000 (at an average price per share of $8.60 ). Management, in its discretion, limited the amount of shares redeemed for the three months ended December 31, 2019 to an amount equal to the net proceeds the Company received from the sale of shares in the DRIP Offering during the respective period. The remaining redemption requests received during the three months ended December 31, 2019 totaling approximately 228,000 shares went unfulfilled. Estimated Per Share NAV On March 25, 2020 , the Board established an updated estimated per share NAV of the Company’s common stock as of December 31, 2019 , of $7.60 per share for both Class A Shares and Class T Shares. Commencing on March 30, 2020 , distributions will be reinvested in shares of the Company’s common stock under the DRIP at a price of $7.60 per share for both Class A Shares and Class T Shares. Distributions on Class A Shares are reinvested in Class A Shares and distributions on Class T Shares are reinvested in Class T Shares. Pursuant to the terms of the Company’s share redemption program, commencing on March 30, 2020 , the estimated per share NAV of $7.60 for both Class A Shares and Class T Shares, as of December 31, 2019 , will serve as the most recent estimated value for purposes of the share redemption program, until such time as the Board determines a new estimated per share NAV. CCI III Management Expense Reimbursement The Company reimburses CCI III Management or its affiliates for the operating expenses they paid or incurred in connection with advisory and administrative services provided to the Company, subject to the limitation that the Company will not reimburse CCI III Management or its affiliates for any amount by which the operating expenses (including the advisory fee) at the end of the four preceding fiscal quarters exceed the greater of (i) 2.0% of average invested assets, or (ii) 25.0% of net income, excluding any additions to reserves for depreciation, bad debts or other similar non-cash reserves and excluding any gain from the sale of assets for that period. As of December 31, 2019 , $961,000 of advisory fees exceeded such expense limit. CCI III Management waived its right to receive these amounts for the years ended December 31, 2019 , 2018, 2017 and 2016. Accordingly, the Company did not reimburse CCI III Management for any such expenses for the years ended December 31, 2019 , 2018, 2017 and 2016. Additionally, CCI III Management waived its right to receive a monthly advisory fee during the year ended December 31, 2020. |
SCHEDULE III _ REAL ESTATE ASSE
SCHEDULE III — REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION | 12 Months Ended |
Dec. 31, 2019 | |
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation Disclosure [Abstract] | |
SCHEDULE III - REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION | SCHEDULE III — REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION Gross Amount at Initial Costs to Company Total Which Carried Accumulated Buildings & Adjustment At December 31, 2019 Depreciation Date Date Description (a) Encumbrances Land Improvements to Basis (b) (c) (d) (e) (f) Acquired Constructed Real Estate Held for Investment: Siemens Milford, OH (g) $ 2,307,312 $ 26,971,327 $ — $ 29,278,639 $ 3,525,094 9/23/2016 1991 Actuant Columbus, WI (g) 937,691 14,287,443 — 15,225,134 803,848 11/6/2017 2014 TOTAL: $ — $ 3,245,003 $ 41,258,770 $ — $ 44,503,773 $ 4,328,942 ____________________________________ (a) As of December 31, 2019 , the Company owned one office property and one industrial property. (b) Gross intangible lease assets of $5.1 million and the associated accumulated amortization of $1.4 million are not reflected in the table above. (c) The aggregate cost for federal income tax purposes was $45.3 million . (d) The following is a reconciliation of total real estate carrying value for the years ended December 31, 2019 , 2018 and 2017 : Year Ended December 31, 2019 2018 2017 Balance, beginning of period $ 44,503,773 $ 44,503,773 $ 29,278,639 Additions Acquisitions — — 15,225,134 Improvements — — — Total additions — — 15,225,134 Deductions — — — Cost of real estate sold — — — Total deductions — — — Balance, end of period $ 44,503,773 $ 44,503,773 $ 44,503,773 (e) The following is a reconciliation of accumulated depreciation for the years ended December 31, 2019 , 2018 and 2017 : Year Ended December 31, 2019 2018 2017 Balance, beginning of period $ 2,879,746 $ 1,430,550 $ 312,350 Additions Acquisitions - Depreciation Expense for Building & Tenant Improvements Acquired 1,449,196 1,449,196 1,118,200 Improvements - Depreciation Expense for Tenant Improvements & Building Equipment — — — Total additions 1,449,196 1,449,196 1,118,200 Deductions — — — Cost of real estate sold — — — Total deductions — — — Balance, end of period $ 4,328,942 $ 2,879,746 $ 1,430,550 (f) The Company’s assets are depreciated or amortized using the straight-line method over the useful lives of the assets by class. Generally, buildings are depreciated over 40 years, site improvements are amortized over 15 years, and tenant improvements are amortized over the remaining life of the lease or the useful life, whichever is shorter. (g) Part of the Credit Facility’s unencumbered borrowing base. As of December 31, 2019 , the Company had $24.2 million outstanding under the Credit Facility. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | The summary of significant accounting policies presented below is designed to assist in understanding the Company’s consolidated financial statements. These accounting policies conform to accounting principles generally accepted in the United States of America (“GAAP”) in all material respects, and have been consistently applied in preparing the accompanying consolidated financial statements. |
Principles of Consolidation and Basis of Presentation | Principles of Consolidation and Basis of Presentation The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. |
Reclassifications | Reclassifications Certain amounts in the Company’s prior period consolidated financial statements have been reclassified to conform to the current period presentation. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Real Estate Assets, Recoverability of Real Estate Assets, and Assets Held for Sale | Real Estate Assets Real estate assets are stated at cost, less accumulated depreciation and amortization. The Company considers the period of future benefit of each respective asset to determine the appropriate useful life. The estimated useful lives of the Company’s real estate assets by class are generally as follows: Buildings 40 years Site improvements 15 years Tenant improvements Lesser of useful life or lease term Intangible lease assets Lease term Recoverability of Real Estate Assets The Company continually monitors events and changes in circumstances that could indicate that the carrying amounts of its real estate assets may not be recoverable. Impairment indicators that the Company considers include, but are not limited to: bankruptcy or other credit concerns of a property’s major tenant, such as a history of late payments, rental concessions and other factors; a significant decrease in a property’s revenues due to lease terminations; vacancies; co-tenancy clauses; reduced lease rates; changes in anticipated holding periods; or other circumstances. When indicators of potential impairment are present, the Company assesses the recoverability of the assets by determining whether the carrying amount of the assets will be recovered through the undiscounted future cash flows expected from the use of the assets and their eventual disposition. In the event that such expected undiscounted future cash flows do not exceed the carrying amount, the Company will adjust the real estate assets to their respective fair values and recognize an impairment loss. Generally, fair value will be determined using a discounted cash flow analysis and recent comparable sales transactions . No impairment indicators were identified and no impairment losses were recorded during the years ended December 31, 2019 , 2018 or 2017 . Assets Held for Sale When a real estate asset is identified by the Company as held for sale, the Company will cease recording depreciation and amortization of the assets related to the property and estimate its fair value, net of selling costs. If, in management’s opinion, the fair value, net of selling costs, of the asset is less than the carrying amount of the asset, an adjustment to the carrying amount is then recorded to reflect the estimated fair value of the property, net of selling costs. |
Allocation of Purchase Price of Real Estate Assets | Allocation of Purchase Price of Real Estate Assets Upon the acquisition of real properties, the Company allocates the purchase price to acquired tangible assets, consisting of land, buildings and improvements, and to identified intangible assets and liabilities, consisting of the value of above- and below-market leases and the value of in-place leases and other intangibles, based in each case on their relative fair values. The Company utilizes independent appraisals to assist in the determination of the fair values of the tangible assets of an acquired property (which includes land and buildings). The information in the appraisal, along with any additional information available to the Company’s management, is used in estimating the amount of the purchase price that is allocated to land. Other information in the appraisal, such as building value and market rents, may be used by the Company’s management in estimating the allocation of purchase price to the building and to intangible lease assets and liabilities. The appraisal firm has no involvement in management’s allocation decisions other than providing this market information. The fair values of above- and below-market lease intangibles are recorded based on the present value (using a discount rate which reflects the risks associated with the leases acquired) of the difference between (1) the contractual amounts to be paid pursuant to the in-place leases and (2) an estimate of fair market lease rates for the corresponding in-place leases, which is generally obtained from independent appraisals, measured over a period equal to the remaining