Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Nov. 14, 2017 | |
Document And Entity Information | ||
Entity Registrant Name | MVP REIT II, Inc. | |
Entity Central Index Key | 1,642,985 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Is Entity a Well-known Seasoned Issuer? | No | |
Is Entity a Voluntary Filer? | No | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 2,612,182 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,017 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Investments in real estate | ||
Land and improvements | $ 60,358,000 | $ 28,854,000 |
Building and improvements | 78,104,000 | 24,889,000 |
Construction in progress | 1,263,000 | |
[us-gaap:PropertyPlantAndEquipmentGross] | 139,725,000 | 53,743,000 |
Accumulated depreciation | (1,599,000) | (195,000) |
Total investments in real estate, net | 138,126,000 | 53,548,000 |
Investment in equity method investee | 465,000 | 1,150,000 |
Investments in cost method investee - held for sale | 838,000 | 836,000 |
Investments in cost method investee | 902,000 | 936,000 |
Assets held for sale | 700,000 | |
Cash | 2,589,000 | 4,885,000 |
Cash - restricted | 5,348,000 | 100,000 |
Prepaid expenses | 223,000 | 283,000 |
Accounts receivable | 115,000 | 208,000 |
Due from related parties | 1,589,000 | |
Investments in MVP REIT, Inc. | 3,121,000 | 3,034,000 |
Investment in DST | 2,821,000 | |
Other assets | 101,000 | 4,575,000 |
Total assets | 156,238,000 | 70,255,000 |
Liabilities | ||
Notes payable, net of unamortized loan issuance costs of approximately $0.9 million and $0.1 million as of September 30, 2017 and December 31, 2016, respectively | 76,734,000 | 5,318,000 |
Notes payable - related party | 2,100,000 | |
Lines of credit, net of unamortized loan issuance costs of approximately $0.2 million as of September 30, 2017 and December 31, 2016, respectively | 1,445,000 | 7,957,000 |
Accounts payable and accrued liabilities | 1,527,000 | 485,000 |
Security Deposit | 130,000 | 2,000 |
Due to related parties | 575,000 | |
Deferred revenue | 253,000 | 45,000 |
Total liabilities | 82,189,000 | 14,382,000 |
MVP REIT II, Inc. Stockholders' Equity | ||
Common stock, $0.0001 par value, 98,999,000 shares authorized, 2,590,932 and 2,601,537 shares issued and outstanding as of September 30, 2017 and December 31, 2016, respectively | ||
Additional paid-in | 76,769,000 | 56,875,000 |
Accumulated deficit | (11,574,000) | (5,126,000) |
Total MVP REIT II, Inc. Shareholders' Equity | 65,195,000 | 51,749,000 |
Non-controlling interest - related party | 8,854,000 | 4,124,000 |
Total equity | 74,049,000 | 55,873,000 |
Total liabilities and equity | 156,238,000 | 70,255,000 |
Preferred Stock Series A | ||
MVP REIT II, Inc. Stockholders' Equity | ||
Preferred stock | ||
Preferred Stock Series 1 | ||
MVP REIT II, Inc. Stockholders' Equity | ||
Preferred stock | ||
Non Voting Non Participating Convertible Stock | ||
MVP REIT II, Inc. Stockholders' Equity | ||
Common stock, $0.0001 par value, 98,999,000 shares authorized, 2,590,932 and 2,601,537 shares issued and outstanding as of September 30, 2017 and December 31, 2016, respectively |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Notes payable, unamortized loan issuance costs | $ 900,000 | $ 100,000 |
Line of credit, unamortized loan issuance costs | $ 200,000 | $ 200,000 |
Preferred stock par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 98,999,000 | 98,999,000 |
Common stock, shares issued | 2,601,537 | 2,301,828 |
Common stock, shares outstanding | 2,601,537 | 2,301,828 |
Preferred Stock Series A | ||
Preferred stock par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 50,000 | 50,000 |
Preferred stock, shares issued | 2,862 | 2,862 |
Preferred stock, shares outstanding | 2,862 | 2,862 |
Stated Liquidation Value | $ 2,876,000 | |
Preferred Stock Series 1 | ||
Preferred stock par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 97,000 | 97,000 |
Preferred stock, shares issued | 13,445 | 5,070 |
Preferred stock, shares outstanding | 13,445 | 5,070 |
Stated Liquidation Value | $ 13,504,000 | |
Non Voting Non Participating Convertible Stock | ||
Common stock par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 0 | 0 |
Common stock, shares issued | 0 | 0 |
Common stock, shares outstanding | 0 | 0 |
Condensed Consolidated Statemen
Condensed Consolidated Statements Of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Revenues | ||||
Base rent income | $ 2,206,000 | $ 607,000 | $ 6,258,000 | $ 676,000 |
Percentage rent income | 16,000 | 523,000 | ||
Total revenues | 2,222,000 | 607,000 | 6,781,000 | 676,000 |
Operating expenses | ||||
Property taxes | 90,000 | 22,000 | 279,000 | 24,000 |
Property operating expense | 273,000 | 220,000 | 608,000 | 238,000 |
Asset management expense - related party | 345,000 | 51,000 | 839,000 | 66,000 |
General and administrative | 400,000 | 267,000 | 1,051,000 | 602,000 |
Merger costs | 824,000 | 1,596,000 | ||
Acquisition expenses | 113,000 | 529,000 | 2,156,000 | 748,000 |
Acquisition expenses - related party | 1,011,000 | 1,710,000 | 1,427,000 | |
Seminar | 6,000 | |||
Depreciation | 508,000 | 43,000 | 1,404,000 | 46,000 |
Total operating expenses | 2,553,000 | 2,143,000 | 9,643,000 | 3,157,000 |
Loss from operations | (331,000) | (1,536,000) | (2,862,000) | (2,481,000) |
Other income (expense) | ||||
Interest expense | (1,297,000) | (3,146,000) | (1,000) | |
Distribution income - related party | 75,000 | 174,000 | ||
Gain from sale of investment in real estate | 1,200,000 | 1,200,000 | ||
Income from investment in equity method investee | 2,000 | 5,000 | 19,000 | 9,000 |
Total other income (expense) | (20,000) | 5,000 | (1,753,000) | 8,000 |
Net loss | (351,000) | (1,531,000) | (4,615,000) | (2,473,000) |
Net income attributable to non-controlling interest - related party | 41,000 | 58,000 | 269,000 | 61,000 |
Net loss attributable to MVP REIT II, Inc.'s stockholders | (392,000) | (1,589,000) | (4,884,000) | (2,534,000) |
Preferred stock distributions declared - Series A | (55,000) | (101,000) | ||
Preferred stock distributions declared - Series 1 | (157,000) | (172,000) | ||
Net loss attributable to MVP REIT II, Inc.'s common stockholders | $ (604,000) | $ (1,589,000) | $ (5,157,000) | $ (2,534,000) |
Basic and diluted loss per weighted average common share: | ||||
Net loss attributable to MVP REIT II, Inc.'s common stockholders - basic and diluted | $ (0.24) | $ (1.18) | $ (2) | $ (3.3) |
Distributions declared per common share | $ 0.25 | $ 0.27 | $ 0.62 | $ 0.47 |
Weighted average common shares outstanding, basic and diluted | 2,577,514 | 1,341,769 | 2,516,496 | 766,902 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements Of Equity (Unaudited) - 9 months ended Sep. 30, 2017 - USD ($) | Preferred Stock | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Non-controlling Interest -Related Party | Total |
Beginning Balance at Dec. 31, 2016 | $ 56,875,000 | $ (5,126,000) | $ 4,124,000 | $ 55,873,000 | ||
Shares Outstanding at Dec. 31, 2016 | 2,301,828 | |||||
Par Value at Dec. 31, 2016 | ||||||
Distributions to non-controlling interest | (1,809,000) | (1,809,000) | ||||
Issuance of common stock | 901,000 | 901,000 | ||||
Issuance of common stock (Shares) | 196,985 | |||||
Issuance of common stock - DRIP | 591,000 | 591,000 | ||||
Issuance of common stock - DRIP (Shares) | 40,153 | |||||
Issuance of preferred Series A | 2,573,000 | 2,573,000 | ||||
Issuance of preferred Series A (Shares) | 2,862 | |||||
Issuance of preferred Series 1 | 11,768,000 | 11,768,000 | ||||
Issuance of preferred Series 1 (Shares) | 13,445 | |||||
Contributions | 6,264,000 | 6,264,000 | ||||
Consolidation of Houston Preston | 6,000 | 6,000 | ||||
Loan Proceeds to NCI | (1,431,000) | (1,431,000) | ||||
Distributions - Common | (1,564,000) | (1,564,000) | ||||
Distributions - Series A | (101,000) | (101,000) | ||||
Distributions - Series 1 | (172,000) | (172,000) | ||||
Stock dividend | 1,564,000 | (1,564,000) | ||||
Stock dividend (Shares) | 62,571 | |||||
Net loss | (4,884,000) | 269,000 | (4,615,000) | |||
Par Value at Sep. 30, 2017 | ||||||
Shares Outstanding at Sep. 30, 2017 | 16,307 | 2,601,537 | ||||
Ending Balance at Sep. 30, 2017 | $ 76,769,000 | $ (11,574,000) | $ 8,854,000 | $ 74,049,000 |
Condensed Consolidated Stateme6
Condensed Consolidated Statement Of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Cash flows from operating activities: | ||
Net loss | $ (4,615,000) | $ (2,473,000) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation expense | 1,404,000 | 46,000 |
Gain on sale of investment in real estate | (1,200,000) | |
Income from investment in equity method investee | (19,000) | (9,000) |
Distribution from MVP REIT | (122,000) | |
Distribution from DST | (52,000) | |
Amortization of loan costs | 335,000 | |
Changes in operating assets and liabilities | ||
Cash - Restricted | (5,248,000) | |
Due to related parties | (2,164,000) | 9,000 |
Accounts payable | 1,028,000 | 593,000 |
Security deposits | 298,000 | |
Other assets | 258,000 | |
Deferred revenue | 17,000 | |
Accounts Receivable | 93,000 | (71,000) |
Prepaid expenses | 60,000 | 138,000 |
Net cash used in operating activities | (9,944,000) | (1,750,000) |
Cash flows from investing activities: | ||
Purchase of investment in real estate | (81,200,000) | (36,642,000) |
Security deposits | (957,000) | |
Investment for 20% ownership Houston Preston, net of cash in bank account | (1,015,000) | |
Investment in DST | (2,821,000) | |
Building improvements | (1,962,000) | |
Assets held for sale, net of liabilities | 623,000 | |
Proceeds from Investments | 87,000 | |
Proceeds from sale of investment in real estate | 1,577,000 | |
Deposits applied to purchase of investment in real estate | 4,216,000 | |
Distribution received from investments | 237,000 | |
Investment in cost method investee | (8,000) | (1,353,000) |
Investment in cost method investee - held for sale | (2,000) | (836,000) |
Investment in equity method investee | (50,000) | (600,000) |
Proceeds from non-controlling interest | 5,075,000 | |
Net cash used in investing activities | (75,243,000) | (40,388,000) |
Cash flows from financing activities: | ||
Proceeds from note payable | 75,752,000 | 434,000 |
Payments on note payable | (1,388,000) | (106,000) |
Proceeds from of line of credit | 32,643,000 | |
Loan fees paid | (1,111,000) | |
Payments made on line of credit | (39,526,000) | |
Distribution to non-controlling interest | (1,809,000) | (17,000) |
Distribution from investment in equity method investee | 7,000 | |
Proceeds from issuance of common stock | 5,826,000 | 42,564,000 |
Proceeds from issuance of preferred stock | 14,341,000 | |
Dividends paid stockholders | (1,837,000) | (142,000) |
Net cash provided by financing activities | 82,891,000 | 42,740,000 |
Net change in cash | (2,296,000) | 602,000 |
Cash, beginning of period | 4,885,000 | 2,268,000 |
Cash, end of period | 2,589,000 | 2,870,000 |
Supplemental disclosures of cash flow information: | ||
Interest Paid | 2,737,000 | |
Non-cash investing and financing activities: | ||
Distributions - DRIP | 901,000 | 217,000 |
Dividend shares | 1,402,000 | |
Dividends declared not yet paid | 235,000 | 143,000 |
Deposits applied to purchase of investment in real estate | 4,216,000 | |
Conversion from debt to preferred shares | $ 2,000,000 |
Organization and Proposed Busin
Organization and Proposed Business Operations | 9 Months Ended |
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization, Proposed Business Operations and Capitalization | Note A — Organization and Business Operations MVP REIT II, Inc. (the “Company,” “we,” “us,” or “our”) is a Maryland corporation formed on May 4, 2015 and intends to qualify as a real estate investment trust (“REIT”) for U.S. federal income tax purposes upon the filing of the federal tax return for the year ended December 31, 2017. The Company believes that it has been organized and has operated in a manner that has enabled it to qualify as a REIT commencing with the taxable year ending December 31, 2017; however, if the company is unable to meet the REIT qualification for 2017 we will continue to operate as a C corporation for U.S. federal income tax purposes. The Company was formed to focus primarily on investments in parking facilities, including parking lots, parking garages and other parking structures throughout the United States and Canada. No more than 10% of the proceeds of the Common Stock Offering will be used for investment in Canadian properties. The Company is the sole general partner of MVP REIT II Operating Partnership, LP, a Delaware limited partnership (the “Operating Partnership”). The Company intends to own substantially all of its assets and conduct its operations through the Operating Partnership. The Company’s wholly owned subsidiary, MVP REIT II Holdings, LLC, is the sole limited partner of the Operating Partnership. The operating agreement provides that the Operating Partnership is operated in a manner that enables the Company to (1) satisfy the requirements for being classified as a REIT for tax purposes, (2) avoid any federal income or excise tax liability, and (3) ensure that the Operating Partnership is not classified as a “publicly traded partnership” for purposes of Section 7704 of the Internal Revenue Code, which classification could result in the Operating Partnership being taxed as a corporation. We utilize an Umbrella Partnership Real Estate Investment Trust (“UPREIT”) structure to enable us to acquire real property in exchange for limited partnership interests in Operating Partnership from owners who desire to defer taxable gain that would otherwise normally be recognized by them upon the disposition of their real property or transfer of their real property to us in exchange for shares of common stock or cash. As part of the Company’s initial capitalization, we sold 8,000 shares of common stock for $200,000 to MVP Capital Partners II, LLC (the “Sponsor”), the sponsor of the Company. The Sponsor is owned 60% by Vestin Realty Mortgage II, Inc., a Maryland corporation and OTC pink sheet company (“VRM II”), and 40% by Vestin Realty Mortgage I, Inc., a Maryland corporation and OTC pink sheet company (“VRM I”), both which are managed by Vestin Mortgage, LLC, a Nevada limited liability company wholly owned by Michael Shustek. The Company also sold 5,000 shares of common stock to VRM II in the Common Stock Offering. The Company’s advisor is MVP Realty Advisors, LLC (the “Advisor”), a Nevada limited liability company, which is owned 60% by VRM II and 40% by VRM I. The Advisor is responsible for managing the Company’s affairs on a day-to-day basis and for identifying and making investments on the Company’s behalf pursuant to an advisory agreement between the Company and the Advisor (the “Advisory Agreement”). The Company has no paid employees. From inception through September 30, 2017, the Company has paid approximately $2.1 million in distributions, including issuing 54,336 shares of its common stock as DRIP shares, issuing 85,358 shares of its common stock as dividend in distributions to the Company’s common stockholders and approximately $200,000 in distributions for preferred stockholders, all of which have been paid from offering proceeds and constituted a return of capital. The Company may continue to pay distributions from sources other than cash flow from operations, including proceeds from the Common Stock Offering and other stock sales, the sale of assets, or borrowings. The Company has no limits on the amounts it may pay from such sources. If the Company continues to pay distributions from sources other than cash flow from operations, the funds available to the Company for investments would be reduced and the share value may be diluted. In October 2016 the Board of Directors appointed a special committee to evaluate liquidity options. After consideration, in January 2017 the special committee of the Board of Directors decided to explore a merger with MVP REIT, Inc. (“MVP REIT”). On May 26, 2017, the Company, MVP REIT, MVP Merger Sub, LLC, a Delaware limited liability company and a wholly-owned subsidiary of the Company (“Merger Sub”), and MVP Realty Advisors, LLC, the Company’s and MVP REIT’s external advisor (the “Advisor”), entered into an agreement and plan of merger (the “Merger Agreement”). Subject to the terms and conditions of the Merger Agreement, MVP REIT will merge with and into Merger Sub (the “Merger”), with Merger Sub surviving the Merger (the “Surviving Entity”), such that following the Merger, the Surviving Entity will continue as a wholly owned subsidiary of the Company. On September 27, 2017, the stockholders of MVP REIT approved the Merger Agreement and the parties are currently in the process of satisfying the remaining conditions to completion of the merger. See Note P- Merger Capitalization As of September 30, 2017, the Company had 2,601,537 On October 27, 2016, the Company filed with the State Department of Assessments and Taxation of Maryland Articles Supplementary to the charter of the Company classifying and designating 50,000 shares of Series A Convertible Redeemable Preferred Stock, par value $0.0001 per share (the “Series A”) The Company commenced a private placement of the shares of Series A, together with warrants to acquire the Company’s common stock, to accredited investors on November 1, 2016 and closed the offering on March 24, 2017. The Company raised approximately $2.6 million, net of offering costs, in the Series A private placement and has 2,862 Series A shares issued and outstanding. On March 29, 2017, the Company filed with the State Department of Assessments and Taxation of Maryland Articles Supplementary to the charter of the Company classifying and designating 97,000 shares of its authorized capital stock as shares of Series 1 Convertible Redeemable Preferred Stock par value $0.0001 per share (the “Series 1”). On April 7, 2017 the Company commenced a private placement of shares of Series 1, together with warrants to acquire the Company’s common stock to accredited investors. As of September 30, 2017, the Company had raised approximately $11.8 million, net of offering costs, in the Series 1 private placements and had 13,445 Series 1 shares issued and outstanding. The Company continues to raise additional funds through a private placement of Series 1 Convertible Redeemable Preferred Stock. Stockholders may elect to reinvest distributions received from the Company in common shares by participating in the Company’s DRIP. The stockholder may enroll in the DRIP by completing the distribution change form. The stockholder may also withdraw at any time, without penalty, by delivering written notice to the Company. Participants will acquire DRIP shares at a fixed price of $25.00 per share until (i) all such shares registered in the Common Stock Offering are issued, (ii) the Common Stock Offering terminates and the Company elects to deregister any unsold shares under the DRIP, or (iii) the Company’s board decides to change the purchase price for DRIP shares or terminate the DRIP for any reason. Commencing no later than May 29, 2018 (the “Valuation Date”), which is 150 days following the second anniversary of the date to satisfy the minimum offering requirement in the Offering, if the DRIP is ongoing, the Company will adjust the price of shares offered in the DRIP to equal the net asset value (“NAV”) per share. The Company will update the NAV per share at least annually following the Valuation Date and further adjust the per share price in the Company’s DRIP accordingly. The Company has registered $50,000,000 in shares for issuance under the DRIP. The Company may amend, suspend or terminate the DRIP for any reason, except that the Company may not amend the DRIP to eliminate a participant’s ability to withdraw from the DRIP, without first providing 10 days prior written notice to participants. In addition, the Company has a Share Repurchase Program (“SRP”) that may provide stockholders who generally have held their shares for at least two years an opportunity to sell their shares to the Company, subject to certain restrictions and limitations. Prior to the date that the Company establishes an estimated value per share of common stock, the purchase price will be 95.0% of the purchase price paid for the shares if redeemed at any time between the second and third anniversaries of the purchase date, and 97.0% of the purchase price paid if redeemed after the third anniversary. After the Company establishes an estimated NAV per share of common stock, the purchase price will be 95.0% of the NAV per share for the shares if redeemed at any time between the second and third anniversaries of the purchase date, 97.0% of the NAV per share if redeemed at any time between the third and fifth anniversaries, and 100.0% of the NAV per share if redeemed after the fifth anniversary. The number of shares to be repurchased during a calendar quarter is limited to the lesser of: (i) 5.0% of the weighted average number of shares of common stock outstanding during the prior calendar year, and (ii) those repurchases that can be funded from the net proceeds of the sale of shares under the DRIP in the prior calendar year plus such additional funds as may be reserved for that purpose by the Company’s board of directors; provided however, that the above volume limitations shall not apply to repurchases requested in connection with the death or qualifying disability of a stockholder. The board of directors may also limit the amounts available for repurchase at any time at its sole discretion. The SRP will terminate if the shares of common stock are listed on a national securities exchange. Redemption requests other than those made in connection with the death or disability (as defined in the Internal Revenue Code of 1986, as amended (the “Code”) of a stockholder will continue to be repurchased as of March 31 st th th st |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note B — Summary of Significant Accounting Policies Basis of Accounting The accompanying unaudited condensed consolidated financial statements of the Company are prepared by management on the accrual basis of accounting and in accordance with principles generally accepted in the United States of America (“GAAP”) for interim financial information as contained in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”), and in conjunction with rules and regulations of the SEC. Certain information and footnote disclosures required for annual financial statements have been condensed or excluded pursuant to SEC rules and regulations. Accordingly, the unaudited condensed consolidated financial statements do not include all of the information and footnotes required by GAAP for complete financial statements. The unaudited condensed consolidated financial statements include accounts and related adjustments, which are, in the opinion of management, of a normal recurring nature and necessary for a fair presentation of the Company’s financial position, results of operations and cash flows for the interim period. Operating results for the three and nine months ended September 30, 2017 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017. These unaudited condensed consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016. The condensed consolidated balance sheet as of December 31, 2016 contained herein has been derived from the audited financial statements as of December 31, 2016, but does not include all disclosures required by GAAP. Consolidation The Company’s consolidated financial statements include its accounts and the accounts of its subsidiaries, Operating Partnership and all of the following subsidiaries. All intercompany profits and losses, balances and transactions are eliminated in consolidation. West 9 th Cleveland Lincoln Garage, LLC MVP San Jose 88 Garage, LLC MVP Houston Jefferson Lot, LLC** MCI 1372 Street, LLC MVP Houston Preston Lot, LLC * Cincinnati Race Street, LLC MVP Houston San Jacinto Lot, LLC St. Louis Washington, LLC MVP Detroit Center Garage, LLC St. Paul Holiday Garage, LLC St Louis Broadway, LLC Louisville Station Broadway, LLC St Louis Seventh & Cerre, LLC White Front Garage Partners, LLC MVP Preferred Parking, LLC * Entity is consolidated with the Company starting May 1, 2017. See Note E Related Party Transactions ** See Note M – Gain on Sale of Investment in Real Estate Under GAAP, the Company’s consolidated financial statements will also include the accounts of its consolidated subsidiaries and joint ventures in which the Company is the primary beneficiary, or in which the Company has a controlling interest. In determining whether the Company has a controlling interest in a joint venture and the requirement to consolidate the accounts of that entity, the Company’s management considers factors such as an entity’s purpose and design and the Company’s ability to direct the activities of the entity that most significantly impacts the entity’s economic performance, ownership interest, board representation, management representation, authority to make decisions, and contractual and substantive participating rights of the partners/members as well as whether the entity is a variable interest entity in which it will absorb the majority of the entity’s expected losses, if they occur, or receive the majority of the expected residual returns, if they occur, or both. Equity investments in which the Company exercises significant influence but does not control and is not the primary beneficiary are accounted for using the equity method. The Company's share of its equity method investees' earnings or losses is included in other income in the accompanying unaudited condensed consolidated statements of operations. Investments in which the Company is not able to exercise significant influence over the investee are accounted for under the cost method. 