UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported):
September 28, 2012
Steadfast Income REIT, Inc.
(Exact Name of Registrant as Specified in Charter)
Maryland | 000-54674 | 27-0351641 | ||
(State or Other Jurisdiction | (Commission File Number) | (IRS Employer | ||
of Incorporation) | Identification No.) | |||
18100 Von Karman Avenue, Suite 500
Irvine, California 92612
(Address of Principal Executive Offices, including Zip Code)
Registrant’s telephone number, including area code: (949) 852-0700
Not applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions ( see General Instruction A.2.):
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | ||
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | ||
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | ||
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | ||
Item 9.01 Financial Statements and Exhibits.
Steadfast Income REIT, Inc. (the “Company”), through its consolidated subsidiaries, has acquired fee simple interests in the following two multifamily properties: the Hilliard Park Apartments (the “Hilliard Park Property”), acquired by the Company on September 11, 2012, and the Hilliard Summit Apartments (the “Hilliard Summit Property”), acquired by the Company on September 28, 2012. The Company acquired the Hilliard Park Property and the Hilliard Summit Property from the same, unaffiliated seller. The Company is filing this Current Report on Form 8-K/A to amend each of the Form 8-Ks below, as applicable, to provide the required financial information related to the acquisition of the Hilliard Park Property and the Hilliard Summit Property.
This Current Report on Form 8-K/A hereby amends the following Form 8-Ks, as applicable:
• | the Company’s Current Report on Form 8-K relating to the acquisition of the Hilliard Park Property, filed with the Securities and Exchange Commission (the “SEC”) on September 17, 2012; and |
• | the Company’s Current Report on Form 8-K relating to the acquisition of the Hilliard Summit Property, filed with the SEC on October 4, 2012. |
(a) Financial Statement of Businesses Acquired.
I. | The Hilliard Park Property | ||
Report of Independent Auditors | |||
Statements of Revenues Over Certain Operating Expenses for the Nine Months Ended September 30, 2012 (unaudited) and the Year Ended December 31, 2011 | |||
Notes to Statements of Revenues Over Certain Operating Expenses for the Nine Months Ended September 30, 2012 (unaudited) and the Year Ended December 31, 2011 | |||
II. | The Hilliard Summit Property | ||
Report of Independent Auditors | |||
Statements of Revenues Over (Under) Certain Operating Expenses for the Nine Months Ended September 30, 2012 (unaudited) and the Year Ended December 31, 2011 | |||
Notes to Statements of Revenues Over (Under) Certain Operating Expenses for the Nine Months Ended September 30, 2012 (unaudited) and the Year Ended December 31, 2011 | |||
(b) Pro Forma Financial Information.
Report of Independent Auditors
To the Board of Directors and Stockholders of
Steadfast Income REIT, Inc.
We have audited the accompanying statement of revenues over certain operating expenses of the Hilliard Park Property for the year ended December 31, 2011. This statement is the responsibility of the Hilliard Park Property’s management. Our responsibility is to express an opinion on the statement based on our audit.
We conducted our audit in accordance with the auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the statement of revenues over certain operating expenses is free of material misstatement. We were not engaged to perform an audit of the Hilliard Park Property’s internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Hilliard Park Property’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the statement of revenues over certain operating expenses, assessing the accounting principles used and significant estimates made by management, and evaluating the overall presentation of the statement of revenues over certain operating expenses. We believe that our audit provides a reasonable basis for our opinion.
The accompanying statement of revenues over certain operating expenses was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission, as described in Note 2, and is not intended to be a complete presentation of the Hilliard Park Property’s revenues and expenses.
In our opinion, the statement of revenues over certain operating expenses referred to above presents fairly, in all material respects, the revenues and certain operating expenses, as described in Note 2, of the Hilliard Park Property for the year ended December 31, 2011, in conformity with U.S. generally accepted accounting principles.
/s/ Ernst & Young, LLP
Irvine, California
December 14, 2012
F-1
HILLIARD PARK PROPERTY
STATEMENTS OF REVENUES OVER CERTAIN OPERATING EXPENSES
For the Nine Months Ended September 30, 2012 | For the Year Ended December 31, 2011 | ||||||
(unaudited) | |||||||
Revenues: | |||||||
Rental income | $ | 1,650,208 | $ | 2,139,079 | |||
Tenant reimbursements and other | 10,689 | 12,426 | |||||
Total revenues | 1,660,897 | 2,151,505 | |||||
Expenses: | |||||||
Operating, maintenance, and management | 393,409 | 481,417 | |||||
Real estate taxes and insurance | 295,138 | 382,953 | |||||
General and administrative expenses | 35,153 | 49,972 | |||||
Total expenses | 723,700 | 914,342 | |||||
Revenues over certain operating expenses | $ | 937,197 | $ | 1,237,163 | |||
See accompanying notes to statement of revenues over certain operating expenses.
F-2
HILLIARD PARK PROPERTY
NOTES TO STATEMENTS OF REVENUES OVER CERTAIN OPERATING EXPENSES
For the Nine Months Ended September 30, 2012 (unaudited)
and the Year Ended December 31, 2011
1. DESCRIPTION OF REAL ESTATE PROPERTY
On September 11, 2012, Steadfast Income REIT, Inc. (the “Company”), through a consolidated subsidiary, acquired a fee simple interest in a multifamily property located in Columbus, Ohio, commonly known as the Hilliard Park Apartments (the “Hilliard Park Property”). The Hilliard Park Property was constructed in 2000 and is composed of 26 two-story buildings.