non-cancelable term of the lease including, for below-market leases, any bargain renewal periods. The above- and below-market lease intangibles are capitalized as intangible lease assets or liabilities, respectively. Above-market leases are amortized as a reduction to rental income over the remaining terms of the respective leases. Below-market leases are amortized as an increase to rental income over the remaining terms of the respective leases, including any bargain renewal periods. In considering whether or not the Company expects a tenant to execute a bargain renewal option, the Company evaluates economic factors and certain qualitative factors at the time of acquisition, such as the financial strength of the tenant, the remaining lease term, the tenant mix of the leased property, the Company’s relationship with the tenant and the availability of competing tenant space. If a lease were to be terminated prior to its stated expiration, all unamortized amounts of above- or below-market lease intangibles relating to that lease would be recorded as an adjustment to rental income. The fair values of in-place leases include estimates of direct costs associated with obtaining a new tenant and opportunity costs associated with lost rental and other property income which are avoided by acquiring a property with an in-place lease. Direct costs associated with obtaining a new tenant include leasing commissions, legal and other related expenses, and are estimated in part by utilizing information obtained from independent appraisals and management’s consideration of current market costs to execute a similar lease. The intangible values of opportunity costs, which are calculated using the contractual amounts to be paid pursuant to the in-place leases over a market absorption period for a similar lease, are capitalized as intangible lease assets and are amortized to expense over the remaining term of the respective leases. If a lease were to be terminated prior to its stated expiration, all unamortized amounts of in-place lease assets relating to that lease would be expensed. The Company may acquire certain properties subject to contingent consideration arrangements that may obligate the Company to pay additional consideration to the seller based on the outcome of future events. Additionally, the Company may acquire certain properties for which it funds certain contingent consideration amounts into an escrow account pending the outcome of certain future events. The outcome may result in the release of all or a portion of the escrow funds to the Company or the seller or a combination thereof. Upon adoption of ASU 2017-01 (as defined below) in April 2017, contingent consideration arrangements for asset acquisitions are recognized when the contingency is resolved. The determination of the amount of contingent consideration arrangements is based on the probability of several possible outcomes as identified by management. The Company estimates the fair value of assumed mortgage notes payable based upon indications of current market pricing for similar types of debt financing with similar maturities. Assumed mortgage notes payable will initially be recorded at their estimated fair value as of the assumption date, and any difference between such estimated fair value and the mortgage note’s outstanding principal balance will be amortized or accreted to interest expense over the term of the respective mortgage note payable. The determination of the fair values of the real estate assets and liabilities acquired requires the use of significant assumptions with regard to the current market rental rates, rental growth rates, capitalization and discount rates, interest rates and other variables. The use of alternative estimates may result in a different allocation of the Company’s purchase price, which could materially impact the Company’s results of operations. In April 2017, the Company elected to early adopt Accounting Standards Update (“ASU”) No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business (“ASU 2017-01”), which clarifies the definition of a business by adding guidance to assist entities in evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. Beginning in April 2017, all real estate acquisitions qualified as asset acquisitions, and as such, acquisition-related fees and certain acquisition-related expenses related to these asset acquisitions are now capitalized and allocated to tangible and intangible assets and liabilities as described above. Other acquisition-related expenses, such as advisor reimbursements, continue to be expensed as incurred and are included in transaction-related expenses in the accompanying consolidated statements of operations. Prior to the adoption of ASU 2017-01 in April 2017, all of the Company’s real estate acquisitions were accounted for as business combinations, and as such, acquisition-related expenses related to these business combination acquisitions were expensed as incurred. Prior to April 2017, acquisition-related expenses included within transaction-related expenses in the Company’s consolidated statements of operations primarily consisted of legal, deed transfer and other costs related to real estate purchase transactions, including costs incurred for deals that were not consummated. The Company expects any future acquisitions to qualify as asset acquisitions and, as such, the Company will allocate the purchase price to acquired tangible assets and identified intangible assets and liabilities on a relative fair value basis. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents includes cash in bank accounts. The Company deposits cash with several high quality financial institutions. These deposits are guaranteed by the Federal Deposit Insurance Company (“FDIC”) up to an insurance limit of $250,000. At times, the Company’s cash and cash equivalents may exceed federally insured levels. Although the Company bears risk on amounts in excess of those insured by the FDIC, it has not experienced and does not anticipate any losses due to the high quality of the institutions where the deposits are held. |
Deferred Financing Costs | Deferred Financing Costs Deferred financing costs represent commitment fees, legal fees and other costs associated with obtaining commitments for financing. These costs are amortized to interest expense over the terms of the respective financing agreements using the straight-line method, which approximates the effective interest method. Unamortized deferred financing costs are written off when the associated debt is extinguished or repaid prior to maturity. The presentation of all deferred financing costs, other than those associated with the revolving loan portion of the credit facility, are classified such that the debt issuance costs related to a recognized debt liability are presented on the consolidated balance sheets as a direct deduction from the carrying amount of the related debt liability rather than as an asset. Debt issuance costs related to securing the Company’s revolving line of credit are presented as an asset and amortized ratably over the term of the line of credit arrangement. The Company’s total deferred costs, net in the accompanying consolidated balance sheets relate only to the revolving loan portion of the Credit Facility (as defined in Note 6 — Credit Facility ). As of December 31, 2019 and 2018 , the Company had $57,000 and $407,000 , respectively, of deferred financing costs, net of accumulated amortization, related to the revolving loan portion of the Credit Facility. Costs incurred in seeking financing transactions that do not close are expensed in the period in which it is determined the financing will not close. |
Distribution and Stockholder Servicing Fees | Distribution and Stockholder Servicing Fees The Company pays CCO Capital a distribution and stockholder servicing fee for Class T Shares sold in the primary portion of the Offering which is calculated on a daily basis in an amount equal to 1/365th of 1.0% of the per share NAV. The aggregate distribution and stockholder servicing fee for Class T Shares will not exceed an amount equal to 4.0% of the total gross offering proceeds of Class T Shares sold in the primary portion of the Offering. The Company will cease paying the distribution and stockholder servicing fee with respect to Class T Shares sold in the Offering at the earliest of: (i) the end of the month in which the transfer agent, on the Company’s behalf, determines that total distribution and stockholder servicing fees paid by a stockholder within his or her individual account would be equal to 4.0% of the stockholder’s total gross investment amount at the time of the purchase of the primary Class T Shares held in such account, or a lower limit agreed upon between the Company’s dealer manager and the participating broker-dealer at the time such Class T Shares were sold; (ii) the date on which the aggregate underwriting compensation from all sources equals 10.0% of the gross offering proceeds (i.e., excluding proceeds from sales pursuant to the DRIP); (iii) the fourth anniversary of the last day of the month in which the Offering (excluding the offering of shares pursuant to the DRIP) terminates; (iv) the date such Class T Share is no longer outstanding; and (v) the date the Company effects a liquidity event (such as the sale of the Company, the sale of all or substantially all of the Company’s assets, a merger or similar transaction, the listing of the Company’s shares of common stock for trading on a national securities exchange or an alternative strategy that would result in a significant increase in the opportunities for stockholders to dispose of their shares). CCO Capital may, in its discretion, reallow to participating broker-dealers all or a portion of the distribution and stockholder servicing fee. At the time the Company ceases paying the distribution and stockholder servicing fee with respect to an outstanding Class T Share pursuant to the provisions above, such Class T Share will convert into a number of Class A Shares (including any fractional shares) with an equivalent net asset value as such share. The distribution and stockholder servicing fee is paid monthly in arrears. An estimated liability for future distribution and stockholder servicing fees payable to CCO Capital was recognized at the time each Class T Share was sold and included in due to affiliates in the consolidated balance sheets with a corresponding decrease to capital in excess of par value. |