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 financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Management makes significant estimates regarding revenue recognition, purchase price allocations to record investments in real estate, and derivative financial instruments and hedging activities, as applicable. Concentration During the last week of August 2017, Houston Texas experienced major flooding due to Hurricane Harvey. This resulted in limited access to the Houston area and a shutdown of most business and government operations. Our parking garage and parking lots located in Houston, TX experienced minimal damage during this time; however, the company is still assessing the long-term impact. As of September 30, 2017, we have not seen a reduction in the base rent from our operator, who will continue to operate these locations under the terms of the current leases. The Company had eight parking tenants as of September 30, 2017 and four parking tenants as of September 30, 2016. One tenant, Standard Parking + (“SP+”), represented a 61.3% concentration for the nine months ended September 30, 2017, in regards to parking rental revenue. Below is a table that summarizes parking rent by tenant: For the Nine Months Ended September 30, Parking Tenant 2017 2016 SP + 61.3% 60.3% iPark Services 10.3% 0.0% Premier 8.1% 0.0% Interstate Parking 6.0% 17.3% St. Louis Parking 4.1% 0.0% Lanier Parking 4.0% 0.0% ABM 3.9% 17.4% Riverside Parking 2.3% 5.0% Grand Total 100.0% 100.0% In addition, the Company had concentrations in various cities based on parking rental revenue for the nine months ended September 30, 2017 and 2016, as well as concentrations in various cities based on the real estate we owned as of September 30, 2017 and December 31, 2016. The below tables summarize this information by city. City Concentration for Parking Rent For the Nine Months Ended September 30, 2017 2016 Detroit 49.5% 0.0% Cleveland 12.0% 47.4% Nashville 8.5% 0.0% St Paul 6.3% 17.3% St Louis 6.2% 9.8% Houston 6.1% 0.0% San Jose 4.4% 10.8% Cincinnati 3.9% 6.6% Louisville 2.4% 5.0% Canton 0.7% 3.1% Grand Total 100.0% 100.0% Real Estate Concentration by City Based on the Company’s Ownership % As of September 30, 2017 December 31, 2016 Detroit 34.1% 0.0% Houston 20.2% 10.5% St Louis 11.2% 5.7% Cleveland 9.1% 22.2% Nashville 7.1% 17.4% St Paul 6.4% 15.5% Cincinnati 3.5% 8.5% San Jose 2.8% 6.8% Louisville 2.4% 5.8% Minneapolis 1.6% 3.8% Bridgeport 0.6% 1.4% Canton 0.5% 1.3% Denver 0.5% 1.1% Grand Total 100.0% 100.0% Acquisitions The Company records the acquired tangible and intangible assets and assumed liabilities of acquisitions of all operating properties and those development and redevelopment opportunities that meet the accounting criteria to be accounted for as business combinations at fair value at the acquisition date. The Company assesses and considers fair value based on estimated cash flow projections that utilize available market information and discount and/or capitalization rates that the Company deems appropriate. Estimates of future cash flows are based on a number of factors including historical operating results, known and anticipated trends, and market and economic conditions. The acquired assets and assumed liabilities for an operating property acquisition generally include but are not limited to: land, buildings and improvements, construction in progress and identified tangible and intangible assets and liabilities associated with in-place leases, including tenant improvements, leasing costs, value of above-market and below-market operating leases and ground leases, acquired in-place lease values and tenant relationships, if any. Costs directly associated with all operating property acquisitions and those development and redevelopment acquisitions that meet the accounting criteria to be accounted for as business combinations are expensed as incurred within operating expenses in the consolidated statement of operations. During the three months and nine months ended September 30, 2017, the Company expensed approximately $0 and $1.7 million in related party acquisition costs, respectively. The Company also had $0.1 million and $2.1 million of non-related party acquisition costs, respectively, for the purchase of an interest in four properties (see Note I – Acquisitions). During the three and nine months ended September 30, 2016, the Company expensed approximately $1.0 million and $1.4 million, respectively, in related party acquisition costs. The Company also expensed $0.5 million and $0.7 million in non-related party acquisition costs for the three and nine months ended September 30, 2016. The Company’s acquisition expenses are directly related to the Company’s acquisition activity and if the Company’s acquisition activity was to increase or decrease, so would the Company’s acquisition costs. Impairment of Long Lived Assets When circumstances indicate the carrying value of a property may not be recoverable, the Company reviews the asset for impairment. This review is based on an estimate of the future undiscounted cash flows, excluding interest charges, expected to result from the property’s use and eventual disposition. These estimates consider factors such as expected future operating income, market and other applicable trends and residual value, as well as the effects of leasing demand, competition and other factors. If impairment exists, due to the inability to recover the carrying value of a property, an impairment loss is recorded to the extent that the carrying value exceeds the estimated fair value of the property for properties to be held and used. For properties held for sale, the impairment loss is the adjustment to fair value less estimated cost to dispose of the asset. These assessments have a direct impact on net income because recording an impairment loss results in an immediate negative adjustment to net income. Cash Cash includes cash in bank accounts. The Company deposits cash with high quality financial institutions with the majority of its cash at KeyBank. These deposits are guaranteed by the Federal Deposit Insurance Company up to an insurance limit up of $250,000. As of September 30, 2017 and December 31, 2016, the Company had approximately $1.2 million and $3.4 million, respectively, in excess of the federally insured limits. As of September 30, 2017, the Company has not experienced any losses on cash deposits. Restricted Cash Restricted cash primarily consists of escrowed tenant improvement funds, real estate taxes, capital improvement funds, insurance premiums, and other amounts required to be escrowed pursuant to loan agreements. Revenue Recognition The Company's revenues, which are derived primarily from rental income, include rents that each tenant pays in accordance with the terms of each lease reported on a straight-line basis over the initial term of the lease. Since many of the Company's leases will provide for rental increases at specified intervals, straight-line basis accounting requires the Company to record a receivable, and include in revenues, unbilled rent receivables that the Company will only receive if the tenant makes all rent payments required through the expiration of the initial term of the lease. Percentage rents will be recorded when earned and certain thresholds have been met. The Company will continually review receivables related to rent and unbilled rent receivables and determine collectability by taking 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. In the event that the collectability of a receivable is in doubt, the Company will record an increase in the Company's allowance for uncollectible accounts or record a direct write-off of the receivable after exhaustive efforts at collection. Advertising Costs Advertising costs incurred in the normal course of operations and are expensed as incurred. During the three and nine months ended September 30, 2017 and 2016, the Company had no advertising costs. Investments in Real Estate and Fixed Assets Investments in real estate and fixed assets are stated at cost less accumulated depreciation. Depreciation is provided principally on the straight-line method over the estimated useful lives of the assets, which are primarily 3 to 40 years. The cost of repairs and maintenance is charged to expense as incurred. Expenditures for property betterments and renewals are capitalized. Upon sale or other disposition of a depreciable asset, cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in other income (expense). The Company periodically evaluates whether events and circumstances have occurred that may warrant revision of the estimated useful lives of fixed assets or whether the remaining balance of fixed assets should be evaluated for possible impairment. The Company uses an estimate of the related undiscounted cash flows over the remaining life of the fixed assets in measuring their recoverability. Purchase Price Allocation The Company allocates the purchase price of acquired properties to tangible and identifiable intangible assets acquired based on their respective fair values. Tangible assets include land, land improvements, buildings, fixtures and tenant improvements on an as-if vacant basis. The Company utilizes various estimates, processes and information to determine the as-if vacant property value. Estimates of value are made using customary methods, including data from appraisals, comparable sales, discounted cash flow analysis and other methods. Amounts allocated to land, land improvements, buildings and fixtures are based on cost segregation studies performed by independent third parties or on the Company's analysis of comparable properties in the Company's portfolio. Identifiable intangible assets include amounts allocated to acquire leases for above- and below-market lease rates, the value of in-place leases, and the value of customer relationships, as applicable. The aggregate value of intangible assets related to in-place leases is primarily the difference between the property valued with existing in-place leases adjusted to market rental rates and the property valued as if vacant. Factors considered by the Company in its analysis of the in-place lease intangibles include an estimate of carrying costs during the expected lease-up period for each property, taking into account current market conditions and costs to execute similar leases. In estimating carrying costs, the Company will include real estate taxes, insurance and other operating expenses and estimates of lost rentals at market rates during the expected lease-up period. Estimates of costs to execute similar leases including leasing commissions, legal and other related expenses are also utilized. Above-market and below-market in-place lease values for owned properties are recorded based on the present value (using an interest rate which reflects the risks associated with the leases acquired) of the difference between the contractual amounts to be paid pursuant to the in-place leases and management’s estimate of fair market lease rates for the corresponding in-place leases, measured over a period equal to the remaining non-cancelable term of the lease. The capitalized above-market lease intangibles are amortized as a decrease to rental income over the remaining term of the lease. The capitalized below-market lease values will be amortized as an increase to rental income over the remaining term and any fixed rate renewal periods provided within the respective leases. In determining the amortization period for below-market lease intangibles, the Company initially will consider, and periodically evaluate on a quarterly basis, the likelihood that a lessee will execute the renewal option. The likelihood that a lessee will execute the renewal option is determined by taking 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. The aggregate value of intangible assets related to customer relationship, as applicable, is measured based on the Company's evaluation of the specific characteristics of each tenant’s lease and the Company's overall relationship with the tenant. Characteristics considered by the Company in determining these values include the nature and extent of its existing business relationships with the tenant, growth prospects for developing new business with the tenant, the tenant’s credit quality and expectations of lease renewals, among other factors. The value of in-place leases is amortized to expense over the initial term of the respective leases. The value of customer relationship intangibles is amortized to expense over the initial term and any renewal periods in the respective leases, but in no event does the amortization period for intangible assets exceed the remaining depreciable life of the building. If a tenant terminates its lease, the unamortized portion of the in-place lease value and customer relationship intangibles is charged to expense. In making estimates of fair values for purposes of allocating purchase price, the Company will utilize a number of sources, including independent appraisals that may be obtained in connection with the acquisition or financing of the respective property and other market data. The Company will also consider information obtained about each property as a result of the Company's pre-acquisition due diligence, as well as subsequent marketing and leasing activities, in estimating the fair value of the tangible and intangible assets acquired and intangible liabilities assumed. Organization, Offering and Related Costs Certain organization and offering costs will be incurred by the Advisor. Pursuant to the terms of the Advisory Agreement, the Company will not reimburse the Advisor for these out of pocket costs and future organization and offering costs it may incur. Such costs shall include legal, accounting, printing and other offering expenses, including marketing, and direct expenses of the Advisor’s employees and employees of the Advisor’s affiliates and others. All direct offering costs incurred and or paid by us that are directly attributable to a proposed or actual offering, including sales commissions, if any, were charged against the gross proceeds of the Offering and recorded as an offset to additional paid-in-capital. All indirect costs will be expensed as incurred. Stock-Based Compensation The Company has a stock-based incentive award plan, which is accounted for under the guidance for share based payments. The expense for such awards will be included in general and administrative expenses and is recognized over the vesting period or when the requirements for exercise of the award have been met (See Note G — Stock-Based Compensation). Income Taxes The Company is organized and conducts operations to qualify as a REIT under Sections 856 to 860 of the Internal Revenue Code of 1986, as amended (the “Code”) and to comply with the provisions of the Internal Revenue Code with respect thereto. A REIT is generally not subject to federal income tax on that portion of its REIT taxable income (“Taxable Income”), which is distributed to its stockholders, provided that at least 90% of Taxable Income is distributed and provided that certain other requirements are met. Our Taxable Income may substantially exceed or be less than our net income as determined based on GAAP, because, differences in GAAP and taxable net income consist primarily of allowances for loan losses or doubtful account, write-downs on real estate held for sale, amortization of deferred financing cost, capital gains and losses, and deferred income. If the Company does not qualify as a REIT for the tax year ended December 31, 2017, we will file as a C corporation and deferred tax assets and liabilities will be established for the temporary differences between the financial reporting basis and the tax basis of assets and liabilities at the enacted tax rates expected to be in effect when the temporary differences reverse. A valuation allowance for the deferred tax assets is provided if we believe that it is more likely than not that we will not realize the tax benefit of deferred tax assets based on the available evidence at the time the determination is made. For the tax year ended December 31, 2016, the Company did not realize the benefits of its deferred tax assets, a valuation allowance was recorded against our net deferred tax assets. Per Share Data The Company calculates basic income (loss) per share by dividing net income (loss) for the period by weighted-average shares of its common stock outstanding for the respective period. Diluted income per share takes into account the effect of dilutive instruments, such as stock options and convertible stock, but uses the average share price for the period in determining the number of incremental shares that are to be added to the weighted-average number of shares outstanding. The Company had no outstanding common share equivalents during the three and nine months ended September 30, 2017 and 2016. There is a potential for dilution from the Company’s Series A Convertible Redeemable Preferred Stock which may be converted into the Company’s common stock at any time beginning upon the earlier of (i) 90 days after the occurrence of a listing event or (ii) the second anniversary of the final closing of the offering (whether or not a listing event has occurred). As of September 30, 2017, there were 2,862 shares of the Series A Convertible Redeemable Preferred Stock issued and outstanding. There is a potential for dilution from the Company’s Series 1 Convertible Redeemable Preferred Stock which may be converted into the Company’s common stock at any time beginning upon the earlier of (i) 45 days after the occurrence of a listing event or (ii) April 7, 2019 (whether or not a listing event has occurred). As of September 30, 2017, there were 13,445 shares of the Series 1 Convertible Redeemable Preferred Stock issued and outstanding. Each share of Series A preferred stock and Series 1 preferred stock will convert into the number of shares of the Company’s common stock determined by dividing (i) the stated value per Series A share or Series 1 share of $1,000 (as may be adjusted pursuant to the applicable articles supplementary) plus any accrued but unpaid dividends to, but not including, the conversion date by (ii) the conversion price. The conversion price is equal to 100% or, if the conversion notice is received before December 1, 2017 (for Series 1 shares) or December 31, 2017 (for Series A shares), 110% of the volume weighted average price per share of the Company’s common stock for the 20 trading days prior to the delivery date of the conversion notice; provided that if the Company’s common stock is not then traded on a national securities exchange, the conversion price will be equal to the net asset value per share of the Company’s common stock. The Company will have the right (but not the obligation) to redeem any Series A or Series 1 shares that are subject to a conversion notice on the terms set forth in the applicable articles supplementary. Reportable Segments We currently operate one reportable segment. Reclassifications Amounts listed in connection with certain expense accounts on the condensed consolidated statements of operations in the 2016 have been reclassified to conform to the September 30, 2017 presentation. Accounting and Auditing Standards Applicable to “Emerging Growth Companies” The Company is an “emerging growth company” under the Jumpstart Our Business Startups Act (the “JOBS Act”). For as long as the Company remains an “emerging growth company,” which may be up to five fiscal years, the Company is not required to (1) comply with any new or revised financial accounting standards that have different effective dates for public and private companies until those standards would otherwise apply to private companies, (2) provide an auditor’s attestation report on management’s assessment of the effectiveness of internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act, (3) comply with any new requirements adopted by the Public Company Accounting Oversight Board, or the PCAOB, requiring mandatory audit firm rotation or a supplement to the auditor’s report in which the auditor would be required to provide additional information about the audit and the financial statements of the issuer or (4) comply with any new audit rules adopted by the PCAOB after April 5, 2012, unless the SEC determines otherwise. The Company intends to take advantage of such extended transition period. Since the Company will not be required to comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for other public companies, the Company’s financial statements may not be comparable to the financial statements of companies that comply with public company effective dates. If the Company were to subsequently elect to instead comply with these public company effective dates, such election would be irrevocable pursuant to Section 107 of the JOBS Act. Share Repurchase Program The Company has a Share Repurchase Program (“SRP”) that enables stockholders to sell their shares to the Company. Under the SRP, stockholders may request that the Company redeem all or any portion, subject to certain minimum conditions described below, if such repurchase does not impair the Company's capital or operations. Prior to the time that the Company’s shares are listed on a national securities exchange, the repurchase price per share will depend on the length of time investors have held such shares as follows: no repurchases for the first two years unless shares are being repurchased in connection with a stockholder’s death or disability (as defined in the Code). Repurchase requests made in connection with the death or disability of a stockholder will be repurchased at a price per share equal to 100% of the amount the stockholder paid for each share, or once we have established an estimated NAV per share, 100% of such amount as determined by the Company’s board of directors, subject to any special distributions previously made to the Company’s stockholders. With respect to all other repurchases, prior to the date that we establish an estimated value per share of common stock, the purchase price will be 95.0% of the purchase price paid for the shares, if redeemed at any time between the second and third anniversaries of the purchase date, and 97.0% of the purchase price paid if redeemed after the third anniversary. After we establish an estimated NAV per share of common stock, the purchase price will be 95.0% of the NAV per share for the shares, if redeemed at any time between the second and third anniversaries of the purchase date, 97.0% of the NAV per share if redeemed at any time between the third and fifth anniversaries, and 100.0% of the NAV per share if redeemed after the fifth anniversary. In the event that the Company does not have sufficient funds available to repurchase all of the shares for which repurchase requests have been submitted in any quarter, we will repurchase the shares on a pro rata basis on the repurchase date. The SRP will be terminated if the Company’s shares become listed for trading on a national securities exchange or if the Company’s board of directors determines that it is in the Company’s best interest to terminate the SRP. The Company is not obligated to repurchase shares of common stock under the share repurchase program. The number of shares to be repurchased during the calendar quarter is limited to the lesser of: (i) 5% of the weighted average number of shares outstanding during the prior calendar year, and (ii) those repurchases that could be funded from the net proceeds of the sale of shares under the DRIP in the prior calendar year plus such additional funds as may be reserved for that purpose by the Company’s board of directors; provided, however, that the above volume limitations shall not apply to repurchases requested in connection with the death or qualifying disability of a stockholder. Because of these limitations, the Company cannot guarantee that the Company will be able to accommodate all repurchase requests. The Company will repurchase shares as of March 31 st th th st On October 27, 2016, the