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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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☒
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Definitive Proxy Statement
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☐
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Definitive Additional Materials
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Soliciting Material Pursuant to §240.14a-12
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Sincerely,
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Evan H. Zucker
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Chairman of the Board of Directors
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For the Board of Directors of
Black Creek Industrial REIT IV Inc.
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(i)
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a proposal to elect six directors to serve until the 2022 annual meeting of stockholders and until their respective successors are duly elected and qualify;
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(ii)
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a proposal to ratify the appointment of KPMG LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2021;
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(iii)
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a proposal to permit our Board of Directors to adjourn the Annual Meeting, if necessary, to solicit additional proxies in favor of the foregoing proposals if there are not sufficient votes for the proposals; and
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(iv)
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any other business that may properly come before the Annual Meeting or any postponement or adjournment of the Annual Meeting.
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By Order of the Board of Directors,
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Joshua J. Widoff
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Managing Director
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Chief Legal Officer and Secretary
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(i)
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a proposal to elect six directors to serve until the 2022 annual meeting of stockholders and until their respective successors are duly elected and qualify;
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(ii)
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a proposal to ratify the appointment of KPMG LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2021;
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(iii)
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a proposal to permit our Board of Directors to adjourn the Annual Meeting, if necessary, to solicit additional proxies in favor of the foregoing proposals if there are not sufficient votes for the proposals; and
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(iv)
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any other business that may properly come before the Annual Meeting or any postponement or adjournment of the Annual Meeting.
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•
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elect six directors to serve until the 2022 annual meeting of stockholders and until their respective successors are duly elected and qualify;
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ratify the appointment of KPMG LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2021;
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permit our Board of Directors to adjourn the Annual Meeting, if necessary, to solicit additional proxies in favor of the foregoing proposals if there are not sufficient votes for the proposal; and
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act on any other business that may properly come before the Annual Meeting.
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FOR the election of the nominees to our Board of Directors;
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FOR the ratification of the appointment of KPMG LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2021; and
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FOR permitting our Board of Directors to adjourn the Annual Meeting, if necessary, to solicit additional proxies in favor of the foregoing proposals if there are not sufficient votes for the proposals.
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1.
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if you received printed proxy materials, by signing, dating, and mailing the proxy card in the postage-paid envelope provided;
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2.
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via the Internet at www.proxyvote.com, as provided in the proxy card and the Internet Availability Notice;
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by touch-tone telephone at the toll-free number, as provided in the proxy card and the Internet Availability Notice; or
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4.
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by telephone at 1-833-795-8490 speaking to a live agent between 9:00am and 9:00pm EDT.
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FOR the election of the nominees to our Board of Directors;
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FOR the ratification of the appointment of KPMG LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2021;
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FOR permitting our Board of Directors to adjourn the Annual Meeting, if necessary, to solicit additional proxies in favor of the foregoing proposals if there are not sufficient votes for the proposals; and
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in the discretion of the proxy holder on any other business that properly comes before the Annual Meeting. As of the date of this Proxy Statement, we are not aware of any other matter to be raised at the Annual Meeting.
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send written notice of revocation, prior to the Annual Meeting, to our Managing Director, Chief Legal Officer and Secretary, Mr. Joshua J. Widoff (the “Secretary”), at 518 Seventeenth Street, Suite 1700, Denver, Colorado 80202;
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properly sign, date, and mail a new proxy card to our Secretary;
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dial the toll-free number provided in the proxy card, the Internet Availability Notice and in this Proxy Statement and authorize your proxy again;
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log onto the Internet site provided in the proxy card, the Internet Availability Notice and in this Proxy Statement and authorize your proxy again; or
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attend the Annual Meeting and vote your shares in person.
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ownership interests in the Sponsor, the Advisor or any of their affiliates;
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employment by the Sponsor, the Advisor or any of their affiliates;
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service as an officer or director of the Sponsor, the Advisor or any of their affiliates;
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performance of services, other than as a director for us;
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service as a director or trustee of more than three real estate investment trusts organized by the Sponsor or advised by the Advisor; or
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maintenance of a material business or professional relationship with the Sponsor, the Advisor or any of their affiliates.
