Company Quick10K Filing
Rodin Global Property Trust
Price-0.00 EPS0
Shares5 P/E-0
MCap-0 P/FCF-0
Net Debt59 EBIT3
TEV59 TEV/EBIT22
TTM 2019-09-30, in MM, except price, ratios
10-Q 2020-03-31 Filed 2020-05-13
10-K 2019-12-31 Filed 2020-03-19
10-Q 2019-09-30 Filed 2019-11-14
10-Q 2019-06-30 Filed 2019-08-14
10-Q 2019-03-31 Filed 2019-05-15
10-K 2018-12-31 Filed 2019-03-27
10-Q 2018-09-30 Filed 2018-11-14
10-Q 2018-06-30 Filed 2018-08-13
10-Q 2018-03-31 Filed 2018-05-15
10-K 2017-12-31 Filed 2018-03-30
10-Q 2017-09-30 Filed 2017-11-14
10-Q 2017-06-30 Filed 2017-08-11
10-Q 2017-03-31 Filed 2017-05-12
8-K 2020-05-04 Officers
8-K 2020-03-31 Other Events, Exhibits
8-K 2020-02-13 Other Events
8-K 2019-12-20 Officers, Other Events
8-K 2019-09-28 Enter Agreement, Shareholder Rights, Exhibits
8-K 2019-09-26 Other Events
8-K 2019-06-26 Enter Agreement, Amend Bylaw, Shareholder Vote, Exhibits
8-K 2019-04-30 Enter Agreement, Off-BS Arrangement
8-K 2019-02-12 Other Events
8-K 2019-01-02 Other Events
8-K 2018-11-07 Enter Agreement, M&A, Exhibits
8-K 2018-07-31 Enter Agreement, M&A, Off-BS Arrangement, Exhibits
8-K 2018-06-29 Enter Agreement, Exhibits
8-K 2018-06-05 Shareholder Vote
8-K 2018-02-14 Other Events
8-K 2018-02-01 Enter Agreement, M&A, Off-BS Arrangement, Exhibits

RGPT 10Q Quarterly Report

Part I - Financial Information
Item 1. Financial Statements.
Note 1 - Organization and Business Purpose
Note 2 - Summary of Significant Accounting Policies
Note 3 - Investment in Real Estate
Note 4 - Intangibles
Note 5 - Five Year Minimum Rental Payments
Note 6 - Investments in Real Estate - Related Assets
Note 7 - Loans Payable
Note 8 - Stockholders' Equity
Note 9 - Related Party Transactions
Note 10 - Variable Interest Entities
Note 11 - Economic Dependency
Note 12 - Commitments and Contingencies
Note 13 - Fair Value Measurements
Note 14 - Subsequent Events
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Item 4. Controls and Procedures
Part II - Other Information
Item 1. Legal Proceedings.
Item 1A. Risk Factors.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds of Registered Securities.
Item 3. Defaults Upon Senior Securities.
Item 4. Mine Safety Disclosures.
Item 5. Other Information.
Item 6. Exhibits.
EX-31.1 rgpt-ex311_8.htm
EX-31.2 rgpt-ex312_6.htm
EX-32 rgpt-ex32_7.htm

Rodin Global Property Trust Earnings 2020-03-31

Balance SheetIncome StatementCash Flow
205164123824102017201820192020
Assets, Equity
3.02.21.40.6-0.2-1.02017201820192020
Rev, G Profit, Net Income
40236-11-28-452017201820192020
Ops, Inv, Fin

10-Q 1 rgpt-10q_20200331.htm 10-Q rgpt-10q_20200331.htm

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2020

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

                                                              For the transition period from                      to                     

 

Commission file number: 000-56043

 

Rodin Global Property Trust, Inc.

(Exact name of registrant as specified in its charter)

 

 

Maryland

 

81-1310268

(State or other jurisdiction of
incorporation or organization)

 

(I.R.S. Employer
Identification No.)

 

 

 

110 E. 59th Street, New York, NY

 

10022

(Address of principal executive offices)

 

(Zip Code)

(Registrant’s telephone number, including area code) (212) 938-5000

 

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

None

N/A

N/A

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes        No   

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes        No   

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

 

 

Accelerated filer

 

 

 

 

 

Non-accelerated filer

 

 

Smaller reporting company

 

 

 

 

 

 

 

 

Emerging growth company

 

 

 

 

 

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes       No   

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

The aggregate market value of the common stock held by non-affiliates of the Registrant: No established market exists for the Registrant’s common stock. As of May 11, 2020, the registrant had 3,397,458 Class A shares, 1,127,957 Class I shares and 1,412,819 Class T shares of $0.01 par value common stock outstanding.

 

 

 

 

 


RODIN GLOBAL PROPERTY TRUST, INC.

TABLE OF CONTENTS

 

 

 

Page

 

 

 

PART I - FINANCIAL INFORMATION

 

3

 

 

 

Item 1. Financial Statements (Unaudited)

 

3

 

 

 

Consolidated Balance Sheets as of March 31, 2020 and December 31, 2019

 

3

 

 

 

Consolidated Statements of Operations for the Three Months Ended March 31, 2020 and March 31, 2019

 

4

 

 

 

Consolidated Statements of Changes in Equity for the Three Months Ended March 31, 2020 and March 31, 2019

 

5

 

 

 

Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2020 and March 31, 2019

 

7

 

 

 

Notes to Consolidated Financial Statements

 

8

 

 

 

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.

 

35

 

 

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

 

56

 

 

 

Item 4. Controls and Procedures.

 

57

 

 

 

PART II - OTHER INFORMATION

 

59

 

 

 

Item 1. Legal Proceedings.

 

59

 

 

 

Item 1A. Risk Factors.

 

59

 

 

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

 

61

 

 

 

Item 3. Defaults Upon Senior Securities.

 

63

 

 

 

Item 4. Mine Safety Disclosures.

 

63

 

 

 

Item 5. Other Information.

 

63

 

 

 

Item 6. Exhibits.

 

63

 

 

 

Signatures

 

66

 

 

 


PART I — FINANCIAL INFORMATION

Item 1. Financial Statements.