Company filed a Form 8-K announcing, among other things, an amendment to the SRP providing for participation in the SRP by any holder of the Company's Series A Convertible Redeemable Preferred Stock, or any future board-authorized series or class of preferred stock that is convertible into common stock of the Company. Under the amendment, which became effective on November 26, 2016, a preferred stock holder may participate in the SRP by converting its preferred stock into common stock of the Company, and submitting such common shares for repurchase. The time period, for purposes of determining how long such stockholder has held the common shares submitted for repurchase, begins as of the date such preferred stockholder acquired the underlying preferred shares that were converted into common shares and submitted for repurchase. The board of directors may, in its sole discretion, terminate, suspend or further amend the share repurchase program upon 30 days’ written notice without stockholder approval if it determines that the funds available to fund the share repurchase program are needed for other business or operational purposes or that amendment, suspension or termination of the share repurchase program is in the best interest of the stockholders. Among other things, we may amend the plan to repurchase shares at prices different from those described above for the purpose of ensuring the Company’s dividends are not “preferential” for incomes tax purposes. Any notice of a termination, suspension or amendment of the share repurchase program will be made via a report on Form 8-K filed with the SEC at least 30 days prior to the effective date of such termination, suspension or amendment. The board of directors may also limit the amounts available for repurchase at any time in its sole discretion. Notwithstanding the foregoing, the share repurchase program will terminate if the shares of common stock are listed on a national securities exchange. As of September 30, 2017, no shares are eligible for redemption (other than in connection with a death or disability of a stockholder). Distribution Reinvestment Plan Pursuant to the DRIP stockholders may elect to reinvest distributions by purchasing shares of common stock in lieu of receiving cash. No dealer manager fees or selling commissions are paid with respect to shares purchased pursuant to the DRIP. Participants purchasing shares pursuant to the DRIP have the same rights and are treated in the same manner as if such shares were issued pursuant to the Offering. The board of directors may designate that certain cash or other distributions be excluded from the DRIP. The Company has the right to amend any aspect of the DRIP or terminate the DRIP with ten days’ notice to participants. Shares issued under the DRIP are recorded to equity in the accompanying balance sheets in the period distributions are declared. We have issued a total of 54,336 shares of common stock under the DRIP as of September 30, 2017. The DRIP program is currently suspended in connection with the merger. Non-controlling Interests The FASB issued authoritative guidance for non-controlling interests in December 2007, which establishes accounting and reporting standards for the non-controlling interest in a subsidiary and for the deconsolidation of a subsidiary. The guidance clarifies that a non-controlling interest in a subsidiary, which is sometimes referred to as an unconsolidated investment, is an ownership interest in the consolidated entity that should be reported as a comp |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note C — Commitments and Contingencies Litigation The nature of our business exposes our properties, us and our operating partnership to the risk of claims and litigation in the normal course of business. Other than routine litigation arising out of the ordinary course of business, we are not presently subject to any material litigation nor, to our knowledge, is any material litigation threatened against us. Environmental Matters As an owner of real estate, we are subject to various environmental laws of federal, state and local governments. We do not believe that compliance with existing laws will have a material adverse effect on the Company’s financial condition or results of operations. However, we cannot predict the impact of any unforeseen environmental contingencies or new or changed laws or regulations on properties in which we hold an interest, or on properties that may be acquired directly or indirectly in the future. |
Investments in Real Estate
Investments in Real Estate | 9 Months Ended |
Sep. 30, 2017 | |
Banking and Thrift [Abstract] | |
Investments in Real Estate | Note D – Investments in Real Estate As of September 30, 2017, the Company had the following Investments in Real Estate that were consolidated on our balance sheet: Property Location Date Acquired Investment Amount Parking Tenant Lease Commencement Date MVP San Jose 88 Garage, LLC San Jose, CA 6/15/2016 $3,824,000 Lanier Parking 3/01/2017 MCI 1372 Street, LLC Canton, OH 7/8/2016 $700,000 ABM 7/8/2016 MVP Cincinnati Race Street Garage, LLC Cincinnati, OH 7/8/2016 $5,408,000 SP + 9/1/2016 MVP St. Louis Washington, LLC St Louis, MO 7/18/2016 $3,000,000 SP + 7/21/2016 MVP St. Paul Holiday Garage, LLC St Paul, MN 8/12/2016 $8,310,000 Interstate Parking 8/12/2016 MVP Louisville Station Broadway, LLC Louisville, KY 8/23/2016 $3,107,000 Riverside Parking 8/23/2016 Cleveland Lincoln Garage Owners, LLC Cleveland, OH 10/19/2016 $7,412,000 SP + 10/25/2016 MVP Houston San Jacinto Lot, LLC Houston, TX 11/22/2016 $3,250,000 iPark Services 12/1/2016 MVP Houston Preston Lot, LLC Houston, TX 11/22/2016* * $2,820,000 iPark Services 12/1/2016 White Front Garage Partners, LLC Nashville, TN 9/30/2016 $11,672,000 Premier Parking 10/1/2016 West 9 th Cleveland, OH 5/11/2016 $5,733,000 SP + 5/11/2016 33740 Crown Colony, LLC** Cleveland, OH 5/17/2016 $3,050,000 SP + 5/17/2016 MVP Detroit Center Garage, LLC Detroit, MI 01/10/2017 $55,139,000 SP + 2/1/2017 St Louis Broadway, LLC St Louis, MO 02/01/2017 $2,400,000 St Louis Parking Co 2/1/2017 St Louis Seventh & Cerre, LLC St Louis, MO 02/01/2017 $3,300,000 St Louis Parking Co 2/1/2017 MVP Preferred Parking, LLC Houston, TX 6/29/2017 $20,600,000 iPark Services 8/01/2017 $139,725,000 * During April 2017, MVP REIT reduced its ownership interest in MVP Houston Preston Lot from 80% to 40%, by selling a portion of its ownership to the Company for $1.12 million. This transaction was completed at par value with no fees paid and no gain or loss recorded by MVP REIT or the Company. Our ownership interest in MVP Houston Preston Lot increased from 20% to 60% and we have been considered the controlling party starting May 1, 2017. ** In November 2016, these properties merged into one holding company called West 9 th |
Related Party Transactions and
Related Party Transactions and Arrangements | 9 Months Ended |
Sep. 30, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions and Arrangements | Note E — Related Party Transactions and Arrangements The transactions described in this Note were approved by a majority of the Company’s board of directors (including a majority of the independent directors) not otherwise interested in such transaction as fair and reasonable to the Company and on terms and conditions no less favorable to the Company than those available from unaffiliated third parties. Ownership of Company Stock During May 2017, VRM II acquired approximately 35,000 shares of our stock from third party investors in exchange for various trust deed investments. During the nine months ended September 30, 2017, VRM II received approximately $11,900 in distributions in accordance with the Company’s DRIP program. As of September 30, 2017, the Company’s Sponsor owned 8,839 shares and VRM II owned 41,435 shares of the Company’s outstanding common stock. Ownership of MVP REIT On November 5, 2016, the Company purchased 338,409 shares of MVP REIT common stock from an unrelated third party for $3.0 million or $8.865 per share. During the three and nine months ended September 30, 2017, MVP REIT paid the Company, approximately $23,000 and $122,000, respectively, in stock distributions and in addition the Company received 2,544 common shares of MVP REIT common shares in accordance with their DRIP program. During April 2017, MVP REIT reduced its ownership interest in MVP Houston Preston Lot from 80% to 40%, by selling a portion of its ownership to the Company for $1.12 million. This transaction was completed at par value with no gain or loss recorded by MVP REIT or the Company. Our ownership interest in MVP Houston Preston Lot increased from 20% to 60% and we will be considered the controlling party starting May 1, 2017. As of September 30, 2017 MVP REIT owed the Company $1.5 million, related to various acquisitions and ongoing operations. Ownership of the Advisor VRM I and VRM II own 40% and 60%, respectively, of the Advisor. Neither VRM I nor VRM II paid any up-front consideration for these ownership interests, but each agreed to be responsible for its proportionate share of future expenses of the Advisor. The operating agreement of the Advisor provides that once VRM I and VRM II have been repaid in full for any capital contributions to the Advisor or for any expenses advanced on the Advisor’s behalf, or capital investment, and once they have received an annualized return on their capital investment of 7.5%, then Michael Shustek will receive 40% of the net profits of the Advisor. Note Payable to the Advisor On June 29, 2017, the Advisor entered into an agreement with the Company to loan the principal amount of $2.1 million to the Company (“Loan Agreement”) for the purchase of the Houston Systems Lot. The terms of this 1-year Loan Agreement includes an annual interest rate of 5% with no penalty for prepayment. Interest and principal are due upon maturity. Fees Paid in Connection with the Offering – Common Stock Various affiliates of the Company are involved in the Common Stock offering and the Company’s operations including MVP American Securities, LLC, or (“MVP American Securities”), which is a broker-dealer and member of the Financial Industry Regulatory Authority, Inc., or FINRA. MVP American Securities is owned by MS MVP Holdings, LLC which is owned and managed by Mr. Shustek. Additionally, the Company’s board of directors, including a majority of the Company’s independent directors, may engage an affiliate of the Advisor to perform certain property management services for us. The Company’s Sponsor or its affiliates paid selling commissions of up to 6.5% of gross offering proceeds from the sale of shares in the Common Stock Offering without any right to seek reimbursement from the Company. The Company’s sponsor or its affiliates also paid non-affiliated selling agents a one-time fee separately negotiated with each selling agent for due diligence expenses, subject to the total underwriting compensation limitation set forth below. Such due diligence expenses were approximately 1.25% to 2.00% of total offering proceeds. Such commissions and fees were paid by sponsor or its affiliates (other than the Company) without any right to seek reimbursement from . Fees Paid in Connection with the Offering – Preferred Stock In connection with the private placement of the Series A and Series 1 preferred stock, the Company may pay selling commissions of up to 6.0% of gross offering proceeds from the sale of shares in the private placements, including sales by affiliated and non-affiliated selling agents. During the three and nine months ended September 30, 2017, the Company paid approximately $0.7 million and $1.3 million, respectively, in selling commissions, of which 0.2 million and $0.3 million, respectively, were paid to affiliated selling agents. The Company Fees Paid in Connection with the Operations of the Company The Advisor or its affiliates will receive an acquisition fee of 2.25% of the purchase price of any real estate provided, however, the Company will not pay any fees when acquiring loans from affiliates. During the three and nine months ended September 30, 2017, approximately zero and $1.7 million, respectively, in acquisition fees had been earned by the Advisor. During the three and nine months ended September 30, 2016, approximately $1.0 million and $1.4 million, respectively, in acquisition fees had been earned by the Advisor. The Advisor or its affiliates can be reimbursed for actual expenses paid or incurred in the investment. During the three and nine months ended September 30, 2017 and 2016, no acquisition expenses had been reimbursed to the Advisor. The Advisor or its affiliates will receive a monthly asset management fee at an annual rate equal to 1.0% of the cost of all assets then held by the Company, or the Company’s proportionate share thereof in the case of an investment made through a joint venture or other co-ownership arrangement. The Company will determine the Company’s NAV, on a date not later than the Valuation Date. Following the Valuation Date, the asset management fee will be based on the value of the Company’s assets rather than their historical cost. Asset management fees for the three and nine months ended September 30, 2017 were approximately $0.3 million and $0.8 million, respectively. Asset management fees for the three and nine months ended September 30, 2016 were approximately $51,000 and $66,000, respectively. The Company will reimburse the Advisor or its affiliates for costs of providing administrative services, subject to the limitation that we will not reimburse the Advisor for any amount by which the Company’s operating expenses, at the end of the four preceding fiscal quarters (commencing after the quarter in which we make the Company’s first investment), exceed the greater of (a) 2.0% of average invested assets and (b) 25.0% of net income connection with the selection or acquisition of an investment, whether or not the Company ultimately acquires, unless the excess amount is approved by a majority of the Company’s independent directors. We will not reimburse the Advisor for personnel costs in connection with services for which the Advisor receives a separate fee, such as an acquisition fee, disposition fee or debt financing fee, or for the salaries and benefits paid to the Company’s executive officers. In addition, we will not reimburse the Advisor for rent or depreciation, utilities, capital equipment or other costs of its own administrative items. During the three and nine months ended September 30, 2017 and 2016, no operating expenses have been reimbursed to the Advisor. In connection with the merger, the Advisory Agreement with MVP Realty Advisor will be amended effective at the closing of the merger to eliminate all fees except a 1.1% asset management fee, which will be limited to $2.0 million per year until the merged company: · holds assets with an Appraised Value equal to or in excess of $500,000,000 or, · the Company reports AFFO per share of Company Common Stock equal to or greater than the $0.3125 per share for two consecutive quarters, on a fully diluted basis at which time all fees subordinated will be paid. In connection with the merger, pursuant to the Termination Agreement, at the effective time of the Merger, the Advisory Agreement, dated September 25, 2012, as amended, among MVP REIT and the Advisor will be terminated and the Company will pay the Advisor an Advisor Acquisition Payment (as such term is defined in the Termination Agreement) of approximately $3.6 million, subject to adjustment in the event that additional properties are acquired by MVP REIT prior to closing, which shall be the only fee payable to the Advisor in connection with the Merger. Fees Paid in Connection with the Liquidation or Listing of the Company’s Real Estate Assets For substantial assistance in connection with the sale of investments, as determined by the independent directors, we will pay the Advisor or its affiliate the lesser of (i) 3.0% of the contract sale price of each real estate-related secured loan or other real estate investment or (ii) 50% of the customary commission which would be paid to a third-party broker for the sale of a comparable property. The amount paid, when added to the sums paid to unaffiliated parties, may not exceed either the customary commission or an amount equal to 6.0% of the contract sales price. The disposition fee will be paid concurrently with the closing of any such disposition of all or any portion of any asset. During the three and nine months ended September 30, 2017 and 2016, no disposition fees have been earned by the Advisor. After the Company’s stockholders have received a return of their net capital invested and a 6.0% annual cumulative, non-compounded return, then the Company’s Advisor will be entitled to receive 15.0% of the remaining proceeds. We will pay this subordinated performance fee only upon one of the following events: (i) if the Company’s shares are listed on a national securities exchange; (ii) if the Company’s assets are sold or liquidated; (iii) upon a merger, share exchange, reorganization or other transaction pursuant to which the Company’s investors receive cash or publicly-traded securities in exchange for their shares; or (iv) upon termination of the Company’s advisory agreement. During the three and nine months ended September 30, 2017 and 2016, no subordinated performance fees have been earned by the Company’s Advisor. Upon completion of the merger of MVP REIT and the Company these fees will be terminated. |
Economic Dependency
Economic Dependency | 9 Months Ended |
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Economic Dependency | Note F — Economic Dependency Under various agreements, the Company has engaged or will engage the Advisor and 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 services, the sale of shares of the Company’s common stock available for issue, as well as other administrative responsibilities for the Company including accounting services and investor relations. In addition, the Sponsor pays selling commissions in connection with the sale of the Company’s shares in the Offering and the Advisor pays the Company’s organization and offering expenses. As a result of these relationships, the Company is dependent upon the Advisor and its affiliates. In the event that these companies are unable to provide the Company with the respective services, the Company will be required to find alternative providers of these services. |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | Note G — Stock-Based Compensation Long-Term Incentive Plan The Company’s board of directors has adopted a long-term incentive plan which we may use to attract and retain qualified directors, officers, employees, and consultants. The Company’s long-term incentive plan will offer these individuals an opportunity to participate in the Company’s growth through awards in the form of, or based on, the Company’s common stock. We currently anticipate that we will not issue awards under the Company’s long-term incentive plan, although we may do so in the future, including possible equity grants to the Company’s independent directors as a form of compensation. The long-term incentive plan authorizes the granting of restricted stock, stock options, stock appreciation rights, restricted or deferred stock units, dividend equivalents, other stock-based awards and cash-based awards to directors, officers, employees and consultants of the Company and the Company’s affiliates’ selected by the board of directors for participation in our long-term incentive plan. Stock options granted under the long-term incentive plan will not exceed an amount equal to 10% of the outstanding shares of our common stock on the date of grant of any such stock options. Stock options may not have an exercise price that is less than the fair market value of a share of our common stock on the date of grant. Our board of directors or a committee appointed by our board of directors will administer the long-term incentive plan, with sole authority to determine all of the terms and conditions of the awards, including whether the grant, vesting or settlement of awards may be subject to the attainment of one or more performance goals. No awards will be granted under the long-term incentive plan if the grant or vesting of the awards would jeopardize our status as a REIT under the Code or otherwise violate the ownership and transfer restrictions imposed under our charter. Unless otherwise determined by our board of directors, no award granted under the long-term incentive plan will be transferable except through the laws of descent and distribution. We have authorized and reserved an aggregate maximum number of 500,000 common shares for issuance under the long-term incentive plan. In the event of a transaction between our company and our stockholders that causes the per-share value of our common stock to change (including, without limitation, any stock dividend, stock split, spin-off, rights offering or large nonrecurring cash dividend), the share authorization limits under the long-term incentive plan will be adjusted proportionately and the board of directors will make such adjustments to the long-term incentive plan and awards as it deems necessary, in its sole discretion, to prevent dilution or enlargement of rights immediately resulting from such transaction. In the event of a stock split, a stock dividend or a combination or consolidation of the outstanding shares of common stock into a lesser number of shares, the authorization limits under the long-term incentive plan will automatically be adjusted proportionately and the shares then subject to each award will automatically be adjusted proportionately without any change in the aggregate purchase price. Our board of directors may in its sole discretion at any time determine that all or a portion of a participant’s awards will become fully vested. The board may discriminate among participants or among awards in exercising such discretion. The long-term incentive plan will automatically expire on the tenth anniversary of the date on which it is approved by our board of directors and stockholders, unless extended or earlier terminated by our board of directors. Our board of directors may terminate the long-term incentive plan at any time. The expiration or other termination of the long-term incentive plan will not, without the participant’s consent, have an adverse impact on any award that is outstanding at the time the long-term incentive plan expires or is terminated. Our board of directors may amend the long-term incentive plan at any time, but no amendment will adversely affect any award without the participant’s consent and no amendment to the long-term incentive plan will be effective without the approval of our stockholders if such approval is required by any law, regulation or rule applicable to the long-term incentive plan. During the three and nine months ended September 30, 2017 and 2016, no grants have been made under the long-term incentive plan. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Changes and Error Corrections [Abstract] | |
Recent Accounting Pronouncements | Note H – Recent Accounting Pronouncements In May 2014, Financial Accounting Standards Board ("FASB") issued ASU 2014-09, Revenue from Contracts with Customers Revenue from Contracts with Customers, Deferral of Effective Date Revenue from Contracts with Customers, Principal versus Agent Considerations (Reporting Revenue Gross versus Net) In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. The Company have on consolidated financial statements . In February 2016, the FASB issued ASU 2016-02, Leases – (Topic 842) In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230) Restricted Cash In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805) Clarifying the Definition of a Business In May 2017, the FASB issued Accounting Standards Update ASU 2017-09, Compensation-Stock Compensation: Scope of Stock Compensation Modification Accounting In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities |
Acquisitions
Acquisitions | 9 Months Ended |
Sep. 30, 2017 | |
Business Combinations [Abstract] | |