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Nominee
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Business Experience and Qualifications
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Evan H. Zucker
Chairman of the Board of Directors
Age: 55
Director since November 2014
Member of Investment Committee
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Evan H. Zucker has served as the Chairman of our Board of Directors and as a director since November 2014. During the past five years, Mr. Zucker has served as a manager of the Advisor and Black Creek Diversified Property Advisors LLC, the advisor to Black Creek Diversified Property Fund Inc. (“DPF”). Mr. Zucker also served as the Chairman of the board of directors and as a director of Industrial Property Trust (formerly known as Industrial Property Trust Inc. until February 2020) (“IPT”). Mr. Zucker is a principal of Black Creek Group, LLC (“BCG”), a Denver based real estate investment firm which he co-founded in 1993. As of December 31, 2020, Mr. Zucker has overseen directly, or indirectly through affiliated entities, the acquisition, development, redevelopment, financing and sale of real estate related assets with an aggregate value in excess of approximately $23.3 billion. Mr. Zucker also was a co-founder and formerly served as a director of DCT Industrial Trust, formerly known as Dividend Capital Trust, a NYSE listed industrial REIT (NYSE: DCT). Mr. Zucker has been active in real estate acquisition, development and redevelopment activities since 1989. In 1993, Mr. Zucker co-founded American Real Estate Investment Corp., which subsequently became Keystone Property Trust (NYSE: KTR), an industrial, office and logistics REIT that was later acquired by ProLogis Trust (NYSE: PLD) in August 2004. Mr. Zucker served as the President and as a director of American Real Estate Investment Corp. from 1993 to 1997 and as a director of Keystone Property Trust from 1997 to 1999. Mr. Zucker graduated from Stanford University with a Bachelor’s Degree in Economics.
We believe that Mr. Zucker’s qualifications to serve on our Board of Directors are demonstrated by his proven business acumen, including his over 25 years of experience with BCG as a co-founder of the company, and his vast experience as a leader of an advisor to real estate investment companies, including DCT Industrial Trust, DPF, Industrial Income Trust Inc. (“IIT”), IPT, and American Real Estate Investment Corp. (which subsequently became Keystone Property Trust, NYSE: KTR).
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Dwight L. Merriman III
Director
Age: 60
Director since November 2014
Member of Investment Committee
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Dwight L. Merriman III has served as a member of our Board of Directors and as a member of the board of managers of the Advisor since November 2014. Mr. Merriman served as our Managing Director from May 2017 through December 2019 and as our Chief Executive Officer from November 2014 through December 2019. In addition, Mr. Merriman served as a trustee of DC Industrial Liquidating Trust from November 2015 through December 2017. During the past five years, Mr. Merriman has also held similar leadership roles at BCG, and is responsible for the oversight of the acquisition, asset management and portfolio management activities for all industrial investments across funds sponsored by affiliates of BCG. Prior to joining the Company, Mr. Merriman served from September 2007 through March 2010 as a Managing Director and the Chief Investment Officer of Stockbridge Capital Group LLC, or “Stockbridge,” a real estate investment management company based in San Francisco, California, which had more than $3 billion in real estate under management. While with Stockbridge, Mr. Merriman served as a member of its investment and management committees, and was responsible for coordinating the
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Nominee
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Business Experience and Qualifications
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investment activities of the company. From May 2000 to September 2007, Mr. Merriman was a Managing Director of RREEF Funds, or “RREEF,” a real estate investment management company, in charge of RREEF’s development and value-added investment opportunities in North America. While at RREEF, he served on the investment committee and was involved in approving approximately $5 billion in commercial real estate transactions, and he started CalSmart, a $1.2 billion value-added real estate investment fund with the California Public Employees’ Retirement System. Prior to joining RREEF in 2000, Mr. Merriman served for approximately five years as a Managing Director at Carr America Realty Corporation, where he was responsible for the company’s acquisition, development and operations activities in Southern California and Utah. Prior to that, he spent 11 years with the Los Angeles development firm of Overton, Moore & Associates, where he was responsible for developing industrial and office property throughout Southern California. Mr. Merriman received a B.S. in Business Administration from the University of Southern California and an M.B.A. from the Anderson School at the University of California at Los Angeles. Mr. Merriman is a member of the Urban Land Institute.