RODIN GLOBAL PROPERTY TRUST, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

March 31, 2020

 

 

December 31, 2019

 

Assets

 

 

 

 

 

 

 

Investment in real estate, net of accumulated depreciation of $5,354,476 and $4,275,639, respectively

$

158,026,562

 

 

$

159,105,399

 

Cash and cash equivalents

 

27,976,366

 

 

 

17,305,001

 

Investments in real estate-related assets

 

24,400,000

 

 

 

24,400,000

 

Intangible assets, net of accumulated amortization of $2,435,335 and $1,876,930, respectively

 

20,251,330

 

 

 

20,809,735

 

Deferred rent receivable

 

1,369,292

 

 

 

1,225,863

 

Prepaid expenses and other assets

 

474,034

 

 

 

461,251

 

Due from related party

 

314,231

 

 

 

49,910

 

Accrued preferred return receivable

 

79,900

 

 

 

 

Accrued income from mezzanine loan investment

 

71,690

 

 

 

 

Stock subscriptions receivable

 

 

 

 

261,038

 

Total assets

$

232,963,405

 

 

$

223,618,197

 

Liabilities and Equity

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

Loans payable, net of deferred financing costs of $822,460 and $841,615, respectively

$

83,322,724

 

 

$

83,303,569

 

Intangible liabilities, net of accumulated amortization of $628,546 and $416,574, respectively

 

8,436,770

 

 

 

8,648,742

 

Due to related parties

 

2,008,823

 

 

 

2,057,181

 

Distributions payable

 

721,496

 

 

 

668,092

 

Deferred revenue

 

547,499

 

 

 

561,056

 

Accrued interest payable

 

273,200

 

 

 

273,200

 

Restricted reserves

 

252,058

 

 

 

33,124

 

Accounts payable and accrued expenses

 

167,458

 

 

 

16,384

 

Total liabilities

 

95,730,028

 

 

 

95,561,348

 

Stockholders' equity

 

 

 

 

 

 

 

Controlling interest

 

 

 

 

 

 

 

Preferred stock, $0.01 par value per share, 50,000,000 shares authorized,

   and 0 issued and outstanding at March 31, 2020 and December 31, 2019,

   respectively

 

 

 

 

 

Class A common stock, $0.01 par value per share, 160,000,000 shares authorized,

   and 3,309,835 and 3,158,796 issued and outstanding at March 31, 2020 and

   December 31, 2019, respectively

 

33,098

 

 

 

31,580

 

Class T common stock, $0.01 par value per share, 200,000,000 shares authorized,

  and 1,392,733 and 1,327,819 issued and outstanding at March 31, 2020 and

   December 31, 2019, respectively

 

13,927

 

 

 

13,278

 

Class I common stock, $0.01 par value per share, 40,000,000 shares authorized,

   and 1,072,644 and 853,734 issued and outstanding at March 31, 2020 and

   December 31, 2019, respectively

 

10,726

 

 

 

8,537

 

Additional paid-in capital

 

146,252,800

 

 

 

135,507,823

 

Accumulated deficit and cumulative distributions

 

(12,100,823

)

 

 

(10,543,287

)

Total controlling interest

 

134,209,728

 

 

 

125,017,931

 

Non-controlling interests in subsidiaries

 

3,023,649

 

 

 

3,038,918

 

Total stockholders' equity

 

137,233,377

 

 

 

128,056,849

 

Total liabilities and stockholders' equity

$

232,963,405

 

 

$

223,618,197

 

See accompanying notes to consolidated financial statements

3

 


RODIN GLOBAL PROPERTY TRUST, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

 

For the Three Months

 

 

Ended March 31,

 

 

2020

 

 

2019

 

Revenues:

 

 

 

 

 

 

 

Rental revenues

$

3,069,547

 

 

$

1,923,220

 

Preferred return income

 

234,546

 

 

 

 

Income from mezzanine loan investment

 

250,242

 

 

 

 

Tenant reimbursement income

 

421,159

 

 

 

375,913

 

Total revenues

 

3,975,494

 

 

 

2,299,133

 

Operating expenses (income):

 

 

 

 

 

 

 

General and administrative expenses

 

54,765

 

 

 

143,228

 

Depreciation and amortization

 

1,629,668

 

 

 

986,152

 

Management fees

 

422,755

 

 

 

527,774

 

Property operating expenses

 

432,964

 

 

 

375,913

 

Total operating expenses

 

2,540,152

 

 

 

2,033,067

 

Other income (expense):

 

 

 

 

 

 

 

Income from investments in real estate-related assets

 

 

 

 

378,318

 

Interest income

 

46,084

 

 

 

20,507

 

Interest expense

 

(979,350

)

 

 

(614,234

)

Total other income (expense)

 

(933,266

)

 

 

(215,409

)

Net income (loss)

$

502,076

 

 

$

50,657

 

Net income (loss) attributable to non-controlling interest

 

1,231

 

 

 

 

Net income (loss) attributable to common stockholders

$

500,845

 

 

$

50,657

 

Weighted average shares outstanding

 

5,536,492

 

 

 

3,738,367

 

Net income (loss) per common share - basic and diluted

$

0.09

 

 

$

0.01

 

See accompanying notes to consolidated financial statements

4

 


 

RODIN GLOBAL PROPERTY TRUST, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(Unaudited)

 

 

Stockholders' Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

Common Stock

 

 

Additional

 

 

Deficit and

 

 

Non-

 

 

 

 

 

 

 

Class A

 

 

Class T

 

 

Class I

 

 

Paid-In

 

 

Cumulative

 

 

controlling

 

 

Total

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Distributions

 

 

interest

 

 

Equity

 

Balance as of January 1, 2019

 

 

2,116,562

 

 

$

21,166

 

 

 

939,185

 

 

$

9,392

 

 

 

401,639

 

 

$

4,016

 

 

$

84,467,731

 

 

$

(4,737,537

)

 

$

179,950

 

 

$

79,944,718

 

Common stock

 

 

263,629

 

 

 

2,636

 

 

 

113,727

 

 

 

1,137

 

 

 

148,278

 

 

 

1,483

 

 

 

13,599,025

 

 

 

 

 

 

 

 

 

13,604,281

 

Common stock repurchased

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Distribution reinvestment

 

 

12,509

 

 

 

125

 

 

 

4,570

 

 

 

46

 

 

 

1,573

 

 

 

16

 

 

 

468,239

 

 

 

 

 

 

 

 

 

468,426

 

Offering costs, commissions and fees

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(643,788

)

 

 

 

 

 

 

 

 

(643,788

)

Net income (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

50,657

 

 

 

(70

)

 

 

50,587

 

Distributions declared on common stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,368,762

)

 

 

 

 

 

(1,368,762

)

Acquired non-controlling interests

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance as of March 31, 2019

 

 

2,392,700

 

 

$

23,927

 

 

 

1,057,482

 

 

$

10,575

 

 

 

551,490

 

 

$

5,515

 

 

$

97,891,207

 

 

$

(6,055,642

)

 

$

179,880

 

 

$

92,055,462

 

See accompanying notes to consolidated financial statements

5

 


 

 

 

RODIN GLOBAL PROPERTY TRUST, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(Unaudited)

 

 

Stockholders' Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

Common Stock

 

 

