ý
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Maryland
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90-0413866
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(State or Other Jurisdiction of
Incorporation or Organization)
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(I.R.S. Employer Identification No.)
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66 Bovet Road, Suite 100
San Mateo, California, 94402
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(650) 343-9300
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(Address of Principal Executive Offices; Zip Code)
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(Registrant’s Telephone Number, Including Area Code)
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Large accelerated filer
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¨
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Accelerated filer
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¨
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Non-accelerated filer
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¨
(Do not check if a smaller reporting company)
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Smaller reporting company
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ý
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Emerging growth company
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¨
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Page
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Item 1.
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Item 2.
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Item 3.
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Item 4.
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Item 1.
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Item 1A.
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Item 2.
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Item 3.
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Item 4.
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Item 5.
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Item 6.
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September 30,
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December 31,
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||||
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2017
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2016
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||||
ASSETS
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|
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||||
Investments in real estate
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|
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Land
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$
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16,451
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$
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15,510
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Building and improvements
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36,649
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47,810
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Tenant improvements
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1,599
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2,307
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54,699
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65,627
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Accumulated depreciation
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(3,840
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)
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(8,163
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)
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Investments in real estate, net
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50,859
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57,464
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Properties under development and development costs
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Land
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25,851
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25,851
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Buildings
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589
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601
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Development costs
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8,346
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4,377
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Properties under development and development costs
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34,786
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30,829
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Cash and cash equivalents
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3,645
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3,130
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Restricted cash
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4,180
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4,728
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Prepaid expenses and other assets, net
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250
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1,070
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Tenant receivables, net of $5 and $38 bad debt reserve
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763
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1,269
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Investments in unconsolidated joint ventures
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2,739
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4,761
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Lease intangibles, net
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2,642
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3,825
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Assets held for sale
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24,668
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24,157
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Deferred financing costs, net
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1,164
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264
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TOTAL ASSETS
(1)
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$
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125,696
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$
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131,497
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LIABILITIES AND EQUITY
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LIABILITIES
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Notes payable, net
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$
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45,473
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$
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54,304
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Accounts payable and accrued expenses
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2,612
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2,955
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Amounts due to affiliates
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2,538
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111
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Other liabilities
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548
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461
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Liabilities related to assets held for sale
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20,445
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22,182
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Below-market lease liabilities, net
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819
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3,049
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Deferred gain on sale of properties to unconsolidated joint venture
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668
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1,202
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TOTAL LIABILITIES
(1)
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73,103
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84,264
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Commitments and contingencies (Note 13)
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EQUITY
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Stockholders’ equity
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Preferred stock, $0.01 par value; 50,000,000 shares authorized, none issued and outstanding
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—
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—
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Common stock, $0.01 par value; 400,000,000 shares authorized; 11,012,726 and 10,938,245 shares issued and outstanding at September 30, 2017 and December 31, 2016, respectively
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111
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111
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Additional paid-in capital
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96,283
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96,032
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Accumulated deficit
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(44,985
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)
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(50,676
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)
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Total stockholders’ equity
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51,409
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45,467
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Non-controlling interests
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1,184
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1,766
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TOTAL EQUITY
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52,593
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47,233
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TOTAL LIABILITIES AND EQUITY
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$
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125,696
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$
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131,497
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(1)
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As of
September 30, 2017
, and
December 31, 2016
, includes approximately
$36.9 million
and
$32.8 million
, respectively, of assets related to consolidated variable interest entities that can be used only to settle obligations of the consolidated variable interest entities and approximately
$19.6 million
and
$19.9 million
, respectively, of liabilities of consolidated variable interest entities for which creditors do not have recourse to the general credit of the Company. Refer to Note 5. “Variable Interest Entities”.
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Three Months Ended
September 30, |
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Nine Months Ended
September 30, |
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2017
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2016
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2017
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2016
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||||||||
Revenue:
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Rental and reimbursements
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$
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2,219
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$
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2,647
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$
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7,084
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$
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7,837
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Expense:
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Operating and maintenance
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848
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949
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2,554
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2,787
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General and administrative
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483
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623
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1,478
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1,691
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Depreciation and amortization
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653
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907
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2,439
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2,628
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Transaction expense
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—
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165
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85
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445
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Interest expense
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449
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550
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1,505
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1,660
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2,433
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3,194
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8,061
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9,211
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Operating loss
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(214
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)
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(547
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)
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(977
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)
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(1,374
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)
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||||
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Other income (loss):
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||||||||
Equity in income (loss) of unconsolidated joint ventures
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(19
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)
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16
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(24
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)
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318
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||||
Net gain on disposal of real estate
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—
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—
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9,131
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|
614