The Hilliard Park Property contains 201 units consisting of 172 two-bedroom apartments and 29 three-bedroom apartments. The apartments range in size from 1,060 to 1,340 square feet and average 1,140 square feet. Apartment amenities include oak cabinetry in kitchens and bathrooms, vertical and horizontal blinds, attractive lighting packages, full kitchen appliance packages, washer and dryer connections, walk-in closets and patio or balcony decks. In addition, select units have full basements, attached garages and vaulted ceilings. Property amenities include a park area with gazebo, a playground, a golf putting green, a basketball court and a central mail center.
The Company is a Maryland corporation formed to invest in and manage a diverse portfolio of real estate investments, primarily in the multifamily sector, located throughout the United States.
2. BASIS OF PRESENTATION
The accompanying statements of revenues over certain operating expenses have been prepared to comply with the rules and regulations of the Securities and Exchange Commission (“SEC”).
The Hilliard Park Property is not a legal entity and the accompanying statements of revenues over certain expenses are not representative of the actual operations for the periods presented, as certain revenues and expenses have been excluded that may not be comparable to the revenues and expenses the Company expects to incur in the future operations of the Hilliard Park Property. Excluded items include interest, depreciation and amortization, and general and administrative costs not directly comparable to the future operations of the Hilliard Park Property.
The accompanying unaudited statement of revenues over certain operating expenses for the nine months ended September 30, 2012 has been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information as contained within the Financial Accounting Standards Board Accounting Standards Codification and the rules and regulations of the SEC, including the instructions to Form 8-K and Article 3-14 of Regulation S-X. Accordingly, the unaudited statement of revenues over certain operating expenses does not include all of the information and footnotes required by GAAP for audited financial statements. In the opinion of management, the statement of revenues over certain operating expenses for the unaudited interim period presented includes all adjustments, which are of a normal and recurring nature, necessary for a fair and consistent presentation of the results for such period. Operating results for the nine months ended September 30, 2012 are not necessarily indicative of the results that may be expected for the year ending December 31, 2012.
An audited statement of revenues over certain operating expenses is being presented for the most recent year available instead of the three most recent years based on the following factors: (1) the Hilliard Park Property was acquired from an unaffiliated party; and (2) based on due diligence of the Hilliard Park Property conducted by the Company, management is not aware of any material factors relating to the Hilliard Park Property that would cause this financial information not to be indicative of future operating results.
Square footage, occupancy and other measures used to describe real estate included in the notes to statement of revenues over certain operating expenses are presented on an unaudited basis.
F-3
HILLIARD PARK PROPERTY
NOTES TO STATEMENTS OF REVENUES OVER CERTAIN OPERATING EXPENSES (CONTINUED)
For the Nine Months Ended September 30, 2012 (unaudited)
and the Year Ended December 31, 2011
3. SIGNIFICANT ACCOUNTING POLICIES
Revenue Recognition
The Hilliard Park Property leases residential apartment units under operating leases generally with terms of one year or less. Rental revenue, including rental abatements, concessions and contractual fixed increases, is recognized on a straight-line basis over the term of the related lease. Tenant reimbursements and other consists of charges billed to tenants for utilities, parking, application and other fees. Tenant reimbursements and other income are recognized when earned.
Use of Estimates
The preparation of financial statements, as described in Note 2 and in conformity with GAAP, requires management to make estimates and assumptions that affect the reported amounts of revenues and expenses during the reporting period. Actual results could materially differ from those estimates.
4. COMMITMENT AND CONTINGENCIES
Litigation
The Hilliard Park Property may become party to legal proceedings that arise in the ordinary course of its business. Management is not aware of any legal proceedings of which the outcome is probable or reasonably possible to have a material adverse effect on its results of operations or financial condition.
Other Matters
The Company is not aware of any material environmental liabilities relating to the Hilliard Park Property that could have a material adverse effect on its financial condition or results of operations. However, changes in applicable environmental laws and regulations or other environmental conditions with respect to the Hilliard Park Property could result in future environmental liabilities.
F-4
Report of Independent Auditors
To the Board of Directors and Stockholders of
Steadfast Income REIT, Inc.
We have audited the accompanying statement of revenues over (under) certain operating expenses of the Hilliard Summit Property for the period from September 1, 2011 (Inception) to December 31, 2011. This statement is the responsibility of the Hilliard Summit Property’s management. Our responsibility is to express an opinion on the statement based on our audit.
We conducted our audit in accordance with the auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the statement of revenues over (under) certain operating expenses is free of material misstatement. We were not engaged to perform an audit of the Hilliard Summit Property’s internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Hilliard Summit Property’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the statement of revenues over (under) certain operating expenses, assessing the accounting principles used and significant estimates made by management, and evaluating the overall presentation of the statement of revenues over certain operating expenses. We believe that our audit provides a reasonable basis for our opinion.
The accompanying statement of revenues over (under) certain operating expenses was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission, as described in Note 2, and is not intended to be a complete presentation of the Hilliard Summit Property’s revenues and expenses.
In our opinion, the statement of revenues over (under) certain operating expenses referred to above presents fairly, in all material respects, the revenues and certain operating expenses, as described in Note 2, of the Hilliard Summit Property for the period from September 1, 2011 (Inception) to December 31, 2011, in conformity with U.S. generally accepted accounting principles.
/s/ Ernst & Young, LLP
Irvine, California
December 14, 2012
F-5
HILLIARD SUMMIT PROPERTY
STATEMENTS OF REVENUES OVER (UNDER) CERTAIN OPERATING EXPENSES
For the Nine Months Ended September 30, 2012 | For the Period from September 1, 2011 (Inception) to December 31, 2011 | ||||||
(unaudited) | |||||||
Revenues: | |||||||
Rental income | $ | 1,286,404 | $ | 74,458 | |||
Tenant reimbursements and other | 4,272 | 968 | |||||
Total revenues | 1,290,676 | 75,426 | |||||
Expenses: | |||||||
Operating, maintenance, and management | 362,537 | 84,047 | |||||
Real estate taxes and insurance | 227,096 | 1,400 | |||||
General and administrative expenses | 68,778 | 23,613 | |||||
Total expenses | 658,411 | 109,060 | |||||
Revenues over (under) certain operating expenses | $ | 632,265 | $ | (33,634 | ) | ||
See accompanying notes to statement of revenues over certain operating expenses.