Due to Affiliates | Due to Affiliates Certain affiliates of CCI III Management received, and will continue to receive, fees, reimbursements and compensation in connection with services provided relating to the Offerings and the acquisition, management, financing and leasing of the Company’s assets. |
Redeemable Common Stock | Redeemable Common Stock Under the Company’s share redemption program, the Company’s obligation to redeem shares of its outstanding common stock is limited, among other things, to the net proceeds received by the Company from the sale of shares under the DRIP during the quarter, net of shares redeemed. The Company records the maximum amount that is redeemable under the share redemption program as redeemable common stock outside of permanent equity in its consolidated balance sheets. Changes in the amount of redeemable common stock from period to period are recorded as an adjustment to capital in excess of par value. |
Leases and Revenue Recognition | Leases The Company adopted ASU No. 2016-02, Leases (Topic 842) (“ASC 842”), on January 1, 2019 using the optional alternative transition method for financial information and related disclosures. The Company elected the “package of practical expedients,” which permits the Company to not reassess under the new standard prior conclusions about lease identification, lease classification and initial direct costs. The Company has lease agreements with lease and non-lease components. The Company has elected to not separate non-lease components from lease components for all classes of underlying assets (primarily real estate assets) and will account for the combined components as rental and other property income. Non-lease components included in rental and other property income include certain tenant reimbursements for maintenance services (including common-area maintenance services or “CAM”), real estate taxes, insurance and utilities paid for by the lessor but consumed by the lessee. As a lessor, the Company has further determined that this policy will be effective only on a lease that has been classified as an operating lease and the revenue recognition pattern and timing is the same for both types of components. The Company is not a party to any material leases where it is the lessee. Significant judgments and assumptions are inherent in not only determining if a contract contains a lease, but also the lease classification, terms, payments, and, if needed, discount rates. Judgments include the nature of any options, including if they will be exercised, evaluation of implicit discount rates and the assessment and consideration of “fixed” payments for straight-line rent revenue calculations. Lease costs represent the initial direct costs incurred in the origination, negotiation and processing of a lease agreement. Such costs include outside broker commissions and other independent third-party costs and are amortized over the life of the lease on a straight-line basis. Costs related to salaries and benefits, supervision, administration, unsuccessful origination efforts and other activities not directly related to completed lease agreements are expensed as incurred. Leasing commissions subsequent to successful lease execution are capitalized. Revenue Recognition Rental and other property income is primarily derived from fixed contractual payments from operating leases and, therefore, is generally recognized on a straight-line basis over the term of the lease, which typically begins the date the tenant takes control of the space. When the Company acquires a property, the terms of existing leases are considered to commence as of the acquisition date for the purpose of this calculation. Variable rental and other property income consists primarily of tenant reimbursements for recoverable real estate taxes and operating expenses which are included in rental and other property income in the period when such costs are incurred, with offsetting expenses in real estate taxes and property operating expenses, respectively, within the consolidated statements of operations. The Company defers the recognition of variable rental and other property income, such as percentage rents, until the specific target that triggers the contingent rental income is achieved. The Company continually reviews whether collection of lease-related receivables, including any straight-line rent, and current and future operating expense reimbursements from tenants are probable. The determination of whether collectability is probable takes into consideration the tenant’s payment history, the financial condition of the tenant, business conditions in the industry in which the tenant operates and economic conditions in the area in which the property is located. Upon the determination that the collectability of a receivable is not probable, the Company will record a reduction to rental and other property income for amounts previously recorded and a decrease in the outstanding receivable. Revenue from leases where collection is deemed to be less than probable is recorded on a cash basis until collectability becomes probable. Management’s estimate of the collectability of lease-related receivables is based on the best information available to management. The Company does not use a general reserve approach and lease-related receivables are adjusted and taken against rental and other property income only when collectability becomes not probable. |
Income Taxes | Income Taxes The Company elected to be taxed, and currently qualifies, as a REIT for federal income tax purposes under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), beginning with its taxable year ended December 31, 2017. The Company will generally not be subject to federal corporate income tax to the extent it distributes its taxable income to its stockholders, and so long as it, among other things, distributes at least 90% of its annual taxable income (computed without regard to the dividends paid deduction and excluding net capital gains). REITs are subject to a number of other organizational and operational requirements. Even if the Company maintains its qualification for taxation as a REIT, it or its subsidiaries may be subject to certain state and local taxes on its income and property, and federal income and excise taxes on its undistributed income. For the period from May 22, 2014 (date of inception) to December 31, 2016, the Company did not meet all of the criteria to qualify as a REIT under the Internal Revenue Code. Specifically, the Company did not have enough stockholders for a sufficient number of days in 2016. As such, the Company was taxable as a C Corporation for the taxable year ended December 31, 2016, and was subject to regular taxes on its income for such period. However, the Company incurred a taxable loss for the period ending December 31, 2016, and as such, there was no federal income tax liability for this period. |
Net Loss and Distributions Per Share | Net Loss and Distributions Per Share The Company has two classes of common stock. Accordingly, the Company utilizes the two-class method to determine its earnings per share, which can result in different earnings per share for each of the classes. Under the two-class method, earnings per share of each class of common stock are computed by dividing the sum of the distributed earnings to common stockholders and undistributed earnings allocated to common stockholders by the weighted average number of shares for each class of common stock for the respective period. The distributed earnings to Class T Share common stockholders represents distributions declared less the distribution and stockholder servicing fees paid with respect to Class T Shares sold in the primary portion of the Offering. Diluted income per share, when applicable, considers the effect of any potentially dilutive share equivalents, of which the Company had none for each of the years ended December 31, 2019 , 2018 or 2017 . Distributions per share are calculated based on the authorized daily distribution rate. |
Offering and Related Costs | Offering and Related Costs CCI III Management funds all of the organization and offering costs on the Company’s behalf (excluding selling commissions, dealer manager fees and distribution and stockholder servicing fees) and may be reimbursed for such costs up to 1.0% of the gross proceeds from the Offering. As of December 31, 2019 , CCI III Management had paid organization and offering costs in excess of 1.0% of the gross proceeds from the Offering. These excess costs were not included in the financial statements of the Company because such costs were not a liability of the Company as they exceeded 1.0% of the aggregate gross proceeds from the Offering. The Company expenses organization costs as incurred and records offering costs, which include items such as legal and accounting fees, marketing, personnel, promotional and printing costs, as a reduction of capital in excess of par value along with selling commissions, and dealer manager fees in the period in which they become payable. |