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Loss on extinguishment of debt
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—
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—
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(80
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)
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(966
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)
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||||
Income (loss) before income taxes
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(233
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)
|
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(531
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)
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8,050
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(1,408
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)
|
||||
Income taxes
|
3
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|
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(19
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)
|
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(99
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)
|
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(153
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)
|
||||
Net income (loss)
|
(230
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)
|
|
(550
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)
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7,951
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|
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(1,561
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)
|
||||
Net income (loss) attributable to non-controlling interests
|
(13
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)
|
|
(21
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)
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293
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|
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(58
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)
|
||||
Net income (loss) attributable to common stockholders
|
$
|
(217
|
)
|
|
$
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(529
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)
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$
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7,658
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|
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$
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(1,503
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)
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||||||||
Earnings (loss) per common share - basic and diluted
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$
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(0.02
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)
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$
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(0.05
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)
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$
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0.70
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$
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(0.14
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)
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||||||||
Weighted average shares outstanding used to calculate earnings (loss) per common share - basic and diluted
|
10,885,095
|
|
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11,007,864
|
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10,909,141
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11,017,654
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Number of
Shares
|
|
Par Value
|
|
Additional
Paid-in Capital
|
|
Accumulated
Deficit
|
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Total
Stockholders’
Equity
|
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Non-controlling
Interests
|
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Total
Equity
|
|||||||||||||
BALANCE — December 31, 2016
|
10,938,245
|
|
|
$
|
111
|
|
|
$
|
96,032
|
|
|
$
|
(50,676
|
)
|
|
$
|
45,467
|
|
|
$
|
1,766
|
|
|
$
|
47,233
|
|
Conversion of OP units to common shares
|
162,409
|
|
|
—
|
|
|
809
|
|
|
—
|
|
|
809
|
|
|
(809
|
)
|
|
—
|
|
||||||
Redemption of common shares
|
(87,928
|
)
|
|
—
|
|
|
(558
|
)
|
|
—
|
|
|
(558
|
)
|
|
—
|
|
|
(558
|
)
|
||||||
Quarterly distributions
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,967
|
)
|
|
(1,967
|
)
|
|
(66
|
)
|
|
(2,033
|
)
|
||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
7,658
|
|
|
7,658
|
|
|
293
|
|
|
7,951
|
|
||||||
BALANCE — September 30, 2017
|
11,012,726
|
|
|
$
|
111
|
|
|
$
|
96,283
|
|
|
$
|
(44,985
|
)
|
|
$
|
51,409
|
|
|
$
|
1,184
|
|
|
$
|
52,593
|
|
|
Nine Months Ended September 30,
|
||||||
|
2017
|
|
2016
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income (loss)
|
$
|
7,951
|
|
|
$
|
(1,561
|
)
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
||||
Net gain on disposal of real estate
|
(9,131
|
)
|
|
(614
|
)
|
||
Loss on extinguishment of debt
|
80
|
|
|
966
|
|
||
Equity in income (loss) of unconsolidated joint ventures
|
24
|
|
|
(318
|
)
|
||
Straight-line rent
|
(179
|
)
|
|
(102
|
)
|
||
Amortization of deferred costs
|
404
|
|
|
381
|
|
||
Depreciation and amortization
|
2,439
|
|
|
2,628
|
|
||
Amortization of above and below-market leases
|
(129
|
)
|
|
(147
|
)
|
||
Bad debt expense
|
20
|
|
|
23
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Prepaid expenses and other assets
|
803
|
|
|
(290
|
)
|
||
Tenant receivables
|
288
|
|
|
462
|
|
||
Accounts payable and accrued expenses
|
(118
|
)
|
|
533
|
|
||
Amounts due to affiliates
|
(73
|
)
|
|
(47
|
)
|
||
Other liabilities
|
87
|
|
|
(117
|
)
|
||
Net change in restricted cash for operational expenditures
|
131
|
|
|
(554
|
)
|
||
Net cash provided by operating activities
|
2,597
|
|
|
1,243
|
|
||
|
|
|
|
||||
Cash flows from investing activities:
|
|
|
|
||||
Net proceeds from the sale of real estate
|
32,398
|
|
|
8,737
|
|
||
Acquisition of real estate
|
(17,812
|
)
|
|
(10,225
|
)
|
||
Investment in properties under development and development costs
|
(3,810
|
)
|
|
(28,538
|
)
|
||
Improvements, capital expenditures, and leasing costs
|
(1,110
|
)
|
|
(289
|
)
|
||
Distributions from unconsolidated joint ventures
|
1,998
|
|
|
1,223
|
|
||
Net change in restricted cash from investments in consolidated variable interest entities
|
8
|
|
|
(3,458
|
)
|
||
Net change in restricted cash for capital expenditures
|
409
|
|
|
981
|
|
||
Net cash provided by (used in) investing activities
|
12,081
|
|
|
(31,569
|
)
|
||
|
|
|
|
||||
Cash flows from financing activities:
|
|
|
|
||||
Redemption of common shares
|
(558
|
)
|
|
(466
|
)
|
||
Quarterly distributions
|
(2,038
|
)
|
|
(2,058
|
)
|
||
Proceeds from notes payable
|
29,700
|
|
|
38,400
|
|
||
Repayment of notes payable
|
(41,999
|
)
|
|
(8,823
|
)
|
||
Loan proceeds from an affiliate
|
2,500
|
|
|
—
|
|
||
Payment of penalties associated with early repayment of notes payable
|
(1
|
)
|
|
(839
|
)
|
||
Payment of loan fees from investments in consolidated variable interest entities
|
(453
|
)
|
|
(719
|
)
|
||
Payment of loan fees and financing costs
|
(1,314
|
)
|
|
(69
|
)
|
||
Net cash provided by (used in) financing activities
|
(14,163
|
)
|
|
25,426
|
|
||
|
|
|
|
||||
Net increase (decrease) in cash and cash equivalents
|
515
|
|
|
(4,900
|
)
|
||
Cash and cash equivalents – beginning of period
|
3,130
|
|
|
8,793
|
|
||
Cash and cash equivalents – end of period
|
$
|
3,645
|
|
|
$
|
3,893
|
|
|
|
|
|
||||
Supplemental disclosure of non-cash investing and financing activities and other cash flow information:
|
|
|
|
||||
Distributions declared but not paid
|
$
|
676
|
|
|
$
|
684
|
|
Change in accrued liabilities capitalized to investment in development
|
(225
|
)
|
|
346
|
|
||
Change to accrued mortgage note payable interest capitalized to investment in development
|
5
|
|
|
159
|
|
||
Amortization of deferred loan fees capitalized to investment in development
|
367
|
|
|
443
|
|
||
Cash paid for interest, net of amounts capitalized
|
1,110
|
|
|
1,121
|
|
|
Years
|
Buildings and improvements
|
5 - 30 years
|
Tenant improvements
|
1 - 36 years
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||||||||||||||||||
|
Pinehurst Square East
|
|
Woodland West Marketplace
|
|
Pinehurst Square East
|
|
Woodland West Marketplace
|
|
Pinehurst Square East
|
|
Woodland West Marketplace
|
|
Pinehurst Square East
|
|
Woodland West Marketplace
|
||||||||||||||||
Operating income (loss)
|
$
|
4
|
|
|
$
|
(4
|
)
|
|
$
|
234
|
|
|
$
|
(73
|
)
|
|
$
|
20
|
|
|
$
|
188
|
|
|
$
|
697
|
|
|
$
|
(160
|
)
|
|
September 30,
|
|
December 31,
|
||||
|
2017
|
|
2016
|
||||
ASSETS
|
|
|
|
||||
Investments in real estate
|
|
|
|
||||
Land
|
$
|
5,932
|
|
|
$
|
5,718
|
|
Building and improvements
|
20,767
|
|
|
20,261
|
|
||
Tenant improvements
|
1,861
|
|
|
1,283
|
|
||
|
28,560
|
|
|
27,262
|
|
||
Accumulated depreciation
|
(6,043
|
)
|
|
(4,257
|
)
|
||
Investments in real estate, net
|
22,517
|
|
|
23,005
|
|
||
Tenant receivables, net
|
370
|
|
|
135
|
|
||
Lease intangibles, net
|
1,781
|
|
|
1,017
|
|
||
Assets held for sale
|
$
|
24,668
|
|
|
$
|
24,157
|
|
LIABILITIES
|
|
|
|
||||
Notes payable
|
$
|
18,298
|
|
|
$
|
21,783
|
|
Below-market lease intangibles, net
|
2,147
|
|
|
399
|
|
||
Liabilities related to assets held for sale
|
$
|
20,445
|
|
|
$
|
22,182
|
|
|
|
|
|
Ownership Interest
|
|
Investment
|
||||||||||
Joint Venture
|
|
Date of Investment
|
|
September 30,
2017 |
|
December 31,
2016 |
|
September 30,
2017 |
|
December 31,
2016 |
||||||
SGO Retail Acquisitions Venture, LLC
|
|
3/11/2015
|
|
19
|
%
|
|
19
|
%
|
|
$
|
1,007
|
|
|
$
|
3,052
|
|
SGO MN Retail Acquisitions Venture, LLC
|
|
9/30/2015
|
|
10
|
%
|
|
10
|
%
|
|
1,732
|
|
|
1,709
|
|
||
Total
|
|
|
|
|
|
|
|
$
|
2,739
|
|
|
$
|
4,761
|
|
(1)
|
The assets of the Gelson’s Joint Venture and Wilshire Joint Venture can be used only to settle obligations of the respective consolidated joint ventures.
|
(2)
|
As of
September 30, 2017
and
December 31, 2016
, includes reclassification of approximately
$0.2 million
and
$0.1 million
, respectively, of deferred financing costs, net, as a contra-liability. The creditors of the consolidated joint ventures do not have recourse to the general credit of the Company. The notes payable of the consolidated joint ventures are not guaranteed by the Company.
|
Remainder of 2017
|
$
|
828
|
|
2018
|
3,134
|
|
|
2019
|
3,110
|
|
|
2020
|
2,953
|
|
|
2021
|
2,603
|
|
|
Thereafter
|
13,915
|
|
|
Total
|
$
|
26,543
|
|
|
Lease Intangibles
|
|
Below-Market Lease Liabilities
|
||||||||||||
|
September 30,
2017 |
|
December 31,
2016 |
|
September 30,
2017 |
|
December 31,
2016 |
||||||||
Cost
|
$
|
3,780
|
|
|
$
|
7,000
|
|
|
$
|
(1,029
|
)
|
|
$
|
(3,904
|
)
|
Accumulated amortization
|
(1,138
|
)
|
|
(3,175
|
)
|
|
210
|
|
|
855
|
|
||||
Total
|
$
|
2,642
|
|
|
$
|
3,825
|
|
|
$
|
(819
|
)
|
|
$
|
(3,049
|
)
|
|
Principal Balance
|
|
Interest Rates At
|
|||||||
|
September 30, 2017
|
|
December 31, 2016
|
|
September 30, 2017
|
|||||
Line of credit
(1)
|
$
|
20,968
|
|
|
$
|
11,150
|
|
|
3.81
|
%
|
Secured term loan
|
5,525
|
|
|
24,277
|
|
|
5.10
|
%
|
||
Mortgage loans secured by properties under development
(2)
|
19,200
|
|
|
19,200
|
|
|
9.5% - 10.0%
|
|
||
Deferred financing costs, net
(3)
|
(220
|
)
|
|
(323
|
)
|
|
n/a
|
|
||
|
$
|
45,473
|
|
|
$
|
54,304
|
|
|
|
|
(1)
|
The Company’s line of credit is a revolving credit facility with an initial maximum aggregate commitment of
$30.0 million
(the “Facility Amount”). Effective February 15, 2017, the Company’s line of credit was refinanced to increase
|
(2)
|
Comprised of
$10.7 million
and
$8.5 million
associated with the Company’s investment in the Gelson’s Joint Venture and the Wilshire Joint Venture, respectively.
|
(3)
|
Reclassification of deferred financing costs, net of accumulated amortization, as a contra-liability.
|
Remainder of 2017
|
$
|
354
|
|
2018
|
20,661
|
|
|
2019
|
3,710
|
|
|
2020
|
20,968
|
|
|
Total
(1)
|
$
|
45,693
|
|
(1)
|
Total future principal payments reflect actual amounts due to creditors, and excludes reclassification of
$0.2 million
deferred financing costs, net.
|
•
|
On January 4, 2017, the Company drew
$4.0 million
and used the proceeds to acquire 388 Fulton.
|
•
|
On January 6, 2017, the Company consummated the disposition of Pinehurst Square East, located in Bismarck, North Dakota, for a sales price of approximately
$19.2 million
in cash,
$18.4 million
of which was used to pay down the Company’s line of credit.
|
•
|
On January 11, 2017, the Company drew
$11.0 million
and used the proceeds to acquire Silver Lake.
|
•
|
On January 27, 2017, the Company drew
$1.0 million
and used the proceeds for working capital.
|
•
|
On February 28, 2017, the Company drew
$9.8 million
and used the proceeds to pay off the mortgage loan related to Woodland West Marketplace.
|
•
|
On February 28, 2017, the Company drew
$0.6 million
and used the proceeds to pay certain costs for the refinancing of the Company’s line of credit.
|
•
|
On March 29, 2017, the Company drew
$1.0 million
and used the proceeds for working capital.
|
•
|
On April 17, 2017, the Company consummated the disposition of Woodland West Marketplace, located in Arlington, Texas, for a sales price of approximately
$14.6 million
in cash,
$13.7 million
of which was used to pay down the Company’s line of credit.
|
•
|
On June 28, 2017, the Company drew
$1.3 million
and used the proceeds for working capital.
|
•
|
On August 22, 2017, the Company drew
$1.0 million
and used the proceeds for working capital.
|
•
|
On March 7, 2016, the Company drew
$6.0 million
and used the proceeds to invest in the Wilshire Joint Venture.
|
•
|
On April 4, 2016, the Company consummated the disposition of Bloomingdale Hills, located in Riverside, Florida, for a sales price of approximately
$9.2 million
in cash,
$3.0 million
of which was used to pay down the line of credit.
|
•
|
On June 9, 2016, the Company drew
$7.5 million
and used the majority of the proceeds to acquire 8 Octavia and 400 Grove.
|
•
|
On July 25, 2016, the Company drew
$4.7 million
and used the majority of the proceeds to acquire the Fulton Shops.
|
•
|
On September 29, 2016, the Company drew
$1.0 million
and used the proceeds for working capital.
|
•
|
Level 1: unadjusted quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities;
|
•
|
Level 2: quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations in which significant inputs and significant value drivers are observable in active markets; and
|
•
|
Level 3: prices or valuation techniques where little or no market data is available for inputs that are significant to the fair value measurement.
|
|
Carrying Value
(1)
|
|
Fair Value
(1) (2)
|
||||||||||||
|
September 30,
2017 |
|
December 31,
2016 |
|
September 30,
2017 |
|
December 31,
2016 |
||||||||
Notes payable, net
|
$
|
45,473
|
|
|
$
|
54,304
|
|
|
$
|
45,530
|
|
|
$
|
54,781
|
|
(1)
|
The carrying value of the Company’s notes payable represents the outstanding principal as of
September 30, 2017
, and
December 31, 2016
. The carrying values and fair values of the notes payable include the reclassification of deferred financing costs, net, of approximately
$0.2 million
and
$0.3 million
, respectively, as a contra-liability, as of
September 30, 2017
and
December 31, 2016
.
|
(2)
|
The estimated fair value of the notes payable is based upon the indicative market prices of the Company’s notes payable based on prevailing market interest rates.