F-6
HILLIARD SUMMIT PROPERTY
NOTES TO STATEMENTS OF REVENUES OVER (UNDER) CERTAIN OPERATING EXPENSES
For the Nine Months Ended September 30, 2012 (unaudited)
and the Year Ended December 31, 2011
1. DESCRIPTION OF REAL ESTATE PROPERTY
On September 28, 2012, Steadfast Income REIT, Inc. (the “Company”), through a consolidated subsidiary, acquired a fee simple interest in a multifamily property located in Columbus, Ohio, commonly known as the Hilliard Summit Apartments (the “Hilliard Summit Property”). The construction of the Hilliard Summit Property was completed in 2012; however, the property operations commenced in September 2011.
The Hilliard Summit Property is composed of 25 two-story buildings and contains 208 units consisting of 36 one-bedroom apartments, 144 two-bedroom apartments and 28 three-bedroom apartments. The apartments range in size from 780 to 1,510 square feet and average 1,166 square feet. Apartment amenities include painted white woodwork throughout, custom birch kitchen cabinetry and bathroom vanities, fully appointed kitchens with complete appliance packages, granite-like laminate kitchen tops with backsplash, washer and dryer connections, oversized walk-in closets and private patio or balcony decks. In addition, select units have vaulted or nine-foot ceilings. Property amenities include a resort-style clubhouse, outdoor swimming pool, barbecue gazebo, outdoor lounge with fire pit, fitness center, community garden and free clubhouse Wi-Fi.
The Company is a Maryland corporation formed to invest in and manage a diverse portfolio of real estate investments, primarily in the multifamily sector, located throughout the United States.
2. BASIS OF PRESENTATION
The accompanying statements of revenues over (under) certain operating expenses have been prepared to comply with the rules and regulations of the Securities and Exchange Commission (“SEC”).
The Hilliard Summit Property is not a legal entity and the accompanying statements of revenues over (under) certain operating expenses are not representative of the actual operations for the periods presented, as certain revenues and expenses have been excluded that may not be comparable to the revenues and expenses the Company expects to incur in the future operations of the Hilliard Summit Property. Excluded items include interest, depreciation and amortization, and general and administrative costs not directly comparable to the future operations of the Hilliard Summit Property.
The accompanying unaudited statement of revenues over certain operating expenses for the nine months ended September 30, 2012 has been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information as contained within the Financial Accounting Standards Board Accounting Standards Codification and the rules and regulations of the SEC, including the instructions to Form 8-K and Article 3-14 of Regulation S-X. Accordingly, the unaudited statement of revenues over certain operating expenses does not include all of the information and footnotes required by GAAP for audited financial statements. In the opinion of management, the statement of revenues over certain operating expenses for the unaudited interim period presented includes all adjustments, which are of a normal and recurring nature, necessary for a fair and consistent presentation of the results for such period. Operating results for the nine months ended September 30, 2012 are not necessarily indicative of the results that may be expected for the year ending December 31, 2012.
An audited statement of revenues over (under) certain operating expenses is being presented for the most recent year available instead of the three most recent years based on the following factors: (1) the Hilliard Summit Property was acquired from an unaffiliated party; and (2) based on due diligence of the Hilliard Summit Property conducted by the Company, management is not aware of any material factors relating to the Hilliard Summit Property that would cause this financial information not to be indicative of future operating results.
Square footage, occupancy and other measures used to describe real estate included in the notes to statement of revenues over certain operating expenses are presented on an unaudited basis.
F-7
HILLIARD SUMMIT PROPERTY
NOTES TO STATEMENTS OF REVENUES OVER CERTAIN OPERATING EXPENSES (CONTINUED)
For the Nine Months Ended September 30, 2012 (unaudited)
and the Year Ended December 31, 2011
3. SIGNIFICANT ACCOUNTING POLICIES
Revenue Recognition
The Hilliard Summit Property leases residential apartment units under operating leases generally with terms of one year or less. Rental revenue, including rental abatements, concessions and contractual fixed increases, is recognized on a straight-line basis over the term of the related lease. Tenant reimbursements and other consists of charges billed to tenants for utilities, parking, application and other fees. Tenant reimbursements and other income are recognized when earned.
Use of Estimates
The preparation of financial statements, as described in Note 2 and in conformity with GAAP, requires management to make estimates and assumptions that affect the reported amounts of revenues and expenses during the reporting period. Actual results could materially differ from those estimates.
4. COMMITMENT AND CONTINGENCIES
Litigation
The Hilliard Summit Property may become party to legal proceedings that arise in the ordinary course of its business. Management is not aware of any legal proceedings of which the outcome is probable or reasonably possible to have a material adverse effect on its results of operations or financial condition.
Other Matters
The Company is not aware of any material environmental liabilities relating to the Hilliard Summit Property that could have a material adverse effect on its financial condition or results of operations. However, changes in applicable environmental laws and regulations or other environmental conditions with respect to the Hilliard Summit Property could result in future environmental liabilities.
F-8
STEADFAST INCOME REIT, INC.
