Company Quick10K Filing
Quick10K
Strategic Realty Trust
10-Q 2019-06-30 Quarter: 2019-06-30
10-Q 2019-03-31 Quarter: 2019-03-31
10-K 2018-12-31 Annual: 2018-12-31
10-Q 2018-09-30 Quarter: 2018-09-30
10-Q 2018-06-30 Quarter: 2018-06-30
10-Q 2018-03-31 Quarter: 2018-03-31
10-K 2017-12-31 Annual: 2017-12-31
10-Q 2017-09-30 Quarter: 2017-09-30
10-Q 2017-06-30 Quarter: 2017-06-30
10-Q 2017-03-31 Quarter: 2017-03-31
10-K 2016-12-31 Annual: 2016-12-31
10-Q 2016-09-30 Quarter: 2016-09-30
10-Q 2016-06-30 Quarter: 2016-06-30
10-Q 2016-03-31 Quarter: 2016-03-31
10-K 2015-12-31 Annual: 2015-12-31
10-Q 2015-09-30 Quarter: 2015-09-30
10-Q 2015-06-30 Quarter: 2015-06-30
10-Q 2015-03-31 Quarter: 2015-03-31
10-K 2014-12-31 Annual: 2014-12-31
10-Q 2014-09-30 Quarter: 2014-09-30
10-Q 2014-06-30 Quarter: 2014-06-30
10-Q 2014-03-31 Quarter: 2014-03-31
10-K 2013-12-31 Annual: 2013-12-31
8-K 2019-08-23 Regulation FD, Other Events, Exhibits
8-K 2019-08-08 Other Events
8-K 2019-08-01 Enter Agreement, Exhibits
8-K 2019-06-20 Shareholder Vote
8-K 2019-05-07 Enter Agreement, Other Events
8-K 2019-04-23 Other Events, Exhibits
8-K 2019-04-16 Officers
8-K 2019-04-16 Regulation FD, Exhibits
8-K 2019-03-14 Other Events
8-K 2018-12-20 M&A
8-K 2018-11-19 Regulation FD, Exhibits
8-K 2018-11-08 Other Events
8-K 2018-10-29 Enter Agreement
8-K 2018-09-20 Enter Agreement
8-K 2018-09-06 Enter Agreement
8-K 2018-08-20 Regulation FD, Other Events, Exhibits
8-K 2018-08-09 Other Events
8-K 2018-08-02 Enter Agreement, Exhibits
8-K 2018-07-19 Enter Agreement, Exhibits
8-K 2018-06-20 Shareholder Vote
8-K 2018-05-30 Regulation FD, Exhibits
8-K 2018-05-10 Other Events
8-K 2018-04-27 Enter Agreement
8-K 2018-04-20 Enter Agreement
8-K 2018-03-30 Regulation FD, Exhibits
8-K 2018-03-21 Other Events
8-K 2018-01-24 Enter Agreement
8-K 2017-12-07 Other Events
CVET Covetrus 1,567
AITB AIT Therapeutics 42
ZMTP Zoom Telephonics 19
ORRP Oroplata Resources 15
FWDR Fairwind Energy 0
MADL Man AHL Diversified I 0
CNCL Cancer Capital 0
DCAC Danielsorate Advisory Company 0
REAC Renewable Energy Acquisition 0
WEYL Weyland Tech 0
SRTR 2019-06-30
Part I
Item 1. Unaudited Condensed Consolidated Financial Statements
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
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Item 4. Mine Safety Disclosures
Item 5. Other Information
Item 6. Exhibits
EX-10.1 exhibit101-promissoryn.htm
EX-10.2 exhibit102-loanagreeme.htm
EX-31.1 exhibit311-6302019.htm
EX-31.2 exhibit312-6302019.htm
EX-32.1 exhibit321-6302019.htm
EX-32.2 exhibit322-6302019.htm

Strategic Realty Trust Earnings 2019-06-30

SRTR 10Q Quarterly Report

Balance SheetIncome StatementCash Flow

Document
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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 June 30, 2019
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 000-54376
_________________________________
STRATEGIC REALTY TRUST, INC.
(Exact name of registrant as specified in its charter)
_________________________________
Maryland
 
 
90-0413866
(State or Other Jurisdiction of
Incorporation or Organization)
 
 
(I.R.S. Employer Identification No.)
 
 
 
 
 
66 Bovet Road, Suite 100,
 
 
 
San Mateo,
California
 
 
94402
(Address of Principal Executive Offices)
 
 
(Zip Code)
(650) 343-9300
(Registrant’s Telephone Number, Including Area Code)
_________________________________
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   ý
As of August 5, 2019, there were 10,801,141 shares of the registrant’s common stock issued and outstanding.




STRATEGIC REALTY TRUST, INC. AND SUBSIDIARIES
TABLE OF CONTENTS
 
Page
 
 
 
 
Item 1.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Item 2.
 
 
 
Item 3.
 
 
 
Item 4.
 
 
 
 
 
 
Item 1.
 
 
 
Item 1A.
 
 
 
Item 2.
 
 
 
Item 3.
 
 
 
Item 4.
 
 
 
Item 5.
 
 
 
Item 6.
 