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Shares of common stock redeemed
|
18,233
|
|
|
33,054
|
|
|
87,928
|
|
|
71,922
|
|
||||
Purchase price
|
$
|
114
|
|
|
$
|
210
|
|
|
$
|
558
|
|
|
$
|
466
|
|
|
Distribution Record
Date
|
|
Distribution
Payable
Date
|
|
Distribution Per Share of Common Stock /
Common Unit
|
|
Total Common
Stockholders
Distribution
|
|
Total Common
Unit Holders
Distribution
|
|
Total
Distribution
|
||||||||
First Quarter 2017
|
3/31/2017
|
|
4/28/2017
|
|
$
|
0.06
|
|
|
$
|
655
|
|
|
$
|
25
|
|
|
$
|
680
|
|
Second Quarter 2017
|
6/30/2017
|
|
7/31/2017
|
|
0.06
|
|
|
652
|
|
|
25
|
|
|
677
|
|
||||
Third Quarter 2017
|
9/30/2017
|
|
10/31/2017
|
|
0.06
|
|
|
660
|
|
|
16
|
|
|
676
|
|
||||
Total
|
|
|
|
|
|
|
$
|
1,967
|
|
|
$
|
66
|
|
|
$
|
2,033
|
|
|
Distribution Record
Date
|
|
Distribution
Payable
Date
|
|
Distribution Per Share of Common Stock /
Common Unit
|
|
Total Common
Stockholders
Distribution
|
|
Total Common
Unit Holders
Distribution
|
|
Total
Distribution
|
||||||||
First Quarter 2016
|
3/31/2016
|
|
4/29/2016
|
|
$
|
0.06
|
|
|
$
|
660
|
|
|
$
|
26
|
|
|
$
|
686
|
|
Second Quarter 2016
|
7/7/2016
|
|
7/29/2016
|
|
0.06
|
|
|
661
|
|
|
25
|
|
|
686
|
|
||||
Third Quarter 2016
|
9/30/2016
|
|
10/31/2016
|
|
0.06
|
|
|
659
|
|
|
25
|
|
|
684
|
|
||||
Fourth Quarter 2016
|
12/30/2016
|
|
1/31/2017
|
|
0.06
|
|
|
656
|
|
|
25
|
|
|
681
|
|
||||
Total
|
|
|
|
|
|
|
$
|
2,636
|
|
|
$
|
101
|
|
|
$
|
2,737
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Numerator - basic and diluted
|
|
|
|
|
|
|
|
||||||||
Net income (loss)
|
$
|
(230
|
)
|
|
$
|
(550
|
)
|
|
$
|
7,951
|
|
|
$
|
(1,561
|
)
|
Net income (loss) attributable to non-controlling interests
|
(13
|
)
|
|
(21
|
)
|
|
293
|
|
|
(58
|
)
|
||||
Net income (loss) attributable to common shares
|
$
|
(217
|
)
|
|
$
|
(529
|
)
|
|
$
|
7,658
|
|
|
$
|
(1,503
|
)
|
Denominator - basic and diluted
|
|
|
|
|
|
|
|
||||||||
Basic weighted average common shares
|
10,885,095
|
|
|
11,007,864
|
|
|
10,909,141
|
|
|
11,017,654
|
|
||||
Common Units
(1)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Diluted weighted average common shares
|
10,885,095
|
|
|
11,007,864
|
|
|
10,909,141
|
|
|
11,017,654
|
|
||||
Earnings (loss) per common share - basic and diluted
|
|
|
|
|
|
|
|
||||||||
Net earnings (loss) attributable to common shares
|
$
|
(0.02
|
)
|
|
$
|
(0.05
|
)
|
|
$
|
0.70
|
|
|
$
|
(0.14
|
)
|
(1)
|
The effect of
259,899
convertible Common Units pursuant to the redemption rights outlined in the Company’s registration statement on Form S-11 have not been included as they would not be dilutive.
|
|
|
Incurred
|
|
Payable as of
|
|
Payable as of
|
||||||||||||||||||
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
|
September 30,
|
|
December 31,
|
||||||||||||||||
Expensed
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||||||
Acquisition fees
|
|
$
|
—
|
|
|
$
|
46
|
|
|
$
|
—
|
|
|
$
|
104
|
|
|
$
|
—
|
|
|
$
|
80
|
|
Asset management fees
|
|
232
|
|
|
227
|
|
|
667
|
|
|
673
|
|
|
—
|
|
|
—
|
|
||||||
Reimbursement of operating expenses
|
|
73
|
|
|
49
|
|
|
173
|
|
|
146
|
|
|
—
|
|
|
—
|
|
||||||
Property management fees
|
|
81
|
|
|
99
|
|
|
280
|
|
|
319
|
|
|
37
|
|
|
2
|
|
||||||
Disposition fees
|
|
—
|
|
|
—
|
|
|
430
|
|
|
115
|
|
|
—
|
|
|
29
|
|
||||||
Total
|
|
$
|
386
|
|
|
$
|
421
|
|
|
$
|
1,550
|
|
|
$
|
1,357
|
|
|
$
|
37
|
|
|
$
|
111
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Acquisition fees
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
194
|
|
|
$
|
273
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Leasing fees
|
|
80
|
|
|
49
|
|
|
145
|
|
|
152
|
|
|
—
|
|
|
—
|
|
||||||
Legal leasing fees
|
|
35
|
|
|
12
|
|
|
86
|
|
|
45
|
|
|
—
|
|
|
—
|
|
||||||
Construction management fees
|
|
19
|
|
|
—
|
|
|
19
|
|
|
2
|
|
|
—
|
|
|
—
|
|
||||||
Financing coordination fees
|
|
107
|
|
|
—
|
|
|
814
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total
|
|
$
|
241
|
|
|
$
|
61
|
|
|
$
|
1,258
|
|
|
$
|
472
|
|
|
$
|
—
|
|
|
$
|
—
|
|
•
|
Our executive officers and certain other key real estate professionals are also officers, directors, managers, key professionals and/or holders of a direct or indirect controlling interest in our advisor. As a result, they face conflicts of interest, including conflicts created by our advisor’s compensation arrangements with us and conflicts in allocating time among us and other programs and business activities.
|
•
|
We are uncertain of our sources for funding our future capital needs. If we cannot obtain debt or equity financing on acceptable terms, our ability to continue to acquire real properties or other real estate-related assets, fund or expand our operations and pay distributions to our stockholders will be adversely affected.
|
•
|
We depend on tenants for our revenue and, accordingly, our revenue is dependent upon the success and economic viability of our tenants. Revenues from our properties could decrease due to a reduction in tenants (caused by factors including, but not limited to, tenant defaults, tenant insolvency, early termination of tenant leases and non-renewal of existing tenant leases) and/or lower rental rates, making it more difficult for us to meet our financial obligations, including debt service and our ability to pay distributions to our stockholders.
|
•
|
Our current and future investments in real estate and other real estate-related investments may be affected by unfavorable real estate market and general economic conditions, which could decrease the value of those assets and reduce the investment return to our stockholders. Revenues from our properties could decrease. Such events would make it more difficult for us to meet our debt service obligations and limit our ability to pay distributions to our stockholders.
|
•
|
Certain of our debt obligations have variable interest rates with interest and related payments that vary with the movement of LIBOR or other indices. Increases in these indices could increase the amount of our debt payments and limit our ability to pay distributions to our stockholders.