Reportable Segment | Reportable Segment The Company’s commercial real estate assets consist primarily of single-tenant, income-producing necessity office and industrial properties, which are leased to creditworthy tenants under a long-term net leases. The commercial properties are geographically diversified throughout the United States and have similar economic characteristics. The Company’s management evaluates operating performance on an overall portfolio level; therefore, the Company’s properties are one reportable segment. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements From time to time, new accounting pronouncements are issued by various standard setting bodies that may have an impact on the Company’s accounting and reporting. Except as otherwise stated below, the Company is currently evaluating the effect that certain new accounting requirements may have on the Company’s accounting and related reporting and disclosures in the Company’s consolidated financial statements. In June 2016, the Financial Accounting Standards Board (the “FASB”) issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326) (“ASU 2016-13”), which was subsequently amended by ASU No. 2018-19, Codification Improvements to Topic 326, Financial Instruments - Credit Losses (“ASU 2018-19”), in November 2018. Subsequently, the FASB issued ASU No. 2019-04, ASU No. 2019-05, ASU No. 2019-10 and ASU No. 2019-11 to provide additional guidance on the credit losses standard. ASU 2016-13 and the related updates are intended to improve financial reporting requiring more timely recognition of credit losses on loans and other financial instruments that are not accounted for at fair value through net income, including loans held for investment, held-to-maturity debt securities, net investment in leases and other such commitments. ASU 2016-13 requires that financial assets measured at amortized cost be presented at the net amount expected to be collected, through an allowance for credit losses that is deducted from the amortized cost basis. The amendments in ASU 2016-13 require the Company to measure all expected credit losses based upon historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the financial assets and eliminates the “incurred loss” methodology under current GAAP. ASU 2018-19 clarified that receivables arising from operating leases are not within the scope of Topic 326. Instead, impairment of receivables arising from operating leases should be accounted for in accordance with Topic 842, Leases. ASU 2016-13 and ASU 2018-19 are effective for fiscal years, and interim periods within those years, beginning after December 15, 2019. Early adoption is permitted for fiscal years, and interim periods within those years, beginning after December 15, 2018. The Company will adopt this ASU during the first quarter of fiscal year 2020 and does not expect it will have a material impact on its consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-13, Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”). This ASU amends and removes several disclosure requirements including the valuation processes for Level 3 fair value measurements. ASU 2018-13 also modifies some disclosure requirements and requires additional disclosures for changes in unrealized gains and losses included in other comprehensive income for recurring Level 3 fair value measurements and requires the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. The provisions of ASU 2018-13 are effective January 1, 2020 using a prospective transition method for amendments effecting changes in unrealized gains and losses, significant unobservable inputs used to develop Level 3 fair value measurements and narrative description on uncertainty of measurements. The remaining provisions of ASU 2018-13 are to be applied retrospectively, and early adoption is permitted. The Company will adopt this ASU during the first quarter of fiscal year 2020 and does not expect it will have a material impact on its consolidated financial statements. In October 2018, the FASB issued ASU 2018-17, Consolidation (Topic 810): Targeted Improvements to Related Party Guidance for Variable Interest Entities . The guidance changes the guidance for determining whether a decision-making fee is a variable interest. Under the new ASU, indirect interests held through related parties under common control will now be considered on a proportional basis when determining whether fees paid to decision makers and service providers are variable interests. Such indirect interests were previously treated the same as direct interests. This ASU is effective for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years. The Company is evaluating the impact of this ASU’s adoption, and does not believe this ASU will have a material impact on its consolidated financial statements. |
Fair Value Measurement | Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions. Depending on the nature of the asset or liability, various techniques and assumptions can be used to estimate the fair value. Assets and liabilities are measured using inputs from three levels of the fair value hierarchy, as follows: Level 1 — Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. An active market is defined as a market in which transactions for the assets or liabilities occur with sufficient frequency and volume to provide pricing information on an ongoing basis. Level 2 — Inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active (markets with few transactions), inputs other than quoted prices that are observable for the asset or liability (i.e., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data correlation or other means (market corroborated inputs). Level 3 — Unobservable inputs, which are only used to the extent that observable inputs are not available, reflect the Company’s assumptions about the pricing of an asset or liability. |
Fair Value of Financial Instruments | The following describes the methods the Company uses to estimate the fair value of the Company’s financial assets and liabilities: Credit facility — The fair value is estimated by discounting the expected cash flows based on estimated borrowing rates available to the Company as of the measurement date. These financial instruments are valued using Level 2 inputs. Other financial instruments — The Company considers the carrying values of its cash and cash equivalents, tenant receivables, accrued expenses and accounts payable, other liabilities, due to affiliates and distributions payable to approximate their fair values because of the short period of time between their origination and their expected realization as well as their highly-liquid nature. Due to the short-term maturities of these instruments, Level 1 inputs are utilized to estimate the fair value of these financial instruments. Considerable judgment is necessary to develop estimated fair values of financial assets and liabilities. Accordingly, the estimates presented herein are not necessarily indicative of the amounts the Company could realize, or be liable for, upon disposition of the financial assets and liabilities. |
Environmental Matters | Environmental Matters In connection with the ownership and operation of real estate, the Company may potentially be liable for costs and damages related to environmental matters. In addition, the Company may own or acquire certain properties that are subject to environmental remediation. Generally, the seller of the property, the tenant of the property and/or another third party is responsible for environmental remediation costs related to a property. Additionally, in connection with the purchase of certain properties, the respective sellers and/or tenants may agree to indemnify the Company against future remediation costs. The Company also carries environmental liability insurance on its properties that provides limited coverage for any remediation liability and/or pollution liability for third-party bodily injury and/or property damage claims for which the Company may be liable. The Company is not aware of any environmental matters which it believes are reasonably likely to have a material effect on its results of operations, financial condition or liquidity. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Investment in and valuation of real estate | The estimated useful lives of the Company’s real estate assets by class are generally as follows: Buildings 40 years Site improvements 15 years Tenant improvements Lesser of useful life or lease term Intangible lease assets Lease term |
REAL ESTATE ASSETS (Tables)
REAL ESTATE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Real Estate [Abstract] | |
Schedule of purchase price allocation | The Company allocated the purchase price of this property to the fair value of the assets acquired. The following table summarizes the purchase price allocation for the 2017 Acquisition: December 31, 2017 Land $ 937,691 Buildings and improvements 14,287,443 Acquired in-place lease (1) 1,630,071 Total purchase price $ 16,855,205 ______________________ (1) The weighted average amortization period for the acquired in-place lease was 16.2 years for the 2017 Acquisition. |
INTANGIBLE LEASE ASSETS (Tables
INTANGIBLE LEASE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of finite-lived intangible asset | The Company’s intangible lease assets consisted of the following as of December 31, 2019 and 2018 : As of December 31, 2019 2018 In-place leases, net of accumulated amortization of $1,406,599 and $943,541, respectively (with a weighted average life remaining of 8.8 years and 9.8 years, respectively) $ 3,694,833 $ 4,157,891 |
Schedule of finite-lived intangible assets amortization expense | The following table summarizes the amortization related to the in-place lease assets for the years ended December 31, 2019 , 2018 and 2017 : Year Ended December 31, 2019 2018 2017 In-place lease amortization $ 463,058 $ 463,058 $ 374,832 |
Schedule of finite-lived intangible assets, future amortization expense | The following table summarizes the estimated amortization relating to the intangible lease assets subsequent to December 31, 2019 : Amortization Year ending December 31, In-Place Leases 2020 $ 463,058 2021 463,058 2022 463,058 2023 463,058 2024 463,058 Thereafter 1,379,543 Total $ 3,694,833 |
CREDIT FACILITY (Tables)
CREDIT FACILITY (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of debt | The following table summarizes the debt balances as of December 31, 2019 and 2018 , respectively, and the debt activity for the year ended December 31, 2019 : During the Year Ended December 31, 2019 Balance as of Debt Issuance Repayments Balance as of Credit facility $ 24,175,000 $ — $ — $ 24,175,000 Total debt $ 24,175,000 $ — $ — $ 24,175,000 |
Schedule of aggregate principal repayments | The following table summarizes the scheduled aggregate principal repayments for the Company’s outstanding debt subsequent to December 31, 2019 : Principal Repayments 2020 $ 24,175,000 2021 — 2022 — 2023 — 2024 — Thereafter — Total $ 24,175,000 |
RELATED-PARTY TRANSACTIONS AN_2
RELATED-PARTY TRANSACTIONS AND ARRANGEMENTS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Related Party Transactions [Abstract] | |