 
 
 



Table of Contents

PART I
FINANCIAL INFORMATION
The accompanying interim unaudited condensed consolidated financial statements as of and for the three and six months ended June 30, 2019, have been prepared by Strategic Realty Trust, Inc. (the “Company”) pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) regarding interim financial reporting. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements and should be read in conjunction with the audited consolidated financial statements and related notes thereto included in the Company’s Annual Report on Form 10-K as of and for the year ended December 31, 2018, as filed with the SEC on March 19, 2019 (the “2018 Annual Report on Form 10-K”). The interim unaudited condensed consolidated financial statements herein should also be read in conjunction with the Notes to Condensed Consolidated Financial Statements and Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in this Quarterly Report on Form 10-Q. The results of operations for the three and six months ended June 30, 2019, are not necessarily indicative of the operating results expected for the full year. The information furnished in the Company’s accompanying unaudited condensed consolidated balance sheets and unaudited condensed consolidated statements of operations, equity, and cash flows reflects all adjustments that, in management’s opinion, are necessary for a fair presentation of the aforementioned financial statements. Such adjustments are of a normal recurring nature.

3

Table of Contents

ITEM 1. UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
STRATEGIC REALTY TRUST, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except shares and per share amounts)
(unaudited)
 
June 30,
 
December 31,
 
2019
 
2018
ASSETS
 
 
 
Investments in real estate
 
 
 
Land
$
15,217

 
$
15,217

Building and improvements
31,697

 
31,697

Tenant improvements
1,799

 
1,479

 
48,713

 
48,393

Accumulated depreciation
(4,515
)
 
(3,917
)
Investments in real estate, net
44,198

 
44,476

Properties under development and development costs
 
 
 
Land
25,851

 
25,851

Buildings
562

 
570

Development costs
15,849

 
13,813

Properties under development and development costs
42,262

 
40,234

Cash, cash equivalents and restricted cash
4,006

 
3,347

Prepaid expenses and other assets, net
139

 
137

Tenant receivables, net of $40 and $40 bad debt reserve
762

 
1,084

Investments in unconsolidated joint ventures
2,671

 
2,701

Lease intangibles, net
1,720

 
1,890

Deferred financing costs, net
421

 
736

TOTAL ASSETS (1)
$
96,179

 
$
94,605

LIABILITIES AND EQUITY
 
 
 
LIABILITIES
 
 
 
Notes payable, net
$
38,899

 
$
34,536

Accounts payable and accrued expenses
1,247

 
1,224

Amounts due to affiliates
12

 
30

Other liabilities
222

 
375

Below-market lease liabilities, net
339

 
370

TOTAL LIABILITIES (1)
40,719

 
36,535

Commitments and contingencies (Note 12)


 


EQUITY
 
 
 
Stockholders’ equity
 
 
 
Preferred stock, $0.01 par value; 50,000,000 shares authorized, none issued and outstanding

 

Common stock, $0.01 par value; 400,000,000 shares authorized; 10,801,141 and 10,863,299 shares issued and outstanding at June 30, 2019 and December 31, 2018, respectively
110

 
110

Additional paid-in capital
94,961

 
95,336

Accumulated deficit
(40,734
)
 
(38,546
)
Total stockholders’ equity
54,337

 
56,900

Non-controlling interests
1,123

 
1,170

TOTAL EQUITY
55,460

 
58,070

TOTAL LIABILITIES AND EQUITY
$
96,179

 
$
94,605

(1)
As of June 30, 2019 and December 31, 2018, includes approximately $43.7 million and $40.5 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 $15.6 million and $17.3 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 4. “Variable Interest Entities”.
See accompanying notes to condensed consolidated financial statements.

4

Table of Contents

STRATEGIC REALTY TRUST, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except shares and per share amounts)
(unaudited)
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2019
 
2018
 
2019
 
2018
Revenue:
 
 
 
 
 
 
 
Rental and reimbursements
$
939

 
$
1,834

 
$
1,883

 
$
3,587

 
 
 
 
 
 
 
 
Expense:
 
 
 
 
 
 
 
Operating and maintenance
586

 
615

 
856


1,265

General and administrative
396

 
449

 
795


896

Depreciation and amortization
378

 
341

 
755


699

Transaction expense

 
30

 


32

Interest expense
130

 
249

 
319


520

 
1,490

 
1,684

 
2,725

 
3,412

Operating income (loss)
(551
)
 
150

 
(842
)
 
175

 
 
 
 
 
 
 
 
Other income (loss):
 
 
 
 
 
 
 
Equity in loss of unconsolidated joint ventures
(15
)
 
(43
)
 
(35
)
 
(45
)
Net gain on disposal of real estate
13

 
2,448

 
13

 
2,448

Income (loss) before income taxes
(553
)
 
2,555

 
(864
)
 
2,578

Income taxes
(44
)
 
(24
)
 
(44
)

(24
)
Net income (loss)
(597
)

2,531

 
(908
)
 
2,554

Net income (loss) attributable to non-controlling interests
(12
)
 
53

 
(19
)
 
54

Net income (loss) attributable to common stockholders
$
(585
)
 
$
2,478

 
$
(889
)
 
$
2,500

 
 
 
 
 
 
 
 
Earnings (loss) per common share - basic and diluted
$
(0.05
)
 
$
0.23

 
$
(0.08
)
 
$
0.23

 
 
 
 
 
 
 
 
Weighted average shares outstanding used to calculate earnings (loss) per common share - basic and diluted
10,839,065

 
10,977,718

 
10,850,842

 
10,982,892

See accompanying notes to condensed consolidated financial statements.