SUMMARY OF UNAUDITED PRO FORMA FINANCIAL STATEMENTS
The following pro forma information should be read in conjunction with the Company’s historical consolidated financial statements and the notes thereto as filed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011, which was filed with the SEC on March 29, 2012. In addition, this pro forma information should be read in conjunction with the statements of revenues over certain operating expenses and the notes thereto of the Arbor Pointe Apartments (the “Arbor Pointe Property”), the Clarion Park Apartments (the “Clarion Park Property”), the Cooper Creek Village (the “Cooper Creek Property”), the Prairie Walk Apartment Homes (the “Prairie Walk Property”), the Truman Farm Villas (the “Truman Farm Villas Property”), the EBT Lofts (the “EBT Lofts Property”), the Windsor on the River (the “Windsor on the River Property”), the Renaissance St. Andrews (the “Renaissance Property”), the Spring Creek of Edmond (the “Spring Creek Property”), the Montclair Parc Apartments (the “Montclair Parc Property”), the Sonoma Grande Apartments (the “Sonoma Grande Property”) and the Estancia Apartments (the “Estancia Property”), which have been included in the Company’s prior filings with the SEC, and the statements of revenues over certain operating expenses and the notes thereto of the Hilliard Park Property and the Hilliard Summit Property, which are included herein.
The Arbor Pointe Property, the Clarion Park Property, the Cooper Creek Property, the Prairie Walk Property, the Truman Farm Villas Property, the EBT Lofts Property, the Windsor on the River Property, the Renaissance Property, the Spring Creek Property, the Montclair Parc Property, the Sonoma Grande Property, the Estancia Property, the Hilliard Park Property and the Hilliard Summit Property (collectively referred to as the “Portfolio Properties”) were acquired on May 5, 2011, June 28, 2011, August 24, 2011, December 22, 2011, December 22, 2011, December 30, 2011, January 26, 2012, February 17, 2012, March 9, 2012, April 26, 2012, May 24, 2012, June 29, 2012, September 11, 2012 and September 28, 2012, respectively, and are recorded in the Company’s historical balance sheet as of September 30, 2012.
The following unaudited pro forma statements of operations for the nine months ended September 30, 2012 and for the year ended December 31, 2011 have been prepared to give effect to the acquisition of the Portfolio Properties as if the acquisitions occurred on January 1, 2011.
These unaudited pro forma financial statements are prepared for informational purposes only and are not necessarily indicative of future results or of actual results that would have been achieved had the acquisitions of the Portfolio Properties been consummated as of January 1, 2011. The audited statements of revenues over certain operating expenses of the Arbor Pointe Property, the Clarion Park Property and the Cooper Creek Property have been previously filed on Form 8-K/As with the SEC on May 13, 2011, August 12, 2011 and October 28, 2011, respectively. The audited statements of revenues over certain operating expenses of the Prairie Walk Property, the Truman Farm Villas Property, the EBT Lofts Property and the Windsor on the River Property have been previously filed on Form 8-K/A with the SEC on March 9, 2012. The audited statements of revenues over certain expenses of the Renaissance Property, the Spring Creek Property and the Montclair Parc Property have been previously filed on Form 8-K/A with the SEC on May 4, 2012. The audited statements of revenues over certain expenses of the Sonoma Grande Property and the Estancia Property have been previously filed on Form 8-K/A with the SEC on August 9, 2012.
F-9
STEADFAST INCOME REIT, INC.
UNAUDITED PRO FORMA STATEMENT OF OPERATIONS
For the Nine Months Ended September 30, 2012
Pro Forma Adjustments | ||||||||||||||||||||||||||||||||||||||||
Steadfast Income REIT, Inc. Historical (a) | Windsor on the River Property (b) | Renaissance Property (b) | Spring Creek Property (b) | Montclair Parc Property (b) | Sonoma Grande Property (b) | Estancia Property (b) | Hilliard Park Property (b) | Hilliard Summit Property (b) | Pro Forma Total | |||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||||
Rental income | $ | 16,843,373 | $ | 255,715 | (c) | $ | 191,919 | (c) | $ | 431,198 | (c) | $ | 1,135,371 | (c) | $ | 1,397,067 | (c) | $ | 1,515,830 | (c) | $ | 1,534,082 | (c) | $ | 1,276,875 | (c) | $ | 24,581,430 | ||||||||||||
Tenant reimbursements and other | 1,621,631 | 28,371 | (d) | 33,964 | (d) | 29,089 | (d) | 103,205 | (d) | 127,802 | (d) | 118,900 | (d) | 9,937 | (d) | 4,240 | (d) | 2,077,139 | ||||||||||||||||||||||
Total revenues | 18,465,004 | 284,086 | 225,883 | 460,287 | 1,238,576 | 1,524,869 | 1,634,730 | 1,544,019 | 1,281,115 | 26,658,569 | ||||||||||||||||||||||||||||||
Expenses: | ||||||||||||||||||||||||||||||||||||||||
Operating, maintenance and management | 5,364,639 | 48,238 | (e) | 90,506 | (e) | 128,444 | (e) | 223,211 | (e) | 336,994 | (e) | 411,357 | (e) | 284,370 | (e) | 315,287 | (e) | 7,203,046 | ||||||||||||||||||||||
Real estate taxes and insurance | 2,159,130 | 462,691 | (f) | 29,918 | (f) | 109,089 | (f) | 261,698 | (f) | 260,477 | (f) | 290,404 | (f) | 476,624 | (f) | 592,994 | (f) | 4,643,025 | ||||||||||||||||||||||