Schedule of related party transactions | The Company incurred commissions, fees and expense reimbursements as shown in the table below for services provided by CCI III Management and its affiliates related to the services described above during the periods indicated: Year Ended December 31, 2019 2018 2017 Selling commissions $ 23,501 $ 540,706 $ 798,184 Dealer manager fees $ 7,000 $ 206,689 $ 331,799 Distribution and stockholder servicing fees (1) $ 60,948 $ 65,165 $ 21,753 Organization and offering costs $ 6,571 $ 109,044 $ 169,944 Acquisition fees and expenses $ — $ — $ 330,000 Advisory fees $ — $ — $ 60,565 Operating expenses $ — $ — $ 50,000 Financing coordination fees $ — $ — $ 99,750 ______________________ (1) Amounts are calculated for the respective periods in accordance with the dealer manager agreement and exclude the estimated liability for future distribution and stockholder servicing fees payable to CCO Capital of $111,000 and $188,000 for the years ended December 31, 2019 and 2018 , respectively, which is included in due to affiliates in the consolidated balance sheets with a corresponding decrease to capital in excess of par value, as described in Note 2 — Summary of Significant Accounting Policies . |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of dividends and distributions | The following table shows the character of the distributions paid on a percentage basis for the years ended December 31, 2019 , 2018 and 2017 : Year Ended December 31, Character of Distributions: 2019 2018 2017 Ordinary dividends 28 % — % — % Nondividend distributions 72 % 100 % 100 % Total 100 % 100 % 100 % |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Future minimum rental income from real estate assets under non-cancelable operating leases | As of December 31, 2019 , the future minimum rental income from the Company’s real estate assets under non-cancelable operating leases, assuming no exercise of renewal options, for the succeeding five fiscal years and thereafter, was as follows: Year Ending December 31, Future Minimum Rental Income 2020 $ 3,878,462 2021 3,756,969 2022 3,829,450 2023 3,903,333 2024 3,978,647 Thereafter 14,902,467 Total $ 34,249,328 |
Schedule of future minimum rental payments for operating leases | As previously disclosed in our 2018 Annual Report on Form 10-K and under the previous lease accounting standard, Topic 840, the following table summarizes the future minimum rental income from the Company’s real estate assets under non-cancelable operating leases, assuming no exercise of renewal options for the succeeding five fiscal years and thereafter, as of December 31, 2018: Year Ending December 31, Future Minimum Rental Income 2019 $ 3,808,708 2020 3,878,462 2021 3,756,969 2022 3,829,450 2023 3,903,333 Thereafter 18,881,112 Total $ 38,058,034 |
Schedule of components of lease income | Rental and other property income during the years ended December 31, 2019, 2018 and 2017 consisted of the following: Year Ended December 31, 2019 2018 2017 Fixed rental and other property income (1) $ 3,888,009 $ 3,888,009 $ 2,880,032 Variable rental and other property income (2) 579,374 518,366 1,224,565 Total rental and other property income $ 4,467,383 $ 4,406,375 $ 4,104,597 ______________________ (1) Consists primarily of fixed contractual payments from operating leases with tenants recognized on a straight-line basis over the lease term, including amortization of acquired above-market leases. (2) Consists primarily of tenant reimbursements for recoverable real estate taxes and property operating expenses. |
QUARTERLY RESULTS (UNAUDITED) (
QUARTERLY RESULTS (UNAUDITED) (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of quarterly financial information | In the opinion of management, the information for the interim periods presented includes all adjustments, which are of a normal and recurring nature, necessary to present a fair presentation of the results for each period. December 31, 2019 First Quarter Second Quarter Third Quarter Fourth Quarter Revenues $ 1,135,875 $ 1,104,195 $ 1,113,311 $ 1,114,002 Net (loss) income $ (209,262 ) $ (140,946 ) $ (157,856 ) $ 20,382 Basic and diluted net (loss) income per share - Class A common stock (1) $ (0.06 ) $ (0.04 ) $ (0.04 ) $ 0.03 Basic and diluted net loss per share - Class T common stock (1) $ (0.08 ) $ (0.06 ) $ (0.06 ) $ (0.07 ) ____________________________________ (1) The Company calculates net loss per share based on the weighted-average number of outstanding shares of common stock during the reporting period. The average number of shares fluctuates throughout the year and can therefore produce a full year result that does not agree to the sum of the individual quarters. December 31, 2018 First Quarter Second Quarter Third Quarter Fourth Quarter Revenues $ 1,101,694 $ 1,101,667 $ 1,101,666 $ 1,101,348 Net loss $ (192,338 ) $ (206,504 ) $ (183,344 ) $ (189,526 ) Basic and diluted net loss per share - Class A common stock (1) $ (0.08 ) $ (0.08 ) $ (0.06 ) $ (0.06 ) Basic and diluted net loss per share - Class T common stock (1) $ (0.10 ) $ (0.10 ) $ (0.08 ) $ (0.08 ) ____________________________________ (1) The Company calculates net loss per share based on the weighted-average number of outstanding shares of common stock during the reporting period. The average number of shares fluctuates throughout the year and can therefore produce a full year result that does not agree to the sum of the individual quarters. |
ORGANIZATION AND BUSINESS (Deta
ORGANIZATION AND BUSINESS (Details) $ / shares in Units, ft² in Thousands | 12 Months Ended | |||||||
Dec. 31, 2019USD ($)ft²statepropertyclass_of_stock$ / shares | Mar. 30, 2020$ / shares | Mar. 27, 2020$ / shares | Apr. 30, 2019USD ($) | Mar. 28, 2019USD ($) | Dec. 31, 2018USD ($)$ / shares | Sep. 22, 2016USD ($)class_of_stock$ / shares | Jul. 14, 2014$ / shares | |
Class of Stock [Line Items] | ||||||||
Number of real estate properties | property | 2 | |||||||
Net rentable square feet | ft² | 391 | |||||||
Number of states in which real estate properties are owned | state | 2 | |||||||
Percentage of rentable space leased | 100.00% | |||||||
Classes of common stock | class_of_stock | 2 | |||||||
Common stock, shares issued | $ 31,200,000 | |||||||
Unsold shares deregistered | 3,500,000,000 | |||||||
Common Stock | ||||||||
Class of Stock [Line Items] | ||||||||
Share price (in dollars per share) | $ / shares | $ 25 | |||||||
Class A Common Stock | ||||||||
Class of Stock [Line Items] | ||||||||
Common stock, shares issued | $ 24,974 | $ 24,179 | ||||||
Net asset value per share (in dollars per share) | $ / shares | $ 8 | $ 8.60 | ||||||
Class T Common Stock | ||||||||
Class of Stock [Line Items] | ||||||||
Common stock, shares issued | $ 7,229 | $ 7,473 | ||||||
Net asset value per share (in dollars per share) | $ / shares | $ 8 | $ 8.60 | ||||||
Initial public offering | ||||||||
Class of Stock [Line Items] | ||||||||
Common stock shares authorized, value | $ 3,500,000,000 | |||||||
Multi class offering | ||||||||
Class of Stock [Line Items] | ||||||||
Common stock shares authorized, value | $ 2,500,000,000 | |||||||
Classes of common stock | class_of_stock | 2 | |||||||
Common stock, shares issued | 30,200,000 | |||||||
Multi class offering | Class A Common Stock | ||||||||
Class of Stock [Line Items] | ||||||||
Common stock shares authorized, value | $ 1,250,000,000 | |||||||
Share price (in dollars per share) | $ / shares | $ 10 | |||||||
Common stock, shares issued | 23,300,000 | |||||||
Multi class offering | Class T Common Stock | ||||||||
Class of Stock [Line Items] | ||||||||
Common stock shares authorized, value | $ 1,250,000,000 | |||||||
Share price (in dollars per share) | $ / shares | $ 9.57 | |||||||
Common stock, shares issued | 6,900,000 | |||||||
Distribution Reinvestment Plan | ||||||||
Class of Stock [Line Items] | ||||||||
Common stock shares authorized, value | $ 4,300,000 | $ 1,000,000,000 | ||||||
Share price (in dollars per share) | $ / shares | $ 9.10 | |||||||
Common stock, shares issued | 1,000,000 | |||||||
Distribution Reinvestment Plan | Class A Common Stock | ||||||||
Class of Stock [Line Items] | ||||||||
Common stock, shares issued | 655,000 | |||||||
Distribution Reinvestment Plan | Class A Common Stock | Common Stock | ||||||||
Class of Stock [Line Items] | ||||||||
Net asset value per share (in dollars per share) | $ / shares | 7.60 | |||||||
Distribution Reinvestment Plan | Class T Common Stock | ||||||||
Class of Stock [Line Items] | ||||||||
Common stock, shares issued | $ 350,000 | |||||||
Distribution Reinvestment Plan | Class T Common Stock | Common Stock | ||||||||
Class of Stock [Line Items] | ||||||||
Net asset value per share (in dollars per share) | $ / shares | $ 7.60 | |||||||
CCI III OP | ||||||||
Class of Stock [Line Items] | ||||||||
General partner partnership interest percentage | 100.00% | |||||||
Subsequent Event | Distribution Reinvestment Plan | Class A Common Stock | ||||||||
Class of Stock [Line Items] | ||||||||
Share price (in dollars per share) | $ / shares | $ 7.60 | |||||||
Subsequent Event | Distribution Reinvestment Plan | Class T Common Stock | ||||||||
Class of Stock [Line Items] | ||||||||
Share price (in dollars per share) | $ / shares | $ 7.60 | |||||||
Subsequent Event | Distribution Reinvestment Plan | Class T Common Stock | Common Stock | ||||||||
Class of Stock [Line Items] | ||||||||
Share price (in dollars per share) | $ / shares | $ 7.60 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Reclassifications (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Class of Stock [Line Items] | ||
Total rental and other property income | $ 4,406,375 | $ 4,104,597 |
Rental Revenue | ||
Class of Stock [Line Items] | ||
Total rental and other property income | 3,888,009 | 2,880,032 |
Tenant Reimbursements Income | ||
Class of Stock [Line Items] | ||
Total rental and other property income | $ 518,366 | $ 1,224,565 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Real Estate) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Real Estate Properties [Line Items] | |||
Impairment | $ 0 | $ 0 | $ 0 |
Assets held for sale | $ 0 | $ 0 | |
Buildings | |||
Real Estate Properties [Line Items] | |||