5

Table of Contents

STRATEGIC REALTY TRUST, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
(in thousands, except shares)
(unaudited)
Six Months Ended June 30, 2019 and 2018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of
Shares
 
Par Value
 
Additional
Paid-in Capital
 
Accumulated
Deficit
 
Total
Stockholders’
Equity
 
Non-controlling
Interests
 
Total
Equity
BALANCE — December 31, 2018
10,863,299

 
$
110

 
$
95,336

 
$
(38,546
)
 
$
56,900

 
$
1,170

 
$
58,070

Redemption of common shares
(62,158
)
 

 
(375
)
 

 
(375
)
 

 
(375
)
Quarterly distributions

 

 

 
(1,299
)
 
(1,299
)
 
(28
)
 
(1,327
)
Net loss

 

 

 
(889
)
 
(889
)
 
(19
)
 
(908
)
BALANCE — June 30, 2019
10,801,141

 
$
110

 
$
94,961

 
$
(40,734
)
 
$
54,337

 
$
1,123

 
$
55,460

 
 
 
 
 
 
 
 
 
 
 
 
 
 
BALANCE — December 31, 2017
10,988,438

 
$
111

 
$
96,097

 
$
(44,741
)
 
$
51,467

 
$
1,051

 
$
52,518

Redemption of common shares
(25,022
)
 

 
(157
)
 

 
(157
)
 

 
(157
)
Quarterly distributions

 

 

 
(1,317
)
 
(1,317
)
 
(28
)
 
(1,345
)
Cumulative effect from change in accounting principle

 

 

 
668

 
668

 

 
668

Net income

 

 

 
2,500

 
2,500

 
54

 
2,554

BALANCE — June 30, 2018
10,963,416

 
$
111

 
$
95,940

 
$
(42,890
)
 
$
53,161

 
$
1,077

 
$
54,238

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended June 30, 2019 and 2018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of
Shares
 
Par Value
 
Additional
Paid-in Capital
 
Accumulated
Deficit
 
Total
Stockholders’
Equity
 
Non-controlling
Interests
 
Total
Equity
BALANCE — March 31, 2019
10,842,444

 
$
110

 
$
95,210

 
$
(39,501
)
 
$
55,819

 
$
1,149

 
$
56,968

Redemption of common shares
(41,303
)
 

 
(249
)
 

 
(249
)
 

 
(249
)
Quarterly distributions

 

 

 
(648
)
 
(648
)
 
(14
)
 
(662
)
Net loss

 

 

 
(585
)
 
(585
)
 
(12
)
 
(597
)
BALANCE — June 30, 2019
10,801,141

 
$
110

 
$
94,961

 
$
(40,734
)
 
$
54,337

 
$
1,123

 
$
55,460

 
 
 
 
 
 
 
 
 
 
 
 
 
 
BALANCE — March 31, 2018
10,978,126

 
$
111

 
$
96,032

 
$
(44,710
)
 
$
51,433

 
$
1,038

 
$
52,471

Redemption of common shares
(14,710
)
 

 
(92
)
 

 
(92
)
 

 
(92
)
Quarterly distributions

 

 

 
(658
)
 
(658
)
 
(14
)
 
(672
)
Net income

 

 

 
2,478

 
2,478

 
53

 
2,531

BALANCE — June 30, 2018
10,963,416

 
$
111

 
$
95,940

 
$
(42,890
)
 
$
53,161

 
$
1,077

 
$
54,238

See accompanying notes to condensed consolidated financial statements.

6

Table of Contents

STRATEGIC REALTY TRUST, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
 
Six Months Ended June 30,
 
2019
 
2018
Cash flows from operating activities:
 
 
 
Net income (loss)
$
(908
)
 
$
2,554

Adjustments to reconcile net income (loss) to net cash provided by operating activities:
 
 
 
Net gain on disposal of real estate
(13
)
 
(2,448
)
Equity in loss of unconsolidated joint ventures
35

 
45

Straight-line rent
(50
)
 
(70
)
Amortization of deferred costs
315

 
292

Depreciation and amortization
755

 
699

Amortization of above and below-market leases
(10
)
 
(29
)
Bad debt expense
309

 
39

Changes in operating assets and liabilities:
 
 
 
Prepaid expenses and other assets
(2
)
 
(69
)
Tenant receivables
63

 
316

Accounts payable and accrued expenses
(82
)
 
(47
)
Amounts due to affiliates
(18
)
 

Other liabilities
(153
)
 
(80
)
Net cash provided by operating activities
241

 
1,202

 
 
 
 
Cash flows from investing activities:
 
 
 
Net proceeds from the sale of real estate
13

 
3,928

Investment in properties under development and development costs
(1,674
)
 
(2,180
)
Improvements, capital expenditures, and leasing costs
(328
)
 
(126
)
Investments in unconsolidated joint ventures
(38
)
 
(77
)
Distributions from unconsolidated joint ventures
33

 
111

Net cash provided by (used in) investing activities
(1,994
)
 
1,656

 
 
 
 
Cash flows from financing activities:
 
 
 
Redemption of common shares
(375
)
 
(157
)
Quarterly distributions
(1,331
)
 
(1,346
)
Proceeds from notes payable
14,811

 
4,100

Repayment of notes payable
(10,250
)
 
(4,978
)
Payment of loan fees from investments in consolidated variable interest entities
(443
)
 
(377
)
Payment of loan fees and financing costs

 
(13
)
Net cash provided by (used in) financing activities
2,412

 
(2,771
)
 
 
 
 
Net increase in cash, cash equivalents and restricted cash
659

 
87

Cash, cash equivalents and restricted cash – beginning of period
3,347

 
3,902

Cash, cash equivalents and restricted cash – end of period
$
4,006

 
$
3,989

 
 
 
 
Supplemental disclosure of non-cash investing and financing activities and other cash flow information:
 
 
 
Distributions declared but not paid
$
662

 
$
672

Change in accrued liabilities capitalized to investment in development
128

 
(256
)
Change to accrued mortgage note payable interest capitalized to investment in development
(11
)
 
(5
)
Amortization of deferred loan fees capitalized to investment in development
245

 
268

Changes in capital improvements, accrued but not paid

 
502

Cumulative effect from change in accounting principle

 
668

Cash paid for interest, net of amounts capitalized
29

 
222

See accompanying notes to condensed consolidated financial statements.