Additional

 

 

Deficit and

 

 

Non-

 

 

 

 

 

 

 

Class A

 

 

Class T

 

 

Class I

 

 

Paid-In

 

 

Cumulative

 

 

controlling

 

 

Total

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Distributions

 

 

interest

 

 

Equity

 

Balance as of January 1, 2020

 

 

3,158,796

 

 

$

31,580

 

 

 

1,327,819

 

 

$

13,278

 

 

 

853,734

 

 

$

8,537

 

 

$

135,507,823

 

 

$

(10,543,287

)

 

$

3,038,918

 

 

$

128,056,849

 

Common stock

 

 

150,441

 

 

 

1,512

 

 

 

66,220

 

 

 

662

 

 

 

215,102

 

 

 

2,151

 

 

 

11,035,494

 

 

 

 

 

 

 

 

 

11,039,819

 

Common stock repurchased

 

 

(17,256

)

 

 

(173

)

 

 

(8,028

)

 

 

(80

)

 

 

 

 

 

 

 

 

(620,406

)

 

 

 

 

 

 

 

 

(620,659

)

Distribution reinvestment

 

 

17,854

 

 

 

179

 

 

 

6,722

 

 

 

67

 

 

 

3,808

 

 

 

38

 

 

 

711,122

 

 

 

 

 

 

 

 

 

711,406

 

Offering costs, commissions and fees

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(381,233

)

 

 

 

 

 

 

 

 

(381,233

)

Net income (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

500,845

 

 

 

1,231

 

 

 

502,076

 

Distributions declared on common stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2,058,381

)

 

 

 

 

 

(2,058,381

)

Acquired non-controlling interests

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(16,500

)

 

 

(16,500

)

Balance as of March 31, 2020

 

 

3,309,835

 

 

$

33,098

 

 

 

1,392,733

 

 

$

13,927

 

 

 

1,072,644

 

 

$

10,726

 

 

$

146,252,800

 

 

$

(12,100,823

)

 

$

3,023,649

 

 

$

137,233,377

 

See accompanying notes to consolidated financial statements

6

 


RODIN GLOBAL PROPERTY TRUST, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

 

 

For the Three Months

 

 

 

Ended March 31,

 

 

 

2020

 

 

2019

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net income (loss)

 

$

502,076

 

 

$

50,657

 

Adjustments to reconcile net income (loss) to net cash provided by/(used in) operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

1,648,823

 

 

 

1,000,580

 

Gains from investments in real estate-related assets

 

 

 

 

 

(378,318

)

Amortization of above-market lease intangibles

 

 

7,574

 

 

 

8,664

 

Amortization of below-market lease intangibles

 

 

(211,972

)

 

 

(73,075

)

Changes in assets and liabilities:

 

 

 

 

 

 

 

 

Proceeds from investments in real estate-related assets

 

 

 

 

 

285,349

 

(Increase) in deferred rent receivable

 

 

(143,429

)

 

 

(120,545

)

(Increase) in accrued preferred return receivable

 

 

(79,900

)

 

 

 

(Increase) in accrued income from mezzanine loan investment

 

 

(71,690

)

 

 

 

(Increase) in prepaid expenses and other assets

 

 

(12,783

)

 

 

(94,360

)

(Increase) in due from related party

 

 

(275,464

)

 

 

 

(Decrease) in due to related parties

 

 

(143,389

)

 

 

(1,011,599

)

(Decrease)/increase in deferred revenue

 

 

(13,557

)

 

 

43,240

 

Increase/(decrease) in restricted reserves

 

 

218,934

 

 

 

(39,062

)

Increase/(decrease) in accounts payable and accrued expenses

 

 

5,821

 

 

 

(3,357

)

Net cash provided by/(used in) operating activities

 

 

1,431,044

 

 

 

(331,826

)

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Purchase of interest in real estate-related assets

 

 

 

 

 

(17,080,113

)

Cash used in investing activities

 

 

 

 

 

(17,080,113

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Proceeds from issuance of common stock, net

 

 

11,171,051

 

 

 

13,468,795

 

Distributions

 

 

(1,293,571

)

 

 

(828,207

)

Payments from redemptions of common stock

 

 

(620,659

)

 

 

 

Non-controlling interest distributions

 

 

(16,500

)

 

 

 

Net cash provided by financing activities

 

 

9,240,321

 

 

 

12,640,588

 

Net increase/(decrease) in cash and cash equivalents

 

 

10,671,365

 

 

 

(4,771,351

)

Cash and cash equivalents, at beginning of period

 

 

17,305,001

 

 

 

14,046,766

 

Cash and cash equivalents, at end of period

 

$

27,976,366

 

 

$

9,275,415

 

Supplemental disclosure of cash flow information:

 

 

 

 

 

 

 

 

Cash paid for interest

 

$

960,195

 

 

$

603,374

 

Non-cash investing and financing activities:

 

 

 

 

 

 

 

 

Distribution reinvestment

 

$

711,406

 

 

$

468,426

 

Distributions payable

 

$

53,404

 

 

$

72,129

 

See accompanying notes to consolidated financial statements

7

 


RODIN GLOBAL PROPERTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

 

Note 1 – Organization and Business Purpose

Rodin Global Property Trust, Inc. (the “Company”) was formed on February 2, 2016 as a Maryland corporation that has elected and qualified to be taxed as a real estate investment trust (“REIT”) for United States (“U.S.”) federal income tax purposes beginning with the taxable year ending December 31, 2017. The Company’s unaudited consolidated financial statements include Rodin Global Property Trust Operating Partnership, L.P. (the “Operating Partnership”) and its operating subsidiaries. Substantially all of the Company’s business is conducted through the Operating Partnership, a Delaware partnership formed on February 11, 2016. The Company is the sole general and a limited partner of the Operating Partnership. Unless the context otherwise requires, the “Company” refers to the Company and the Operating Partnership. The Company currently operates its business in one reportable segment, which focuses on investing in and managing income-producing commercial properties and other real estate-related assets.

On February 2, 2016, the Company was capitalized with a $200,001 investment by the Company’s sponsor, Cantor Fitzgerald Investors, LLC (“CFI”) through the purchase of 8,180 Class A shares. In addition, a wholly owned subsidiary of CFI, Rodin Global Property Trust OP Holdings, LLC (the “Special Unit Holder”), has invested $1,000 in the Operating Partnership and has been issued a special class of limited partnership units (“Special Units”), which is recorded as a non-controlling interest on the consolidated balance sheet as of March 31, 2020. The Company has registered with the Securities and Exchange Commission (“SEC”) an offering of up to $1.25 billion in shares of common stock, consisting of up to $1.0 billion in shares in the Company’s primary offering (the “Primary Offering”) and up to $250 million in shares pursuant to its distribution reinvestment plan (the “DRP”, and together with the Primary Offering, the “Offering”). On May 18, 2017, the Company satisfied the minimum offering requirement as a result of CFI’s purchase of $2.0 million in Class I shares (the “Minimum Offering Requirement”).