Acquired real estate asset, useful life (in years) | 40 years | ||
Site Improvements | |||
Real Estate Properties [Line Items] | |||
Acquired real estate asset, useful life (in years) | 15 years |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Distribution and Stockholder Servicing Fees) (Details) - Advisors | Feb. 19, 2019 | Dec. 31, 2019 |
Class T Common Stock | ||
Related Party Transaction [Line Items] | ||
Net asset value, daily accrual rate | 0.00274% | 0.00274% |
Distribution and stockholder servicing fees | ||
Related Party Transaction [Line Items] | ||
Related party transaction, daily distribution and servicing fee, termination of payments threshold, percentage of total gross investment | 4.00% | |
Related party transaction, daily distribution and servicing fee, termination of payments threshold, percentage of gross proceeds from shares in offering | 10.00% | |
Distribution and stockholder servicing fees | Class T Common Stock | Maximum | ||
Related Party Transaction [Line Items] | ||
Related party expense from transaction, percent of gross proceeds | 4.00% |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Other Narrative) (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019USD ($)segmentclass_of_stockshares | Dec. 31, 2018USD ($)shares | Dec. 31, 2017shares | |
Accounting Policies [Abstract] | |||
Deferred finance costs | $ | $ 57 | $ 407 | |
Classes of common stock | class_of_stock | 2 | ||
Antidilutive securities (in shares) | shares | 0 | 0 | 0 |
Number of reportable segments | segment | 1 |
SUMMARY OF SIGNIFICANT ACCOUN_8
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Offering and Related Costs) (Details) | Dec. 31, 2019 |
Other organization and offering expenses | Maximum | Advisors | |
Related Party Transaction [Line Items] | |
Organization and offering expense limit, percent | 1.00% |
FAIR VALUE MEASUREMENTS (Narrat
FAIR VALUE MEASUREMENTS (Narrative) (Details) - Affiliated Entity - Fair Value, Inputs, Level 2 - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Estimate of Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Notes payable | $ 24.2 | $ 24.3 |
Carrying Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Notes payable | $ 24.2 | $ 24.2 |
REAL ESTATE ASSETS (Narrative)
REAL ESTATE ASSETS (Narrative) (Details) | 12 Months Ended | ||
Dec. 31, 2019USD ($)tenantproperty | Dec. 31, 2018USD ($)property | Dec. 31, 2017USD ($)property | |
Business Acquisition [Line Items] | |||
Number of real estate properties acquired | property | 0 | 0 | |
Acquisition-related expenses | $ 0 | $ 0 | $ 41,576 |
Number of tenants, constitute significant asset concentrations | tenant | 2 | ||
Acquisitions, 2017 | |||
Business Acquisition [Line Items] | |||
Number of real estate properties acquired | property | 1 | ||
Aggregate purchase price | $ 16,900,000 | ||
Acquisition-related expenses | $ 355,000 |
REAL ESTATE ASSETS (Purchase Pr
REAL ESTATE ASSETS (Purchase Price Allocation) (Details) - Acquisitions, 2017 | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Business Acquisition [Line Items] | |
Land | $ 937,691 |
Buildings and improvements | 14,287,443 |
Total purchase price | 16,855,205 |
Acquired in-place Leases | |
Business Acquisition [Line Items] | |
Acquired in-place lease | $ 1,630,071 |
Weighted average amortization period | 16 years 2 months 11 days |
INTANGIBLE LEASE ASSETS (Detail
INTANGIBLE LEASE ASSETS (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Finite-Lived Intangible Assets [Line Items] | ||
Accumulated amortization | $ 1,400,000 | |
Acquired in-place Leases | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible leased asset | 3,694,833 | $ 4,157,891 |
Accumulated amortization | $ 1,406,599 | $ 943,541 |
Useful life | 8 years 9 months 18 days | 9 years 9 months |
INTANGIBLE LEASE ASSETS (Schedu
INTANGIBLE LEASE ASSETS (Schedule of Finite-lived Intangible Assets Amortization Expense) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Acquired in-place Leases | |||
Finite-Lived Intangible Assets [Line Items] | |||
In-place lease amortization | $ 463,058 | $ 463,058 | $ 374,832 |
INTANGIBLE LEASE ASSETS (Estima
INTANGIBLE LEASE ASSETS (Estimated Amortization of Intangible Lease Assets) (Details) - Acquired in-place Leases - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Amortization In-Place Leases | ||
2020 | $ 463,058 | |
2021 | 463,058 | |
2022 | 463,058 | |
2023 | 463,058 | |
2024 | 463,058 | |
Thereafter | 1,379,543 | |
Total | $ 3,694,833 | $ 4,157,891 |
CREDIT FACILITY (Credit Facilit
CREDIT FACILITY (Credit Facility and Subordinate Promissory Note) (Details) | 12 Months Ended | |||
Dec. 31, 2019USD ($) | Sep. 20, 2019USD ($) | Sep. 19, 2019USD ($) | Dec. 31, 2018USD ($) | |
Line of Credit Facility [Line Items] | ||||
Long-term debt | $ 24,175,000 | $ 24,175,000 | ||
Debt, weighted average interest rate | 4.00% | |||
Weighted average remaining term | 9 months | |||
Credit facility | $ 24,175,000 | 24,175,000 | ||
Line of Credit | ||||
Line of Credit Facility [Line Items] | ||||
Long-term debt | 24,175,000 | $ 24,175,000 | ||
Line of Credit | JPMorgan Chase Bank, N.A. | ||||
Line of Credit Facility [Line Items] | ||||
Credit facility | $ 24,200,000 | |||
Line of Credit | Revolving Credit Facility | JPMorgan Chase Bank, N.A. | ||||
Line of Credit Facility [Line Items] | ||||
Debt, weighted average interest rate | 4.00% | |||
Credit facility | $ 24,200,000 | |||
Line of credit facility, maximum borrowing capacity | $ 29,300,000 | $ 100,000,000 | ||
Line of credit facility, remaining available borrowing capacity | $ 5,100,000 | |||
Line of credit facility, covenant, minimum consolidated net worth (percentage) | 75.00% | |||
Line of Credit | Revolving Credit Facility | JPMorgan Chase Bank, N.A. | Minimum | ||||
Line of Credit Facility [Line Items] | ||||
Interest rate spread (percentage) | 1.20% | |||
Debt covenant fixed charge coverage ratio | 1.50 | |||
Line of Credit | Revolving Credit Facility | JPMorgan Chase Bank, N.A. | Maximum | ||||
Line of Credit Facility [Line Items] | ||||
Debt covenant leverage ratio | 60.00% | |||
Line of Credit | Revolving Credit Facility | JPMorgan Chase Bank, N.A. | LIBOR | Minimum | ||||
Line of Credit Facility [Line Items] | ||||
Debt instrument, basis spread on variable rate | 2.20% | |||
Line of Credit | Revolving Credit Facility | JPMorgan Chase Bank, N.A. | Federal Funds Effective Rate | ||||
Line of Credit Facility [Line Items] | ||||
Debt instrument, basis spread on variable rate | 0.50% | |||
Line of Credit | Revolving Credit Facility | JPMorgan Chase Bank, N.A. | Statutory Reserve Rate | ||||
Line of Credit Facility [Line Items] | ||||
Debt instrument, basis spread on variable rate | 1.00% |
CREDIT FACILITY (Schedule of De
CREDIT FACILITY (Schedule of Debt) (Details) | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Debt [Roll Forward] | |
Beginning of period | $ 24,175,000 |
Debt Issuance | 0 |
Repayments | 0 |
End of period | 24,175,000 |
Credit facility | |
Debt [Roll Forward] | |
Beginning of period | 24,175,000 |
Debt Issuance | 0 |
Repayments | 0 |
End of period | $ 24,175,000 |
CREDIT FACILITY (Future Debt Re
CREDIT FACILITY (Future Debt Repayments Schedule) (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Principal Repayments | |
2020 | $ 24,175 |
2021 | 0 |
2022 | 0 |
2023 | 0 |
2024 | 0 |
Thereafter | 0 |
Total | $ 24,175 |
RELATED-PARTY TRANSACTIONS AN_3
RELATED-PARTY TRANSACTIONS AND ARRANGEMENTS (Selling Commissions and Dealer Manager Fees) (Details) - Dealer manager | Dec. 31, 2019 |
Selling commissions | |
Related Party Transaction [Line Items] | |
Expense reallowed | 100.00% |
Class A Common Stock | Dealer manager fees | |
Related Party Transaction [Line Items] | |
Commissions percentage on stock sales and related dealer manager fees | 2.00% |
Class T Common Stock | Dealer manager fees | |
Related Party Transaction [Line Items] | |
Commissions percentage on stock sales and related dealer manager fees | 2.00% |
Maximum | Class A Common Stock | Selling commissions | |
Related Party Transaction [Line Items] | |
Related party expense from transaction, percent of gross proceeds (up to) | 7.00% |
Maximum | Class T Common Stock | Selling commissions | |
Related Party Transaction [Line Items] | |
Related party expense from transaction, percent of gross proceeds (up to) | 3.00% |
RELATED-PARTY TRANSACTIONS AN_4
RELATED-PARTY TRANSACTIONS AND ARRANGEMENTS (Organization and Offering Expenses) (Details) | Dec. 31, 2019 |
Advisors | Other organization and offering expenses | |
Related Party Transaction [Line Items] | |
Related party expense from transaction, percent of gross proceeds (up to) | 1.00% |
RELATED-PARTY TRANSACTIONS AN_5
RELATED-PARTY TRANSACTIONS AND ARRANGEMENTS (Distribution and Stockholder Servicing Fees) (Details) - Advisors | Feb. 19, 2019 | Dec. 31, 2019 |
Distribution and stockholder servicing fees | ||
Related Party Transaction [Line Items] | ||
Related party transaction, daily distribution and servicing fee, termination of payments threshold, percentage of total gross investment | 4.00% | |
Related party transaction, daily distribution and servicing fee, termination of payments threshold, percentage of gross proceeds from shares in offering | 10.00% | |
Class T Common Stock | ||
Related Party Transaction [Line Items] | ||
Net asset value, daily accrual rate | 0.00274% | 0.00274% |
RELATED-PARTY TRANSACTIONS AN_6
RELATED-PARTY TRANSACTIONS AND ARRANGEMENTS (Acquisition Fees and Expenses) (Details) - Maximum - Advisors - Acquisition fees and expenses | Dec. 31, 2019 |
Related Party Transaction [Line Items] | |
Acquisition and expenses percentage (up to) | 2.00% |
Acquisition fees and expenses, reimbursement, percentage (to not exceed) | 6.00% |
RELATED-PARTY TRANSACTIONS AN_7
RELATED-PARTY TRANSACTIONS AND ARRANGEMENTS (Advisory Fees and Expenses) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Advisors | Advisory fees | ||
Related Party Transaction [Line Items] | ||
Reimbursement threshold, percent of average asset | 2.00% | |
Reimbursement of related party expense threshold, percent of net income | 25.00% | |
Expenses exceeding the average asset value percent threshold | $ 961,000 | $ 576,000 |
Expenses waived | $ 385,000 | |
Average invested assets between $0 to $2 billion | Advisors | Advisory fees | ||