Fees to affiliates | 6,928,656 | (636,794 | ) | (g) | (232,455 | ) | (g) | (345,326 | ) | (g) | (589,340 | ) | (g) | (499,405 | ) | (g) | (401,161 | ) | (g) | (239,985 | ) | (g) | (300,327 | ) | (g) | 3,683,863 | ||||||||||||||
Depreciation and amortization | 9,471,699 | (1,126,746 | ) | (h) | (187,031 | ) | (h) | (279,426 | ) | (h) | (646,637 | ) | (h) | 66,429 | (h) | 253,110 | (h) | 436,998 | (h) | 627,762 | (h) | 8,616,158 | ||||||||||||||||||
Interest expense | 3,887,837 | 55,745 | (i) | (257,514 | ) | (i) | 46,704 | (i) | 290,532 | (i) | 308,783 | (i) | 362,230 | (i) | 390,011 | (i) | 459,042 | (i) | 5,543,370 | |||||||||||||||||||||
General and administrative expenses | 2,094,725 | 2,399 | (j) | 4,960 | (j) | 5,771 | (j) | 8,284 | (j) | 16,075 | (j) | 12,222 | (j) | 32,679 | (j) | 68,269 | (j) | 2,245,384 | ||||||||||||||||||||||
Acquisition costs | 1,694,574 | (173,427 | ) | (k) | (140,025 | ) | (k) | (145,988 | ) | (k) | (160,715 | ) | (k) | (215,193 | ) | (k) | (160,780 | ) | (k) | (42,446 | ) | (k) | (102,472 | ) | (k) | 553,528 | ||||||||||||||
31,601,260 | (1,367,894 | ) | (691,641 | ) | (480,732 | ) | (612,967 | ) | 274,160 | 767,382 | 1,338,251 | 1,660,555 | 32,488,374 | |||||||||||||||||||||||||||
Net loss | (13,136,256 | ) | $ | 1,651,980 | $ | 917,524 | $ | 941,019 | $ | 1,851,543 | $ | 1,250,709 | $ | 867,348 | $ | 205,768 | $ | (379,440 | ) | (5,829,805 | ) | |||||||||||||||||||
Net loss per common share – basic and diluted | $ | (1.39 | ) | $ | (0.32 | ) | ||||||||||||||||||||||||||||||||||
Weighted-average number of common shares outstanding, basic and diluted | 9,423,555 | 18,336,342 | (l) | |||||||||||||||||||||||||||||||||||||
F-10
STEADFAST INCOME REIT, INC.
NOTES TO UNAUDITED PRO FORMA STATEMENT OF OPERATIONS
For the Nine Months Ended September 30, 2012
(a) | Historical financial information for the nine months ended September 30, 2012 derived from the Company’s Quarterly Report on Form 10-Q for the nine months ended September 30, 2012. |
(b) | Represents adjustments to historical operations of the Company to give effect to the acquisition of the Windsor on the River Property, the Renaissance Property, the Spring Creek Property, the Montclair Parc Property, the Sonoma Grande Property, the Estancia Property, the Hilliard Park Property and the Hilliard Summit Property (collectively the “2012 Properties”) as if these assets had been acquired on January 1, 2011. |
(c) | Represents the base rental income (not reflected in the historical statement of operations of the Company) for the nine months ended September 30, 2012, based on the historical operations of the previous owners as if the 2012 Properties had been acquired on January 1, 2011. |
(d) | Represents operating cost reimbursements and other operating income from tenants (not reflected in the historical statement of operations of the Company) for the nine months ended September 30, 2012, based on historical operations of the previous owners as if the 2012 Properties had been acquired on January 1, 2011. |
(e) | Represents operating, maintenance and management expenses (not reflected in the historical statement of operations of the Company) for the nine months ended September 30, 2012, based on historical operations of the previous owners as if the 2012 Properties were acquired on January 1, 2011. Amounts exclude the following property management fees: |
Portfolio Properties | Property Management Fees For the Nine Months Ended September 30, 2012 | |||
Windsor on the River Property | $ | 10,229 | ||
Renaissance Property | 7,833 | |||
Spring Creek Property | 16,129 | |||
Montclair Parc Property | 61,966 | |||
Sonoma Grande Property | 60,217 | |||
Estancia Property | 64,488 | |||
Hilliard Park Property | 81,355 | |||
Hilliard Summit Property | 44,564 | |||
(f) | Represents real estate taxes and insurance expense (not reflected in the historical statement of operations of the Company) for the nine months ended September 30, 2012, based on management estimates as if the 2012 Properties were acquired on January 1, 2011. |
(g) | Represents adjustments made to fees to affiliates for the nine months ended September 30, 2012 to eliminate acquisition fees incurred by the Company that are included in the historical financial information for the nine months ended September 30, 2012 and to include the fees to affiliates (not reflected in the historical statement of operations of the Company) for the nine months ended September 30, 2012 that would be due to affiliates had the 2012 Properties been acquired on January 1, 2011. The pro forma total fees to affiliates are as follows: |
• | Investment Management Fees: Investment management fees are payable to the Company's external advisor, Steadfast Income Advisor, LLC (“Advisor”) based on an annual fee, payable monthly, of 0.80% of the acquisition cost of the 2012 Properties, including acquisition fees and acquisition expenses, as defined in the advisory agreement by and among the Company, its operating partnership and Advisor (“Advisory Agreement”). |
• | Property Management Fees: Property management fees are payable to the property manager based on between 3.0% and 3.5% of the monthly gross revenues of the 2012 Properties, as defined in the Property Management Agreement for each property. |
F-11
The acquisition fees eliminated and investment management fees payable to the Advisor and the property management fees payable to the property managers were:
For the Nine Months Ended September 30, 2012 | ||||||||||||||||
Acquisition Fees Eliminated from Historical Financial Information | Fees Included in Pro Forma Financial Information | |||||||||||||||
2012 Properties | Investment Management Fees | Property Management Fees | Total | |||||||||||||
Windsor on the River Property | $ | (666,381 | ) | $ | 19,644 | $ | 9,943 | $ | (636,794 | ) | ||||||
Renaissance Property | (253,897 | ) | 13,536 | 7,906 | (232,455 | ) | ||||||||||
Spring Creek Property | (392,099 | ) | 30,663 | 16,110 | (345,326 | ) | ||||||||||
Montclair Parc Property | (721,328 | ) | 94,831 | 37,157 | (589,340 | ) | ||||||||||
Sonoma Grande Property | (651,458 | ) | 106,307 | 45,746 | (499,405 | ) | ||||||||||
Estancia Property | (564,777 | ) | 114,574 | 49,042 | (401,161 | ) | ||||||||||
Hilliard Park Property | (400,130 | ) | 113,824 | 46,321 | (239,985 | ) | ||||||||||
Hilliard Summit Property | (486,537 | ) | 147,777 | 38,433 | (300,327 | ) | ||||||||||
(h) | Represents depreciation and amortization expense (not reflected in the historical statement of operations of the Company) for the nine months ended September 30, 2012, as if the 2012 Properties were acquired on January 1, 2011. Depreciation expense on the purchase price of building and furniture & fixtures is recognized using the straight-line method over an estimated useful life of 27.5 years and 5 years, respectively. Depreciation expense on the purchase price of tenant improvements is recognized using the straight-line method over the life of the lease. Amortization expense on lease intangible costs is recognized using the straight-line method over the life of the lease. |
(i) | Represents interest expense (not reflected in the historical statement of operations of the Company) for the nine months ended September 30, 2012, as if the borrowings attributable to the 2012 Properties were borrowed on January 1, 2011. |
Portfolio Properties | Initial Mortgage Debt (In Millions) | |||
Windsor on the River Property | $ | 23.5 | ||
Renaissance Property | 7.0 | |||
Spring Creek Property(1) | 13.9 | |||
Montclair Parc Property | 25.0 | |||
Sonoma Grande Property | 22.5 | |||
Estancia Property(1) | 20.5 | |||
Hilliard Park Property | 13.9 | |||
Hilliard Summit Property | 16.8 | |||
(1) | The identifiable assets and mortgage note payable assumed in connection with the acquisition of the Spring Creek Property and the Estancia Property include an allocation adjustment of $0.6 million and $1.9 million, respectively, to record the assumed mortgage at fair value. |
(j) | Represents general and administrative expenses (not reflected in the historical statement of operations of the Company) for the nine months ended September 30, 2012, based on historical operations of the previous owners, as if the 2012 Properties had been acquired as of January 1, 2011. |
(k) | Represents adjustments made to acquisition costs (not reflected in the historical statement of operations of the Company) for the nine months ended September 30, 2012, to include those amounts incurred by the Company that were attributable to the 2012 Properties, as if the assets had been acquired as of January 1, 2011. |
(l) | Represents the actual number of shares of the Company’s common stock outstanding as of September 30, 2012. The calculation assumes that these shares were issued and the related proceeds were raised on January 1, 2011. |
F-12
STEADFAST INCOME REIT, INC.
UNAUDITED PRO FORMA STATEMENT OF OPERATIONS
For the Year Ended December 31, 2011
Pro Forma Adjustments | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Steadfast Income REIT, Inc. Historical (a) | Arbor Pointe Property (b) | Clarion Park Property (b) | Cooper Creek Property (b) | Prairie Walk Property (b) | Truman Farm Villas Property (b) | EBT Lofts Property (b) | Windsor on the River Property (b) | Renaissance Property (b) | Spring Creek Property (b) | Montclair Parc Property (b) | Sonoma Grande Property (b) | Estancia Property (b) | Hilliard Park Property (b) | Hilliard Summit Property (b) | Pro Forma Total | |||||||||||||||||||||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Rental income | $ | 5,185,990 | $ | 374,627 | (c) | $ | 840,923 | (c) | $ | 782,048 | (c) | $ | 806,986 | (c) | $ | 1,377,635 | (c) | $ | 982,462 | (c) | $ | 3,540,668 | (c) | $ | 1,470,018 | (c) | $ | 2,249,728 | (c) | $ | 3,523,566 | (c) | $ | 3,474,682 | (c) | $ | 3,123,544 | (c) | $ | 2,139,079 | (c) | $ | 74,458 | (c) | $ | 29,946,414 | ||||||||||||||||||
Tenant reimbursements and other | 524,183 | 14,892 | (d) | 12,372 | (d) | 68,187 | (d) | 101,429 | (d) | 20,793 | (d) | 53,817 | (d) | 392,824 | (d) | 260,149 | (d) | 151,769 | (d) | 320,291 | (d) | 289,627 | (d) | 269,815 | (d) | 12,426 | (d) | 968 | (d) | 2,493,542 | ||||||||||||||||||||||||||||||||||
Total revenues | 5,710,173 | 389,519 | 853,295 | 850,235 | 908,415 | 1,398,428 | 1,036,279 | 3,933,492 | 1,730,167 | 2,401,497 | 3,843,857 | 3,764,309 | 3,393,359 | 2,151,505 | 75,426 | 32,439,956 | ||||||||||||||||||||||||||||||||||||||||||||||||
Expenses: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Operating, maintenance and management | 2,022,124 | 189,685 | (e) | 248,987 | (e) | 270,120 | (e) | 337,387 | (e) | 466,099 | (e) | 228,048 | (e) | 703,319 | (e) | 693,238 | (e) | 670,140 | (e) | 692,724 | (e) | 775,264 | (e) | 786,875 | (e) | 374,710 | (e) | 82,058 | (e) | 8,540,778 | ||||||||||||||||||||||||||||||||||