We believe that Mr. Merriman’s qualifications to serve on our Board of Directors include over 30 years of extensive real estate investment and development experience, including specifically his experience serving in leadership positions and on the investment committees of significant real estate investment funds.
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Marshall M. Burton
Independent Director
Age: 52
Director since August 2015
Member of Audit Committee
Member of Nominating and Corporate Governance Committee
Member of Investment Committee
Member of Conflicts Resolution Committee
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Marshall M. Burton has served as an independent director on our Board of Directors since August 2015. In addition, during the past five years, Mr. Burton has served as an independent director on the board of directors of IPT, as an independent trustee of DC Industrial Liquidating Trust, and as a director and President of both MVG, Inc. and Confluent Development, L.L.C. Mr. Burton has more than 20 years of commercial real estate experience, including development, leasing, investment and management. In March 2014, Mr. Burton founded Confluent Holdings, L.L.C. to develop and invest in office, industrial and multi-family projects throughout the U.S. In April 2015, Mr. Burton expanded Confluent Holdings, L.L.C. and co-founded Confluent Development, L.L.C. in a merger with MVG, Inc., to form a diverse real estate investment and development platform with projects in various stages of development totaling $500 million. From March 2011 to March 2014, Mr. Burton served as Senior Vice President and General Manager of Opus Development Company L.L.C., an affiliate of The Opus Group, a real estate developer, or “Opus,” where he was responsible for managing operations and seeking new development opportunities in Denver, Colorado and in the western region of the U.S. Prior to joining Opus, Mr. Burton founded the Denver office of McWhinney, a real estate development company, in February 2010. As Senior Vice President of McWhinney, Mr. Burton oversaw operations for the commercial development team in the Denver metropolitan area and other strategic locations across the western U.S. Mr. Burton served as the Senior Vice President of Opus Northwest, L.L.C., a full-service real estate developer, from May 2009 through February 2010, and previously served as Vice President from October 2002 through September 2008
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Nominee
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Business Experience and Qualifications
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and in other capacities beginning in 1996. Prior to joining Opus in 1996, Mr. Burton was co-founder of Denver Capital Corporation, a multi-bank community lending organization. Mr. Burton is a licensed Colorado Real Estate Broker and is active in many civic and real estate associations, including serving as Treasurer and President-elect of the National Association of Industrial and Office Properties and as an executive committee member of the Urban Land Institute. Mr. Burton received his Bachelor of Science in Business Administration from the University of Denver.
We believe that Mr. Burton’s qualifications to serve on our Board of Directors include his over 20 years of experience overseeing the development, leasing, investment and management of commercial real estate. This experience provides a valuable perspective on the commercial real estate industry.
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Charles B. Duke
Independent Director
Age: 63
Director since February 2016
Chairman of Audit Committee
Member of Nominating and Corporate Governance Committee
Member of Investment Committee
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Charles B. Duke has served as an independent director on our Board of Directors since February 2016. In addition, during the past five years, Mr. Duke has served as an independent director and independent trustee, as applicable, of IPT and DPF. Mr. Duke is currently Founder and Chief Executive Officer of To-Table Inc. (“To-Table”), a retailer of specialty gourmet foods. Prior to founding To-Table in November 2014, Mr. Duke was involved in the management of two ink jet cartridge remanufacturers and aftermarket suppliers. Mr. Duke served as the Executive Vice President of IJR, Inc. in Phoenix, Arizona from October 2012 to July 2014 and as Founder, President and Chief Executive Officer of Legacy Imaging, Inc., from 1996 through 2012. Mr. Duke has been active in entrepreneurial and general business activities since 1980 and has held several executive and management roles throughout his career, including Founder, President and Owner of Careyes Corporation, a private bank, registered investment advisor and a member of the Financial Industry Regulatory Authority (“FINRA”) based in Denver, Colorado, Chief Financial Officer at Particle Measuring Systems, a global technology leader in the environmental monitoring industry based in Boulder, Colorado, and Vice President of Commercial Loans at Colorado National Bank. Mr. Duke also spent four years with Kirkpatrick Pettis, the investment banking subsidiary of Mutual of Omaha, as Vice President of Corporate Finance, involved primarily in mergers and acquisitions, financing and valuation activities. Mr. Duke graduated from Hamilton College in 1980 with a Bachelor’s Degree in Economics and English.