7

Table of Contents

STRATEGIC REALTY TRUST, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
1. ORGANIZATION AND BUSINESS
Strategic Realty Trust, Inc. (the “Company”) was formed on September 18, 2008, as a Maryland corporation. Effective August 22, 2013, the Company changed its name from TNP Strategic Retail Trust, Inc. to Strategic Realty Trust, Inc. The Company believes it qualifies as a real estate investment trust (“REIT”) under the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), and has elected REIT status beginning with the taxable year ended December 31, 2009, the year in which the Company began material operations.
Since the Company’s inception, its business has been managed by an external advisor. The Company has no direct employees and all management and administrative personnel responsible for conducting the Company’s business are employed by its advisor. Currently, the Company is externally managed and advised by SRT Advisor, LLC, a Delaware limited liability company (the “Advisor”) pursuant to an advisory agreement with the Advisor (the “Advisory Agreement”) initially executed on August 10, 2013, and subsequently renewed every year through 2019. The current term of the Advisory Agreement terminates on August 9, 2020. The Advisor is an affiliate of Glenborough, LLC (together with its affiliates, “Glenborough”), a privately held full-service real estate investment and management company focused on the acquisition, management and leasing of commercial properties.
Substantially all of the Company’s business is conducted through Strategic Realty Operating Partnership, L.P. (the “OP”). During the Company’s initial public offering (“Offering”), as the Company accepted subscriptions for shares of its common stock, it transferred substantially all of the net proceeds of the Offering to the OP as a capital contribution. The Company is the sole general partner of the OP. As of both June 30, 2019 and December 31, 2018, the Company owned 97.9% of the limited partnership interests in the OP.
The Company’s principal demand for funds has been for the acquisition of real estate assets, the payment of operating expenses, interest on outstanding indebtedness, the payment of distributions to stockholders, and investments in unconsolidated joint ventures as well as development of properties. Substantially all of the proceeds of the completed Offering have been used to fund investments in real properties and other real estate-related assets, for payment of operating expenses, for payment of interest, for payment of various fees and expenses, such as acquisition fees and management fees, and for payment of distributions to stockholders. The Company’s available capital resources, cash and cash equivalents on hand and sources of liquidity are currently limited. The Company expects its future cash needs will be funded using cash from operations, future asset sales, debt financing and the proceeds to the Company from any sale of equity that it may conduct in the future.
The Company invests in and manages a portfolio of income-producing retail properties, located in the United States, real estate-owning entities and real estate-related assets. The Company has invested directly, and indirectly through joint ventures, in a portfolio of income-producing retail properties located throughout the United States, with a focus on grocery anchored multi-tenant retail centers, including neighborhood, community and lifestyle shopping centers, multi-tenant shopping centers and free standing single-tenant retail properties. During the first quarter of 2016, the Company invested, through joint ventures, in two significant retail projects under development.
As of June 30, 2019, in addition to the development projects, the Company’s portfolio of properties was comprised of 8 properties, with approximately 86,000 rentable square feet of retail space located in two states. As of June 30, 2019, the rentable space at the Company’s retail properties was 90% leased.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation and Basis of Presentation
The accompanying interim unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) as contained within the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) and the rules and regulations of the Securities and Exchange Commission (the “SEC”), including the instructions to Form 10-Q and Regulation S-X.
The interim unaudited condensed consolidated financial statements include the accounts of the Company, the OP, their direct and indirect owned subsidiaries, and the accounts of joint ventures that are determined to be variable interest entities for which the Company is the primary beneficiary. All significant intercompany balances and transactions are eliminated in consolidation. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) necessary to present fairly the Company’s condensed consolidated financial position, results of operations and cash flows have been included.

8

Table of Contents
STRATEGIC REALTY TRUST, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

The Company evaluates the need to consolidate joint ventures and variable interest entities based on standards set forth in ASC Topic 810, Consolidation (“ASC 810”). In determining whether the Company has a controlling interest in a joint venture or a variable interest entity and the requirement to consolidate the accounts of that entity, management considers factors such as ownership interest, authority to make decisions and contractual and substantive participating rights of the partners/members, as well as whether the entity is a variable interest entity for which the Company is the primary beneficiary. As of June 30, 2019 and December 31, 2018, the Company held ownership interests in two unconsolidated joint ventures. Refer to Note 3. “Investments in Unconsolidated Joint Ventures” for additional information. As of June 30, 2019 and December 31, 2018, the Company held variable interests in two variable interest entities and consolidated those entities. Refer to Note 4. “Variable Interest Entities” for additional information.
Cash, Cash Equivalents and Restricted Cash
Cash and cash equivalents represent current bank accounts and other bank deposits free of encumbrances and having maturity dates of three months or less from the respective dates of deposit. The Company limits cash investments to financial institutions with high credit standing; therefore, the Company believes it is not exposed to any significant credit risk in cash.
Restricted cash includes escrow accounts for real property taxes, insurance, capital expenditures and tenant improvements, debt service and leasing costs held by lenders.
The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported on the consolidated balance sheets that sum to the total of the same such amounts shown on the consolidated statement of cash flows (amounts in thousands):
 
June 30, 2019
 
December 31, 2018
Cash and cash equivalents
$
2,971

 
$
3,347

Restricted cash
1,035

 