Acquisitions | Note I – Acquisitions The following table is a summary of the acquisitions for the nine months ended September 30, 2017. Property Location Date Acquired Property Type # Spaces Size / Acreage Retail /Office Square Ft. Cash Consideration Ownership % MVP Detroit Center Garage Detroit, MI 01/10/2017 Garage 1,275 8.78 N/A $55,000,000 80% St Louis Broadway, LLC St Louis, MO 02/01/2017 Lot 161 0.96 N/A $2,400,000 100% St Louis Seventh & Cerre, LLC St Louis, MO 02/01/2017 Lot 174 1.20 N/A $3,300,000 100% MVP Preferred Parking, LLC Houston, TX 06/29/2017 Garage & Lot 521 1.0 784 $20,500,000 100% Assets Land and Improvements Building and improvements Total assets acquired MVP Detroit Center Garage $ 7,000,000 $ 48,000,000 $ 55,000,000 St Louis Broadway, LLC 2,400,000 -- 2,400,000 St Louis Seventh & Cerre, LLC 3,300,000 -- 3,300,000 MVP Preferred Parking, LLC 15,800,000 4,700,000 20,500,000 $ 28,500,000 $ 52,700,000 $ 81,200,000 The following table of results of operations of the acquired properties for the three and nine months ended September 30, 2017: Three Month Ended 9/30/2017 Nine Month Ended 9/30/2017 Total Revenues Net Income Total Revenues Net Income 2017 acquisitions $ 1,271,000 $ 263,000 $ 3,743,000 $ 664,000 Pro forma results of the Company The following table of pro forma consolidated results of operations of the Company for the three and nine months ended September 30, 2017 and 2016, and assumes that the acquisitions were completed as of January 1, 2016 For the three months ended September 30, For the nine months ended September 30, 2017 2016 2017 2016 Revenues from continuing operations $ 2,222,000 $ 1,933,000 $ 7,693,000 $ 4,653,000 Net income (loss) available to common stockholders $ (392,000) $ (307,000) $ (4,104,000) $ 1,311,000 Net income (loss) available to common stockholders per share – basic $ (0.15) $ (0.23) $ (1.63) $ 1.71 Net income (loss) available to common stockholders per share – diluted $ (0.15) $ (0.23) $ (1.63) $ 1.71 |
Line of Credit
Line of Credit | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Line of Credit | Note J — Line of Credit On October 5, 2016, the Company, through its Operating Partnership, and MVP REIT, (the “REITs”) through a wholly owned subsidiary (the "Borrowers"), entered into a credit agreement (the "Unsecured Credit Agreement") with KeyBank, National Association ('KeyBank") as the administrative agent and KeyBank Capital Markets ("KeyBank Capital Markets") as the lead arranger. Pursuant to the Unsecured Credit Agreement, the Borrowers were provided with a $30 million unsecured credit facility (the "Unsecured Credit Facility"), which may be increased up to $100 million, in minimum increments of $10 million. The Unsecured Credit Facility has an initial term of two years, maturing on October 5, 2018, and may be extended for a one-year period if certain conditions are met and upon payment of an extension fee. The Unsecured Credit Facility has an interest rate calculated based on LIBOR Rate plus 2.25% or Base Rate plus 1.25%, both as provided in the Unsecured Credit Agreement. The Base Rate is calculated as the greater of (i) the KeyBank Prime rate or (ii) the Federal Funds rate plus ½ of 1%. Payments under the Unsecured Credit Facility are interest only and are due on the first day of each quarter. The obligations of the Borrowers of the Unsecured Credit Agreement are joint and several. The REITs have entered into cross-indemnification provisions with respect to their joint and several obligations under the Unsecured Credit Agreement. As of September 30, 2017 the interest rate was 3.49%. As of September 30, 2017, the Borrowers had one property listed on the line of credit, which provided an available draw of approximately $2.2 million, and had drawn approximately $2.0 million, of which our portion of the current draw was approximately $0, based on our pro-rata ownership of the properties listed on the line of credit. Based on the one property on the line of credit as of September 30, 2017, the REITs had an additional available draw of approximately $0.2 million. For the three and nine months ended September 30, 2017, we expensed approximately $34,000 and $220,000, respectively, in interest expense. For the three and nine months ended September 30, 2017, we expensed approximately $9,000 and $18,400, respectively, in unused line fees associated with our draw. Total loan amortization cost for the three and nine months ended September 30, 2017 were $62,000 and $189,000, respectively. On June 26, 2017, the Company and MVP REIT (together, the “REITs”), each through a wholly owned subsidiary, MVP REIT II Operating Partnership, LP and MVP Real Estate Holdings, LLC (together, the "Borrowers"), entered into a credit agreement (the "Working Capital Credit Agreement") with KeyBank, National Association ("KeyBank") as the administrative agent and KeyBanc Capital Markets ("KeyBanc Capital Markets") as the lead arranger. Pursuant to the Working Capital Credit Agreement, the Borrowers were provided with a $6.0 million credit facility (the "Total Commitment"), which may be increased up to $10 million, in minimum increments of $1 million. The Total Commitment had an initial term of six months, maturing on December 26, 2017. In October 2017, this was extended to March 31, 2018. The Working Capital Credit Agreement has an interest rate calculated based on LIBOR Rate plus 4.5% or Base Rate plus 3.5%, both as provided in the Working Capital Credit Agreement. The Base Rate is calculated as the greater of (i) the KeyBank Prime rate or (ii) the Federal Funds rate plus ½ of 1%. Payments under the Working Capital Credit Facility require 100% of the net proceeds of all capital events and equity issuances by the REITs within 5 business days of receipt. The obligations of the Borrowers of the Unsecured Credit Agreement are joint and several. The REITs have entered into cross-indemnification provisions with respect to their joint and several obligations under the Unsecured Credit Agreement. As of September 30, 2017 the interest rate was 5.73%. As of September 30, 2017, the balance on the Working Capital Credit Facility was approximately $1.5 million (net of unamortized loan costs), of which our portion of the current draw was approximately $1.5 million. As of September 30, 2017, the REITs had an additional available draw of approximately $4.4 million. The Company used net proceeds from the private placement of the Series 1 Convertible Redeemable Preferred Stock to paydown the $1.5 million in October 2017. For the three and nine months ended September 30, 2017, we expensed approximately $49,000 in interest expense. For the three and nine months ended September 30, 2017, we expensed approximately $1,600 in unused line fees associated with our draw. Total loan amortization cost for the three and nine months ended September 30, 2017 were $50,000 and $53,000, respectively. |
Notes Payable and Notes Payable
Notes Payable and Notes Payable Related Party | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Notes Payable | Note K — Notes Payable and Notes Payable Related Party As of September 30, 2017, the principal balances on notes payable are as follows: Property Original Debt Amount Monthly Payment Balance as of 9/30/2017 Lender Term Interest Rate Loan Maturity MVP Realty Advisors $2,100,000 -- $2,100,000 MVP Realty Advisors 1 Year (I/O) 5.00% 6/30/2018 West 9 th $5,300,000 $30,000 $5,192,000 American National Insurance Co. 10 year 4.50% 11/1/2026 MVP Detroit Center Garage, LLC $31,500,000 $194,000 $31,112,000 Bank of America 10 year 5.52% 2/1/2027 MVP San Jose 88 Garage, LLC $2,200,000 Interest Only $2,200,000 Owens Realty Mortgage, Inc. 2 year (I/O) 7.75% 1/15/2019 MVP Cincinnati Race Street Garage, LLC $3,000,000 Interest Only $3,000,000 Moonshell, LLC 3 Months (I/O) 9.00% 1/10/2018 MVP St Louis Washington, LLC $1,380,000 Interest Only $1,380,000 KeyBank 10 year (2 year I/O) 4.90% 5/1/2027 St Paul Holiday Garage, LLC $4,132,000 Interest Only $4,132,000 KeyBank 10 year (2 year I/O) 4.90% 5/1/2027 Cleveland Lincoln Garage, LLC $3,999,000 Interest Only $3,999,000 KeyBank 10 year (2 year I/O) 4.90% 5/1/2027 Louisville Broadway Station, LLC $1,682,000 Interest Only $1,682,000 Cantor Commercial Real Estate (CCRE) 10 year (I/O) 5.03% 5/6/2027 Whitefront Garage, LLC $6,454,000 Interest Only $6,454,000 Cantor Commercial Real Estate (CCRE) 10 year (I/O) 5.03% 5/6/2027 MVP Houston Preston Lot, LLC $1,627,000 Interest Only $1,627,000 Cantor Commercial Real Estate (CCRE) 10 year (I/O) 5.03% 5/6/2027 MVP Houston San Jacinto Lot, LLC $1,820,000 Interest Only $1,820,000 Cantor Commercial Real Estate (CCRE) 10 year (I/O) 5.03% 5/6/2027 St. Louis Broadway, LLC $1,671,000 Interest Only $1,671,000 Cantor Commercial Real Estate (CCRE) 10 year (I/O) 5.03% 5/6/2027 St. Louis Seventh & Cerre, LLC $2,058,000 Interest Only $2,058,000 Cantor Commercial Real Estate (CCRE) 10 year (I/O) 5.03% 5/6/2027 MVP Preferred Parking, LLC $11,330,000 Interest Only $11,330,000 Key Bank 10 year 5.02% 8/1/2027 Less unamortized loan issuance costs ($923,000) $78,834,000 Total interest expense incurred for the three and nine months ended September 30, 2017 was approximately $1.1 million and $2.7 million, respectively. Total interest expense incurred for the nine months ended September 30, 2016 was approximately $1,000. There was no interest expense for the three months ended September 30, 2016. Total loan amortization cost for the three and nine months ended September 30, 2017 was approximately $0.2 and $0.4 million, respectively. During the three and nine months ended September 30, 2010 there were no loan amortization cost. As of September 30, 2017, future principal payments on the notes payable are as follows: 2017 $ 173,000 2018 8,032,000 2019 882,000 2020 1,008,000 2021 1,068,000 Thereafter 68,594000 Less unamortized loan issuance costs (923,000) Total $ 78,834,000 |
Fair Value
Fair Value | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value | Note L — Fair Value A fair value measurement is based on the assumptions that market participants would use in pricing an asset or liability in an orderly transaction. The hierarchy for inputs used in measuring fair value are as follows: 1. 2. 3. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurement. The Company's financial instruments include cash and cash equivalents, restricted cash, accounts payable and accrued expenses. Due to their short maturities, the carrying amounts of these assets and liabilities approximate fair value. Assets and liabilities measured at fair value level 3 on a non-recurring basis may include Assets Held for Sale. |
Gain on Sale of Investment in R
Gain on Sale of Investment in Real Estate | 9 Months Ended |
Sep. 30, 2017 | |
Real Estate [Abstract] | |
Gain on Sale of Investment in Real Estate | Note M — Gain on Sale of Investment in Real Estate During September 2017, we sold one property listed as held for sale for $2.0 million. The Company acquired the property on November 22, 2016 and recorded at the fair value based on an appraisal. During March 2017, Houston Jefferson entered into a purchase and sale agreement to sell the property “as is” to a third party for approximately $2.0 million. During May 2017, this purchase and sale agreement was cancelled. During May and June, another unsolicited third party expressed interest in purchasing the property for $2.0 million and during July 2017, the Company entered into a purchase and sale agreement with this third party which closed on September 20, 2017. As a result of the sale the Company recorded a gain of approximately $1.2 million. |
Investment In DST
Investment In DST | 9 Months Ended |
Sep. 30, 2017 | |
Equity Method Investment [Member] | |
Investment In DST | Note N – Investment In DST On May 31, 2017, the Company, through a wholly-owned subsidiary of its operating partnership, purchased a 51.0% beneficial interest in MVP St. Louis Cardinal Lot, DST, a Delaware statutory trust, or MVP St Louis, for approximately $2.8 million. MVP St. Louis is the owner of a 2.56-acre, 376-vehicle, commercial parking lot located at 500 South Broadway, St. Louis, Missouri 63103, known as the Cardinal Lot, or the Property, which is adjacent to Busch Stadium, the home of the St. Louis Cardinals major league baseball team. The Property was purchased by MVP St. Louis from an unaffiliated seller for a purchase price of $11,350,000, plus payment of closing costs, financing costs, and related transactional costs. Concurrently with the acquisition of the Property, MVP St. Louis obtained a first mortgage loan from Cantor Commercial Real Estate Lending, L.P, or St. Louis Lender, in the principal amount of $6,000,000, with a 10-year, interest-only term at a fixed interest rate of 5.25%, resulting in an annual debt service payment of $315,000, or St. Louis Loan. MVP St. Louis used the Company’s investment to fund a portion of the purchase price for the Property. The remaining equity portion was funded through short-term investments by Vestin Realty Mortgage I, Inc. and Vestin Realty Mortgage II, Inc., both of which are affiliates of MVP Realty Advisors, LLC, the external advisor to the Company, or MVP Realty, pending the private placements of additional beneficial interest in MVP St. Louis exempt from registration under the Securities Act of 1933, as amended. Vestin Realty Mortgage II, Inc. and Michael V. Shustek, our Chairman and Chief Executive Officer, provided non-recourse carveout guaranties of the loan and environmental indemnities of St. Louis Lender. Also concurrently with the acquisition of the Property, MVP St. Louis, as landlord, entered into a 10-year master lease, or St. Louis Master Lease, with MVP St. Louis Cardinal Lot Master Tenant, LLC, an affiliate of MVP Realty, as tenant, or St. Louis Master Tenant. St. Louis Master Tenant, in turn, concurrently entered into a 10-year sublease with Premier Parking of Missouri, LLC. The St. Louis Master Lease provides for annual rent payable monthly to MVP St. Louis, consisting of base rent in an amount to pay debt service on the St. Louis Loan, stated rent of $414,000 and potential bonus rent equal to a share of the revenues payable under the sublease in excess of a threshold. The Company will be entitled to its proportionate share of the rent payments based on its ownership interest. Under the St. Louis Master Lease, MVP St. Louis is responsible for capital expenditures and the St. Louis Master Tenant is responsible for taxes, insurance and operating expenses. Distributions to the Company, for the 3 months ended September 30, 2017, totaled $52,000. Summarized Balance Sheets—Unconsolidated Real Estate Affiliates—Equity Method Investments September 30, 2017 (Unaudited) ASSETS Investments in real estate and fixed assets $ 11,350,000 Cash 37,000 Cash - restricted 3,000 Due from related party 9,000 Total assets $ 11,399,000 LIABILITIES AND EQUITY Liabilities Notes payable, net of unamortized loan issuance cost of $65,734.77 $ 5,934,000 Accounts payable and accrued liabilities 27,000 Total liabilities 5,961,000 Equity Shareholders’ Equity Member’s equity 6,547,000 Unsold equity (bridged by Vestin Realty Mortgage II, Inc) 203,000 Offering costs (1,312,000) Accumulated earnings 138,000 Distributions to members (138,000) Total equity 5,438,000 Total liabilities and equity $ 11,399,000 Summarized Statements of Operations—Unconsolidated Real Estate Affiliates—Equity Method Investments For the three months ended September 30, 2017 For the period from May 31, 2017 (inception) to September 30, 2017 Revenu $ 182,000 $ 243,000 Expenses 79,000 105,000 Net income $ 103,000 $ 138,000 |
Investment in Equity Method Inv
Investment in Equity Method Investee | 9 Months Ended |
Sep. 30, 2017 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Investment in Equity Method Investee | Note O – Investment in Equity Method Investee Denver 1935 Sherman On February 12, 2016, the Company along with MVP REIT, through MVP Denver 1935 Sherman, LLC ("MVP Denver"), a Nevada limited liability company owned 24.49% by the Company and 75.51% by MVP REIT, closed on the purchase of a parking lot for approximately $2.4 million in cash, of which the Company's share was approximately $0.6 million. The parking lot is located at 1935 Sherman Avenue, Denver, Colorado (the "Denver parking lot"). The Denver parking lot consists of approximately 18,765 square feet and has approximately 72 parking spaces. , a national parking operator, under a net lease agreement where MVP Denver is responsible for property taxes and SP Plus Corporation pays for all insurance and maintenance costs. SP Plus Corporation pays annual rent of $120,000. In addition, the lease provides percentage rent with MVP Denver receiving 70% of gross receipts over $160,000. The term of the lease is for 10 years. Houston Preston Lot On November 22, 2016, the Company and MVP REIT , through MVP Houston Preston Lot, LLC, a Delaware limited liability company (“MVP Preston”), an entity wholly owned by the Company, The parking lot is under a 10-year lease with iPark Services LLC (“iPark”), a regional parking operator, under a modified net lease agreement where MVP Preston is responsible for property taxes above a $38,238 threshold, and iPark pays for insurance and maintenance costs. iPark pays annual rent of $228,000. In addition, the lease provides percentage rent with MVP Preston receiving 65% of gross receipts over $300,000. The term of the lease is for 10 years. During April 2017, the company increased their ownership interest in the MVP Houston Preston Lot from 20% to 60%, by purchasing $1.12 million of MVP REIT ownership and will now be considered the controlling party. Summarized Balance Sheets—Unconsolidated Real Estate Affiliates—Equity Method Investments September 30, 2017 December 31, 2016 (Unaudited) (Unaudited) ASSETS Investments in real estate and fixed assets $ 2,438,000 $ 2,438,000 Cash 234,000 51,000 Cash - restricted 337,000 -- Total assets $ 3,009,000 $ 2,489,000 LIABILITIES AND EQUITY Liabilities Notes payable, net of unamortized loan issuance cost $ 735,000 $ -- Due to related party 318,000 -- Accounts payable and accrued liabilities 117,000 36,000 Total liabilities 1,170,000 36,000 Equity Shareholders’ Equity Additional paid-in capital 1,294,000 1,802,000 Retained Earnings 103,000 64,000 Total Shareholders’ Equity 1,397,000 1,866,000 Non-controlling interest 442,000 587,000 Total equity 1,839,000 2,453,000 Total liabilities and equity $ 3,009,000 $ 2,489,000 Summarized Statements of Operations—Unconsolidated Real Estate Affiliates—Equity Method Investments For the Three Months Ended September 30, For the Nine Months Ended September 30, 2017 2016 2017 2016 Rental revenue $ 30,000 $ 30,000 $ 90,000 $ 76,000 Expenses (22,000) (9,000) (52,000) (32,000) Net income $ 8,000 $ 21,000 $ 38,000 $ 44,000 |
Merger
Merger | 9 Months Ended |
Sep. 30, 2017 | |
Business Combinations [Abstract] | |
Merger | Note P – Merger As previously announced, on May 26, 2017, the Company, MVP REIT Inc., a Maryland corporation (“MVP REIT”), MVP Merger Sub, LLC, a Delaware limited liability company and a wholly-owned subsidiary of the Company (“Merger Sub”), and MVP Realty Advisors, LLC, the Company’s and MVP REIT’s external advisor (the “Advisor”), entered into an agreement and plan of merger (the “Merger Agreement”). Subject to the terms and conditions of the Merger Agreement, MVP REIT will merge with and into Merger Sub (the “Merger”), with Merger Sub surviving the Merger (the “Surviving Entity”), such that following the Merger, the Surviving Entity will continue as a wholly owned subsidiary of the Company. The Merger is intended to qualify as a “reorganization” under, and within the meaning of, Section 368(a) of the Internal Revenue Code of 1986, as amended (the “Code”). The combined company will be renamed "The Parking REIT, Inc." Subject to the terms and conditions of the Merger Agreement, at the effective time of the Merger, each outstanding share of MVP REIT’s common stock, $0.001 par value per share (the “MVP REIT Common Stock”), will be automatically cancelled and retired, and converted into the right to receive 0.365 shares of common stock, $0.0001 par value per share, of the Company (the “Company Common Stock”) (such ratio, as it may be adjusted pursuant to the Merger Agreement, the “Exchange Ratio”). Holders of shares of MVP REIT Common Stock will receive cash in lieu of fractional shares. At the effective time of the Merger each share of MVP REIT Common Stock, if any, then held by any wholly owned subsidiary of MVP REIT or by the Company or any of its wholly owned subsidiaries will no longer be outstanding and will automatically be retired and will cease to exist, and no consideration will be paid, nor will any other payment or right inure or be made with respect to such shares of MVP REIT Common Stock in connection with or as a consequence of the Merger. In addition, each share of MVP REIT’s Non-Participating, Non-Voting Convertible Stock, $0.001 par value per share (“MVP REIT Convertible Stock”), all 1,000 of which are held by the Advisor, will automatically be retired and will cease to exist, and no consideration will be paid, nor will any other payment or right inure or be made with respect to such shares of MVP REIT Convertible Stock in connection with or as a consequence of the Merger. The Merger Agreement contains customary covenants, including covenants prohibiting MVP REIT and its subsidiaries and representatives from soliciting, providing information or entering into discussions concerning proposals relating to alternative business combination transactions, subject to certain limited exceptions. However, under the terms of the Merger Agreement, during the period beginning on the date of the Merger Agreement and continuing until 11:59 p.m. New York City time on July 10, 2017 (the “Go Shop Period End Time”), MVP REIT (through the MVP REIT special committee and its representatives) was permitted to initiate, solicit, provide information and enter into discussions concerning proposals relating to alternative business combination transactions. From May 30, 2017, through July 10, 2017, in connection with the ‘‘go shop’’ process provided for under the Merger Agreement, Robert A. Stanger & Co., Inc., (“Stanger”) contacted approximately 78 parties, which the MVP I Special Committee and Stanger believed had the financial ability and potential strategic interest in reviewing the opportunity, to solicit their interest in a possible alternative transaction with MVP REIT. Stanger and Venable, LLP negotiated with 12 parties with regard to signing a confidentiality agreement of which 8 confidentiality agreements were executed. No bids were received prior to the July 10, 2017 Go Shop Period End Time. Pursuant to the Merger Agreement, the board of directors of the Company (the “Company Board”) will, effective as of the effective time of the Merger, increase the number of directors comprising the Company Board to eight and Nicholas Nilsen, Robert J. Aalberts and Shawn Newson, previous Directors of MVP REIT, will be elected to the Company Board. As previously announced, the stockholders of MVP REIT have approved the Merger and the Merger Agreement at the special meeting of stockholders of MVP REIT held on September 27, 2017. The completion of the Merger remains subject to receipt of certain third party consents and satisfaction of other customary closing conditions. Amended and Restated Advisory Agreement Concurrently with the entry into the Merger Agreement, on May 26, 2017, the Company, MVP REIT II Operating Partnership, LP and the Advisor entered into the Second Amended and Restated Advisory Agreement (the “Second Amended and Restated Advisory Agreement”), which will become effective at the effective time of the Merger. The Second Amended and Restated Advisory Agreement will amend the Company’s existing advisory agreement, dated October 5, 2015 (the “Original Agreement”), to provide for, among other amendments, (i) elimination of acquisition fees, disposition fees and subordinated performance fees and (ii) the payment of an asset management fee by the Company to the Advisor calculated and paid monthly in an amount equal to one-twelfth of 1.1% of the (a) cost of each asset then held by the Company, without deduction for depreciation, bad debts or other non-cash reserves, or (b) the Company’s proportionate share thereof in the case of an investment made through a joint venture or other co-ownership arrangement excluding (only for clause (b)) debt financing on the investment. Pursuant to the Second Amended and Restated Advisory Agreement, the asset management fee may not exceed $2,000,000 per annum (the “Asset Management Fee Cap”) until the earlier of such time, if ever, that (i) the Company holds assets with an Appraised Value (as defined Second Amended and Restated Advisory Agreement) equal to or in excess of $500,000,000 or (ii) the Company reports AFFO (as defined in the Second Amended and Restated Advisory Agreement) equal to or greater than $0.3125 per share of Company Common Stock (an amount intended to reflect a 5% or greater annualized return on $25.00 per share of the Company Common Stock) (the “Per Share Amount”) for two consecutive quarters, on a fully diluted basis. All amounts of the asset management fee in excess of the Asset Management Fee Cap, plus interest thereon at a rate of 3.5% per annum, will be due and payable by the Company no later than ninety (90) days after the earlier of the date that (i) the Company holds assets with an Appraised Value equal to or in excess of $500,000,000 or (ii) the Company reports AFFO per share of Company Common Stock equal to or greater than the Per Share Amount for two consecutive quarters, on a fully diluted basis. In the event that the Merger Agreement is terminated prior to the consummation of the Merger, the Second Amended and Restated Advisory Agreement will automatically terminate and be of no further effect and the Company, MVP REIT II Operating Partnership, LP and the Advisor will have the rights and obligations set forth in the Original Agreement. Termination Agreement Concurrently with the entry into the Merger Agreement, on May 26, 2017, the Company, MVP REIT, the Advisor and MVP REIT II Operating Partnership, LP entered into a termination and fee agreement (the “Termination Agreement”). Pursuant to the Termination Agreement, at the effective time of the Merger, the Advisory Agreement, dated September 25, 2012, as amended, among MVP REIT and the Advisor will be terminated and the Company will pay the Advisor an Advisor Acquisition Payment (as such term is defined in the Termination Agreement) of approximately $3.6 million, subject to adjustment in the event that additional properties are acquired by MVP REIT prior to closing, which shall be the only fee payable to the Advisor in connection with the Merger. In the event that the Merger Agreement is terminated prior to the consummation of the Merger, the Termination Agreement will automatically terminate and be of no further effect and no Advisor Acquisition Payment will be owed and payable. The foregoing description of the Merger Agreement, the Amended and Restated Advisory Agreement and the Termination Agreement is only a summary, does not purport to be complete and is qualified in its entirety by reference to the full text of the applicable agreements, each of which is filed with as a Form 8-K exhibit with the SEC on May 31, 2017. Amended Charter In connection with the Merger, at the Company annual stockholders’ meeting held on September 27, 2017, the Company’s stockholders approved, among other matters, the amendment and restatement of its charter (the “Amended Charter”). As described in more detail in the final proxy statement distributed to our stockholders for the annual meeting, the Amended Charter is primarily intended to accomplish two objectives in connection with the possible listing of the Company’s Common Stock after the closing of the Merger: (1) to remove provisions of our charter that we believe may unnecessarily restrict our ability to take advantage of further opportunities for liquidity events or are redundant with or otherwise addressed or permitted to be addressed under Maryland law and (2) to amend certain provisions in a manner that we believe would be more suitable for becoming a publicly-traded REIT. The Amended Charter will become effective upon its filing with the State Department of Assessments and Taxation of Maryland. We expect to file the proposed Amended Charter immediately before the Company’s Common Stock becomes listed for trading on a national securities exchange. This means that the changes to the charter will not be effective unless and until we complete an exchange listing. |