Related Party Transaction [Line Items] | ||
Asset management or advisory fees percent | 0.75% | |
Average invested assets between $2 billion to $4 billion | Advisors | Advisory fees | ||
Related Party Transaction [Line Items] | ||
Asset management or advisory fees percent | 0.70% | |
Average invested assets over $4 billion | Advisors | Advisory fees | ||
Related Party Transaction [Line Items] | ||
Asset management or advisory fees percent | 0.65% | |
Minimum | Average invested assets between $0 to $2 billion | ||
Related Party Transaction [Line Items] | ||
Average invested assets | $ 0 | |
Minimum | Average invested assets between $2 billion to $4 billion | ||
Related Party Transaction [Line Items] | ||
Average invested assets | 2,000,000,000 | |
Minimum | Average invested assets over $4 billion | ||
Related Party Transaction [Line Items] | ||
Average invested assets | 4,000,000,000 | |
Maximum | Average invested assets between $0 to $2 billion | ||
Related Party Transaction [Line Items] | ||
Average invested assets | 2,000,000,000 | |
Maximum | Average invested assets between $2 billion to $4 billion | ||
Related Party Transaction [Line Items] | ||
Average invested assets | $ 4,000,000,000 |
RELATED-PARTY TRANSACTIONS AN_8
RELATED-PARTY TRANSACTIONS AND ARRANGEMENTS (Operating Expenses) (Details) - Operating Expenses - Advisors | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Related Party Transaction [Line Items] | |
Related party transaction reimbursement of expenses deferred | $ 567,000 |
Minimum | |
Related Party Transaction [Line Items] | |
Reimbursement of related party expense threshold, percent of average invested assets | 2.00% |
Reimbursement of related party expense threshold, percent of net income | 25.00% |
RELATED-PARTY TRANSACTIONS AN_9
RELATED-PARTY TRANSACTIONS AND ARRANGEMENTS (Financing Coordination Fees) (Details) | Dec. 31, 2019 |
Advisors | Financing Coordination Fees | |
Related Party Transaction [Line Items] | |
Expense from related party transaction, percent | 1.00% |
RELATED-PARTY TRANSACTIONS A_10
RELATED-PARTY TRANSACTIONS AND ARRANGEMENTS (Disposition Fees) (Details) - Advisors - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Property Sales Commission | |||
Related Party Transaction [Line Items] | |||
Commissions performance and other fees percent | 1.00% | ||
Related party transaction, expenses from transactions with related party | $ 0 | $ 0 | $ 0 |
Maximum | Brokerage Commission Fee | |||
Related Party Transaction [Line Items] | |||
Expense from related party transaction, percent (up to) | 50.00% | ||
Maximum | Property Portfolio | |||
Related Party Transaction [Line Items] | |||
Commissions performance and other fees percent | 6.00% |
RELATED-PARTY TRANSACTIONS A_11
RELATED-PARTY TRANSACTIONS AND ARRANGEMENTS (Subordinated Performance Fees) (Details) - Advisors - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Related Party Transaction [Line Items] | |||
Cumulative noncompounded annual return | 6.00% | ||
Subordinate performance fees on event of sale of company | |||
Related Party Transaction [Line Items] | |||
Commissions performance and other fees percent | 15.00% | ||
Subordinate fees for listing | |||
Related Party Transaction [Line Items] | |||
Commissions performance and other fees percent | 15.00% | ||
Subordinated performance fees | |||
Related Party Transaction [Line Items] | |||
Related party transaction, expenses from transactions with related party | $ 0 | $ 0 | $ 0 |
RELATED-PARTY TRANSACTIONS A_12
RELATED-PARTY TRANSACTIONS AND ARRANGEMENTS (Schedule of Related Party Transactions) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Related Party Transaction [Line Items] | |||
Distribution and stockholder fees payable | $ 111,000 | $ 188,000 | |
Selling commissions | Advisors | |||
Related Party Transaction [Line Items] | |||
Related party transaction, expenses from transactions with related party | 23,501 | 540,706 | $ 798,184 |
Dealer manager fees | Advisors | |||
Related Party Transaction [Line Items] | |||
Related party transaction, expenses from transactions with related party | 7,000 | 206,689 | 331,799 |
Distribution and stockholder servicing fees | Advisors | |||
Related Party Transaction [Line Items] | |||
Related party transaction, expenses from transactions with related party | 60,948 | 65,165 | 21,753 |
Organization and offering costs | Advisors | |||
Related Party Transaction [Line Items] | |||
Related party transaction, expenses from transactions with related party | 6,571 | 109,044 | 169,944 |
Acquisition fees and expenses | Advisors | |||
Related Party Transaction [Line Items] | |||
Related party transaction, expenses from transactions with related party | 0 | 0 | 330,000 |
Advisory fees | Advisors | |||
Related Party Transaction [Line Items] | |||
Related party transaction, expenses from transactions with related party | 0 | 0 | 60,565 |
Operating expenses | Advisors | |||
Related Party Transaction [Line Items] | |||
Related party transaction, expenses from transactions with related party | 0 | 0 | 50,000 |
Financing coordination fees | Advisors | |||
Related Party Transaction [Line Items] | |||
Related party transaction, expenses from transactions with related party | $ 0 | $ 0 | $ 99,750 |
RELATED-PARTY TRANSACTIONS A_13
RELATED-PARTY TRANSACTIONS AND ARRANGEMENTS (Due to/from Affiliates) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Affiliated Entity | ||
Related Party Transaction [Line Items] | ||
Due to affiliates | $ 111 | $ 188 |
STOCKHOLDERS_ EQUITY (Narrative
STOCKHOLDERS’ EQUITY (Narrative) (Details) | Dec. 31, 2015shares | Dec. 30, 2015 | Jul. 14, 2014$ / sharesshares | Dec. 31, 2019$ / sharesshares | Dec. 31, 2018$ / sharesshares | Dec. 31, 2017shares |
Class of Stock [Line Items] | ||||||
Common stock, shares authorized (in shares) | 490,000,000 | 490,000,000 | 490,000,000 | |||
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 | 10,000,000 | |||
Common stock, par value (in usd per share) | $ / shares | $ 0.01 | |||||
Class A Common Stock | ||||||
Class of Stock [Line Items] | ||||||
Common stock, shares authorized (in shares) | 245,000,000 | 245,000,000 | 245,000,000 | |||
Common stock, par value (in usd per share) | $ / shares | $ 0.01 | $ 0.01 | ||||
Stock issued during period, shares, stock splits, conversion ratio | 2.5 | |||||
Class T Common Stock | ||||||
Class of Stock [Line Items] | ||||||
Common stock, shares authorized (in shares) | 245,000,000 | 245,000,000 | 245,000,000 | |||
Common stock, par value (in usd per share) | $ / shares | $ 0.01 | $ 0.01 | ||||
Common Stock | ||||||
Class of Stock [Line Items] | ||||||
Issuance of common stock (in shares) | 8,000 | |||||
Share price (in dollars per share) | $ / shares | $ 25 | |||||
Common Stock | Class A Common Stock | ||||||
Class of Stock [Line Items] | ||||||
Issuance of common stock (in shares) | 20,000 | 86,168 | 984,096 | 1,102,237 | ||
Common Stock | Class T Common Stock | ||||||
Class of Stock [Line Items] | ||||||
Issuance of common stock (in shares) | 24,638 | 115,970 | 626,121 |
STOCKHOLDERS_ EQUITY (Distribut
STOCKHOLDERS’ EQUITY (Distribution Reinvestment Plan) (Details) - USD ($) shares in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Class of Stock [Line Items] | |||
Dividend reinvestment plan, termination notice period | 10 days | ||
Common stock issued through distribution reinvestment plan | $ 658,062 | $ 569,926 | $ 179,564 |
Common Stock | Distribution Reinvestment Plan | |||
Class of Stock [Line Items] | |||
Stock issued during period, distribution reinvestment plan (in shares) | 76 | 63 | 20 |
Common stock issued through distribution reinvestment plan | $ 658,000 | $ 570,000 | $ 180,000 |
STOCKHOLDERS_ EQUITY (Share Red
STOCKHOLDERS’ EQUITY (Share Redemption Program) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Class of Stock [Line Items] | |||
Stock repurchase program, required holding period | 1 year | ||
Stock redemption program, number of shares authorized to be repurchased, percentage of weighted average number of shares outstanding | 5.00% | ||
Stock redemption program, termination notice period | 30 days | ||
Stock redeemed during period (in shares) | 65,000 | 5,300 | 0 |
Redemptions of common stock | $ 560,257 | $ 48,015 | |
Maximum | |||
Class of Stock [Line Items] | |||
Stock redemption program, number of shares authorized to be repurchased, percentage of weighted average number of shares outstanding | 1.25% | ||
Stock redemption program, redemption priority (in shares) | 250 | ||
Common Class A | |||
Class of Stock [Line Items] | |||
Net asset value per share (in dollars per share) | $ 8 | $ 8.60 | |
Class T Common Stock | |||
Class of Stock [Line Items] | |||
Net asset value per share (in dollars per share) | $ 8 | $ 8.60 |
STOCKHOLDERS_ EQUITY (Distrib_2
STOCKHOLDERS’ EQUITY (Distribution Payable and Distributions Policy) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Class of Stock [Line Items] | ||||
Distributions payable | $ 132,145 | $ 155,111 | $ 100,241 | |
Class A Common Stock | ||||
Class of Stock [Line Items] | ||||
Daily distributions payable amount per share (in usd per share) | $ 0.001369863 | |||
Class T Common Stock | ||||
Class of Stock [Line Items] | ||||
Daily distributions payable amount per share (in usd per share) | $ 0.001369863 | |||
Subsequent Event | Class A Common Stock | Forecast | ||||
Class of Stock [Line Items] | ||||
Daily distributions payable amount per share (in usd per share) | $ 0.001366120 | |||
Subsequent Event | Class T Common Stock | Forecast | ||||
Class of Stock [Line Items] | ||||
Daily distributions payable amount per share (in usd per share) | $ 0.001366120 |
STOCKHOLDERS_ EQUITY (Equity Ba
STOCKHOLDERS’ EQUITY (Equity Based Compensation) (Details) - CCIT III 2018 Equity Incentive Plan - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Aug. 09, 2018 | |
Restricted Stock | Class A Common Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares granted to each independent member of Board of Directors (in shares) | 6,000 | ||
Shares granted (in shares) | 19,000 | ||
Shares vested (in shares) | 9,000 | ||
Vesting period | 1 year | ||
Nonvested (in shares) | 10,000 | ||
Unrecognized compensation expense | $ 62 | ||
