BLACK CREEK DIVERSIFIED PROPERTY FUND INC.

(Exact Name of Registrant as Specified in its Charter)

 

Maryland		000-52596		30-0309068
(State or other jurisdiction of incorporation)		(Commission File No.)		(I.R.S. Employer Identification No.)

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Item 8.01    Other Events.

Black Creek Diversified Property Fund Inc. (referred to herein as the “Company,” “we,” “our,” or “us”) is filing this Current Report on Form 8-K in order to disclose the most recent transaction price and net asset value (“NAV”) per share, as determined in accordance with the Company’s valuation procedures, for each of its classes of common stock. 

February 1, 2020 Transaction Price

The transaction price for each share class of our common stock for subscriptions accepted (and distribution reinvestment plan issuances) as of February 1, 2020 (and redemptions as of January 31, 2020) is as follows:

Share Class		Transaction Price (per share)
Class T		$	7.4937
Class S		$	7.4937
Class D		$	7.4937
Class I		$	7.4937
Class E		$	7.4937

The transaction price for each of our share classes is equal to such class’s NAV per share as of December 31, 2019. A calculation of the NAV per share is set forth below. The purchase price of our common stock for each share class equals the transaction price of such class, plus applicable upfront selling commissions and dealer manager fees.

December 31, 2019 NAV Per Share

Our board of directors, including a majority of our independent directors, has adopted valuation procedures, as amended from time to time, that contain a comprehensive set of methodologies to be used in connection with the calculation of our NAV. Our most recent NAV per share for each share class, which is updated as of the last calendar day of each month, is posted on our website at www.blackcreekdiversified.com and is also available on our toll-free, automated telephone line at (888) 310-9352. Please see our valuation procedures filed with our most recent Annual Report on Form 10-K and our subsequent Quarterly Reports and Current Reports, which were filed with the Securities and Exchange Commission (the “SEC”) and are available on the SEC’s website at www.sec.gov, for a more detailed description of our valuation procedures, including important disclosure regarding real property valuations provided by Altus Group U.S. Inc. (the “Independent Valuation Firm”). All parties engaged by us in the calculation of our NAV, including the external advisor, are subject to the oversight of our board of directors. Generally, all of our real properties are appraised once each calendar year by third party appraisal firms in accordance with our valuation guidelines and such appraisals are reviewed by the Independent Valuation Firm.

As used below, “Fund Interests” means our outstanding shares of common stock, along with the partnership units in our operating partnership (“OP Units”) held by third parties, and “Aggregate Fund NAV” means the NAV of all of the Fund Interests.

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The following table sets forth the components of total NAV as of December 31, 2019 and November 30, 2019:

		As of
(in thousands)		December 31, 2019				November 30, 2019
Investments in office properties		$	727,450			$	804,950
Investments in retail properties		866,400				875,950
Investments in multi-family properties		301,850				183,150
Investments in industrial properties		234,450				224,150
Investments in debt assets		22,007				17,602
Cash and cash equivalents		97,280				49,514
Restricted cash		10,010				10,942
Other assets		28,049				29,217
Line of credit, term loans and mortgage notes		(852,857		)		(789,865		)
Financing obligations associated with our DST Program		(262,692		)		(239,639		)
Other liabilities		(44,682		)		(49,358		)
Accrued performance-based fee		3,776				—
Accrued advisory fees		(1,256		)		(1,218		)
Aggregate Fund NAV		$	1,129,785			$	1,115,395
Total Fund Interests outstanding		150,766				150,789

The following table sets forth the NAV per Fund Interest as of December 31, 2019 and November 30, 2019:

(in thousands, except per Fund Interest data)		Total				Class T Shares				Class S Shares				Class D Shares				Class I Shares				Class E Shares				Class E OP Units
As of December 31, 2019
Monthly NAV		$	1,129,785			$	43,852			$	154,313			$	26,222			$	327,715			$	500,604			$	77,079
Fund Interests outstanding		150,766				5,852				20,593				3,499				43,732				66,804				10,286
NAV Per Fund Interest		$	7.4937			$	7.4937			$	7.4937			$	7.4937			$	7.4937			$	7.4937			$	7.4937
As of November 30, 2019
Monthly NAV		$	1,115,395			$	39,964			$	152,579			$	25,235			$	322,557			$	498,823			$	76,237
Fund Interests outstanding		150,789				5,403				20,627				3,412				43,606				67,435				10,306
NAV Per Fund Interest		$	7.3971			$	7.3971			$	7.3971			$	7.3971			$	7.3971			$	7.3971			$	7.3971