Total cash, cash equivalents, and restricted cash
$
4,006

 
$
3,347


Recent Accounting Pronouncements
The FASB issued the following ASUs which could have potential impact to the Company’s condensed consolidated financial statements:
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 (“ASU 2018-13”). ASU 2018-13 modifies the disclosure requirements on fair value measurements in Topic 820. ASU 2018-13 is effective for fiscal years beginning after December 15, 2019. Early adoption is permitted for any removed or modified disclosures upon issuance of ASU 2018-13 and delayed adoption of the additional disclosures until the effective date. The adoption of ASU 2018-13 will not have an impact on the Company’s condensed consolidated financial statements.
In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (“ASU 2016-13”). ASU 2016-13 requires a financial asset, measured at amortized cost basis to be presented at the net amount expected to be collected. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019, with adoption permitted for fiscal years beginning after December 15, 2018. Adjustments resulting from adopting ASU 2016-13 shall be applied through a cumulative-effect adjustment to retained earnings. The adoption of ASU 2016-13 will not have an impact on the Company’s condensed consolidated financial statements.
In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”). ASU 2016-02 requires entities to recognize lease assets and lease liabilities on the consolidated balance sheet and disclose key information about leasing arrangements. The guidance retains a distinction between finance leases and operating leases. The recognition, measurement and presentation of expenses and cash flows arising from a lease by a lessee have not significantly changed from previous guidance. However, the principal difference from previous guidance is that the lease assets and lease liabilities arising from operating leases should be recognized in the statement of financial position. The accounting applied by a lessor is largely unchanged from that applied under Accounting Standards Codification (“ASC”) 840. Lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using the modified retrospective approach. The modified retrospective approach includes a number of optional practical expedients that entities may elect to apply under ASC 842. The amendments in this guidance are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company adopted ASU 2016-02 (as amended by subsequent ASUs) effective January 1, 2019 utilizing the practical expedients described in ASU 2018-11. The Company has elected the lessor practical expedient to not separate common area maintenance and reimbursement of real estate taxes from the associated lease for all existing and

9

Table of Contents
STRATEGIC REALTY TRUST, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

new leases as the timing and pattern of payments and associated lease payments are the same. The timing of revenue recognition remains the same for the Company’s existing leases and new leases. Revenues related to the Company’s leases continue to be reported on one line in the presentation within the statement of operations as a result of electing this lessor practical expedient. The Company continues to capitalize its direct leasing costs. These costs are incurred as a result of obtaining new leases, and renewing leases, and are paid to the Company’s Advisor. Additionally, the Company is not a lessee of real estate or equipment, as it is externally managed by its Advisor.
3. INVESTMENTS IN UNCONSOLIDATED JOINT VENTURES
The following table summarizes the Company’s investments in unconsolidated joint ventures as of June 30, 2019 and December 31, 2018 (amounts in thousands):
 
 
 
 
Ownership Interest
 
Investment
Joint Venture
 
Date of Investment
 
June 30,
2019
 
December 31,
2018
 
June 30,
2019
 
December 31,
2018
SGO Retail Acquisitions Venture, LLC
 
3/11/2015
 
19
%
 
19
%
 
$
1,136

 
$
1,128

SGO MN Retail Acquisitions Venture, LLC
 
9/30/2015
 
10
%
 
10
%
 
1,535

 
1,573

Total
 
 
 
 
 
 
 
$
2,671

 
$
2,701


The Company’s off-balance sheet arrangements consist primarily of investments in the joint ventures as set forth in the table above. The joint ventures typically fund their cash needs through secured debt financings obtained by and in the name of the joint venture entity. The joint ventures’ debts are secured by a first mortgage, are without recourse to the joint venture members, and do not represent a liability of the members other than carve-out guarantees for certain matters such as environmental conditions, misuse of funds and material misrepresentations. As of June 30, 2019 and December 31, 2018, the Company has provided carve-out guarantees in connection with the two aforementioned unconsolidated joint ventures; in connection with those carve-out guarantees, the Company has certain rights of recovery from the joint venture members.
4. VARIABLE INTEREST ENTITIES
The Company has variable interests in, and is the primary beneficiary of, variable interest entities (“VIEs”) through its investments in (i) the Sunset & Gardner Joint Venture (formerly known as Gelson’s Joint Venture) and (ii) the 3032 Wilshire Joint Venture (both defined below). The Company has consolidated the accounts of these variable interest entities.
Through June 30, 2019, post the initial capital contributions, the Company made additional capital contributions totaling $5.9 million and $6.5 million to the Sunset & Gardner Joint Venture and Wilshire Joint Venture, respectively.

10

Table of Contents
STRATEGIC REALTY TRUST, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

The following reflects the aggregate assets and liabilities of the Sunset & Gardner Joint Venture and the Wilshire Joint Venture, which were consolidated by the Company, as of June 30, 2019 and December 31, 2018 (amounts in thousands):
 
June 30,
 
December 31,
 
2019
 
2018
ASSETS
 
 
 
Properties under development and development costs:
 
 
 
Land
$
25,851

 
$
25,851

Buildings
562

 
570

Development costs
15,849

 
13,813

Properties under development and development costs
42,262

 
40,234

Cash, cash equivalents and restricted cash
1,392

 
276

Prepaid expenses and other assets, net
42

 
9

Lease intangibles, net
4

 
4

TOTAL ASSETS (1)
$
43,700

 
$
40,523

 
 
 
 
LIABILITIES
 
 
 