|
(dollars in thousands)
|
|
Rentable Square
Feet
(1)
|
|
Percent
Leased
(2)
|
|
Effective
Rent
(3)
(Sq. Foot)
|
|
Anchor
Tenant
|
|
Date
Acquired
|
|
Original
Purchase
Price
(4)
|
|
Debt
(5)
|
||||||||||
Property Name
|
|
Location
|
|
|
|
|
|
|
|
|||||||||||||||
Topaz Marketplace
|
|
Hesperia, CA
|
|
50,699
|
|
|
83
|
%
|
|
$
|
22.30
|
|
|
n/a
|
|
9/23/2011
|
|
13,500
|
|
|
—
|
|
||
Ensenada Square
|
|
Arlington, TX
|
|
62,628
|
|
|
100
|
%
|
|
7.52
|
|
|
Kroger
|
|
2/27/2012
|
|
5,025
|
|
|
2,901
|
|
|||
Shops at Turkey Creek
|
|
Knoxville, TN
|
|
16,324
|
|
|
100
|
%
|
|
27.71
|
|
|
n/a
|
|
3/12/2012
|
|
4,300
|
|
|
2,624
|
|
|||
400 Grove Street
|
|
San Francisco, CA
|
|
2,000
|
|
|
100
|
%
|
|
60.00
|
|
|
n/a
|
|
6/14/2016
|
|
2,890
|
|
|
—
|
|
|||
8 Octavia Street
|
|
San Francisco, CA
|
|
3,640
|
|
|
47
|
%
|
|
32.00
|
|
|
n/a
|
|
6/14/2016
|
|
2,740
|
|
|
—
|
|
|||
Fulton Shops
|
|
San Francisco, CA
|
|
3,758
|
|
|
100
|
%
|
|
55.91
|
|
|
n/a
|
|
7/27/2016
|
|
4,595
|
|
|
—
|
|
|||
450 Hayes
|
|
San Francisco, CA
|
|
3,724
|
|
|
100
|
%
|
|
89.82
|
|
|
n/a
|
|
12/22/2016
|
|
8,020
|
|
|
—
|
|
|||
388 Fulton
|
|
San Fancisco, CA
|
|
3,110
|
|
|
100
|
%
|
|
63.05
|
|
|
n/a
|
|
1/4/2017
|
|
4,500
|
|
|
—
|
|
|||
Silver Lake
|
|
Los Angeles, CA
|
|
10,497
|
|
|
100
|
%
|
|
62.96
|
|
|
n/a
|
|
1/11/2017
|
|
13,300
|
|
|
—
|
|
|||
|
|
|
|
156,380
|
|
|
|
|
|
|
|
|
|
|
$
|
58,870
|
|
|
$
|
5,525
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Properties Held for Sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cochran Bypass
|
|
Chester, SC
|
|
45,817
|
|
|
100
|
%
|
|
5.11
|
|
|
Bi-Lo Store
|
|
7/14/2011
|
|
$
|
2,585
|
|
|
$
|
1,465
|
|
|
Florissant Marketplace
|
|
Florissant, MO
|
|
146,257
|
|
|
98
|
%
|
|
9.90
|
|
|
Schnuck's
|
|
5/16/2012
|
|
15,250
|
|
|
8,588
|
|
|||
Morningside Marketplace
|
|
Fontana, CA
|
|
76,923
|
|
|
100
|
%
|
|
16.24
|
|
|
Ralph's
|
|
1/9/2012
|
|
18,050
|
|
|
8,365
|
|
|||
|
|
|
|
268,997
|
|
|
|
|
|
|
|
|
|
|
35,885
|
|
|
18,418
|
|
|||||
|
|
|
|
425,377
|
|
|
|
|
|
|
|
|
|
|
$
|
94,755
|
|
|
$
|
23,943
|
|
(1)
|
Square feet includes improvements made on ground leases at the property.
|
(2)
|
Percentage is based on leased rentable square feet of each property as of
September 30, 2017
.
|
(3)
|
Effective rent per square foot is calculated by dividing the annualized
September 2017
contractual base rent by the total square feet occupied at the property. The contractual base rent does not include other items such as tenant concessions (e.g., free rent), percentage rent, and expense recoveries.
|
(4)
|
The purchase price for Shops at Turkey Creek includes the issuance of common units in our operating partnership to the sellers.
|
(5)
|
Debt represents the outstanding balance as of
September 30, 2017
, and excludes reclassification of approximately
$36 thousand
deferred financing costs, net, as a contra-liability. For more information on our financing, refer to Note 8. “Notes Payable, Net” to our interim unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q. As of
September 30, 2017
, our line of credit principal balance of
$21.0 million
was secured by Topaz Marketplace, 8 Octavia Street, 400 Grove Street, the Fulton Shops, 450 Hayes, 388 Fulton, and Silver Lake. For information regarding recent draws under the Key Bank credit facility, see “– Recent Financing Transactions - Our Line of Credit.”
|
Properties Under Development
|
|
Location
|
|
Estimated
Completion Date
|
|
Estimated
Expected
Square Feet
|
|
Debt
|
|||
Wilshire Property
|
|
Santa Monica, CA
|
|
May, 2018
|
|
12,500
|
|
|
$
|
8,500
|
|
Gelson’s Property
|
|
Hollywood, CA
|
|
July, 2018
|
|
37,000
|
|
|
10,700
|
|
|
Total
|
|
|
|
|
|
49,500
|
|
|
$
|
19,200
|
|
•
|
Investments in two consolidated joint ventures, which own property under development in the Los Angeles, California area that are expected to comprise
49,500
square feet upon completion.
|
•
|
Investments in two unconsolidated joint ventures, which own, in aggregate, 8 retail centers, comprising an aggregate of approximately 599,000 square feet and located in four states.
|
•
|
Twelve
retail properties, including
3
properties held for sale, comprising an aggregate of approximately
425,000
square feet of single- and multi-tenant, commercial retail space located in
five
states.
|
|
Three Months Ended
September 30, |
|
|
|
|
|||||||||
|
2017
|
|
2016
|
|
$ Change
|
|
% Change
|
|||||||
Rental revenue and reimbursements
|
$
|
2,219
|
|
|
$
|
2,647
|
|
|
$
|
(428
|
)
|
|
(16.2
|
)%
|
Operating and maintenance expenses
|
848
|
|
|
949
|
|
|
(101
|
)
|
|
(10.6
|
)%
|
|||
General and administrative expenses
|
483
|
|
|
623
|
|
|
(140
|
)
|
|
(22.5
|
)%
|
|||
Depreciation and amortization expenses
|
653
|
|
|
907
|
|
|
(254
|
)
|
|
(28.0
|
)%
|
|||
Transaction expense
|
—
|
|
|
165
|
|
|
(165
|
)
|
|
(100.0
|
)%
|
|||
Interest expense
|
449
|
|
|
550
|
|
|
(101
|
)
|
|
(18.4
|
)%
|
|||
Operating loss
|
(214
|
)
|
|
(547
|
)
|
|
333
|
|
|
(60.9
|
)%
|
|||
Other income (loss), net
|
(19
|
)
|
|
16
|
|
|
(35
|
)
|
|
(218.8
|
)%
|
|||
Income taxes
|
3
|
|
|
(19
|
)
|
|
22
|
|
|
(115.8
|
)%
|
|||
Net income (loss)
|
$
|
(230
|
)
|
|
$
|
(550
|
)
|
|
$
|
320
|
|
|
(58.2
|
)%
|
|
|
|
|
|
|
|
|
|||||||
|
Nine Months Ended
September 30, |
|
|
|
|
|||||||||
|
2017
|
|
2016
|
|
$ Change
|
|
% Change
|
|||||||
Rental revenue and reimbursements
|
$
|
7,084
|
|
|
$
|
7,837
|
|
|
$
|
(753
|
)
|
|
(9.6
|
)%
|
Operating and maintenance expenses
|
2,554
|
|
|
2,787
|
|
|
(233
|
)
|
|
(8.4
|
)%
|
|||
General and administrative expenses
|
1,478
|
|
|
1,691
|
|
|
(213
|
)
|
|
(12.6
|
)%
|
|||
Depreciation and amortization expenses
|
2,439
|
|
|
2,628
|
|
|
(189
|
)
|
|
(7.2
|
)%
|
|||
Transaction expense
|
85
|
|
|
445
|
|
|
(360
|
)
|
|
(80.9
|
)%
|
|||
Interest expense
|
1,505
|
|
|
1,660
|
|
|
(155
|
)
|
|
(9.3
|
)%
|
|||
Operating loss
|
(977
|
)
|
|
(1,374
|
)
|
|
397
|
|
|
(28.9
|
)%
|
|||
Other income (loss), net
|
9,027
|
|
|
(34
|
)
|
|
9,061
|
|
|
(26,650.0
|
)%
|
|||
Income taxes
|
(99
|
)
|
|
(153
|
)
|
|
54
|
|
|
(35.3
|
)%
|
|||
Net income (loss)
|
$
|
7,951
|
|
|
$
|
(1,561
|
)
|
|
$
|
9,512
|
|
|
(609.4
|
)%
|
|
Nine Months Ended
September 30,
|
|
|
||||||||
|
2017
|
|
2016
|
|
$ Change
|
||||||
Net cash provided by (used in):
|
|
|
|
|
|
||||||
Operating activities
|
$
|
2,597
|
|
|
$
|
1,243
|
|
|
$
|
1,354
|
|
Investing activities
|
12,081
|
|
|
(31,569
|
)
|
|
43,650
|
|
|||
Financing activities
|
(14,163
|
)
|
|
25,426
|
|
|
(39,589
|
)
|
|||
Net increase (decrease) in cash and cash equivalents
|
$
|
515
|
|
|
$
|
(4,900
|
)
|
|
|
•
|
On January 6, 2017, we consummated the disposition of Pinehurst Square East, located in Bismarck, North Dakota, for a sales price of approximately
$19.2 million
in cash,
$18.4 million
of which was used to pay down our line of credit.
|
•
|
On January 11, 2017, we drew
$11.0 million
and used the proceeds to acquire Silver Lake.
|
•
|
On January 27, 2017, we drew
$1.0 million
and used the proceeds for working capital.
|
•
|
On February 28, 2017, we drew
$9.8 million
and used the proceeds to pay off the mortgage loan related to Woodland West Marketplace.
|
•
|
On February 28, 2017, we drew
$0.6 million
and used the proceeds to pay certain costs for the refinancing of our line of credit.
|
•
|
On March 29, 2017, we drew
$1.0 million
and used the proceeds for working capital.