Income Taxes and Critical Accou
Income Taxes and Critical Accounting Policy | 9 Months Ended |
Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes and Critical Accounting Policy | Note Q — Income Taxes and Critical Accounting Policy The Company will be electing to be treated as a REIT for the tax year beginning January 1, 2017 and ending December 31, 2017, and believes that it has been organized and has operated during 2017 in such a manner to meet the qualifications to be treated as a REIT for federal and state income tax purposes. During 2016, the Company was subject to U.S. federal and state income taxes as it filed income tax returns as a C corporation. As such, we account for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. The Company uses a two-step approach to recognize and measure uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolutions of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more likely than not of being realized upon ultimate settlement. The Company believes that its income tax filing positions and deductions would be sustained upon examination; thus, the Company has not recorded any uncertain tax positions as of September 30, 2017. A full valuation allowance for deferred tax assets was provided since the Company believes that it is more likely than not that it will not realize the benefits of its deferred tax assets. A change in circumstances may cause the Company to change its judgment about whether deferred tax assets will more likely than not be realized. The Company would generally report any change in the valuation allowance through its income statement in the period in which such changes in circumstances occur. As a REIT, the Company will generally not be subject to corporate level federal income taxes on earnings distributed to our stockholders, and therefore may not realize deferred tax assets arising during the Company’s pre-2017 periods before the Company became a REIT. The Company intends to distribute at least 100% of its taxable income annually and intends to do so for the tax year ending December 31, 2017 and future periods. Accordingly, the Company has not included any provisions for federal income taxes in the accompanying consolidated financial statements for the three and nine months ended September 30, 2017. The Company owns and rents real estate in various states and municipalities within the United States, and, as a result, the Company or one or more of its subsidiaries may have income or other tax return filing requirements, and may be subject to income or franchise taxes, in state and municipal jurisdictions. The Company has a net deferred tax asset of $1.6 million which is subject to a full valuation allowance and thus is not recorded on the Company’s balance sheet. The deferred tax asset is primarily made up of net operating losses and capitalized acquisition costs which are deducted for books but capitalized for tax. If the Company makes a REIT election, generally the net operating losses will not be available to offset future income. Due to the valuation allowance, the Company’s effective rate is approximately 0%. |
Preferred Stock and Warrants
Preferred Stock and Warrants | 9 Months Ended |
Sep. 30, 2017 | |
Equity | |
Preferred Stock and Warrants | Note R —Preferred Stock and Warrants The Company reviewed the relevant ASC’s, specifically ASC 480 – Distinguishing Liabilities From Equity and ASC 815 – Derivates and Hedging, in connection with the presentation of the Series A and Series 1 preferred stock. Below is a summary of the Company’s Preferred Stock offerings. Series A Preferred Stock The Company offered up to $50 million in shares of the Company’s Series A Convertible Redeemable Preferred Stock (“Series A”), par value $0.0001 per share, together with warrants to acquire the Company’s common stock, in a Regulation D 506(c) private placement to accredited investors. In connection with the private placement, on October 27, 2016, the Company filed with the State Department of Assessments and Taxation of Maryland Articles Supplementary to the charter of the Company classifying and designating 50,000 shares of Series A Convertible Redeemable Preferred Stock. The Company commenced the private placement of the Shares to accredited investors on November 1, 2016 and closed the offering on March 24, 2017. As of September 30, 2017, the Company raised approximately $2.6 million, net of offering costs, in the Series A private placements. The holders of the Series A Preferred Stock shall be entitled to receive, when and as authorized by the board of directors and declared by the Company out of funds legally available for the payment of dividends, cash dividends at the rate of 5.75% per annum of the initial stated value of $1,000 per share. If a Listing Event, as defined in the offering, has not occurred by March 31, 2017, the cash dividend rate shall increase to 7.50%, until a Listing Event has occurred. Base on the number of Series A shares outstanding at September 30, 2017, the increased dividend rate would cost the Company approximately $12,000 more per quarter in Series A dividends. Subject to the Company’s redemption rights as described below, each Share will be convertible into shares of our common stock, at the election of the holder thereof by written notice to the Company (each, a “Conversion Notice”) containing the information required by the charter, at any time beginning upon the earlier of (i) 90 days after the occurrence of a Listing Event or (ii) the second anniversary of the final Closing of this Offering (whether or not a Listing Event has occurred). Each Share will convert into a number of shares of our common stock determined by dividing (i) the sum of (A) 100% of the Stated Value, initially $1,000, plus (B) any accrued but unpaid dividends to, but not including, the date of conversion, by (ii) the conversion price for each share of our common stock (the “Conversion Price”) determined as follows: · Provided there has been a Listing Event, if a Conversion Notice with respect to any Share is received on or prior to the day immediately preceding the first anniversary of the issuance of such Share, the Conversion Price for such Share will be equal to 110% of the volume weighted average price per share of the common stock of the Company (or its successor) for the 20 trading days prior to the delivery date of the Conversion Notice. · Provided there has been a Listing Event, if a Conversion Notice with respect to any Share is received on or after the first anniversary of the issuance of such Share, the Conversion Price for such Share will be equal to the volume weighted average price per share of the common stock of the Company (or its successor) for the 20 trading days prior to the delivery date of the Conversion Notice. · If a Conversion Notice with respect to any Share is received on or after the second anniversary of the final Closing of this Offering, and at the time of receipt of such Conversion Notice, a Listing Event has not occurred, the Conversion Price for such Share will be equal to 100% of our net asset value per share, or NAV per share, if then established, and until we establish a NAV per share, the Conversion Price will be equal to $25.00, or the initial offering price per share of our common stock in our initial public offering. If and when the Amended Charter becomes effective, the date by which holders of Series A must provide notice of conversion will be changed from the day immediately preceding the first anniversary of the issuance of such share to December 31, 2017. This change will conform the terms of the Series A with the terms of the Series 1 with respect to conversions. Each investor in the Series A shall receive, for every $1,000 in shares subscribed by such investor, detachable warrants to purchase 30 shares of the Company’s common stock, par value $0.0001 per share, if the Company’s common stock is listed on a national securities exchange. The warrants’ exercise price is equal to 110% of the volume weighted average closing stock price of the Company’s common stock over a specified period as determined in accordance with the terms of the warrant; however, in no event shall the exercise price be less than $25 per share. As of September 30, 2017, there were detachable warrants that may be exercised for 85,740 shares of the Company’s common stock after the 90th day following the occurrence of a listing event. These potential warrants will expire five years from the 90th day after the occurrence of a listing event. If all the potential warrants outstanding at September 30, 2017 became exercisable because of a listing event, and were exercised at the minimum price of $25 per share, gross proceeds to us would be approximately $2.1 million and we would as a result issue an additional 85,740 shares of common stock. As of March 31, 2017, June 30, 2017 and September 30, 2017, the Company an estimated fair market value of potential warrants to be immaterial. Series 1 Preferred Stock On March 29, 2017, the Company filed with the State Department of Assessments and Taxation of Maryland Articles Supplementary to the charter of the Company classifying and designating 97,000 shares of its authorized capital stock as shares of Series 1 Convertible Redeemable Preferred Stock ("Series 1"), par value $0.0001 per share. On April 7, 2017, the Company commenced the Regulation D 506(b) private placement of shares of Series 1, together with warrants to acquire the Company’s common stock, to accredited investors. The holders of the Series 1 Preferred Stock are entitled to receive, when and as authorized by our board of directors and declared by us out of legally available funds, cumulative, cash dividends on each Share at an annual rate of 5.50% of the Stated Value pari passu with the dividend preference of the Series A Preferred Stock and in preference to any payment of any dividend on our common stock; provided, however, that Qualified Purchasers (who purchased $1.0 million or more in a single closing) are entitled to receive, when and as authorized by our board of directors and declared by us out of legally available funds, cumulative, cash dividends on each Share held by such Qualified Purchaser at an annual rate of 5.75% of the Stated Value (instead of the annual rate of 5.50% for all other holders of the Shares) until April 7, 2018, at which time, the annual dividend rate will be reduced to 5.50% of Stated Value; provided further, however, that if a Listing Event has not occurred by April 7, 2018, the annual dividend rate on all Shares (without regard to Qualified Purchaser status) will be increased to 7.00% of the Stated Value until the occurrence of a Listing Event, at which time, the annual dividend rate will be reduced to 5.50% of the Stated Value. Base on the number of Series 1 shares outstanding at September 30, 2017, the increased dividend rate would cost the Company approximately $50,000 more per quarter in Series 1 dividends. Subject to the Company’s redemption rights as described below, each Share will be convertible into shares of our common stock, at the election of the holder thereof by written notice to the Company (each, a “Conversion Notice”) containing the information required by the charter, at any time beginning upon the earlier of (i) 45 days after the occurrence of a Listing Event or (ii) April 7, 2019 (whether or not a Listing Event has occurred). Each Share will convert into a number of shares of our common stock determined by dividing (i) the sum of (A) 100% of the Stated Value, initially $1,000, plus (B) any accrued but unpaid dividends to, but not including, the date of conversion, by (ii) the conversion price for each share of our common stock (the “Conversion Price”) determined as follows: · Provided there has been a Listing Event, if a Conversion Notice with respect to any Share is received prior to December 1, 2017, the Conversion Price for such Share will be equal to 110% of the volume weighted average price per share of the common stock of the Company (or its successor) for the 20 trading days prior to the delivery date of the Conversion Notice. · Provided there has been a Listing Event, if a Conversion Notice with respect to any Share is received on or after December 1, 2017, the Conversion Price for such Share will be equal to the volume weighted average price per share of the common stock of the Company (or its successor) for the 20 trading days prior to the delivery date of the Conversion Notice. · If a Conversion Notice with respect to any Share is received on or after April 7, 2019, and at the time of receipt of such Conversion Notice, a Listing Event has not occurred, the Conversion Price for such Share will be equal to 100% of our net asset value per share, or NAV per share, if then established, and until we establish a NAV per share, the Conversion Price will be equal to $25.00, or the initial offering price per share of our common stock in our initial public offering. Each investor in the Series 1 shall receive, for every $1,000 in shares subscribed by such investor, detachable warrants to purchase 35 shares of the Company’s common stock, par value $0.0001 per share, if the Company’s common stock is listed on a national securities exchange. The warrants’ exercise price is equal to 110% of the volume weighted average closing stock price of the Company’s common stock over a specified period as determined in accordance with the terms of the warrant; however, in no event shall the exercise price be less than $25 per share. As of September 30, 2017, there were detachable warrants that may be exercised for 175,805 shares of the Company’s common stock after the 90th day following the occurrence of a listing event. These potential warrants will expire five years from the 90th day after the occurrence of a listing event. If all the potential warrants outstanding at September 30, 2017 became exercisable because of a listing event, and were exercised at the minimum price of $25 per share, gross proceeds to us would be approximately $4.4 million and we would as a result issue an additional 175,805 shares of common stock. As of March 31, 2017, June 30, 2017 and September 30, 2017, the Company an estimated fair market value of potential warrants to be immaterial. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note S — Subsequent Events The following subsequent events have been evaluated through the date of this filing with the SEC. On October 17, 2017 the Company made a payment of $1.0 million to MVP Realty Advisors towards the principal balance of the outstanding $2.1 million note payable. During October 2017, the balance on our Working Capital Credit Facility was paid in full; however, on November 7, 2017, MVP REIT took a draw of $1.5 million to mainly pay acquisition fees and merger costs. In November 2017, the Company acquired approximately 118,932 shares of MVP REIT’s stock at $8.56 per share from an unrelated third party. |
Summary of Significant Accoun26
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Basis of Accounting | Basis of Accounting The accompanying unaudited condensed consolidated financial statements of the Company are prepared by management on the accrual basis of accounting and in accordance with principles generally accepted in the United States of America (“GAAP”) for interim financial information as contained in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”), and in conjunction with rules and regulations of the SEC. Certain information and footnote disclosures required for annual financial statements have been condensed or excluded pursuant to SEC rules and regulations. Accordingly, the unaudited condensed consolidated financial statements do not include all of the information and footnotes required by GAAP for complete financial statements. The unaudited condensed consolidated financial statements include accounts and related adjustments, which are, in the opinion of management, of a normal recurring nature and necessary for a fair presentation of the Company’s financial position, results of operations and cash flows for the interim period. Operating results for the three and nine months ended September 30, 2017 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017. These unaudited condensed consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016. The condensed consolidated balance sheet as of December 31, 2016 contained herein has been derived from the audited financial statements as of December 31, 2016, but does not include all disclosures required by GAAP. |
Consolidation | Consolidation The Company’s consolidated financial statements include its accounts and the accounts of its subsidiaries, Operating Partnership and all of the following subsidiaries. All intercompany profits and losses, balances and transactions are eliminated in consolidation. West 9 th Cleveland Lincoln Garage, LLC MVP San Jose 88 Garage, LLC MVP Houston Jefferson Lot, LLC** MCI 1372 Street, LLC MVP Houston Preston Lot, LLC * Cincinnati Race Street, LLC MVP Houston San Jacinto Lot, LLC St. Louis Washington, LLC MVP Detroit Center Garage, LLC St. Paul Holiday Garage, LLC St Louis Broadway, LLC Louisville Station Broadway, LLC St Louis Seventh & Cerre, LLC White Front Garage Partners, LLC MVP Preferred Parking, LLC * Entity is consolidated with the Company starting May 1, 2017. See Note E Related Party Transactions ** See Note M – Gain on Sale of Investment in Real Estate Under GAAP, the Company’s consolidated financial statements will also include the accounts of its consolidated subsidiaries and joint ventures in which the Company is the primary beneficiary, or in which the Company has a controlling interest. In determining whether the Company has a controlling interest in a joint venture and the requirement to consolidate the accounts of that entity, the Company’s management considers factors such as an entity’s purpose and design and the Company’s ability to direct the activities of the entity that most significantly impacts the entity’s economic performance, ownership interest, board representation, management representation, authority to make decisions, and contractual and substantive participating rights of the partners/members as well as whether the entity is a variable interest entity in which it will absorb the majority of the entity’s expected losses, if they occur, or receive the majority of the expected residual returns, if they occur, or both. Equity investments in which the Company exercises significant influence but does not control and is not the primary beneficiary are accounted for using the equity method. The Company's share of its equity method investees' earnings or losses is included in other income in the accompanying unaudited condensed consolidated statements of operations. Investments in which the Company is not able to exercise significant influence over the investee are accounted for under the cost method. |
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 financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Management makes significant estimates regarding revenue recognition, purchase price allocations to record investments in real estate, and derivative financial instruments and hedging activities, as applicable. |
Concentration | Concentration During the last week of August 2017, Houston Texas experienced major flooding due to Hurricane Harvey. This resulted in limited access to the Houston area and a shutdown of most business and government operations. Our parking garage and parking lots located in Houston, TX experienced minimal damage during this time; however, the company is still assessing the long-term impact. As of September 30, 2017, we have not seen a reduction in the base rent from our operator, who will continue to operate these locations under the terms of the current leases. The Company had eight parking tenants as of September 30, 2017 and four parking tenants as of September 30, 2016. One tenant, Standard Parking + (“SP+”), represented a 61.3% concentration for the nine months ended September 30, 2017, in regards to parking rental revenue. Below is a table that summarizes parking rent by tenant: For the Nine Months Ended September 30, Parking Tenant 2017 2016 SP + 61.3% 60.3% iPark Services 10.3% 0.0% Premier 8.1% 0.0% Interstate Parking 6.0% 17.3% St. Louis Parking 4.1% 0.0% Lanier Parking 4.0% 0.0% ABM 3.9% 17.4% Riverside Parking 2.3% 5.0% Grand Total 100.0% 100.0% In addition, the Company had concentrations in various cities based on parking rental revenue for the nine months ended September 30, 2017 and 2016, as well as concentrations in various cities based on the real estate we owned as of September 30, 2017 and December 31, 2016. The below tables summarize this information by city. City Concentration for Parking Rent For the Nine Months Ended September 30, 2017 2016 Detroit 49.5% 0.0% Cleveland 12.0% 47.4% Nashville 8.5% 0.0% St Paul 6.3% 17.3% St Louis 6.2% 9.8% Houston 6.1% 0.0% San Jose 4.4% 10.8% Cincinnati 3.9% 6.6% Louisville 2.4% 5.0% Canton 0.7% 3.1% Grand Total 100.0% 100.0% Real Estate Concentration by City Based on the Company’s Ownership % As of September 30, 2017 December 31, 2016 Detroit 34.1% 0.0% Houston 20.2% 10.5% St Louis 11.2% 5.7% Cleveland 9.1% 22.2% Nashville 7.1% 17.4% St Paul 6.4% 15.5% Cincinnati 3.5% 8.5% San Jose 2.8% 6.8% Louisville 2.4% 5.8% Minneapolis 1.6% 3.8% Bridgeport 0.6% 1.4% Canton 0.5% 1.3% Denver 0.5% 1.1% Grand Total 100.0% 100.0% |