Notes payable, net (2)
$
15,329

 
$
17,166

Accounts payable and accrued expenses
249

 
132

Amounts due to affiliates

 
8

Other liabilities
9

 
9

TOTAL LIABILITIES
$
15,587

 
$
17,315

(1)
The assets of the Sunset & Gardner Joint Venture and Wilshire Joint Venture can be used only to settle obligations of the respective consolidated joint ventures.
(2)
As of June 30, 2019 and December 31, 2018, includes reclassification of approximately $0.5 million and $0.3 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 Wilshire Joint Venture is partially guaranteed by the Company, refer to Note 7, “Notes Payable, Net”. The notes payable of the Sunset & Gardner Joint Venture is not guaranteed by the Company.
5. LEASES
Operating Leases
The Company’s real estate properties are leased to tenants under operating leases for which the terms and expirations vary. As of June 30, 2019, the leases at the Company’s properties have remaining terms (excluding options to extend) of up to 12.4 years with a weighted-average remaining term (excluding options to extend) of approximately 5.4 years. The leases may have provisions to extend the lease agreements, options for early termination after paying a specified penalty, rights of first refusal to purchase the property at competitive market rates, and other terms and conditions as negotiated. The Company retains substantially all of the risks and benefits of ownership of the real estate assets leased to tenants. Generally, upon the execution of a lease, the Company requires security deposits from tenants in the form of a cash deposit and/or a letter of credit. Amounts required as security deposits vary depending upon the terms of the respective leases and the creditworthiness of the tenant, but generally are not significant amounts. Therefore, exposure to credit risk exists to the extent that a receivable from a tenant exceeds the amount of its security deposit. Security deposits received in cash related to tenant leases are included in other liabilities in the accompanying condensed consolidated balance sheets and totaled approximately $0.2 million as of both June 30, 2019 and December 31, 2018.

11

Table of Contents
STRATEGIC REALTY TRUST, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

The following table presents the components of income from real estate operations for the three and six months ended June 30, 2019 (amounts in thousands):
 
Three Months Ended
June 30, 2019
 
Six Months Ended
June 30, 2019
Lease income - operating leases
$
719

 
$
1,421

Variable lease income (1)
220

 
462

Rental and reimbursements income
$
939

 
$
1,883

(1)
Primarily includes tenant reimbursements for real estate taxes, insurance and common area maintenance.
As of June 30, 2019, the future minimum rental income from the Company’s properties under non-cancelable operating leases was as follows (amounts in thousands):
Remainder of 2019
$
1,398

2020
2,625

2021
2,365

2022
2,353

2023
2,316

Thereafter
7,750

Total
$
18,807


6. LEASE INTANGIBLES AND BELOW-MARKET LEASE LIABILITIES, NET
As of June 30, 2019 and December 31, 2018, the Company’s acquired lease intangibles and below-market lease liabilities were as follows (amounts in thousands):
 
Lease Intangibles
 
Below-Market Lease Liabilities
 
June 30,
2019
 
December 31,
2018
 
June 30,
2019
 
December 31,
2018
Cost
$
3,038

 
$
3,030

 
$
(526
)
 
$
(526
)
Accumulated amortization
(1,318
)
 
(1,140
)
 
187

 
156

Total
$
1,720

 
$
1,890

 
$
(339
)
 
$
(370
)

The Company’s amortization of lease intangibles and below-market lease liabilities for the three and six months ended June 30, 2019 and 2018, were as follows (amounts in thousands): 
 
Lease Intangibles
 
Below-Market Lease Liabilities
 
Three Months Ended
June 30,
 
Three Months Ended
June 30,
 
2019
 
2018
 
2019
 
2018
Amortization
$
(90
)
 
$
(75
)
 
$
16

 
$
16

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Lease Intangibles
 
Below-Market Lease Liabilities
 
Six Months Ended
June 30,
 
Six Months Ended
June 30,
 
2019
 
2018
 
2019
 
2018
Amortization
$
(178
)
 
$
(158
)
 
$
32

 
$
33

 
7. NOTES PAYABLE, NET
Line of Credit
The Company’s line of credit is a revolving credit facility with an initial maximum aggregate commitment of $30.0 million. Effective February 15, 2017, the Company’s line of credit was refinanced to increase the maximum aggregate commitment under the credit facility from $30.0 million to $60.0 million. The credit facility matures on February 15, 2020.

12

Table of Contents
STRATEGIC REALTY TRUST, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

Each loan made pursuant to the credit facility will be either a LIBOR loan or a base rate loan, at the election of the Company, plus an applicable margin, as defined. Monthly payments are interest only with the entire principal balance and all outstanding interest due at maturity. The Company will pay the lender an unused commitment fee, quarterly in arrears, which will accrue at 0.30% per annum, if the usage under the Company’s line of credit is less than or equal to 50% of the line of credit amount, and 0.20% per annum if the usage under the Company’s line of credit is greater than 50% of the line of credit amount. The Company is providing a guaranty of all of its obligations under the Company’s line of credit and all other loan documents.
As of June 30, 2019 and December 31, 2018, the Company’s line of credit had an outstanding principal balance of $23.6 million and $17.4 million, respectively. As of June 30, 2019 and December 31, 2018, the Company’s line of credit was secured by Topaz Marketplace, 8 Octavia Street, 400 Grove Street, the Fulton Shops, 450 Hayes, 388 Fulton, Silver Lake, and The Shops at Turkey Creek.
Loans Secured by Properties Under Development
On May 7, 2019, the Company refinanced and repaid its current financing (outstanding balance of $8.8 million at the time of refinancing) with a new construction loan from ReadyCap Commercial, LLC (the “Lender”) (the “Wilshire Construction Loan”). As of June 30, 2019, the Wilshire Construction Loan has a principal balance of approximately $7.1 million, with future funding availability up to a total of approximately $13.9 million, and bears an interest rate of 1-month LIBOR plus an interest margin of 4.25% per annum, payable monthly. The Wilshire Loan is scheduled to mature on May 10, 2022, with options to extend for two additional twelve-month periods, subject to certain conditions as stated in the loan agreement. The Wilshire Construction Loan is secured by a first Deed of Trust on the property. The Company executed a guaranty that guaranties that the loan interest reserve amounts are kept in compliance with the terms of the loan agreement. The Lender also required that a principal in the upstream owner of the Company’s joint venture partner in the Wilshire Joint Venture (the “Guarantor”), guarantees performance of borrower’s obligations under the loan agreement with respect to the completion of capital improvements to the property. The Company executed an Indemnity Agreement in favor of the Guarantor against liability under that completion guaranty except to the extent caused by gross negligence or willful misconduct, as well as for liabilities incurred under the Environmental Indemnity Agreement executed by the Guarantor in favor of the Lender. The Company used working capital funds of approximately $3.1 million to repay the difference between the new construction loan initial advance and the prior loan, to pay transaction costs, as well as to fund certain required interest and construction reserves. 
On October 29, 2018, the Company refinanced and repaid its initial financing with a new loan from Lone Oak Fund LLC (the “Sunset & Gardner Loan”). The Sunset & Gardner Loan has a principal balance of approximately $8.7 million, and bears an interest rate of 6.9% per annum. The Sunset & Gardner Loan is scheduled to mature on October 31, 2019. The Company intends to explore all available financing options prior to the loan’s maturity date. The Sunset & Gardner Loan is secured by a first Deed of Trust on the property.
The following is a schedule of future principal payments for all of the Company’s notes payable outstanding as of June 30, 2019 (amounts in thousands): 
Remainder of 2019
$
8,700