|
•
|
On April 17, 2017, we consummated the disposition of Woodland West Marketplace, located in Arlington, Texas, for a sales price of approximately
$14.6 million
in cash,
$13.7 million
of which was used to pay down our line of credit.
|
•
|
On June 28, 2017, we drew
$1.3 million
and used the proceeds for working capital.
|
•
|
On August 22, 2017, we drew
$1.0 million
and used the proceeds for working capital.
|
•
|
On March 7, 2016, we drew
$6.0 million
and used the proceeds to invest in the Wilshire Joint Venture.
|
•
|
On April 4, 2016, we consummated the disposition of Bloomingdale Hills, located in Riverside, Florida, for a sales price of approximately
$9.2 million
in cash,
$3.0 million
of which was used to pay down the line of credit.
|
•
|
On June 9, 2016, we drew
$7.5 million
and used the majority of the proceeds to acquire 8 Octavia and 400 Grove.
|
•
|
On July 25, 2016, we drew
$4.7 million
and used the majority of the proceeds to acquire the Fulton Shops.
|
•
|
On September 29, 2016, we drew
$1.0 million
and used the proceeds for working capital.
|
|
Distribution Record
Date
|
|
Distribution
Payable
Date
|
|
Distribution Per Share of Common Stock /
Common Unit
|
|
Total Common
Stockholders
Distribution
|
|
Total Common
Unit Holders
Distribution
|
|
Total
Distribution
|
||||||||
First Quarter 2017
|
3/31/2017
|
|
4/28/2017
|
|
$
|
0.06
|
|
|
$
|
655
|
|
|
$
|
25
|
|
|
$
|
680
|
|
Second Quarter 2017
|
6/30/2017
|
|
7/31/2017
|
|
0.06
|
|
|
652
|
|
|
25
|
|
|
677
|
|
||||
Third Quarter 2017
|
9/30/2017
|
|
10/31/2017
|
|
0.06
|
|
|
660
|
|
|
16
|
|
|
676
|
|
||||
Total
|
|
|
|
|
|
|
$
|
1,967
|
|
|
$
|
66
|
|
|
$
|
2,033
|
|
|
Distribution Record
Date
|
|
Distribution
Payable
Date
|
|
Distribution Per Share of Common Stock /
Common Unit
|
|
Total Common
Stockholders
Distribution
|
|
Total Common
Unit Holders
Distribution
|
|
Total
Distribution
|
||||||||
First Quarter 2016
|
3/31/2016
|
|
4/29/2016
|
|
$
|
0.06
|
|
|
$
|
660
|
|
|
$
|
26
|
|
|
$
|
686
|
|
Second Quarter 2016
|
7/7/2016
|
|
7/29/2016
|
|
0.06
|
|
|
661
|
|
|
25
|
|
|
686
|
|
||||
Third Quarter 2016
|
9/30/2016
|
|
10/31/2016
|
|
0.06
|
|
|
659
|
|
|
25
|
|
|
684
|
|
||||
Fourth Quarter 2016
|
12/30/2016
|
|
1/31/2017
|
|
0.06
|
|
|
656
|
|
|
25
|
|
|
681
|
|
||||
Total
|
|
|
|
|
|
|
$
|
2,636
|
|
|
$
|
101
|
|
|
$
|
2,737
|
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30,
|
||||||||||||
FFO
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Net income (loss)
(1)
|
|
$
|
(230
|
)
|
|
$
|
(550
|
)
|
|
$
|
7,951
|
|
|
$
|
(1,561
|
)
|
Adjustments:
|
|
|
|
|
|
|
|
|
||||||||
Gain on disposal of assets
|
|
—
|
|
|
—
|
|
|
(9,131
|
)
|
|
(614
|
)
|
||||
Adjustment to reflect FFO of unconsolidated joint ventures
|
|
97
|
|
|
184
|
|
|
309
|
|
|
360
|
|
||||
Depreciation of real estate
|
|
503
|
|
|
680
|
|
|
1,725
|
|
|
1,962
|
|
||||
Amortization of in-place leases and other intangibles
|
|
150
|
|
|
227
|
|
|
714
|
|
|
666
|
|
||||
FFO attributable to common shares and Common Units
|
|
$
|
520
|
|
|
$
|
541
|
|
|
$
|
1,568
|
|
|
$
|
813
|
|
|
|
|
|
|
|
|
|
|
||||||||
FFO per share and Common Unit
|
|
$
|
0.05
|
|
|
$
|
0.05
|
|
|
$
|
0.14
|
|
|
$
|
0.07
|
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares and units outstanding
|
|
11,290,377
|
|
|
11,430,172
|
|
|
11,325,712
|
|
|
11,445,981
|
|
(1)
|
Our common units have the right to convert a unit into common stock for a one-to-one conversion. Therefore, we are including the related non-controlling interest income/loss attributable to common units in the computation of FFO and including the common units together with weighted average shares outstanding for the computation of FFO per share and common unit.
|
|
Years
|
Buildings and improvements
|
5 - 30 years
|
Tenant improvements
|
1 - 36 years
|
Period
|
|
Total Number of
Shares Redeemed
(1)
|
|
Average Price
Paid per Share
|
|
Total Number of Shares
Purchased as Part of a
Publicly Announced Plan
or Program
|
|
Approximate Dollar Value of
Shares That May Yet be
Redeemed Under the Program
(2)
|
||||||
January 2017
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
915,158
|
|
February 2017
|
|
—
|
|
|
—
|
|
|
—
|
|
|
915,158
|
|
||
March 2017
|
|
31,875
|
|
|
6.36
|
|
|
31,875
|
|
|
712,431
|
|
||
April 2017
|
|
—
|
|
|
—
|
|
|
—
|
|
|
712,431
|
|
||
May 2017
|
|
—
|
|
|
—
|
|
|
—
|
|
|
712,431
|
|
||
June 2017
|
|
37,820
|
|
|
6.36
|
|
|
37,820
|
|
|
471,900
|
|
||
July 2017
|
|
—
|
|
|
—
|
|
|
—
|
|
|
471,900
|
|
||
August 2017
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,471,900
|
|
||
September 2017
|
|
18,233
|
|
|
6.27
|
|
|
18,233
|
|
|
1,357,581
|
|
||
Total
|
|
87,928
|
|
|
|
|
|
87,928
|
|
|
|
(1)
|
All of our purchases of equity securities during the
nine
months ended
September 30, 2017
, were made pursuant to the SRP.
|
(2)
|
We currently limit the dollar value and number of shares that may yet be repurchased under the SRP as described above.
|
|
Strategic Realty Trust, Inc.
|
|
|
|
|
|
By:
|
/s/ Andrew Batinovich
|
|
|
Andrew Batinovich
|
|
|
Chief Executive Officer, Corporate Secretary and Director
(Principal Executive Officer)
|
|
|
|
|
By:
|
/s/ Terri Garnick
|
|
|
Terri Garnick
|
|
|
Chief Financial Officer
(Principal Financial and Accounting Officer)
|
|
|
|
|
|
|
Incorporated by Reference
|
||
Exhibit No.
|
|
Description
|
|
Filed
Herewith
|
|
Form/File No.
|
|
Filing Date
|
|
|
|
|
|
|
|
|
|
|
Articles of Amendment and Restatement of TNP Strategic Retail Trust, Inc.
|
|
|
|
S-11/
No. 333-154975
|
|
7/10/2009
|
|
|
|
|
|
|
|
|
|
|
|
Articles of Amendment, dated August 22, 2013
|
|
|
|
8-K
|
|
8/26/2013
|
|
|
|
|
|
|
|
|
|
|
|
Articles Supplementary, dated November 1, 2013
|
|
|
|
8-K
|
|
11/4/2013
|
|
|
|
|
|
|
|
|
|
|
|
Articles Supplementary, dated January 22, 2014
|
|
|
|
8-K
|
|
1/28/2014
|
|
|
|
|
|
|
|
|
|
|
|
Third Amended and Restated Bylaws of Strategic Realty Trust, Inc.
|
|
|
|
8-K
|
|
1/28/2014
|
|
|
|
|
|
|
|
|
|
|
|
The Purchase and Sale Agreement by and between TNP SRT Portfolio II, LLC and Baseline Property, LLC, dated September 14, 2017.
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Strategic Realty Trust, Inc. Amended and Restated Share Redemption Program Adopted August 26, 2016
|
|
|
|
8-K
|
|
8/30/2016
|
|
|
|
|
|
|
|
|
|
|
101.INS
|
|
XBRL Instance Document
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
X
|
|
|
|
|
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101.DEF
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XBRL Taxonomy Extension Definition Linkbase Document
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X
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101.LAB
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XBRL Taxonomy Extension Label Linkbase Document
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X
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101.PRE
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XBRL Taxonomy Extension Presentation Linkbase Document
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X
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If to Buyer:
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If to Seller:
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Huo You Liang
14328 Lomitas Ave.
Industry, CA 91746
Fax No. 626-369-3290
Email: victor@leyenfood.com
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TNP SRT Portfolio II, LLC
c/o Glenborough, LLC
66 Bovet Road, Suite 100
San Mateo, CA 94402
Attention: Alan Shapiro
Fax No.: 650-343-9690
Email: alan.shapiro@glenborough.com
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with a copy to:
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with a copy to:
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Richard Leung
20955 Pathfinder Road, Suite 100
Diamond Bar, California 91765
Fax No. 909-843-6311
Email: rleung@rllawoffice.com
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TNP SRT Portfolio II, LLC
c/o Glenborough, LLC
66 Bovet Road, Suite 100
San Mateo, CA 94402
Attention: G. Lee Burns, Jr.
