UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR l5(D) OF THE SECURITIES EXCHANGE ACT OF 1934

 

Date of Report (Date of earliest event reported):

January 11, 2019

 

RW Holdings NNN REIT, Inc.

(Exact name of registrant as specified in its charter)

 

Maryland 000-55776 47-4156046
(State or other jurisdiction of incorporation or organization) (Commission File Number) (I.R.S. Employer Identification No.)

 

3090 Bristol Street, Suite 550, Costa Mesa, CA 92626

(Address of principal executive offices)

(Zip Code)

 

855-742-4862

(Registrant's telephone number, including area code)

 

None

(Former name or former address, if changed since last report)

  

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240. l4d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 ( § 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 ( § 240.12b-2 of this chapter).

 

Emerging growth company x

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act x

 

 

 

 

 

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

 

On January 11, 2019, Messrs. Vipe Desai, David Feinleib and Jonathan Platt resigned as members of the board of directors (the “Board”) of RW Holdings NNN REIT, Inc. (the “Company”) effective January 15, 2019. Messrs. Desai, Feinleib and Platt resigned voluntarily and their decisions were not the result of any disagreement with the Company on any matter relating to the Company's operations, policies or practices.

 

Messrs. Desai, Feinleib and Platt’s resignations were in connection with Rich Uncles Real Estate Investment Trust I’s (“REIT I”) decision to pursue strategic alternatives which REIT I announced on January 14, 2019.

 

On January 15, 2019, the remaining directors on the Board appointed Messrs. Adam S. Markman, Curtis B. McWilliams and Thomas H. Nolan, Jr. to the Board to fill the vacancies resulting from the resignations described above. Messrs. Markman, McWilliams and Nolan, Jr. were also each appointed to the conflicts committee and the audit committee of the Board, with Mr. McWilliams serving as chair of the conflicts committee. Mr. Jeffrey Randolph, a current independent director of the Board, also serves on the conflicts committee of the Board and will continue to chair the audit committee of the Board. There is no arrangement or understanding between Messrs. Markman, McWilliams or Nolan, Jr. and any other person pursuant to which any of such individuals was appointed as a director, and none of Messrs. Markman, McWilliams or Nolan, Jr. has a direct or indirect material interest in any transaction required to be disclosed pursuant to Item 404(a) of Regulation S-K.

 

In connection with their service on the Board, Messrs. Markman, McWilliams and Nolan, Jr. will receive compensation from the Company in accordance with the Company’s director compensation program, which was amended by the Board on January 15, 2019. Pursuant to this program, each of the Company’s independent directors receives $12,500 per quarter and the chair of each of the conflicts committee and audit committee of the Board receives an additional $2,500 per quarter, which, in each case, shall be payable in stock of the Company. Directors also receive reimbursement of reasonable out-of-pocket expenses incurred in connection with attendance at meetings of the Board.

 

As a result of the appointments of Messrs. Markman, McWilliams and Nolan, Jr. to the Board and the resignation of Mr. Randolph from the board of directors of REIT I effective January 11, 2019, there is no longer an overlap of independent board members of the Company and REIT I.

 

Item 8.01 Other Events

 

On January 17, 2019, the Company issued a press release announcing that its Board has been reconstituted. A copy of the press release is attached hereto as Exhibit 99.1 and incorporated herein by reference.

 

Item 9.01 Financial Statements and Exhibits.

 

(d ) Exhibits.

 

99.1 Press Release dated January 17, 2019, reconstitution of the Company’s board.

  

 

 

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Dated: January 17, 2019 RW HOLDINGS NNN REIT, INC.
     