2020
23,570

2021

2022
7,111

   Total (1)
$
39,381

(1)
Total future principal payments reflect actual amounts due to creditors, and excludes reclassification of $0.5 million deferred financing costs, net.
During the three months ended June 30, 2019, the Company incurred and expensed approximately $0.1 million of interest costs, which primarily consisted of amortization of deferred financing costs. During the three months ended June 30, 2018, the Company incurred and expensed approximately $0.2 million of interest costs, which included amortization of deferred financing costs of approximately $0.1 million. Also during the three months ended June 30, 2019 and 2018, the Company incurred and capitalized approximately $0.8 million and $1.0 million, respectively, of interest expense related to the variable interest entities, which included amortization of deferred financing costs of approximately $0.2 million for each period.
During the six months ended June 30, 2019, the Company incurred and expensed approximately $0.3 million of interest costs, which primarily consisted of amortization of deferred financing costs. During the six months ended June 30, 2018, the Company incurred and expensed approximately $0.5 million of interest costs, which included the amortization of deferred financing costs of approximately $0.3 million. Also during the six months ended June 30, 2019 and 2018, the Company incurred and capitalized approximately $1.4 million and $1.9 million, respectively, of interest expense related to the variable

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

interest entities, which included amortization of deferred financing costs of approximately $0.2 million and $0.3 million, respectively, for each period.
As of both June 30, 2019 and December 31, 2018, interest expense payable was approximately $0.2 million, including an amount related to the variable interest entities of approximately $0.1 million, for each period.
8. FAIR VALUE DISCLOSURES
Certain financial assets and liabilities are measured at fair value on a recurring basis. The Company determines fair value using the following hierarchy:
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.
The Company believes the total carrying values reflected on its condensed consolidated balance sheets for cash, cash equivalents and restricted cash, accounts receivable, accounts payable and accrued expenses, amounts due to affiliates, mortgage loan and construction loan secured by properties under development, and the Company’s line of credit reasonably approximated their fair values at June 30, 2019.
As part of the Company’s ongoing evaluation of the Company’s real estate portfolio, the Company estimates the fair value of its investments in real estate by obtaining outside independent appraisals on all of the operating properties. The appraised values are compared with the carrying values of its real estate portfolio to determine if there are indications of impairment.
For both the three and six months ended June 30, 2019 and 2018, the Company did not record any impairment losses.
9. EQUITY
Share Redemption Program
On April 1, 2015, the Company’s board of directors approved the reinstatement of the share redemption program (which had been suspended since January 15, 2013) and adopted the SRP. Under the SRP, only shares submitted for repurchase in connection with the death or “qualifying disability” (as defined in the SRP) of a stockholder are eligible for repurchase by the Company. Under the current SRP, as amended to date, the number of shares to be redeemed is limited to the lesser of (i) a total of $3.5 million for redemptions sought upon a stockholder’s death and a total of $1.0 million for redemptions sought upon a stockholder’s qualifying disability, and (ii) 5% of the weighted-average number of shares of the Company’s common stock outstanding during the prior calendar year. Share repurchases pursuant to the SRP are made at the sole discretion of the Company. The Company reserves the right to reject any redemption request for any reason or no reason or to amend or terminate the share redemption program at any time subject to the notice requirements in the SRP.
The redemption price for shares that are redeemed is 100% of the Company’s most recent estimated net asset value per share as of the applicable redemption date. A redemption request must be made within one year after the stockholder’s death or disability.
The SRP provides that any request to redeem less than $5,000 worth of shares will be treated as a request to redeem all of the stockholder’s shares. If the Company cannot honor all redemption requests received in a given quarter, all requests, including death and disability redemptions, will be honored on a pro rata basis. If the Company does not completely satisfy a redemption request in one quarter, it will treat the unsatisfied portion as a request for redemption in the next quarter when funds are available for redemption, unless the request is withdrawn. The Company may increase or decrease the amount of funding available for redemptions under the SRP on ten business days’ notice to stockholders. Shares submitted for redemption during any quarter will be redeemed on the penultimate business day of such quarter. The record date for quarterly distributions has historically been and is expected to continue to be the last business day of each quarter; therefore, shares that are redeemed during any quarter are expected to be redeemed prior to the record date and thus would not be eligible to receive the distribution declared for such quarter.