Fax No.: 650-343-9690
Email: chip.burns@glenborough.com
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First American Title Company
Escrow No.
RECORDING REQUESTED BY AND WHEN RECORDED RETURN TO:
Attention:
MAIL TAX STATEMENTS TO:
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4.
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Transferor’s office address is: c/o Glenborough, LLC
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1.
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The undersigned is the Tenant under that certain Lease dated
(as amended and supplemented by the following instruments:
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2.
|
Pursuant to the Lease, Tenant has leased approximately ______ rentable square feet of space (the “
Premises
”) at the Property. The term of the Lease terminates on
.
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3.
|
As of the date hereof, Tenant is occupying the Premises and is paying rent on a current basis under the Lease.
|
a.
|
The minimum monthly or base rent currently being paid by Tenant for the Premises pursuant to the terms of the Lease is [_____] per month.
|
b.
|
Percentage rent (“
Percentage Rent
”), if any, due under the Lease has been paid through [
] and the amount of Percentage Rent for [
] was [
].
|
c.
|
Estimated common area maintenance, taxes, insurance and other charges (the “
Reimbursables
”) due under the Lease are currently in the amount of $
per month.
|
d.
|
Tenant has paid to Landlord a security deposit of $
(none, if no figure inserted).
|
4.
|
No prepayments of rentals due under the Lease have been made for more than one month in advance.
|
5.
|
Tenant does not have any right or option to renew or extend the term of the Lease, to lease other space at the Property, nor any preferential right to purchase all or any part of the Premises or the Property, except as follows (if none, so state): [
].
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6.
|
All space and improvements leased by Tenant have been completed and furnished in accordance with the provisions of the Lease, and Tenant has accepted and taken possession of the Premises. Landlord has paid in full any required contribution towards work to be performed by Tenant under the Lease, except as follows (if none, so state): [
].
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7.
|
To the best of Tenant’s knowledge, Landlord is not in material default in the performance of the terms and provisions of the Lease. Tenant is not in any respect in default under the Lease and has not assigned, transferred or hypothecated the Lease or any interest therein or subleased all or any portion of the Premises.
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8.
|
There are no current offsets or credits against rentals payable under the Lease and no free periods or rental concessions have been granted to Tenant applicable to the portion of the term of the Lease arising from and after the date hereof, except as follows:
.
|
9.
|
Tenant has not subleased or allowed any third party to occupy any part of the Premises.
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10.
|
Neither the Lease nor any obligations of Tenant thereunder have been guaranteed by any person or entity, except as follows (if none, so state):
.
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11.
|
None of the following have been done by, against, or with respect to Tenant: (a) the commencement of a case under Title 11 of the U.S. Code, as now constituted or hereafter amended, or under any other applicable federal or state bankruptcy law or other similar law; (b) the appointment of a trustee or receiver of the property of Tenant generally; or (c) an assignment for the benefit of creditors generally. There are no actions, voluntary or otherwise, pending or, to the best knowledge of the Tenant, threatened against the Tenant under the bankruptcy, reorganization, moratorium or similar laws of the United States, any state thereof or any other jurisdiction.
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1.
|
The undersigned is the _________________ of the Company.
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2.
|
There have been no:
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a.
|
Bankruptcy proceedings involving the Company or dissolution proceeding involving the Company during the time the Company had any interest in the premises described in
Exhibit A
(“Land”), except as follows: ___________________.
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b.
|
Tax liens filed against the Company, except as follows:
;
|
c.
|
Unsatisfied judgments of record against the Company, nor any actions pending in any courts, which affect the Land, except as follows:
.
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3.
|
There has/have been no labor or materials furnished to the Land at the request of the Company in the past 180 days and there are no plans for any labor or materials to be furnished to the Land at the request of the Company, except as follows:
.
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4.
|
There are no unrecorded contracts, leases, easements or other agreements or interest relating to the Land except the leases shown on the rent roll attached hereto as
Exhibit B
, which the undersigned certifies is a true and correct copy of the Company’s rent roll, except as follows:
.
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5.
|
There are no persons in possession of any portion of the Land other than pursuant to a recorded document except tenants pursuant to the leases shown on the rent roll attached hereto as
Exhibit B
, except as follows:
.
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6.
|
There are no encroachments or boundary line questions affecting the Land of which the undersigned has knowledge, other than as shown on any survey delivered to the Title Company for purposes of issuance of an ALTA Owner’s Policy, except as follows:
.
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1.
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2017 Stub Reconciliation
. As defined in
Section 7(d)(v)
of the Agreement.
|
2.
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Actual Knowledge of Buyer (or Buyer’s Actual Knowledge.)
The knowledge of any Responsible Individual of Buyer, without duty of inquiry; provided that so qualifying Buyer’s knowledge shall in no event give rise to any personal liability on the part of the Responsible Individual, on account of any breach of any representation and warranty of Buyer herein. Actual Knowledge shall not include constructive knowledge, imputed knowledge, or knowledge Buyer or such Responsible Individual do not have but could have obtained through further investigation or inquiry.
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3.
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Actual Knowledge of Seller (or Seller’s Actual Knowledge.)
The knowledge of any Responsible Individual of Seller, without duty of inquiry; provided that so qualifying Seller’s knowledge shall in no event give rise to any personal liability on the part of the Responsible Individual, on account of any breach of any representation and warranty of Seller herein. Actual Knowledge shall not include constructive knowledge, imputed knowledge, or knowledge Seller or such Responsible Individual do not have but could have obtained through further investigation or inquiry.
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4.
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Additional Rents
. All amounts, other than Fixed Rents, due from any Tenant under any Lease, including without limitation, percentage rents, escalation charges for real estate taxes, parking charges, marketing fund charges, reimbursement of Expenses, maintenance escalation rents or charges, cost of living increases or other charges of a similar nature, if any, and any additional charges and expenses payable under any Lease.
|
5.
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Affiliate
. Any Person that, directly or indirectly, through one or more intermediaries, controls or is controlled by or is under common control with another Person, or any successor to a Person owned by the Persons controlling the predecessor to such successor. An affiliate of a Person includes any officer, director, managing member, member or general partner, and any record or beneficial owner of more than 10% of any class of ownership interests in such Person.
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6.
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Agreement
. This Agreement between Seller and Buyer, including all Addenda, Schedules and Exhibits attached hereto and incorporated herein by reference.
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7.
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Approval Date.
The Business Day on or prior to the end of the Due Diligence Period on which Buyer delivers its Approval Notice to Seller.
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8.
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Approval Notice
. Buyer’s notice delivered to Seller (if at all) under
Section 4(l)
of the Agreement.
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9.
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Assignment of Leases
. An Assignment and Assumption of Leases in the form attached to this Agreement as
Exhibit B
.
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10.
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Assignment of Service Contracts and Warranties
. An Assignment and Assumption of Service Contracts, Warranties and Other General Intangibles in the form attached to this Agreement as
Exhibit D
.
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11.
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Bill of Sale
. A Bill of Sale in the form attached to this Agreement as
Exhibit C
.
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12.
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Business Day
. Any day other than a Saturday, Sunday or holiday on which Bank of America, N.A., located in San Francisco, California, is authorized or required by law to close for business.
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13.
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Buyer
. The “Buyer” in the preamble to this Agreement.
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14.
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Buyer’s Agents
. The employees, agents, contractors, consultants, officers, directors, representatives, managers and members of Buyer or its Affiliates, and such other Persons as are acting under the direction of, or on behalf of, Buyer or any Affiliate of Buyer.
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15.
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Buyer’s Broker
. ReMax Premier Properties (Michelle Chen).
|
16.
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Buyer Closing Conditions
. Conditions precedent to Buyer’s obligation to consummate this transaction, as set forth in
Section 5(a)
.
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17.
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Cash
. Immediately available funds to be paid by Buyer at the Closing, as provided in the Section entitled “Consideration”.
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18.
|
Closing
. The delivery of the Deed and the other documents required to be delivered hereunder and the payment of the Consideration.
|
19.
|
Closing Date
. Forty (40) days after delivery of an Approval Notice.
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20.
|
Consideration
. The total consideration to be paid by Buyer to Seller as described in the Section entitled “Consideration.”
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21.
|
Contracts
. The service contracts, construction contracts for work in progress, any warranties thereunder, management contracts, unrecorded reciprocal easement agreements, operating agreements, maintenance agreements, franchise agreements and other similar agreements relating to the Property.
|
22.
|
Creditors’ Rights Laws
. All bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the rights of creditors generally, as well as general equitable principles whether or not the enforcement thereof is considered to be a proceeding at law or in equity.
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23.
|
Day
. The term “day” used herein and not capitalized means a calendar day.
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24.
|
Deed
. A deed in the form attached to this Agreement as
Exhibit A
.
|
25.
|
Due Diligence Materials
. The materials described in
Schedule 1
to this Agreement.
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26.
|
Due Diligence Period.
A period of time commencing on the Effective Date and ending at 5:00 p.m., California time, on the date that is twenty-one (21) days after the Effective Date.
|
27.
|
Earnest Money
. The aggregate of the Initial Earnest Money Deposit and the Remaining Earnest Money Deposit.
|
28.
|
Effective Date.
The date set forth in the preamble to this Agreement.
|
29.
|
Environmental Laws
. All federal, state, local or administrative agency ordinances, laws, rules, regulations, orders or requirements relating to Hazardous Materials.
|
30.
|
Environmental Reports
. All environmental reports and investigations relating to the Property which are available to Seller, which are listed on
Schedule 4
to this Agreement.