Acquisitions | Acquisitions The Company records the acquired tangible and intangible assets and assumed liabilities of acquisitions of all operating properties and those development and redevelopment opportunities that meet the accounting criteria to be accounted for as business combinations at fair value at the acquisition date. The Company assesses and considers fair value based on estimated cash flow projections that utilize available market information and discount and/or capitalization rates that the Company deems appropriate. Estimates of future cash flows are based on a number of factors including historical operating results, known and anticipated trends, and market and economic conditions. The acquired assets and assumed liabilities for an operating property acquisition generally include but are not limited to: land, buildings and improvements, construction in progress and identified tangible and intangible assets and liabilities associated with in-place leases, including tenant improvements, leasing costs, value of above-market and below-market operating leases and ground leases, acquired in-place lease values and tenant relationships, if any. Costs directly associated with all operating property acquisitions and those development and redevelopment acquisitions that meet the accounting criteria to be accounted for as business combinations are expensed as incurred within operating expenses in the consolidated statement of operations. During the three months and nine months ended September 30, 2017, the Company expensed approximately $0 and $1.7 million in related party acquisition costs, respectively. The Company also had $0.1 million and $2.1 million of non-related party acquisition costs, respectively, for the purchase of an interest in four properties (see Note I – Acquisitions). During the three and nine months ended September 30, 2016, the Company expensed approximately $1.0 million and $1.4 million, respectively, in related party acquisition costs. The Company also expensed $0.5 million and $0.7 million in non-related party acquisition costs for the three and nine months ended September 30, 2016. The Company’s acquisition expenses are directly related to the Company’s acquisition activity and if the Company’s acquisition activity was to increase or decrease, so would the Company’s acquisition costs. |
Impairment of Long Lived Assets | Impairment of Long Lived Assets When circumstances indicate the carrying value of a property may not be recoverable, the Company reviews the asset for impairment. This review is based on an estimate of the future undiscounted cash flows, excluding interest charges, expected to result from the property’s use and eventual disposition. These estimates consider factors such as expected future operating income, market and other applicable trends and residual value, as well as the effects of leasing demand, competition and other factors. If impairment exists, due to the inability to recover the carrying value of a property, an impairment loss is recorded to the extent that the carrying value exceeds the estimated fair value of the property for properties to be held and used. For properties held for sale, the impairment loss is the adjustment to fair value less estimated cost to dispose of the asset. These assessments have a direct impact on net income because recording an impairment loss results in an immediate negative adjustment to net income. |
Cash | Cash Cash includes cash in bank accounts. The Company deposits cash with high quality financial institutions with the majority of its cash at KeyBank. These deposits are guaranteed by the Federal Deposit Insurance Company up to an insurance limit up of $250,000. As of September 30, 2017 and December 31, 2016, the Company had approximately $1.2 million and $3.4 million, respectively, in excess of the federally insured limits. As of September 30, 2017, the Company has not experienced any losses on cash deposits. |
Restricted Cash | Restricted Cash Restricted cash primarily consists of escrowed tenant improvement funds, real estate taxes, capital improvement funds, insurance premiums, and other amounts required to be escrowed pursuant to loan agreements. |
Revenue Recognition | Revenue Recognition The Company's revenues, which are derived primarily from rental income, include rents that each tenant pays in accordance with the terms of each lease reported on a straight-line basis over the initial term of the lease. Since many of the Company's leases will provide for rental increases at specified intervals, straight-line basis accounting requires the Company to record a receivable, and include in revenues, unbilled rent receivables that the Company will only receive if the tenant makes all rent payments required through the expiration of the initial term of the lease. Percentage rents will be recorded when earned and certain thresholds have been met. The Company will continually review receivables related to rent and unbilled rent receivables and determine collectability by taking 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. In the event that the collectability of a receivable is in doubt, the Company will record an increase in the Company's allowance for uncollectible accounts or record a direct write-off of the receivable after exhaustive efforts at collection. |
Advertising Costs | Advertising Costs Advertising costs incurred in the normal course of operations and are expensed as incurred. During the three and nine months ended September 30, 2017 and 2016, the Company had no advertising costs. |
Investments in Real Estate and Fixed Assets | Investments in Real Estate and Fixed Assets Investments in real estate and fixed assets are stated at cost less accumulated depreciation. Depreciation is provided principally on the straight-line method over the estimated useful lives of the assets, which are primarily 3 to 40 years. The cost of repairs and maintenance is charged to expense as incurred. Expenditures for property betterments and renewals are capitalized. Upon sale or other disposition of a depreciable asset, cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in other income (expense). The Company periodically evaluates whether events and circumstances have occurred that may warrant revision of the estimated useful lives of fixed assets or whether the remaining balance of fixed assets should be evaluated for possible impairment. The Company uses an estimate of the related undiscounted cash flows over the remaining life of the fixed assets in measuring their recoverability. |
Purchase Price Allocation | Purchase Price Allocation The Company allocates the purchase price of acquired properties to tangible and identifiable intangible assets acquired based on their respective fair values. Tangible assets include land, land improvements, buildings, fixtures and tenant improvements on an as-if vacant basis. The Company utilizes various estimates, processes and information to determine the as-if vacant property value. Estimates of value are made using customary methods, including data from appraisals, comparable sales, discounted cash flow analysis and other methods. Amounts allocated to land, land improvements, buildings and fixtures are based on cost segregation studies performed by independent third parties or on the Company's analysis of comparable properties in the Company's portfolio. Identifiable intangible assets include amounts allocated to acquire leases for above- and below-market lease rates, the value of in-place leases, and the value of customer relationships, as applicable. The aggregate value of intangible assets related to in-place leases is primarily the difference between the property valued with existing in-place leases adjusted to market rental rates and the property valued as if vacant. Factors considered by the Company in its analysis of the in-place lease intangibles include an estimate of carrying costs during the expected lease-up period for each property, taking into account current market conditions and costs to execute similar leases. In estimating carrying costs, the Company will include real estate taxes, insurance and other operating expenses and estimates of lost rentals at market rates during the expected lease-up period. Estimates of costs to execute similar leases including leasing commissions, legal and other related expenses are also utilized. Above-market and below-market in-place lease values for owned properties are recorded based on the present value (using an interest rate which reflects the risks associated with the leases acquired) of the difference between the contractual amounts to be paid pursuant to the in-place leases and management’s estimate of fair market lease rates for the corresponding in-place leases, measured over a period equal to the remaining non-cancelable term of the lease. The capitalized above-market lease intangibles are amortized as a decrease to rental income over the remaining term of the lease. The capitalized below-market lease values will be amortized as an increase to rental income over the remaining term and any fixed rate renewal periods provided within the respective leases. In determining the amortization period for below-market lease intangibles, the Company initially will consider, and periodically evaluate on a quarterly basis, the likelihood that a lessee will execute the renewal option. The likelihood that a lessee will execute the renewal option is determined by taking 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. The aggregate value of intangible assets related to customer relationship, as applicable, is measured based on the Company's evaluation of the specific characteristics of each tenant’s lease and the Company's overall relationship with the tenant. Characteristics considered by the Company in determining these values include the nature and extent of its existing business relationships with the tenant, growth prospects for developing new business with the tenant, the tenant’s credit quality and expectations of lease renewals, among other factors. The value of in-place leases is amortized to expense over the initial term of the respective leases. The value of customer relationship intangibles is amortized to expense over the initial term and any renewal periods in the respective leases, but in no event does the amortization period for intangible assets exceed the remaining depreciable life of the building. If a tenant terminates its lease, the unamortized portion of the in-place lease value and customer relationship intangibles is charged to expense. In making estimates of fair values for purposes of allocating purchase price, the Company will utilize a number of sources, including independent appraisals that may be obtained in connection with the acquisition or financing of the respective property and other market data. The Company will also consider information obtained about each property as a result of the Company's pre-acquisition due diligence, as well as subsequent marketing and leasing activities, in estimating the fair value of the tangible and intangible assets acquired and intangible liabilities assumed. |
Organization, Offering and Related Costs | Organization, Offering and Related Costs Certain organization and offering costs will be incurred by the Advisor. Pursuant to the terms of the Advisory Agreement, the Company will not reimburse the Advisor for these out of pocket costs and future organization and offering costs it may incur. Such costs shall include legal, accounting, printing and other offering expenses, including marketing, and direct expenses of the Advisor’s employees and employees of the Advisor’s affiliates and others. All direct offering costs incurred and or paid by us that are directly attributable to a proposed or actual offering, including sales commissions, if any, were charged against the gross proceeds of the Offering and recorded as an offset to additional paid-in-capital. All indirect costs will be expensed as incurred. |
Stock-Based Compensation | Stock-Based Compensation The Company has a stock-based incentive award plan, which is accounted for under the guidance for share based payments. The expense for such awards will be included in general and administrative expenses and is recognized over the vesting period or when the requirements for exercise of the award have been met (See Note G — Stock-Based Compensation). |
Income Taxes | Income Taxes The Company is organized and conducts operations to qualify as a REIT under Sections 856 to 860 of the Internal Revenue Code of 1986, as amended (the “Code”) and to comply with the provisions of the Internal Revenue Code with respect thereto. A REIT is generally not subject to federal income tax on that portion of its REIT taxable income (“Taxable Income”), which is distributed to its stockholders, provided that at least 90% of Taxable Income is distributed and provided that certain other requirements are met. Our Taxable Income may substantially exceed or be less than our net income as determined based on GAAP, because, differences in GAAP and taxable net income consist primarily of allowances for loan losses or doubtful account, write-downs on real estate held for sale, amortization of deferred financing cost, capital gains and losses, and deferred income. If the Company does not qualify as a REIT for the tax year ended December 31, 2017, we will file as a C corporation and deferred tax assets and liabilities will be established for the temporary differences between the financial reporting basis and the tax basis of assets and liabilities at the enacted tax rates expected to be in effect when the temporary differences reverse. A valuation allowance for the deferred tax assets is provided if we believe that it is more likely than not that we will not realize the tax benefit of deferred tax assets based on the available evidence at the time the determination is made. For the tax year ended December 31, 2016, the Company did not realize the benefits of its deferred tax assets, a valuation allowance was recorded against our net deferred tax assets. |
Per Share Data | Per Share Data The Company calculates basic income (loss) per share by dividing net income (loss) for the period by weighted-average shares of its common stock outstanding for the respective period. Diluted income per share takes into account the effect of dilutive instruments, such as stock options and convertible stock, but uses the average share price for the period in determining the number of incremental shares that are to be added to the weighted-average number of shares outstanding. The Company had no outstanding common share equivalents during the three and nine months ended September 30, 2017 and 2016. There is a potential for dilution from the Company’s Series A Convertible Redeemable Preferred Stock which may be converted into the Company’s common stock at any time beginning upon the earlier of (i) 90 days after the occurrence of a listing event or (ii) the second anniversary of the final closing of the offering (whether or not a listing event has occurred). As of September 30, 2017, there were 2,862 shares of the Series A Convertible Redeemable Preferred Stock issued and outstanding. There is a potential for dilution from the Company’s Series 1 Convertible Redeemable Preferred Stock which may be converted into the Company’s common stock at any time beginning upon the earlier of (i) 45 days after the occurrence of a listing event or (ii) April 7, 2019 (whether or not a listing event has occurred). As of September 30, 2017, there were 13,445 shares of the Series 1 Convertible Redeemable Preferred Stock issued and outstanding. Each share of Series A preferred stock and Series 1 preferred stock will convert into the number of shares of the Company’s common stock determined by dividing (i) the stated value per Series A share or Series 1 share of $1,000 (as may be adjusted pursuant to the applicable articles supplementary) plus any accrued but unpaid dividends to, but not including, the conversion date by (ii) the conversion price. The conversion price is equal to 100% or, if the conversion notice is received before December 1, 2017 (for Series 1 shares) or December 31, 2017 (for Series A shares), 110% of the volume weighted average price per share of the Company’s common stock for the 20 trading days prior to the delivery date of the conversion notice; provided that if the Company’s common stock is not then traded on a national securities exchange, the conversion price will be equal to the net asset value per share of the Company’s common stock. The Company will have the right (but not the obligation) to redeem any Series A or Series 1 shares that are subject to a conversion notice on the terms set forth in the applicable articles supplementary. |
Reportable Segments | Reportable Segments We currently operate one reportable segment. |
Reclassifications | Reclassifications Amounts listed in connection with certain expense accounts on the condensed consolidated statements of operations in the 2016 have been reclassified to conform to the September 30, 2017 presentation. |
Accounting and Auditing Standards Applicable to "Emerging Growth Companies" | Accounting and Auditing Standards Applicable to “Emerging Growth Companies” The Company is an “emerging growth company” under the Jumpstart Our Business Startups Act (the “JOBS Act”). For as long as the Company remains an “emerging growth company,” which may be up to five fiscal years, the Company is not required to (1) comply with any new or revised financial accounting standards that have different effective dates for public and private companies until those standards would otherwise apply to private companies, (2) provide an auditor’s attestation report on management’s assessment of the effectiveness of internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act, (3) comply with any new requirements adopted by the Public Company Accounting Oversight Board, or the PCAOB, requiring mandatory audit firm rotation or a supplement to the auditor’s report in which the auditor would be required to provide additional information about the audit and the financial statements of the issuer or (4) comply with any new audit rules adopted by the PCAOB after April 5, 2012, unless the SEC determines otherwise. The Company intends to take advantage of such extended transition period. Since the Company will not be required to comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for other public companies, the Company’s financial statements may not be comparable to the financial statements of companies that comply with public company effective dates. If the Company were to subsequently elect to instead comply with these public company effective dates, such election would be irrevocable pursuant to Section 107 of the JOBS Act. |
Share Repurchase Program | Share Repurchase Program The Company has a Share Repurchase Program (“SRP”) that enables stockholders to sell their shares to the Company. Under the SRP, stockholders may request that the Company redeem all or any portion, subject to certain minimum conditions described below, if such repurchase does not impair the Company's capital or operations. Prior to the time that the Company’s shares are listed on a national securities exchange, the repurchase price per share will depend on the length of time investors have held such shares as follows: no repurchases for the first two years unless shares are being repurchased in connection with a stockholder’s death or disability (as defined in the Code). Repurchase requests made in connection with the death or disability of a stockholder will be repurchased at a price per share equal to 100% of the amount the stockholder paid for each share, or once we have established an estimated NAV per share, 100% of such amount as determined by the Company’s board of directors, subject to any special distributions previously made to the Company’s stockholders. With respect to all other repurchases, prior to the date that we establish an estimated value per share of common stock, the purchase price will be 95.0% of the purchase price paid for the shares, if redeemed at any time between the second and third anniversaries of the purchase date, and 97.0% of the purchase price paid if redeemed after the third anniversary. After we establish an estimated NAV per share of common stock, the purchase price will be 95.0% of the NAV per share for the shares, if redeemed at any time between the second and third anniversaries of the purchase date, 97.0% of the NAV per share if redeemed at any time between the third and fifth anniversaries, and 100.0% of the NAV per share if redeemed after the fifth anniversary. In the event that the Company does not have sufficient funds available to repurchase all of the shares for which repurchase requests have been submitted in any quarter, we will repurchase the shares on a pro rata basis on the repurchase date. The SRP will be terminated if the Company’s shares become listed for trading on a national securities exchange or if the Company’s board of directors determines that it is in the Company’s best interest to terminate the SRP. The Company is not obligated to repurchase shares of common stock under the share repurchase program. The number of shares to be repurchased during the calendar quarter is limited to the lesser of: (i) 5% of the weighted average number of shares outstanding during the prior calendar year, and (ii) those repurchases that could be funded from the net proceeds of the sale of shares under the DRIP in the prior calendar year plus such additional funds as may be reserved for that purpose by the Company’s board of directors; provided, however, that the above volume limitations shall not apply to repurchases requested in connection with the death or qualifying disability of a stockholder. Because of these limitations, the Company cannot guarantee that the Company will be able to accommodate all repurchase requests. The Company will repurchase shares as of March 31 st th th st On October 27, 2016, the Company filed a Form 8-K announcing, among other things, an amendment to the SRP providing for participation in the SRP by any holder of the Company's Series A Convertible Redeemable Preferred Stock, or any future board-authorized series or class of preferred stock that is convertible into common stock of the Company. Under the amendment, which became effective on November 26, 2016, a preferred stock holder may participate in the SRP by converting its preferred stock into common stock of the Company, and submitting such common shares for repurchase. The time period, for purposes of determining how long such stockholder has held the common shares submitted for repurchase, begins as of the date such preferred stockholder acquired the underlying preferred shares that were converted into common shares and submitted for repurchase. The board of directors may, in its sole discretion, terminate, suspend or further amend the share repurchase program upon 30 days’ written notice without stockholder approval if it determines that the funds available to fund the share repurchase program are needed for other business or operational purposes or that amendment, suspension or termination of the share repurchase program is in the best interest of the stockholders. Among other things, we may amend the plan to repurchase shares at prices different from those described above for the purpose of ensuring the Company’s dividends are not “preferential” for incomes tax purposes. Any notice of a termination, suspension or amendment of the share repurchase program will be made via a report on Form 8-K filed with the SEC at least 30 days prior to the effective date of such termination, suspension or amendment. The board of directors may also limit the amounts available for repurchase at any time in its sole discretion. Notwithstanding the foregoing, the share repurchase program will terminate if the shares of common stock are listed on a national securities exchange. As of September 30, 2017, no shares are eligible for redemption (other than in connection with a death or disability of a stockholder). |
Distribution Reinvestment Plan | Distribution Reinvestment Plan Pursuant to the DRIP stockholders may elect to reinvest distributions by purchasing shares of common stock in lieu of receiving cash. No dealer manager fees or selling commissions are paid with respect to shares purchased pursuant to the DRIP. Participants purchasing shares pursuant to the DRIP have the same rights and are treated in the same manner as if such shares were issued pursuant to the Offering. The board of directors may designate that certain cash or other distributions be excluded from the DRIP. The Company has the right to amend any aspect of the DRIP or terminate the DRIP with ten days’ notice to participants. Shares issued under the DRIP are recorded to equity in the accompanying balance sheets in the period distributions are declared. We have issued a total of 54,336 shares of common stock under the DRIP as of September 30, 2017. The DRIP program is currently suspended in connection with the merger. |