The Company is a commercial real estate company formed to invest in and manage a diversified portfolio of income-producing commercial properties and other real estate-related assets. The Company intends to invest primarily in the acquisition of single-tenant net leased commercial properties located in the U.S., United Kingdom and other European countries. The Company may also originate and invest in loans related to net leased commercial properties and invest in commercial real estate-related securities.

As of March 31, 2020, the Company owned the following investments:

 

A retail property located in Grand Rapids, Michigan (the “GR Property”).

 

An office property located in Fort Mill, South Carolina (the “FM Property”).

 

An office property located in Columbus, Ohio (the “CO Property”).

 

A flex industrial property located in Lewisville, TX (the “Lewisville Property”).

 

A Delaware Statutory Trust, CF Net Lease Portfolio IV DST (the “DST”), which owns seven properties (individually, a “DST Property”, and collectively, the “DST Properties”).

 

CF Albertsons Lancaster, LLC (the “Pennsylvania SPE”), which made a preferred equity investment (the “Lancaster PE”) through a joint venture agreement to purchase a cold storage and warehouse distribution facility located in Denver, Pennsylvania (the “PA Property”).

 

CF Albertsons Chicago, LLC (the “Illinois SPE”), which originated a fixed rate, subordinate mezzanine loan (the “Chicago Jr Mezz”) for the acquisition of a cold storage and warehouse distribution facility located in Melrose Park, Illinois (the “IL Property”).

 

A majority interest in a joint venture with an unrelated third party (the “Battery Street SF JV”) that owns an office property located in San Francisco, California (the “SF Property”).

 

An industrial property located in Phoenix, Arizona (the “Buchanan Property”).

The Company is externally managed by Rodin Global Property Advisors, LLC (the “Advisor”), a Delaware limited liability company and wholly owned subsidiary of CFI. CFI is a wholly owned subsidiary of CFIM Holdings, LLC, which is a wholly owned subsidiary of Cantor Fitzgerald, L.P. (“CFLP”).

8


RODIN GLOBAL PROPERTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

Note 2 Summary of Significant Accounting Policies

Basis of Presentation

The consolidated financial statements are presented in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the SEC. In the opinion of management, the accompanying consolidated financial statements contain all adjustments and eliminations, consisting only of normal recurring adjustments necessary for a fair presentation in conformity with U.S. GAAP. Certain reclassifications have been made to previously reported amounts to conform to the current presentation.

Use of Estimates

The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the balance sheet. Management believes that the estimates utilized in preparing the consolidated financial statements are reasonable. As such, actual results could differ from those estimates.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company, the Operating Partnership and any single member limited liability companies or other entities which are consolidated in accordance with U.S. GAAP. The Company consolidates variable interest entities (“VIEs”) where it is the primary beneficiary and voting interest entities which are generally majority owned or otherwise controlled by the Company. All intercompany balances are eliminated in consolidation.

Variable Interest Entities

The Company determines if an entity is a VIE in accordance with guidance in Accounting Standards Codification (“ASC”) Topic 810, Consolidation. For an entity in which the Company has acquired an interest, the entity will be considered a VIE if both of the following characteristics are not met: 1) the equity investors in the entity have the characteristics of a controlling financial interest and 2) the equity investors’ total investment at risk is sufficient to finance the entity’s activities without additional subordinated financial support. The Company makes judgments regarding the sufficiency of the equity at risk based first on a qualitative analysis, then a quantitative analysis, if necessary. A qualitative analysis is generally based on a review of the design of the entity, including its control structure and decision-making abilities, and also its financial structure. In a quantitative analysis, the Company would incorporate various estimates, including estimated future cash flows, assumed hold periods and capitalization or discount rates.

If an entity is determined to be a VIE, the Company then determines whether to consolidate the entity as the primary beneficiary. The primary beneficiary has both (i) the power to direct the activities that most significantly impact the VIE’s economic performance and (ii) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could potentially be significant to the entity.

The Company evaluates all of its investments in real estate-related assets to determine if they are VIEs utilizing judgments and estimates that are inherently subjective. If different judgments or estimates were used for these evaluations, it could result in differing conclusions as to whether or not an entity is a VIE and whether or not to consolidate such entity. As of March 31, 2020 and December 31, 2019, the Company concluded that it had investments in VIEs, and because the Company was the primary beneficiary, it consolidated the entities. Refer to Note 10 — Variable Interest Entities for additional information.

9


RODIN GLOBAL PROPERTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

Voting Interest Entities

A voting interest entity is an entity in which the total equity investment at risk is sufficient to enable it to finance its activities independently and the equity holders have the power to direct the activities of the entity that most significantly impact its economic performance, the obligation to absorb the losses of the entity and the right to receive the residual returns of the entity. The usual condition for a controlling financial interest in a voting interest entity is ownership of a majority voting interest. If the Company has a majority voting interest in a voting interest entity, the entity will generally be consolidated. The Company will not consolidate a voting interest entity if there are substantive participating rights by other parties and/or kick-out rights by a single party. The Company performs ongoing reassessments of whether entities previously evaluated under the voting interest framework have become VIEs, based on certain events, and therefore subject to the VIE consolidation framework, and vice versa.

Cash and Cash Equivalents

Cash and cash equivalents consist of cash on hand and highly liquid investments with original maturities of three months or less.

Deferred Rent Receivable

Deferred rent receivable represents rent earned in excess of rent received as a result of straight-lining rents over the terms of the leases on the FM Property, the CO Property, the Lewisville Property, the SF Property, the Buchanan Property and the DST in accordance with ASC Topic 842, Leases. As of March 31, 2020 and December 31, 2019, Deferred rent receivable was $1,369,292 and $1,225,863, respectively.  

Prepaid Expenses and Other Assets

Prepaid expenses and other assets consist primarily of prepaid operating expenses and reimbursements due from tenants.  

Investment in Real Estate, net

Real estate assets are stated at cost, less accumulated depreciation and amortization. Amounts capitalized to real estate assets consist of the costs of acquisition, including certain acquisition-related expenses, major improvements and betterments that extend the useful life of the real estate assets and leasing costs. All repairs and maintenance costs are expensed as incurred. The Company accounts for its acquisitions (or disposals) of assets or businesses in accordance with ASC Topic 805, Business Combinations.