Under GAAP, we record liabilities for ongoing distribution fees (i) that we currently owe Black Creek Capital Markets, LLC (the “Dealer Manager”) under the terms of our dealer manager agreement and (ii) for an estimate that we may pay to the Dealer Manager in future periods for shares of our common stock. As of December 31, 2019, we estimated approximately $14.5 million of ongoing distribution fees were potentially payable to the Dealer Manager. We do not deduct the liability for estimated future distribution fees in our calculation of NAV since we intend for our NAV to reflect our estimated value on the date that we determine our NAV. Accordingly, our estimated NAV at any given time does not include consideration of any estimated future distribution fees that may become payable after such date.

The valuation for our real properties as of December 31, 2019 was provided by the Independent Valuation Firm in accordance with our valuation procedures and determined starting with the appraised value. Certain key assumptions that were used by the Independent Valuation Firm in the discounted cash flow analysis are set forth in the following table based on weighted-averages by property type.

		Office			Retail			Multi-family			Industrial			Weighted-Average Basis
Exit capitalization rate		6.31	%		6.38	%		5.36	%		5.97	%		6.19	%
Discount rate / internal rate of return (“IRR”)		6.94	%		6.85	%		6.76	%		6.92	%		6.88	%
Annual market rent growth rate		3.01	%		2.95	%		3.00	%		2.88	%		2.98	%
Average holding period (years)		10.0			10.0			10.0			10.0			10.0

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A change in the rates used would impact the calculation of the value of our real properties. For example, assuming all other factors remain constant, the changes listed below would result in the following effects on the value of our real properties:

Input		Hypothetical Change		Office			Retail			Multi-family			Industrial			Weighted-Average Values
Exit capitalization rate (weighted-average)		0.25% decrease		3.00	%		2.43	%		3.04	%		2.88	%		2.76	%
		0.25% increase		(2.74	)%		(2.25	)%		(2.77	)%		(2.64	)%		(2.53	)%
Discount rate (weighted-average)		0.25% decrease		2.11	%		1.91	%		1.95	%		1.96	%		1.99	%
		0.25% increase		(2.04	)%		(1.87	)%		(1.90	)%		(1.91	)%		(1.94	)%

Forward-Looking Statements

This Current Report on Form 8-K includes certain statements that may be deemed to be “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Such forward-looking statements include forward-looking assumptions and methodologies used to determine our NAV per share. These statements are based on certain assumptions and analyses made by us in light of our experience and our perception of historical trends, current conditions, expected future developments and other factors we believe are appropriate. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act and Section 21E of the Exchange Act. Such statements are subject to a number of assumptions, risks and uncertainties that may cause our actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by these forward-looking statements. Forward-looking statements are generally identifiable by the use of the words “may,” “will,” “should,” “expect,” “anticipate,” “estimate,” “believe,” “intend,” “project,” “continue,” or the negative of these words, or other similar words or terms. Readers are cautioned not to place undue reliance on these forward-looking statements. Among the factors that may cause our results to vary are general economic and business (particularly real estate and capital market) conditions being less favorable than expected, the business opportunities that may be presented to and pursued by us, changes in laws or regulations (including changes to laws governing the taxation of real estate investment trusts (“REITs”)), risk of acquisitions, availability and creditworthiness of prospective tenants, availability of capital (debt and equity), interest rate fluctuations, competition, supply and demand for properties in our current and any proposed market areas, tenants’ ability to pay rent at current or increased levels, accounting principles, policies and guidelines applicable to REITs, environmental, regulatory and/or safety requirements, tenant bankruptcies and defaults, the availability and cost of comprehensive insurance, including coverage for terrorist acts, and other factors, many of which are beyond our control. For a further discussion of these factors and other risk factors that could lead to actual results materially different from those described in the forward-looking statements, see “Risk Factors” under Item 1A of Part 1 of our Annual Report on Form 10-K for the year ended December 31, 2018 and subsequent periodic and current reports filed with the SEC. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of future events, new information or otherwise.

Item 9.01    Financial Statements and Exhibits.

(d)    Exhibits

Exhibit Number		Description
99.1*		Consent of Altus Group U.S., Inc.

*    Filed herewith.

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SIGNATURES

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

	Black Creek Diversified Property Fund Inc.
January 15, 2020
	By:	/s/ LAINIE P. MINNICK
		Lainie P. Minnick Managing Director, Chief Financial Officer and Treasurer