Non-controlling Interests | Non-controlling Interests The FASB issued authoritative guidance for non-controlling interests in December 2007, which establishes accounting and reporting standards for the non-controlling interest in a subsidiary and for the deconsolidation of a subsidiary. The guidance clarifies that a non-controlling interest in a subsidiary, which is sometimes referred to as an unconsolidated investment, is an ownership interest in the consolidated entity that should be reported as a component of equity in the consolidated financial statements. Among other requirements, the guidance requires consolidated net income to be reported at amounts attributable to both the parent and the non-controlling interest. It also requires disclosure, on the face of the consolidated income statement, of the amounts of consolidated net income attributable to the parent and to the non-controlling interest. |
Summary of Significant Accoun27
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Revenue Concentration Tenants | For the Nine Months Ended September 30, Parking Tenant 2017 2016 SP + 61.3% 60.3% iPark Services 10.3% 0.0% Premier 8.1% 0.0% Interstate Parking 6.0% 17.3% St. Louis Parking 4.1% 0.0% Lanier Parking 4.0% 0.0% ABM 3.9% 17.4% Riverside Parking 2.3% 5.0% Grand Total 100.0% 100.0% City Concentration for Parking Base Rent For the Nine Months Ended September 30, 2017 2016 Detroit 49.5% 0.0% Cleveland 12.0% 47.4% Nashville 8.5% 0.0% St Paul 6.3% 17.3% St Louis 6.2% 9.8% Houston 6.1% 0.0% San Jose 4.4% 10.8% Cincinnati 3.9% 6.6% Louisville 2.4% 5.0% Canton 0.7% 3.1% Grand Total 100.0% 100.0% Real Estate Concentration by City Based on the Company’s Ownership % As of September 30, 2017 December 31, 2016 Detroit 34.1% 0.0% Houston 20.2% 10.5% Cleveland 9.1% 22.2% St Louis 11.2% 5.7% Nashville 7.1% 17.4% St Paul 6.4% 15.5% Cincinnati 3.5% 8.5% San Jose 2.8% 6.8% Louisville 2.4% 5.8% Minneapolis 1.6% 3.8% Bridgeport 0.6% 1.4% Canton 0.5% 1.3% Denver 0.5% 1.1% Grand Total 100.0% 100.0% |
Investments in Real Estate (Tab
Investments in Real Estate (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Real Estate [Abstract] | |
Schedule Of Real Estate Properties | Property Location Date Acquired Investment Amount Parking Tenant Lease Commencement Date MVP San Jose 88 Garage, LLC San Jose, CA 6/15/2016 $3,824,000 Lanier Parking 3/01/2017 MCI 1372 Street, LLC Canton, OH 7/8/2016 $700,000 ABM 7/8/2016 MVP Cincinnati Race Street Garage, LLC Cincinnati, OH 7/8/2016 $5,408,000 SP + 9/1/2016 MVP St. Louis Washington, LLC St Louis, MO 7/18/2016 $3,000,000 SP + 7/21/2016 MVP St. Paul Holiday Garage, LLC St Paul, MN 8/12/2016 $8,310,000 Interstate Parking 8/12/2016 MVP Louisville Station Broadway, LLC Louisville, KY 8/23/2016 $3,107,000 Riverside Parking 8/23/2016 Cleveland Lincoln Garage Owners, LLC Cleveland, OH 10/19/2016 $7,412,000 SP + 10/25/2016 MVP Houston San Jacinto Lot, LLC Houston, TX 11/22/2016 $3,250,000 iPark Services 12/1/2016 MVP Houston Preston Lot, LLC Houston, TX 11/22/2016* * $2,820,000 iPark Services 12/1/2016 White Front Garage Partners, LLC Nashville, TN 9/30/2016 $11,672,000 Premier Parking 10/1/2016 West 9 th Cleveland, OH 5/11/2016 $5,733,000 SP + 5/11/2016 33740 Crown Colony, LLC** Cleveland, OH 5/17/2016 $3,050,000 SP + 5/17/2016 MVP Detroit Center Garage, LLC Detroit, MI 01/10/2017 $55,139,000 SP + 2/1/2017 St Louis Broadway, LLC St Louis, MO 02/01/2017 $2,400,000 St Louis Parking Co 2/1/2017 St Louis Seventh & Cerre, LLC St Louis, MO 02/01/2017 $3,300,000 St Louis Parking Co 2/1/2017 MVP Preferred Parking, LLC Houston, TX 6/29/2017 $20,600,000 iPark Services 8/01/2017 $139,725,000 |
Acquisitions (Tables)
Acquisitions (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Business Combinations [Abstract] | |
Schedule Of Business Acquisitions | Property Location Date Acquired Property Type # Spaces Size / Acreage Retail /Office Square Ft. Cash Consideration Ownership % MVP Detroit Center Garage Detroit, MI 01/10/2017 Garage 1,275 8.78 N/A $55,000,000 80% St Louis Broadway, LLC St Louis, MO 02/01/2017 Lot 161 0.96 N/A $2,400,000 100% St Louis Seventh & Cerre, LLC St Louis, MO 02/01/2017 Lot 174 1.20 N/A $3,300,000 100% MVP Preferred Parking, LLC Houston, TX 06/29/2017 Garage & Lot 521 1.0 784 $20,500,000 100% |
Assets Acquired And Liabilities Assumed | Assets Land and Improvements Building and improvements Total assets acquired MVP Detroit Center Garage $ 7,000,000 $ 48,000,000 $ 55,000,000 St Louis Broadway, LLC 2,400,000 -- 2,400,000 St Louis Seventh & Cerre, LLC 3,300,000 -- 3,300,000 MVP Preferred Parking, LLC 15,800,000 4,700,000 20,500,000 $ 28,500,000 $ 52,700,000 $ 81,200,000 |
Results Of Operations Of The Acquired Properties | Three Month Ended 9/30/2017 Nine Month Ended 9/30/2017 Total Revenues Net Income Total Revenues Net Income 2017 acquisitions $ 1,271,000 $ 263,000 $ 3,743,000 $ 664,000 |
Pro Forma Consolidated Results Of Operations | For the three months ended September 30, For the nine months ended September 30, 2017 2016 2017 2016 Revenues from continuing operations $ 2,222,000 $ 1,933,000 $ 7,693,000 $ 4,653,000 Net income (loss) available to common stockholders $ (392,000) $ (307,000) $ (4,104,000) $ 1,311,000 Net income (loss) available to common stockholders per share – basic $ (0.15) $ (0.23) $ (1.63) $ 1.71 Net income (loss) available to common stockholders per share – diluted $ (0.15) $ (0.23) $ (1.63) $ 1.71 |
Notes Payable and Notes Payab30
Notes Payable and Notes Payable Related Party (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Schedule Of Debt | Property Original Debt Amount Monthly Payment Balance as of 9/30/2017 Lender Term Interest Rate Loan Maturity MVP Realty Advisors $2,100,000 -- $2,100,000 MVP Realty Advisors 1 Year (I/O) 5.00% 6/30/2018 West 9 th $5,300,000 $30,000 $5,192,000 American National Insurance Co. 10 year 4.50% 11/1/2026 MVP Detroit Center Garage, LLC $31,500,000 $194,000 $31,112,000 Bank of America 10 year 5.52% 2/1/2027 MVP San Jose 88 Garage, LLC $2,200,000 Interest Only $2,200,000 Owens Realty Mortgage, Inc. 2 year (I/O) 7.75% 1/15/2019 MVP Cincinnati Race Street Garage, LLC $3,000,000 Interest Only $3,000,000 Moonshell, LLC 3 Months (I/O) 9.00% 1/10/2018 MVP St Louis Washington, LLC $1,380,000 Interest Only $1,380,000 KeyBank 10 year (2 year I/O) 4.90% 5/1/2027 St Paul Holiday Garage, LLC $4,132,000 Interest Only $4,132,000 KeyBank 10 year (2 year I/O) 4.90% 5/1/2027 Cleveland Lincoln Garage, LLC $3,999,000 Interest Only $3,999,000 KeyBank 10 year (2 year I/O) 4.90% 5/1/2027 Louisville Broadway Station, LLC $1,682,000 Interest Only $1,682,000 Cantor Commercial Real Estate (CCRE) 10 year (I/O) 5.03% 5/6/2027 Whitefront Garage, LLC $6,454,000 Interest Only $6,454,000 Cantor Commercial Real Estate (CCRE) 10 year (I/O) 5.03% 5/6/2027 MVP Houston Preston Lot, LLC $1,627,000 Interest Only $1,627,000 Cantor Commercial Real Estate (CCRE) 10 year (I/O) 5.03% 5/6/2027 MVP Houston San Jacinto Lot, LLC $1,820,000 Interest Only $1,820,000 Cantor Commercial Real Estate (CCRE) 10 year (I/O) 5.03% 5/6/2027 St. Louis Broadway, LLC $1,671,000 Interest Only $1,671,000 Cantor Commercial Real Estate (CCRE) 10 year (I/O) 5.03% 5/6/2027 St. Louis Seventh & Cerre, LLC $2,058,000 Interest Only $2,058,000 Cantor Commercial Real Estate (CCRE) 10 year (I/O) 5.03% 5/6/2027 MVP Preferred Parking, LLC $11,330,000 Interest Only $11,330,000 Key Bank 10 year 5.02% 8/1/2027 Less unamortized loan issuance costs ($923,000) $78,834,000 |
Future Principal Payments On The Notes Payable | 2017 $ 173,000 2018 8,032,000 2019 882,000 2020 1,008,000 2021 1,068,000 Thereafter 68,594000 Less unamortized loan issuance costs (923,000) Total $ 78,834,000 |
Gain on Sale of Investment in31
Gain on Sale of Investment in Real Estate (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Real Estate [Abstract] | |
Summary Of The Results Of Operations for Assets Held For Sale | For the three months ended September 30, 2017 For the nine months ended September 30, 2017 Revenue $ 19,000 $ 58,000 Expenses (16,000) (39,000) Net income $ 3,000 $ 19,000 |
Investment In DST (Tables)
Investment In DST (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Investment In DST [Member] | |
Summarized Financial Information | Summarized Balance Sheets—Unconsolidated Real Estate Affiliates—Equity Method Investments September 30, 2017 (Unaudited) ASSETS Investments in real estate and fixed assets $ 11,350,000 Cash 37,000 Cash - restricted 3,000 Due from related party 9,000 Total assets $ 11,399,000 LIABILITIES AND EQUITY Liabilities Notes payable, net of unamortized loan issuance cost of $65,734.77 $ 5,934,000 Accounts payable and accrued liabilities 27,000 Total liabilities 5,961,000 Equity Shareholders’ Equity Member’s equity 6,547,000 Unsold equity (bridged by Vestin Realty Mortgage II, Inc) 203,000 Offering costs (1,312,000) Accumulated earnings 138,000 Distributions to members (138,000) Total equity 5,438,000 Total liabilities and equity $ 11,399,000 Summarized Statements of Operations—Unconsolidated Real Estate Affiliates—Equity Method Investments For the three months ended September 30, 2017 For the period from May 31, 2017 (inception) to September 30, 2017 Revenu $ 182,000 $ 243,000 Expenses 79,000 105,000 Net income $ 103,000 $ 138,000 |
Investment in Equity Method I33
Investment in Equity Method Investee (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Investment in Equity Method Investee [Member] | |
Summarized Financial Information | Summarized Balance Sheets—Unconsolidated Real Estate Affiliates—Equity Method Investments September 30, 2017 December 31, 2016 (Unaudited) ASSETS Investments in real estate and fixed assets $ 2,438,000 $ 2,438,000 Cash 234,000 51,000 Cash - restricted 337,000 -- Total assets $ 3,009,000 $ 2,489,000 LIABILITIES AND EQUITY Liabilities Notes payable, net of unamortized loan issuance cost $ 735,000 $ -- Due to related party 318,000 -- Accounts payable and accrued liabilities 117,000 36,000 Total liabilities 1,170,000 36,000 Equity Shareholders’ Equity Additional paid-in capital 1,294,000 1,802,000 Retained Earnings 103,000 64,000 Total Shareholders’ Equity 1,397,000 1,866,000 Non-controlling interest 442,000 587,000 Total equity 1,839,000 2,453,000 Total liabilities and equity $ 3,009,000 $ 2,489,000 Summarized Statements of Operations—Unconsolidated Real Estate Affiliates—Equity Method Investments For the Three Months Ended September 30, For the Nine Months Ended September 30, 2017 2016 2017 2016 Rental revenue $ 30,000 $ 30,000 $ 90,000 $ 76,000 Expenses (22,000) (9,000) (52,000) (32,000) Net income $ 8,000 $ 21,000 $ 38,000 $ 44,000 |
Summary of Significant Accoun34
Summary of Significant Accounting Policies (Details) - Revenue Concentration | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Base Parking Rent By Tenant [Member] | SP + [Member] | ||
Concentration, Percentage | 61.30% | 60.30% |
Base Parking Rent By Tenant [Member] | iPark Services [Member] | ||
Concentration, Percentage | 10.30% | 0.00% |
Base Parking Rent By Tenant [Member] | Premier Parking [Member] | ||
Concentration, Percentage | 8.10% | 0.00% |
Base Parking Rent By Tenant [Member] | Interstate Parking [Member] | ||
Concentration, Percentage | 6.00% | 17.30% |
Base Parking Rent By Tenant [Member] | St. Louis Parking [Member] | ||
Concentration, Percentage | 4.10% | 0.00% |
Base Parking Rent By Tenant [Member] | Lanier Parking [Member] | ||
Concentration, Percentage | 4.00% | 0.00% |
Base Parking Rent By Tenant [Member] | ABM [Member] | ||
Concentration, Percentage | 3.90% | 17.40% |
Base Parking Rent By Tenant [Member] | Riverside Parking [Member] | ||
Concentration, Percentage | 2.30% | 5.00% |
Base Parking Rent By Tenant [Member] | Total [Member] | ||
Concentration, Percentage | 100.00% | 100.00% |
City Concentration for Parking Base Rent [Member] | Total [Member] | ||
Concentration, Percentage | 100.00% | 100.00% |
City Concentration for Parking Base Rent [Member] | Detroit [Member] | ||
Concentration, Percentage | 49.50% | 0.00% |
City Concentration for Parking Base Rent [Member] | Cleveland [Member] | ||
Concentration, Percentage | 12.00% | 47.40% |
City Concentration for Parking Base Rent [Member] | Nashville [Member] | ||
Concentration, Percentage | 8.50% | 0.00% |
City Concentration for Parking Base Rent [Member] | St Paul [Member] | ||
Concentration, Percentage | 6.30% | 17.30% |
City Concentration for Parking Base Rent [Member] | St Louis [Member] | ||
Concentration, Percentage | 6.20% | 9.80% |
City Concentration for Parking Base Rent [Member] | Houston [Member] | ||
Concentration, Percentage | 6.10% | 0.00% |
City Concentration for Parking Base Rent [Member] | San Jose [Member] | ||
Concentration, Percentage | 4.40% | 10.80% |
City Concentration for Parking Base Rent [Member] | Cincinnati [Member] | ||
Concentration, Percentage | 3.90% | 6.60% |
City Concentration for Parking Base Rent [Member] | Louisville [Member] | ||
Concentration, Percentage | 2.40% | 5.00% |
City Concentration for Parking Base Rent [Member] | Canton [Member] | ||
Concentration, Percentage | 0.70% | 3.10% |
Real Estate Concentration by City Based on the Company's Ownership [Member] | Total [Member] | ||
Concentration, Percentage | 100.00% | 100.00% |
Real Estate Concentration by City Based on the Company's Ownership [Member] | Detroit [Member] | ||
Concentration, Percentage | 34.10% | 0.00% |
Real Estate Concentration by City Based on the Company's Ownership [Member] | Cleveland [Member] | ||
Concentration, Percentage | 9.10% | 22.20% |
Real Estate Concentration by City Based on the Company's Ownership [Member] | Nashville [Member] | ||
Concentration, Percentage | 7.10% | 17.40% |
Real Estate Concentration by City Based on the Company's Ownership [Member] | St Paul [Member] | ||
Concentration, Percentage | 6.40% | 15.50% |
Real Estate Concentration by City Based on the Company's Ownership [Member] | St Louis [Member] | ||
Concentration, Percentage | 11.20% | 5.70% |
Real Estate Concentration by City Based on the Company's Ownership [Member] | Houston [Member] | ||
Concentration, Percentage | 20.20% | 10.50% |
Real Estate Concentration by City Based on the Company's Ownership [Member] | San Jose [Member] | ||
Concentration, Percentage | 2.80% | 6.80% |
Real Estate Concentration by City Based on the Company's Ownership [Member] | Cincinnati [Member] | ||
Concentration, Percentage | 3.50% | 8.50% |
Real Estate Concentration by City Based on the Company's Ownership [Member] | Louisville [Member] | ||
Concentration, Percentage | 2.40% | 5.80% |
Real Estate Concentration by City Based on the Company's Ownership [Member] | Canton [Member] | ||
Concentration, Percentage | 0.50% | 1.30% |
Real Estate Concentration by City Based on the Company's Ownership [Member] | Minneapolis [Member] | ||
Concentration, Percentage | 1.60% | 3.80% |
Real Estate Concentration by City Based on the Company's Ownership [Member] | Bridgeport [Member] | ||
Concentration, Percentage | 0.60% | 1.40% |
Real Estate Concentration by City Based on the Company's Ownership [Member] | Denver [Member] | ||
Concentration, Percentage | 0.50% | 1.10% |
Investments in Real Estate (Det
Investments in Real Estate (Detail) - Schedule of Real Estate Properties | 9 Months Ended |
Sep. 30, 2017USD ($) | |
San Jose 88 Garage [Member] | |
Location | San Jose, CA |
Date Acquired | 6/15/2016 |
Investment Amount | $ 3,824,000 |
Parking Tenant | Lanier Parking |
Lease Commencement Date | 3/01/2017 |
MCI 1372 Street [Member] | |
Location | Canton, OH |
Date Acquired | 7/8/2016 |
Investment Amount | $ 700,000 |
Parking Tenant | ABM |
Lease Commencement Date | 7/8/2016 |
MVP Cincinnati Race Street Garage, LLC [Member] | |
Location | Cincinnati, OH |
Date Acquired | 7/8/2016 |
Investment Amount | $ 5,408,000 |
Parking Tenant | SP + |
Lease Commencement Date | 9/1/2016 |
MVP St. Louis Washington, LLC [Member] | |
Location | St Louis, MO |
Date Acquired | 7/18/2016 |
Investment Amount | $ 3,000,000 |
Parking Tenant | SP + |
Lease Commencement Date | 7/21/2016 |
MVP St. Paul Holiday Garage, LLC [Member] | |
Location | St Paul, MN |
Date Acquired | 8/12/2016 |
Investment Amount | $ 8,310,000 |
Parking Tenant | Interstate Parking |
Lease Commencement Date | 8/12/2016 |
MVP Louisville Station Broadway, LLC [Member] | |
Location | Louisville, KY |
Date Acquired | 8/23/2016 |
Investment Amount | $ 3,107,000 |
Parking Tenant | Riverside Parking |
Lease Commencement Date | 8/23/2016 |
Cleveland Lincoln Garage Owners, LLC [Member] | |
Location | Cleveland, OH |
Date Acquired | 10/19/2016 |
Investment Amount | $ 7,412,000 |
Parking Tenant | SP + |
Lease Commencement Date | 10/25/2016 |
MVP Houston San Jacinto Lot, LLC [Member] | |
Location | Houston, TX |
Date Acquired | 11/22/2016 |
Investment Amount | $ 3,250,000 |
Parking Tenant | iPark Services |
Lease Commencement Date | 12/1/2016 |
MVP Houston Preston Lot [Member] | |
Location | Houston, TX |
Date Acquired | 11/22/2016 |
Investment Amount | $ 2,820,000 |
Parking Tenant | iPark Services |
Lease Commencement Date | 12/1/2016 |
White Front Garage Partners, LLC [Member] | |
Location | Nashville, TN |
Date Acquired | 9/30/2016 |
Investment Amount | $ 11,672,000 |
Parking Tenant | Premier Parking |
Lease Commencement Date | 10/1/2016 |
West 9th Properties II [Member] | |
Location | Cleveland, OH |
Date Acquired | 5/11/2016 |
Investment Amount | $ 5,733,000 |
Parking Tenant | SP + |
Lease Commencement Date | 5/11/2016 |
33740 Crown Colony, LLC [Member] | |
Location | Cleveland, OH |
Date Acquired | 5/17/2016 |
Investment Amount | $ 3,050,000 |
Parking Tenant | SP + |
Lease Commencement Date | 5/17/2016 |
MVP Detroit Center Garage, LLC [Member] | |
Location | Detroit, MI |
Date Acquired | 01/10/2017 |
Investment Amount | $ 55,139,000 |
Parking Tenant | SP + |
Lease Commencement Date | 2/1/2017 |
St Louis Broadway, LLC [Member] | |
Location | St Louis, MO |
Date Acquired | 02/01/2017 |
Investment Amount | $ 2,400,000 |
Parking Tenant | St Louis Parking Co |
Lease Commencement Date | 2/1/2017 |
St Louis Seventh & Cerre, LLC [Member] | |
Location | St Louis, MO |
Date Acquired | 02/01/2017 |
Investment Amount | $ 3,300,000 |
Parking Tenant | St Louis Parking Co |
Lease Commencement Date | 2/1/2017 |
MVP Preferred Parking [Member] | |
Location | Houston, TX |
Date Acquired | 6/29/2017 |
Investment Amount | $ 20,600,000 |
Parking Tenant | iPark Services |
Lease Commencement Date | 8/01/2017 |
Total [Member] | |
Investment Amount | $ 139,725,000 |
Acquisitions (Detail) - Schedul
Acquisitions (Detail) - Schedule Of Business Acquisitions | 9 Months Ended |
Sep. 30, 2017USD ($)ft²a | |
MVP Detroit Center Garage [Member] | |
Location | Detroit, MI |
Date Acquired | Jan. 10, 2017 |
Property Type | Garage |
# Spaces | 1,275 |
Size / Acreage | a | 8.78 |
Retail /Office Square Ft. | ft² | |
Cash Consideration | $ | $ 55,000,000 |
Ownership % | 80.00% |
St Louis Broadway, LLC [Member] | |
Location | St Louis, MO |
Date Acquired | Feb. 1, 2017 |
Property Type | Lot |
# Spaces | 161 |
Size / Acreage | a | 0.96 |
Retail /Office Square Ft. | ft² | |
Cash Consideration | $ | $ 2,400,000 |
Ownership % | 100.00% |
St Louis Seventh & Cerre, LLC [Member] | |
Location | St Louis, MO |
Date Acquired | Feb. 1, 2017 |
Property Type | Lot |
# Spaces | 174 |
Size / Acreage | a | 1.2 |
Retail /Office Square Ft. | ft² | |
Cash Consideration | $ | $ 3,300,000 |
Ownership % | 100.00% |
MVP Preferred Parking, LLC [Member] | |
Location | Houston, TX |
Date Acquired | Jun. 29, 2017 |
Property Type | Garage & Lot |
# Spaces | 521 |
Size / Acreage | a | 1 |
Retail /Office Square Ft. | ft² | 784 |
Cash Consideration | $ | $ 20,500,000 |
Ownership % | 100.00% |
Acquisitions (Detail) - Assets
Acquisitions (Detail) - Assets Acquired And Liabilities Assumed | Sep. 30, 2017USD ($) |
MVP Detroit Center Garage [Member] | |
Assets | |
Land and improvements | $ 7,000,000 |
Building and improvements | 48,000,000 |
Total assets acquired | 55,000,000 |
St Louis Broadway, LLC [Member] | |
Assets | |
Land and improvements | 2,400,000 |
Building and improvements | |
Total assets acquired | 2,400,000 |
St Louis Seventh & Cerre, LLC [Member] | |
Assets | |
Land and improvements | 3,300,000 |
Building and improvements | |
Total assets acquired | 3,300,000 |
MVP Preferred Parking, LLC [Member] | |
Assets | |
Land and improvements | 15,800,000 |
Building and improvements | 4,700,000 |
Total assets acquired | 20,500,000 |
Total [Member] | |
Assets | |
Land and improvements | 28,500,000 |
Building and improvements | 52,700,000 |
Total assets acquired | $ 81,200,000 |
Acquisitions (Detail) - Results
Acquisitions (Detail) - Results Of Operations Of The Acquired Properties - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Revenue | $ 2,222,000 | $ 607,000 | $ 6,781,000 | $ 676,000 |
Net Income | (351,000) | $ (1,531,000) | (4,615,000) | $ (2,473,000) |
2017 Acquisitions [Member] | ||||
Revenue | 1,271,000 | 3,743,000 | ||
Net Income | $ 263,000 | $ 664,000 |
Acquisitions (Detail) - Pro For
Acquisitions (Detail) - Pro Forma Consolidated Results Of Operations - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Jun. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Business Combinations [Abstract] | ||||
Revenues from continuing operations | $ 2,222,000 | $ 1,933,000 | $ 7,693,000 | $ 4,653,000 |
Net Income (loss) available to common stockholders | $ (392,000) | $ (307,000) | $ (4,104,000) | $ 1,311,000 |
Net loss available to common stockholders per share - basic | $ (0.15) | $ (0.23) | $ (1.63) | $ 1.71 |
Net loss available to common stockholders per share - diluted | $ (0.15) | $ (0.23) | $ (1.63) | $ 1.71 |
Notes Payable (Detail) - Schedu
Notes Payable (Detail) - Schedule of Debt | 9 Months Ended |
Sep. 30, 2017USD ($) | |
MVP Realty Advisors [Member] | |
Original Debt Amount | $ 2,100,000 |
Monthly Payment (approx.) | |
Current Loan Balance | $ 2,100,000 |
Lender | MVP Realty Advisors |
Term | 1 year |
Interest Rate | 5.00% |
Loan Maturity | Jun. 30, 2018 |
West 9th Properties II, LLC [Member] | |
Original Debt Amount | $ 5,300,000 |
Monthly Payment (approx.) | 30,000 |
Current Loan Balance | $ 5,192,000 |
Lender | American National Insurance Co. |
Term | 10 years |
Interest Rate | 4.50% |
Loan Maturity | Nov. 1, 2026 |
MVP Detroit Center Garage, LLC [Member] | |
Original Debt Amount | $ 31,500,000 |
Monthly Payment (approx.) | 194,000 |
Current Loan Balance | $ 31,112,000 |
Lender | Bank of America |
Term | 10 years |
Interest Rate | 5.52% |
Loan Maturity | Feb. 1, 2027 |
MVP San Jose 88 Garage, LLC [Member] | |
Original Debt Amount | $ 2,200,000 |
Monthly Payment (approx.) | |
Current Loan Balance | $ 2,200,000 |
Lender | Owens Realty Mortgage, Inc. |
Term | 2 years |
Interest Rate | 7.75% |
Loan Maturity | Jan. 15, 2019 |
MVP Cincinnati Race Street Garage, LLC [Member] | |
Original Debt Amount | $ 3,000,000 |
Monthly Payment (approx.) | |
Current Loan Balance | $ 3,000,000 |
Lender | Moonshell, LLC |
Term | 3 months |
Interest Rate | 9.00% |
Loan Maturity | Jan. 10, 2018 |
MVP St Louis Washington, LLC [Member] | |
Original Debt Amount | $ 1,380,000 |
Monthly Payment (approx.) | |
Current Loan Balance | $ 1,380,000 |
Lender | KeyBank |
Term | 10 years |
Interest Rate | 4.90% |
Loan Maturity | May 1, 2027 |
St Paul Holiday Garage, LLC [Member] | |
Original Debt Amount | $ 4,132,000 |
Monthly Payment (approx.) | |
Current Loan Balance | $ 4,132,000 |
Lender | KeyBank |
Term | 10 years |
Interest Rate | 4.90% |
Loan Maturity | May 1, 2027 |
Cleveland Lincoln Garage, LLC [Member] | |
Original Debt Amount | $ 3,999,000 |
Monthly Payment (approx.) | |
Current Loan Balance | $ 3,999,000 |
Lender | KeyBank |
Term | 10 years |
Interest Rate | 4.90% |
Loan Maturity | May 1, 2027 |
Louisville Broadway Station, LLC [Member] | |
Original Debt Amount | $ 1,682,000 |
Monthly Payment (approx.) | |
Current Loan Balance | $ 1,682,000 |
Lender | Cantor Commercial Real Estate (CCRE) |
Term | 10 years |
Interest Rate | 5.03% |
Loan Maturity | May 6, 2027 |
Whitefront Garage, LLC [Member] | |
Original Debt Amount | $ 6,454,000 |
Monthly Payment (approx.) | |
Current Loan Balance | $ 6,454,000 |
Lender | Cantor Commercial Real Estate (CCRE) |
Term | 10 years |
Interest Rate | 5.03% |
Loan Maturity | May 6, 2027 |
MVP Houston Preston Lot, LLC [Member] | |
Original Debt Amount | $ 1,627,000 |
Monthly Payment (approx.) | |
Current Loan Balance | $ 1,627,000 |
Lender | Cantor Commercial Real Estate (CCRE) |
Term | 10 years |
Interest Rate | 5.03% |
Loan Maturity | May 6, 2027 |
MVP Houston San Jacinto Lot, LLC [Member] | |
Original Debt Amount | $ 1,820,000 |
Monthly Payment (approx.) | |
Current Loan Balance | $ 1,820,000 |
Lender | Cantor Commercial Real Estate (CCRE) |
Term | 10 years |
Interest Rate | 5.03% |
Loan Maturity | May 6, 2027 |
St. Louis Broadway, LLC [Member] | |
Original Debt Amount | $ 1,671,000 |
Monthly Payment (approx.) | |
Current Loan Balance | $ 1,671,000 |
Lender | Cantor Commercial Real Estate (CCRE) |
Term | 10 years |
Interest Rate | 5.03% |
Loan Maturity | May 6, 2027 |
St. Louis Seventh & Cerre, LLC [Member] | |
Original Debt Amount | $ 2,058,000 |
Monthly Payment (approx.) | |
Current Loan Balance | $ 2,058,000 |
Lender | Cantor Commercial Real Estate (CCRE) |
Term | 10 years |
Interest Rate | 5.03% |
Loan Maturity | May 6, 2027 |
MVP Preferred Parking, LLC [Member] | |
Original Debt Amount | $ 11,330,000 |
Monthly Payment (approx.) | |