Upon the acquisition of real estate properties, the Company allocates the purchase price to acquired tangible assets, consisting of land, buildings and improvements, and to identified intangible assets and liabilities, consisting of the value of above-market leases, below-market leases, and in-place leases, based in each case on their respective fair values. The Company utilizes independent appraisals to assist in the determination of the fair values of the tangible assets of an acquired property (which includes land and buildings). The information in the appraisal, along with any additional information available to the Company’s management, is used in estimating the amount of the purchase price that is allocated to land. Other information in the appraisal, such as building value and market rents, may be used by the Company’s management in estimating the allocation of purchase price to the building and to intangible lease assets and liabilities. The appraisal firm has no involvement in management’s allocation decisions other than providing this market information.

The Company considers the period of future benefit of each respective asset to determine its appropriate useful life. The estimated useful lives of the Company’s real estate assets by class are generally as follows:

Description

 

Depreciable Life

Buildings

 

39 years

Site improvements

 

Over lease term

Intangible lease assets and liabilities

 

Over lease term

The determination of the fair values of the real estate assets and liabilities acquired requires the use of assumptions with regard to the current market rental rates, rental growth rates, capitalization and discount rates, interest rates and other variables. The use of alternative estimates may result in a different allocation of the Company’s purchase price, which could materially impact the Company’s results of operations.

10


RODIN GLOBAL PROPERTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

The Company continually monitors events and changes in circumstances that could indicate that the carrying amounts of its real estate assets may not be recoverable. Impairment indicators that the Company considers include, but are not limited to, bankruptcy or other credit concerns of a property’s major tenant, such as a history of late payments, rental concessions and other factors, a significant decrease in a property’s revenues due to lease terminations, vacancies, co-tenancy clauses, reduced lease rates or other circumstances. When indicators of potential impairment are present, the Company assesses the recoverability of the assets by determining whether the carrying amount of the assets will be recovered through the undiscounted future cash flows expected from the use of the assets and their eventual disposition. In the event that such expected undiscounted future cash flows do not exceed the carrying amount, the Company will adjust the real estate assets to their respective fair values and recognize an impairment loss. Generally, fair value is determined using a discounted cash flow analysis and recent comparable sales transactions. No impairment losses were recorded during the three months ended March 31, 2020 or March 31, 2019 after the Company assessed the recoverability of its assets. As of March 31, 2020 and December 31, 2019, no impairment losses have been identified.

Investments in Real Estate-Related Assets

Mezzanine Loan Investment

The Company has made a mezzanine loan investment through the Illinois SPE. Mezzanine loan investments are generally intended to be held for investment and, accordingly, are carried at cost, net of unamortized fees, premiums, discounts and unfunded commitments. Mezzanine loan investments that are deemed to be impaired are carried at amortized cost less a loss reserve, if deemed appropriate. Mezzanine loan investment where the Company does not have the intent to hold the investment for the foreseeable future or until its expected payoff are classified as held for sale and recorded at the lower of cost or estimated value.

Mezzanine loan investments are considered impaired when, based on current information and events, it is probable that the Company will not be able to collect principal and income from mezzanine loan amounts due according to the contractual terms. The Company assesses the credit quality of the portfolio and adequacy of loss reserves on a periodic basis. Significant judgment of management is required in this analysis. The Company considers the estimated net recoverable value of the mezzanine loan investment as well as other factors, including but not limited to the fair value of any collateral, the amount and the status of any senior debt, the quality and financial condition of the borrower and the competitive situation of the area where the underlying collateral is located. Because this determination is based on projections of future economic events, which are inherently subjective, the amount ultimately realized may differ materially from the carrying value as of the balance sheet date. If upon completion of the assessment, the estimated fair value of the underlying collateral is less than the net carrying value of the mezzanine loan investment, a loss reserve is recorded with a corresponding charge to provision for losses. The loss reserve for each mezzanine loan investment is maintained at a level that is determined to be adequate by management to absorb probable losses.

Income recognition is suspended for a mezzanine loan investment at the earlier of the date at which payments become 90-days past due or when, in the opinion of management, a full recovery of income and principal becomes doubtful. When the ultimate collectability of the principal of an impaired mezzanine loan investment is in doubt, all payments are applied to principal under the cost recovery method. When the ultimate collectability of the principal of an impaired mezzanine loan investment is not in doubt, contractual income from mezzanine loan is recorded as income from mezzanine loan when received, under the cash basis method until an accrual is resumed when the mezzanine loan investment becomes contractually current and performance is demonstrated to be resumed. A mezzanine loan investment is written off when it is no longer realizable and/or legally discharged. No impairment losses were recorded during the three months ended March 31, 2020 or March 31, 2019 after the Company assessed the recoverability of its assets. As of March 31, 2020 and December 31, 2019, no impairment losses have been identified.

Preferred Equity Investment

The Company has made a preferred equity investment in the Pennsylvania SPE, an entity that holds commercial real estate. Preferred equity investments are generally intended to be held to maturity and, accordingly, are carried at cost, net of unamortized fees, premium, discount and unfunded commitments. Preferred Equity investments that are deemed to be impaired are carried at amortized cost less a loss reserve, if deemed appropriate. Preferred equity investments where we do not have the intent to hold the investment for the foreseeable future or until its expected payoff are classified as held for sale and recorded at the lower of cost or estimated value.

11


RODIN GLOBAL PROPERTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

Preferred equity investments are considered impaired when, based on current information and events, it is probable that the Company will not be able to collect principal and preferred return income amounts due according to the contractual terms. The Company assesses the credit quality of the portfolio and adequacy of loss reserves on a periodic basis. Significant judgment of management is required in this analysis. The Company considers the estimated net recoverable value of the preferred equity investment as well as other factors, including but not limited to the fair value of any collateral, the amount and the status of any senior debt, the quality and financial condition of the borrower and the competitive situation of the area where the underlying collateral is located. Because this determination is based on projections of future economic events, which are inherently subjective, the amount ultimately realized may differ materially from the carrying value as of the balance sheet date. If upon completion of the assessment, the estimated fair value of the underlying collateral is less than the net carrying value of the preferred equity investment, a loss reserve is recorded with a corresponding charge to provision for losses. The loss reserve for each preferred equity investment is maintained at a level that is determined to be adequate by management to absorb probable losses.

Income recognition is suspended for a preferred equity investment at the earlier of the date at which payments become 90-days past due or when, in the opinion of management, a full recovery of income and principal becomes doubtful. When the ultimate collectability of the principal of an impaired preferred equity investment is in doubt, all payments are applied to principal under the cost recovery method. When the ultimate collectability of the principal of an impaired preferred equity investment is not in doubt, contractual preferred return income is recorded as preferred return income when received, under the cash basis method until an accrual is resumed when the preferred return investment becomes contractually current and performance is demonstrated to be resumed. A preferred return investment is written off when it is no longer realizable and/or legally discharged. No impairment losses were recorded during the three months ended March 31, 2020 or March 31, 2019 after the Company assessed the recoverability of its assets. As of March 31, 2020 and December 31, 2019, no impairment losses have been identified.