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31.
|
Existing Lender
. U.S. Bank National Association.
|
32.
|
Expenses
. All operating expenses normal to the operation and maintenance of the Property, including without limitation: Property Taxes; current installments of any improvement bonds or assessments which are a lien on the Property or which are pending and may become a lien on the Property; water, sewer and utility charges; amounts payable under any Contract for any period in which the Closing occurs; and permits, licenses and inspection fees. Expenses shall not include expenses which are of a capital nature.
|
33.
|
Expense Reimbursement.
That amount necessary to reimburse Buyer for all of its out-of-pocket, third-party costs and expenses related to the transactions contemplated by this Agreement, including, without limitation, to consultants and for third‐party reports, for legal fees incurred in connection with negotiating and entering into a letter of intent, non-disclosure agreement, or other preliminary document, and this Agreement, up to a maximum, in the aggregate, of Fifty Thousand and No/100ths Dollars ($50,000).
|
34.
|
Fixed Rents.
The fixed periodic payments under any Lease.
|
35.
|
General Intangibles
. All general intangibles relating to design, development, operation, management and use of the Real Property; all certificates of occupancy, zoning variances, building, use or other permits, approvals, authorizations, licenses and consents obtained from any governmental authority or other person in connection with the development, use, operation or management of the Real Property; all engineering reports, architectural drawings, plans and specifications relating to all or any portion of the Real Property, and all payment and performance bonds or warranties or guarantees relating to the Real Property; and all of Seller’s right, title and interest in and to any and all of the following to the extent assignable: trademarks, service marks, logos or other source and business identifiers, trademark registration and applications for registration used at or relating to the Real Property and any
|
36.
|
Hazardous Materials
. Any substance which is (a) designated, defined, classified or regulated as a hazardous substance, hazardous material, hazardous waste, toxic substance, pollutant or contaminant under any federal or state law or regulation, (b) a petroleum hydrocarbon, including crude oil or any fraction thereof and all petroleum products, (c) PCBs, (d) asbestos or asbestos-containing products, (e) a flammable explosive, (f) an infectious material, (g) a radioactive material, (h) a carcinogenic, or (i) a reproductive toxicant.
|
37.
|
Improvements
. All buildings, parking lots, parking garages, signs, walks and walkways, fixtures and equipment and all other improvements located at or on or affixed to the Land to the full extent that such items are owned by Seller and constitute realty under the laws of the state in which the Land is located.
|
38.
|
Initial Earnest Money Deposit
. The initial earnest money deposit(s) paid by Buyer pursuant to the Section entitled “Consideration,” in the amount(s) of Two Hundred Fifty Thousand and No/100ths Dollars ($250,000.00).
|
39.
|
Land
. The land described in
Schedule 2
to this Agreement, together with all appurtenances thereto, including without limitation easements and mineral and water rights.
|
40.
|
Laws
. All Environmental Laws, zoning and land use laws, and other local, state and federal laws and regulations applicable to the Property, the Parties, and/or the transactions contemplated by this Agreement.
|
41.
|
Leases
. The leases for the Tenants listed in the Rent Roll, together with any leases of all or any portion of the Real Property executed between the Effective Date and the Closing Date, and all amendments and modifications thereof.
|
42.
|
Leasing Commission
. Commissions payable to brokers or other Persons in connection with leasing space in the Property and for which the landlord is obligated under any Lease, or for which Seller is obligated under any agreement made by Seller with any such Person.
|
43.
|
Major Loss.
Any damage or destruction to, or condemnation of, any Real Property as to which the cost to repair, or the value of the portion taken, as the case may be, exceeds Two Hundred Thousand and No/100ths Dollars ($200,000.00).
|
44.
|
Major Tenant
. Ralphs Grocery.
|
45.
|
Material Damage Ceiling.
Damage in the aggregate of Five Hundred Thousand and No/100ths Dollars ($500,000.00) suffered by Buyer as a result of any inaccuracy or breach of any representation or warranty or covenant (on a cumulative basis and not per occurrence) by Seller hereunder.
|
46.
|
Material Damage Floor
. Damage in excess of Twenty-Five Thousand and No/100ths Dollars ($25,000.00) suffered by Buyer as a result of any inaccuracy or breach of any representation or warranty or covenant (on a cumulative basis and not per occurrence) by Seller hereunder.
|
47.
|
Minor Loss.
Damage or destruction to, or condemnation of, any Real Property that is not a Major Loss.
|
48.
|
Minor Tenants
. Tenants other than the Major Tenant.
|
49.
|
Monetary Liens.
As defined in the Section entitled “Approval of Title.”
|
50.
|
New Exception.
An exception to title to the Real Property that is not (i) included in or referenced in any preliminary report delivered to Buyer prior to the Approval Date, or in any exception document delivered to Buyer by the Title Company prior to the Approval Date, (ii) disclosed to Buyer in any of the Due Diligence Materials, (iii) shown on or referenced in the Survey, (iv) caused by Buyer or any of Buyer’s Agents, or (v) previously approved in writing by Buyer or any of Buyer’s Agents.
|
51.
|
Non-Refundable Payment
. See
Section 3(b)
.
|
52.
|
Parties.
Buyer and Seller.
|
53.
|
Percentage Rents.
Rents under any Lease based on a percentage of Tenant revenue, sales or income, or on the performance of the business of any Tenant.
|
54.
|
Permitted Exceptions
. The Leases and the exceptions to title approved by Buyer during the Due Diligence Period, pursuant to the title review procedure set forth in the Agreement.
|
55.
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Person
. An individual, partnership, corporation, business trust, joint stock company, limited liability company, trust, unincorporated association, joint venture or governmental authority.
|
56.
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Personal Property
. All of Seller’s right, title and interest in and to the personal property and any interest therein owned by Seller or held directly for the benefit of Seller, if any, located on the Real Property and used in the operation or maintenance of the Real Property.
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57.
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Physical Testing
. Any physically intrusive, invasive or destructive testing or investigation (however characterized) of, on or under the Property or any portion or part thereof, for the presence or absence of Hazardous Materials, or for other purposes, including, without limitation, by (i) taking, sampling or testing groundwater or soils, (ii) air quality sampling or testing, or (iii) probing, cutting, penetrating, removing or otherwise disturbing any interior or exterior feature of the Land or Improvements in order to sample, test, observe or monitor normally inaccessible areas, components, features or systems.
|
58.
|
Property.
The Real Property, the Leases, the Personal Property, the General Intangibles, and the Contracts (excluding Contracts to be terminated by Seller pursuant to this Agreement).
|
59.
|
Property Taxes.
As defined in Section
7(c)(ii)(c)
, entitled “Property Taxes.”
|
60.
|
Real Property
. The Land and Improvements.
|
61.
|
Remaining Earnest Money Deposit
. The additional earnest money deposit(s) paid by Buyer on or after the Approval Date pursuant to the Section entitled “Consideration”, in the amount of Two Hundred Fifty Thousand and No/100ths Dollars ($250,000.00)
|
62.
|
Rent Roll
. The list of each of the Tenants under Leases as of the date of this Agreement, attached to this Agreement as
Schedule 5
.
|
63.
|
Rents
. Fixed Rents and Percentage Rents.
|
64.
|
Required Tenants
. The Major Tenant and, in addition, Minor Tenants which in the aggregate with the Major Tenant occupy eighty-five percent (85%) of the rentable area of the Property occupied by all Tenants.
|
65.
|
Responsible Individuals
. With respect to Buyer: Huo You Liang; and with respect to Seller: Alan Shapiro.
|
66.
|
Seller
. The “Seller” in the preamble to this Agreement.
|
67.
|
Seller Related Party
. Seller, any Affiliate of Seller, and any of its or their respective shareholders, partners, members, managers, officers, directors, employees, contractors, agents, attorneys or other representatives of Seller.
|
68.
|
Seller’s Broker
. CBRE, Inc.
|
69.
|
Seller Closing Conditions
. Conditions precedent to Seller’s obligation to consummate this transaction, as set forth in
Section 5(b)
.
|
70.
|
Service Contracts
. All Contracts involving ongoing services and periodic payment therefor, as distinguished from franchise agreements, easements, guarantees, warranties and the like.
|
71.
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Specific Performance Amount
. One Hundred Thousand and No/100ths Dollars ($100,000.00).
|
72.
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Survey
. That certain Land Title Survey of the Property delivered to Buyer with the Due Diligence Materials.
|
73.
|
Tenant(s)
. Tenants under the Leases and listed on the Rent Roll.
|
74.
|
Tenant Estoppel(s)
. Estoppel certificates in the form attached to this Agreement as
Exhibit F
(or on such other form as may be prescribed in the Tenant Lease or otherwise permitted under this Agreement), to be provided by Seller as provided in the Section entitled “Tenant Estoppel(s).”
|
75.
|
Tenant Improvement Allowances
. Tenant improvement allowances and/or tenant improvement costs which the landlord is responsible to pay to a Tenant or reimburse to a Tenant under its Lease.
|
76.
|
Title Company
. First American Title Insurance Company – National Commercial Services, at its office located at 2755 Campus Drive, Suite 125, San Mateo, CA 94403; Attention: Erwin J. Broekhuis, Commercial Escrow Officer, (650) 356-1729 (direct), email ebroekhuis@firstam.com.