Our Board of Directors has determined that Mr. Duke is the audit committee financial expert. In that role, we believe that Mr. Duke brings a unique perspective to the audit committee, as he is the only audit committee member with investment banking experience. We believe Mr. Duke’s qualifications to serve on our Board of Directors include his considerable business and financial experience, including specifically his experience as founder and president of a private bank and as Chief Financial Officer of a significant organization.
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Nominee
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Business Experience and Qualifications
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Stanley A. Moore
Independent Director
Age: 82
Director since August 2015
Chairman of Nominating and Corporate Governance Committee
Chairman of Investment Committee
Member of Conflicts Resolution Committee
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Stanley A. Moore has served as an independent director on our Board of Directors since August 2015. In addition, during the past five years, Mr. Moore has served as an independent director and independent trustee, as applicable, of IPT and DC Industrial Liquidating Trust. Mr. Moore is a Co-Founder and Chairman and the former Chief Executive Officer of Overton Moore Properties, or “OMP,” a leading commercial real estate development firm in Los Angeles County that develops, owns and manages office, industrial and mixed-use space. He served as Chief Executive Officer of OMP from 1975 until January 2010 and has served as a director since 1972. Since its founding, OMP has developed and/or invested in over 30 million square feet of commercial space in California. Mr. Moore served as a member of the board of directors of The Macerich Company (NYSE: MAC), a leading owner, operator and developer of major retail properties, from 1994 through May 2015. Mr. Moore is past President of the Southern California Chapter of the National Association of Industrial and Office Parks, and is currently a board member of the Economic Resources Corporation of South Central Los Angeles. His many awards and citations include the Humanitarian of the Year awarded to him by the National Conference of Christians and Jews.
We believe that Mr. Moore’s qualifications to serve on our Board of Directors include his over 36 years of experience as a Chief Executive Officer of a leading commercial real estate development firm, his expertise in the areas of acquisitions, development and management of commercial real estate, and more specifically, industrial properties, his leadership experience with the National Association of Industrial and Office Parks, and his service on civic and private and public company boards.
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John S. Hagestad
Independent Director
Age: 74
Director since August 2015
Member of the Audit Committee
Member of Investment Committee
Member of Conflicts Resolution Committee
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John S. Hagestad has served as an independent director on our Board of Directors since August 2015. In addition, during the past five years, Mr. Hagestad has served as an independent director and independent trustee, as applicable, of IPT. Mr. Hagestad is Senior Managing Director and Co-Founder of SARES•REGIS Group, a vertically integrated real estate development services company focusing on both commercial and residential real estate. Mr. Hagestad has served in this role since 1993 and is responsible for overseeing all of SARES•REGIS Group’s commercial activities which includes the development, investment and management divisions. Mr. Hagestad serves on SARES•REGIS Group’s Executive Management Committee which approves all property acquisitions and investment decisions and provides strategic planning for the future. During his career, Mr. Hagestad has been responsible for the acquisition and development of over 85 million square feet of commercial, office and industrial property totaling more than $6 billion in value. In 1972, he joined the Koll Company as a Vice President for project acquisition and development. Three years later he joined The Sammis Company as a founding partner responsible for all matters of finance and administration, with emphasis on lender and partner relationships. In 1990, Mr. Hagestad became President and Chief Executive Officer of the SARES Company (the successor to The Sammis Company), where he was instrumental in its merger with The Regis Group to create the SARES•REGIS Group in 1993. Mr. Hagestad
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Nominee
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Business Experience and Qualifications
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is a Certified Public Accountant and holds a bachelor’s degree in Business Administration and a master’s degree in Finance from the University of Southern California. He is a past trustee of the Urban Land Institute, a member of the Marshall School of Business Board of Leaders at the University of Southern California, the UCI Center for Real Estate, The Fisher Center for Real Estate and Urban Economics at UC Berkeley and the Real Estate Roundtable. He is also on the Board of Trustees / Directors for the Cystinosis Research Foundation.
We believe that Mr. Hagestad’s qualifications to serve on our Board of Directors include his over 40 years of involvement in overseeing the development, acquisition and management of commercial, office and industrial real estate, in addition to his valuable accounting background. This experience provides a valuable perspective on the various facets of the real estate industry.