Real estate taxes and insurance | 756,403 | 41,438 | (f) | 98,450 | (f) | 83,860 | (f) | 126,097 | (f) | 175,962 | (f) | 155,789 | (f) | 1,252,124 | (f) | 164,436 | (f) | 276,116 | (f) | 555,793 | (f) | 552,268 | (f) | 517,165 | (f) | 651,796 | (f) | 261,475 | (f) | 5,669,172 | ||||||||||||||||||||||||||||||||||
Fees to affiliates | 1,519,026 | 32,008 | (g) | 73,252 | (g) | 85,701 | (g) | 81,361 | (g) | 122,459 | (g) | 107,228 | (g) | 1,076,638 | (g) | 418,360 | (g) | 636,135 | (g) | 1,130,947 | (g) | 1,030,088 | (g) | 897,007 | (g) | 627,928 | (g) | 554,969 | (g) | 8,393,107 | ||||||||||||||||||||||||||||||||||
Depreciation and amortization | 2,577,462 | 70,326 | (h) | 183,777 | (h) | 294,489 | (h) | 419,172 | (h) | 544,408 | (h) | 636,963 | (h) | 2,290,237 | (h) | 696,735 | (h) | 1,099,749 | (h) | 2,365,222 | (h) | 1,706,236 | (h) | 1,573,947 | (h) | 985,620 | (h) | 409,209 | (h) | 15,853,552 | ||||||||||||||||||||||||||||||||||
Interest expense | 1,186,938 | 84,636 | (i) | 202,512 | (i) | 179,235 | (i) | 152,655 | (i) | 230,073 | (i) | 224,596 | (i) | 525,435 | (i) | 411,660 | (i) | 602,914 | (i) | 953,906 | (i) | 780,722 | (i) | 914,563 | (i) | 526,592 | (i) | 206,609 | (i) | 7,183,046 | ||||||||||||||||||||||||||||||||||
General and administrative expenses | 816,085 | 11,250 | (j) | 28,043 | (j) | 18,527 | (j) | 23,526 | (j) | 29,586 | (j) | 19,100 | (j) | 33,211 | (j) | 37,992 | (j) | 30,111 | (j) | 25,709 | (j) | 36,628 | (j) | 33,527 | (j) | 49,972 | (j) | 23,613 | (j) | 1,216,880 | ||||||||||||||||||||||||||||||||||
Acquisition costs | 881,145 | — | — | — | — | — | — | 170,869 | (k) | 122,697 | (k) | 106,819 | (k) | 156,434 | (k) | 198,898 | (k) | 133,183 | (k) | 27,562 | (k) | 92,472 | (k) | 1,890,079 | ||||||||||||||||||||||||||||||||||||||||
9,759,183 | 429,343 | 835,021 | 931,932 | 1,140,198 | 1,568,587 | 1,371,724 | 6,051,833 | 2,545,118 | 3,421,984 | 5,880,735 | 5,080,104 | 4,856,267 | 3,244,180 | 1,630,405 | 48,746,614 | |||||||||||||||||||||||||||||||||||||||||||||||||
Net loss | $ | (4,049,010 | ) | $ | (39,824 | ) | $ | 18,274 | $ | (81,697 | ) | $ | (231,783 | ) | $ | (170,159 | ) | $ | (335,445 | ) | $ | (2,118,341 | ) | $ | (814,951 | ) | $ | (1,020,487 | ) | $ | (2,036,878 | ) | $ | (1,315,795 | ) | $ | (1,462,908 | ) | $ | (1,092,675 | ) | $ | (1,554,979 | ) | $ | (16,306,658 | ) | |||||||||||||||||
Net loss per common share – basic and diluted | $ | (1.72 | ) | $ | (0.89 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Weighted-average number of common shares outstanding, basic and diluted | 2,358,867 | 18,336,342 | (l) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
F-13
STEADFAST INCOME REIT, INC.
NOTES TO UNAUDITED PRO FORMA STATEMENT OF OPERATIONS
For the Year Ended December 31, 2011
(a) | Historical financial information for the year ended December 31, 2011 derived from the Company’s Annual Report on Form 10-K for the year ended December 31, 2011. |
(b) | Represents adjustments to historical operations of the Company to give effect to the acquisition of the Portfolio Properties as if these assets had been acquired on January 1, 2011. |
(c) | Represents the base rental income (not reflected in the historical statement of operations of the Company) for the year ended December 31, 2011, based on the historical operations of the previous owners as if the Portfolio Properties had been acquired on January 1, 2011. |
(d) | Represents operating cost reimbursements and other operating income from tenants (not reflected in the historical statement of operations of the Company) for the year ended December 31, 2011, based on historical operations of the previous owners as if the Portfolio Properties had been acquired on January 1, 2011. |
(e) | Represents operating, maintenance and management expenses (not reflected in the historical statement of operations of the Company) for the year ended December 31, 2011, based on historical operations of the previous owners as if the Portfolio Properties were acquired on January 1, 2011. Amounts exclude the following property management fees: |
Portfolio Properties | Property Management Fees For the Year Ended December 31, 2011 | |||
Arbor Pointe Property | $ | 19,478 | ||
Clarion Park Property | 42,917 | |||
Cooper Creek Property | 19,996 | |||
Prairie Walk Property | 33,318 | |||
Truman Farm Villas Property | 71,644 | |||
EBT Lofts Property | 42,304 | |||
Windsor on the River Property | 106,220 | |||
Renaissance Property | 60,000 | |||
Spring Creek Property | 84,151 | |||
Montclair Parc Property | 192,307 | |||
Sonoma Grande Property | 149,496 | |||
Estancia Property | 132,619 | |||
Hilliard Park Property | 106,707 | |||
Hilliard Summit Property | 1,989 | |||
(f) | Represents real estate taxes and insurance expense (not reflected in the historical statement of operations of the Company) for the year ended December 31, 2011, based on management estimates as if the Portfolio Properties were acquired on January 1, 2011. |
(g) | Represents fees to affiliates (not reflected in the historical statement of operations of the Company) for the year ended December 31, 2011 that would be due to affiliates had the Portfolio Properties been acquired on January 1, 2011. The pro forma total fees to affiliates are as follows: |