General and Administrative Expense | Restricted Stock | Class A Common Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Compensation expense | $ 82 | $ 21 | |
Common Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares reserved for issuance (in shares) | 400,000 | ||
Shares available for future grants (in shares) | 381,000 |
INCOME TAXES (Schedule of Divid
INCOME TAXES (Schedule of Dividends and Distributions) (Details) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
Ordinary dividends | 28.00% | 0.00% | 0.00% |
Nondividend distributions | 72.00% | 100.00% | 100.00% |
Total | 100.00% | 100.00% | 100.00% |
INCOME TAXES (Narrative) (Detai
INCOME TAXES (Narrative) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
State and local income and franchise taxes | $ 9,700 | $ 6,500 | $ 2,500 |
Unrecognized tax benefits | $ 0 | $ 0 | $ 0 |
LEASES (Future Operating Lease
LEASES (Future Operating Lease Income) (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Leases [Abstract] | ||
Operating lease, weighted average remaining lease term | 8 years 8 months 11 days | |
Future Minimum Rental Income | ||
2020 | $ 3,878,462 | |
2021 | 3,756,969 | |
2022 | 3,829,450 | |
2023 | 3,903,333 | |
2024 | 3,978,647 | |
Thereafter | 14,902,467 | |
Total | $ 34,249,328 | |
Future Minimum Rental Income | ||
2019 | $ 3,808,708 | |
2020 | 3,878,462 | |
2021 | 3,756,969 | |
2022 | 3,829,450 | |
2023 | 3,903,333 | |
Thereafter | 18,881,112 | |
Total | $ 38,058,034 |
LEASES (Rental and Other Proper
LEASES (Rental and Other Property Income) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Lessor, Lease, Description [Line Items] | |||
Fixed rental and other property income | $ 3,888,009 | ||
Variable rental and other property income | 579,374 | ||
Total rental and other property income | $ 4,467,383 | ||
Total rental and other property income | $ 4,406,375 | $ 4,104,597 | |
Tenant Reimbursements Income | |||
Lessor, Lease, Description [Line Items] | |||
Total rental and other property income | 518,366 | 1,224,565 | |
Rental Revenue | |||
Lessor, Lease, Description [Line Items] | |||
Total rental and other property income | $ 3,888,009 | $ 2,880,032 |
QUARTERLY RESULTS (UNAUDITED)_2
QUARTERLY RESULTS (UNAUDITED) (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Class of Stock [Line Items] | |||||||||||
Revenues | $ 1,114,002 | $ 1,113,311 | $ 1,104,195 | $ 1,135,875 | $ 1,101,348 | $ 1,101,666 | $ 1,101,667 | $ 1,101,694 | $ 4,467,383 | $ 4,406,375 | $ 4,104,597 |
Net (loss) income | $ 20,382 | $ (157,856) | $ (140,946) | $ (209,262) | $ (189,526) | $ (183,344) | $ (206,504) | $ (192,338) | (487,682) | (771,712) | (1,121,995) |
Class A Common Stock | |||||||||||
Class of Stock [Line Items] | |||||||||||
Net (loss) income | $ (331,200) | $ (523,089) | $ (894,373) | ||||||||
Basic and diluted net (loss) income per common share (in dollars per share) | $ 0.03 | $ (0.04) | $ (0.04) | $ (0.06) | $ (0.06) | $ (0.06) | $ (0.08) | $ (0.08) | $ (0.13) | $ (0.26) | $ (0.90) |
Class T Common Stock | |||||||||||
Class of Stock [Line Items] | |||||||||||
Net (loss) income | $ (156,482) | $ (248,623) | $ (227,622) | ||||||||
Basic and diluted net (loss) income per common share (in dollars per share) | $ (0.07) | $ (0.06) | $ (0.06) | $ (0.08) | $ (0.08) | $ (0.08) | $ (0.10) | $ (0.10) | $ (0.21) | $ (0.36) | $ (0.99) |
SUBSEQUENT EVENTS (Narrative) (
SUBSEQUENT EVENTS (Narrative) (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||
Mar. 26, 2020 | Dec. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Mar. 30, 2020 | Mar. 27, 2020 | Sep. 22, 2016 | Jul. 14, 2014 | |
Subsequent Event [Line Items] | |||||||||
Stock redeemed during period (in shares) | 65,000 | 5,300 | 0 | ||||||
Redemptions of common stock | $ 560,257 | $ 48,015 | |||||||
Remaining redemption requests, that were unfulfilled | 228,000 | ||||||||
Subsequent Event | |||||||||
Subsequent Event [Line Items] | |||||||||
Stock redeemed during period (in shares) | 17,000 | ||||||||
Redemptions of common stock | $ 142,000 | ||||||||
Stock redeemed during period (in usd per share) | $ 8.60 | ||||||||
Class A Common Stock | |||||||||
Subsequent Event [Line Items] | |||||||||
Net asset value per share (in dollars per share) | $ 8 | $ 8 | $ 8.60 | ||||||
Class T Common Stock | |||||||||
Subsequent Event [Line Items] | |||||||||
Net asset value per share (in dollars per share) | 8 | $ 8 | $ 8.60 | ||||||
Distribution Reinvestment Plan | |||||||||
Subsequent Event [Line Items] | |||||||||
Share price (in dollars per share) | $ 9.10 | ||||||||
Distribution Reinvestment Plan | Class A Common Stock | Subsequent Event | |||||||||
Subsequent Event [Line Items] | |||||||||
Share price (in dollars per share) | $ 7.60 | ||||||||
Distribution Reinvestment Plan | Class T Common Stock | Subsequent Event | |||||||||
Subsequent Event [Line Items] | |||||||||
Share price (in dollars per share) | 7.60 | ||||||||
Common Stock | |||||||||
Subsequent Event [Line Items] | |||||||||
Share price (in dollars per share) | $ 25 | ||||||||
Common Stock | Class A Common Stock | |||||||||
Subsequent Event [Line Items] | |||||||||
Stock redeemed during period (in shares) | 15,814 | 5,335 | |||||||
Redemptions of common stock | $ 158 | $ 53 | |||||||
Common Stock | Class T Common Stock | |||||||||
Subsequent Event [Line Items] | |||||||||
Stock redeemed during period (in shares) | 49,081 | ||||||||
Redemptions of common stock | $ 491 | ||||||||
Common Stock | Distribution Reinvestment Plan | Class A Common Stock | |||||||||
Subsequent Event [Line Items] | |||||||||
Net asset value per share (in dollars per share) | 7.60 | $ 7.60 | |||||||
Common Stock | Distribution Reinvestment Plan | Class T Common Stock | |||||||||
Subsequent Event [Line Items] | |||||||||
Net asset value per share (in dollars per share) | $ 7.60 | $ 7.60 | |||||||
Common Stock | Distribution Reinvestment Plan | Class T Common Stock | Subsequent Event | |||||||||
Subsequent Event [Line Items] | |||||||||
Share price (in dollars per share) | $ 7.60 | ||||||||
Advisory Fees | Advisors | |||||||||
Subsequent Event [Line Items] | |||||||||
Reimbursement of related party expense threshold, percent of net income | 25.00% | ||||||||
Expense exceeding the expense limit | $ 961,000 | ||||||||
Minimum | Operating Expenses | Advisors | |||||||||
Subsequent Event [Line Items] | |||||||||
Reimbursement of related party expense threshold, percent of average invested assets | 2.00% | 2.00% | |||||||
Reimbursement of related party expense threshold, percent of net income | 25.00% | 25.00% | |||||||
Forecast | The Share Redemption Program | Common Stock | |||||||||
Subsequent Event [Line Items] | |||||||||
Net asset value per share (in dollars per share) | $ 7.60 |
SCHEDULE III _ REAL ESTATE AS_2
SCHEDULE III — REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION (Details) | 12 Months Ended | ||||
Dec. 31, 2019USD ($)property | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | |
Real Estate and Accumulated Depreciation [Line Items] | |||||
Encumbrances | $ 0 | ||||
Initial Costs to Company | |||||
Land | 3,245,003 | ||||
Buildings & Improvements | 41,258,770 | ||||
Total Adjustments to Basis | 0 | ||||
Gross Amount at Which Carried at December 31, 2019 | $ 44,503,773 | $ 44,503,773 | $ 44,503,773 | 44,503,773 | $ 44,503,773 |
Accumulated Depreciation | 4,328,942 | 2,879,746 | 1,430,550 | 4,328,942 | 2,879,746 |
Intangible lease assets, gross | 5,101,432 | 5,101,432 | |||
Accumulated amortization | 1,400,000 | ||||
Aggregate cost for federal income tax purposes | 45,300,000 | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate [Roll Forward] | |||||
Balance, beginning of period | 44,503,773 | 44,503,773 | 29,278,639 | ||
Additions | |||||
Acquisitions | 0 | 0 | 15,225,134 | ||
Improvements | 0 | 0 | 0 | ||
Total additions | 0 | 0 | 15,225,134 | ||
Deductions | 0 | 0 | 0 | ||
Cost of real estate sold | 0 | 0 | 0 | ||
Total deductions | 0 | 0 | 0 | ||
Balance, end of period | 44,503,773 | 44,503,773 | 44,503,773 | ||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Accumulated Depreciation [Roll Forward] | |||||
Balance, beginning of period | 2,879,746 | 1,430,550 | 312,350 | ||
Additions | |||||
Acquisitions - Depreciation Expense for Building & Tenant Improvements Acquired | 1,449,196 | 1,449,196 | 1,118,200 | ||
Improvements - Depreciation Expense for Tenant Improvements & Building Equipment | 0 | 0 | 0 | ||
Total additions | 1,449,196 | 1,449,196 | 1,118,200 | ||
Total additions | |||||
Deductions | 0 | 0 | 0 | ||
Cost of real estate sold | 0 | 0 | 0 | ||
Total deductions | 0 | 0 | 0 | ||
Balance, end of period | $ 4,328,942 | $ 2,879,746 | $ 1,430,550 | ||
Credit facility | 24,175,000 | $ 24,175,000 | |||
JPMorgan Chase Bank, N.A. | Line of Credit | |||||
Total additions | |||||
Credit facility | 24,200,000 | ||||
Revolving Credit Facility | JPMorgan Chase Bank, N.A. | Line of Credit | |||||
Total additions | |||||
Credit facility | 24,200,000 | ||||
Buildings | |||||
Total additions | |||||
Acquired real estate asset, useful life (in years) | 40 years | ||||
Site Improvements | |||||
Total additions | |||||
Acquired real estate asset, useful life (in years) | 15 years | ||||
Office Property | |||||
Initial Costs to Company | |||||
Number of single-tenant commercial properties owned | property | 1 | ||||
Industrial Property | |||||
Initial Costs to Company | |||||
Number of single-tenant commercial properties owned | property | 1 | ||||
Siemens | Milford, OH | |||||
Initial Costs to Company | |||||
Land | 2,307,312 | ||||
Buildings & Improvements | 26,971,327 | ||||
Total Adjustments to Basis | 0 | ||||
Gross Amount at Which Carried at December 31, 2019 | $ 29,278,639 | 29,278,639 | |||
Accumulated Depreciation | 3,525,094 | 3,525,094 | |||
Additions | |||||
Balance, end of period | 29,278,639 | ||||
Total additions | |||||
Balance, end of period | 3,525,094 | ||||
Actuant | Columbus, WI | |||||
Initial Costs to Company | |||||
Land | 937,691 | ||||
Buildings & Improvements | 14,287,443 | ||||
Total Adjustments to Basis | 0 | ||||
Gross Amount at Which Carried at December 31, 2019 | 15,225,134 | 15,225,134 | |||
Accumulated Depreciation | 803,848 | $ 803,848 | |||
Additions | |||||
Balance, end of period | 15,225,134 | ||||
Total additions | |||||
Balance, end of period | $ 803,848 |