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Name
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Age
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Position
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Rajat Dhanda
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53
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Managing Director, Co-President
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Jeffrey W. Taylor
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48
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Managing Director, Co-President
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Scott A. Seager
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40
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Senior Vice President, Chief Financial Officer and Treasurer
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Scott W. Recknor
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53
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Managing Director, Head of Asset Management
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Joshua J. Widoff
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50
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Managing Director, Chief Legal Officer and Secretary
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Name
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Fees Earned or
Paid in Cash
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Stock Awards
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Total
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Marshall M. Burton
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$130,000
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$75,000
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$205,000
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Charles B. Duke
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$195,000
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$75,000
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$270,000
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John S. Hagestad
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$132,500
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$75,000
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$207,500
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Stanley A. Moore
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$180,000
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$75,000
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$255,000
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•
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$15,000 to the Chairperson of our Audit Committee;
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$10,000 to the Chairperson of our Investment Committee; and
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$10,000 to the Chairperson of our Nominating and Corporate Governance Committee.
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INDEPENDENT DIRECTORS:
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Marshall M. Burton
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Charles B. Duke
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John S. Hagestad
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Stanley A. Moore
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Plan Category
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Number of securities
to be issued upon
exercise of
outstanding options,
warrants and rights
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Weighted-average
exercise price of
outstanding options,
warrants and rights
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Number of securities
remaining available for
future issuance under
equity incentive plans
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Equity compensation plans approved by security holders
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312,711
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—
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1,532,790
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Equity compensation plans not approved by security holders
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16,199
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—
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1,964,409
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Total
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—
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—
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3,497,199
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Name of Beneficial Owner(1)
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Title
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Amount and Nature of
Beneficial Ownership(1)
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Percent of
Common Stock
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BCI IV Advisors LLC (Advisor)(2)
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—
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20,225 shares
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*
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19,253 shares
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Evan H. Zucker(2)
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Chairman, Director
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437,101 OP Units(3)
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*
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Dwight L. Merriman III
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Director
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28,092 shares
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*
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Marshall M. Burton
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Director
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19,878 shares
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*
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Stanley A. Moore
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Director
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19,878 shares
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*
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John S. Hagestad
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Director
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21,296 shares
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*
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Charles B. Duke
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Director
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19,878 shares
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*
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Rajat Dhanda
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Managing Director, Co-President
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—
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*
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Jeffrey W. Taylor
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Managing Director, Co-President
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2,113 shares
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*
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Scott A. Seager
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SVP, CFO and Treasurer
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9,244 shares
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*
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Joshua J. Widoff
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Managing Director, Chief Legal Officer and Secretary
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2,818 shares
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*
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Scott W. Recknor
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Managing Director, Head of Asset Management
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—
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*
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Beneficial ownership of common stock and OP Units by all directors and executive officers as a group
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—
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579,551 shares/OP Units
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*
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*
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Less than one percent.
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(1)
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Except as otherwise indicated below, each beneficial owner has the sole power to vote and dispose of all common stock held by that beneficial owner. Beneficial ownership is determined in accordance with Rule 13d-3 under the Exchange Act. Common stock issuable upon redemption of OP Units are treated as beneficially owned and outstanding for the purpose of computing the percentage ownership of the person holding the OP Units, but are not treated as outstanding for the purpose of computing the percentage ownership of any other person.
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(2)
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The Advisor is directly or indirectly jointly controlled by the estate of John Blumberg, James R. Mulvihill and Evan H. Zucker, Chairman of our Board of Directors, and/or their affiliates. The amount of shares indicated in the table as being owned by Mr. Zucker does not include the shares owned by the Advisor. Mr. Zucker disclaims beneficial ownership of the shares owned by the Advisor except to the extent of his pecuniary interests.
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(3)
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Reflects 19,253 shares and 437,101 OP Units owned indirectly by Mr. Zucker through a limited liability company. The OP Units may be redeemed for shares of our common stock at the election of the holder.