Deferred Financing Costs

Costs incurred in connection with obtaining financing are capitalized and amortized over the term of the related loan on a straight-line basis, which approximates the effective interest method. The carrying value of the deferred financing costs at March 31, 2020 and December 31, 2019 was $822,460 and $841,615, respectively, which is net of accumulated amortization of  $100,336 and $81,181, respectively, and recorded as an offset to the related debt. For the three months ended March 31, 2020 and March 31, 2019, amortization of deferred financing costs was $19,155 and $10,860, respectively, and is included in Interest expense on the accompanying consolidated statements of operations.

Revenue Recognition

Rental revenue is recognized on a straight-line basis over the life of the respective leases.

Preferred return income from the Company’s preferred equity investment is recognized when earned and accrued based on the outstanding investment balance.

Income from mezzanine loan investment is recognized when earned and accrued based on the outstanding loan balance.

Stock Subscriptions Receivable

As prescribed by ASC Topic 505, Equity, Stock subscriptions receivable represent the purchase of common stock for which the Company has not yet received payment from the purchaser. As of March 31, 2020 and December 31, 2019, Stock subscriptions receivable were $0 and $261,038, respectively. The amounts of outstanding Stock subscriptions receivable as of December 31, 2019 were received by the Company during January 2020.

Due from Related Party

Due from related party includes amounts owed to the Company by CFI pursuant to the terms of the sponsor support agreement for the reimbursement of selling commissions and dealer manager fees, as well as other amounts due from the Advisor, which at March 31, 2020 and December 31, 2019 was $314,231 and $49,910, respectively. The amount of Sponsor Support (as defined below in Note 9 – Related Party Transactions) outstanding at March 31, 2020 was received by the Company during April 2020.

12


RODIN GLOBAL PROPERTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

Deferred Revenue

Deferred revenue represents unearned rent received in advance from tenants at certain of the Company’s properties, which at March 31, 2020 and December 31, 2019 was $547,499 and $561,056, respectively.

Restricted Reserves

Restricted reserves is comprised of amounts received from tenants at certain of the Company’s properties for recoverable property operating expenses to be paid by the Company on behalf of the tenants, pursuant to the terms of the respective net lease arrangements, which at March 31, 2020 and December 31, 2019 was $252,058 and $33,124, respectively.

Tenant Reimbursement Income

Certain property operating expenses, including real estate taxes and insurance, among others, are paid by the Company and are reimbursed by the tenants of the Company’s properties pursuant to the terms of the respective net leases. These reimbursements are reflected as Tenant reimbursement income in the accompanying consolidated statements of operations, which, for the three months ended March 31, 2020 and March 31, 2019 was $421,159 and $375,913, respectively.

Property Operating Expenses

Certain property operating expenses, including real estate taxes and insurance, among others, are paid by the Company and may be reimbursed by the tenants of the Company’s properties pursuant to the terms of the respective net leases. These expenses incurred are reflected as Property operating expenses in the accompanying consolidated statements of operations, which for the three months ended March 31, 2020 and March 31, 2019 was $432,964 and $375,913, respectively.

Due to Related Parties

Due to related parties is comprised of amounts contractually owed by the Company for various services provided to the Company from related parties, which at March 31, 2020 and December 31, 2019 was $2,008,823 and $2,057,181, respectively (See Note 9 – Related Party Transactions).

Organization and Offering Costs

The Advisor has agreed to pay, on behalf of the Company, all organizational and offering costs (including legal, accounting, and other costs attributable to the Company’s organization and offering, but excluding upfront selling commissions, dealer manager fees and distribution fees) (“O&O Costs”) through the first anniversary of the date on which the Company satisfied the Minimum Offering Requirement, which was May 18, 2018 (the “Escrow Break Anniversary”). After the Escrow Break Anniversary, the Advisor, in its sole discretion, may pay some or all of the additional O&O Costs incurred, but is not required to do so. To the extent the Advisor pays such additional O&O Costs, the Company is obligated to reimburse the Advisor subject to the 1% Cap (as defined below). Following the Escrow Break Anniversary, the Company began reimbursing the Advisor for payment of O&O Costs on a monthly basis, which will continue through the period ended May 18, 2021; provided, however, that the Company will not be obligated to pay any amounts that as a result of such payment would cause the aggregate payments for O&O Costs (less selling commissions, dealer manager fees and distribution fees) paid to the Advisor to exceed 1% of gross proceeds of the Offering (the “1% Cap”), as of such payment date. Any amounts not reimbursed in any period shall be included in determining any reimbursement liability for a subsequent period. As of March 31, 2020, the Advisor has continued to pay all O&O Costs on behalf of the Company.

As of March 31, 2020 and December 31, 2019, the Advisor has incurred O&O Costs on the Company’s behalf of $9,659,293 and $8,613,586, respectively. As of March 31, 2020 and December 31, 2019, the Company is obligated to reimburse the Advisor for O&O Costs in the amount of $747,070 and $789,661, respectively, which is included within Due to related parties in the accompanying consolidated balance sheets. As of March 31, 2020 and December 31, 2019, organizational costs of $90,676 and $90,232, respectively, were expensed and offering costs of $1,398,065 and $1,287,203, respectively, were charged to stockholders’ equity. As of March 31, 2020 and December 31, 2019, the Company has made reimbursement payments of $741,671 and $587,774, respectively, to the Advisor for O&O Costs incurred.

13


RODIN GLOBAL PROPERTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

Income Taxes

The Company has elected and qualified to be taxed as a REIT under the Internal Revenue Code of 1986, as amended. Accordingly, the Company generally will not be subject to U.S. federal income tax to the extent of its distributions to stockholders and as long as certain asset, income, share ownership, minimum distribution and other requirements are met. To qualify as a REIT, the Company must annually distribute at least 90% of its REIT taxable income to its stockholders and meet certain other requirements. Under certain circumstances, federal income and excise taxes may be due on its undistributed taxable income. The Company may also be subject to certain state and local taxes. If the Company fails to meet these requirements, it will be subject to U.S. federal income tax, which could have a material adverse impact on its results of operations and amounts available for distributions to its stockholders.