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77.
|
Title Policy
. An owner’s standard coverage ALTA title policy, issued by Title Company in the amount of the Consideration, showing title vested in Buyer subject only to the Permitted Exceptions.
|
78.
|
Transaction Documents
. The Deed, Bill of Sale, Assignment of Service Contracts and Warranties, Assignment of Leases, and any and all other agreements entered into by the Parties in connection with the Closing.
|
•
|
ALTA Survey
|
o
|
ALTA/NSPS Land Title Survey prepared by American National dated August 8, 2017
|
•
|
Aged Receivables
|
o
|
A/R as of May, 2017
|
•
|
CAM Recs
|
o
|
2016 CAM Recovery Schedules
|
o
|
2017 CAM Recovery Estimates
|
•
|
CC&R’s
|
o
|
Declaration of Covenants, Conditions, and Restrictions for Morningside Marketplace dated April 15, 2002
|
•
|
Certificates of Occupancy
|
•
|
Environmental
|
◦
|
Phase I Environmental Site Assessment Report prepared by Millennium Consulting Associates dated August 11, 2017
|
◦
|
Phase I Environmental Site Assessment Report prepared by ASM, dated November 7, 2011
|
◦
|
Phase I Environmental Site Assessment prepared by RMA Group, dated February 1, 2000
|
•
|
Leases
|
o
|
Express Donuts
|
§
|
Retail Space Lease dated November 20, 2001
|
§
|
Addendum No. 1 to Lease dated May 3, 2002
|
§
|
Second Amendment to Lease dated August 23, 2011
|
§
|
Assignment and Assumption of Lease dated April 3, 2014
|
§
|
Landlord’s Consent to Assignment of Lease
|
o
|
CA Business Systems Enterprise, dba Great Clips for Hair
|
§
|
Retail Space Lease dated June 20, 2001
|
§
|
First Amendment to Lease dated July 11, 2006
|
§
|
Second Amendment to Lease dated March 22, 2011
|
§
|
Third Amendment to Lease dated April 11, 2016
|
§
|
Guaranty dated April 11, 2016
|
o
|
Reyes & Reyes Incorporation dba It’s Her’s Beauty Salon
|
§
|
Retail Lease dated September 3, 2014
|
§
|
Guaranty of Lease dated September 3, 2014
|
§
|
Notice of Lease Term Dates dated September 10, 2014
|
o
|
Chenyang Ren and Xinxin Li, dba Kids Mini
|
§
|
Retail Lease dated May 31, 2017
|
§
|
Notice of Lease Term Dates dated June 2, 2017
|
o
|
Kona Cleaners, Inc.
|
§
|
Retail Lease dated September 21, 2016
|
§
|
Guaranty dated September 21, 2016
|
§
|
Notice of Lease Term Dates dated October 3, 2016
|
o
|
Juan De La O and Luz Elena De La O, dba La Tapatia Mexican Grill
|
§
|
Retail Lease dated March 17, 2016
|
§
|
Notice of Lease Term Dates dated March 3, 2016
|
o
|
Hsiung I. Hsung, dba Magic Wok
|
§
|
Lease dated June 29, 2001
|
§
|
First Amendment to Lease dated March 30, 2011
|
§
|
Second Amendment to Lease dated April 12, 2016
|
o
|
Dr. Bhagat, Uppal & Shah’s Morningside Dental Group dba Morningside Dental Group
|
§
|
Retail Space Lease dated February 5, 2002
|
§
|
First Amendment to Lease dated April 26, 2007
|
§
|
Second Amendment to Lease dated August 9, 2012
|
§
|
Third Amendment to Lease dated June 15, 2016
|
§
|
Agreement for the Purchase of All Shares, Equity, Property and Interests of Shah, Bhagat & Uppal, dated April 1, 2008
|
o
|
Dien N. Mach and Chanh T. Mach, dba The Nail Studio
|
§
|
Lease dated July 21, 2010
|
§
|
Revised Addendum No. 1 to Lease dated September 27, 2010
|
§
|
Second Amendment to Lease dated July 25, 2014
|
o
|
Sam Opipaht and Chuenjit Chanchairungjaroen, dba Nokki Thai Kitchen
|
§
|
Retail Lease dated December 17, 2014
|
§
|
Notice of Lease Term Dates dated December 30, 2014
|
§
|
Acceptance of Premises dated December 30, 2014
|
o
|
Arvanti Corporation dba Pizza 101
|
§
|
Lease dated May 14, 2011
|
§
|
Addendum No. 1 to Lease dated September 7, 2011
|
§
|
Second Amendment to Lease dated August 3, 2016
|
o
|
Ralphs Grocery Company
|
§
|
Lease dated January 27, 2000
|
§
|
Memorandum of Lease dated January 27, 2000
|
§
|
Agreement for Confirmation of Lease Commencement Date dated May 6, 2005
|
o
|
Anton Barakat and Souzan Samouh, dba Smoke Shop
|
§
|
Lease dated July 8, 2013
|
§
|
First Amendment to Lease dated April 18, 2016
|
o
|
Shiva Holdings, Inc. dba Togo’s/Baskin Robbins
|
§
|
Retail Space Lease July 19, 2001
|
§
|
Guaranty of Lease dated July 19, 2001
|
§
|
First Amendment to Lease dated December 26, 2001
|
§
|
Assignment and Assumption of Lease dated September 27, 2004
|
§
|
Guaranty of Lease dated September 27, 2004
|
§
|
Assignment and Assumption of Lease dated June 8, 2007
|
§
|
Guaranty of Lease dated June 8, 2007
|
§
|
Second Amendment to Lease dated June 27, 2007
|
§
|
Third Amendment to Lease dated October 23, 2008
|
§
|
Assignment and Assumption of Lease dated April 4, 2011
|
§
|
Guaranty of Lease dated April 4, 2011
|
§
|
Assignment and Assumption of Lease dated June 21, 2011
|
§
|
Guaranty of Lease dated June 21, 2011
|
§
|
Addendum to Lease dated June 23, 2011
|
§
|
Settlement and Mutual Release Agreement dated June 23, 2011
|
§
|
Fourth Amendment to Lease dated October 24, 2016
|
§
|
Landlord Consent to Assignment and Assumption of Lease and Modification of Lease dated February 15, 2017
|
§
|
Assignment and Assumption of Leasehold Interest dated January 27, 2017
|
§
|
Lessor’s Agreement dated February 10, 2017
|
§
|
Guaranty of Lease dated February 10, 2017
|
§
|
Franchise Agreement dated February 24, 2017
|
§
|
Acknowledgment Addendum to Togo’s Franchise Agreement dated February 22, 2017
|
§
|
Addendum to Franchise Agreement dated February 24, 2017
|
§
|
Assignment and Consent Agreement dated February 24, 2017
|
•
|
Operating Statements
|
o
|
Operating Statement as of December 31, 2014
|
o
|
Operating Statement as of December 31, 2015
|
o
|
Operating Statement as of December 31, 2016
|
o
|
Operating Statement as of May 31, 2017
|
•
|
Property Taxes
|
o
|
APN 0228-101-31-0-000 for year July 1, 2016 to June 30, 2017
|
o
|
APN 0228-101-31-0-000 for year July 1, 2015 to June 30, 2016
|
o
|
APN 0228-101-31-0-000 for year July 1, 2014 to June 30, 2015
|
o
|
APN 0228-101-32-0-000 for year July 1, 2016 to June 30, 2017
|
o
|
APN 0228-101-32-0-000 for year July 1, 2015 to June 30, 2016
|
o
|
APN 0228-101-32-0-000 for year July 1, 2014 to June 30, 2015
|
o
|
APN 0228-101-33-0-000 for year July 1, 2016 to June 30, 2017
|
o
|
APN 0228-101-33-0-000 for year July 1, 2015 to June 30, 2016
|
o
|
APN 0228-101-33-0-000 for year July 1, 2014 to June 30, 2015
|
o
|
APN 0228-101-38-0-000 for year July 1, 2016 to June 30, 2017
|
o
|
APN 0228-101-38-0-000 for year July 1, 2015 to June 30, 2016
|
o
|
APN 0228-101-38-0-000 for year July 1, 2014 to June 30, 2015
|
•
|
Rent Roll
|
o
|
Rent Roll dated August 1, 2017
|
•
|
Service Contracts
|
o
|
Landscaping-Mission Landscape Maintenance, dated February 1, 2012
|
o
|
Lighting Maintenance-AAA Electrical & Communications Inc., dated March 30, 2016
|
o
|
Security-Elite Enforcement Security Solutions, Inc., dated December 18, 2015
|
o
|
Day Porter-Avalon Building Maintenance of the Inland Empire, dated June 20, 2014
|
o
|
HVAC-Ontario Refrigeration Service, Inc., dated January 1, 2014
|
o
|
5 Year Fire Sprinkler certification-Kimble & Company, dated July 25, 2016
|
•
|
Tenant Sales
|
•
|
Title
|
o
|
First American-Title Insurance Commitment dated July 17, 2017
|
•
|
Zoning Report
|
o
|
Preliminary Zoning Compliance Report prepared by Global Zoning dated August 7, 2017
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Strategic Realty Trust, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
/s/ Andrew Batinovich
|
|
Andrew Batinovich
|
|
Chief Executive Officer, Corporate Secretary and Director
|
|
(Principal Executive Officer)
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Strategic Realty Trust, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
/s/ Terri Garnick
|
|
Terri Garnick
|
|
Chief Financial Officer
|
|
(Principal Financial and Accounting Officer)
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
/s/ Andrew Batinovich
|
|
Andrew Batinovich
|
|
Chief Executive Officer, Corporate Secretary and Director
|
|
(Principal Executive Officer)
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
/s/ Terri Garnick
|
|
Terri Garnick
|
|
Chief Financial Officer
|
|
(Principal Financial and Accounting Officer)
|