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•
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Participate in formulating an investment strategy consistent with achieving our investment objectives;
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•
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Manage and supervise the offering process;
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•
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Assist our Board of Directors in developing, overseeing, implementing and coordinating our monthly NAV procedures;
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•
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Provide information about our properties and other assets and liability to the Independent Valuation Advisor and other parties involved with determining our monthly NAV;
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•
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Research, identify, review and recommend for approval to our Board of Directors or Investment Committee, as applicable, real property, debt and other investments and dispositions consistent with our investment policies and objectives;
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•
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Structure the terms and conditions of transactions pursuant to which acquisitions and dispositions of investments will be made;
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•
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Actively oversee and manage our investment portfolio for purposes of meeting our investment objectives;
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•
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Manage our day-to-day affairs, including financial accounting and reporting, investor relations, marketing, informational systems and other administrative services on our behalf;
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•
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Select joint venture partners, structure corresponding agreements and oversee and monitor these relationships;
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•
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Arrange for financing and refinancing of our assets; and
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•
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Recommend various liquidity events to our Board of Directors when appropriate.
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•
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Immediately by us for “cause” (as defined in the Advisory Agreement) or upon a material breach of the Advisory Agreement by the Advisor;
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•
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Without cause or penalty by either the Advisor or a majority of our independent directors, in each case upon 60 days’ written notice to the other party;
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•
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With “good reason” (as defined in the Advisory Agreement) by the Advisor upon 60 days’ written notice; or
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•
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Immediately by us and/or the Operating Partnership in connection with a merger, sale of our assets or transaction involving us pursuant to which a majority of our directors then in office are replaced or removed.
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For the Years Ended
December 31,
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| |
Payable as of
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|||||||||
(in thousands)
|
| |
2020
|
| |
2019
|
| |
2018
|
| |
December 31,
2020
|
| |
December 31,
2019
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Selling commissions—the Dealer Manager
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| |
$22,433
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| |
$6,391
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| |
$4,372
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| |
$—
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| |
$—
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Dealer manager fees—the Dealer Manager
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| |
16,757
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| |
5,306
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| |
4,430
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| |
—
|
| |
—
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Offering costs—the Advisor or its affiliates, including the Dealer Manager(1)
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| |
7,404
|
| |
7,150
|
| |
13,270
|
| |
18,246
|
| |
21,269
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Distribution fees—the Dealer Manager(2)
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| |
39,127
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| |
12,545
|
| |
7,938
|
| |
46,084
|
| |
16,856
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Organization costs—the Advisor or its affiliates, including the Dealer Manager(1)
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| |
—
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| |
—
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| |
—
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| |
—
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| |
78
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Advisory fee—fixed component
|
| |
9,653
|
| |
4,585
|
| |
901
|
| |
1,345
|
| |
593
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Advisory fee—performance component(3)
|
| |
9,640
|
| |
2,913
|
| |
723
|
| |
9,640
|
| |
2,913
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Acquisition expense reimbursements—the Advisor(4)
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| |
2,958
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| |
3,068
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| |
4,900
|
| |
1,037
|
| |
182
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Other expense reimbursements—the Advisor(5)
|
| |
3,003
|
| |
1,963
|
| |
1,195
|
| |
539
|
| |
473
|
Development fees—the Advisor(6)
|
| |
24
|
| |
—
|
| |
—
|
| |
24
|
| |
—
|
Total
|
| |
$110,999
|
| |
$43,921
|
| |
$37,729
|
| |
$76,915
|
| |
$42,364
|
(1)
|
Since January 1, 2020, we have reimbursed the Advisor for organization and offering costs that were incurred on our behalf through December 31, 2019. In January 2021, we paid the Advisor for the remaining organization and offering costs that had been incurred on our behalf through December 31, 2019. In addition, since January 1, 2020, we either pay directly or reimburse the Advisor for offering costs as and when incurred. As of December 31, 2020 and 2019, the Advisor had incurred $22.0 million and $21.3 million, respectively, of offering costs on our behalf.