Current Loan Balance | $ 11,330,000 |
Lender | Key Bank |
Term | 10 years |
Interest Rate | 5.02% |
Loan Maturity | Aug. 1, 2027 |
Less unamortized loan issuance costs [Member] | |
Current Loan Balance | $ (923,000) |
Total [Member] | |
Current Loan Balance | $ 78,834,000 |
Notes Payable (Detail) - Future
Notes Payable (Detail) - Future Principal Payments On The Notes Payable 2016 | Sep. 30, 2017USD ($) |
2017 [Member] | |
Principal Payments | $ 173,000 |
2018 [Member] | |
Principal Payments | 8,032,000 |
2019 [Member] | |
Principal Payments | 882,000 |
2020 [Member] | |
Principal Payments | 1,008,000 |
2021 [Member] | |
Principal Payments | 1,068,000 |
Thereafter [Member] | |
Principal Payments | 68,594,000 |
Less unamortized loan issuance costs [Member] | |
Principal Payments | (923,000) |
Total [Member] | |
Principal Payments | $ 78,834,000 |
Gain on Sale of Investment in42
Gain on Sale of Investment in Real Estate (Detail) - Summary Of Results Of Operations Related To Assets Held For Sale - USD ($) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2017 | Sep. 30, 2017 | |
Real Estate [Abstract] | ||
Revenue | $ 19,000 | $ 58,000 |
Expenses | (16,000) | (39,000) |
Net Income | $ 3,000 | $ 19,000 |
Investment In DST (Detail) - Su
Investment In DST (Detail) - Summarized Financial Information - Investment In DST [Member] | 3 Months Ended | 6 Months Ended |
Sep. 30, 2017USD ($) | Sep. 30, 2017USD ($) | |
Assets | ||
Investments in real estate and fixed assets | $ 11,350,000 | $ 11,350,000 |
Cash | 37,000 | 37,000 |
Cash - restricted | 3,000 | 3,000 |
Due from related party | 9,000 | 9,000 |
Total Assets | 11,399,000 | 11,399,000 |
Liabilities And Equity | ||
Notes payable, net of unamortized loan issuance cost of $65,734.77 | 5,934,000 | 5,934,000 |
Accounts payable and accrued liabilities | 27,000 | 27,000 |
Total Liabilities | 5,961,000 | 5,961,000 |
Equity | ||
Member's equity | 5,438,000 | 5,438,000 |
Unsold equity (bridged by Vestin Realty Mortgage II, Inc) | 203,000 | 203,000 |
Offering costs | (1,312,000) | (1,312,000) |
Accumulated earnings | 138,000 | 138,000 |
Distributions to members | (138,000) | (138,000) |
Total Shareholders' Equity | 5,438,000 | 5,438,000 |
Total Equity | 11,399,000 | 11,399,000 |
Income Statement | ||
Revenue | 182,000 | 243,000 |
Expenses | 79,000 | 105,000 |
Net income | $ 103,000 | $ 138,000 |
Investment in Equity Method I44
Investment in Equity Method Investee (Detail) - Summarized Financial Information - Equity Method Investments [Member] - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Assets | |||||
Investments in real estate and fixed assets | $ 2,438,000 | $ 2,438,000 | $ 2,438,000 | ||
Cash | 234,000 | 234,000 | 51,000 | ||
Cash - restricted | 337,000 | 337,000 | |||
Total Assets | 3,009,000 | 3,009,000 | 2,489,000 | ||
Liabilities And Equity | |||||
Notes payable, net of unamortized loan issuance cost | 735,000 | 735,000 | |||
Due to related party | 318,000 | 318,000 | |||
Accounts payable and accrued liabilities | 117,000 | 117,000 | 36,000 | ||
Total Liabilities | 1,170,000 | 1,170,000 | 36,000 | ||
Equity | |||||
Additional paid-in capital | 1,294,000 | 1,294,000 | 1,802,000 | ||
Retained Earnings | 103,000 | 103,000 | 64,000 | ||
Total Shareholders' Equity | 1,397,000 | 1,397,000 | 1,866,000 | ||
Non-controlling interest | 442,000 | 442,000 | 587,000 | ||
Total Equity | 1,839,000 | 1,839,000 | 2,453,000 | ||
Total liabilities and equity | 3,009,000 | 3,009,000 | $ 2,489,000 | ||
Income Statement | |||||
Revenue | 30,000 | $ 30,000 | 90,000 | $ 76,000 | |
Expenses | (22,000) | (9,000) | (52,000) | (32,000) | |
Net income | $ 8,000 | $ 21,000 | $ 38,000 | $ 44,000 |
Organization and Proposed Bus45
Organization and Proposed Business Operations (Details Narrative) - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2016 | |
Date of Incorporation | May 4, 2015 | |
Incorporation State | Maryland | |
Common Stock, Par or Stated Value Per Share, Initial Public Offering | $ 0.0001 | $ 0.0001 |
Share Price, Initial Public Offering | $ 25 | |
Shares Issued | 2,601,537 | 2,301,828 |
Stock Issued Value | $ 67,700,000 | |
Advisor | The Companys advisor is MVP Realty Advisors, LLC (the Advisor), a Nevada limited liability company, which is owned 60% by VRM II and 40% by VRM I. | |
Common stock, shares issued | 2,601,537 | 2,301,828 |
Common stock, shares outstanding | 2,601,537 | 2,301,828 |
Issuance Of Its Common Stock, Consideration | $ 4,900,000 | |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Dividend Reinvestment Plan (DRIP) | $ 50,000,000 | |
Dividend Reinvestment Plan (DRIP), per share price | $ 25 | |
Preferred Stock Series A | ||
Preferred stock, shares authorized | 50,000 | 50,000 |
Private Placement | The Company commenced a private placement of the shares of Series A, together with warrants to acquire the Companys common stock, to accredited investors on November 1, 2016 and closed the offering on March 24, 2017. | |
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock proceeds, net of offering costs | $ 2,600,000 | |
Preferred stock, shares issued | 2,862 | 2,862 |
Preferred stock, shares outstanding | 2,862 | 2,862 |
Preferred Stock Series 1 | ||
Preferred stock, shares authorized | 97,000 | 97,000 |
Private Placement | On April 7, 2017 the Company commenced a private placement of shares of Series 1, which is currently open, together with warrants to acquire the Companys common stock to accredited investors. | |
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock proceeds, net of offering costs | $ 11,800,000 | |
Preferred stock, shares issued | 13,445 | 5,070 |
Preferred stock, shares outstanding | 13,445 | 5,070 |
MVP CP II / Sponser [Member] | ||
Shares Issued | 8,000 | |
Stock Issued Value | $ 200,000 | |
Deferred Offering Costs | 1,100,000 | |
Cash Distributions | $ 600,000 | |
Common stock, shares issued | 8,000 | |
VRM II [Member] | ||
Shares Issued | 5,000 | |
Common stock, shares issued | 5,000 | |
Common stock, shares outstanding | 41,435 |
Summary of Significant Accoun46
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Acquisition expenses | $ 113,000 | $ 529,000 | $ 2,156,000 | $ 748,000 | |
Federally Insured Amount Limit | 250,000 | 250,000 | $ 250,000 | ||
Cash In Excess Of The Federally Insured Limits | 1,200,000 | 1,200,000 | $ 3,400,000 | ||
Advertising Costs | |||||
Common Share Equivalents Outstanding | |||||
Segments | one reportable segment | ||||
DRIP [Member] | |||||
Share Issued | 54,336 | ||||
Series A Convertible Redeemable Preferred Stock [Member] | |||||
Share Issued | 2,862 | ||||
Series 1 Convertible Redeemable Preferred Stock [Member] | |||||
Share Issued | 13,445 | ||||
Related Party [Member] | |||||
Acquisition expenses | $ 0 | $ 1,000,000 | $ 1,700,000 | $ 1,400,000 | |
Non-Related Party [Member] | |||||
Acquisition expenses | $ 500,000 | $ 700,000 | |||
4 Properties [Member] | Non-Related Party [Member] | |||||
Acquisition expenses | $ 100,000 | $ 2,100,000 | |||
Standard Parking + [Member] | |||||
Concentration | 61.30% |
Related Party Transactions an47
Related Party Transactions and Arrangements (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Common Stock Outstanding | 2,601,537 | 2,601,537 | 2,301,828 | ||
Distributions Received | $ 122,000 | ||||
Distributions Paid - DRIP | 591,000 | ||||
Note Payable Related Party | $ 2,100,000 | 2,100,000 | |||
Acquisition Fees | 200,000 | 400,000 | |||
Acquisition Expenses | $ 113,000 | 529,000 | $ 2,156,000 | 748,000 | |
Sponsor [Member] | |||||
Common Stock Outstanding | 8,839 | 8,839 | |||
VRM II [Member] | |||||
Common Stock Outstanding | 41,435 | 41,435 | |||
Distributions Paid - DRIP | $ 11,900 | ||||
MVP REIT [Member] | |||||
Investment in Affiliate | $ 3,000,000 | $ 3,000,000 | |||
Investment in Affiliate, shares | 338,409 | 338,409 | |||
Investement in Affiliate, per share | $ 8.865 | ||||
Distributions Received | $ 23,000 | $ 122,000 | |||
Distributions Paid - DRIP (Shares) | 2,544 | ||||
Receivables Related Party | 1,400,000 | $ 1,400,000 | |||
Sales By Affiliated And Non-Affiliated Selling Agents [Member] | |||||
Selling Commissions Paid | 500,000 | 1,000,000 | |||
MVP American Securities [Member] | |||||
Dealer Manager Compensation | 200,000 | 300,000 | |||
Advisor [Member] | |||||
Note Payable Related Party | 2,100,000 | 2,100,000 | |||
Acquisition Fees | 0 | 1,000,000 | 1,700,000 | 1,400,000 | |
Acquisition Expenses | |||||
Asset Management Fees | 300,000 | 51,000 | 800,000 | 66,000 | |
Operating Expenses | |||||
Disposition Fees | |||||
Performance Fees |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details Narrative) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Stock Options Granted Percentage Limit | 10.00% | |||
Aggregate Maximum Number of Shares Under Incentive Plan | 500,000 | 500,000 | ||
Long-Term Incentive Plan [Member] | ||||
Grants |
Line of Credit (Details Narrati
Line of Credit (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Interest expense | $ (1,297,000) | $ (3,146,000) | $ (1,000) | |
Unsecured Credit Agreement [Member] | ||||
Interest expense | 34,000 | 220,000 | ||
Unused Line Fees | 9,000 | 18,400 | ||
Loan Amortization Cost | 62,000 | 189,000 | ||
Working Capital Credit Agreement [Member] | ||||
Maximum Amount Outstanding During Period | 1,500,000 | |||
Remaining Borrowing Capacity | 4,400,000 | 4,400,000 | ||
Interest expense | 49,000 | 49,000 | ||
Unused Line Fees | 1,600 | 1,600 | ||
Loan Amortization Cost | 50,000 | $ 53,000 | ||
Subsidiary (the "Borrowers") [Member] | ||||
Initiation Date | Oct. 5, 2016 | |||
Line of Credit, Description | On October 5, 2016, the Company, through its Operating Partnership, and MVP REIT, (the REITs) through a wholly owned subsidiary (the "Borrowers"), entered into a credit agreement (the "Unsecured Credit Agreement") with KeyBank, National Association ('KeyBank") as the administrative agent and KeyBank Capital Markets ("KeyBank Capital Markets") as the lead arranger. Pursuant to the Unsecured Credit Agreement, the Borrowers were provided with a $30 million unsecured credit facility (the "Unsecured Credit Facility"), which may be increased up to $100 million, in minimum increments of $10 million. The Unsecured Credit Facility has an initial term of two years, maturing on October 5, 2018, and may be extended for a one-year period if certain conditions are met and upon payment of an extension fee. | |||
Interest Rate, Description | As of September 30,2017 the interest rate was 3.49%. | |||
Maximum Borrowing Capacity | $ 30,000,000 | $ 30,000,000 | ||
Maximum Amount Outstanding During Period | $ 0 |
Notes Payable and Notes Payab50
Notes Payable and Notes Payable Related Party (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Debt Disclosure [Abstract] | ||||
Interest Incurred | $ 1,100,000 | $ 2,700,000 | ||
Interest Expense | 1,297,000 | 3,146,000 | $ 1,000 | |
Loan Amortization Cost | $ 200,000 | $ 400,000 |
Gain on Sale of Investment in51
Gain on Sale of Investment in Real Estate (Details Narrative) | 9 Months Ended |
Sep. 30, 2017USD ($) | |
Real Estate [Abstract] | |
Assets held for sale | |
Property Sold (Selling Price) | $ 2,000,000 |
Date Property Acquired | Nov. 22, 2016 |
Agreement to Sell Property | During May 2017, this purchase and sale agreement had been cancelled. During May and June, another unsolicited third party expressed interest in purchasing the property for $2.0 million and during July 2017, the Company entered into a purchase and sale agreement with this third party which closed on September 20, 2017. |
Gain on Property Sold | $ 1,200,000 |
Investment in Equity Method I52
Investment in Equity Method Investee (Details Narrative) | 9 Months Ended |
Sep. 30, 2017USD ($) | |
Denver 1935 Sherman [Member] | |
Description of Investment Activities | On February 12, 2016, the Company along with MVP REIT, through MVP Denver 1935 Sherman, LLC ("MVP Denver"), a Nevada limited liability company owned 24.49% by the Company and 75.51% by MVP REIT, closed on the purchase of a parking lot for approximately $2.4 million in cash, of which the Company's share was approximately $0.6 million. |
Aggregate Cost | $ 2,400,000 |
Ownership Percentage | 24.49% |
Additional Information | The Denver parking lot consists of approximately 18,765 square feet and has approximately 72 parking spaces. The Denver parking lot is leased by SP Plus Corporation, a national parking operator, under a net lease agreement where MVP Denver is responsible for property taxes and SP Plus Corporation pays for all insurance and maintenance costs. SP Plus Corporation pays annual rent of $120,000. In addition, the lease provides percentage rent with MVP Denver receiving 70% of gross receipts over $160,000. The term of the lease is for 10 years. |
Houston Preston Lot [Member] | |
Description of Investment Activities | On November 22, 2016, the Company and MVP REIT, through MVP Houston Preston Lot, LLC, a Delaware limited liability company (MVP Preston), an entity wholly owned by the Company, closed on the purchase of a parking lot consisting of approximately 46 parking spaces, located in Houston, Texas, for a purchase price of $2.8 million in cash plus closing costs, of which our portion was $560,000. |
Aggregate Cost | $ 2,800,000 |
Ownership Percentage | 20.00% |
Additional Information | The parking lot is under a 10-year lease with iPark Services LLC (iPark), a regional parking operator, under a modified net lease agreement where MVP Preston is responsible for property taxes above a $38,238 threshold, and iPark pays for insurance and maintenance costs. iPark pays annual rent of $228,000. In addition, the lease provides percentage rent with MVP Preston receiving 65% of gross receipts over $300,000. The term of the lease is for 10 years. |
Merger (Details Narrative)
Merger (Details Narrative) | 9 Months Ended |
Sep. 30, 2017 | |
Business Combinations [Abstract] | |
Merger Equity Transfer | Subject to the terms and conditions of the Merger Agreement, at the effective time of the Merger, each outstanding share of MVP REITs common stock, $0.001 par value per share (the MVP REIT Common Stock), will be automatically cancelled and retired, and converted into the right to receive 0.365 shares of common stock, $0.0001 par value per share, of the Company (the Company Common Stock) (such ratio, as it may be adjusted pursuant to the Merger Agreement, the Exchange Ratio). Holders of shares of MVP REIT Common Stock will receive cash in lieu of fractional shares. |
Income Taxes and Critical Acc54
Income Taxes and Critical Accounting Policy (Details Narrative) | 9 Months Ended |
Sep. 30, 2017USD ($) | |
Income Tax Disclosure [Abstract] | |
Net Deferred Tax Asset | $ 1,600,000 |
Effective Tax Rate | 0.00% |
Preferred Stock and Warrants (D
Preferred Stock and Warrants (Details Narrative) - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2016 | |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock par value | $ 0.0001 | $ 0.0001 |
Preferred Stock Series A | ||
Preferred stock, shares authorized | 50,000 | |
Preferred stock par value | $ 0.0001 | |
Share Value Raised | $ 2,600,000 | |
Dividends | The holders of the Series A Preferred Stock shall be entitled to receive, when and as authorized by the board of directors and declared by the Company out of funds legally available for the payment of dividends, cash dividends at the rate of 5.75% per annum of the initial stated value of $1,000 per share. If a Listing Event, as defined in the offering, has not occurred by March 31, 2017, the cash dividend rate shall increase to 7.50%, until a Listing Event has occurred. Base on the number of Series A shares outstanding at September 30, 2017, the increased dividend rate would cost the Company approximately $12,000 more per quarter in Series A dividends. | |
Conversion Options | Subject to the Companys redemption rights as described below, each Share will be convertible into shares of our common stock, at the election of the holder thereof by written notice to the Company (each, a Conversion Notice) containing the information required by the charter, at any time beginning upon the earlier of (i) 90 days after the occurrence of a Listing Event or (ii) the second anniversary of the final Closing of this Offering (whether or not a Listing Event has occurred). Each Share will convert into a number of shares of our common stock determined by dividing (i) the sum of (A) 100% of the Stated Value, initially $1,000, plus (B) any accrued but unpaid dividends to, but not including, the date of conversion, by (ii) the conversion price for each share of our common stock (the Conversion Price) determined as follows: Provided there has been a Listing Event, if a Conversion Notice with respect to any Share is received on or prior to the day immediately preceding the first anniversary of the issuance of such Share, the Conversion Price for such Share will be equal to 110% of the volume weighted average price per share of the common stock of the Company (or its successor) for the 20 trading days prior to the delivery date of the Conversion Notice. Provided there has been a Listing Event, if a Conversion Notice with respect to any Share is received on or after the first anniversary of the issuance of such Share, the Conversion Price for such Share will be equal to the volume weighted average price per share of the common stock of the Company (or its successor) for the 20 trading days prior to the delivery date of the Conversion Notice. If a Conversion Notice with respect to any Share is received on or after the second anniversary of the final Closing of this Offering, and at the time of receipt of such Conversion Notice, a Listing Event has not occurred, the Conversion Price for such Share will be equal to 100% of our net asset value per share, or NAV per share, if then established, and until we establish a NAV per share, the Conversion Price will be equal to $25.00, or the initial offering price per share of our common stock in our initial public offering. | |
Warrants | Each investor in the Series A shall receive, for every $1,000 in shares subscribed by such investor, detachable warrants to purchase 30 shares of the Companys common stock, par value $0.0001 per share, if the Companys common stock is listed on a national securities exchange. The warrants exercise price is equal to 110% of the volume weighted average closing stock price of the Companys common stock over a specified period as determined in accordance with the terms of the warrant; however, in no event shall the exercise price be less than $25 per share. As of September 30, 2017, there were detachable warrants that may be exercised for 85,740 shares of the Companys common stock after the 90th day following the occurrence of a listing event. These potential warrants will expire five years from the 90th day after the occurrence of a listing event. If all the potential warrants outstanding at September 30, 2017 became exercisable because of a listing event, and were exercised at the minimum price of $25 per share, gross proceeds to us would be approximately $2.1 million and we would as a result issue an additional 85,740 shares of common stock. As of March 31, 2017, June 30, 2017 and September 30, 2017, the Company an estimated fair market value of potential warrants to be immaterial. | |
Series 1 Preferred Stock [Member] | ||
Preferred stock, shares authorized | 97,000 | |
Preferred stock par value | $ 0.0001 | |
Dividends | The holders of the Series 1 Preferred Stock are entitled to receive, when and as authorized by our board of directors and declared by us out of legally available funds, cumulative, cash dividends on each Share at an annual rate of 5.50% of the Stated Value pari passu with the dividend preference of the Series A Preferred Stock and in preference to any payment of any dividend on our common stock; provided, however, that Qualified Purchasers (who purchased $1.0 million or more in a single closing) are entitled to receive, when and as authorized by our board of directors and declared by us out of legally available funds, cumulative, cash dividends on each Share held by such Qualified Purchaser at an annual rate of 5.75% of the Stated Value (instead of the annual rate of 5.50% for all other holders of the Shares) until April 7, 2018, at which time, the annual dividend rate will be reduced to 5.50% of Stated Value; provided further, however, that if a Listing Event has not occurred by April 7, 2018, the annual dividend rate on all Shares (without regard to Qualified Purchaser status) will be increased to 7.00% of the Stated Value until the occurrence of a Listing Event, at which time, the annual dividend rate will be reduced to 5.50% of the Stated Value. Base on the number of Series 1 shares outstanding at September 30, 2017, the increased dividend rate would cost the Company approximately $50,000 more per quarter in Series 1 dividends. | |
Conversion Options | Subject to the Companys redemption rights as described below, each Share will be convertible into shares of our common stock, at the election of the holder thereof by written notice to the Company (each, a Conversion Notice) containing the information required by the charter, at any time beginning upon the earlier of (i) 45 days after the occurrence of a Listing Event or (ii) April 7, 2019 (whether or not a Listing Event has occurred). Each Share will convert into a number of shares of our common stock determined by dividing (i) the sum of (A) 100% of the Stated Value, initially $1,000, plus (B) any accrued but unpaid dividends to, but not including, the date of conversion, by (ii) the conversion price for each share of our common stock (the Conversion Price) determined as follows: Provided there has been a Listing Event, if a Conversion Notice with respect to any Share is received prior to December 1, 2017, the Conversion Price for such Share will be equal to 110% of the volume weighted average price per share of the common stock of the Company (or its successor) for the 20 trading days prior to the delivery date of the Conversion Notice. Provided there has been a Listing Event, if a Conversion Notice with respect to any Share is received on or after December 1, 2017, the Conversion Price for such Share will be equal to the volume weighted average price per share of the common stock of the Company (or its successor) for the 20 trading days prior to the delivery date of the Conversion Notice. If a Conversion Notice with respect to any Share is received on or after April 7, 2019, and at the time of receipt of such Conversion Notice, a Listing Event has not occurred, the Conversion Price for such Share will be equal to 100% of our net asset value per share, or NAV per share, if then established, and until we establish a NAV per share, the Conversion Price will be equal to $25.00, or the initial offering price per share of our common stock in our initial public offering. | |
Warrants | Each investor in the Series 1 shall receive, for every $1,000 in shares subscribed by such investor, detachable warrants to purchase 35 shares of the Companys common stock, par value $0.0001 per share, if the Companys common stock is listed on a national securities exchange. The warrants exercise price is equal to 110% of the volume weighted average closing stock price of the Companys common stock over a specified period as determined in accordance with the terms of the warrant; however, in no event shall the exercise price be less than $25 per share. As of September 30, 2017, there were detachable warrants that may be exercised for 175,805 shares of the Companys common stock after the 90th day following the occurrence of a listing event. These potential warrants will expire five years from the 90th day after the occurrence of a listing event. If all the potential warrants outstanding at September 30, 2017 became exercisable because of a listing event, and were exercised at the minimum price of $25 per share, gross proceeds to us would be approximately $4.4 million and we would as a result issue an additional 175,805 shares of common stock. As of March 31, 2017, June 30, 2017 and September 30, 2017, the Company an estimated fair market value of potential warrants to be immaterial. |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) | Nov. 14, 2017 | Oct. 31, 2017 |
MVP Realty Advisors Note Payable Payment [Member] | ||
Date of Event | Oct. 17, 2017 | |
Description | On October 17, 2017 the Company made a payment of $1.0 million to MVP Realty Advisors towards the principal balance of the outstanding $2.1 million note payable. | |
Working Capital Credit Facility [Member] | ||
Description | During October 2017, the balance on our Working Capital Credit Facility was paid in full; however, on November 7, 2017, MVP REIT took a draw of $1.5 million to mainly pay acquisition fees and merger costs. | |
Investment in MVP REIT [Member] | ||
Description | In November 2017, the Company acquired approximately 118,932 shares of MVP REITs stock at $8.56 per share from an unrelated third party. |