• | Acquisition Fees: Acquisition fees are payable based on 2% of the sum of the acquisition costs of the Portfolio Properties, including acquisition expenses (with the total acquisition fees and acquisition expenses payable to the Advisor being subject to a limitation of 6% of the contract purchase price), as defined in the Advisory Agreement. |
• | Investment Management Fees: Investment management fees are payable to the Advisor based on an annual fee, payable monthly, of 0.80% of the acquisition cost of the Portfolio Properties, including acquisition fees and acquisition expenses, as defined in the Advisory Agreement. |
• | Property Management Fees: Property management fees are payable to the property manager based on between 3.0% and 3.5% of the monthly gross revenues of the Portfolio Properties, as defined in the Property Management Agreement for each property. |
F-14
The acquisition fees and investment management fees payable to the Advisor and the property management fees payable to the property managers were:
For the Year Ended December 31, 2011 | ||||||||||||||||
Portfolio Properties | Acquisition Fees | Investment Management Fees | Property Management Fees | Total | ||||||||||||
Arbor Pointe Property (1) | $ | 133,545 | $ | 53,418 | $ | 39,494 | $ | 226,457 | ||||||||
Clarion Park Property (1) | 229,118 | 89,720 | 61,028 | 379,866 | ||||||||||||
Cooper Creek Property (1) | 212,526 | 86,711 | 44,376 | 343,613 | ||||||||||||
Prairie Walk Property (1) | 124,663 | 50,935 | 33,180 | 208,778 | ||||||||||||
Truman Farm Villas Property (1) | 185,240 | 75,545 | 50,451 | 311,236 | ||||||||||||
EBT Lofts Property (1) | 174,658 | 71,342 | 36,361 | 282,361 | ||||||||||||
Windsor on the River Property | 666,381 | 272,585 | 137,672 | 1,076,638 | ||||||||||||
Renaissance Property | 253,897 | 103,907 | 60,556 | 418,360 | ||||||||||||
Spring Creek Property | 392,099 | 159,984 | 84,052 | 636,135 | ||||||||||||
Montclair Parc Property | 721,328 | 294,303 | 115,316 | 1,130,947 | ||||||||||||
Sonoma Grande Property | 651,458 | 265,701 | 112,929 | 1,030,088 | ||||||||||||
Estancia Property | 564,777 | 230,429 | 101,801 | 897,007 | ||||||||||||
Hilliard Park Property | 400,130 | 163,253 | 64,545 | 627,928 | ||||||||||||
Hilliard Summit Property | 486,537 | 66,169 | 2,263 | 554,969 | ||||||||||||
(1) | Comprises the total fees for the year ended December 31, 2011, a portion of which is included in the historical statement of operations of the Company. |
(h) | Represents depreciation and amortization expense (not reflected in the historical statement of operations of the Company) for the year ended December 31, 2011, as if the Portfolio Properties were acquired on January 1, 2011. Depreciation expense on the purchase price of building and furniture & fixtures is recognized using the straight-line method over an estimated useful life of 27.5 years and 5 years, respectively. Depreciation expense on the purchase price of tenant improvements is recognized using the straight-line method over the life of the lease. Amortization expense on lease intangible costs is recognized using the straight-line method over the life of the lease. |
(i) | Represents interest expense (not reflected in the historical statement of operations of the Company) for the year ended December 31, 2011, as if the borrowings attributable to the Portfolio Properties were borrowed on January 1, 2011. |
Portfolio Properties | Initial Mortgage Debt (In Millions) | |||
Arbor Pointe Property | $ | 5.2 | ||
Clarion Park Property | 9.0 | |||
Cooper Creek Property | 6.8 | |||
Prairie Walk Property | 4.0 | |||
Truman Farm Villas Property | 5.9 | |||
EBT Lofts Property | 5.6 | |||
Windsor on the River Property | 23.5 | |||
Renaissance Property | 7.0 | |||
Spring Creek Property(1) | 13.9 | |||
Montclair Parc Property | 25.0 | |||
Sonoma Grande Property | 22.5 | |||
Estancia Property(1) | 20.5 | |||
Hilliard Park Property | 13.9 | |||
Hilliard Summit Property | 16.8 | |||
F-15
(1) | The identifiable assets and mortgage note payable assumed in connection with the acquisition of the Spring Creek Property and the Estancia Property include an allocation adjustment of $0.6 million and $1.9 million, respectively, to record the assumed mortgage at fair value. |
(j) | Represents general and administrative expenses (not reflected in the historical statement of operations of the Company) for the year ended December 31, 2011, based on historical operations of the previous owners, as if the Portfolio Properties had been acquired as of January 1, 2011. |
(k) | Represents adjustments made to acquisition costs (not reflected in the historical statement of operations of the Company) for the year ended December 31, 2011, to include those amounts incurred by the Company that were attributable to the Windsor on the River Property, the Renaissance Property, the Spring Creek Property, the Montclair Parc Property, the Sonoma Grande Property, the Estancia Property, the Hilliard Park Property and the Hilliard Summit Property, as if the assets had been acquired as of January 1, 2011. |
(l) | Represents the actual number of shares of the Company’s common stock outstanding as of September 30, 2012. The calculation assumes that these shares were issued and the related proceeds were raised on January 1, 2011. |
F-16
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
STEADFAST INCOME REIT, INC. | |||
Date: | December 14, 2012 | By: | /s/ Kevin J Keating |
Kevin J Keating | |||
Principal Financial and Accounting Officer | |||