  By: /s/ Raymond J. Pacini
    Raymond J. Pacini
    Chief Financial Officer

 

 

 

Exhibit 99.1

 

FOR IMMEDIATE RELEASE

 

RW HOLDINGS NNN REIT, INC. ANNOUNCES RECONSTITUTION OF ITS BOARD

 

January 17, 2019, Costa Mesa, CA. RW Holdings NNN REIT, Inc. (the “Company”) announced today that following the decision of Rich Uncles Real Estate Investment Trust I (“REIT I”) to pursue strategic alternatives including the potential sale of its real estate portfolio, which was announced by REIT I on January 14, 2019, three (3) of the Company’s independent directors who are also independent trust managers of REIT I resigned from the Company’s Board and the Company’s remaining independent director has resigned from the REIT I Board. As a result of these resignations, there is no longer an overlap of independent directors on the boards of directors of the Company and REIT I. To fill the vacancies on the Company’s Board resulting from these resignations, the Company has appointed the following three (3) new independent directors to the Board:

 

Adam S. Markman . Mr. Markman has been E xecutive Vice President, Chief Financial Officer and Treasurer of Equity Commonwealth, a REIT primarily investing in office properties, since July 2014. Mr. Markman served as Managing Director of Green Street Advisors, Inc., a real estate research firm ("Green Street"), where he worked from 1994 to 2014. While at Green Street, Mr. Markman headed the firm's consulting and advisory practice, played a key role in the firm's investment arm for real estate investment trusts and previously led the firm's retail and lodging research efforts. Mr. Markman has also served as a real estate consultant at Kenneth Leventhal & Co. Mr. Markman was a member of Green Street's Board of Directors, currently sits on Mark IV Capital's Board of Directors and is an adviser to Twin Rock Partner's Housing Fund. He is also a member of the National Association of Real Estate Investment Trusts (NAREIT) and the Urban Land Institute (ULI). Mr. Markman earned his M.B.A. in Finance/Real Estate from Columbia University and a B.A. from U.C. Berkeley.

 

Curtis B. McWilliams . Mr. McWilliams has been non-executive Chairman of the Board of Ardmore Shipping Corporation since January 1, 2019 and a director since January 2016. Mr. McWilliams is also Lead Director and chair of the Audit Committee of Braemar Hotels & Resorts Inc. where he has been a member of the board since November 2013. Mr. McWilliams was also an independent director of Campus Crest Communities, Inc. from May 2015 to March 2016. Mr. McWilliams is a real estate industry veteran with over 25 years of experience in finance and real estate. He retired from his position as President and Chief Executive Officer of CNL Real Estate Advisors, Inc. in 2010 after serving in the role since 2007. Mr. McWilliams was also the President and Chief Executive Officer of Trustreet Properties Inc. from 1997 to 2007, and a director of the company from 2005 to 2007. He served on the Board of Directors and as the Audit Committee Chairman of CNL Bank from 1999 to 2004 and has over 13 years of investment banking experience at Merrill Lynch & Co. Mr. McWilliams holds a M.B.A., with a concentration in Finance, from the University of Chicago Graduate School of Business and a Bachelor of Science in Engineering in Chemical Engineering from Princeton University.

 

Thomas H. Nolan, Jr . Mr. Nolan has been a director of WashREIT since 2015. He previously served as Chairman of the Board of Directors and Chief Executive Officer of Spirit Realty Capital, Inc. from September 2011 until May 2017. Mr. Nolan previously worked for General Growth Properties, Inc. (“GGP”), serving as Chief Operating Officer from March 2009 to December 2010 and as President from October 2008 to December 2010. He also served as a member of the board of directors of GGP from 2005 to 2010. GGP filed for protection under Chapter 11 of the U.S. Bankruptcy Code in April 2009 and emerged from bankruptcy in November 2010. Mr. Nolan was a member of the senior management team that led GGP’s reorganization and emergence from bankruptcy, which included the restructuring of $15.0 billion in project-level debt, payment in full of all of GGP’s pre-petition creditors and the securing of $6.8 billion in equity commitments. From July 2004 to February 2008, Mr. Nolan served as a Principal and Chief Financial Officer of Loreto Bay Company, the developer of the Loreto Bay master planned community in Baja, California Sur, Mexico. From October 1984 to July 2004, Mr. Nolan held various financial positions with AEW Capital Management, L.P., a national real estate investment advisor, and from 1998 to 2004, he served as Head of Private Equity Investing and as President and Senior Portfolio Manager of The AEW Partners Funds. Mr. Nolan holds a B.B.A. from the University of Massachusetts, Amherst.