The Company provides for uncertain tax positions based upon management’s assessment of whether a tax benefit is more likely than not to be sustained upon examination by tax authorities. Management is required to determine whether a tax position is more likely than not to be sustained upon examination by tax authorities, including resolution of any related appeals or litigation processes, based on the technical merits of the position. Because assumptions are used in determining whether a tax benefit is more likely than not to be sustained upon examination by tax authorities, actual results may differ from the Company’s estimates under different assumptions or conditions. The Company recognizes interest and penalties, if any, related to unrecognized tax benefits in “Provision for income taxes” in the consolidated statement of operations.

Earnings Per Share

Basic net income (loss) per share of common stock is determined by dividing net income (loss) attributable to common stockholders by the weighted average number of common shares outstanding during the period. Diluted net income (loss) per share is determined by dividing net income (loss) attributable to common stockholders by the weighted average number of common shares outstanding during the period, including common stock equivalents. As of March 31, 2020 and December 31, 2019, there were no material common stock equivalents that would have a dilutive effect on net income (loss) per share for common stockholders. All classes of common stock are allocated net income (loss) at the same rate per share.

For the three months ended March 31, 2020 and March 31, 2019, basic and diluted net income per share was $0.09 and $0.01, respectively.  

14


RODIN GLOBAL PROPERTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

Recently Adopted Accounting Pronouncements

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). This standard requires lessees to recognize a right-of-use (“ROU”) asset and lease liability for all leases with terms of more than 12 months. Recognition, measurement and presentation of expenses will depend on the classification of a lease as a finance or operating lease. The amendments also require certain quantitative and qualitative disclosures. Accounting guidance for lessors is mostly unchanged. In July 2018, the FASB issued ASU No. 2018-10, Codification Improvements to Topic 842: Leases, to clarify how to apply certain aspects of the new leases standard. The amendments address the rate implicit in the lease, impairment of the net investment in the lease, lessee reassessment of lease classification, lessor reassessment of lease term and purchase options, variable payments that depend on an index or rate and certain transition adjustments, among other issues. In addition, in July 2018, the FASB issued ASU No. 2018-11, Leases (Topic 842): Targeted Improvements, which provides an additional (and optional) transition method to adopt the new leases standard. Under this transition method, a reporting entity would initially apply the lease requirements at the effective date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption; continue to report comparative periods presented in the financial statements in the period of adoption in accordance with previous U.S. GAAP (i.e., ASC 840, Leases); and provide the required disclosures required by ASC 840 for all periods presented under that standard. Further, ASU No. 2018-11 contains an additional practical expedient that allows lessors to avoid separating lease and associated non-lease components within a contract if certain criteria are met. In December 2018, the FASB issued ASU No. 2018-20, Leases (Topic 842): Narrow-Scope Improvements for Lessors, to clarify guidance for lessors on sales taxes and other similar taxes collected from lessees, certain lessor costs and recognition of variable payments for contracts with lease and non-lease components. In March 2019, the FASB issued ASU 2019-01, Leases (Topic 842): Codification Improvements, to clarify certain application and transitional disclosure aspects of the leases standard. The amendments address determination of the fair value of the underlying asset by lessors that are not manufacturers or dealers and clarify interim period transition disclosure requirements, among other issues. The guidance in ASUs 2016-02, 2018-10, 2018-11 and 2018-20 was effective beginning January 1, 2019, with early adoption permitted; whereas the guidance in ASU 2019-01 is effective beginning January 1, 2020, with early adoption permitted. The Company adopted the above mentioned standards on January 1, 2019 using the effective date as the date of initial application. As a result, pursuant to this transition method financial information was not updated and the disclosures required under the leases standards were not provided for dates and periods before January 1, 2019. The guidance provides a number of optional practical expedients to be utilized upon transition. Accordingly, the Company has elected the ‘package of practical expedients,’ which permitted the Company not to reassess under the leases standard its prior conclusions about lease identification, lease classification and initial direct costs. The Company did not elect the use-of-hindsight or the practical expedient pertaining to land easements, with the latter not being applicable to the Company. While the guidance identifies common area (building) maintenance as a non-lease component of the Company’s real estate lease contracts, the Company has applied the practical expedient to account for its real estate leases and associated common area maintenance (“CAM”) service components as a single, combined operating lease component, however, the CAM service component is not material to the Company’s unaudited consolidated financial statements. Consequently, the application of the guidance on contract components did not have a material effect on the Company’s unaudited consolidated financial statements. In addition, due to the standard’s narrowed definition of initial direct costs, the Company will expense as incurred significant lease origination costs that were previously capitalized as initial direct costs and amortized to expense over the lease term. As these types of costs have not historically been incurred by the Company, the change in accounting did not have a material impact on the Company’s unaudited consolidated financial statements. See Note 3 — Investment in Real Estate for additional information on the Company’s leasing arrangements.

In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement. The guidance is part of the FASB’s disclosure framework project, whose objective and primary focus are to improve the effectiveness of disclosures in the notes to financial statements. The ASU eliminates, amends and adds certain disclosure requirements for fair value measurements. The FASB concluded that these changes improve the overall usefulness of the footnote disclosures for financial statement users and reduce costs for preparers. The new standard will become effective for the Company beginning January 1, 2020 and early adoption is permitted for eliminated and modified fair value measurement disclosures. Certain disclosures are required to be applied prospectively and other disclosures need to be adopted retrospectively in the period of adoption. As permitted by the transition guidance in the ASU, the Company early adopted, eliminated and modified disclosure requirements as of September 30, 2018. The early adoption of this guidance did not have an impact on the Company’s unaudited consolidated financial statements. The additional disclosure requirements were adopted by the Company beginning January 1, 2020, and the adoption of these fair value measurement disclosures did not have an impact on the Company’s unaudited consolidated financial statements. See Note 13 — Fair Value Measurements for additional information.

15


RODIN GLOBAL PROPERTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

In October 2018, the FASB issued ASU No. 2018-17, Consolidation (Topic 810): Targeted Improvements to Related Party Guidance for Variable Interest Entities. The guidance was issued in response to stakeholders’ observations that Topic 810, Consolidation, could be improved in the areas of applying the VIE guidance to private companies under common control and in considering indirect interests held through related parties under common control for determining whether fees paid to decision makers and service providers are variable interests. The Company adopted the standard on its effective date beginning January 1, 2020. The adoption of this guidance did not have a material impact on the Company’s unaudited consolidated financial statements.

In July 2019, the FASB issued ASU No. 2019-07, Codification Updates to SEC Sections—Amendments to SEC Paragraphs Pursuant to SEC Final Rule Releases No. 33-10532, Disclosure Update and Simplification, and Nos. 33-10231 and 33-10442, Investment Company Reporting Modernization, and Miscellaneous Updates. The guidance clarifies or improves the disclosure and presentation requirements of a variety of codification topics by aligning them with already effective SEC rules, thereby eliminating redundancies and making the codification easier to apply. This ASU was effective upon issuance, and it did not have a material impact on the Company’s unaudited consolidated financial statements and related disclosures.