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STRATEGIC REALTY TRUST, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

The following table summarizes share redemption activity during the three and six months ended June 30, 2019 and 2018 (amounts in thousands, except shares):
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2019
 
2018
 
2019
 
2018
Shares of common stock redeemed
41,303

 
14,710

 
62,158

 
25,022

Purchase price
$
249

 
$
92

 
$
375

 
$
157


As stated above, cumulatively, through June 30, 2019, pursuant to the Original Share Redemption Program and the SRP, the Company has redeemed 799,412 shares sold in the Offering and/or its dividend reinvestment plan for $5.7 million.
Quarterly Distributions
In order to qualify as a REIT, the Company is required to distribute at least 90% of its annual REIT taxable income, subject to certain adjustments, to its stockholders. Some or all of the Company’s distributions have been paid, and in the future may continue to be paid from sources other than cash flows from operations.
Under the terms of the amended credit facility, the Company may pay distributions to its investors so long as the total amount paid does not exceed 100% of the cumulative Adjusted Funds From Operations plus up to an additional $2.0 million of the Company’s net proceeds from property dispositions, as defined in the amended Company’s line of credit; provided, however, that the Company is not restricted from making any distributions necessary in order to maintain its status as a REIT. The Company’s board of directors evaluates the Company’s ability to make quarterly distributions based on the Company’s operational cash needs.
The following tables set forth the quarterly distributions declared to the Company’s common stockholders and Common Unit holders for the six months ended June 30, 2019, and the year ended 2018 (amounts in thousands, except per share amounts):
 
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 2019
3/31/2019
 
4/30/2019
 
$
0.06

 
$
651

 
$
14

 
$
665

Second Quarter 2019
6/30/2019
 
7/31/2019
 
0.06

 
648

 
14

 
662

Total
 
 
 
 
 
 
$
1,299

 
$
28

 
$
1,327

 
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 2018
3/31/2018
 
4/30/2018
 
$
0.06

 
$
659

 
$
14

 
$
673

Second Quarter 2018
6/30/2018
 
7/31/2018
 
0.06

 
658

 
14

 
672

Third Quarter 2018
9/30/2018
 
10/31/2018
 
0.06

 
656

 
14

 
670

Fourth Quarter 2018
12/31/2018
 
1/31/2019
 
0.06

 
652

 
14

 
666

Total
 
 
 
 
 
 
$
2,625

 
$
56

 
$
2,681

 
10. EARNINGS PER SHARE
EPS is computed by dividing net income (loss) attributable to common stockholders by the weighted average number of common shares outstanding during each period. Diluted EPS is computed after adjusting the basic EPS computation for the effect of potentially dilutive securities outstanding during the period. The effect of non-vested shares, if dilutive, is computed using the treasury stock method. The Company applies the two-class method for determining EPS as its outstanding shares of non-vested restricted stock are considered participating securities as dividend payments are not forfeited even if the underlying award does not vest. There was no unvested stock as of June 30, 2019. The Company’s excess of distributions over earnings

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

related to participating securities are shown as a reduction in income (loss) attributable to common stockholders in the Company’s computation of EPS.
The following table sets forth the computation of the Company’s basic and diluted earnings (loss) per share for the three and six months ended June 30, 2019 and 2018 (amounts in thousands, except shares and per share amounts):
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2019
 
2018
 
2019
 
2018
Numerator - basic and diluted
 
 
 
 
 
 
 
Net income (loss)
$
(597
)
 
$
2,531

 
$
(908
)
 
$
2,554

Net income (loss) attributable to non-controlling interests
(12
)
 
53

 
(19
)
 
54

Net income (loss) attributable to common shares
$
(585
)
 
$
2,478

 
$
(889
)
 
$
2,500

Denominator - basic and diluted
 
 
 
 
 
 
 
Basic weighted average common shares
10,839,065

 
10,977,718

 
10,850,842

 
10,982,892

Common Units (1)

 

 

 

Diluted weighted average common shares
10,839,065

 
10,977,718

 
10,850,842

 
10,982,892

Earnings (loss) per common share - basic and diluted
 
 
 
 
 
 
 
Net earnings (loss) attributable to common shares
$
(0.05
)
 
$
0.23

 
$
(0.08
)
 
$
0.23

(1)
The effect of 235,194 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.
11. RELATED PARTY TRANSACTIONS
On August 7, 2013, the Company entered into the Advisory Agreement with the Advisor, which has been renewed for successive terms with a current expiration date of August 9, 2020. The Advisor manages the Company’s business as the Company’s external advisor pursuant to the Advisory Agreement. Pursuant to the Advisory Agreement, the Company will pay the Advisor specified fees for services related to the investment of funds in real estate and real estate-related investments, management of the Company’s investments and for other services.
On March 11, 2015, the Company, through a wholly-owned subsidiary, entered into the Limited Liability Company Agreement of SGO Retail Acquisitions Venture, LLC to form the SGO Joint Venture. On September 30, 2015, the Company, through wholly-owned subsidiaries, entered into the Limited Liability Company Agreement of SGO MN Retail Acquisitions Venture, LLC to form the SGO MN Joint Venture. For additional information regarding the SGO Joint Venture and the SGO MN Joint Venture, refer to Note 3. “Investments in Unconsolidated Joint Ventures.”

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

Summary of Related Party Fees
The following table sets forth the Advisor related party costs incurred and payable by the Company for the periods presented (amounts in thousands):
 
 
Incurred
 
Payable as of
 
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
June 30,
 
December 31,
Expensed
 
2019
 
2018
 
2019
 
2018
 
2019
 
2018
Financing coordination fees
 
$

 
$
30

 
$

 
$
30

 
$

 
$

Asset management fees
 
160

 
188

 
317

 
379

 

 

Reimbursement of operating expenses
 
11

 
36

 
22

 
81

 

 

Property management fees
 
36