 

 

 

 

The fourth independent director who will continue as a member of the Company’s board of directors is Mr. Jeffrey Randolph. His biographical information is provided below.

 

Jeffrey Randolph . Mr. Randolph has served as a member of the Company’s board of directors since June 2015. From 2002 through 2007 and then again from 2010 through March 2017 (now retired), Mr. Randolph was a Principal and served as Chief Financial Officer and Chief Compliance Officer for Affinity Investment Advisors, LLC, a firm specializing in U.S. stock exchange investments. In 2007, Affinity was purchased by Morgan Stanley Investment Management. From 2007 through 2010, Mr. Randolph served as Managing Director for Morgan Stanley and its wholly owned subsidiary Van Kampen Investments. His role included supporting the firm’s domestic and international investment clients. Toward the end of 2010, Mr. Randolph was part of the decision to re-launch Affinity as an independent entity to capitalize on the increasing investor interest in boutique management firms. Mr. Randolph brings 25 years of investment experience to the Company. His previous work experience includes Principal at Avalon Financial Group Inc., Chief Financial Officer for Bonutto-Hofer Investments and Vice President at Security Pacific National Bank. Mr. Randolph received his bachelor’s degree in Business Finance from California State University, Long Beach in 1978.

 

Aaron Halfacre, Chief Executive Officer stated, “I am very pleased to welcome our new board members as they exemplify the highest standards of independence, acumen and integrity. Ray Wirta and I are honored that all of our directors share in our goal of establishing best-in-class corporate governance.”

 

In light of REIT I’s decision to pursue strategic alternatives, the Company may explore an acquisition of REIT I’s real estate portfolio (the “REIT I Portfolio”). Such an acquisition would provide the Company with significant diversification of its portfolio and enhance its presence in California where 18 of REIT I’s properties are located. Currently, the Company does not own any real estate in California other than a 72.7% interest in one property located in Santa Clara, California. The Company also currently owns an approximate 4.8% interest in REIT I.

 

Under the Company’s charter, the Conflicts Committee of the Company’s Board of Directors would need to authorize any offer by the Company for the REIT I Portfolio. The Company expects that in making any such determination, the Conflicts Committee would engage legal and financial advisors to assist it. There can be no assurances that the Conflicts Committee will authorize an offer for the REIT I Portfolio. Even if the Conflicts Committee authorizes an offer for the REIT Portfolio, there can be no assurances that the offer would be accepted by REIT I or that the Company would be able to enter into an agreement with REIT I to purchase the REIT I Portfolio on terms acceptable to the Company or at all.

 

 

 

 

Safe Harbor Statement

 

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act. Forward-looking statements include any statements in this press release that are not historical or current facts and include, but are not limited to, statements relating to the possibility that the Company may pursue an acquisition of the REIT I Portfolio. These forward-looking statements represent management’s current expectations and assumptions based on information available as of the date of this press release and involve known and unknown risks and uncertainties that may cause our actual results, performance or achievements to differ materially from those that are expressed or implied by the forward-looking statements, including but not limited to the risks and uncertainties set forth above in this press release and the other risks and uncertainties as described under “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 and in other periodic reports and filings submitted to the Securities and Exchange Commission. The Company does not intend, and undertakes no obligation, to update any forward-looking information to reflect events or circumstances after the date of this press release or to reflect the occurrence of unanticipated events, unless required by law to do so.

  

Contact:

Jennifer Barber

Chief of Staff

(949)537-2421

jbarber@richuncles.com