|
(2)
|
The distribution fees are payable monthly in arrears. The monthly amount of distribution fees payable is included in distributions payable on the condensed consolidated balance sheets. Additionally, we accrue for future estimated trailing amounts payable based on the shares outstanding as of the balance sheet date, which are included in distribution fees payable to affiliates on the condensed
|
(3)
|
For the years ended December 31, 2019 and 2018, the performance component of the advisory fee was paid to the Sponsor in the form of Class I OP Units. On January 1, 2019, we issued 71,872 Class I OP Units to the Sponsor as payment for the 2018 performance component of the advisory fee and on February 1, 2020, we issued 289,074 Class I OP units to the Sponsor as payment for the 2019 performance component of the advisory fee. In each case, the number of Class I OP Units issued was determined using the NAV per unit most recently determined by our board of directors as of the date of issuance. The performance component of the advisory fee for the year ended December 31, 2020 was paid to the Sponsor in the form of 950,358 Class I OP Units on January 20, 2021.
|
(4)
|
Reflects amounts reimbursable to the Advisor for all expenses incurred by the Advisor and its affiliates on our behalf in connection with the selection, acquisition, development or origination of an asset. Beginning January 1, 2020, we either pay directly or reimburse the Advisor for such expenses.
|
(5)
|
Other expense reimbursements include certain general overhead and administrative expenses incurred in connection with the services provided to us under the Advisory Agreement, including, but not limited to, certain expenses described below after footnote 6, allocated rent paid to both third parties and affiliates of the Advisor, equipment, utilities, insurance, travel and entertainment.
|
(6)
|
Development fees are included in the total development project costs of the respective properties and are capitalized in construction in progress, which is included in net investment in real estate properties on the consolidated balance sheets.
|
|
| |
For the Year Ended December 31,
|
||||||
(in thousands)
|
| |
2020
|
| |
2019
|
| |
2018
|
Fees deferred
|
| |
$3,896
|
| |
$3,895
|
| |
$901
|
Other expenses supported
|
| |
9,609
|
| |
2,243
|
| |
4,682
|
Total expense support from Advisor
|
| |
13,505
|
| |
6,138
|
| |
$5,583
|
Reimbursement of previously deferred fees and other expenses supported
|
| |
(13,505)
|
| |
(13,606)
|
| |
—
|
Total (reimbursement to) expense support from Advisor, net(1)
|
| |
$—
|
| |
$(7,468)
|
| |
$5,583
|
(1)
|
As of December 31, 2020, no amounts were payable to or receivable from the Advisor. As of December 31, 2019, approximately $5.4 million was payable to the Advisor by the Company and is included in due to affiliates on the consolidated balance sheets.
|
•
|
We may purchase or lease an asset from a Related Party if a majority of our Board of Directors, including a majority of our independent directors, not otherwise interested in the transaction, finds that the transaction is fair and reasonable to us and at a price no greater than the cost of the asset to the Related Party, unless there is substantial justification for the amount in excess of the cost to the Related Party and such excess is reasonable (as determined by a majority of our Board of Directors, including a majority of the independent directors);
|
•
|
A Related Party may purchase or lease an asset from us if a majority of our Board of Directors, including a majority of our independent directors, not otherwise interested in the transaction, determines that the transaction is fair and reasonable to us;
|
•
|
We may not borrow money from a Related Party unless a majority of our Board of Directors, including a majority of our independent directors, not otherwise interested in the transaction, approve the transaction as fair, competitive, and commercially reasonable, and no less favorable to us than comparable loans between unaffiliated parties; and
|
•
|
Other transactions with a Related Party generally require a majority of our Board of Directors, including a majority of our independent directors, not otherwise interested in the transaction, to approve such transaction as fair and reasonable to us and on terms and conditions no less favorable to us than those available from an unaffiliated third party.
|
|
| |
THE AUDIT COMMITTEE
|
|
| |
|
|
| |
Charles B. Duke, Chairman
Marshall M. Burton
John S. Hagestad
|
|
| |
For the Year Ended
December 31, 2020
|
| |
For the Year Ended
December 31, 2019
|
Audit Fees
|
| |
$687,000
|
| |
$604,000
|
Audit-Related Fees
|
| |
—
|
| |
—
|
Tax Fees
|
| |
—
|
| |
—
|
All Other Fees
|
| |
—
|
| |
—
|
Total
|
| |
$687,000
|
| |
$604,000
|
|
| |
By Order of the Board of Directors,
|
|
| |
|
|
| |
Joshua J. Widoff
Managing Director
Chief Legal Officer and Secretary
|