New Accounting Pronouncements

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which requires financial assets that are measured at amortized cost to be presented, net of an allowance for credit losses, at the amount expected to be collected over their estimated life. Expected credit losses for newly recognized financial assets, as well as changes to credit losses during the period, are recognized in earnings. For certain purchased financial assets with deterioration in credit quality since origination (“PCD assets”), the initial allowance for expected credit losses will be recorded as an increase to the purchase price. Expected credit losses, including losses on off-balance-sheet exposures such as lending commitments, will be measured based on historical experience, current conditions and reasonable and supportable forecasts that affect the collectability of the reported amount. In November 2018, the FASB issued ASU No. 2018-19, Codification Improvements to Topic 326, Financial Instruments—Credit Losses, to clarify that operating lease receivables accounted for under ASC 842, Leases, are not in the scope of the new credit losses guidance, and, instead, impairment of receivables arising from operating leases should be accounted for in accordance with ASC 842, Leases. In April 2019, the FASB issued ASU No. 2019-04, Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments. The ASU makes changes to the guidance introduced or amended by ASU No. 2016-13 to clarify the scope of the credit losses standard and address guidance related to accrued interest receivable balances, recoveries, variable interest rates and prepayments, among other issues. In addition, in May 2019, the FASB issued ASU No. 2019-05, Financial Instruments—Credit Losses (Topic 326): Targeted Transition Relief. The amendments in this ASU allow entities, upon adoption of ASU No. 2016-13, to irrevocably elect the fair value option for financial instruments that were previously carried at amortized cost and are eligible for the fair value option under ASC 825-10, Financial Instruments: Overall. In November 2019, the FASB issued ASU No. 2019-10, Financial Instruments—Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842) Effective Dates. Pursuant to this ASU, the effective date of the new credit losses standard was deferred, and the new credit impairment guidance will become effective for the Company on January 1, 2023, under a modified retrospective approach, and early adoption is permitted. In addition, in November 2019, the FASB issued ASU No. 2019-11, Codification Improvements to Topic 326, Financial Instruments—Credit Losses. The amendments in this ASU require entities to include certain expected recoveries of the amortized cost basis previously written off, or expected to be written off, in the allowance for credit losses for PCD assets; provide transition relief related to troubled debt restructurings; allow entities to exclude accrued interest amounts from certain required disclosures; and clarify the requirements for applying the collateral maintenance practical expedient. The amendments in ASUs No. 2018-19, 2019-04, 2019-05, 2019-10 and 2019-11 are required to be adopted concurrently with the guidance in ASU No. 2016-13. The Company plans to adopt the standards on their required effective date. Management is continuing to implement the new credit losses guidance, including the assessment of the impact of the new guidance on the Company’s consolidated financial statements. Given the objective of the new standard, it is generally expected allowances for credit losses for the financial instruments within its scope would increase, however, the amount of any change will be dependent on the composition and quality of the Company’s portfolios at the adoption date as well as economic conditions and forecasts at that time.

16


RODIN GLOBAL PROPERTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

In January 2020, the FASB issued ASU No. 2020-01, Investments—Equity Securities (Topic 321), Investments—Equity Method and Joint  Ventures (Topic 323), and Derivatives and Hedging (Topic 815)—Clarifying the Interactions between Topic 321, Topic 323, and Topic 815 (a consensus of the FASB Emerging Issues Task Force). These amendments improve current guidance by reducing diversity in practice and increasing comparability of the accounting for the interactions between these codification topics as they pertain to certain equity securities, investments under the equity method of accounting and forward contracts or purchased options to purchase securities that, upon settlement of the forward contract or exercise of the purchased option, would be accounted for under the equity method of accounting or the fair value option. The new standard will become effective for the Company beginning January 1, 2022 and will be applied prospectively. Early adoption is permitted. Management is currently evaluating the impact of the new guidance on the Company’s unaudited consolidated financial statements.

In March 2020, the FASB issued ASU No. 2020-03, Codification Improvements to Financial Instruments. This ASU which makes narrow-scope amendments related to various aspects pertaining to financial instruments and related disclosures by clarifying or improving the Codification. Certain guidance will become effective for the Company for annual periods beginning January 1, 2020, while the guidance related to credit losses will be effective for the Company on January 1, 2023. Early adoption is permitted. Management is currently evaluating the impact of the new guidance on the Company’s unaudited consolidated financial statements.

In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The guidance is designed to provide relief from the accounting analysis and impacts that may otherwise be required for modifications to agreements (e.g., loans, debt securities, derivatives, and borrowings) necessitated by reference rate reform as entities transition away from LIBOR and other interbank offered rates to alternative reference rates. This ASU also provides optional expedients to enable companies to continue to apply hedge accounting to certain hedging relationships impacted by reference rate reform. Application of the guidance is optional and only available in certain situations. The ASU is effective upon issuance and generally can be applied through December 31, 2022. Management is currently evaluating the impact of the new guidance on the Company’s unaudited consolidated financial statements.

Note 3 – Investment in Real Estate

Investment in real estate, net consisted of the following at March 31, 2020 and December 31, 2019:

 

 

 

March 31, 2020

 

 

December 31, 2019

 

Building and building improvements

 

$

140,185,153

 

 

$

140,185,153

 

Land

 

 

23,195,885

 

 

 

23,195,885

 

Total

 

 

163,381,038

 

 

 

163,381,038

 

Accumulated depreciation

 

 

(5,354,476

)

 

 

(4,275,639

)

Investment in real estate, net

 

$

158,026,562

 

 

$

159,105,399

 

17


RODIN GLOBAL PROPERTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

As of March 31, 2020, the Company owned interests in 13 real properties as described below:

 

Portfolio

 

Ownership

Percentage

 

Location

 

Number of

Properties

 

Square

Feet

 

 

Remaining

Lease

Term(1)

 

Annualized

Rental

Income(2)

 

 

Acquisition

Date

 

Purchase

Price(3)

 

 

Walgreens Grand Rapids ("GR Property")

 

100

%

 

Grand Rapids, MI

 

1

 

 

14,552

 

 

12.3 years

 

$

 

500,000

 

 

July 2017

 

$

 

7,936,508

 

 

CF Net Lease Portfolio IV DST ("DST Properties")

 

100

%

 

Various

 

7

 

 

103,537

 

 

11.6 years

 

$

 

2,323,749

 

 

September 2017

 

$

 

35,706,642

 

 

Daimler Trucks North America Office Building ("FM Property")

 

100

%

 

Fort Mill, SC

 

1

 

 

150,164

 

 

8.7 years

 

$

 

2,670,638

 

 

February 2018